Avient Corporation · NYSE:AVNT
Avient — Investor Presentation (June 2021)
42 slides from Avient's investor presentation, June 2021
Slide 1: Avient Corporation June 2021 Investor Meetings
AVIENT CORPORATION JUNE 2021 INVESTOR MEETINGS (NYSE: AVNT)
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: Who We Are – Vision, Strategy, Culture
W H O W E A R E – V I S I O N , S T R AT E G Y, C U LT U R E Avient Corporation (NYSE: AVNT) provides OUR VISION specialized and sustainable material solutions that At Avient, we create specialized and sustainable material solutions that transform transform customer challenges into opportunities, cu
Slide 4: What We Do: Material Science
W H AT W E D O : M AT E R I A L S C I E N C E Innovation is the lifeblood of a specialty company. We create specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. We partner with Brand Owners / OEMs, pro
Slide 5: Why Avient Wins
W H Y AV I E N T W I N S At Avient, we’ve built a culture of winning and how we do so is unique, lasting and Speed to market is essential today, and Avient plays a crucial role in our customers’ difficult to replicate. It’s why customers choose us. And we have over 21,000 who do. success. Our except
Slide 6: Better Together: PolyOne and Clariant Masterbatch
B ET T E R TO G E TH E R : P O LYO NE A N D C L A R I A N T M A S T ER BATC H In July 2020, we completed the acquisition of the Clariant Masterbatch business, the We are better together through: largest acquisition in the 20-year history of our company. Keeping Safety First — PolyOne and Clariant ar
Slide 7: Clariant Cost Synergies
C L A R I A N T C O S T S Y N ERG I E S Synergies Three-Year • On-track to realize $45 million of expected ($ millions) Estimate synergies in 2021 – up from previous estimate of $35 million Administrative $ 20 • Relentless focus on guiding principles for Sourcing 30 acquisition integration: safety f
Slide 8: Complementary Technologies and Customers Drive Revenue Synergies
C O M P L E M E NTA RY T E C H N O LOG I E S A N D C U S TO M ER S D R I V E R E V E N U E S Y N E RG I E S The complementary aspects of our combined businesses are unquestionable. From technology portfolios to end markets to geographies and distribution channels, this acquisition made perfect sense
Slide 9: Sustainability
S U S TA I NA B I L I T Y (1) Revenue from Sustainable Solutions 2016 – 2020 Newsweek Most Responsible Companies $560M $410M $355M $325M $275M (2) 2016 2017 2018 2019 2020PF VOC Reduction Reduced Energy Use Bio-derived Content Eco-conscious Renewable Energy Applications Recyclability Reduced Materia
Slide 10: 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 expected to grow 11% in 2021 as our innovation efforts and collaboration with customers continues to accelerate • Relentless focus on delivering our 2030 sustainability targets to benefit the planet and pe
Slide 11: 2030 Sustainability Targets
2 0 3 0 S U STA I NA B I L I T Y TA RG E TS Enable 100% of products manufactured for Obtain 40% of electricity demand from packaging applications to be recyclable or renewable sources. reusable. 100% of technology platform projects Assess top 90% of supplier spend for alignment will deliver sustaina
Slide 12: Future Growth in Excess of GDP Is Driven By
F U T U R E G ROW TH I N E XC E S S O F G D P I S D R I V E N B Y: Our company is positioned to sustainably grow at a rate that exceeds GDP. We will do so though our investments and focus on sustainable solutions for high-growth markets, including healthcare, consumer, packaging and composites/5G. T
Slide 13: Q1 2021 Performance Update
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Slide 14: Q1 2021 – Organic Performance
Q1 2021 – ORGANIC PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 17% + 43% + 68% $1,162 $123 $0.89 $991 $86 $0.53 (1) (1) (1) 2020PF 2021 2020PF 2021 2020PF 2021 (in millions) (in millions) 14 (1) Financial information is pro forma to include a full year of Clar
