Avient Corporation · NYSE:AVNT
Avient — Q4 2023 Earnings Presentation
28 slides from Avient's earnings presentation, Feb 14, 2024
Slide 1: Fourth Quarter 2023 Results and 2024 Financial Guidance
AVIENT CORPORATION FOURTH QUARTER 2023 RESULTS AND 2024 FINANCIAL GUIDANCE (NYSE: AVNT) FEBRUARY 14, 2024
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: Opening Remarks
OPENING REMARKS
Slide 4: Dr. Ashish Khandpur, President & CEO
DR. ASHISH KHANDPUR PRESIDENT & CEO 4
Slide 5: Portfolio Transformation
PORTFOLIO TRANSFORMATION Adjusted EBITDA from Specialty Applications 100% 80% % of Adjusted EBITDA 60% 100% 40% 87% 66% 20% 46% 0% 7% 2005 2010 2015 2020 2023 Commodity JVs Distribution Performance Products & Solutions Specialty Businesses 5
Slide 6: Avient
YX AVIENT
Slide 7: Long-Term Revenue Growth Drivers
LONG-TERM REVENUE SUSTAINABILITY GROWTH AS A GROWTH DRIVERS DRIVER Total Company Revenue Long-Term Growth Drivers Growth Rate Sustainable Other Solutions Sustainable Solutions 8–12% Composites 8–10% Healthcare 8–10% 60%+ Key Growth Overlap Asia / LATAM 5% Drivers Other 0–2% Avient 6% Composites, Hea
Slide 8: End Market Observations
END MARKET OBSERVATIONS ( % O F C O M PA N Y S A L E S ) PACKAGING CONSUMER INDUSTRIAL TRANSPORTATION BUILDING & 23% 19% 16% 10% CONSTRUCTION 9% HEALTHCARE DEFENSE ENERGY TELECOMMUNICATIONS 7% 7% 5% 4% 8
Slide 9: Regional Observations
REGIONAL OBSERVATIONS ( % O F C O M PA N Y S A L E S ) US & Canada 41% EMEA Asia 36% Latin America 18% 5% 9
Slide 10: Q4 2023 Results
Q 4 2 0 2 3 R E S U LT S
Slide 11: Q4 2023 Performance vs. Guidance
Q4 2023 PERFORMANCE VS. GUIDANCE ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS $719 $114 $0.52 $710 $112 $0.47 Guidance Actual Guidance Actual Guidance Actual (in millions) (in millions) 11
Slide 12: Q4 2023 Adj. EBITDA Margin Performance
Q4 2023 ADJ. EBITDA MARGIN PERFORMANCE Results vs. Guidance Results vs. Prior Year 15.9% 15.9% 15.8% 13.5% Guidance Actual 2022 2023 12
Slide 13: Q4 2023 Performance vs. PY
Q4 2023 PERFORMANCE VS. PY ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS - 9% + 7% + 24% $790 $114 $0.52 $107 $719 $0.42 2022 2023 2022 2023 2022 2023 (in millions) (in millions) 13
Slide 14: Q4 2023 Segment Performance
Q4 2023 SEGMENT PERFORMANCE CAI SEM (in millions) (in millions) - 7% +20% - 14% - 11% $491 $84 $55 $301 $459 $260 $49 $70 Sales EBITDA Sales EBITDA 2022 2023 14
Slide 15: Q4 EBITDA Bridge
Q4 EBITDA BRIDGE ( T O TA L C O M PA N Y ) Adjusted $ millions EBITDA Q4 2022 $ 107 Demand (34) • Demand was down, but less than in previous CAI: quarters, due to slowing pace of destocking Price / Mix 11 • Positive net price benefit: Deflation 14 o CAI – Pricing flat with favorable mix from SEM: up
Slide 16: 2024 Guidance
2 0 2 4 G U I DA N C E
Slide 17: 2024 Guidance
2024 GUIDANCE Full Year 2024 Guidance Adjusted EBITDA $505 to $535 million Adjusted EPS $2.40 to $2.65 Interest Expense $105 to $110 million Adjusted Effective Tax Rate 23% to 25% Capital Expenditures ~$140 million Q1 Adjusted EPS of $0.68 17
Slide 18: Avient
YX AVIENT
Slide 19: Appendix
APPENDIX
Slide 20: Raw Material Basket
RAW MATERIAL BASKET Performance Additives 15% Other Raw Materials 38% Pigments 13% Non-hydrocarbon based materials TiO2 9% Styrenic Block Copolymer Dyestuffs 4% 2% Polypropylene Polyethylene 4% Nylon 10% 5% ~40% hydrocarbon based (Grey shaded materials are hydrocarbon based, includes portion of “Oth
Slide 21: Segment Data
SEGMENT DATA <AVIENT
Slide 22: 2023 Segment, End Market and Geography
2023 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Defense Latin America 5% 7% 5% $3,143M $502M Telecommunications 4% Asia Consumer U.S. & Canada Building and 18% 19% 41% Construction $1,138M $224M 9% Transportation 10% $2,007M $358M Packaging Indus
Slide 23: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2023 REVENUE | $2.0 BILLION END MARKET REGION Telecommunications 1% Energy Latin America Building & 2% 8% Construction 10% US & Canada 34% Transportation Packaging 9% 34% Asia 21% Industrial 15% Healthcare 8% Consumer 21% EMEA 37% 23
Slide 24: Specialty Engineered Materials
SPECIALTY ENGINEERED MATERIALS 2023 REVENUE | $1.1 BILLION END MARKET REGION Energy 10% Asia Defense 13% 18% US & Canada Telecommunications 52% 9% Packaging 5% Building & Construction 8% Consumer 16% EMEA Transportation 35% 12% Healthcare Industrial 6% 16% 24
Slide 25: 2023 Avient Regional Sales by End Market
2 0 2 3 AV I E N T R E G I O N A L S A L E S BY END MARKET Defense Energy Energy 8% Defense 5% 8% Telecommunications 6% Packaging Telecommunications 4% 13% 4% Building & Construction 9% Packaging Building & Construction 25% 12% US & Canada Consumer EMEA 22% Transportation (36% of sales) (41% of sale
Slide 26: 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 27: Reconciliation to EBITDA and Pro Forma Adjusted EBITDA
Three Months Ended Year Ended December 31, December 31, Reconciliation to EBITDA and Pro Forma Adjusted EBITDA 2023 2022 2023 2022 Sales - GAAP $ 719.0 $ 790.4 $ 3,142.8 $ 3,396.9 Pro forma APM adjustments — — — 256.1 Pro forma adjusted sales $ 719.0 $ 790.4 $ 3,142.8 $ 3,653.0 Net income (loss) fro
Slide 28: Segment Sales, Operating Income and EBITDA
Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Sales: Color, Additives and Inks $ 459.4 $ 490.8 $ 2,007.4 $ 2,355.0 Specialty Engineered Materials 259.8 300.8 1,138.2 1,044.4 Corporate (0.2) (1.2) (2.8) (2.5) Sales $ 719.0 $ 790.4 $ 3,142.8 $ 3,396.9 Operating income: Co