Slide 1: Avient Corporation Fourth Quarter 2021 Results and 2022 Financial Guidance
AVIENT CORPORATION F O U R TH Q UA RT ER 2 0 2 1 R E SU LT S AND 2022 FINANCIAL GUIDANCE (NYSE: AVNT) F E B RUARY 8 , 2 0 2 2
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements In this presentation, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectat
Slide 3: 2021 Performance
mh, » 2021 PERFORMANCE d
Slide 4: Q4 2021 Performance
Q4 2021 PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 21% + 6% + 12% $0.58 $1,202 $85 $80 $0.52 $997 2020 2021 2020 2021 2020 2021 (in millions) (in millions) 4
Slide 5: Full Year 2021 Performance
FULL YEAR 2021 PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 27% + 39% + 58% $4,819 $429 $3.05 $3,783 $308 $1.93 (1) (1) 2020PF (1) 2021 2020PF 2021 2020PF 2021 (in millions) (in millions) 5 (1) Financial information is pro forma to include a full year of Clari
Slide 6: Full Year 2021 Segment Performance
FULL YEAR 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) + 18% + 34% + 30% + 40% + 47% + 33% $2,402 $303 $919 $1,631 $132 $93 $2,043 $709 $226 $70 $94 $1,110 Sales Operating Income Sales Operating Income Sales Operating Income (1) (1) 6 (1) Financial information is pro forma to includ
Slide 7: Full Year 2021 Sales and Operating Income
FULL YEAR 2021 SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income (1) 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-tot
Slide 8: Full Year 2021 EBITDA Bridge
FULL YEAR 2021 EBITDA BRIDGE Adjusted $ millions EBITDA (1) Full Year 2020 (Pro forma) $ 457 Demand 135 • Demand impact driven by growth CAI: in key focus areas: sustainable Price / Mix 158 Inflation (120) solutions, healthcare, composites and growth in Asia / LATAM SEM: Price / Mix 84 Inflation (
Slide 9: Specialty EBITDA Margin Expansion
SPECIALTY EBITDA MARGIN EXPANSION 17.0% • Record margins in 2021 despite 16.2% unprecedented supply chain challenges 15.3% 15.2% (1) CAI • Continued portfolio transformation to high-growth end markets and 2018 2019 2020 2021 sustainable solutions • Clariant Color synergy realization 17.6% 17.8% • In
Slide 10: Clariant Color: Transformational Acquisition
CLARIANT COLOR: TRANSFORMATIONAL ACQUISITION Clariant Color EBITDA Growth ($ in millions) $205 • Acquisition of Clariant Color business significantly expanded $133 presence in healthcare, packaging and consumer end markets (1) 2019PF 2021 EBITDA Margins • Strength of portfolio – double-digit annual
Slide 11: Clariant Color Integration & Cost Synergies Update
C L A R I A N T C O LO R I N T E G R AT I O N & C O S T S Y N ERG I E S U PDATE Initial 2021 Total ($ millions) Synergy Synergy Synergies Estimate Realization Expected Administrative $ 18 $ 29 $ 40 Sourcing 24 20 24 Operational 18 5 21 Total Synergies $ 60 $ 54 $ 85 • Integration going extremely wel
Slide 12: Sustainability for a Better Tomorrow
S U S TA I NA B I L I T Y F O R A B ET T E R TO M O R ROW Revenue From Sustainable Solutions* 2016-2021 • Revenue from sustainable solutions grew 16% in 2021 and expected to grow 8-12% in $915M 2022 as our innovation efforts and collaboration with customers accelerates $790M • Investments centered a
Slide 13: People
PEOPL E C ULTU RE IS EVERYTH ING World-Class Safety Diversity & Inclusion 7x Safer than Industry Average Community Service Leadership Development Over $16 million raised since 2010 13
Slide 14: Q4 2021 Sales and Operating Income
Q4 2021 SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income 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 Over
Slide 15: Q4 EBITDA Bridge