Slide 15: Q1 2021 Segment Performance
Q1 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) +14% +17% +25% +39% +55% +26% $609 $217 $363 $89 $34 $536 $24 $185 $290 $19 $64 $22 Sales Operating Income Sales Operating Income Sales Operating Income (1) 15 (1) Financial information is pro forma to include a full year of Clariant M
Slide 16: Specialty EBITDA Margin Expansion
SPECIALTY EBITDA MARGIN EXPANSION 19.1% 16.2% 15.3% 15.2% • Continued portfolio transformation to (1) CAI high-growth end markets and sustainable solutions 2018 2019 2020 Q1 2021 • Clariant Masterbatch synergy realization 19.4% • Investments in composites and outdoor 17.6% high performance applicati
Slide 17: CAI EBITDA Margin Expansion
CAI EBITDA MARGIN EXPANSION 21.0% 18.9% 18.9% • Early synergy capture translating to the bottom line Legacy CAI • Positive mix with growth in healthcare, consumer and packaging end-markets 2019 2020 Q1 2021 • World-class vitality index of 36% represents sales from products 17.4% introduced in the la
Slide 18: Q1 2021 Organic Sales and Operating Income
Q1 2021 ORGANIC SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income (1) 2020 Pro forma $991 $86 Sustainable Solutions 15 11% 6 Healthcare 28 22% 6 Composites 6 10% 3 Growth in Emerging Regions 44 30% 10 Other 53 10% 7 Sub-total $1,137 15% $118
Slide 19: Q1 End Market Sales Performance
Q1 END MARKET SALES PERFORMANCE (58% of total revenue) +24% (42% of total revenue) +5% +8% +22% +10% +14% +8% +17% Electrical & Building & Wire & Cable Transportation Industrial Healthcare Packaging Consumer Electronics Construction (1,2) Q1 2020PF Q1 2021 19 (1) (2) Financial information is pro for
Slide 20: Q2 and Full Year 2021 Outlook
Q2 AND FULL YEAR 2021 OUTLOOK AS OF APRIL 30, 2021 WEBCAST
Slide 21: Organic Growth Projections – Q2
ORGANIC GROWTH PROJECTIONS – Q2 ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 26% + 62% + 90% $1,100 $112 $0.80 $870 $69 $0.42 (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E (in millions) (in millions) 21 (1) Financial information is pro forma to include a full year of
Slide 22: Full Year Guidance Increased
FULL YEAR GUIDANCE INCREASED Sales Adj. Operating Income Adjusted EPS (in millions) (in millions) $4,100 $360 $2.40 $3,783 $308 $1.93 Previous Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E $410 $2.80 $4,300 $3,783 $1.93 $308 Current Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF
Slide 23: Full Year 2019 – 2021 Organic Growth
FULL YEAR 2019 – 2021 ORGANIC GROWTH ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS + 8% + 27% + 61% $4,300 $560 $2.80 $3,981 $3,783 $457 $442 $1.93 $1.74 (1) (1) (1) (1) (1) (1) 2019PF 2020PF 2021E 2019PF 2020PF 2021E 2019PF 2020PF 2021E (in millions) (in millions) 23 (1) Financial in
Slide 24: Balance Sheet
BA L A N C E S H E E T ($ in millions) 2021E Adjusted EBITDA $ 560 • Deleveraging to 1.9x net debt to Free Cash Flow $ 275 adjusted EBITDA by the end of 2021 Total Debt 1,860 Less: Cash (800) Net Debt $ 1,060 • Driven by record adjusted EBITDA 2021E Net Debt / Adjusted EBITDA 1.9x performance and st
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 2021E (%) require significant capital investment, as compared to the Median: 3% Median: 5% 23 base resin raw material suppliers we purchase from. Even more, our manufacturing capabilities are flexible and easily ad
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) 2021E (%) Being asset light helps us to generate Median: 84% Median: 78% strong free cash flow that is in line 87 89 87 88 86 85 83 with specialty formulators. 83 81 82 81 80 78 78 78 76 76 72 71 69 Our free cash flow supports 5
Slide 28: Our Valuation Versus Peers
