https://www.avient.com/sites/default/files/resources/PolyOne%2520IR%2520Presentation%2520-%2520Goldman%2520Sachs%2520Basic%2520Materials%2520Conference%2520-%2520May%25202016.pdf
PolyOne Corporation Page 1
PolyOne Investor Presentation
Goldman Sachs Basic Materials Conference
May 2016
PolyOne Corporation Page 2
Forward-Looking Statements
In this presentation, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995.
Adjusted EPS is calculated as follows:
Adjusted EPS 2006Y* 2007Y* 2008Y* 2009Y* 2010Y 2011Y 2012Y 2013Y 2014Y 2015Y
Net income (loss) attributable to PolyOne common
shareholders $ 130.9 $ 40.9 $ (417.0) $ 106.7 $ 152.5 $ 153.4 $ 53.3 $ 94.0 $ 78.0 $ 144.6
Joint venture equity earnings, after tax (68.5) (26.1) (20.8) (19.0) (14.7) (3.7) - - - -
Special items, after tax(1) (51.2) 10.7 457.2 (75.9) (72.5) (72.8) 36.2 32.6 90.5 28.9
Adjusted net income $ 11.2 $ 25.5 $ 19.4 $ 11.8 $ 65.3 $ 76.9 $ 89.5 $ 126.6 $ 168.5 $ 173.5
Diluted shares 92.8 93.1 92.7 93.4 96.0 94.3 89.8 96.5 93.5 88.7
Adjusted EPS $ 0.12 $ 0.27 $ 0.21 $ 0.13 $ 0.68 $ 0.82 $ 1.00 $ 1.31 $ 1.80 $ 1.96
Adjusted EPS Q1 2009* Q2 2009* Q3 2009* Q4 2009* Q1 2010 Q2 2010 Q3 2010 Q4 2010
Net income attributable to PolyOne common shareholders $ 3.3 $ 1.3 $ 51.3 $ 50.8 $ 20.1 $ 44.7 $ 0.1 $ 87.6
Joint venture equity earnings, after tax (8.2) (5.8) (3.0) (2.0) (0.5) (4.5) (6.2) (3.5)
Special items, after tax(1) (10.2) 9.2 (36.9) (38.0) (3.8) (22.1) 25.4 (72.0)
Adjusted net (loss) income $ (15.1) $ 4.7 $ 11.4 $ 10.8 $ 15.8 $ 18.1 $ 19.3 $ 12.1
Diluted shares 92.2 93.5 93.9 94.4 95.3 96.3 96.3 97.4
Adjusted EPS $ (0.16) $ 0.05 $ 0.12 $ 0.11 $ 0.17 $ 0.19 $ 0.20 $ 0.12
Adjusted EPS Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Net income attributable to PolyOne common shareholders $ 106.0 $ 23.1 $ 16.0 $ 8.3 $ 15.3 $ 18.4 $ 19.4 $ 0.2
Joint venture equity earnings, after tax (3.7) - - - - - - -
Special items, after tax(1) (81.3) 1.3 2.8 4.4 6.2 8.9 5.4 15.7
Adjusted net income $ 21.0 $ 24.4 $ 18.8 $ 12.7 $ 21.5 $ 27.3 $ 24.8 $ 15.9
Diluted shares 96.4 95.5 94.0 91.9 90.7 90.7 90.2 90.5
Adjusted EPS $ 0.22 $ 0.26 $ 0.20 $ 0.14 $ 0.24 $ 0.30 $ 0.28 $ 0.18
2
Adjusted EPS Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014
Net income (loss) attributable to PolyOne common
shareholders $ 11.2 $ 38.6 $ 23.2 $ 21.0 $ 29.4 $ 30.9 $ 32.3 $ (14.6)
Special items, after tax(1) 17.7 (2.0) 12.3 4.6 12.5 17.4 13.1 47.5
Adjusted net income $ 28.9 $ 36.6 $ 35.5 $ 25.6 $ 41.9 $ 48.3 $ 45.4 $ 32.9
Diluted shares 92.8 99.1 98.1 97.2 95.7 94.3 93.1 91.3
Adjusted EPS $ 0.31 $ 0.37 $ 0.36 $ 0.26 $ 0.44 $ 0.51 $ 0.49 $ 0.36
Adjusted EPS Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Net income attributable to PolyOne common shareholders $ 30.2 $ 66.8 $ 44.5 $ 3.1 $ 39.1
Special items, after tax(1) 11.4 (15.9) 3.0 30.4 9.1
Adjusted net income $ 41.6 $ 50.9 $ 47.5 $ 33.5 $ 48.2
Diluted shares 90.1 89.8 88.4 86.6 85.5
Adjusted EPS $ 0.46 $ 0.57 $ 0.54 $ 0.39 $ 0.56
Adjusted operating margin is calculated as follows:
Adjusted operating margin Q1 2009* Q2 2009* Q3 2009* Q4 2009* YTD 2009* Q1 2010 Q2 2010 Q3 2010 Q4 2010 YTD 2010
Operating Income $ 9.9 $ 17.1 $ 57.9 $ 52.2 $ 137.1 $ 32.3 $ 58.6 $ 42.0 $ 26.3 $ 159.2
Special items (1) (1.3) 4.6 (27.5) (24.5) (48.7) - (14.5) 5.5 4.2 (4.8)
Joint venture equity earnings (12.8) (9.0) (4.8) (3.1) (29.7) (0.8) (7.1) (9.7) (5.5) (23.1)
Adjusted operating (loss) income $ (4.2) $ 12.7 $ 25.6 $ 24.6 $ 58.7 $ 31.5 $ 37.0 $ 37.8 $ 25.0 $ 131.3
Sales $ 463.4 $ 496.5 $ 548.3 $ 552.5 $ 2,060.7 $ 604.0 $ 666.2 $ 650.7 $ 585.3 $ 2,506.2
Operating Margin (0.9)% 2.6% 4.7% 4.5% 2.8% 5.2% 5.6% 5.8% 4.3% 5.2%
Adjusted operating margin Q1 2011 Q2 2011 Q3 2011 Q4 2011 YTD 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 YTD 2012
Operating income (loss) $ 173.4 $ 42.4 $ 33.4 $ (46.2) $ 203.0 $ 37.4 $ 43.3 $ 43.5 $ 13.3 $ 137.5
Special items (1) (127.2) 2.7 4.9 72.9 (46.7) 8.5 11.8 8.3 25.3 53.9
Joint venture equity earnings (5.7) - - - (5.7) - - - - -
Adjusted operating income $ 40.5 $ 45.1 $ 38.3 $ 26.7 $ 150.6 $ 45.9 $ 55.1 $ 51.8 $ 38.6 $ 191.4
Sales $ 682.8 $ 723.4 $ 694.0 $ 609.2 $ 2,709.4 $ 745.5 $ 756.6 $ 707.7 $ 651.0 $ 2,860.8
Operating Margin 5.9% 6.2% 5.5% 4.4% 5.6% 6.2% 7.3% 7.3% 5.9% 6.7%
3
Adjusted operating margin Q1 2013 Q2 2013 Q3 2013 Q4 2013 YTD 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 YTD 2014
Operating income (loss) $ 40.5 $ 80.7 $ 61.6 $ 48.7 $ 231.5 $ 56.4 $ 49.4 $ 63.6 $ (14.3) $ 155.1
Special items (1) 16.6 (5.2) 10.8 7.8 30.0 22.9 39.8 22.0 80.2 164.9
Adjusted operating income $ 57.1 $ 75.5 $ 72.4 $ 56.5 $ 261.5 $ 79.3 $ 89.2 $ 85.6 $ 65.9 $ 320.0
Sales $ 801.1 $ 1,037.6 $ 1,008.9 $ 923.6 $ 3,771.2 $ 1,002.3 $ 1,005.5 $ 958.4 $ 869.3 $ 3,835.5
Operating Margin 7.1% 7.3% 7.2% 6.1% 6.9% 7.9% 8.9% 8.9% 7.6% 8.3%
Adjusted operating margin Q1 2015 Q2 2015 Q3 2015 Q4 2015 YTD 2015 Q1 2016
Operating income $ 70.1 $ 80.3 $ 69.2 $ 31.3 $ 250.9 $ 71.3
Special items (1) 9.3 11.9 18.7 31.4 71.3 13.8
Adjusted operating income $ 79.4 $ 92.2 $ 87.9 $ 62.7 $ 322.2 $ 85.1
Sales $ 873.1 $ 887.1 $ 841.6 $ 775.8 $ 3,377.6 $ 847.0
Operating Margin 9.1% 10.4% 10.4% 8.1% 9.5% 10.0%
Adjusted gross margin is calculated as follows:
(In millions) Twelve Months Ended December 31, 2015
Gross margin - GAAP $ 681.5
Special items in gross margin(1) 39.7
Gross margin before special items $ 721.2
Specialty operating income mix percentage is calculated as follows:
Platform operating income mix percentage 2005* 2010* 2015
Color, Additives and Inks $ 4.3 $ 37.7 $ 135.4
Specialty Engineered Materials 0.4 49.7 79.6
Designed Structures and Solutions - - 13.8
Specialty Platform $ 4.7 $ 87.4 $ 228.8
Performance Products and Solutions 75.7 54.0 57.4
Distribution 19.5 42.0 68.0
Joint ventures 91.9 18.9 —
Corporate and eliminations (51.5) (27.7) (103.3)
Operating income GAAP $ 140.3 $ 174.6 $ 250.9
Less: Corporate operating expense 51.5 27.7 103.3
Operating income excluding Corporate $ 191.8 $ 202.3 $ 354.2
Specialty platform operating mix percentage 2% 43% 65%
4
Adjusted EBITDA and net debt to adjusted EBITDA is calculated as follows:
(In millions) Q2 2015 Q3 2015 Q4 2015 Q1 2016
