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PolyOne Corporation Page 3 PolyOne Commodity to Specialty Transformation 2000-20052000-2005 2006 - 20092006 - 2009 2010 – 20152010 – 2015 2016 and beyond 2016 and beyond • Steve Newlin appointed, Chairman, • Steve Newlin appointed, Chairman, • Substantial EPS growth from $0.13 to all-time high of $1.96 • Substantial EPS growth from $0.13 to all-time high of $1.96 • Deliver consistent double digit annual EPS growth • Deliver consistent double digit annual EPS growth • Volume driven, commodity producer • Volume driven, commodity producer pp , , President and CEO • New leadership team appointed pp , , President and CEO • New leadership team appointed • Shift to faster growing, high margin, less cyclical end markets • Key acquisitions propel • Shift to faster growing, high margin, less cyclical end markets • Key acquisitions propel • Maintain >35% vitality index • Pursue strategic i iti th t • Maintain >35% vitality index • Pursue strategic i iti th t • Heavily tied to cyclical end markets • Heavily tied to cyclical end markets • Implementation of four pillar strategy • Implementation of four pillar strategy y q p p current and future growth, as well as margin expansion • Specialty mix expands y q p p current and future growth, as well as margin expansion • Specialty mix expands acquisitions that expand specialty offerings and geographic breadth acquisitions that expand specialty offerings and geographic breadth • Performance largely dependent on non- controlling joint ventures • Performance largely dependent on non- controlling joint ventures • Focus on value based selling, investment in commercial resources and innovation to drive transformation • Focus on value based selling, investment in commercial resources and innovation to drive transformation to 65% of Operating Income – strongest mix of earnings in history to 65% of Operating Income – strongest mix of earnings in history • Invest and grow current and next generation talent • Invest and grow current and next generation talent PolyOne Corporation Page 4 Confirmation of Our Strategy SpecializationSpecialization GlobalizationGlobalization Associates Operational Excellence Operational Excellence Commercial Excellence Commercial Excellence Th W ld’ P i P id f S i li d PolyOne Corporation Page 5 The World’s Premier Provider of Specialized Polymer Materials, Services and Solutions 27 Consecutive Quarters of EPS Growth PolyOne Corporation Page 6 PolyOne At A Glance 2015 Revenues: $3.4 Billion2015 Revenues: $3.4 Billion 2015 Revenues: $3.4 Billion2015 Revenues: $3.4 Billion Europe 13% Canada 7% Asia 7% Latin America 7% PP&S 20% United States Distribution 29% CAI 23% SEM %DSS End MarketsEnd Markets Adjusted EPSAdjusted EPS 66% 15%DSS 13% End MarketsEnd Markets $1.31 $1.80 Adjusted EPSAdjusted EPS Industrial 14% Packaging 13% Textiles 2% Transportation $1.96 $0 27 $0 21 $0.68 $0.82 $1.00 $1.31 Building & C Consumer Healthcare 11% 20% Wire & Cable 9% PolyOne Corporation Page 7 $0.12 $0.27 $0.21 $0.13 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Appliances 4% Construction 12% 10%Electrical & Electronics 5% Mix Shift Highlights Specialty Transformation Old PolyOne 100% Transformation 2020 Platinum Vision 80% nc om e* 40% 60% pe ra tin g In 80%+ 43% 65% 20% 40% % o f O 2%0% 2005 2010 2015 2020 Specialty OI $5M $87M $229M Platinum Vision PolyOne Corporation Page 8 *Operating Income excludes corporate charges and special items JV's Performance Products & Solutions Distribution Specialty Vision Color and Engineered Materials at the Heart of Specialty Transformation OPERATING MARGIN 16.7% 17.5% 20%+ COLOR, ADDITIVES AND INKS 15 8% 20%+ SPECIALTY ENGINEERED MATERIALS 9.7% 12.2% 14.7% 9.6% 9.3% 12.1% 14.7% 15.8% 1 7% 4.6% 5.1% 5.5% 7.2% 8.1% 3.4% 5.1% 8.0% 8.6% 1.7% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 Platinum Vision 1.1% 1.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 Platinum Vision YTD YTD PolyOne Corporation Page 9 Proof of Performance & 2020 Goals 2006 2Q 2016 2020 “Where we were” “Where we are” Platinum Vision 1) Operating Income %1) Operating Income % Specialty: Color, Additives & Inks 1.7% 18.0% 20%+ S i lt E i d M t i l 1 1% 14 9% 20%+Specialty Engineered Materials 1.1% 14.9% 20%+ Designed Structures & Solutions N/A 1.7% (TTM) 8 – 10% Performance Products & Solutions 5.5% 12.3% 12 – 14% Distribution 2.6% 6.5% 6.5 – 7.5% 2) Specialty Platform % of Operating Income 6.0% 61% 80%+ 3) ROIC* 5.0% 12.0% 15% 4) Adjusted EPS Growth N/A 11% Double Digit PolyOne Corporation Page 10 ) j % Expansion *ROIC is defined as TTM adjusted OI divided by the sum of average debt and equity over a 5 quarter period TPE’s & Film Therma-Tech™ & Sheet GEON™ Vinyl TPE + OnForce™ Gravi-Tech™ Polymer ColorantsTherma-Tech™ Film PolyOne Corporation Page 11Page 11 Target End Markets… Healthcare OnForce (SEM) Glasforms (SEM) TPE + OnForce (SEM) TPE Vibration Dampening (SEM/GLS) Source: Outdoor Industry Association TPE & Film (SEM + DSS) Thermoplastic Elastomers (SEM) TPE O F Glasforms (SEM) Polymer Colorants (CAI) Thermatech (SEM) TPE + OnForce (SEM) OnForce (SEM) Thermoplastic Elastomers (SEM) Sheet (DSS) (SEM) Glasforms (SEM) Polymer Colorants (CAI) PolyOne Corporation Page 12 Target End Markets… Outdoor High Performance Sound & Vibration Management Roof Systems Management Interior & Exterior Trim Interior Structural Components Fuel Handling Underhood Components g SystemsAir management Electronics & Cameras Structural Braces & Brackets Lighting Fluid Handling PolyOne Corporation Page 13 Target End Markets… Automotive ColorMatrix™ Amosorb™ ColorMatrix™ Ultimate™ UV Oxygen Scavenger Ultimate UV Light Barrier PreservaPak™ OnColor™ Smart Batch™ OnCap™ Laser Marking Additives VersaFlex™ TPE Cap Liner PolyOne Corporation Page 14 Target End Markets… Packaging Innovation Drives Earnings Growth $53 Research & Development Spending ($ millions) Specialty Platform Vitality Index Progression* 34% CAI & SEM Gross Margin Target ≥ 35% $20 $53 14% 12% 43% *Specialty Platform revenue from products introduced in last five years 2006 2015 2006 20152006 2015 Innovation Pipeline PotentialInnovation Pipeline Potential PolyOne Corporation Page 15 