Avient Corporation · NYSE:AVNT
Avient — Q3 2023 Earnings Presentation
23 slides from Avient's earnings presentation, Nov 2, 2023
Slide 1: Avient Corporation Third Quarter 2023 Results
AVIENT CORPORATION THIRD QUARTER 2023 RESULTS (NYSE: AVNT) NOVEMBER 2, 2023
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 B O B PAT T E R S O N CHAIRMAN, PRESIDENT AND CEO
Slide 4: Avient Protective Materials First Year
AVIENT PROTECTIVE MATERIALS FIRST YEAR Composites as a % of SEM Collaboration & Innovation People & Culture 44% 2023E Sales 56% Composites Composites comprises over half of Complementary technologies and Talented, passionate, and Specialty Engineered Materials, customer relationships offer opportuni
Slide 5: Avient Protective Materials Cross Selling Opportunities
AVIENT PROTECTIVE MATERIALS CROSS SELLING OPPORTUNITIES Lightweight Protective Laminates: PROJECTILE PROTECTION Dyneema® Fiber Solutions Strength + Durability + Light-Weighting: SOLID MOUNTING BRACKETS Nymax™ Bergamid™ Complēt™ Engineered Materials Color Consistency and Weatherability CUSTOMIZED SPE
Slide 6: Avient Protective Materials Cross Selling Opportunities
AVIENT PROTECTIVE MATERIALS CROSS SELLING OPPORTUNITIES 66
Slide 7: Q3 Performance
Q3 PERFORMANCE
Slide 8: Q3 2023 Adj. EBITDA Margin Performance
Q3 2023 ADJ. EBITDA MARGIN PERFORMANCE Results vs. Guidance Results vs. Prior Year 16.3% 16.3% 16.0% 15.4% Guidance Actual 2022 PF 2023 8
Slide 9: Q3 2023 Performance vs. Guidance
Q3 2023 PERFORMANCE VS. GUIDANCE Sales Adjusted EBITDA Adjusted EPS $800 $128 $0.57 $0.56 $123 $754 Guidance Actual Guidance Actual Guidance Actual (in millions) (in millions) 9
Slide 10: Q3 EBITDA Bridge
Q3 EBITDA BRIDGE Adjusted • Demand impacted by destocking ($ millions) EBITDA and cautious customer sentiment Q3 2022 Pro Forma $ 137) Demand (49) • Positive net price benefit: CAI: o CAI - Pricing flat and raw Price / Mix -) material deflation Deflation 22) SEM: o SEM - Pricing flat with Price / Mi
Slide 11: 2023 Guidance
2 0 2 3 G U I DA N C E
Slide 12: Q4 2023 Guidance vs. Prior Year
Q4 2023 GUIDANCE VS. PRIOR YEAR Sales Adjusted EBITDA Adjusted EPS - 10% + 5% + 12% $790 $112 $0.47 $107 $0.42 $710 2022 2023 2022 2023 2022 PF 2023 (in millions) (in millions) 12
Slide 13: Q4 and Full Year 2023 Guidance
Q4 AND FULL YEAR 2023 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,130 $500 $2.30 $710 $112 $0.47 Q4 FY Q4 FY Q4 FY (in millions) (in millions) 13
Slide 14: Free Cash Flow & Increased Dividend
FREE CASH FLOW & INCREASED DIVIDEND Guidance: Free Cash Flow 13th Consecutive Dividend Increase $180 $180 1.03 0.99 0.85 0.79 0.58 0.42 0.26 0.16 Prior Guidance Guidance 2011 2013 2015 2017 2019 2021 2023 2024 14
Slide 15: Avient
YX AVIENT
Slide 16: Sustainability Day Recap
SUSTAINABILITY DAY RECAP V
Slide 17: Long-Term Revenue Growth Drivers
LONG-TERM REVENUE SUSTAINABILITY GROWTH AS A GROWTH DRIVERS DRIVER Total Company Revenue Long-Term Growth Drivers Other Growth Rate Sustainable (GDP Growth) Solutions Sustainable Solutions 8–12% Composites 8–10% Healthcare 8–10% 60%+ Key Growth Overlap Asia / LATAM 5% Drivers Other (GDP growth) 0–2%
Slide 18: Sustainability Trends Drive Long-Term Growth
SUSTAINABILITY SUSTAINABILITY TRENDS TRENDS DRIVE DRIVE LONG-TERM GROWTH LONG-TERM GROWTH Global Offshore Annual Growing Demand Medical Plastics Wind Installations for Recycled Market Size (in Gigawatts) Content (in $Billions) 46 Avient Sustainable 90 Recycled Solutions Plastics 18 Virgin 50 8-12% P
Slide 19: Adjusted EBITDA Margin Expansion
ADJUSTED EBITDA MARGIN EXPANSION +3%+ 20%+ • Transformative acquisitions +1%+ 16.0% combined with divestitures of more cyclical businesses have 11.5% improved margins over 400 bps since 2018 5.4% • 20% long-term margin goal to be driven by key growth drivers, with sustainable solutions playing a mea
Slide 20: Creating a World-Class Sustainable Organization
CRE AT ING A WORL D-CL AS S S US TAINABL E ORGANIZ AT ION • 6% annualized long-term sales growth leveraging sustainable solutions, composites, healthcare, and emerging regions • Expand EBITDA margins to 20% • Deliver annual EBITDA and EPS growth of 10% and 15% • Maintain asset-light, 80% free cash f
Slide 21: Avient
YX AVIENT
Slide 22: 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 23: Reconciliation to EBITDA and Adjusted EBITDA
Year Ended December 31, Reconciliation to EBITDA and Adjusted EBITDA: 2006 2018 Sales $ 2,622.4 $ 3,533.4 Net income from continuing operations – GAAP $ 133.5 $ 160.8 Income tax expense 29.7 36.4 Interest expense, net 63.1 62.8 Depreciation and amortization 57.1 91.5 EBITDA from continuing operation