Slide 1: Avient Corporation First Quarter 2021 Results
AVIENT CORPORATION F I R ST QUA RTER 2 0 2 1 RE S ULTS (NYSE: AVNT) APRIL 30, 2021
Slide 2: Disclaimer
DISCLAIMER 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 expectat
Slide 3: Q1 2021 – Organic Performance
Q1 2021 – ORGANIC PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 17% + 43% + 68% $1,162 $123 $0.89 $991 $86 $0.53 (1) (1) (1) 2020PF 2021 2020PF 2021 2020PF 2021 (in millions) (in millions) 3 (1) Financial information is pro forma to include a full year of Clari
Slide 4: Q1 2021 Segment Performance
Q1 2021 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) +14% +17% +25% +39% +55% +26% $609 $217 $363 $89 $34 $536 $24 $185 $290 $19 $64 $22 Sales Operating Income Sales Operating Income Sales Operating Income (1) 4 (1) Financial information is pro forma to include a full year of Clariant Ma
Slide 5: Specialty EBITDA Margin Expansion
SPECIALTY EBITDA MARGIN EXPANSION 19.1% 16.2% 15.3% 15.2% • Continued portfolio transformation to (1) CAI high-growth end markets and sustainable solutions 2018 2019 2020 Q1 2021 • Clariant Masterbatch synergy realization 19.4% • Investments in composites and outdoor 17.6% high performance applicati
Slide 6: CAI EBITDA Margin Expansion
CAI EBITDA MARGIN EXPANSION 21.0% 18.9% 18.9% • Early synergy capture translating to the bottom line Legacy CAI • Positive mix with growth in healthcare, consumer and packaging end-markets 2019 2020 Q1 2021 • World-class vitality index of 36% represents sales from products 17.4% introduced in the la
Slide 7: Q1 2021 Organic Sales and Operating Income
Q1 2021 ORGANIC SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income (1) 2020 Pro forma $991 $86 Sustainable Solutions 15 11% 6 Healthcare 28 22% 6 Composites 6 10% 3 Growth in Emerging Regions 44 30% 10 Other 53 10% 7 Sub-total $1,137 15% $118
Slide 8: Q1 End Market Sales Performance
Q1 END MARKET SALES PERFORMANCE (58% of total revenue) +24% (42% of total revenue) +5% +8% +22% +10% +14% +8% +17% Electrical & Building & Wire & Cable Transportation Industrial Healthcare Packaging Consumer Electronics Construction (1,2) Q1 2020PF Q1 2021 8 (1) (2) Financial information is pro form
Slide 9: Q2 and Full Year 2021 Outlook
i, ~ Q2 AND FULL YEAR 2021 OUTLOOK d
Slide 10: Organic Growth Projections – Q2
ORGANIC GROWTH PROJECTIONS – Q2 ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 26% + 62% + 90% $1,100 $112 $0.80 $870 $69 $0.42 (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E (in millions) (in millions) 10 (1) Financial information is pro forma to include a full year of
Slide 11: Full Year Guidance Increased
FULL YEAR GUIDANCE INCREASED Sales Adj. Operating Income Adjusted EPS (in millions) (in millions) $4,100 $360 $2.40 $3,783 $308 $1.93 Previous Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF 2021E $410 $2.80 $4,300 $3,783 $1.93 $308 Current Guidance (1) (1) (1) 2020PF 2021E 2020PF 2021E 2020PF
Slide 12: Balance Sheet
BALANCE SHEET ($ in millions) 2021E Adjusted EBITDA $ 560 • Deleveraging to 1.9x net debt to Free Cash Flow $ 275 adjusted EBITDA by the end of 2021 Total Debt 1,860 Less: Cash (800) Net Debt $ 1,060 • Driven by record adjusted EBITDA 2021E Net Debt / Adjusted EBITDA 1.9x performance and strong free
Slide 13: Sustainability
S U S TA I NA B I L I T Y (1) Revenue from Sustainable Solutions 2016 – 2020 Newsweek Most Responsible Companies $560M $410M $355M $325M $275M (2) 2016 2017 2018 2019 2020PF VOC Reduction Reduced Energy Use Bio-derived Content Eco-conscious Renewable Energy Applications Recyclability Reduced Materia
Slide 14: Sustainability for a Better Tomorrow
S U S TA I NA B I L I T Y F O R A B ET T E R TO M O R ROW • Revenue from sustainable solutions expected to grow 11% in 2021 as our innovation efforts and collaboration with customers continues to accelerate • Relentless focus on delivering our 2030 sustainability targets to benefit the planet and pe
Slide 15: 2030 Sustainability Targets
2 0 3 0 S U STA I NA B I L I T Y TA RG E TS Enable 100% of products manufactured for Obtain 40% of electricity demand from packaging applications to be recyclable or renewable sources. reusable. 100% of technology platform projects Assess top 90% of supplier spend for alignment will deliver sustaina
Slide 16: Peer Comparisons
PEER COMPARISONS 16
Slide 17: Full Year 2019 – 2021 Organic Growth
FULL YEAR 2019 – 2021 ORGANIC GROWTH ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS + 8% + 27% + 61% $4,300 $560 $2.80 $3,981 $3,783 $457 $442 $1.93 $1.74 (1) (1) (1) (1) (1) (1) 2019PF 2020PF 2021E 2019PF 2020PF 2021E 2019PF 2020PF 2021E (in millions) (in millions) 17 (1) Financial in
Slide 18: Avient Is Asset Light
AV I E N T I S A SS E T L I G H T Capex / Revenue As a specialty formulator, we don’t 2021E (%) require significant capital investment, as compared to the Median: 3% Median: 5% 24 base resin raw material suppliers we purchase from. Even more, our manufacturing capabilities are flexible and easily ad
Slide 19: High Free Cash Flow Conversion
H I G H F R E E C A S H F L OW CONVERSION Free Cash Flow Conversion (1) 2021E (%) Being asset light helps us to generate Median: 84% Median: 77% strong free cash flow that is in line 87 89 87 88 87 86 84 with specialty formulators. 82 81 82 81 78 76 77 77 77 76 73 70 69 Our free cash flow supports 5
Slide 20: Our Valuation Versus Peers
O U R VA LUATI O N V E R S U S P E E R S Total Enterprise Value / 2021E EBITDA Our current valuation with updated guidance implies an EBITDA multiple Median: 14.8x 26.7 Median: 11.1x that is below specialty formulator 24.0 peers and the majority of our 22.8 chemical peers. 17.7 16.0 14.9 14.6 14.3 W
Slide 21: Summary: Why Invest in Avient?