Ours is Not a Cost Cutting Story VolumeCommercial, R&D Adjusted 2,883 Volume (lbs in millions) $192 Commercial, R&D and Marketing Spending ($M) $721 Adjusted Gross Profit ($M) -16% +86% +138% 2,414$103 $303 2006 20152006 2015 2006 2015 PolyOne Corporation Page 16 Design and Service as a Differentiator Right Material & Color Desired Product Design Appropriate Manufacturing Process Connecting Delivering Concept to Commercialization Connecting the Dots with iQ Design Labs and InVisiO Color Design PolyOne Corporation Page 17 CommercializationInVisiO Color Design Customer First Through World-Class Service Strengthening relationships through: Providing LSS services to small/medium sized customers Providing training in Customer Centric Selling Skills with customers On-Time Delivery Commitment to Operational Excellence World’s Best Business Process Excellence Program in 2012* World’s Best Start-up program for Lean Six Sigma Deployment in 2009* 81% 93% 2006 2015 Working Capital % of Sales 16.2% 9.7% 52% of associates trained in LSS PolyOne Corporation Page 18 2006 2015 Five consecutive years – CFO Magazine Best Working Capital Management in the chemical industry Debt Maturities & Pension Funding 102% 100% Pension Funding** As of June 30, 2016 $700 $800 Debt Maturities As of June 30, 2016 ($ millions) 80% 90% 100% $547 $600 $600 $700 60% 60% 70% $500 40% 50% $300 $400 20% 30% 2008 2Q 2016 $200 2022 2023 Coupon Rate: LIBOR + 2 75% 5 250% PolyOne Corporation Page 19 Net Debt / Adjusted EBITDA*= 2.3x ** includes US-qualified pension plans only*TTM 6/30/2016 Coupon Rate: LIBOR + 2.75% 5.250% (3.50%) Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, and technical capabilities Investing in operational Repurchased 17.3 million shares since early 2013 10 0 million shares are Investing in operational and LSS initiatives ~75% of capital expenditures fund growth initiatives Organic Gro th Share Rep rchases 10.0 million shares are available for repurchase under the current authorization Growth Repurchases Acquisitions Dividends Annual Dividend Targets that expand our: • Specialty offerings • End market $0.20 $0.32 $0.40 $0.48 $0.30 $0.40 $0.50 • End market presence • Geographic breadth Synergy opportunities Adjacent material $0.24 PolyOne Corporation Page 20 $0.16 $ $0.10 $0.20 2011 2012 2013 2014 2015 2016 solutions Why Invest In PolyOne?
Addressable market exceeds $40 billion St f d t t th t t t d ti Strong performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with our strengths Innovation and services provide differentiation, incremental pricing power, and competitive advantage Strong and proven management team driving growth and performance The New PolyOne: A Specialty Growth Company g p g g g p PolyOne Corporation Page 21 The New PolyOne: A Specialty Growth Company Appendix PolyOne Corporation Page 22 2Q 2016 Financial Highlights Performance Products & Solutions operating margin grew 370 basis $18 $16 $21 $18 $22 PP&S Operating Profit points year-over-year to 12.3% $11 $15 $16 $10 $14 $18 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 SEM O ti P fit SEM operating margin expanded 50 basis points to a record second $15 $19 $20 $21 $18 $22 SEM Operating Profit Adjusted EPS quarter level of 14.9% $13 $15 $10 $14 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 $0.37 $0.51 $0.57 $0.63 $0.45 $0.70 Adjusted EPS Second quarter adjusted EPS has grown on average 20% per year PolyOne Corporation Page 23 $0.30 $ $0.20 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 since 2012 Note: $ in millions, except per share data At a Glance Color, Additives and Inks 2015 Revenues: $0.8 Billion Solutions United States 48% Europe 33% Asia Canada 2% 12% Latin America 5% 16.7% 18.0% 20%+Operating Income % of Sales Expanding Profits2015 Revenue by Industry Segment 14.7% Packaging 31% Textiles 1.7% 4.6% 5.1% 5.5% 7.2% 8.1% 9.7% 12.2% Building & C i Consumer Healthcare 6% Industrial 13% 8% Transportation 9% Wire & Cable 11% PolyOne Corporation Page 24 1.7% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 Platinum Vision Appliances 2% Construction 11% 8% Electrical & Electronics 1% At a Glance Specialty Engineered Materials 2015 Revenues: $0.5 Billion Solutions United States 49%49% Europe 29% Asia 20% Canada 2% 14.7% 14.9% 20%+Operating Income % of Sales 2015 Revenue by Industry Segment Expanding Profits Appliances 3% Packaging 5% Transportation 19% Wire & Cable 15% 1.1% 1.3% 3.4% 5.1% 9.6% 8.0% 8.6% 9.3% 12.1%Building & Construction 3% Consumer 20% Electrical & Electronics Healthcare 11% Industrial 8% PolyOne Corporation Page 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 Platinum Vision Electronics 16% At a Glance Designed Structures and Solutions Solutions2015 Revenues: $0.5 Billion United States 97% Canada 3% 8-10% Operating Income % of Sales Expanding Profits2015 Revenue by Industry Segment Packaging 19% 1.4% 5.6% 7.3% 3.0% 1.0%Building & Construction Healthcare 7% Industrial 24% Transportation 33% PolyOne Corporation Page 26 2012 2013 2014 2015 2Q'16 2020 Platinum Vision Appliances, 3% Construction 9% Consumer 5% 7% At a Glance Performance Products and Solutions Solutions2015 Revenues: $0.7 Billion United States 79% CanadaCanada 14% Asia 2% Latin America 5% Packaging 5% Transportation 19% Wire & Cable 16% 12-14% Operating Income % of Sales Expanding Profits 12.3% 2015 Revenue by Industry Segment Appliances 7% Building & Construction 31% Electrical & El t i Healthcare 1% Industrial 13% % 5.5% 6.9% 3.8% 3.6% 5.5% 4.3% 6.3% 7.2% 8.3%7.7% PolyOne Corporation Page 27 31% Consumer 5% Electronics 3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 Platinum Vision At a Glance Distribution Key Suppliers2015 Revenues: $1.0 Billion Packaging 4% Transportation 24% Wire & Cable 4% Appliances 6% Building & Construction 4%Consumer 13%Healthcare Industrial 16% Electrical & Electronics 6% 23% 6 6% 6.5-7.5% 6 5% Operating Income % of Sales53% ROIC Expanding Profits 2.6% 3.0% 3.5% 4.0% 4.6% 5.6% 6.4% 5.9% 6.6% 6.5% 15% 6.1% PolyOne Corporation Page 28 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q'16 2020 15% 2006 2Q 2016 Platinum Vision Plastics: Key to Future Sustainable Development 2 lbs Plastic = 3 lbs aluminum Requires 