https://www.avient.com/sites/default/files/2021-09/avnt-q2-2021-earnings-presentation.pdf
Operating Income $3,783 $4,300 2020PF 2021E Adjusted EPS (1) Financial information is pro forma to include a full year of Clariant Masterbatch business acquisition Previous Guidance Current Guidance $3,783 $4,650 2020PF 2021E $308 $410 2020PF 2021E $308 $430 2020PF 2021E $1.93 $2.80 2020PF 2021E $1.93 $3.00 2020PF 2021E (1) (1)(1) (1)(1) (1) (in millions) (in millions) $442 $457 $580 2019PF 2020PF 2021E $1.74 $1.93 $3.00 2019PF 2020PF 2021E FULL YEAR 2019 – 2021 ORGANIC GROWTH (TOTAL COMPANY) 16 Sales Adjusted EBITDA $3,981 $3,783 $4,650 2019PF 2020PF 2021E + 17% Adjusted EPS (1) Financial information is pro forma to include a full year of Clariant Masterbatch business acquisition (1) (1) (in millions) (in millions) (1)(1) + 31% + 72% (1) (1) ($ in millions) 2021E Adjusted EBITDA 580$ Free Cash Flow 280$ Total Debt 1,860 Less: Cash (755) Net Debt 1,105$ 2021E Net Debt / Adjusted EBITDA 1.9x 17 BALANCE SHEET • Acquisition of Magna Colours completed on July 1 – expands sustainable solutions portfolio through water-based inks technology • Deleveraging to 1.9x net debt to adjusted EBITDA by the end of 2021 • Driven by record adjusted EBITDA performance and strong free cash flow generation from asset light business • Future cash deployment: M&A, opportunistic share repurchases and balance sheet / continued leverage reduction 3.5x 2.7x 1.9x 2019PF 2020PF 2021E Net Debt / Adjusted EBITDA (1) (1) (1) Financial information is pro forma to include a full year of Clariant Masterbatch business acquisition SUSTAINABILITY FOR A BETTER TOMORROW 18 • Revenue from sustainable solutions expected to grow 14% in 2021 as our innovation efforts and collaboration with customers continues to accelerate • 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 18 2016 2017 2018 2019 2020PF** Bio-polymers Reduced Energy Use Human Health & Safety Sustainable Infrastructure VOC Reduction Recycle Solutions Eco-Conscious Lightweighting Revenue From Sustainable Solutions* 2016-2020 $405M $455M *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 Masterbatch business $340M $550M $790M 18 19 Key Updates • Includes Clariant Masterbatch performance • Increases disclosures and ESG data • Provides performance updates on 2030 Sustainability Goals • Commits to operational carbon neutrality in 2050 and 100% renewable energy by 2050 (RE 100) • Announces Avient’s participation in U.N.
APPENDIX Performance Additives 15% Pigments 15% TiO2 12% Dyestuffs 4%Polyethylene 10% Nylon 5% Polypropylene 4% Other Raw Materials 29% Styrenic Block Copolymer 6% ~1/3 hydrocarbon based (Grey shaded materials are hydrocarbon based, includes portion of “Other Raw Materials”) Non-hydrocarbon based materials 28 • In Q2 2021, several raw material markets experienced significant price inflation and tight inventory o Average cost of hydrocarbon based materials was up 45% year-over-year and 20% sequentially o Average cost of non-hydrocarbon based materials was up 10% year-over-year and 8% sequentially • Additionally, we experienced other supply chain challenges during Q2 related to raw material spot purchases, freight constraints and productivity loss as a result of these shortages Annual Purchases RAW MATERIAL AND SUPPLY CHAIN UPDATE Based on 2020 pro forma purchases, excludes