Slide 1: Avient Corporation Second Quarter 2021 Results
AVIENT CORPORATION S E C O N D Q UA R T E R 2 0 2 1 R E S U LT S (NYSE: AVNT) J U LY 3 0 , 2 0 2 1
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: Q2 2021 Performance Update
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Slide 4: Q2 2021 – Organic Performance
Q2 2021 – ORGANIC PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 42% + 77% + 107% $1,235 $122 $0.87 $870 $69 $0.42 (1) (1) (1) 2020PF 2021 2020PF 2021 2020PF 2021 (in millions) (in millions) 4 (1) Financial information is pro forma to include a full year of Clar
Slide 5: Q2 2021 Segment Performance
Q2 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) +28% +52% +69% +59% +118% +60% $624 $241 $404 $86 $24 $37 $488 $159 $239 $54 $15 $17 Sales Operating Income Sales Operating Income Sales Operating Income (1) (1) 5 (1) Financial information is pro forma to include a full year of Claria
Slide 6: Specialty EBITDA Margin Expansion
SPECIALTY EBITDA MARGIN EXPANSION 18.5% 16.2% 15.3% 15.2% • Continued portfolio transformation to (1) CAI high-growth end markets and sustainable solutions 2018 2019 2020 YTD 2021 • Clariant Masterbatch synergy realization 19.1% • Investments in composites and outdoor 17.6% high performance applicat
Slide 7: CAI EBITDA Margin Expansion
CAI EBITDA MARGIN EXPANSION 20.3% 18.9% 18.9% • Synergy capture translating to the bottom line Legacy CAI • Positive mix with growth in healthcare, consumer and packaging end-markets 2019 2020 YTD 2021 • World-class vitality index of 35% represents sales from products 16.8% introduced in the last fi
Slide 8: ColorWorks
COLORWORKS I N S P I R AT I O N . I N N OVAT I O N . C O - C R E AT I O N . • ColorWorks innovation centers are specially designed to foster imagination and enable creative exploration of innovative solutions • Focus on customers’ sustainability initiatives through recyclability and post-consumer re
Slide 9: Q2 2021 Organic Sales and Operating Income
Q2 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 $870 $69 Sustainable Solutions 66 37% 26 Healthcare 29 20% 7 Composites 12 36% 6 Growth in Asia / LATAM 47 39% 11 Other 190 48% 22 Sub-total $1,214 40% $141
Slide 10: Q2 End Market Sales Performance
Q2 END MARKET SALES PERFORMANCE (56% of total revenue) +67% (44% of total revenue) +7% +51% +9% +103% +46% +38% +26% Energy Telecom Building & Transportation Industrial Healthcare Packaging Consumer Construction (1,2) Q2 2020PF Q2 2021 10 (1) (2) Financial information is pro forma to include a full
Slide 11: Q2 Year-over-Year EBITDA Bridge
Q2 YEAR-OVER-YEAR EBITDA BRIDGE Adjusted $ millions EBITDA (1) Q2 2020 Pro forma $ 106 Demand 69 • Demand impact driven by CAI: growth in sustainable Price / Mix 40 Inflation (32) solutions and consumer SEM: products Price / Mix 23 Inflation (18) Distribution: Price / Mix Inflation 81 (77) • P
Slide 12: Q1 to Q2 Sequential EBITDA Bridge
Q1 TO Q2 SEQUENTIAL EBITDA BRIDGE Adjusted $ millions EBITDA Q1 2021 Actual $ 161 CAI: Price / Mix 32 • Price increases more than Inflation (22) offset raw material and SEM: freight inflation impacts Price / Mix 15 Inflation (9) Distribution: Price / Mix 50 Inflation (48) Net Price Benefit 18
Slide 13: Q3 and Full Year 2021 Outlook
i, ~ Q3 AND FULL YEAR 2021 OUTLOOK d
Slide 14: Organic Growth Projections – Q3
ORGANIC GROWTH PROJECTIONS – Q3 ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 24% + 32% + 48% $1,150 $0.68 $98 $925 $74 $0.46 2020 2021E 2020 2021E 2020 2021E (in millions) (in millions) 14
Slide 15: Full Year Guidance Increased
FULL YEAR GUIDANCE INCREASED Sales Adj. Operating Income Adjusted EPS (in millions) (in millions) $2.80 $4,300 $410 $3,783 $1.93 $308 Previous Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E $430 $4,650 $3.00 $3,783 $308 $1.93 Current Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF
Slide 16: 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 + 17% + 31% + 72% $4,650 $580 $3.00 $3,981 $3,783 $457 $442 $1.93 $1.74 (1) (1) (1) (1) (1) (1) 2019PF 2020PF 2021E 2019PF 2020PF 2021E 2019PF 2020PF 2021E (in millions) (in millions) 16 (1) Financial i
Slide 17: Balance Sheet
BA L A N C E S H E E T ($ in millions) 2021E Adjusted EBITDA $ 580 • Acquisition of Magna Colours completed on Free Cash Flow $ 280 July 1 – expands sustainable solutions Total Debt 1,860 portfolio through water-based inks technology Less: Cash (755) Net Debt $ 1,105 • Deleveraging to 1.9x net debt