91% less energy to recycle a pound of plastic versus a pound of paper3 lbs aluminum or 8 lbs steel or a pound of paper or 27 lbs glass 33% less material by weight than aluminum 75% less material by weight75% less material by weight than steel 93% less material by weight than glass PolyOne Corporation Page 29 than glass Source: SPI: Sustainability and the Plastics Industry Application Examples PolyOne Corporation Page 30 Luxury Packaging with Gravitech Density Modified Polymers • Impart weight, sound and metallic finish to caps andmetallic finish to caps and closures for cosmetics and spirits applications • Elevate quality and prestige perceptions amongperceptions among high‐end consumers • Eliminate time and cost associated with secondary operations and assembly PolyOne Corporation Page 31 p y Medical Device Housings with Chemically Resistant Engineered Polymers • Durable, long‐lasting products stand up to the most aggressive disinfectants • Minimize environmental stress cracking and discolorationg • One of the broadest medically y approved polymer and colorant portfolios PolyOne Corporation Page 32 Printed Circuit Boards with Thermally Conductive Polymers • Replaces metal by etchingReplaces metal by etching circuit designs into thermally conductive plastic • Maintains heat transfer and cooling capabilities of metals • Reduces both weight and cost • Increases the lifetime and reliability of electronic systems PolyOne Corporation Page 33 Color & Design Services • Greater control of color development and supply chain • Work across entire design process from concept to commercialization • Inspire creativity in the use of polymer materials, colors and effects • Innovative brand differentiation • Faster development timelines PolyOne Corporation Page 34 • Faster development timelines Outdoor Applications • Leading provider of high performance specialty materials for the recreational and sports & p leisure industry • Well positioned across all segments to address market needs Metal to Polymer Conversion Lightweighting Thermal Management Impact Performance PolyOne Corporation Page 35 Source: Outdoor Industry Association Fiber Colorants Solutions for clothing, apparel, footwear, automotive & sporting goods • ColorMatrix Fiber Colorant Solutions Proprietary advanced liquid color formulations and equipment enable greater efficiency and productivity Eliminates aqueous dyeing and its associated wastewater treatment • Solid Color Concentrates Extrusion spun fibers colored viaExtrusion‐spun fibers colored via solid masterbatch PolyOne Corporation Page 36 PET Bottling Technology • $1.5 billion attractive, growing market Shelf‐life extension Weight reduction • Improve performance and reduce cost through light‐weighting, d d t f t l ti Greater product consistency l b l Enhanced product aesthetics reduced waste, faster cycle times and extended shelf life Recyclability and reduced carbon footprint aesthetics High heat • Aligned with megatrend of facing climate and resource challenges: Color and Special Effects High heat resistance Sustainability benefits include lower package weight and improved recyclability of package at end of use PolyOne Corporation Page 37 at end of use Metal Replacement Solutions • Replaces metal in LED lighting • Extends LED durability and life span eliminating hot spots • Greater design flexibility with fewer parts • Weight reduction l f f d• Simplifies manufacturing and lowers total production cost PolyOne Corporation Page 38 High-Barrier Packaging Containers • Capability to extrude up to 13 layers• Capability to extrude up to 13 layers • Strong oxygen and moisture vapor transmission protectiontransmission protection • Can be made symmetrical or asymmetrical to meet customizedasymmetrical to meet customized needs of broad variety of applications • Barrier protection and superiorBarrier protection and superior sensory properties PolyOne Corporation Page 39 1 Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with U.S.
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A reconciliation of each non-GAAP financial measure with the most directly comparable GAAP financial measure is attached to this presentation which is posted on our website at www.polyone.com. 4 POLYONE CORPORATION About PolyOne Reach 7,000 associates | 77 facilities | $3.4 B 2015 revenue Global Presence 10,000 global customers | Americas, Europe, Africa, Asia | Global sales, technical and manufacturing footprint Solutions 35,000+ polymer solutions | 12 innovation centers | Support for design through manufacturing 5 POLYONE CORPORATION What We Do Value Formulation Expertise Inputs Base resins Additives Modifiers Pigments Expertise in Polymer Materials, Services and Solutions OEMs Brand Owners Processers Assemblers Driving customer value with specialty products & services Service InVisiOSM Color Services IQ Design Labs LSS Customer First POLYONE CORPORATION 6 CAI 23% SEM 15% DSS 13% POD 29% PPS 20% 2015 Revenue: $3.4 Billion At a Glance United States 66% Europe 13% Canada 7% Asia 7% Latin America 7% $0.12 $0.27 $0.21 $0.13 $0.68 $0.82 $1.00 $1.31 $1.80 $1.96 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 Revenue: $3.4 Billion 2015 Operating Income: $322 Million CAI 38% SEM 23% DSS 4% POD 19% PPS 16% Adjusted Earnings Per Share 7 POLYONE CORPORATION Old PolyOne *Operating Income excludes corporate charges and special items 2% 43% 65% 0% 20% 40% 60% 80% 100% 2005 2010 2015 2020 % o f O pe ra tin g In co m e* JV's Performance Products & Solutions Distribution Specialty 80%+ Specialty OI $5M $87M $229M Transformation 2020 Platinum Vision Platinum Vision Mix Shift Highlights Specialty Transformation POLYONE CORPORATION 8 -$0.10 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2009 2010 2011 2012 2013 2014 2015 2016 Adjusted Earnings Per Share $0.56 3Q -2% 0% 2% 4% 6% 8% 10% 12% 2009 2010 2011 2012 2013 2014 2015 2016 Adjusted Consolidated Operating Margin 2.8% 5.2% 5.6% 6.7% 8.3% 6.9% 9.5% 9.9% 3Q 28 Consecutive Quarters of EPS Growth 9 POLYONE CORPORATION 2006 2016 YTD 2020 “Where we were” “Where we are” Platinum Vision 1) Operating Income % of Sales Specialty: Color, Additives & Inks 1.7% 17.0% 20%+ Specialty Engineered Materials 1.1% 15.2% 