Slide 1: Avient Corporation Second Quarter 2023 Results
AVIENT CORPORATION SE C O N D Q UA RT ER 2 0 23 R ES U LTS (NYSE: AVNT) J U LY 2 7 , 2 0 2 3
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
YX AVIENT
Slide 4: Composites Portfolio
COMPOSI TES PORTF OL IO D Y N E E M A® E X PAN D S O U R E N G I N E E R E D F I B E R S AN D PAN E L S TECHNOLOGY LFT Tapes Laminates/Panels Shapes Pultrusion Engineered Fibers 4
Slide 5: Composites Serve Diversified End Markets
COMPOSI TES SERVE D IV ER SIF IED END MAR KETS DEFENSE INDUSTRIAL TELECOMMUNICATIONS ENERGY TRANSPORTATION Military • Law Enforcement Lifting Slings • Aquaculture 5G Applications Sustainable Infrastructure EV Battery Components First Responders High Pressure Pipe Fiber Optic Cables Offshore Wind Com
Slide 6: Q2 Performance
Q2 PERFORMANCE
Slide 7: Q2 2023 Performance vs. Guidance
Q2 2023 PERFORMANCE VS. GUIDANCE ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS $845 $130 $131 $0.63 $824 $0.60 Guidance Actual Guidance Actual Guidance Actual (in millions) (in millions) 7
Slide 8: Q2 2023 Performance vs. Guidance
Q2 2023 PERFORMANCE VS. GUIDANCE ( T O TA L C O M PA N Y ) Adjusted EBITDA Margin % 15.9% Better-than-expected margins driven by: 15.4% • Favorable mix - strong demand for composite applications • Raw material deflation Guidance Actual 8
Slide 9: Q2 EBITDA Bridge
Q2 EBITDA BRIDGE ( T O TA L C O M PA N Y ) Adjusted ($ millions) EBITDA Q2 2022 Pro Forma $ 172) Demand (68) • Demand conditions vs. CAI: expectations: Price / Mix 7) US & Canada Deflation 11) LATAM SEM: EMEA Price / Mix 2) Asia Deflation 6) Net Price Benefit 26) • Net price benefit remains greater
Slide 10: Q2 Sequential Sales by Region
Q2 2 023 SEQUENTI AL SAL ES BY REGI ON Q2 2023 vs. Q1 2023 US & Canada Flat EMEA Asia -8% Latin America +6% -1% Total Avient -2.6% 10
Slide 11: 2023 Guidance
2 0 2 3 G U I DA N C E
Slide 12: 2023 Guidance
2023 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,280 $525 $2.40 $800 $128 $0.56 Q3 FY Q3 FY Q3 FY (in millions) (in millions) 12
Slide 13: Cash Flow / Leverage
CASH FLOW / LEVERAGE • Focused on working capital ($ millions) 2023E management, restructuring actions to streamline Cash Flow from Operating Activities $ 320 operations Less: CapEx (140) • IT investment to further Free Cash Flow $ 180 integrate acquired businesses and capture Adjusted EBITDA $ 525
Slide 14: Long-Term Revenue Growth Driver: Sustainability
LONG-TERM REVENUE SUSTAINABILITY GROWTH AS A GROWTH DRI VERS DRIVER Total Company Revenue Revenue From Sustainable Solutions* 2016-2022 $1,175M Other Sustainable (GDP Growth) Solutions $915M $790M 60%+ $550M $455M Key Growth Overlap $405M Drivers $340M 2016 2017 2018 2019 2020PF** 2021 2022PF*** Com
Slide 15: Sustainability Report 2022
SUSTAINABILITY REPORT 20 22 SUSTAI NA BILI TY REPORT 2022 • Provides progress on 2030 goals • Reaffirms commitment to U.N. Global Compact • Highlights ESG Performance, including ratings, awards, and certifications • Features increased carbon emissions disclosures, including Climate Change Scenario A
Slide 16: Sustainability Day
SUSTAINABILITY DAY • Virtual presentation to be held September 20, 2023 • Leadership will be conducting an investor-focused presentation around our sustainable solutions portfolio • Deep dive into how we enable customers to achieve their sustainability goals Avient Confidential 16 16
Slide 17: Stakeholder Influence Drives Demand
STAKEHOLD ER INFLUENC E D RI VES D EMA ND …are Growing at Twice the Rate as Sustainably-Branded Products… Conventional Products Consumers Governments Are demanding Are mandating changes recyclability and eco- through legislation, taxes, conscious products and regional accords Brand Owners Have commi
Slide 18: Avient
YX AVIENT
Slide 19: Appendix
APPENDIX
Slide 20: Raw Material Basket
RA W MATERI AL BA SKET 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, 20 includes portion
Slide 21: Peer Comparisons
PEER COMPARISONS SX<AVIENT
Slide 22: Avient Is Asset Light
AVI ENT I S ASSET LI GHT Capex / Revenue 2023E (%) 8 8 7 5 5 4 4 4 3 3 3 3 3 2 PPG AVY FUL RPM HXL ECL SCL ASH CE KWR FMC HUN EMN Avient Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of July 21, 2023 Note: Avient reflects 2023 estimated revenue
Slide 23: Free Cash Flow Conversion
FR EE CA SH FLOW CONV ER SION 2023E (%) 90 88 84 83 82 79 77 76 74 73 72 67 57 20 RPM HXL ECL SCL CE PPG KWR AVY FUL EMN ASH Avient FMC HUN Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of July 21, 2023 Note: Free cash flow conversion calculated
Slide 24: Multiple Expansion
MULTI PL E EX PANSION EV / 2023E EBITDA Historic Multiple 20.2 18.2 14.4 13.6 13.6 12.4 11.5 10.3 10.6 9.7 9.6 9.0 8.7 8.3 8.3 6.5 RPM ECL HXL SCL PPG KWR AVY EMN (2011) (2018) (2023) FUL ASH CE FMC HUN Avient Avient Avient Avient Specialty Other Specialty / Formulators Chemical Companies Source: Pe
Slide 25: Segment Data
SEGMENT DATA SX<AVIENT
Slide 26: 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% Telecommunications 5% $3,653M $592M 4% Asia Building and Consumer 18% Construction 20% U.S. & Canada 10% 40% $1,300M $272M Transportation 9% $2,355M $402M Indus
Slide 27: Color, Additives & Inks
COLOR , AD DI TI VES & 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% 27
Slide 28: Specialty Engineered Materials
SPEC IA LTY ENGI NEER ED MATERI ALS 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% 28
Slide 29: 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 30: 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