https://www.avient.com/sites/default/files/2023-03/AVNT Mar 2023 Earnings Presentation.pdf
Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: • Disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; • The effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; • The current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows, including, without limitation, any supply chain and logistics issues; • Changes in laws and regulations regarding plastics in jurisdictions where we conduct business; • Fluctuations in raw material prices, quality and supply, and in energy prices and supply; • Production outages or material costs associated with scheduled or unscheduled maintenance programs; • Unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; • Our ability to achieve strategic objectives and successfully integrate acquisitions, including Avient Protective Materials (APM); • An inability to raise or sustain prices for products or services; • Our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; • Information systems failures and cyberattacks; • Amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions; and • Other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates, changes in the rate of inflation and any recessionary conditions Use of Non-GAAP Measures This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures.
EPS (1) $0.14 $2.67 $3.04 2006 2018 2022PF TOP-TIER SUSTAINABILITY PERFORMANCE AND RECOGNITION Industry Sustainability Standards 90th percentile 84th ESG Ratings Performance 3 1 4 14 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 $17 million raised since 2010 Diversity & Inclusion 15 2022 RE SU LT S Q4 EBITDA BRIDGE (PRO FORMA TOTAL COMPANY) 17 $ millions CAI: Price / Mix 42 Inflation (20) SEM: Price / Mix 14 Inflation (10) Net Price Benefit 26 Wage and Energy Inflation (13) Clariant Color Integration Synergies 4 Incentives, Other Employee Costs 21 FX (10) Q4 2022 $107 Adjusted EBITDA Q4 2021 $ 132 Demand (50) Russia Import Sales (3) • Demand contraction especially prevalent in EMEA and Asia • Pricing continues to cover inflation of raw materials, wages and energy PROVEN TRACK RECORD OF STRONG AND IMPROVING FREE CASH FLOW GENERATION 18 • Periods of economic weakness have driven higher levels of cash generation due to working capital management • Anticipate continued strong free cash flow generation and conversion despite global uncertainty 78% 78% 80% 80% 81% 78% 84% 83% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2014 2015 2016 2017 2018 2019 2020 2021 2022 0 50 100 150 200 250 300 350 400 F re e C as h F lo w C o n ve rs io n F re e C as h F lo w FCF $ AVNT FCF Conversion % S&P FCF Conversion % Note: Free cash flow conversion calculated as (Adjusted EBITDA – Capex) / Adjusted EBITDA. 2020 is pro forma for Clariant Color and 2022 is pro forma for Avient Protective Materials. $600 $592 2021 2022 $3.02 $3.04 2021 2022 FULL YEAR 2022 PERFORMANCE (TOTAL COMPANY PRO FORMA) 19 Sales Adjusted EBITDA $3,712 $3,653 2021 2022 -2% Adjusted EPS -1% + 1% (in millions) (in millions) (+4% excluding FX) (+5% excluding FX) (+9% excluding FX) FULL YEAR 2022 SEGMENT PERFORMANCE 20 CAI $2,402 $2,355 Sales ($ in millions) $409 $402 EBITDA SEM Pro Forma $1,308 $1,300 Sales $278 $272 EBITDA (+4% excluding FX) - 2% -1% (+5% excluding FX) - 2% (+4% excluding FX) - 2% (+2% excluding FX) PRO FORMA FULL YEAR EPS BRIDGE 21 Pro Forma 2021 Adjusted EPS 3.02$ Foreign Currency (0.23) Russia Import Sales (0.07) Outdoor High Performance (0.13) Color, Additives and Inks 0.18 Specialty Engineered Materials 0.24 Corporate Costs / Other 0.03 Pro Forma 2022 Adjusted EPS 3.04$ FULL YEAR EBITDA BRIDGE (PRO FORMA TOTAL COMPANY) 22 $ millions CAI: Price / Mix 247 Inflation (176) SEM: Price / Mix 121 Inflation (77) Net Price Benefit 115 Wage and Energy Inflation (47) Clariant Color Integration Synergies 23 Incentives, Other Employee Costs 43 FX (34) Full Year 2022 $592 Adjusted EBITDA Full Year 2021 $ 600 Demand (99) Russia Import Sales (9) • Demand primarily impacted by China lockdowns, 4th quarter industrywide destocking and declining consumer sentiment • Pricing outpaced inflation of raw materials, wages and energy 2023 G U IDA N CE $125 $530 Q1 FY $0.55 $2.40 Q1 FY 2023 GUIDANCE 24 Sales Adjusted EBITDA $845 $3,450 Q1 FY Adjusted EPS (in millions) (in millions) CASH FLOW / BALANCE SHEET 25 • IT investment to further integrate acquired businesses and capture operational efficiencies • Restructuring actions to streamline operations and improve profitability, primarily in