https://www.avient.com/sites/default/files/2022-02/AVNT Q4 2021 Earnings Presentation_0.pdf
Purchase price multiple rapidly declining on strength of business and synergy capture 10 $133 $205 2019PF 2021 10 Clariant Color EBITDA Growth Purchase Price Multiple 10.8x 7.0x 6.1x 2019PF 2021 2021 w/ Full Synergies (1) (1) 11.9% 16.2% 2019PF 2021 EBITDA Margins (1) CLARIANT COLOR: TRANSFORMATIONAL ACQUISITION ($ in millions) (1) Financial information is pro forma to include a full year of Clariant Color business ($ millions) Initial Synergy Estimate 2021 Synergy Realization Total Synergies Expected Administrative $ 18 $ 29 $ 40 Sourcing 24 20 24 Operational 18 5 21 Total Synergies $ 60 $ 54 $ 85 CLARIANT COLOR INTEGRATION & COST SYNERGIES UPDATE 11 • Integration going extremely well: synergy target increased to $85 million at December 9th Investor Day • Relentless focus on guiding principles of safety first, employee collaboration and exceeding customer expectations • Future revenue synergies are not part of these estimates and represent additional growth over the long term SUSTAINABILITY FOR A BETTER TOMORROW 12 • Revenue from sustainable solutions grew 16% in 2021 and expected to grow 8-12% in 2022 as our innovation efforts and collaboration with customers accelerates • Investments centered around innovation and global sustainability megatrends o Enabling a circular economy – Technologies that allow for increased use of post-consumer recycled (PCR) material and improve recyclability of plastics o Light-weighting – Composites and CAI applications to reduce weight and material requirements, which minimize energy and carbon emissions o Eco-Conscious – Health and human safety applications as well as Avient’s alternative materials to replace lead, PVC, halogens, BPA and other less eco-friendly options 12 *Avient Sustainable Solutions definitions aligned with FTC 2012 Guide for the Use of Environmental Marketing Claims (“Green Guides”) **2020 is Pro Forma to include full year of the Clariant Color business 12 2016 2017 2018 2019 2020PF** 2021 $405M $455M $550M $790M Revenue From Sustainable Solutions* 2016-2021 $915M $340M PEOPLE C U L T U R E I S E V E R Y T H I N G Community Service 7x Safer than Industry Average World-Class Safety Leadership Development Over $16 million raised since 2010 Diversity & Inclusion 13 Q4 2020 $997 $80 Sustainable Solutions 23 12% 8 Healthcare 53 43% 9 Composites 7 22% 2 Growth in Asia / LATAM 14 10% 3 Other 118 23% 2 Sub-total $1,212 22% $104 Wage Inflation and Overtime (11) Other Supply Chain Costs (4) Synergies 9 Incentives, FX, Other Employee Costs (10) (13) Q4 2021 $1,202 21% $85 Q4 2021 SALES AND OPERATING INCOME (TOTAL COMPANY) 14 Sales Growth Rate Adjusted Operating Income$ millions Adjusted EBITDA Q4 EBITDA BRIDGE 15 Price increases more than offsets raw material and supply chain impacts Q4 2020 $ 118 Demand - $ millions CAI: Price / Mix 62 Inflation (45) SEM: Price / Mix 25 Inflation (20) Distribution: Price / Mix 114 Inflation (109) Net Price Benefit 27 Wage Inflation and Overtime (11) Other Supply Chain Costs (4) Synergies 9 Incentives, FX, Other Employee Costs (13) Q4 2021 $ 126 Transportation (5)$ Outdoor High Performance (3) Other 8 Total Demand - Q4 2021 SEGMENT PERFORMANCE 16 CAI $526 $581 Sales ($ in millions) SEM Distribution $58 $61 Operating Income + 11% + 6% $305 $425 Sales $18 $22 Operating Income + 39% + 22% (1) $191 $228 Sales $30 $29 Operating Income + 19% - 3% 2022 O U TLO O K REVENUE GROWTH DRIVERS Growth Drivers Long-Term Growth Rate 2022E Growth Rate Sustainable Solutions 8–12% 12% Healthcare 8–10% 10% Composites 10% 3% Asia / LATAM 5% 6% Other (GDP growth) 2–3% 2–3% Avient 6.5% 6% 18 Excluding Outdoor High Performance 13% (7.5% excl.