20%+ Designed Structures & Solutions N/A 0.6% (TTM) 8 – 10% Performance Products & Solutions 5.5% 11.6% 12 – 14% Distribution 2.6% 6.6% 6.5 – 7.5% 2) Specialty Platform % of Operating Income 6.0% 60% 80%+ 3) ROIC* 5.0% 11.6% 15% 4) Adjusted EPS Growth N/A 11.5% Double Digit Expansion Proof of Performance & 2020 Goals *ROIC is defined as TTM adjusted OI divided by the sum of average debt and equity over a 5 quarter period POLYONE CORPORATION 10 2,883 2,414 2006 2015 Volume (lbs in millions) -16% $103 $192 2006 2015 Commercial, R&D and Marketing Spending ($M) +86% $88 $322 2006 2015 Adjusted Operating Profit ($M) +266% Ours is Not a Cost Cutting Story 11 POLYONE CORPORATION Innovation Drives Earnings Growth *Specialty Platform revenue from products introduced in last five years $20 $53 2006 2015 Research & Development Spending ($ millions) Specialty Platform Vitality Index Progression* 14% 34% 2006 2015 CAI & SEM Gross Margin 12% 43% 2006 2015 Target ≥ 35% Innovation Pipeline Potential 12 POLYONE CORPORATION Globalization Specialization Commercial Excellence Operational Excellence Growth in urbanization Changing demographics Climate and resource challenges Increase of individual power Evolution and expansion of healthcare Strategic Growth Opportunities Four Pillar Strategy Global Megatrends Attractive Revenue & Margin Growth Opportunities 13 POLYONE CORPORATION Primary Industries Served 2015 Revenue: $3.4 Billion Electrical & Electronic 5% Building & Construction 12% Appliance 4% Industrial 14% Wire & Cable 9% Healthcare 11% Consumer 10% Packaging 13% Transportation 20% Focus End Markets 14 POLYONE CORPORATION Therma-Tech™ & Sheet GEON™ Vinyl Polymer Colorants Therma-Tech™ TPE’s & Film TPE + OnForce™ Gravi-Tech™ Page 14 Film Target End Markets… Healthcare 15 POLYONE CORPORATION Sound & Vibration Management Fuel Handling Systems Interior & Exterior Trim Structural Braces & Brackets Interior Structural Components Lighting Air management Electronics & Cameras Fluid Handling Target End Markets… Automotive Underhood Components Roof Systems 16 POLYONE CORPORATION PreservaPak™ OnColor™ Smart Batch™ VersaFlex™ TPE Cap Liner ColorMatrix™ Amosorb™ Oxygen Scavenger ColorMatrix™ Ultimate™ UV Light Barrier OnCap™ Laser Marking Additives Target End Markets… Packaging 17 POLYONE CORPORATION Source: Outdoor Industry Association TPE Vibration Dampening (SEM/GLS) TPE + OnForce (SEM) OnForce (SEM) Advanced Composites (SEM) TPE Vibration Dampening (SEM/GLS) Target End Markets… Outdoor High Performance Thermoplastic Elastomers (SEM) Advanced Composites (SEM) Polymer Colorants (CAI) Sheet (DSS) TPE & Film (SEM + DSS) Advanced Composites (SEM) Polymer Colorants (CAI) Thermatech (SEM) Thermoplastic Elastomers (SEM) TPE + OnForce (SEM) OnForce (SEM) 18 POLYONE CORPORATION Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, and technical capabilities Investing in operational and LSS initiatives ~75% of capital expenditures fund growth initiatives Organic Growth Acquisitions Share Repurchases Dividends Targets that expand our: • Specialty offerings • End market presence • Geographic breadth Synergy opportunities Adjacent material solutions Repurchased 318,000 shares in Q3 2016 Repurchased 17.6 million shares since early 2013 9.7 million shares are available for repurchase under the current authorization Increased annual dividend by 12.5% to $0.54 per share, representing the sixth consecutive year of dividend growth 19 POLYONE CORPORATION Returning Cash to Shareholders $0.16 $0.20 $0.24 $0.32 $0.40 $0.48 $0.54 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 2011 2012 2013 2014 2015 2016 2017 Annual Dividend Since 2011, we have returned nearly $800 million to shareholders $130 million returned through dividends $650 million returned through share repurchases $650M $0 $150 $300 $450 $600 $750 2011 2012 2013 2014 2015 Q3'16 Cumulative Share Repurchases (in millions) POLYONE CORPORATION 20 The New PolyOne: A Specialty Growth Company Why Invest In PolyOne?
Addressable market exceeds $40 billion Strong performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with strengths Innovation and services provide differentiation, incremental pricing power and competitive advantage Strong and proven management team driving growth and performance 21 POLYONE CORPORATION Segment Highlights POLYONE CORPORATION 22 2015 Revenue: $0.8 Billion At a Glance: Color, Additives & Inks Key Applications 2015 Revenue by Industry Expanding Profits 1.7% 4.6% 5.1% 5.5% 7.2% 8.1% 9.7% 12.2% 14.7% 16.7% 17.0% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision United States 48% Europe 33% Asia 12% Latin America 5% Canada 2% Packaging 31% Industrial 13% B & C 11% W & C 11% Transportation 9% Consumer 8% Textiles 8% Healtchare 6% Appliances 2% E & E 1% POLYONE CORPORATION 23 2015 Revenue: $0.5 Billion At a Glance: Specialty Engineered Materials 2015 Revenue by Industry Expanding Profits 1.1% 1.3% 3.4% 5.1% 9.6% 8.0% 8.6% 9.3% 12.1% 14.7% 15.2% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision Consumer 20% Transportation 19% E & E 16% W & C 15% Healthcare 11% Industrial 8% Packaging 5% Appliances 3% B & C 3% United States 49% Europe 29% Asia 20% Canada 2% Key Applications POLYONE CORPORATION 24 2015 Revenue: $0.5 Billion At a Glance: Designed Structures & Solutions 2015 Revenue by Industry Expanding Profits 1.4% 5.6% 7.3% 3.0% 8-10% 0.3% 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision Transportation 33% Industrial 24% Packaging 19% B & C 9% Healthcare 7% Consumer 5% Appliances 3% United States 97% Canada 3% Key Applications http://www.google.com/url?
Investor Presentation - November 2016 IR Presentation - Q3 2016 - RW Baird.pdf PolyOne Investor �Presentation�3Q 2016 Forward-Looking Statements Use of Non-GAAP Measures About PolyOne What We Do At a Glance Slide Number 7 28 Consecutive Quarters of EPS Growth Proof of Performance & 2020 Goals Ours is Not a Cost Cutting Story Innovation Drives Earnings Growth Strategic Growth Opportunities Primary Industries Served Slide Number 14 Slide Number 15 Slide Number 16 Slide Number 17 Free Cash Flow and Strong Balance Sheet �Fund Investment / Shareholder Return Returning Cash to Shareholders Why Invest In PolyOne?
