Slide 1: Avient Corporation Investor Presentation
AVIENT CORPORATION I N V E S TO R P R E S E N TAT I O N (NYSE: AVNT) AUGUST 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: Avient: Who We Are
AVIENT: WHO WE ARE Headquartered in Avon Lake, OH Key Financial Data (Cleveland) 2022E Sales $5.1 billion 8,800+ employees 100+ manufacturing plants 2022E EBITDA $635 million 2022E EPS $3.50 34 38 21 25,000+ 9 CUSTOMERS >70% of sales • U.S. and Canada • Latin America • Europe, Middle East & Africa •
Slide 4: Who We Are – Vision, Strategy, Culture
W H O W E A R E – V I S I O N , S T R AT E G Y, C U LT U R E Avient Corporation (NYSE: AVNT) provides OUR VISION specialized and sustainable material solutions that At Avient, we create specialized and sustainable material solutions that transform transform customer challenges into opportunities, cu
Slide 5: What We Do: Materials Science
W H AT W E D O : M AT E R I A L S C I E N C E Innovation is the lifeblood of a specialty company. We create specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. We partner with Brand Owners / OEMs, pro
Slide 6: Sustainability for a Better Tomorrow
SUSTAINABILITY FOR A BETTER TOMORROW Revenue From Sustainable Solutions* 2016-2021 ($ in millions) $310 205 140 80 75 45 40 20 2021 Sales $915M *Avient Sustainable Solutions definitions aligned with FTC 2012 Guide for the Use of Environmental Marketing Claims (“Green Guides”) **2020 is Pro Forma to
Slide 7: Second Quarter 2022 Results
SECOND QUARTER 2022 ie RESULTS
Slide 8: Q2 2022 Performance
Q2 2022 PERFORMANCE ( T O TA L C O M PA N Y ) Sales Adjusted Operating Income Adjusted EPS + 5% + 10% + 13% (+ 10% excluding FX) (+ 16% excluding FX) (+ 20% excluding FX) $1,302 $134 $0.98 $1,235 $122 $0.87 2021 2022 2021 2022 2021 2022 (in millions) (in millions) 8
Slide 9: Q2 2022 Segment Performance
Q2 2022 SEGMENT PERFORMANCE CAI SEM Distribution ($ in millions) + 4% + 9% + 1% Flat + 10% + 13% (+ 10% excluding FX) (+ 16% excluding FX) (+ 6% excluding FX) (+ 3% excluding FX) $649 $241 $244 $443 $27 $94 $37 $37 $404 $624 $86 $24 Sales Operating Income Sales Operating Income Sales Operating Incom
Slide 10: Q2 2022 Sales and Operating Income
Q2 2022 SALES AND OPERATING INCOME ( T O TA L C O M PA N Y ) Adjusted Sales Growth Rate Operating $ millions Income Q2 2021 $1,235 $122 Sustainable Solutions 17 7% 7 Healthcare 23 14% 5 Composites (ex Outdoor High Performance) 10 20% 4 Growth in Asia / LATAM 5 3% 1 Other 69 11% 5 Sub-total $1,359 10
Slide 11: Q2 EBITDA Bridge
Q2 EBITDA BRIDGE Adjusted $ millions EBITDA Q2 2021 $ 159 China Lockdowns / Russia Impact $ (14) Demand (29) Outdoor High Performance (5) CAI: Transportation (5) Price / Mix 87 Inflation (58) SEM: Price increases more than Price / Mix 36 Inflation (24) offsets raw material and Distribution: supp
Slide 12: Q2 EPS Bridge
Q2 EPS BRIDGE Q2 '21 Adjusted EPS $ 0.87 Color, Additives and Inks 0.11 Specialty Engineered Materials 0.01 Distribution 0.03 Corporate Costs 0.01 F/X (0.05) Segment OI $ 0.11 Interest Expense 0.03 Tax Rate (0.03) Q2 '22 Adjusted EPS $ 0.98 12
Slide 13: 2021 Sustainability Report
2021 SUSTAINABILITY REPORT Key Updates • Provided progress on 2030 Sustainability Goals • Emphasized commitment to U.N. Global Compact & fulfilled Communication of Progress (COP) requirements • New Sustainability Strategy overview page including our 2022 AIP ESG metrics • New ESG Performance page wi
Slide 14: ESG Performance & Awards
ESG PERFORMANCE & A WARDS (as of 6/30/22) 16th ENVIRONMENTAL 2 SOCIAL 1 GOVERNANCE 3 14
Slide 15: 2022 Outlook
2022 OUTLOOK
Slide 16: FY 2022 Guidance
FY 2022 GUIDANCE ( T O TA L C O M PA N Y: C U R R E N T P O R T F O L I O ) Sales Adjusted Operating Income Adjusted EPS + 6% + 14% + 15% (+ 9% excluding FX) (+ 18% excluding FX) (+ 20% excluding FX) $490 $3.50 $5,100 $3.05 $4,819 $429 2021 2022E 2021 2022E 2021 2022E (in millions) (in millions) 16
Slide 17: Cash Flow / Leverage