O U R VA LUATI O N V E R S U S P E E R S Total Enterprise Value / 2021E EBITDA Our current valuation with updated guidance implies an EBITDA multiple Median: 15.4x Median: 11.7x 29.7 that is below specialty formulator 26.5 peers and the majority of our 23.5 chemical peers. 18.2 18.2 16.0 15.5 15.3 W
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 ex
Slide 30: Appendix
APPENDIX SX<AVIENT
Slide 31: Raw Material Update
RAW MATERIAL UPDATE Annual Purchases • Exiting 2020, the majority of hydrocarbon based raw Performance Additives material markets were experiencing price inflation 15% Other Raw and tight inventory Materials 29% Pigments • Winter Storm Uri in the Gulf Coast caused further 15% stress on the situation
Slide 32: Segment Data
SEGMENT DATA SX<AVIENT
Slide 33: 2020 Segment, End Market and Geography
2020 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Electrical & Building & Electronics Latin America $3,783M $457M Construction 6% 4% Consumer 8% U.S. & Canada 23% 50% Wire & Cable $70M 6% Asia 16% $1,110M $124M $709M Transportation 10% $331M $2,043M Packa
Slide 34: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2020 PF REVENUE | $2.0 BILLION END MARKET REGION Electrical & Wire & Cable Electronics Latin America 3% 2% 7% Transportation US & Canada 7% 31% Packaging 35% Building & Asia Construction 22% 8% Industrial 14% Healthcare 8% EMEA Consumer 40% 23% 2020 figures Pro forma for acqu
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 2020 REVENUE | $709 MILLION END MARKET REGION Building & Construction 2% Industrial 10% Consumer Asia 19% US & Canada 24% 58% Transportation 11% Healthcare 10% Electrical & Electronics 13% Packaging EMEA 6% 23% Wire & Cable(1) 24% (1) Approximate
Slide 36: Distribution
DISTRIBUTION 2020 REVENUE | $1.1 BILLION END MARKET REGION Building & Wire & Cable Construction Latin 1% Electrical & 4% America Electronics 15% 5% US & Canada Healthcare 82% 29% Asia Transportation 3% 14% Industrial 20% Consumer 25% Packaging 2% KEY SUPPLIERS 36
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 Electrical & BY END MARKET Electrical & Building & Electronics Building & Electronics Construction 4% Construction 3% 5% 8% Wire & Cable Consumer Wire & Cable Packaging 7% 26% 10% 34% Transportation 10% US & Canada Transportation EMEA 7% (26% of sales
Slide 38: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Three Months Ended March 31, 2021 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results Income from continuing operations before income taxes
Slide 39: Business Segment Operations
Three Months Ended Year Ended Business Segment Operations March 31, December 31, 2021 2020 2020 2019 2018 Sales: Color, Additives and Inks $ 609.3 $ 256.5 $ 1,502.9 $ 1,003.8 $ 1,046.5 Specialty Engineered Materials 216.5 185.3 708.8 745.7 645.8 Distribution 362.7 289.5 1,110.3 1,192.2 1,265.4 Corpo
Slide 40: Reconciliation of Pro Forma EBITDA - Color, Additives and Inks
Reconciliation of Pro Forma EBITDA - Color, Three Months Ended Year Ended Additives and Inks March 31, December 31, 2021 2020 2020 2019 2018 Sales: Color, Additives and Inks $ 609.3 $ 256.5 $ 1,502.9 $ 1,003.8 $ 1,046.5 (1) Clariant MB pro forma adjustments — 279.4 540.4 1,118.6 1,209.8 Pro forma sa
Slide 41: Reconciliation of Pro Forma Adjusted Earnings per Share, Q2 2020
Three Months Ended June 30, 2020 Pro Clariant MB Forma Reconciliation of Pro Forma Adjusted Earnings per Special Adjusted Pro Forma Adjusted Share Avient Items Avient Adjustments(2) Avient Sales $ 609.1 $ — $ 609.1 $ 261.1 $ 870.2 Operating income $ 38.0 $ 9.0 $ 47.0 $ 22.0 $ 69.0 Interest expense,
Slide 42: Reconciliation of Pro Forma Adjusted EPS, Year Ended 2020
Year Ended December 31, 2020 Clariant MB Pro Forma Reconciliation of Pro Forma Adjusted Special Adjusted Pro Forma Adjusted Earnings per Share Avient Items Avient Adjustments(3) 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 exp