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PolyOne Corporation Page 4 PolyOne Commodity to Specialty Transformation • Volume driven, commodity producer • Heavily tied to cyclical end markets • Performance largely dependent on non- controlling joint ventures 2000-2005 2006 - 2009 2010 – 2014 2015 and beyond • Steve Newlin appointed, Chairman, President and CEO • New leadership team appointed • Implementation of four pillar strategy • Focus on value based selling, investment in commercial resources and innovation to drive transformation • Substantial EPS growth from $0.13 to all-time high of $1.80 • Shift to faster growing, high margin, less cyclical end markets • Key acquisitions propel current and future growth, as well as margin expansion • Specialty mix expands to 65% of Operating Income – strongest mix of earnings in history • Accelerating growth • Deliver consistent double digit annual EPS growth • Maintain >35% vitality index • Pursue strategic acquisitions that expand specialty offerings and geographic breadth • Invest and grow current and next generation talent PolyOne Corporation Page 5 Appliances 5% Building & Construction 12% Consumer 10% Electrical & Electronics 5% Healthcare 11% Industrial 14% Packaging 14% Transportation 20% Wire & Cable 9% Distribution 28% PP&S 20% Specialty 52% United States 69% Europe 13% Canada 7% Asia 6% Latin America 5% 2014 Revenues: $3.8 Billion End Markets 2014 Revenues: $3.8 Billion PolyOne At A Glance $0.12 $0.27 $0.21 $0.13 $0.68 $0.82 $1.00 $1.31 $1.80 2006 2007 2008 2009 2010 2011 2012 2013 2014 Adjusted EPS PolyOne Corporation Page 6 Old PolyOne *Operating Income excludes corporate charges and special items 2% 34% 43% 62% 65% 66% 0% 20% 40% 60% 80% 100% 2005 2008 2010 2013 2014 YTD 2015 2020 % o f O pe ra tin g In co m e* JV's Performance Products & Solutions Distribution Specialty 80%+ Specialty OI $5M $46M $87M $195M $242M $183M Mix Shift Highlights Specialty Transformation Transformation 2020 Platinum Vision Platinum Vision PolyOne Corporation Page 7 2006 YTD 2015 2020 “Where we were” “Where we are” Platinum Vision 1) Operating Income % Specialty: Global Color, Additives & Inks 1.7% 17.2% 20%+ Global Specialty Engineered Materials 1.1% 15.1% 20%+ Designed Structures & Solutions 1.4% (2012) 3.5% 12 – 14% Performance Products & Solutions 5.5% 8.1% 10 – 12% Distribution 2.6% 6.6% 6.5 – 7.5% 2) Specialty Platform % of Operating Income 6.0% 66% 80%+ 3) ROIC 5.0% 11.9% 15% 4) Adjusted EPS Growth N/A 24 Consecutive Quarters of YOY EPS Growth Double Digit Expansion Proof of Performance & 2020 Goals PolyOne Corporation Page 8 Innovation Drives Earnings Growth *Percentage of Specialty Platform revenue from products introduced in last five years $20 $52 2006 TTM Research & Development Spending ($ millions) Specialty Platform Vitality Index Progression* 14% 28% 2006 TTM Specialty Platform Gross Margin % 12% 43% 2006 TTM Specialty Vitality Index Target ≥ 35% TTM 9/30/15 TTM 9/30/15 TTM 9/30/15 PolyOne Corporation Page 9 Innovation Pipeline Potential Prototype Frame Opportunity Scale-up & Test Market Build Business Case Commercial Launch Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 12 4 9 6 1 6 3 7 4 5 6 1 1 7 2 Breakthrough Platform Derivative Number of Projects 12 10 23 19 10 74 Specialty Addressable Market ($ millions) - - $1,150 $1,000 $250 $2,400 PolyOne Corporation Page 10 Lightweighting with Advanced Composites Increasing Healthcare Penetration Innovation Initiatives Expansion in Consumer Markets New Market Development $$$ $$ $ High Temperature Polymers PolyOne Corporation Page 11 Design and Service as a Differentiator Right Material & Color Desired Product Design Appropriate Manufacturing Process Delivering Concept to Commercialization Connecting the Dots with iQ Design Labs and InVisiO Color Design PolyOne Corporation Page 12 Customer First Through World-Class Service Strengthening relationships through: Providing LSS services to small/medium sized customers • Supporting customers who lack their own formal process improvement initiatives Providing training in Customer Centric Selling Skills with customers’ sales force PolyOne Corporation Page 13 60% 97% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 Q3 2015 Pension Funding** As of September 30, 2015 Debt Maturities & Pension Funding Net Debt / Adjusted EBITDA** = 2.1x $49 $121 $317 $600 $400 $0 $100 $200 $300 $400 $500 $600 $700 $800 2015 2018 2020 2023 Debt Maturities As of September 30, 2015 ($ millions) Coupon Rate: 7.500% Variable* 7.375% 5.250% ** includes US-qualified pension plans only *Weighted average rate on revolver was 2.49% as of 9/30/15 **TTM 9/30/2015 PolyOne Corporation Page 14 Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, and technical capabilities Investing in operational and LSS initiatives ~75% of capital expenditures fund growth initiatives Organic Growth Acquisitions Share Repurchases Dividends $0.16 $0.20 $0.32 $0.40 $0.48 $0.10 $0.20 $0.30 $0.40 $0.50 2011 2012 2013 2014 2015 2016 Annual Dividend Targets that expand our: • Specialty offerings • End market presence • Geographic breadth Synergy opportunities Adjacent material solutions Repurchased nearly 2.4 million shares in Q3 2015 Repurchased 14.8 million shares since early 2013 5.2 million shares are available for repurchase under the current authorization $0.24 PolyOne Corporation Page 15 The New PolyOne: A Specialty Growth Company Why Invest In PolyOne?
Addressable market exceeds $40 billion Strong performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with our strengths Innovation and services provide differentiation, incremental pricing power, and competitive advantage Strong and proven management team driving growth and performance PolyOne Corporation Page 16 Appendix PolyOne Corporation Page 17 $0.20 $0.28 $0.36 $0.49 $0.54 $0.00 $0.15 $0.30 $0.45 $0.60 Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 Adjusted EPS Q3 2015 Financial Highlights Color Additives & Inks operating margin reaches record third quarter level of 17.3% Specialty Engineered Materials operating margin grew 210 basis points year-over-year to 14.7% Third quarter adjusted EPS has grown on average 28% per year since 2011 $13 $19 $29 $30 $35 $0 $10 $20 $30 $40 Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 GCAI Operating Profit $11 $13 $15 $18 $20 $10 $14 $18 $22 Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 GSEM Operating Profit Note: $ in millions, except per share data PolyOne Corporation Page 18 Appliances 2% Building & Construction 12% Consumer 7% Electrical & Electronics 1% Healthcare 6% Industrial 14% Packaging 31% Textiles 7% Transportation 8% Wire & Cable 12% 1.7% 4.6% 5.1% 5.5% 7.2% 8.1% 9.7% 12.2% 17.2% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 2020 Operating Income % of Sales At a Glance Global Color, Additives and Inks 2014 Revenues: $0.9 Billion Solutions Expanding Profits 2014 Revenue by Industry Segment 14.7% Platinum Vision United States 44% Europe 36% Canada 2% Asia 12% Latin America 6% PolyOne Corporation Page 19 Appliances 4% Building & Construction 3% Consumer 18% Electrical & Electronics 16% Healthcare 12% Industrial 8% Packaging 5% Transportation 20% Wire & Cable 12% At a Glance Global Specialty Engineered Materials 2014 Revenues: $0.6 Billion Solutions 2014 Revenue by Industry Segment Expanding Profits 1.1% 1.3% 3.4% 5.1% 9.6% 8.0% 8.6% 9.3% 15.1% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 2020 Operating Income % of Sales Platinum Vision 12.1% United