CASH FLOW / LEVERAGE ($ millions) 2022E Cash Flow from Operating Activities $ 400 Less: Run-Rate CapEx (90) CapEx for Clariant Integration (10) CapEx for IT System Upgrade (15) Total CapEx (115) Free Cash Flow $ 285 Adjusted EBITDA $ 635 Net Debt / Adjusted EBITDA 1.6x 17
Slide 18: Dyneema / Distribution Updates
DYNEEMA / DISTRIBUTION UPDATES DISTRIBUTION • Strong performance so far in 2022 in-line • Encouraging interest thus far from with our modeling potential buyers for world-class business with a strong track record • Acquisition to be finalized as early as • Second round bids due in August September 1,
Slide 19: Pro Forma Modeling Update
PRO FORMA MODELING UPDATE 2022E Forecast + Sale of Pro Forma Forecast Dyneema ($M) Dyneema Distribution 2022 Revenue $ 5,100 $ 415 $ 5,515 $ (1,635) $ 3,880 Adjusted EBITDA 635 130 765 (109) 656 EBITDA % 12% 31% 14% 7% 17% Adj. EPS $ 3.50 Adj. EPS (ex Amort & Financing) $ 3.96 $ 0.82 $ 4.78 $ (0.88)
Slide 20: Two-Year Leverage Model
TWO-YEAR LEVERAGE MODEL Clariant Color Acquisition Dyneema® Acquisition 3.5x 2.7x 2.8x 2.4x 2.0x 1.6x (1) (1) (2) 2019PF 2020PF 2022E 2022PF 2023E 2024E (1) Pro forma for the acquisition of the Clariant Color business 20 (2) Pro forma for the acquisition of Dyneema® and potential divestiture of Dist
Slide 21: Our Specialty Journey Continues
OUR SPECIALTY JOURNEY CONTINUES 100% • Dyneema® brings leading technology and brand with the World’s Strongest Fiber™, deep history of application development and strong 80% management team focused on specialty applications % of Adjusted EBITDA(1) 60% • Dyneema® transaction is aligned with our previ
Slide 22: End Market Transformation to Less Cyclical Industries
END MARKET TRANSFORMATION TO LESS CYCLICAL INDUSTRIES (WITH DYNEEMA, EX. DISTRIBUTION) 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% Bui
Slide 23: End-Market Focus for New Innovation
END-MARKET FOCUS FOR NEW INNOVATION Semiconductors Robotics Healthcare Interconnected disruptive markets with massive innovation needs 23
Slide 24: Avient
YX AVIENT
Slide 25: Appendix
APPENDIX SC AVIENT
Slide 26: Raw Material and Supply Chain Update
RAW MATERIAL AND SUPPLY CHAIN UPDATE Annual Purchases • Significant raw material price inflation and Performance tight inventory continued in Q2 2022, Additives 15% although at a slightly lesser rate compared Other Raw Materials to the prior quarter 30% Pigments 13% o For Q2 2022, the average cost o
Slide 27: Dyneema Acquisition
DYNEEMA ACQUISITION
Slide 28: Dyneema Acquisition Overview
• Purchase price of $1.48B represents 11.4x multiple of 2022 EBITDA 2022E Sales By Region ($M) • Acquisition will expand Avient’s composites and fiber portfolio with Dyneema®, the World’s Strongest Fiber™ $65M (16%) • $415M sales and 30%+ EBITDA margins; Immediately (1) (2) accretive to pro forma 20
Slide 29: Fit with Four Pillar Strategy
F I T W I T H F O U R P I L L A R S T R AT E G Y Specialization Globalization • Innovation-led organization with • Global customer base with an tremendous intellectual property value in established presence across all major trademarks, patents and “know-how” geographic regions • Deep history of appl
Slide 30: Dyneema Overview
DY N E E M A ® OV E RV I E W KEY INDUSTRIES PERSONAL PROTECTION MARINE & SUSTAINABLE CONSUMER INFRASTRUCTURE Military • Law Enforcement • First Consumer • Outdoor High Performance • Responders Body Armor • Helmets • Towing / Mooring • Aquaculture • Safety Equipment Vehicle Protection Floating Wind •
Slide 31: Technology
Value chain & Overview Competition Strategy Innovation Financials MIF TECHNOLOGY Go-to-market • True specialty business – the World’s Strongest Fiber™ Patents • Deep history of application development with customers, 2,500 strongest in the industry 1,200 1,300 • The only UHMwPE (ultra-high molecular
Slide 32: Formulation Process