Q4 EBITDA BRIDGE Adjusted $ millions EBITDA Transportation $ (5) Q4 2020 $ 118 Outdoor High Performance (3) Demand - Other 8 CAI: Total Demand - Price / Mix 62 Inflation (45) SEM: Price / Mix Inflation 25 (20) Distribution: Price / Mix 114 Price increases more than Inflation (109) offsets raw
Slide 16: Q4 2021 Segment Performance
Q4 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) + 11% + 6% + 19% - 3% + 39% + 22% $581 $228 $425 $61 $30 $22 $526 $58 $29 $191 $18 $305 Sales Operating Income Sales Operating Income Sales Operating Income (1) 16
Slide 17: 2022 Outlook
2022 OUTLOOK
Slide 18: Revenue Growth Drivers
REVENUE GROWTH DRIVERS Long-Term 2022E Growth Drivers Growth Rate Growth Rate Sustainable Solutions 8–12% 12% Healthcare 8–10% 10% Composites 10% 3% Excluding Outdoor High Performance 13% Asia / LATAM 5% 6% Other (GDP growth) 2–3% 2–3% Avient 6.5% 6% (7.5% excl. FX) 18
Slide 19: 2022 Growth Projections
2022 GROWTH PROJECTIONS ( T O TA L C O M PA N Y ) Q1 – Adjusted EPS Full Year – Adjusted EPS + 7% + 15% (+ 10% excluding FX) (+ 17% excluding FX) $0.95 $3.50 $0.89 $3.05 2021 2022E 2021 2022E 19
Slide 20: 2022 Sales and OI – Q1 and Full Year
2022 SALES AND OI – Q1 AND FULL YEAR ( T O TA L C O M PA N Y ) Adjusted Sales Operating Income ($ millions) Q1 Full Year Q1 Full Year 2021 - Actual $ 1,162 $ 4,819 $ 123 $ 429 Sustainable Solutions 27 110 12 44 Healthcare 15 66 4 13 Composites (excl.Outdoor High Performance) 11 29 5 13 Outdoor High
Slide 21: Cash Flow / Leverage
C A SH F LOW / L E VE R AGE ($ millions) 2021 2022E Cash Flow from Operating Activities $ 234 $ 385 Less: Run-Rate CapEx (86) (90) CapEx for Clariant Integration (15) (20) CapEx for IT System Upgrade - (25) Total CapEx (101) (135) Free Cash Flow $ 133 $ 250 Adjusted EBITDA $ 581 $ 635 Net Debt / Adj
Slide 22: 2021 Highlights
2021 HIGHLIGHTS • Record results – highest level of sales ($4.8B) and earnings ($3.05 adjusted EPS) in company history • Successful Clariant Color integration – net debt to adjusted EBITDA reduced to 2.2x, one-year ahead of schedule • Recognized as one of America’s Most Responsible Companies by News
Slide 23: 2022 Summary
2022 SUMMARY • 15% adjusted EPS growth to $3.50, led by growth in sustainable solutions and increased synergy realization • Continued strong synergy capture from the Clariant Color integration: $75M anticipated run-rate synergies by the end of 2022 • Adjusted EBITDA of $635M represents 9% growth abo
Slide 24: Avient
YX AVIENT
Slide 25: Peer Comparisons
PEER COMPARISONS 25
Slide 26: Avient Is Asset Light
AV I E N T I S A SS E T L I G H T Capex / Revenue As a specialty formulator, we don’t 2022E (%) require significant capital 7 7 investment, as compared to the 7 base resin raw material suppliers 5 we purchase from. Even more, our 5 5 manufacturing capabilities are 4 flexible and easily adaptable to
Slide 27: High Free Cash Flow Conversion
H I G H F R E E C A S H F L OW CONVERSION Free Cash Flow Conversion (1) 2022E (%) Being asset light helps us to generate strong free cash flow that is in line 86 89 89 85 85 with specialty formulators. 80 79 78 76 76 76 76 76 70 69 63 Our free cash flow supports shareholder value creation through in
Slide 28: Our Valuation Versus Peers
O U R VA LUATI O N V E R S U S P E E R S With the Clariant Color business Total Enterprise Value / 2022E EBITDA acquisition and divestment of the PP&S business, our exposure is now concentrated in less-cyclical Historic Multiple and high-growth markets. 25.0 19.7 Over the last 10 years, our 17.7 mul
Slide 29: Summary: Why Invest in Avient?