Distribution business SEGMENT DATA U.S. & Canada 50% EMEA 26% Asia 16% Latin America 8% 2021 YTD SEGMENT, END MARKET AND GEOGRAPHY 30 GEOGRAPHY REVENUESEGMENT FINANCIALS Consumer 23% Packaging 20% Industrial 16% Building and Construction 9% Telecommunications 4% Energy 2% END MARKET REVENUE (1) Total company sales and EBITDA of $2,398M and $320M, respectively, include intercompany sales eliminations and corporate costs All charts reflect YTD financials through June 30 $1,234M $228M $457M $87M $767M $48M Sales EBITDA Distribution Specialty Engineered Materials Color Additives and Inks $320M$2,398M (1) Transportation 12% Healthcare 14% Packaging 34% Consumer 21% Healthcare 7% Industrial 16% Building & Construction 10% Transportation 9% Energy 2% Telecommunications 1% C O L O R , A D D I T I V E S & I N K S 2021 YTD REVENUE | $1 .2 BILL ION US & Canada 31% EMEA 42% Asia 21% Latin America 6% END MARKET REGION 31 All charts reflect 2021 YTD financials through June 30 S P E C I A LT Y E N G I N E E R E D M AT E R I A L S Consumer 28% Healthcare 10% Packaging 6% Telecommunications 16% Industrial 12% Transportation 11% Building & Construction 10% Energy 7% 2021 YTD REVENUE | $457 MILLION END MARKET US & Canada 54% EMEA 26% Asia 20% REGION 32 All charts reflect 2021 YTD financials through June 30 DI S TR IBU T I ON Healthcare 27% Consumer 22% Packaging 5% Industrial 20% Transportation 16% Building and Construction 8% Energy 1% Telecommunications 1% US & Canada 81% Asia 4% Latin America 15% END MARKET REGION K E Y S U P P L I ER S 2021 YTD REVENUE | $767 MILLION 33 All charts reflect 2021 YTD financials through June 30 TOTA L C O M PA N Y R E G I O N A L S A L E S BY END MARKET Packaging 30% Consumer 27%Healthcare 11% Industrial 15% Building & Construction 5% Telecommunications 2% Energy 2% Asia (16% of sales) Transportation 8% Packaging 32% Consumer 13% Healthcare 5% Industrial 18% Building & Construction 11% Telecommunications 5% Energy 4% EMEA (26% of sales) Transportation 12% 34 Consumer 25% Healthcare 19% Packaging 11% Industrial 16% Building & Construction 10% Telecommunications 4% Energy 2% US & Canada (50% of sales) Transportation 13% Packaging 40% Consumer 33% Healthcare 4% Industrial 10% Building & Construction 5% Telecommunications 1% LATAM (8% of sales) Transportation 7% All charts reflect 2021 YTD financials through June 30 Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Three Months Ended June 30, 2021 Reconciliation to Condensed Consolidated Statements of Income GAAP Results Special Items Adjusted Results Operating income $ 108.1 $ 14.2 $ 122.3 Income from continuing operations before income taxes $ 89.8 $ 14.2 $ 104.0 Income tax expense - GAAP (20.4) — (20.4) Income tax impact of special items — (3.4) (3.4) Tax adjustments — 0.9 0.9 Net income attributable to noncontrolling interests (0.6) — (0.6) Net income from continuing operations attributable to Avient shareholders $ 68.8 $ 11.7 $ 80.5 Net income / EPS $ 0.74 $ 0.13 $ 0.87 Weighted-average diluted shares 92.4 92.4 92.4 Three Months Ended September 30, 2020 Reconciliation to Condensed Consolidated Statements of Income GAAP Results Special Items Adjusted Results Operating income $ 33.5 $ 40.4 $ 73.9 Income from continuing operations before income taxes $ 5.3 $ 50.0 $ 55.3 Income tax expense - GAAP (2.7) — (2.7) Income tax impact of