FORMULATION PROCESS • Like Avient, Dyneema® offers similar core competencies around formulation and material science • Technology that combines polymers and fibers to provide specialized, high performing solutions for customers • Design capabilities ensure that applications are highly customized for
Slide 33: Dyneema in the Value Chain
DYNEEMA ® IN THE VALUE CHAIN INTERMEDIATE MANUFACTURING OEM / APPLICATION (CUSTOMERS) Military Personnel, Law Enforcement UHMwPE Heavy Marine, Fiber / Tapes Offshore Wind Energy and Mooring, Aquaculture • Material Science • Formulation • Service Outdoor, Footwear, Apparel, Inflatables 37
Slide 34: Demand Trends
DEMAND TRENDS • Military spending and near-term demand for higher performing personal protection products (like Dyneema®) expected to increase o European NATO members annual defense spend expected to increase by up to 20%(1) o Japan aiming to almost double defense spending over the next 5 years(2) o
Slide 35: Products: Alignment with Sustainability Goals
P RO D U C T S ALIGNMENT WITH SUSTAINABILITY GOALS 39
Slide 36: Avient's Existing Composites Portfolio
AVIE NT ’S E XIS T ING COMP OS IT E S P ORT F OL IO DIVERSE CAPABILITIES AND SOLUTIONS SERVING MANUFACTURERS AND OEMS LFT Tapes Laminates/Panels Shapes Pultrusion Engineered Fibers 40
Slide 37: Avient's Composites Portfolio Sales and EBITDA
AV I E N T ’ S C O M P O S I T E S P O RT F O L I O S A L E S A N D E B I T DA $750 $700 $680 200 • Dyneema® acquisition will further $650 $600 improve Composites EBITDA margins $180 $550 to 26% 150 $500 $450 $400 • Dyneema® will complement our $350 100 existing portfolio with deep formulation $300
Slide 38: Segment Data
SEGMENT DATA SC AVIENT
Slide 39: 2021 Segment, End Market and Geography
2021 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Telecommunications 2% Latin America $4,819M $581M 4% Consumer 9% U.S. & Canada Building and 23% 50% Construction $94M 10% Asia 16% $1,631M $164M Transportation 11% $919M $409M Packaging $2,402M 19%
Slide 40: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2021 REVENUE | $2.4 BILLION END MARKET REGION Energy 1% Telecommunications Latin America 1% 7% Transportation 9% US & Canada 32% Packaging Building & Asia 34% Construction 21% 10% Industrial 16% Healthcare Consumer 8% 21% EMEA 40% 44 All charts reflect 2021 financials
Slide 41: 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 2021 REVENUE | $919 MILLION END MARKET REGION Energy 7% Asia US & Canada Building & Consumer 20% 55% Construction 27% 11% Industrial 11% Healthcare 10% Transportation EMEA 11% 25% Packaging 7% Telecommunications 16% 45 All charts reflect 2021 fin
Slide 42: Distribution
DISTRIBUTION 2021 REVENUE | $1.6 BILLION END MARKET REGION Energy Telecommunications Building and 1% 1% Latin Construction America 8% 17% US & Canada Healthcare 80% 26% Transportation Asia 16% 3% Consumer Industrial 23% 20% Packaging 5% KEY SUPPLIERS 46 All charts reflect 2021 financials
Slide 43: Total Company Regional Sales by End Market
T O TA L C O M PA N Y R E G I O N A L S A L E S BY END MARKET Energy Energy Telecommunications 2% Telecommunications 4% 4% 5% Building & Consumer Packaging Construction 25% Building & Construction 32% 10% 12% Transportation 13% US & Canada Transportation EMEA 12% (25% of sales) (50% of sales) Indust
Slide 44: 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 45: Three Months Ended June 30, 2022 Reconciliation
Three Months Ended June 30, 2022 GAAP Special Adjusted Reconciliation to Condensed Consolidated Statements of Income Results Items Results Operating Income $ 129.5 $ 4.3 $ 133.8 Income before income taxes $ 114.7 $ 3.4 $ 118.1 Income tax expense - GAAP (30.0) — (30.0) Income tax impact of special it
Slide 46: Reconciliation of EBITDA by Segment
Year Ended Reconciliation of EBITDA by Segment December 31, 2021 Operating income: Color, Additives and Inks $ 303.1 Specialty Engineered Materials 132.0 Distribution 93.2 Corporate and eliminations (147.1) Operating income $ 381.2 Items below OI in Corporate: Other income, net $ (1.3) Depreciation