States 44% Europe 33% Canada 2% Asia 19% Latin America 2% PolyOne Corporation Page 20 Appliances 2% Building & Construction 8% Consumer 5% Healthcare 6% Industrial 23% Packaging 27% Transportation 30% United States 96% Canada 4% At a Glance Designed Structures and Solutions Solutions 2014 Revenues: $0.6 Billion Expanding Profits 2014 Revenue by Industry Segment 1.4% 5.6% 7.3% 3.5% 12-14% 2012 2013 2014 YTD 2015 2020 Operating Income % of Sales Platinum Vision PolyOne Corporation Page 21 Appliances 8% Building & Construction 33% Consumer 5% Electrical & Electronics 3% Healthcare 1% Industrial 11% Packaging 5% Transportation 18% Wire & Cable 16% 5.5% 6.9% 3.8% 3.6% 5.5% 4.3% 6.3% 7.2% 8.1% 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 2020 Operating Income % of Sales At a Glance Performance Products and Solutions Solutions Expanding Profits 2014 Revenues: $0.8 Billion 10-12% Platinum Vision 2014 Revenue by Industry Segment 7.7% United States 80% Canada 14% Asia 2% Latin America 4% PolyOne Corporation Page 22 Appliances 6% Building & Construction 5% Consumer 13% Electrical & Electronics 6% Healthcare 23% Industrial 15% Packaging 4% Transportation 25% Wire & Cable 3% 2.6% 3.0% 3.5% 4.0% 4.6% 5.6% 6.4% 5.9% 6.6% 6.5-7.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 2020 Operating Income % of Sales 15% 52% 2006 Q3 2015 At a Glance Distribution Key Suppliers 2014 Revenues: $1.1 Billion ROIC Expanding Profits 6.1% Platinum Vision http://www.polyone.com/Pages/VariationRoot.aspx PolyOne Corporation Page 23 2 lbs Plastic = 3 lbs aluminum or 8 lbs steel or 27 lbs glass 33% less material by weight than aluminum 75% less material by weight than steel 93% less material by weight than glass Requires 91% less energy to recycle a pound of plastic versus a pound of paper Source: SPI: Sustainability and the Plastics Industry Plastics: Key to Future Sustainable Development PolyOne Corporation Page 24 Commitment to Operational Excellence 81% 93% 2006 2014 16.2% 9.9% 2006 2014 On-Time Delivery Working Capital % of Sales 5% 43% 2006 2014 Percent of Associates Trained in LSS Five consecutive years – CFO Magazine Best Working Capital Management in the chemical industry World’s Best Business Process Excellence Program in 2012* 113 trained Black Belts 235 trained Green Belts 151 trained Kaizen Leaders World’s Best Start-up Program for Lean Six Sigma Deployment in 2009* *Both awards received from International Quality and Productivity Center PolyOne Corporation Page 25 Application Examples PolyOne Corporation Page 26 Outdoor Applications • Leading provider of high performance specialty materials for the recreational and sports & leisure industry • Well positioned across all segments to address market needs Metal to Polymer Conversion Lightweighting Thermal Management Impact Performance Source: Outdoor Industry Association PolyOne Corporation Page 27 $1.5 billion attractive, growing market Additives improve performance and reduce cost through light-weighting, reduced waste, faster cycle times, and extended shelf life of finished product Aligned with megatrend of protecting the environment: Sustainability benefits include lower package weight and improved recyclability of package at end of use Market Opportunity Leading Global Supplier of Additives In Growing PET Market Shelf-life extension Greater product consistency Recyclability and reduced carbon footprint Color and Special Effects Weight reduction Enhanced product aesthetics High heat resistance PET Bottling Technology 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 2009 2014 2019 Asia Pacific North America Latin America Western Europe Eastern Europe Middle East and Africa Global PET Packaging Growth 2009-2019 Source: Euromonitor retail off-trade consumption (PET bottles & jars, home care, personal care, food & non-alcoholic beverages) B ill io n un its 5% CAGR PolyOne Corporation Page 28 • Includes formulation and consultative services to assist manufacturers and brand owners in positively identifying their finished goods • Protects brand equity & consumer welfare • Reduces exposure to unwarranted recall expenses • Secures supply chain integrity – support for safe expansion into new geographies Authentication Technology PolyOne Corporation Page 29 • Color harmonization across 15 unique color-and-polymer combinations • Eliminated need for multiple pre- colored materials • Reduced Land Rover’s working capital 2015 Range Rover Evoque Interior PolyOne Corporation Page 30 • Reduced health and environmental impact • System cost reduction • Radiation-shielding performance • Parts consolidation • Design freedom CT Scanner PolyOne Corporation Page 31 Metal Replacement Solutions • Replaces metal in LED lighting • Extends LED durability and life span eliminating hot spots • Greater design flexibility with fewer parts • Weight reduction • Simplifies manufacturing and lowers total production cost PolyOne Corporation Page 32 High-Barrier Packaging Containers • Capability to extrude up to 13 layers • Strong oxygen and moisture vapor transmission protection • Can be made symmetrical or asymmetrical to meet customized needs of broad variety of applications • Barrier protection and superior sensory properties PolyOne Corporation Page 33 Aerospace Applications • Leading provider of specialty materials for the aerospace industry • Typical applications Mil-spec aircraft windows, canopies, windscreens, instrument panels, wingtip lenses Interior – gallery furnishings, tray tables, arm rests, trim strips, joint/edge coverings • Benefits: High impact strength Resistant to UV rays Flame and smoke compliance Easy to clean with aggressive cleaners; anti-microbial grades available Range of sizes, thicknesses, colors, etc. 1 Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with U.S.
Trailing twelve months adjusted gross margin is calculated as follows: Three Months Ended Nine Months Ended Trailing Twelve Months (TTM) Ended (In millions) December 31, 2014 September 30, 2015 September 30, 2015 Gross margin - GAAP $ 152.6 $ 524.6 $ 677.2 Special items in gross margin 15.8 30.0 45.8 Gross margin excluding special items $ 168.4 $ 554.6 $ 723.0 Adjusted EBITDA and net debt to adjusted EBITDA is calculated as follows: Three Months Ended Nine Months Ended Trailing Twelve Months (TTM) Ended (In millions) December 31, 2014 September 30, 2015 September 30, 2015 Income from continuing operations, before income taxes $ (31.2) $ 168.1 $ 136.9 Interest expense, net 15.6 48.5 64.1 Depreciation and amortization 25.0 78.4 103.4 Special items, impact on income from continuing operations before income taxes 80.8 39.8 120.6 Accelerated depreciation included in special items (0.2) (4.6) (4.8) Adjusted EBITDA $ 90.0 $ 330.2 $ 420.2 Short-term portion and current portion of long-term debt $ 61.8 Long-term debt 1,038.0 Less: Cash and cash equivalents (235.7) Net Debt 864.1 Net Debt/TTM Adjusted EBITDA 2.1 ��PolyOne Investor Presentation�Goldman Sachs 2015 US Emerging/�SMID Cap Growth Conference�November 2015�� Forward-Looking Statements Use of Non-GAAP Measures PolyOne Commodity to Specialty Transformation PolyOne�At A Glance Mix Shift Highlights Specialty Transformation Proof of Performance & 2020 Goals Innovation Drives Earnings Growth Innovation Pipeline Potential Innovation Initiatives Design and Service as a Differentiator Customer First Through World-Class Service Debt Maturities & Pension Funding Free Cash Flow and Strong Balance Sheet �Fund Investment / Shareholder Return Why Invest In PolyOne?