Europe ($ millions) 2023E Cash Flow from Operating Activities 350$ Less: Run-Rate CapEx (110) CapEx for IT System Upgrade (25) CapEx for Restructuring (15) Total CapEx (150) Free Cash Flow 200$ Adjusted EBITDA 530$ Net Debt / Adjusted EBITDA 2.9x K E Y G R O W T H D R I V E R S A N D T R A N S F O R M E D P O R T F O L I O GROWTH DRIVERS: PROVEN SUCCESS 27 (1) Pro forma for the acquisition of Avient Protective Materials (APM) COMPOSITES $51 $84 $212 $668 2016 2018 2020 2022 Long Term Growth Rate 10% Organic CAGR 10% HEALTHCARE $108 $113 $231 $293 2016 2018 2020 2022 Long Term Growth Rate 8-10% Organic CAGR 11% ASIA/EMERGING REGIONS $265 $358 $726 $830 2016 2018 2020 2022 Long Term Growth Rate 5% Organic CAGR 12% $340 $455 $790 2016 2018 2020 2022 $1,175 SUSTAINABLE SOLUTIONS Long Term Growth Rate 8-12% Organic CAGR 11% (1) (1)(1) (Sales in $ millions) #1 Color Formulator Dyneema® - World’s Strongest Fiber™ #1 in Composites applications for outdoor high performance #1 in Performance Inks Customized solutions 140+ PhDs on staff Rapid development of innovative products Extensive patent (2,500+) portfolio 33% Vitality Index Better-positioned toward stable, high-growth end markets Consumer, packaging, healthcare and defense comprise nearly 60% of sales Agnostic to raw materials, helping all customers achieve their goals Broad portfolio of diversified sustainable solutions 90%+ of our innovation pipeline invested in sustainable solutions Long-term growth rate well above GDP with expectations of 8-12% LEVERAGING OUR TRANSFORMED PORTFOLIO 28 Healthcare 8% Packaging 24% Consumer 20% Building & Construction 10% Industrial 15% Transportation 9% Energy 4% Telecom. 4% 2022 PF $3.65B sales Defense 6% Leading Positions Sustainable SolutionsDiversified IndustriesSpecialty Formulator (1) 2022 Pro forma for the acquisition of Avient Protective Materials (2) 2020 Pro forma for the acquisition of Clariant Color (1)(2) (1) $340M $455M $790M 2016 2018 2020PF 2022PF $1,175M P EE R C O M PAR IS O N S AVIENT IS ASSET LIGHT Capex / Revenue 2023E (%) Avient Specialty Formulators Other Specialty / Chemical Companies Source: Peer data per Bloomberg as of February 13, 2023 Note: Avient reflects 2023 estimated revenue of $3,450 and estimated run-rate CAPEX of $110M. 30 3 2 3 3 4 4 3 4 5 5 5 6 7 7 A vi en t K W R P P G F U L A V Y R P M F M C H U N H X L C E E C L A S H S C L E M N FREE CASH FLOW CONVERSION Source: Peer data per Bloomberg as of February 13, 2023 Note: Free cash flow conversion calculated as (Adjusted EBITDA – Capex) / Adjusted EBITDA.
https://www.avient.com/sites/default/files/2021-06/fl.datasheet-belthose-reinforcement.pdf
FL.Datasheet Belt&Hose Reinforcement.indd FIBER OPTICAL CABLES MOVING HIGH PERFORMANCE FIBERS FORWARD Key Features • Flexible & lightweight reinforcements • Limited elongation & high strength • Various twisted & corded constructions available • Significantly reduce fraying during processing • Metered lengths available FIBER-LINE® FIBERS FOR BELT & HOSE REINFORCEMENT • Kevlar® Para-Aramid • Vectran® Liquid Crystal Polymer (LCP) • Carbon Fiber • PET Polyester • Technora® FIBER-LINE® PERFORMANCE ADDING COATINGS • Bondcoat™: Adhesion promotion to urethanes Overview • FIBER-LINE® produces various twisted and corded products for re-inforcement in drive/timing belts and hoses.
BELT & HOSE REINFORCEMENT FIBERS PROCESSES PRODUCTS MOVING HIGH PERFORMANCE FIBERS FORWARD This data is provided for informational purposes only, and does not constitute a specification.
For over 25 years, FIBER-LINE® has provided science- driven expertise that improves the performance and the end-use processing of high performance fibers.
https://www.avient.com/sites/default/files/2021-06/fl.datasheet-kevlarr-distribution-program.pdf
KEVLAR® DISTRIBUTION PROGRAM FIBERS PROCESSES PRODUCTS MOVING HIGH PERFORMANCE FIBERS FORWARD This data is provided for informational purposes only, and does not constitute a specification.
Chemical Resistance to Alkali: Strong alkalis will attack at high temperature or concentration.
For over 25 years, FIBER-LINE® has provided science- driven expertise that improves the performance and the end-use processing of high performance fibers.
https://www.avient.com/sites/default/files/2021-06/fl.datasheet-industrialfabricyarn.pdf
FIBER-LINE®’s marriage of high-performance fibers and additional processing create unique products that extend the life of our customer’s end use product. • Our yarn have been processed in a variety of different ways utilizing: Knitting, weaving, braiding.
