Slide 1: Avient Corporation Third Quarter 2021 Results
AVIENT CORPORATION T HI RD QUA RTER 2 0 2 1 R ES ULTS (NYSE: AVNT) OCTOBER 28, 2021
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: Q3 2021 Performance Update
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Slide 4: Q3 2021 Performance (Total Company)
Q3 2021 PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 32% + 34% + 52% $1,220 $0.70 $99 $925 $74 $0.46 2020 2021 2020 2021 2020 2021 (in millions) (in millions) 4
Slide 5: Q3 2021 Segment Performance
Q3 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) +19% +34% +58% +31% +28% +33% $234 $439 $587 $67 $32 $24 $494 $174 $51 $25 $18 $277 Sales Operating Income Sales Operating Income Sales Operating Income (1) 5
Slide 6: Specialty EBITDA Margin Expansion
SPECIALTY EBITDA MARGIN EXPANSION 17.6% 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 Color synergy realization 18.4% • Investments in composites and outdoor 17.6% high performance applications d
Slide 7: CAI EBITDA Margin Expansion
CAI EBITDA MARGIN EXPANSION 19.8% 18.9% 18.9% • Synergy capture driving margin improvement Legacy CAI • Favorable mix with growth in healthcare, consumer and packaging 2019 2020 YTD 2021 end-markets • World-class vitality index of 35% 15.7% represents sales from products Legacy 11.9% 13.8% introduce
Slide 8: Brand Owners Committed to Increasing Use of Recycled Materials
B R A N D O W N E R S C O M M I T T E D TO I N C R E A S I N G U S E O F R E C YC L E D M AT E R I A L S (1) Percent recycled plastic used: Current Additional share needed to reach 2025 target (examples and not exhaustive) Brand Owner 1 9 41 Brand Owner 2 7 18 Brand Owner 3 7 13 Brand Owner 4 7 19 B
Slide 9: Enabling the Use of Recycled Content
E NA B L I N G T H E U S E O F R E C YC L E D C O N T EN T T O P 5 G AP S T H AT W E AR E A D D R E S S I N G 1) COLOR MANAGEMENT 2) DECONTAMINATION 3) MAINTAINING MECHANICAL PROPERTIES 4) MONO-MATERIAL 5) CONSISTENT RECYCLED CONSTRUCTION MATERIAL QUALITY 9
Slide 10: Case Study with Brand Owner
C A S E S T U DY WI T H B R A N D OWN E R G U I D I N G B R A N D S T O W H AT I S P O S S I B L E Virgin Resin Recycled Resin 10
Slide 11: 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 expected to grow 18% in 2021 as our innovation efforts $930M and collaboration with customers continues to accelerate $790M • Investments centered around innov
Slide 12: Q3 2021 Sales and Operating Income
Q3 2021 SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income Q3 2020 $925 $74 Sustainable Solutions 35 19% 14 Healthcare 51 44% 10 Composites 13 39% 6 Growth in Asia / LATAM 14 11% 3 Other 177 39% 16 Sub-total $1,215 31% $123 Supply Chain Disrup
Slide 13: Q3 End Market Sales Performance
Q3 END MARKET SALES PERFORMANCE (56% of total revenue) +33% (44% of total revenue) +14% +46% +40% +24% +40% +31% +20% Energy Telecom Building & Transportation Industrial Healthcare Packaging Consumer Construction (1) Q3 2020 Q3 2021 13 (1) Financial information is presented on a constant currency ba
Slide 14: Q3 Year-over-Year EBITDA Bridge
Q3 YEAR-OVER-YEAR EBITDA BRIDGE Adjusted $ millions EBITDA Q3 2020 $ 111 Demand 29 • Demand driven by growth CAI: in sustainable solutions, Price / Mix 51 Inflation (37) healthcare and consumer SEM: applications Price / Mix 25 Inflation (22) • Price increases more than Distribution: offsets raw
Slide 15: Q2 to Q3 Sequential EBITDA Bridge
Q2 TO Q3 SEQUENTIAL EBITDA BRIDGE Adjusted $ millions EBITDA Q2 2021 $ 159 CAI: Price / Mix 17 Inflation (8) • Price increases have more than SEM: covered raw material and freight Price / Mix 6 Inflation (5) inflation impacts of $300M year- to-date compared to 2020 Distribution: Price / Mix 35 I
Slide 16: Full Year 2021 Outlook
i, ~ FULL YEAR 2021 OUTLOOK d
Slide 17: Full Year Growth Projections
FULL YEAR GROWTH PROJECTIONS ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 26% + 40% + 55% $4,750 $430 $3.00 $3,783 $308 $1.93 (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E (in millions) (in millions) 17 (1) Financial information is pro forma to include a full year of
Slide 18: Full Year 2019 – 2021 Growth
FULL YEAR 2019 – 2021 GROWTH ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS + 19% + 31% + 72% $4,750 $3.00 $580 $3,981 $457 $3,783 $442 $1.93 $1.74 (1) (1) (1) (1) (1) (1) 2019PF 2020PF 2021E 2019PF 2020PF 2021E 2019PF 2020PF 2021E (in millions) (in millions) 18 (1) Financial informati
