Avient Corporation · NYSE:AVNT

Avient — PolyOne — Morgan Stanley Global Chemicals and Agriculture Conference 2016

39 slides from Avient's conference presentation, November 2016

  1. Slide 1: PolyOne Investor Presentation 3Q 2016

    PolyOne Investor Presentation 3Q 2016 Morgan Stanley Global Chemicals and Agriculture Conference November 2016

  2. Slide 2: Forward-Looking Statements

    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 expectations or f

  3. Slide 3: Use of Non-GAAP Measures

    Use of Non-GAAP Measures  This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include: adjusted EPS, Specialty platform operating income percentage, adjusted operating income, and return on inves

  4. Slide 4: About PolyOne

    About PolyOne Reach 7,000 associates | 77 facilities | $3.4 B 2015 revenue Global Presence 10,000 global customers | Americas, Europe, Africa, Asia | Global sales, technical and manufacturing footprint Solutions 35,000+ polymer solutions | 12 innovation centers | Support for design through manufactu

  5. Slide 5: What We Do

    What We Do Formulation Inputs Expertise Service Value Base resins Expertise in InVisiOSM Color OEMs Additives Polymer Services Brand Owners Modifiers Materials, IQ Design Labs Processers Pigments Services and LSS Customer Assemblers Solutions First Driving customer value with specialty products & se

  6. Slide 6: At a Glance

    At a Glance 2015 Revenue: $3.4 Billion 2015 Revenue: $3.4 Billion DSS Europe Canada 13% 13% 7% POD SEM 29% 15% Asia 7% United States Latin CAI PPS 66% America 23% 20% 7% 2015 Operating Income: $322 Million Adjusted Earnings Per Share DSS $1.96 4% $1.80 SEM 23% $1.31 POD $1.00 19% $0.82 CAI $0.68 38%

  7. Slide 7: Mix Shift Highlights Specialty Transformation

    Mix Shift Highlights Specialty Transformation 2020 Old PolyOne Transformation Platinum Vision 100% % of Operating Income* 80% 60% 80%+ 40% 65% 20% 43% 2% 0% 2005 2010 2015 2020 Specialty OI $5M $87M $229M Platinum Vision JV's Performance Products & Solutions Distribution Specialty *Operating Income

  8. Slide 8: 28 Consecutive Quarters of EPS Growth

    28 Consecutive Quarters of EPS Growth Adjusted Earnings Per Share Adjusted Consolidated Operating Margin 3Q 3Q 12% $0.70 9.9% $0.56 9.5% $0.60 10% 8.3% $0.50 8% 6.9% 6.7% $0.40 5.6% 6% 5.2% $0.30 4% $0.20 2.8% 2% $0.10 $0.00 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 20

  9. Slide 9: Proof of Performance & 2020 Goals

    Proof of Performance & 2020 Goals 2006 2016 YTD 2020 “Where we were” “Where we are” Platinum Vision 1) Operating Income % of Sales Specialty: Color, Additives & Inks 1.7% 17.0% 20%+ Specialty Engineered Materials 1.1% 15.2% 20%+ Designed Structures & Solutions N/A 0.6% (TTM) 8 – 10% Performance Prod

  10. Slide 10: Ours is Not a Cost Cutting Story

    Ours is Not a Cost Cutting Story Commercial, R&D Volume Adjusted and Marketing (lbs in millions) Operating Profit ($M) Spending ($M) $322 2,883 $192 +86% -16% +266% $103 2,414 $88 2006 2015 2006 2015 2006 2015 POLYONE CORPORATION 10

  11. Slide 11: Innovation Drives Earnings Growth

    Innovation Drives Earnings Growth Research & Development Specialty Platform CAI & SEM Spending Vitality Index Progression* Gross Margin ($ millions) Target ≥ 35% 34% $53 43% 14% $20 12% 2006 2015 2006 2015 2006 2015 *Specialty Platform revenue from products introduced in last five years Innovation P

  12. Slide 12: Strategic Growth Opportunities

    Strategic Growth Opportunities Global Megatrends Four Pillar Strategy Growth in urbanization Specialization Changing demographics Attractive Globalization Climate and Revenue & resource challenges Margin Growth Opportunities Operational Increase of Excellence individual power Commercial Evolution an

  13. Slide 13: Primary Industries Served

    Primary Industries Served Transportation Packaging Healthcare Consumer 20% 13% 11% 10% Focus End Markets Building & Electrical & Industrial Construction Wire & Cable Electronic Appliance 14% 12% 9% 5% 4% 2015 Revenue: $3.4 Billion POLYONE CORPORATION 13