Trailing Twelve Months
Ended March 31, 2016
Income (loss) from continuing operations, before income taxes $ 63.4 $ 51.4 $ (0.4) $ 57.0 $ 171.4
Interest expense, net 16.2 16.2 15.6 14.6 62.6
Depreciation and amortization 25.0 28.3 25.9 27.2 106.4
Special items, impact on income (loss) from continuing operations
before income taxes(1) 11.9 18.6 47.8 13.6 91.9
Accelerated depreciation included in special items (0.2) (4.3) (1.6) (2.8) (8.9)
Adjusted EBITDA $ 116.3 $ 110.2 $ 87.3 $ 109.6 $ 423.4
Short-term and current portion of long-term debt $ 18.6
Long-term debt 1,174.3
Less: Cash and cash equivalents (155.4)
Net Debt 1,037.5
Net Debt/TTM Adjusted EBITDA 2.5
* Historical results are shown as presented in prior filings and have not been updated to reflect subsequent changes in accounting principal, discontinued operations or the related resegmentation
1) Special items are a non-GAAP financial measure and are used to determine adjusted earnings.
https://www.avient.com/news/avient-s-new-recycled-tpe-grades-support-greater-use-recycled-materials-automotive-vehicles
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Avient’s New Recycled TPE Grades Support Greater Use of Recycled Materials in Automotive Vehicles
Overall, the new reSound REC AF 7210 TPE grades from Avient contain 51-59% recycled content, with a minimum of 37% from PCR sources, including closed-loop feedstock.
They offer an 8-18% reduction in product carbon footprint1 (PCF) compared to virgin TPE grades.
https://www.avient.com/news/avient-launches-automotive-specific-grades-within-its-resound-rec-recycled-content-tpes-portfolio
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Avient Launches Automotive-Specific Grades within its reSound™ REC Recycled Content TPEs Portfolio
New reSound™ REC TPEs from Avient offer sustainable alternatives to traditional materials for automotive interior applications.
The new grades for automotive interior applications are formulated with post-consumer recycled (PCR) content, offering a more sustainable TPE option with comparable performance to traditional TPEs.
https://www.avient.com/news/avient-extends-recycled-tpe-portfolio-grades-containing-60-recycled-content-supporting-global-customers
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Avient Extends Recycled TPE Portfolio with Grades Containing up to 60% Recycled Content, Supporting Global Customers
Avient’s new reSound™ REC GP 7820 TPE grades highlighted at Fakuma 2024 can be used for overmolded components in consumer electronics, grips for razors and personal care products, and handles for bicycles and power tools
The new reSound REC GP 7820 TPE grades are available in hardnesses ranging from 40 – 80 Shore A.
https://www.avient.com/sites/default/files/2020-11/gls-acqua-plose-case-study.pdf
When closurelogic
turned to Avient for material selection help, the team
developed a GLS™ TPE (thermoplastic elastomer) based
on a stable, low migration TPE with a lower processing
temperature compared to competitive TPEs, thus
resulting in even fewer volatiles.