A reconciliation of these measures to their most directly comparable GAAP measures is provided in the tables below. 1 Reconciliation of EBITDA by Segment Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 2019 2018 Sales: Color, Additives and Inks $ 581.3 $ 525.8 $ 2,401.6 $ 1,502.9 $ 1,003.8 $ 1,046.5 Specialty Engineered Materials 228.2 190.6 918.9 708.8 745.7 645.8 Distribution 425.0 305.1 1,630.9 1,110.3 1,192.2 1,265.4 Corporate and eliminations (33.0) (24.5) (132.6) (79.9) (79.0) (76.7) Sales $ 1,201.5 $ 997.0 $ 4,818.8 $ 3,242.1 $ 2,862.7 $ 2,881.0 Operating income: Color, Additives and Inks $ 61.2 $ 57.5 $ 303.1 $ 180.8 $ 147.4 $ 158.5 Specialty Engineered Materials 28.8 30.4 132.0 94.4 83.7 72.3 Distribution 21.7 18.0 93.2 69.5 75.4 71.5 Corporate and eliminations (37.7) (40.9) (147.1) (155.4) (149.7) (123.7) Operating Income $ 74.0 $ 65.0 $ 381.2 $ 189.3 $ 156.8 $ 178.6 Items Below Operating Income in Corporate: Other income, net $ (5.4) $ 11.7 $ (1.3) $ 24.3 $ 12.1 $ (12.9) Depreciation & amortization: Color, Additives and Inks $ 26.4 $ 27.3 $ 105.7 $ 75.1 $ 42.7 $ 44.3 Specialty Engineered Materials 8.0 7.4 31.7 30.0 29.5 23.2 Distribution 0.2 0.3 0.8 0.7 0.5 0.7 Corporate and eliminations 3.6 2.8 7.7 9.3 5.4 4.4 Depreciation & Amortization $ 38.2 $ 37.8 $ 145.9 $ 115.1 $ 78.1 $ 72.6 EBITDA: Color, Additives and Inks $ 87.6 $ 84.8 $ 408.8 $ 255.9 $ 190.1 $ 202.8 Specialty Engineered Materials 36.8 37.8 163.7 124.4 113.2 95.5 Distribution 21.9 18.3 94.0 70.2 75.9 72.2 Corporate and eliminations (39.5) (26.4) (140.7) (121.8) (132.2) (132.2) EBITDA $ 106.8 $ 114.5 $ 525.8 $ 328.7 $ 247.0 $ 238.3 EBITDA as a % of sales: Color, Additives and Inks 15.1 % 16.1 % 17.0 % 17.0 % 18.9 % 19.4 % Specialty Engineered Materials 16.1 % 19.8 % 17.8 % 17.6 % 15.2 % 14.8 % Distribution 5.2 % 6.0 % 5.8 % 6.3 % 6.4 % 5.7 % 2 Reconciliation of Pro Forma Sales, Operating Income and EBITDA - Color, Additives and Inks Year Ended December 31, 2020 2019 2018 Sales: Color, Additives and Inks $ 1,502.9 $ 1,003.8 $ 1,046.5 Clariant Color pro forma adjustments(1) 540.4 1,118.6 1,209.8 Pro forma sales $ 2,043.3 $ 2,122.4 $ 2,256.3 Operating income: Color, Additives and Inks $ 180.8 $ 147.4 $ 158.5 Clariant Color pro forma adjustments(1) 45.0 72.9 80.3 Pro forma operating income $ 225.8 $ 220.3 $ 238.8 Depreciation & amortization: Color, Additives and Inks $ 75.1 $ 42.7 $ 44.3 Clariant Color pro forma adjustments(1) 30.1 60.3 61.2 Pro forma depreciation & amortization $ 105.2 $ 103.0 $ 105.5 EBITDA Color, Additives and Inks $ 255.9 $ 190.1 $ 202.8 Clariant Color pro forma adjustments(1) 75.1 133.2 141.5 Pro forma EBITDA $ 331.0 $ 323.3 $ 344.3 Pro forma EBITDA as a % of Sales 16.2 % 15.2 % 15.3 % Three Months Ended December 31, Year Ended December 31, Reconciliation to Adjusted EBITDA: 2021 2020 2021 2020 2019 Net income from continuing operations – GAAP $ 28.9 $ 74.7 $ 230.6 $ 133.8 $ 75.7 Income tax expense (benefit) 22.2 (17.3) 74.0 5.2 33.7 Interest expense 17.5 19.3 75.3 74.6 59.5 Depreciation and amortization from continuing operations 38.2 37.8 145.9 115.0 78.1 EBITDA $ 106.8 $ 114.5 $ 525.8 $ 328.6 $ 247.0 Special items, before tax 20.6 4.2 57.1 66.2 61.7 Interest expense included in special items — — — (10.1) — Depreciation and amortization included in special items (1.6) (0.70) (1.7) (3.2) — Adjusted EBITDA $ 125.8 $ 118.0 $ 581.2 $ 381.6 $ 308.7 Clariant Color pro forma adjustments(1) — 33.4 — 75.1 133.2 Pro forma adjusted EBITDA $ 125.8 $ 113.1 $ 581.2 $ 456.7 $ 441.9 Free Cash Flow Calculation December 31, 2021 Cash provided by operating activities 233.8 Capital expenditures (100.6) Free cash flow $ 133.2 3 Net Debt Calculation December 31, 2021 Total long-term debt, net $ 1,850.3 Unamortized discount and debt issuance cost 14.4 Short-term and current portion of long term debt 8.6 Total debt $ 1,873.3 Cash (601.2) Net debt $ 1,272.1 Three Months Ended December 31, 2021 Reconciliation of Adjusted Earnings per Share: Avient Special Items Adjusted Avient Sales $ 1,201.5 $ — $ 1,201.5 Operating income $ 74.0 $ 11.2 $ 85.2 Interest expense, net (17.5) — (17.5) Other income, net (5.4) 9.4 4.0 Income taxes (22.2) 3.4 (18.8) Net income from continuing operations attributable to Avient shareholders $ 29.8 $ 24.0 $ 53.8 Weighted average diluted shares 92.1 Adjusted EPS - excluding special items $ 0.58 Reconciliation of Adjusted EBITDA from continuing operations: Operating income and other income, net $ 68.6 $ 20.6 $ 89.2 Depreciation and amortization 38.2 (1.6) 36.6 EBITDA from continuing operations $ 106.8 $ 19.0 $ 125.8 EBITDA as a % of sales 10.5 % Three Months Ended December 31, 2020 Reconciliation of Adjusted Earnings per Share: Avient Special Items Adjusted Avient Sales $ 997.0 $ — $ 997.0 Operating income $ 65.0 $ 14.6 $ 79.6 Interest expense, net (19.3) — (19.3) Other income, net 11.7 (10.4) 1.3 Income taxes 17.3 (30.9) (13.6) Net income from continuing operations attributable to Avient shareholders $ 74.2 $ (26.7) $ 47.5 Weighted average diluted shares 92.1 Adjusted EPS - excluding special items $ 0.52 Reconciliation of Adjusted EBITDA from continuing operations: Operating income and other income, net $ 76.7 $ 4.2 $ 80.9 Depreciation and amortization 37.8 (0.7) 37.1 EBITDA from continuing operations $ 114.5 $ 3.5 $ 118.0 EBITDA as a % of sales 11.8 % (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 4 Year Ended December 31, 2020 Reconciliation of Pro Forma Adjusted Earnings per Share: Avient Special Items Adjusted Avient Clariant Color Pro Forma Adjustments(1) Pro Forma Adjusted Avient Sales $ 3,242.1 $ — $ 3,242.1 $ 540.4 $ 3,782.5 Operating income $ 189.3 $ 73.7 $ 263.0 $ 45.0 $ 308.0 Interest expense, net (74.6) 10.1 (64.5) (18.1) (82.6) Other income, net 24.3 (17.6) 6.7 — 6.7 Income taxes (5.2) (41.4) (46.6) (6.2) (52.8) Net income attributable to noncontrolling interests (1.8) — (1.8) — (1.8) Net income from continuing operations attributable to Avient shareholders $ 132.0 $ 24.8 $ 156.8 $ 20.7 $ 177.5 Weighted average diluted shares 90.6 Impact to diluted shares from January 2020 equity offering 1.5 Pro forma weighted average diluted shares 92.1 Pro forma adjusted EPS $ 1.93 Reconciliation of Pro Forma Adjusted EBITDA from continuing operations: Operating income and other income, net $ 213.6 $ — $ 56.1 $ 269.7 $ 45.0 $ — $ 314.7 Depreciation and amortization 115.1 (3.2) 111.9 30.1 142.0 EBITDA from continuing operations $ 328.7 $ 52.9 $ 381.6 $ 75.1 $ 456.7 EBITDA as a % of sales 12.1 % Year Ended December 31, 2019 Reconciliation of Pro Forma Adjusted Earnings per Share: Avient Special Items Adjusted Avient Clariant Color Pro Forma Adjustments(1) Pro Forma Adjusted Avient Sales $ 2,862.7 $ — $ 2,862.7 $ 1,118.6 $ 3,981.3 Operating income $ 156.8 $ 71.7 $ 228.5 $ 72.9 $ 301.4 Interest expense, net (59.5) — (59.5) (33.4) (92.9) Other income, net 12.1 (10.0) 2.1 — 2.1 Income taxes (33.7) (5.9) (39.6) (9.1) (48.7) Net income attributable to noncontrolling interests (0.2) — (0.2) — (0.2) Net income from continuing operations attributable to Avient shareholders $ 75.5 $ 55.8 $ 131.3 $ 30.4 $ 161.7 Weighted average diluted shares 77.7 Impact to diluted shares from January 2020 equity offering 15.3 Pro forma weighted average diluted shares 93.0 Pro