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A reconciliation of each non-GAAP financial measure with the most directly comparable GAAP financial measure is attached to this presentation which is posted on our website at www.polyone.com. 4 POLYONE CORPORATION About PolyOne Reach 7,000 associates | 77 facilities | $3.4 B 2015 revenue Global Presence 10,000 global customers | Americas, Europe, Africa, Asia | Global sales, technical and manufacturing footprint Solutions 35,000+ polymer solutions | 12 innovation centers | Support for design through manufacturing 5 POLYONE CORPORATION What We Do Value Formulation Expertise Inputs Base resins Additives Modifiers Pigments Expertise in Polymer Materials, Services and Solutions OEMs Brand Owners Processers Assemblers Driving customer value with specialty products & services Service InVisiOSM Color Services IQ Design Labs LSS Customer First POLYONE CORPORATION 6 CAI 23% SEM 15% DSS 13% POD 29% PPS 20% 2015 Revenue: $3.4 Billion At a Glance United States 66% Europe 13% Canada 7% Asia 7% Latin America 7% $0.12 $0.27 $0.21 $0.13 $0.68 $0.82 $1.00 $1.31 $1.80 $1.96 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 Revenue: $3.4 Billion 2015 Operating Income: $322 Million CAI 38% SEM 23% DSS 4% POD 19% PPS 16% Adjusted Earnings Per Share 7 POLYONE CORPORATION Old PolyOne *Operating Income excludes corporate charges and special items 2% 43% 65% 0% 20% 40% 60% 80% 100% 2005 2010 2015 2020 % o f O pe ra tin g In co m e* JV's Performance Products & Solutions Distribution Specialty 80%+ Specialty OI $5M $87M $229M Transformation 2020 Platinum Vision Platinum Vision Mix Shift Highlights Specialty Transformation POLYONE CORPORATION 8 -$0.10 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2009 2010 2011 2012 2013 2014 2015 2016 Adjusted Earnings Per Share $0.56 3Q -2% 0% 2% 4% 6% 8% 10% 12% 2009 2010 2011 2012 2013 2014 2015 2016 Adjusted Consolidated Operating Margin 2.8% 5.2% 5.6% 6.7% 8.3% 6.9% 9.5% 9.9% 3Q 28 Consecutive Quarters of EPS Growth 9 POLYONE CORPORATION 2006 2016 YTD 2020 “Where we were” “Where we are” Platinum Vision 1) Operating Income % of Sales Specialty: Color, Additives & Inks 1.7% 17.0% 20%+ Specialty Engineered Materials 1.1% 15.2% 20%+ Designed Structures & Solutions N/A 0.6% (TTM) 8 – 10% Performance Products & Solutions 5.5% 11.6% 12 – 14% Distribution 2.6% 6.6% 6.5 – 7.5% 2) Specialty Platform % of Operating Income 6.0% 60% 80%+ 3) ROIC* 5.0% 11.6% 15% 4) Adjusted EPS Growth N/A 11.5% Double Digit Expansion Proof of Performance & 2020 Goals *ROIC is defined as TTM adjusted OI divided by the sum of average debt and equity over a 5 quarter period POLYONE CORPORATION 10 2,883 2,414 2006 2015 Volume (lbs in millions) -16% $103 $192 2006 2015 Commercial, R&D and Marketing Spending ($M) +86% $88 $322 2006 2015 Adjusted Operating Profit ($M) +266% Ours is Not a Cost Cutting Story 11 POLYONE CORPORATION Innovation Drives Earnings Growth *Specialty Platform revenue from products introduced in last five years $20 $53 2006 2015 Research & Development Spending ($ millions) Specialty Platform Vitality Index Progression* 14% 34% 2006 2015 CAI & SEM Gross Margin 12% 43% 2006 2015 Target ≥ 35% Innovation Pipeline Potential 12 POLYONE CORPORATION Globalization Specialization Commercial Excellence Operational Excellence Growth in urbanization Changing demographics Climate and resource challenges Increase of individual power Evolution and expansion of healthcare Strategic Growth Opportunities Four Pillar Strategy Global Megatrends Attractive Revenue & Margin Growth Opportunities 13 POLYONE CORPORATION Primary Industries Served 2015 Revenue: $3.4 Billion Electrical & Electronic 5% Building & Construction 12% Appliance 4% Industrial 14% Wire & Cable 9% Healthcare 11% Consumer 10% Packaging 13% Transportation 20% Focus End Markets 14 POLYONE CORPORATION Therma-Tech™ & Sheet GEON™ Vinyl Polymer Colorants Therma-Tech™ TPE’s & Film TPE + OnForce™ Gravi-Tech™ Page 14 Film Target End Markets… Healthcare 15 POLYONE CORPORATION Sound & Vibration Management Fuel Handling Systems Interior & Exterior Trim Structural Braces & Brackets Interior Structural Components Lighting Air management Electronics & Cameras Fluid Handling Target End Markets… Automotive Underhood Components Roof Systems 16 POLYONE CORPORATION PreservaPak™ OnColor™ Smart Batch™ VersaFlex™ TPE Cap Liner ColorMatrix™ Amosorb™ Oxygen Scavenger ColorMatrix™ Ultimate™ UV Light Barrier OnCap™ Laser Marking Additives Target End Markets… Packaging 17 POLYONE CORPORATION Source: Outdoor Industry Association TPE Vibration Dampening (SEM/GLS) TPE + OnForce (SEM) OnForce (SEM) Advanced Composites (SEM) TPE Vibration Dampening (SEM/GLS) Target End Markets… Outdoor High Performance Thermoplastic Elastomers (SEM) Advanced Composites (SEM) Polymer Colorants (CAI) Sheet (DSS) TPE & Film (SEM + DSS) Advanced Composites (SEM) Polymer Colorants (CAI) Thermatech (SEM) Thermoplastic Elastomers (SEM) TPE + OnForce (SEM) OnForce (SEM) 18 POLYONE CORPORATION Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, and technical capabilities Investing in operational and LSS initiatives ~75% of capital expenditures fund growth initiatives Organic Growth Acquisitions Share Repurchases Dividends Targets that expand our: • Specialty offerings • End market presence • Geographic breadth Synergy opportunities Adjacent material solutions Repurchased 318,000 shares in Q3 2016 Repurchased 17.6 million shares since early 2013 9.7 million shares are available for repurchase under the current authorization Increased annual dividend by 12.5% to $0.54 per share, representing the sixth consecutive year of dividend growth 19 POLYONE CORPORATION Returning Cash to Shareholders $0.16 $0.20 $0.24 $0.32 $0.40 $0.48 $0.54 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 2011 2012 2013 2014 2015 2016 2017 Annual Dividend Since 2011, we have returned nearly $800 million to shareholders $130 million returned through dividends $650 million returned through share repurchases $650M $0 $150 $300 $450 $600 $750 2011 2012 2013 2014 2015 Q3'16 Cumulative Share Repurchases (in millions) POLYONE CORPORATION 20 The New PolyOne: A Specialty Growth Company Why Invest In PolyOne?