Lined with TPE, closurelogic
caps have outstanding tightness for sealability of both
one-way and refillable bottles, while maintaining good
removal torque.
Avient offers GLS TPE cap liner formulations that are
suitable for aqueous, acidic and low alcohol beverages
processed under ambient, pasteurized
or hot fill conditions.
https://www.avient.com/sites/default/files/2020-09/chemically-compatible-tpes-for-cosmetic-pkg-application-bulletin.pdf
IMPROVE FINISH AND PERFORMANCE
CHEMICALLY COMPATIBLE
TPES FOR COSMETIC
PACKAGING
Functionality and differentiation are key when designing cosmetic packaging.
Ability to add surface texture – Our injection
molded TPEs are easily processed in commonly
used, complex molds.
Simpler production process – Overmolding
Versaflex PKG TPEs is an effective method for
simplifying a two-step process into a single step
https://www.avient.com/sites/default/files/2024-06/reSound REC TPEs for Automotive Interiors _AF 7210 series_ Product Bulletin.pdf
reSound™ REC Recycled Content TPEs – AF 7210 Series
Recycled TPEs for Automotive Interiors
Sustainability continues to be a key driver in the
automotive industry.
They provide comparable performance to virgin
TPEs, with good UV stability and meet vehicle
interior air quality (VIAQ) standards for odor
and fogging.
KEY CHARACTERISTICS
• Contains 51–59% recycled content, with a
minimum of 37% from PCR sources, including
closed-loop feedstock
• Provides comparable performance to virgin
TPEs
- Good UV stability
- Meets VIAQ standards for odor and fogging
• Supports compliance with the ELV Directive
• Provides a more sustainable alternative to
virgin TPE grades and supports a reduction in
product carbon footprint (PCF)
• Can be injection molded and overmolded
onto PP
KEY APPLICATIONS
The reSound REC TPEs – AF 7210 series has
been developed for use in automotive interior
applications such as cup holder mats, phone
charging mats, peddle covers, boot/trunk lining,
HVAC flaps and other center console parts.
https://www.avient.com/sites/default/files/2024-08/Versaflex-HVAC Thumb Wheel and Vent-Case study Snapshot_0826.pdf
HVAC Thumb Wheel and Vent
NEW ENERGY
VEHICLE OEM
H V A C T H U M B W H E E L & V E N T
• Reliable sealing performance
• Excellent abrasion resistance
• Good bonding with PA6
• Formulated a TPE with good sealing and
insulation for gaskets within the vent to
minimize air and moisture leaks, improving
the overall efficiency and performance of the
HVAC system
• Provided a solution that resisted wear,
abrasion, and impact to enhance the
longevity of components
Versaflex Thermoplastic Elastomers
KEY REQUIREMENTS
WHY AVIENT?
LEARN MORE
https://www.avient.com/products/thermoplastic-elastomers/versaflex-thermoplastic-elastomers
Slide 1: New energy vehicle oem
https://www.avient.com/news/bio-based-tpe-biopharmaceutical-tubing-added-avient-s-sustainable-healthcare-solutions
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Bio-Based TPE for Biopharmaceutical Tubing Added to Avient’s Sustainable Healthcare Solutions
Avient’s new Versaflex™ HC BIO TPE offers a sustainable alternative for biopharma tubing applications.
CLEVELAND – July 10, 2023 – Today, Avient Corporation announced the availability of its newest bio-derived healthcare solution, Versaflex™ HC BIO thermoplastic elastomer (TPE).
https://www.avient.com/sites/default/files/2020-12/portable-speakers-bulletin-selector-guide-2020.pdf
Versaflex™ TPE materials offer great compression set properties for gaskets that
need a long lasting seal, and also create durable speaker skins with a silky feel.
These TPEs meet
industry ingress protection (IP) standards, are overmoldable directly onto common speaker housing
substrates, and deliver more design freedom than you’ve ever thought possible.
Versaflex TPEs safely deliver on all of these requirements,
while also accelerating production speed and reducing manufacturing cost.