Slide 1: Avient Corporation Third Quarter 2022 Results
AVIENT CORPORATION TH I R D Q UA RT ER 2 0 2 2 R E SU LT S (NYSE: AVNT) N OVEMBER 2 , 2022
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: Transformational Overview
i, ~ TRANSFORMATIONAL OVERVIEW d
Slide 4: Recent Transactions
RECENT TRANSAC TIONS Acquired Divested Avient Protective Materials Distribution ® Dyneema $1.45 B $0.95 B 4
Slide 5: Updated Capital Structure & Liquidity
UPDATED CA PI TAL STRUC TURE & LI QUI DI TY Capital Structure Liquidity • Proceeds from completed $3.15B $794M sale of Distribution used to pay near-term maturing debt 2023 Notes $600 Undrawn to strengthen balance sheet Revolver $2.40B $250 (1) • Fixed/floating debt ratio of 2025 Notes $650 ~55/45 $
Slide 6: Previous Transactions
PREVI OUS TR ANSACTIONS Divested (2019) Acquired (2020) Performance Products & Solutions COLOR $0.8 B $1.4 B 6
Slide 7: Clariant Color: Transformational Acquisition
CLARIANT COLOR: TRANSFORMATIONAL ACQUISITION Clariant Color EBITDA Growth ($ in millions) $201 • Acquisition of Clariant Color business significantly expanded $133 presence in healthcare, packaging and consumer end markets (1) 2019PF 2022E EBITDA Margins • Strength of portfolio – double-digit annual
Slide 8: Historic Specialization Through M&A
HISTORI C SPECI AL IZATION THROUGH M& A 20 Acquisitions $4.8B Investment TPE $2.7B of Annual Revenue DSM Protective Materials 5 Divestments Distribution SUNBELT PVC Resins DSS PP&S $2.3B Proceeds 8
Slide 9: Bolt-On Acquisition History
BOLT-ON AC QUI SITI ON HISTORY INVEST TO GROW Established Acquisitions (> 7 years) Commercial Operating Income Operating Margins Resources ($ in millions) 363 $139 22% + 40% + 248% + 1300 bps 259 $40 9% At Acquisition 2022E At Acquisition 2022E At Acquisition 2022E 9
Slide 10: Specialty Transformation to Today
S P E C I A LT Y T R A N SF O R M ATI O N T O D AY 100% (1) % of Adjusted EBITDA 80% 60% 100% 40% 86% 67% 20% 46% 0% 7% (2) 2005 2010 2019 2021 2022 PF • Commodity JVs • Performance Products & Solutions • Distribution • Specialty Businesses (1) Adjusted EBITDA is EBITDA excluding corporate costs and
Slide 11: End Market Focus on Less Cyclical Industries
END MAR KET F OCUS ON LESS CYCL IC AL I ND USTRI ES 2006 2022 Pro Forma Healthcare Defense Telecom. 6% 4% Telecom. Energy 2% Packaging Energy 4% 4% 8% Healthcare 4% 8% Transportation Transportation 14% 9% Consumer 10% Packaging Industrial 23% 15% Industrial 15% Building & Building & Construction Con
Slide 12: Specialty EBITDA Margin Expansion
SPEC IA LTY EBI TDA MA RGI N EX PANSION 17.0% 16.2% • Portfolio transformation 15.3% CAI accelerates growth in less 2.7% cyclical, higher margin end (1) (1) markets 2006 2018PF 2020PF 2022E 21.0% • Investments in our composites platform continue to drive margin 17.6% expansion SEM 14.8% 1.8% 2006 20
Slide 13: Portfolio Evolution Over the Years
PORTFOLIO EVOLUTION OVER THE YEARS Adj. EBITDA Adj. EBITDA Margins ($ in millions) • Focus on organic growth combined with transformative $585 16.1% and bolt-on acquisitions • Divested commodity businesses $408 11.5% tied to more cyclical end markets • Expanded presence in high growth areas of susta
Slide 14: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Earnings Growth Dividends Share Repurchases $2.95 ~$550MM ~$1Bn 2022 PRO FORMA PAID OVER LAST 11 YEARS REPURCHASED ADJUSTED EPS OVER LAST 11 YEARS 0.99 0.95 0.85 1.0 0.79 0.81 1.0 1.0 $2.95 0.9 0.72 0.9 $2.67 0.8 0.58 0.7 $2.08 0.50 0.6 $ per share 0.42 0.5 0.34 $Bn $1