Slide 19: Creating Value for Shareholders
C R E AT I N G VA LU E F O R SH A R E H O L D E R S Share Performance Dividends Share Repurchases Deleveraging ~$4Bn ~$450MM ~$1Bn 2.1x MARKET CAP INCREASE PAID OVER LAST 11 YEARS REPURCHASED Q4 NET LEVERAGE OVER LAST 10 YEARS OVER LAST 10 YEARS 0.95 494% 0.85 0.79 0.81 1.0 1.0 0.9 0.72 0.9 3.5x 0.8
Slide 20: 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 • The company will be doing a deep dive into its key long- term growth drivers with a particular focus on sustainable solutions Long-Term Revenue Growth Drivers Growth Rate Sustainable Solutions 8–12% He
Slide 21: Peer Comparisons
PEER COMPARISONS 21
Slide 22: 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 8 investment, as compared to the base resin raw material suppliers we purchase from. Even more, our 6 manufacturing capabilities are 5 5 5 5 flexible and easily adaptable to 4
Slide 23: 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 strong free cash flow that is in line 86 92 89 85 with specialty formulators. 82 79 83 82 80 79 79 78 78 77 74 72 Our free cash flow supports shareholder value creation through in
Slide 24: 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 36.2 that is below specialty formulator peers and the median of other selected chemical / specialty 28.0 companies. 24.9 18.3 16.3 With the Clariant C
Slide 25: 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 26: Appendix
APPENDIX SX<AVIENT
Slide 27: Raw Material and Supply Chain Update
RAW MATERIAL AND SUPPLY CHAIN UPDATE Annual Purchases • Significant raw material price inflation and Performance tight inventory continued in Q3 2021 Additives 15% Other Raw Materials o Average cost of hydrocarbon based 29% materials was up 65% year-over-year and Pigments 10% sequentially 15% Non-hy
Slide 28: Segment Data
SEGMENT DATA SX<AVIENT
Slide 29: 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 $3,617M $455M 4% Consumer 8% U.S. & Canada Building and 23% 51% Construction $72M 10% Asia 16% $1,206M $127M Transportation 12% $691M $321M Packaging $1,820M
Slide 30: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2021 YTD REVENUE | $1.8 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% 30 All charts reflect 2021 YTD financials
Slide 31: 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 | $691 MILLION END MARKET REGION Energy 7% Building & Asia US & Canada Construction Consumer 20% 55% 10% 28% Industrial 11% Healthcare 10% Transportation EMEA 12% 25% Packaging 6% Telecommunications 16% 31 All charts reflect 2021
Slide 32: Distribution
DISTRIBUTION 2021 YTD REVENUE | $1.2 BILLION END MARKET REGION Energy Telecommunications Building and 1% Latin 1% America Construction 8% 15% Healthcare US & Canada 26% 81% Asia Transportation 4% 16% Consumer Industrial 22% 20% KEY SUPPLIERS Packaging 6% 32 All charts reflect 2021 YTD financials thr
Slide 33: 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 & 31% 10% Construction 12% Transportation 13% US & Canada Transportation EMEA 12% (25% of sales) (51% of sales) Indus
Slide 34: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Three Months Ended September 30, 2021 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results Operating income $ 78.7 $ 20.0 $ 98.7 Income from
Slide 35: Reconciliation to Pro Forma Adjusted EBITDA
Three Nine Three Months Ended Months Months Year Ended September 30, Ended Ended December 31, Reconciliation to Pro Forma June 30, September Adjusted EBITDA 2021 2020 2021 30, 2021 2020 2019 2018 Net income from continuing operations – GAAP $ 52.6 $ 2.6 $ 69.4 $ 201.7 $ 133.8 $ 75.7 $ 87.4 Income ta
Slide 36: Reconciliation of EBITDA by Segment
Nine Months Three Months Ended Ended Year Ended Reconciliation of EBITDA by Segment September 30, September 30, December 31, 2021 2020 2021 2020 2019 2018 Sales: Color, Additives and Inks $ 586.6 $ 493.8 $ 1,820.3 $ 1,502.9 $ 1,003.8 $ 1,046.5 Specialty Engineered Materials 233.6 174.1 690.7 708.8 7
Slide 37: Reconciliation of Pro Forma EBITDA - Color, Additives and Inks
Year Ended Reconciliation of Pro Forma EBITDA - Color, Additives and Inks December 31, 2020 2019 2018 Sales: Color, Additives and Inks $ 1,502.9 $ 1,003.8 $ 1,046.5 Clariant MB pro forma adjustments(1) 540.4 1,118.6 1,209.8 Pro forma sales $ 2,043.3 $ 2,122.4 $ 2,256.3 Operating income: Color, Addit
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