https://www.avient.com/sites/default/files/2022-02/AVNT Q4 2021 Earnings Presentation_0.pdf
Unless otherwise stated, Adjusted Operating Income, Adjusted EBITDA and Adjusted EPS figures included in this presentation exclude the impact of special items as defined in our quarterly earnings releases.
2021 PE RF O RM AN CE
$80
$85
$0.52
$0.58
Q4 2021 PERFORMANCE
Sales Adjusted Operating Income
$997
$1,202
+ 21%
Adjusted EPS
+ 6% + 12%
(in millions) (in millions)
$308
$429
$1.93
$3.05
FULL YEAR 2021 PERFORMANCE
Sales Adjusted Operating Income
$3,783
$4,819
+ 27%
Adjusted EPS
+ 39% + 58%
(in millions) (in millions)
(1) (1) (1)
FULL YEAR 2021 SEGMENT PERFORMANCE
6
$2,043
$2,402
SEM Distribution
$226
$303
+ 18% + 34%
$1,110
$1,631
$70
$93
+ 47% + 33%
$709
$919
$94
$132
+ 30% + 40%
Full Year 2020 (Pro forma) $3,783 $308
Sustainable Solutions 147 19% 60
Healthcare 143 28% 30
Composites 58 43% 29
Growth in Asia / LATAM 107 21% 26
Other 543 30% 58
Sub-total $4,781 26% $511
Wage Inflation and Overtime (39)
Other Supply Chain Costs (15)
COVID Response Applications (22) (12)
Synergies 44
FX, Incentives, Other Employee Costs 60 (60)
Full Year 2021 $4,819 27% $429
FULL YEAR 2021 SALES AND OPERATING INCOME
Sales Growth Rate
Operating
Income$ millions
8
Full Year 2020 (Pro forma) $ 457
Demand 135
$ millions
CAI:
Price / Mix 158
Inflation (120)
SEM:
Price / Mix 84
Inflation (65)
Distribution:
Price / Mix 318
Inflation (304)
Net Price Benefit 71
Wage Inflation and Overtime (39)
Other Supply Chain Costs (15)
COVID Response Applications (12)
Synergies 44
Incentives, FX, Other Employee Costs (60)
Full Year 2021 $ 581
• Demand impact driven by growth
in key focus areas: sustainable
solutions, healthcare, composites
and growth in Asia / LATAM
• Price increases more than offset
raw material and supply chain
impacts
FULL YEAR 2021 EBITDA BRIDGE
SPECIALTY EBITDA MARGIN EXPANSION
9
(1) 2018-2020 financial information is pro forma to include a full year of Clariant Color business
15.3% 15.2%
16.2%
17.0%
2018 2019 2020 2021
14.8%
15.2%
17.6% 17.8%
2018 2019 2020 2021
SEM
• Record margins in 2021 despite
unprecedented supply chain challenges
• Continued portfolio transformation to
high-growth end markets and
sustainable solutions
• Clariant Color synergy realization
• Investments in composites and outdoor
high performance applications drove
growth and mix improvements
• Acquisition of Clariant Color business significantly expanded
presence in healthcare, packaging and consumer end markets
• Strength of portfolio – double-digit annual EBITDA growth
since acquisition
• $54 million of synergies realized in 2021
• Acquisition completed on July 1, 2020 for $1.45 billion.
Purchase price multiple rapidly declining on strength of
business and synergy capture
10
$133
$205
2019PF 2021
10
Clariant Color EBITDA Growth
Purchase Price Multiple
10.8x
7.0x
6.1x
2019PF 2021 2021 w/ Full
Synergies
11.9%
16.2%
2019PF 2021
EBITDA Margins
CLARIANT COLOR:
TRANSFORMATIONAL ACQUISITION
(1) Financial information is pro forma to include a full year of Clariant Color business
($ 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
• 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
*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
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% $85
Q4 2021 SALES AND OPERATING INCOME
14
Sales Growth Rate
Operating
Income$ millions
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
$526
$581
SEM Distribution
$58
$61
+ 11% + 6%
$305
$425
$18
$22
+ 39% + 22%
$191
$228
$30
$29
+ 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
Year Ended
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 %
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
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
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
Adjusted
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
Reconciliation of Adjusted Earnings per Share: Avient
Special
Adjusted
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 %
Reconciliation of Pro Forma Adjusted
Earnings per Share: Avient
Special
Adjusted
Clariant Color
Pro Forma
Pro Forma
Adjusted
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 %
Reconciliation of Pro Forma Adjusted
Earnings per Share: Avient
Special
Adjusted
Clariant Color
Pro Forma
Pro Forma
Adjusted
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 %
March 31, 2021
Reconciliation to Condensed Consolidated Statements of Income
GAAP
Special
Adjusted
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
Special
Adjusted
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
Reconciliation of pro
forma sales, operating
income, and EBITDA: CAI
Clariant Color
Pro Forma
Pro Forma
CAI CAI
Clariant Color
Pro Forma
Pro Forma
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 %
6
Year Ended
December 31, 2020
Reconciliation of pro
forma sales, operating
income, and EBITDA: CAI
Clariant Color
Pro Forma
Pro Forma
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 %
AVNT Q4 2021 Earnings Presentation.pdf
AVNT Q4 2021 Earnings Presentation.pdf
2.7.22 632pm IR Deck - AVNT-2021.12.31.pdf