forma adjusted EPS $ 1.74 Reconciliation of Pro Forma Adjusted EBITDA from continuing operations: Operating income and other income, net $ 168.9 $ — $ 61.7 $ 230.6 $ 72.9 $ — $ 303.5 Depreciation and amortization 78.1 — 78.1 60.3 138.4 EBITDA from continuing operations $ 247.0 $ 61.7 $ 308.7 $ 133.2 $ 441.9 EBITDA as a % of sales 11.1 % (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 5 Three Months Ended March 31, 2021 Reconciliation to Condensed Consolidated Statements of Income GAAP Results Special Items Adjusted Results Operating income $ 120.4 $ 2.4 $ 122.8 Income from continuing operations before income taxes $ 102.6 $ 2.4 $ 105.0 Income tax expense - GAAP (22.9) — (22.9) Income tax impact of special items — (0.9) (0.9) Tax adjustments — 1.1 1.1 Net income attributable to noncontrolling interests (0.4) — (0.4) Net income from continuing operations attributable to Avient shareholders $ 79.3 $ 2.6 $ 81.9 Net income / EPS $ 0.86 0.03 $ 0.89 Weighted-average diluted shares 92.2 92.2 92.2 Year Ended December 31, 2021 Reconciliation to Condensed Consolidated Statements of Income GAAP Results Special Items Adjusted Results Operating income $ 381.2 $ 47.8 $ 429.0 Income from continuing operations before income taxes $ 304.6 $ 57.1 $ 361.7 Income tax expense - GAAP (74.0) — (74.0) Income tax impact of special items — (13.0) (13.0) Tax adjustments — 5.9 5.9 Net income attributable to noncontrolling interests 0.2 — 0.2 Net income from continuing operations attributable to Avient shareholders $ 230.8 $ 50.0 $ 280.8 Net income / EPS $ 2.51 0.54 $ 3.05 Weighted-average diluted shares 92.1 92.1 92.1 Three Months Ended December 31, 2019 Year Ended December 31, 2019 Reconciliation of pro forma sales, operating income, and EBITDA: CAI Clariant Color Pro Forma Adjustments(1) Pro Forma CAI CAI Clariant Color Pro Forma Adjustments(1) Pro Forma CAI Sales $ 226.7 $ 263.5 $ 490.2 $ 1,003.8 $ 1,118.6 $ 2,122.4 Operating income $ 27.2 $ 13.2 $ 40.4 $ 147.4 $ 72.9 $ 220.3 EBITDA $ 37.9 $ 28.3 $ 66.2 $ 190.1 $ 133.2 $ 323.3 EBITDA as a % of sales 13.5 % 15.2 % (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 6 Year Ended December 31, 2020 Reconciliation of pro forma sales, operating income, and EBITDA: CAI Clariant Color Pro Forma Adjustments(1) Pro Forma CAI Sales $ 1,502.9 $ 540.4 $ 2,043.3 Operating income $ 180.8 $ 45.0 $ 225.8 EBITDA $ 255.9 $ 75.1 $ 331.0 EBITDA as a % of sales 16.2 % (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 7 AVNT Q4 2021 Earnings Presentation.pdf AVNT Q4 2021 Earnings Presentation.pdf 2.7.22 632pm IR Deck - AVNT-2021.12.31.pdf
https://www.avient.com/sites/default/files/2020-10/excelite-im-product-bulletin-americas-1.pdf
Utilized for weight reduction, sink mark removal or dimensional stability.
PP, PE, PS, PVC No Good Foam PP Better, larger cells with lower cell density in standard IM processes; suitable for cell nucleation in structural foam processing PP, PE, PS, PVC Yes Better FA-110 Best cell structure with higher cell density; provides better structural integrity and lower density in standard IM processes PP, PE, PS, PVC Yes Best KEY CHARACTERISTICS Excelite IM formulations provide injection molders with: • Material density and weight reduction • High concentration of active CFA • Improved distribution of CFA into polymer matrix • High cell density with tight cell structure • Control over consistency and accuracy • Reduced sink marks • Ability to improve flow of material • Cycle time reduction • Improved dimensional stability • Improved thermal insulation EXCELITE IM – PRODUCT FORMULATIONS www.avient.com Copyright © 2020, Avient Corporation.