S U M M A RY: W H Y I N V E S T I N AV I E N T ? We are a specialty formulator that enables many of the world’s products through innovation and custom solutions. We take great pride in our essential role and responsibility—to our people, our customers, our planet and our shareholders. In 2021, we de
Slide 30: Appendix
APPENDIX SX<AVIENT
Slide 31: Raw Material and Supply Chain Update
RAW MATERIAL AND SUPPLY CHAIN UPDATE Annual Purchases • Significant raw material price inflation Performance and tight inventory continued in Q4 2021 Additives 15% Other Raw Materials o For the full year, the average cost of 30% hydrocarbon based materials was up Pigments 50% in 2021 13% Non-hydroca
Slide 32: Segment Data
SEGMENT DATA SX<AVIENT
Slide 33: 2021 Segment, End Market and Geography
2021 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Telecommunications 2% Latin America $4,819M $581M 4% Consumer 9% U.S. & Canada Building and 23% 50% Construction $94M 10% Asia 16% $1,631M $164M Transportation 11% $919M $409M Packaging $2,402M 19%
Slide 34: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2021 REVENUE | $2.4 BILLION END MARKET REGION Energy 1% Telecommunications Latin America 1% 7% Transportation 9% US & Canada 32% Building & Packaging 34% Asia Construction 21% 10% Industrial 16% Healthcare Consumer 8% 21% EMEA 40% 34 All charts reflect 2021 financials
Slide 35: Specialty Engineered Materials
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 2021 REVENUE | $919 MILLION END MARKET REGION Energy 7% Asia US & Canada Building & Consumer 20% 55% Construction 27% 11% Industrial 11% Healthcare 10% Transportation EMEA 11% 25% Packaging 7% Telecommunications 16% 35 All charts reflect 2021 fin
Slide 36: Distribution
DISTRIBUTION 2021 REVENUE | $1.6 BILLION END MARKET REGION Energy Telecommunications Building and 1% 1% Latin Construction America 8% 17% US & Canada Healthcare 80% 26% Transportation Asia 16% 3% Consumer Industrial 23% 20% Packaging 5% KEY SUPPLIERS 36 All charts reflect 2021 financials
Slide 37: Total Company Regional Sales by End Market
T O T A L C O M PA N Y R E G I O N A L S A L E S BY END MARKET Energy Energy Telecommunications 2% Telecommunications 4% 4% 5% Building & Consumer Packaging Construction 25% Building & Construction 32% 10% 12% Transportation 13% US & Canada Transportation EMEA 12% (25% of sales) (50% of sales) Indus
Slide 38: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted adjusted earnings per share (EPS) from continuing operations
Slide 39: Reconciliation of EBITDA by Segment
Three Months Ended Year Ended Reconciliation of EBITDA by Segment December 31, December 31, 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
Slide 40: Reconciliation of Pro Forma Sales, Operating Income and EBITDA - Color, Additives and Inks
Reconciliation of Pro Forma Sales, Operating Income and EBITDA - Color, Year Ended Additives and Inks 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
Slide 41: Net Debt Calculation and Adjusted EPS Reconciliation
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 Special Adjusted Reconciliation o
Slide 42: Reconciliation of Pro Forma Adjusted Earnings per Share
Year Ended December 31, 2020 Clariant Color Pro Forma Reconciliation of Pro Forma Adjusted Special Adjusted Pro Forma Adjusted Earnings per Share: Avient Items Avient Adjustments(1) 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
Slide 43: Reconciliation to Condensed Consolidated Statements of Income
Three Months Ended March 31, 2021 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results 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) Inc
Slide 44: Reconciliation of Pro Forma Sales, Operating Income, and EBITDA
Year Ended December 31, 2020 Reconciliation of pro Clariant Color forma sales, operating Pro Forma Pro Forma income, and EBITDA: CAI Adjustments(1) CAI 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 % (1) - Pro form