Slide 1: PolyOne Investor Presentation
PolyOne Investor Presentation May 2017
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
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
Slide 4: 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
Slide 5: At a Glance
At a Glance 2016 Revenue ($3.3 Billion) by Segment 2016 Revenue by Geography Canada Europe Designed 8% 12% Structures & Solutions PolyOne Specialty 11% Distribution Engineered Asia 31% Materials 8% 16% Color United Performance States Latin Additives Products & and Inks 65% America Solutions 23% 7% 1
Slide 6: Mix Shift Highlights Specialty Transformation
Mix Shift Highlights Specialty Transformation 100% % of Operating Income* 80% 60% 40% 80% 20% 43% 2% 0% 2005 2010 1Q 2017 Specialty OI $5M $87M $274M** JV’s Performance Products & Solutions Distribution Specialty Mix *Operating Income excludes corporate charges and special items **LTM 1Q 2017 POLYON
Slide 7: Proof of Performance & 2020 Platinum Vision
Proof of Performance & 2020 Platinum Vision 2006 1Q 2017 2020 “Where we were” “Where we are” Platinum Vision Operating Income % of Sales Color, Additives & Inks 1.7% 16.6% 20%+ Specialty Engineered Materials 1.1% 14.8% 20%+ Performance Products & Solutions 5.5% 12.0% 12 – 14% Distribution 2.6% 6.5%
Slide 8: Returning Cash to Shareholders
Returning Cash to Shareholders Since 2011, we have returned nearly $900 million to shareholders $167 million returned through dividends $731 million returned through share repurchases Annual Dividend* Cumulative Share Repurchases (in millions) $0.60 $731M $750 $0.54 $0.50 $0.48 $600 $0.40 $0.4
Slide 9: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return
Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, Repurchased 1.0 marketing, and million shares in Q1 technical capabilities 2017 Investing in operational Repurchased 19.8 and LSS initiatives million shares since ~60 - 70% of capital early 20
Slide 10: Ours is Not a Cost Cutting Story
Ours is Not a Cost Cutting Story Commercial, R&D Volume Adjusted and Marketing (lbs in millions) Operating Profit ($M) Spending ($M) $200 2,883 $317 -12% +95% +263% 2,538 $103 $88 2006 2016 2006 2016 2006 2016 POLYONE CORPORATION 10
Slide 11: Primary Industries Served
Primary Industries Served Transportation Packaging Healthcare Consumer 19% 12% 11% 11% Focus End Markets Building & Electrical & Industrial Construction Wire & Cable Electronic Appliance 15% 11% 9% 5% 5% 2016 Revenue: $3.3 Billion POLYONE CORPORATION 11
Slide 12: Innovation Drives Earnings Growth
Innovation Drives Earnings Growth Research & Development Specialty Platform CAI & SEM Spending Vitality Index Progression* Gross Margin ($ millions) Target ≥ 35% $54 33% 42% 14% $20 12% 2006 2016 2006 2016 2006 2016 *Specialty Platform revenue from products introduced in last five years Innovation P
Slide 13: 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
Slide 14: Segment Highlights
Segment Highlights POLYONE CORPORATION 14
Slide 15: At a Glance: Color, Additives & Inks
At a Glance: Color, Additives & Inks 2016 Revenue: $0.8 Billion Key Applications Asia 15% Latin Europe 33% America 5% Canada 2% United States 45% 2016 Revenue by Industry Expanding Profits B&C Operating Income % of Sales 20%+ 10% Textiles Transportation 9% 9% 16.7% 16.6% W&C 16.0% 10% 14.7% 12.2% Co
Slide 16: At a Glance: Specialty Engineered Materials
At a Glance: Specialty Engineered Materials 2016 Revenue: $0.6 Billion Key Applications Europe Asia 27% 20% Canada 2% United States 51% 2016 Revenue by Industry Expanding Profits Healthcare Industrial Operating Income % of Sales 20%+ 11% 8% W&C 15% 14.7% 14.8% 14.3% Packaging 7% 12.1% E&E 9.6% 9.3%
Slide 17: At a Glance: Designed Structures & Solutions
At a Glance: Designed Structures & Solutions 2016 Revenue: $0.4 Billion Key Applications Canada 5% United States 95% 2016 Revenue by Industry 2020 Platinum Vision Drive operational efficiency with LSS Packaging B&C 21% 11% Healthcare projects and customer first mentality 8% Recapture customers b
Slide 18: At a Glance: Performance Products & Solutions
At a Glance: Performance Products & Solutions 2016 Revenue: $0.7 Billion Key Applications Latin Canada America 16% 4% Asia 2% United States 78% 2016 Revenue by Industry Expanding Profits Operating Income % of Sales Industrial 12-14% W&C 16% Appliance 12.0% 16% 6% 11.1% Consumer 8.3% 5% 6.9% 7.2% 7.7
Slide 19: At a Glance: Distribution
At a Glance: Distribution 2016 Revenue: $1.1 Billion Key Suppliers Industrial Consumer 18% 15% Appliance 6% E&E Healthcare 5% 22% B&C 4% Packaging Transportation 4% 24% W&C 2% ROIC Expanding Profits 36% Operating Income % of Sales 6.5-7.5% 6.4% 6.6% 6.4% 6.5% 5.6% 5.9% 6.1% 4.6% 4.0% 3.5% 3.0% 2.6%
Slide 20: Target End Markets & Application Examples
Target End Markets & Application Examples POLYONE CORPORATION 20
Slide 21: 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 21 Page 21
Slide 22: 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 22
Slide 23: 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 23
Slide 24: Target End Markets… Consumer
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
Slide 25: 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
Slide 26: Optimize Color Usage
Optimize Color Usage with OnColor Super Concentrates Eliminate costs by increasing pigment density Enhance color performance without altering form and formulation Increase design capabilities by reducing weight and layer thickness POLYONE CORPORATION 26
Slide 27: Combat Bacteria Formation
Combat Bacteria Formation with WithStand Antimicrobial Technology Inhibit microbial growth on polymer surface Enhance value or products and devices Highly versatile concentrate with the ability to be incorporated into a wide variety of products POLYONE CORPORATION 27
Slide 28: 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
Slide 29: 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
Slide 30: 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
Slide 31: 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
Slide 32: 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
Slide 33: Smart Home Devices
Smart Home Devices with Resilience Vinyl Solutions High flame retardancy to meet strict UL standards Greater processing and design flexibility Specialized additives provide long term color stability Diffusive lens materials improve light dispersion POLYONE CORPORATION 33
Slide 34: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Senior management uses comparisons of adjusted net income attributable to PolyOne common shareholders, adjusted earnings per share (EPS) attributable to PolyOne common shareholders and operating in