  14. Slide 14: Target End Markets… Healthcare

    TPE’s & Film GEON™ Vinyl Therma-Tech™ & Sheet TPE + OnForce™ Gravi-Tech™ Therma-Tech™ Polymer Colorants Film Target End Markets… Healthcare POLYONE CORPORATION 14 Page 14

  15. Slide 15: Target End Markets… Automotive

    Sound & Vibration Roof Systems Management Interior & Exterior Trim Interior Structural Components Underhood Components Fuel Handling Air management Systems Electronics & Cameras Structural Braces & Brackets Lighting Fluid Handling Target End Markets… Automotive POLYONE CORPORATION 15

  16. Slide 16: Target End Markets… Packaging

    ColorMatrix™ ColorMatrix™ Amosorb™ Ultimate™ UV Oxygen Scavenger Light Barrier PreservaPak™ OnCap™ Laser Marking Additives OnColor™ Smart Batch™ VersaFlex™ TPE Cap Liner Target End Markets… Packaging POLYONE CORPORATION 16

  17. Slide 17: Target End Markets… Outdoor High Performance

    OnForce (SEM) Advanced Composites (SEM) TPE + OnForce (SEM) TPE Vibration Dampening (SEM/GLS) Source: Outdoor Industry Association Thermoplastic Elastomers (SEM) TPE & Film (SEM + DSS) TPE + OnForce (SEM) Polymer Colorants OnForce (CAI) Thermoplastic Elastomers (SEM) (SEM) Thermatech (SEM) Sheet (DS

  18. Slide 18: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return

    Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return  Expanding our sales,  Repurchased 318,000 marketing, and shares in Q3 2016 technical capabilities  Repurchased 17.6  Investing in operational million shares since and LSS initiatives early 2013  ~75% of capital  9.7

  19. Slide 19: Returning Cash to Shareholders

    Returning Cash to Shareholders  Since 2011, we have returned nearly $800 million to shareholders  $130 million returned through dividends  $650 million returned through share repurchases Annual Dividend Cumulative Share Repurchases (in millions) $0.60 $750 $0.54 $650M $0.50 $0.48 $600 $0.40 $0.40

  20. Slide 20: Why Invest In PolyOne?

    Why Invest In PolyOne?  Addressable market exceeds $40 billion  Strong performance demonstrates that our strategy and execution are working  Megatrends and emerging opportunities align with strengths  Innovation and services provide differentiation, incremental pricing power and competitive adva

  21. Slide 21: Segment Highlights

    Segment Highlights POLYONE CORPORATION 21

  22. Slide 22: At a Glance: Color, Additives & Inks

    At a Glance: Color, Additives & Inks 2015 Revenue: $0.8 Billion Key Applications Europe Asia 12% Latin 33% America 5% Canada 2% United States 48% 2015 Revenue by Industry Expanding Profits Transportation W&C 9% Operating Income % of Sales 20%+ 11% Consumer 8% 16.7% 17.0% B&C 11% 14.7% 12.2% Textiles

  23. Slide 23: At a Glance: Specialty Engineered Materials

    At a Glance: Specialty Engineered Materials 2015 Revenue: $0.5 Billion Key Applications Europe Asia 29% 20% Canada 2% United States 49% 2015 Revenue by Industry Expanding Profits Operating Income % of Sales 20%+ Healthcare W&C 11% Industrial 15% 8% 15.2% 14.7% Packaging 12.1% E&E 5% 16% 9.6% 9.3% Ap

  24. Slide 24: At a Glance: Designed Structures & Solutions

    At a Glance: Designed Structures & Solutions 2015 Revenue: $0.5 Billion Key Applications Canada 3% United States 97% 2015 Revenue by Industry Expanding Profits Operating Income % of Sales Packaging 19% 8-10% B&C 9% Healthcare 7.3% Industrial 7% 5.6% 24% Consumer 3.0% 5% 1.4% Appliances 0.3% Transpor

  25. Slide 25: At a Glance: Performance Products & Solutions

    At a Glance: Performance Products & Solutions 2015 Revenue: $0.7 Billion Key Applications Latin Canada America 14% 5% Asia 2% United States 79% 2015 Revenue by Industry Expanding Profits Operating Income % of Sales Industrial 12-14% W&C Appliances 13% 16% 7% 11.6% Consumer 8.3% 5% 6.9% 7.2% 7.7% Tra