Slide 15: Third Quarter 2022 Results
i, ~ THIRD QUARTER 2022 ‘ RESULTS d
Slide 16: Q3 2022 Performance
Q3 2022 PERFORMANCE ( T O TA L C O M PA N Y C O N T. O P S ) Sales Adjusted EBITDA Adjusted EPS + 1% + 8% - 3% (+ 9% excluding FX) (+ 18% excluding FX) (+ 5% excluding FX) $119 $823 $0.61 $818 $110 $0.59 2021 2022 2021 2022 2021 2022 (in millions) (in millions) 16
Slide 17: Q3 EBITDA Bridge
Q3 EBITDA BRIDGE ( P R O F O R M A T O TA L C O M PA N Y ) Adjusted $ millions EBITDA Q3 2021 $ 142 Demand (39) CAI: Price / Mix 68 Price increases more than Inflation (44) offset raw material and SEM: supply chain impacts Price / Mix 41 Inflation (26) Net Price Benefit 39 Wage and Energy Inflat
Slide 18: Q3 2022 Segment Performance
Q3 2022 SEGMENT PERFORMANCE CAI SEM Pro Forma ($ in millions) - 4% Flat - 2% - 11% (+ 4% excluding FX) (+ 7% excluding FX) (+ 5% excluding FX) (- 7% excluding FX) $587 $326 $319 $93 $93 $566 $70 $62 Sales EBITDA Sales EBITDA 18
Slide 19: Full Year 2022 Guidance
FULL YEAR 2022 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,635 $585 $2.95 $3,375 $2.60 $500 Cont. Ops Pro Forma Cont. Ops Pro Forma Cont. Ops Pro Forma (in millions) (in millions) 19
Slide 20: Summary
SUMMARY • Executed the plans we laid out earlier this year • Completed the Dyneema acquisition and Distribution divestiture amid challenging market conditions • Paid down debt and expect to finish the year modestly levered at 3.1x net debt to 2022 pro forma adjusted EBITDA • Expect $200 million of f
Slide 21: Avient
YX AVIENT
Slide 22: Segment Data
SEGMENT DATA SX<AVIENT
Slide 23: 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 6% Latin America 4% 5% $3,635M $585M Telecommunications 4% Building and Asia Consumer Construction 20% 21% U.S. & Canada 10% 40% Transportation 9% Industrial Packaging 15% 23% EMEA
Slide 24: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2022 REVENUE | $2.3 BILLION END MARKET REGION Telecommunications 1% Energy Latin America 1% 5% Building & Construction 11% US & Canada 35% Packaging Asia Transportation 33% 20% 8% Industrial 15% Healthcare 9% Consumer 22% EMEA 40% 24 Figures represent 2022 full year estimates
Slide 25: Specialty Engineered Materials
S P E C I A LT Y E N G I N E E R E D M AT E R I A L S 2022 PRO FORMA REVENUE | $1.3 BILLION END MARKET REGION Energy Defense Asia 9% 15% 15% US & Canada 50% Telecommunications 10% Packaging 5% Building & Construction 8% Consumer 19% Transportation 10% EMEA 35% Healthcare Industrial 8% 16% 25 Figures
Slide 26: 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 Energy Defense Energy Defense 5% 7% 5% 7% Telecommunications Telecommunications Packaging 3% 6% 14% Building & Construction Building & 11% Packaging Construction 29% 12% US & Canada Transportation EMEA 10% (35% of sales) (40%
Slide 27: 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 28: 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 63.1 62.8 Depreciation and amortization 57.1 91.5 EBITDA $ 283.4 $ 351.5 Special items,
Slide 29: Reconciliation of Avient Consolidated Pro Forma EBITDA
Reconciliation of Avient consolidated pro forma EBITDA Q3 2022 Q3 2021 Pro Pro Pro Pro forma forma forma forma (1) Avient APM(1) Avient Avient APM Avient Net income from continuing operations (27.8) 3.9 (23.9) 33.4 0.3 33.7 Income tax expense (1.2) 0.6 (0.6) 2.0 2.5 4.5 Interest expense 37.3 1.8 39.