INDUSTRIAL FABRIC YARN FIBERS PROCESSES PRODUCTS MOVING HIGH PERFORMANCE FIBERS FORWARD This data is provided for informational purposes only, and does not constitute a specification.
For over 25 years, FIBER-LINE® has provided science- driven expertise that improves the performance and the end-use processing of high performance fibers.
https://www.avient.com/sites/default/files/2021-06/fl.datasheet-extrusion.pdf
FL.Datasheet Extrusion .indd FIBER OPTICAL CABLES MOVING HIGH PERFORMANCE FIBERS FORWARD WHY FIBER-LINE® EXTRUSION?
Overview • FIBER-LINE® extrusion is the process of forming a polymer jacket of various thickness around a core of high-performance fibers • Fiber core can be parallel, twisted, or in rope form • Polymer jacket selected to optimize flex, chemical, temperature, & UV resistance Key Features • .50mm – 30.00mm size capability • Protect the core from mechanical, environmental, and chemical damage • Extend life of cable or strength member • Enhance flame & chemical resistance • Improve UV resistance • Many polymers available FIBER-LINE® FIBERS SUITABLE FOR EXTRUSION • Kevlar® Para-Aramid • Vectran® LCP • Zylon® PBO • Technora® • Carbon Fiber • Fiberglass FIBER-LINE® PRODUCTS ADDED BY EXTRUSION • Strength members • Tracer-wire • Micro-cable • Ruggedized cable Our Polymer Offering • EPC • ETFE • FEP • Hytrel • PFA • Polyethylene • Polypropylene • Polyurethane • PVC • PVDF EXTRUSION FIBERS PROCESSES PRODUCTS FIBER OPTICAL CABLES MOVING HIGH PERFORMANCE FIBERS FORWARD This data is provided for informational purposes only, and does not constitute a specification.
For over 25 years, FIBER-LINE® has provided science- driven expertise that improves the performance and the end-use processing of high performance fibers.
https://www.avient.com/sites/default/files/2020-08/composite-braces-case-study.pdf
They realized they might be able to shave off even more weight and improve performance by replacing the aluminum braces with a continuous-fiber composite if they could find a material with an exceptional strength- to-weight ratio, high flexural stiffness, good torsional rigidity, and superior fatigue strength.
THE IMPACT Finding ways to reduce weight is a high priority for vehicle manufacturers, because lighter weight corresponds to better fuel efficiency for gas-powered vehicles and more miles per charge for electric cars.
https://www.avient.com/sites/default/files/resources/Lockport_IATF%252016949%25202016_EXP%25205-2021.pdf
IATF Contracted Office: BSI Assurance UK Limited, registered in England under number 7805321 at 389 Chiswick High Road, London W4 4AL, UK.
IATF Contracted Office: BSI Assurance UK Limited, registered in England under number 7805321 at 389 Chiswick High Road, London W4 4AL, UK.
https://www.avient.com/sites/default/files/2024-01/ECCOH 5983 - Power Cable - Case Study Snapshot.pdf
CABLE MANUFACTURER J A C K E T F O R P O W E R C A B L E • High tear resistance > 11 N/mm • High ESCR performance • Cost efficient solution • Hot pressure resistance above 80°C • Provided a jacket solution that complies with the LTS1 requirement as per BS 7655-6.1 • Enabled use in armored cables operating at a maximum conductor temperature of 90°C • Supported customer to optimize processing of the new material ECCOH™ LSFOH 5983 Formulation KEY REQUIREMENTS WHY AVIENT?
AVIENT SOLUTION HIGH ESCR + TEAR RESISTANCE LEARN MORE Copyright © 2023, Avient Corporation.
https://www.avient.com/sites/default/files/2022-11/Bergamid_Battery Frame - Application Snapshot.pdf
SOLAR ENERGY COMPANY B A T T E R Y F R A M E • Good dimensional stiffness at high operating temperatures • Eco-conscious performance of a non-halogenated fire retardant • Easy processing • Met regulatory requirements of UL 746C for ultraviolet light, water, and immersion exposures • Delivered excellent high heat and eco- friendly performance of non-halogenated flame resistance • Offered prompt development and on-site technical services to accelerate the speed- to-market Bergamid™ FR Non-Halogen Flame Retardant Formulations KEY REQUIREMENTS HIGH HEAT FLAME RESISTANCE WHY AVIENT?
https://www.avient.com/sites/default/files/2020-12/automotive-ir-lens-of-sensor-case-study-brief.pdf
FAMOUS TIER 2 COMPANY A U T O M O T I V E L I G H T I N G I R L E N S O F S E N S O R • High heat resistance up to 203°C • PESU base resin with high IR transmission • Visible light cannot pass through • Used rich experience with different IR transmission materials to support customer’s material design and test method • Customized color for IR transmittance, which allowed IR to pass through the plastic lamp without accumulating high heat Edgetek™ ET9400-8005 IR Formulation KEY REQUIREMENTS WHY AVIENT?