  26. Slide 26: At a Glance: Distribution

    At a Glance: Distribution 2015 Revenue: $1.0 Billion Key Suppliers Industrial Consumer E&E 16% 13% 6% Appliances 6% Healthcare W&C 23% 4% Packaging 4% Transportation B&C 24% 4% ROIC Expanding Profits 53% Operating Income % of Sales 6.5-7.5% 6.4% 6.6% 6.6% 5.6% 5.9% 6.1% 4.6% 4.0% 3.5% 3.0% 2.6% 15%

  27. Slide 27: Application Examples

    Application Examples POLYONE CORPORATION 27

  28. Slide 28: Luxury Packaging

    Luxury Packaging with Gravitech Density Modified Polymers  Impart weight, sound and metallic finish to caps and closures for cosmetics and spirits applications  Elevate quality and prestige perceptions among high-end consumers  Eliminate time and cost associated with secondary operations and asse

  29. Slide 29: Medical Device Housings

    Medical Device Housings with Chemically Resistant Engineered Polymers  Durable, long-lasting products stand up to the most aggressive disinfectants  Minimize environmental stress cracking and discoloration  One of the broadest medically approved polymer and colorant portfolios POLYONE CORPORATION

  30. Slide 30: Printed Circuit Boards

    Printed Circuit Boards with Thermally Conductive Polymers  Replaces metal by etching circuit designs into thermally conductive plastic  Maintains heat transfer and cooling capabilities of metals  Reduces both weight and cost  Increases the lifetime and reliability of electronic systems POLYONE C

  31. Slide 31: Color & Design Services

    Color & Design Services  Greater control of color development and supply chain  Work across entire design process from concept to commercialization  Inspire creativity in the use of polymer materials, colors and effects  Innovative brand differentiation  Faster development timelines POLYONE COR

  32. Slide 32: Outdoor Applications

    Outdoor Applications  Leading provider of high performance specialty materials for the recreational and sports & leisure industry  Well positioned across all segments to address market needs  Metal to Polymer Conversion  Lightweighting  Thermal Management  Impact Performance Source: Outdoor In

  33. Slide 33: Fiber Colorants

    Fiber Colorants Solutions for clothing, apparel, footwear, automotive & sporting goods  ColorMatrix Fiber Colorant Solutions  Proprietary advanced liquid color formulations and equipment enable greater efficiency and productivity  Eliminates aqueous dyeing and its associated wastewater treatment

  34. Slide 34: Preservative Technology

    Preservative Technology  Improve performance and reduce cost through light-weighting, Shelf-life reduced waste, faster cycle times extension and extended shelf life Weight reduction Greater product consistency Enhanced product  Aligned with megatrend of facing aesthetics climate and resource chall

  35. Slide 35: Metal Replacement Solutions

    Metal Replacement Solutions  Replaces metal in LED lighting  Extends LED durability and life span eliminating hot spots  Greater design flexibility with fewer parts  Weight reduction  Simplifies manufacturing and lowers total production cost POLYONE CORPORATION 35

  36. Slide 36: High-Barrier Packaging Containers

    High-Barrier Packaging Containers  Capability to extrude up to 13 layers  Strong oxygen and moisture vapor transmission protection  Can be made symmetrical or asymmetrical to meet customized needs of broad variety of applications  Barrier protection and superior sensory properties POLYONE CORPOR

  37. Slide 37: Reconciliation of Non-GAAP Financial Measures (Unaudited)

    Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with U.S. GAAP. Senior management uses operating income excl

  38. Slide 38: Adjusted EPS Reconciliation by Quarter

    Adjusted EPS Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net income (loss) attributable to PolyOne common shareholders $ 11.2 $ 38.6 $ 23.2 $ 21.0 $ 29.4 $ 30.9 $ 32.3 $ (14.6) Special items, after tax(1) 17.7 (2.0) 12.3 4.6 12.5 17.4 13.1 47.5 Adjusted net income $ 28.9 $ 36.6 $

  39. Slide 39: Adjusted Operating Margin Reconciliation

    Adjusted operating margin Q1 2013 Q2 2013 Q3 2013 Q4 2013 YTD 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 YTD 2014 Operating income (loss) $ 40.5 $ 80.7 $ 61.6 $ 48.7 $ 231.5 $ 56.4 $ 49.4 $ 63.6 $ (14.3) $ 155.1 (1) Special items 16.6 (5.2) 10.8 7.8 30.0 22.9 39.8 22.0 80.2 164.9 Adjusted operating income

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