Avient Corporation · NYSE:AVNT
Avient — Investor Presentation (November 2023)
37 slides from Avient's investor presentation, November 2023
Slide 1: Avient Corporation Investor Presentation
AVIENT CORPORATION I N V E S TO R P R E S E N TAT I O N (NYSE: AVNT) NOVEMBER 2023
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements contained in or incorporated by reference into this presentation constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or foreca
Slide 3: Avient Overview
AVIENT OVERVIEW OUR VISION: Creating specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world Company Overview 2023 Financial Guidance Revenue By: Latin America Geography 104 5% U.S. & 9,700 Manufacturing 2
Slide 4: Creating a World-Class Sustainable Organization
CRE AT ING A WORL D-CL AS S S US TAINABL E ORGANIZ AT ION Strategic Objectives Growth Drivers Sustainable Solutions Composites Healthcare Asia/Emerging Regions 1. 6% annualized long term sales $1,120 $650 growth leveraging sustainable $231 $230 $726 $730 solutions, composites, healthcare $790 and em
Slide 5: Top-Tier Sustainability Performance and Recognition
TOP -T IE R S US TAINABIL IT Y P E RF ORMANCE AND RE COGNIT ION Industry Sustainability Standards 94th percentile ESG Ratings Performance 87th 1 3 5 5
Slide 6: What We Do: We Are a Formulator
W H AT W E D O : W E A R E A F O R M U L ATO R 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, pr
Slide 7: November 2, 2023 Webcast Presentation
N OV E M B E R 2 , 2 0 2 3 WEBCAST P R E S E N T AT I O N
Slide 8: Avient Protective Materials First Year
AVIENT PROTECTIVE MATERIALS FIRST YEAR Composites as a % of SEM Collaboration & Innovation People & Culture 44% 2023E Sales 56% Composites Composites comprises over half of Complementary technologies and Talented, passionate, and Specialty Engineered Materials, customer relationships offer opportuni
Slide 9: Avient Protective Materials Cross Selling Opportunities
AVIENT PROTECTIVE MATERIALS CROSS SELLING OPPORTUNITIES Lightweight Protective Laminates: PROJECTILE PROTECTION Dyneema® Fiber Solutions Strength + Durability + Light-Weighting: SOLID MOUNTING BRACKETS Nymax™ Bergamid™ Complēt™ Engineered Materials Color Consistency and Weatherability CUSTOMIZED SPE
Slide 10: Avient Protective Materials Cross Selling Opportunities
AVIENT PROTECTIVE MATERIALS CROSS SELLING OPPORTUNITIES 10 10
Slide 11: Q3 Performance
Q3 PERFORMANCE
Slide 12: Q3 2023 Adj. EBITDA Margin Performance
Q3 2023 ADJ. EBITDA MARGIN PERFORMANCE Results vs. Guidance Results vs. Prior Year 16.3% 16.3% 16.0% 15.4% Guidance Actual 2022 PF 2023 12
Slide 13: Q3 2023 Performance vs. Guidance
Q3 2023 PERFORMANCE VS. GUIDANCE Sales Adjusted EBITDA Adjusted EPS $800 $128 $0.57 $0.56 $123 $754 Guidance Actual Guidance Actual Guidance Actual (in millions) (in millions) 13
Slide 14: Q3 EBITDA Bridge
Q3 EBITDA BRIDGE Adjusted • Demand impacted by destocking ($ millions) EBITDA and cautious customer sentiment Q3 2022 Pro Forma $ 137) Demand (49) • Positive net price benefit: CAI: o CAI - Pricing flat and raw Price / Mix -) material deflation Deflation 22) SEM: o SEM - Pricing flat with Price / Mi
Slide 15: 2023 Guidance
2 0 2 3 G U I DA N C E
Slide 16: Q4 2023 Guidance vs. Prior Year
Q4 2023 GUIDANCE VS. PRIOR YEAR Sales Adjusted EBITDA Adjusted EPS - 10% + 5% + 12% $790 $112 $0.47 $107 $0.42 $710 2022 2023 2022 2023 2022 PF 2023 (in millions) (in millions) 16
Slide 17: Q4 and Full Year 2023 Guidance
Q4 AND FULL YEAR 2023 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,130 $500 $2.30 $710 $112 $0.47 Q4 FY Q4 FY Q4 FY (in millions) (in millions) 17
Slide 18: Free Cash Flow & Increased Dividend
FREE CASH FLOW & INCREASED DIVIDEND Guidance: Free Cash Flow 13th Consecutive Dividend Increase $180 $180 1.03 0.99 0.85 0.79 0.58 0.42 0.26 0.16 Prior Guidance Guidance 2011 2013 2015 2017 2019 2021 2023 2024 18
Slide 19: Sustainability Day Recap
SUSTAINABILITY DAY RECAP V
Slide 20: Long-Term Revenue Growth Drivers
LONG-TERM REVENUE SUSTAINABILITY GROWTH AS A GROWTH DRIVERS DRIVER Total Company Revenue Long-Term Growth Drivers Other Growth Rate Sustainable (GDP Growth) Solutions Sustainable Solutions 8–12% Composites 8–10% Healthcare 8–10% 60%+ Key Growth Overlap Asia / LATAM 5% Drivers Other (GDP growth) 0–2%