Slide 18: 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* 2016-2020 • Revenue from sustainable solutions expected to $790M grow 14% in 2021 as our innovation efforts and collaboration with customers continues to accelerate $550M • Investments centered around innov
Slide 19: 2020 Sustainability Report
2 0 2 0 S U STA I NA B I L I T Y R E P O R T 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) • Announ
Slide 20: 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 60% of electricity demand from packaging applications to be recyclable or renewable sources. reusable. Deliver cumulative annual revenue Assess top 90% of supplier spend for alignment growth from sustainable
Slide 21: 2021 Avient Investor Day
2 0 2 1 AV I E N T I N V E S TO R DAY • Investor Day to be held December 9, 2021 in New York, NY • Company will provide updates on its key growth drivers with a deep focus on sustainable solutions Long-Term Revenue Growth Drivers Growth Rate Sustainable Solutions 8–12% Healthcare 8–10% Composites /
Slide 22: Peer Comparisons
PEER COMPARISONS 22
Slide 23: 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 27 investment, as compared to the Median: 3% Median: 5% base resin raw material suppliers we purchase from. Even more, our manufacturing capabilities are flexible and easily ad
Slide 24: 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: 81% Median: 78% strong free cash flow that is in line 87 90 86 87 with specialty formulators. 82 80 78 82 82 79 79 78 78 77 76 73 71 67 Our free cash flow supports shareho
Slide 25: 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: 14.6x Median: 11.1x 29.5 that is below specialty formulator 28.2 peers and the median of other selected chemical / specialty 23.9 companies. 1
Slide 26: 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 27: Appendix
APPENDIX SX<AVIENT
Slide 28: Raw Material and Supply Chain Update
RAW MATERIAL AND SUPPLY CHAIN UPDATE Annual Purchases • In Q2 2021, several raw material markets Performance experienced significant price inflation and Additives 15% tight inventory Other Raw Materials 29% o Average cost of hydrocarbon based materials Pigments was up 45% year-over-year and 20% 15%
Slide 29: Segment Data
SEGMENT DATA SX<AVIENT
Slide 30: 2021 YTD Segment, End Market and Geography
2021 YTD SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Telecommunications 2% Latin America $2,398M $320M 4% Consumer 8% U.S. & Canada Building and 23% 50% Construction $48M 9% Asia 16% $767M $87M Transportation 12% $457M $228M $1,234M Packaging 20%
Slide 31: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2021 YTD REVENUE | $1.2 BILLION END MARKET REGION Energy 2% Telecommunications Latin America 1% 6% Transportation US & Canada 9% 31% Packaging Building & 34% Asia Construction 21% 10% Industrial 16% Healthcare EMEA Consumer 42% 7% 21% 31 All charts reflect 2021 YTD financials
Slide 32: 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 YTD REVENUE | $457 MILLION END MARKET REGION Energy 7% US & Canada Building & Asia Consumer 54% Construction 20% 10% 28% Transportation 11% Healthcare 10% Industrial EMEA 12% 26% Packaging 6% Telecommunications 16% 32 All charts reflect 2021
Slide 33: Distribution
DISTRIBUTION 2021 YTD REVENUE | $767 MILLION END MARKET REGION Energy Telecommunications Building and 1% Latin 1% America Construction 8% 15% US & Canada Healthcare 81% 27% Asia Transportation 4% 16% Consumer Industrial 22% 20% Packaging 5% KEY SUPPLIERS 33 All charts reflect 2021 YTD financials thr
Slide 34: 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% 11% Transportation 13% US & Canada Transportation EMEA 12% (26% of sales) (50% of sales) Indus
Slide 35: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Three Months Ended June 30, 2021 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results Operating income $ 108.1 $ 14.2 $ 122.3 Income from co
Slide 36: Reconciliation of EBITDA by Segment
Six Months Three Months Ended Ended Year Ended Reconciliation of EBITDA by Segment June 30, June 30, 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 Di
Slide 37: Reconciliation of Pro Forma EBITDA - Color, Additives and Inks
Six Months Reconciliation of Pro Forma EBITDA Three Months Ended Ended Year Ended - Color, Additives and Inks June 30, June 30, 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) — 26
Slide 38: Reconciliation of Pro Forma Adjusted Earnings per Share
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(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 exp