special items — (12.7) (12.7) Tax adjustments — 3.0 3.0 Net income attributable to noncontrolling interests (0.9) — (0.9) Net income from continuing operations attributable to Avient shareholders $ 1.7 $ 40.3 $ 42.0 Net income / EPS $ 0.02 $ 0.44 $ 0.46 Weighted-average diluted shares 91.9 91.9 91.9 Three Months Ended Year Ended December 31, Reconciliation to Pro Forma Adjusted EBITDA June 30, 2021 March 31, 2021 June 30, 2020 2020 2019 Net income from continuing operations – GAAP $ 69.4 $ 79.7 $ 23.4 $ 133.8 $ 75.7 Income tax expense 20.4 22.9 7.9 5.2 33.7 Interest expense 19.5 19.3 16.2 74.6 59.5 Depreciation and amortization from continuing operations 33.8 37.1 20.9 115.0 78.1 EBITDA $ 143.1 $ 159.0 $ 68.4 $ 328.6 $ 247.0 Special items, before tax 14.2 2.4 2.4 66.2 61.7 Interest expense included in special items — — (0.5) (10.1) — Depreciation and amortization included in special items 1.4 (0.5) (1.2) (3.2) — Adjusted EBITDA $ 158.7 $ 160.9 $ 69.1 $ 381.6 $ 308.7 Clariant MB pro forma adjustments(1) — — 37.0 75.1 133.2 Pro forma adjusted EBITDA $ 158.7 $ 160.9 $ 106.1 $ 456.7 $ 441.9 (1) Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects to the financing for the acquisition 1 Reconciliation of EBITDA by Segment Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2021 2020 2021 2020 2019 2018 Sales: Color, Additives and Inks $ 624.4 $ 226.8 $ 1,233.7 $ 483.3 $ 1,502.9 $ 1,003.8 Specialty Engineered Materials 240.6 158.8 457.1 344.1 708.8 745.7 Distribution 404.4 238.8 767.1 528.3 1,110.3 1,192.2 Corporate and eliminations (34.2) (15.3) (60.4) (35.1) (79.9) (79.0) Sales $ 1,235.2 $ 609.1 $ 2,397.5 $ 1,320.6 $ 3,242.1 $ 2,862.7 Operating income: Color, Additives and Inks $ 86.3 $ 32.3 $ 175.1 $ 180.8 $ 147.4 $ 158.5 Specialty Engineered Materials 37.3 17.0 71.5 94.4 83.7 72.3 Distribution 23.7 14.6 47.7 69.5 75.4 71.5 Corporate and eliminations (39.2) (25.9) (65.8) (155.4) (149.7) (123.7) Operating income $ 108.1 $ 38.0 $ 228.5 $ 189.3 $ 156.8 $ 178.6 Items below OI in Corporate: Other income, net $ 1.2 $ 9.5 $ 2.7 $ 24.3 $ 12.1 $ (12.9) Depreciation & amortization: Color, Additives and Inks $ 25.3 $ 10.6 $ 52.6 $ 75.1 $ 42.7 $ 44.3 Specialty Engineered Materials 8.1 7.6 15.9 30.0 29.5 23.2 Distribution 0.2 0.1 0.4 0.7 0.5 0.7 Corporate and eliminations 0.2 2.6 2.0 9.2 5.4 4.4 Depreciation & Amortization $ 33.8 $ 20.9 $ 70.9 $ 115.0 $ 78.1 $ 72.6 EBITDA: Color, Additives and Inks $ 111.6 $ 42.9 $ 227.7 $ 255.9 $ 190.1 $ 202.8 Specialty Engineered Materials 45.4 24.6 87.4 124.4 113.2 95.5 Distribution 23.9 14.7 48.1 70.2 75.9 72.2 Corporate and eliminations (39.0) (23.3) (63.8) (146.2) (144.3) (119.3) EBITDA $ 143.1 $ 68.4 $ 302.1 $ 328.6 $ 247.0 $ 238.3 EBITDA as a % of Sales: Color, Additives and Inks 17.9 % 18.9 % 18.5 % 17.0 % 18.9 % 19.4 % Specialty Engineered Materials 18.9 % 15.5 % 19.1 % 17.6 % 15.2 % 14.8 % Distribution 5.9 % 6.2 % 6.3 % 6.3 % 6.4 % 5.7 % 2 Reconciliation of Pro Forma EBITDA - Color, Additives and Inks Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2021 2020 2021 2020 2019 2018 Sales: Color, Additives and Inks $ 624.4 $ 226.8 $ 1,233.7 $ 1,502.9 $ 1,003.8 $ 1,046.5 Clariant MB pro forma adjustments(1) — 261.1 — 540.4 1,118.6 1,209.8 Pro forma sales $ 624.4 $ 487.9 $ 1,233.7 $ 2,043.3 $ 2,122.4 $ 2,256.3 Operating income: Color, Additives and Inks $ 86.3 $ 32.3 $ 175.1 $ 180.8 $ 147.4 $ 158.5 Clariant MB pro forma adjustments(1) — 22.0 — 45.0 72.9 80.3 Pro forma operating income $ 86.3 $ 54.3 $ 175.1 $ 225.8 $ 220.3 $ 238.8 Depreciation & amortization: Color, Additives and Inks $ 25.3 $ 10.6 $ 52.6 $ 75.1 $ 42.7 $ 44.3 Clariant MB pro forma adjustments(1) — 15.0 — 30.1 60.3 61.2 Pro forma depreciation & amortization $ 25.3 $ 25.6 $ 52.6 $ 105.2 $ 103.0 $ 105.5 EBITDA Color, Additives and Inks $ 111.6 $ 42.9 $ 227.7 $ 255.9 $ 190.1 $ 202.8 Clariant MB pro forma adjustments(1) — 37.0 — 75.1 133.2 141.5 Pro forma EBITDA $ 111.6 $ 79.9 $ 227.7 $ 331.0 $ 323.3 $ 344.3 Pro forma EBITDA as a % of Sales 17.9 % 16.4 % 18.5 % 16.2 % 15.2 % 15.3 % (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition Three Months Ended June 30, 2020 Reconciliation of Pro Forma Adjusted Earnings per Share Avient Special Items Adjusted Avient Clariant MB Pro Forma Adjustments(1) Pro Forma Adjusted Avient Sales $ 609.1 $ — $ 609.1 $ 261.1 $ 870.2 Operating income $ 38.0 $ 9.0 $ 47.0 $ 22.0 $ 69.0 Interest expense, net (16.2) — (16.2) (5.3) (21.5) Other income, net 9.5 (6.6) 2.9 — 2.9 Income taxes (7.9) 0.2 (7.7) (3.8) (11.5) Net income attributable to noncontrolling interests (0.4) — (0.4) — (0.4) Net income from continuing operations attributable to Avient shareholders $ 23.0 $ 2.6 $ 25.6 $ 12.9 $ 38.5 Weighted average diluted shares 91.8 Pro forma adjusted EPS $ 0.42 (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 3 Year Ended December 31, 2020 Reconciliation of Pro Forma Adjusted Earnings per Share Avient Special Items Adjusted Avient Clariant MB Pro Forma Adjustments(1) Pro Forma Adjusted Avient Sales $ 3,242.1 $ — $ 3,242.1 $ 540.4 $ 3,782.5 Operating income $ 189.3 $ 73.7 $ 263.0 $ 45.0 $ 308.0 Interest expense, net (74.6) 10.1 (64.5) (18.1) (82.6) Other income, net 24.3 (17.6) 6.7 — 6.7 Income taxes (5.2) (41.4) (46.6) (6.2) (52.8) Net income attributable to noncontrolling interests (1.8) — (1.8) — (1.8) Net income from continuing operations attributable to Avient shareholders $ 132.0 $ 24.8 $ 156.8 $ 20.7 $ 177.5 Weighted average diluted shares 90.6 Impact to diluted shares from January 2020 equity offering 1.5 Pro forma weighted average diluted shares 92.1 Pro forma adjusted EPS $ 1.93 (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition Year Ended December 31, 2019 Reconciliation of Pro Forma Adjusted Earnings per Share Avient Special Items Adjusted Avient Clariant MB Pro Forma Adjustments(1) Pro Forma Adjusted Avient Sales $ 2,862.7 $ — $ 2,862.7 $ 1,118.6 $ 3,981.3 Operating income $ 156.8 $ 71.7 $ 228.5 $ 72.9 $ 301.4 Interest expense, net (59.5) — (59.5) (33.4) (92.9) Other income, net 12.1 (10.0) 2.1 — 2.1 Income taxes (33.7) (5.9) (39.6) (9.1) (48.7) Net income attributable to noncontrolling interests (0.2) — (0.2) — (0.2) Net income from continuing operations attributable to Avient shareholders $ 75.5 $ 55.8 $ 131.3 $ 30.4 $ 161.7 Weighted average diluted shares 77.7 Impact to diluted shares from January 2020 equity offering 15.3 Pro forma weighted average diluted shares 93.0 Pro forma adjusted EPS $ 1.74 (1) - Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects of the financing for the acquisition 4 AVNT Q2 2021 Earnings Presentation - Website NEW.pdf AVNT Q2 2021 Earnings Presentation - Website.pdf Final - 7.19 1158am Q2 21 IR Deck Version v2