Slide 21: Sustainability Trends Drive Long-Term Growth
SUSTAINABILITY SUSTAINABILITY TRENDS TRENDS DRIVE DRIVE LONG-TERM GROWTH LONG-TERM GROWTH Global Offshore Annual Growing Demand Medical Plastics Wind Installations for Recycled Market Size (in Gigawatts) Content (in $Billions) 46 Avient Sustainable 90 Recycled Solutions Plastics 18 Virgin 50 8-12% P
Slide 22: Adjusted EBITDA Margin Expansion
ADJUSTED EBITDA MARGIN EXPANSION +3%+ 20%+ • Transformative acquisitions +1%+ 16.0% combined with divestitures of more cyclical businesses have 11.5% improved margins over 400 bps since 2018 5.4% • 20% long-term margin goal to be driven by key growth drivers, with sustainable solutions playing a mea
Slide 23: Creating a World-Class Sustainable Organization
CRE AT ING A WORL D-CL AS S S US TAINABL E ORGANIZ AT ION • 6% annualized long-term sales growth leveraging sustainable solutions, composites, healthcare, and emerging regions • Expand EBITDA margins to 20% • Deliver annual EBITDA and EPS growth of 10% and 15% • Maintain asset-light, 80% free cash f
Slide 24: Avient
YX AVIENT
Slide 25: Peer Comparisons
PEER COMPARISONS
Slide 26: Avient Is Asset Light
AVIENT IS ASSET LIGHT Capex / Revenue 2023E (%) 11.1 8.6 6.9 7.0 5.0 4.6 3.5 3.7 3.7 3.4 3.0 2.8 2.7 1.8 RPM ECL HXL SCL EMN Avient KWR CE FUL PPG AVY FMC HUN ASH Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of October 27, 2023 Note: Avient ref
Slide 27: Free Cash Flow Conversion
FREE CASH FLOW CONVERSION 2023E (%) 89 88 84 82 80 81 78 77 76 70 69 60 54 (6) RPM ECL HXL SCL EMN KWR Avient CE FUL PPG AVY FMC ASH HUN Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of October 27, 2023 Note: Free cash flow conversion calculated
Slide 28: Multiple Expansion
MULTIPLE EXPANSION EV / 2023E EBITDA Avient Historic Multiple 16.3 13.8 12.0 11.9 11.9 11.0 10.9 9.9 9.6 9.5 9.5 8.9 9.2 8.5 8.2 7.7 6.5 2011 2018 2021 2023 RPM ECL HXL SCL EMN KWR CE FUL AVY PPG ASH FMC HUN Oct Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per
Slide 29: Appendix
APPENDIX
Slide 30: Raw Material Basket
RA W MATERIAL BASKET Performance Additives 16% Other Raw Materials 33% Pigments 12% Non-hydrocarbon based materials TiO2 Styrenic Block 10% Copolymer 5% Dyestuffs Polypropylene 2% 5% Nylon Polyethylene 6% 11% ~40% hydrocarbon based (Grey shaded materials are hydrocarbon based, 30 includes portion of
Slide 31: Segment Data
SEGMENT DATA SC AVIENT
Slide 32: 2022 Pro Forma Segment, End Market and Geography
2022 PRO FORMA SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Defense Latin America 4% 6% $592M 5% $3,653M Telecommunications 4% Asia Building and Consumer 18% Construction 20% U.S. & Canada 10% $1,300M $272M 40% Transportation 9% $2,355M $402M Indus
Slide 33: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2022 REVENUE | $2.4 BILLION END MARKET REGION Telecommunications 1% Energy Latin America Building & 2% 8% Construction US & Canada 11% 34% Transportation Packaging 34% Asia 8% 20% Industrial 15% Healthcare 8% Consumer 21% EMEA 38% 33
Slide 34: Specialty Engineered Materials
SPECIALTY ENGINEERED MATERIALS 2022 PRO FORMA REVENUE | $1.3 BILLION END MARKET REGION Energy 9% Defense Asia 15% 13% US & Canada Telecommunications 52% 10% Packaging 5% Building & Construction 8% Consumer 19% Transportation EMEA 10% 35% Healthcare Industrial 8% 16% 34
Slide 35: 2022 Pro Forma Avient Regional Sales by End Market
2 0 2 2 P R O F O R M A AV I E N T R E G I O N A L S A L E S BY END MARKET Defense Energy Energy Defense 5% 5% 5% 8% Telecommunications Packaging Telecommunications 6% 13% 3% Building & Construction Packaging Building & 10% 27% Construction 13% US & Consumer Canada 24% EMEA Transportation (37% of sa
Slide 36: 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 37: Reconciliation to EBITDA and Adjusted EBITDA
Year Ended December 31, Reconciliation to EBITDA and Adjusted EBITDA: 2006 2018 Sales $ 2,622.4 $ 3,533.4 Net income from continuing operations – GAAP $ 133.5 $ 160.8 Income tax expense 29.7 36.4 Interest expense, net 63.1 62.8 Depreciation and amortization 57.1 91.5 EBITDA from continuing operation