Addressable market exceeds $40 billion Strong performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with strengths Innovation and services provide differentiation, incremental pricing power and competitive advantage Strong and proven management team driving growth and performance 21 POLYONE CORPORATION Segment Highlights POLYONE CORPORATION 22 2015 Revenue: $0.8 Billion At a Glance: Color, Additives & Inks Key Applications 2015 Revenue by Industry Expanding Profits 1.7% 4.6% 5.1% 5.5% 7.2% 8.1% 9.7% 12.2% 14.7% 16.7% 17.0% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision United States 48% Europe 33% Asia 12% Latin America 5% Canada 2% Packaging 31% Industrial 13% B & C 11% W & C 11% Transportation 9% Consumer 8% Textiles 8% Healtchare 6% Appliances 2% E & E 1% POLYONE CORPORATION 23 2015 Revenue: $0.5 Billion At a Glance: Specialty Engineered Materials 2015 Revenue by Industry Expanding Profits 1.1% 1.3% 3.4% 5.1% 9.6% 8.0% 8.6% 9.3% 12.1% 14.7% 15.2% 20%+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision Consumer 20% Transportation 19% E & E 16% W & C 15% Healthcare 11% Industrial 8% Packaging 5% Appliances 3% B & C 3% United States 49% Europe 29% Asia 20% Canada 2% Key Applications POLYONE CORPORATION 24 2015 Revenue: $0.5 Billion At a Glance: Designed Structures & Solutions 2015 Revenue by Industry Expanding Profits 1.4% 5.6% 7.3% 3.0% 8-10% 0.3% 2012 2013 2014 2015 2016 YTD 2020 Operating Income % of Sales Platinum Vision Transportation 33% Industrial 24% Packaging 19% B & C 9% Healthcare 7% Consumer 5% Appliances 3% United States 97% Canada 3% Key Applications http://www.google.com/url?
PolyOne Investor �Presentation�3Q 2016 Forward-Looking Statements Use of Non-GAAP Measures About PolyOne What We Do At a Glance Slide Number 7 28 Consecutive Quarters of EPS Growth Proof of Performance & 2020 Goals Ours is Not a Cost Cutting Story Innovation Drives Earnings Growth Strategic Growth Opportunities Primary Industries Served Slide Number 14 Slide Number 15 Slide Number 16 Slide Number 17 Free Cash Flow and Strong Balance Sheet �Fund Investment / Shareholder Return Returning Cash to Shareholders Why Invest In PolyOne?
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Setting goals and objectives that drive continual improvement and check effectiveness of risk reduction measures in product safety and stewardship. Consider environmental, health and safety impacts into product design, manufacture, use, reuse, recycling and disposal. Promote openness and two-way communication with key stakeholders regarding environmental, health and safety measures and risks associated with use, storage, transportation and disposal of our products.
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Rosenau Page 84 United States 81% Europe Canada 15% Asia 2% 2011 Revenue: $0.9 Billion2011 Revenue: $0.9 Billion SolutionsSolutions At a Glance Performance Products and Solutions Europe 2% 2% $400 $600 $800 $1,000 $1,200 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2006 2007 2008 2009 2010 2011 2015 S a le s ($ m il li o n s) O p e ra ti n g I n co m e % o f S a le s Operating Income % and Revenue 2011 Revenue by Industry Segment2011 Revenue by Industry Segment Expanding ProfitsExpanding Profits OI % of Sales Sales 9-12% Appliance 4% Building & Construction 30% Wire & Cable 17% Electrical & Electronics 2% Consumer 4% Packaging 9% Industrial 20% Misc. 2% HealthCare 2% Transportation 8% Textiles 2% Target Page 85 • Trend toward more affordable housing favors our product 1.5 2.0 2.5 Housing Starts (in million units) 50 year average Market Dynamics Performance Products and Solutions • Ultimate housing recovery presents substantial upside to already record- setting results Source: Historical Data from the US Census Bureau, 2012 estimate is a PolyOne projection. 0.0 0.5 1.0 '87 '89 '91 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 Page 86 Value Proposition • Premier provider of specialized vinyl and supply chain solutions, leading the industry in innovation and service Transformation Highlights • Management upgrades ensure that each PP&S business Value Proposition and Transformation Highlights Performance Products and Solutions • Management upgrades ensure that each PP&S business maximizes performance • Asset realignment and Lean Six Sigma reduce costs • Strengthened relationship with winning customers • Increased differentiation in all business units > $12B Addressable Market Page 87 Key Differentiators Performance Products and Solutions • Providing application design, material design and / or process design assistance not available from competitors • Capability to improve joint value streams • We are the best innovator in our space • We are the best innovator in our space • Expanding customers’ opportunities by providing innovative materials and marketing ideas • We provide world-class customer service and delivery performance Page 88 13.7% 14.3% 15.5% 9.9% 6.2% 5.4% 2006 2007 2008 2009 2010 2011 WC % of Sales • Best-in-class working capital management and delivery performance • Improved raw material Areas of Focus – Operational Excellence Performance Products and Solutions 2006 2007 2008 2009 2010 2011 89.1% 92.0% 94.2% 93.4% 93.4% 94.0% 2006 2007 2008 2009 2010 2011 On-Time Delivery • Improved raw material positions, sourcing savings • PolyOne pilot site for many LSS and manufacturing excellence programs *As measured to customer request date * Page 89 • reFlexTM Bioplasticizers Applications: Wide variety of flexible vinyl-based products • GeonTM HC for Healthcare � Applications: Medical device housings, specialty tubing � Customer benefits: Withstand aggressive antiseptics Key Innovations Performance Products and Solutions � Applications: Wide variety of flexible vinyl-based products � Customer benefits: Lower carbon footprint, improved productivity • GeonTM SF Super Flow � Applications: Large appliance parts, molded siding panels � Customer benefits: Flame retardancy, detergent resistance Page 90 Critical Imperatives and 2015 Goal Performance Products and Solutions Critical Imperatives • Accelerate innovation - grow in new applications not historically served with vinyl • Drive continuous improvement in manufacturing and working capital efficienciesworking capital efficiencies • Selectively leverage construction recovery 2015 Goal • 9 - 12% return on sales Page 91 Page 92
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Setting goals and objectives that drive continual improvement and check effectiveness of risk reduction measures in product safety and stewardship. Consider environmental, health and safety impacts into product design, manufacture, use, reuse, recycling and disposal. Promote openness and two-way communication with key stakeholders regarding environmental, health and safety measures and risks associated with use, storage, transportation and disposal of our products.
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This literature shall NOT operate as permission, recommendation, or inducement to practice any patented invention without permission of the patent owner. www.polyone.com Specialty Inks Global Headquarters and Manufacturing Plant 8155 Cobb Center Drive Kennesaw, GA 30152 Phone: +1 800.326.0226 Wilflex Warehouse Knowsley, Merseyside, L34 9GT Unity Grove, Knowsley Business Park Phone: +44 151 547 3800 Rutland Manufacturing Plant 10021 Rodney Street Pineville, NC 28134 Phone: +1 704.553.0044 Toll Free: +1 800.438.5134 Union Ink Manufacturing Plant 10021 Rodney Street Pineville, NC 28134 Phone: +1 704.553.0046 Toll Free: +1 800.438.5134 QCM Manufacturing Plant 10021 Rodney Street Pineville, NC 28134 Phone: +1 704.553.0046 Toll Free: +1 800.438.5134 Printop Manufacturing Plant Sociedad Química Alemana S.A.
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Finely dispersed TiO2, and color distribution with precision dosing, drive consistency, material efficiency, and sustainable consumption.
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And when it comes to ultra- connected society, we are happy to be involved in countless game-changers related to 5G and autonomous driving.