S U M M A RY: W H Y I N V E S T I N AV I E N T ? We are a specialty formulator that enables many of the world’s products through innovation and custom solutions. We take great pride in our essential role and responsibility—to our people, our customers, our planet and our shareholders. In 2021, we ex
Slide 22: Appendix
APPENDIX SX<AVIENT
Slide 23: Raw Material Update
RAW MATERIAL UPDATE Annual Purchases • Exiting 2020, the majority of hydrocarbon based raw Performance Additives material markets were experiencing price inflation 15% Other Raw and tight inventory Materials 29% Pigments • Winter Storm Uri in the Gulf Coast caused further 15% stress on the situation
Slide 24: Segment Data
SEGMENT DATA SX<AVIENT
Slide 25: 2020 Segment, End Market and Geography
2020 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Electrical & Building & Electronics Latin America $3,783M $457M Construction 6% 4% Consumer 8% U.S. & Canada 23% 50% Wire & Cable $70M 6% Asia 16% $1,110M $124M $709M Transportation 10% $331M $2,043M Packa
Slide 26: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2020 PF REVENUE | $2.0 BILLION END MARKET REGION Electrical & Wire & Cable Electronics Latin America 3% 2% 7% Transportation US & Canada 7% 31% Packaging 35% Building & Asia Construction 22% 8% Industrial 14% Healthcare 8% EMEA Consumer 40% 23% 2020 figures Pro forma for acqu
Slide 27: 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 2020 REVENUE | $709 MILLION END MARKET REGION Building & Construction 2% Industrial 10% Consumer Asia 19% US & Canada 24% 58% Transportation 11% Healthcare 10% Electrical & Electronics 13% Packaging EMEA 6% 23% Wire & Cable(1) 24% (1) Approximate
Slide 28: Distribution
DISTRIBUTION 2020 REVENUE | $1.1 BILLION END MARKET REGION Building & Wire & Cable Construction Latin 1% Electrical & 4% America Electronics 15% 5% US & Canada Healthcare 82% 29% Asia Transportation 3% 14% Industrial 20% Consumer 25% Packaging 2% KEY SUPPLIERS 28
Slide 29: Total Company Regional Sales
T O T A L C O M PA N Y R E G I O N A L S A L E S Electrical & BY END MARKET Electrical & Building & Electronics Building & Electronics Construction 4% Construction 3% 5% 8% Wire & Cable Consumer Wire & Cable Packaging 7% 26% 10% 34% Transportation 10% US & Canada Transportation EMEA 7% (26% of sales
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Three Months Ended March 31, 2021 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results Income from continuing operations before income taxes
Slide 31: Business Segment Operations
Three Months Ended Year Ended Business Segment Operations March 31, December 31, 2021 2020 2020 2019 2018 Sales: Color, Additives and Inks $ 609.3 $ 256.5 $ 1,502.9 $ 1,003.8 $ 1,046.5 Specialty Engineered Materials 216.5 185.3 708.8 745.7 645.8 Distribution 362.7 289.5 1,110.3 1,192.2 1,265.4 Corpo
Slide 32: Reconciliation of Pro Forma EBITDA - Color, Additives and Inks
Reconciliation of Pro Forma EBITDA - Color, Three Months Ended Year Ended Additives and Inks March 31, December 31, 2021 2020 2020 2019 2018 Sales: Color, Additives and Inks $ 609.3 $ 256.5 $ 1,502.9 $ 1,003.8 $ 1,046.5 (1) Clariant MB pro forma adjustments — 279.4 540.4 1,118.6 1,209.8 Pro forma sa
Slide 33: Reconciliation of Pro Forma Adjusted Earnings per Share – Q2 2020
Three Months Ended June 30, 2020 Pro Clariant MB Forma Reconciliation of Pro Forma Adjusted Earnings per Special Adjusted Pro Forma Adjusted Share Avient Items Avient Adjustments(2) Avient Sales $ 609.1 $ — $ 609.1 $ 261.1 $ 870.2 Operating income $ 38.0 $ 9.0 $ 47.0 $ 22.0 $ 69.0 Interest expense,
Slide 34: Reconciliation of Pro Forma Adjusted Earnings per Share – FY2020
Year Ended December 31, 2020 Clariant MB Pro Forma Reconciliation of Pro Forma Adjusted Special Adjusted Pro Forma Adjusted Earnings per Share Avient Items Avient Adjustments(3) Avient Sales $ 3,242.1 $ — $ 3,242.1 $ 540.4 $ 3,782.5 Operating income $ 189.3 $ 73.7 $ 263.0 $ 45.0 $ 308.0 Interest exp