Avient Corporation · NYSE:AVNT
Avient — Fermium Investor Meetings 2023
39 slides from Avient's conference presentation, May 4, 2023
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) H O ST ED B Y: M AY 4 , 2 0 2 3
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
AVI ENT: WHO WE A RE Key Financial Data Headquartered in Avon Lake, OH (Cleveland) 2023E Sales $3.4 billion 100+ manufacturing plants 2023E EBITDA $530 million 2023E EPS $2.40 Guidance as of May 3, 2023 Webcast 35 36 24 25,000+ 9 CUSTOMERS 100% of sales • U.S. and Canada • Latin America • Europe, Mi
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: May 3, 2023 Webcast
MAY 3, 2023 WEBCAST y
Slide 7: Avient Protective Materials Integration
AVI E N T P ROT EC T I VE MAT ER I A L S I N T EG R ATI O N Keeping Safety First o Relentless focus on best-in-class safety performance as an ACC Responsible Care® organization Exceeding Customer Expectations o Complementary technologies and customer relationships offer opportunity for future revenu
Slide 8: Avient Protective Materials
AVI ENT PROTEC TI VE MATERI ALS 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 W
Slide 9: Q1 Performance
Q1 PERFORMANCE
Slide 10: Q1 2023 Performance vs. Guidance
Q1 2023 PERFORMANCE VS. GUIDANCE ( T O TA L C O M PA N Y ) Sales Adjusted EBITDA Adjusted EPS $845 $846 $134 $0.63 $125 $0.55 Guidance Actual Guidance Actual Guidance Actual (in millions) (in millions) 10
Slide 11: Q1 2023 Performance vs. Guidance (Margin)
Q1 2023 PERFORMANCE VS. GUIDANCE ( T O TA L C O M PA N Y ) Adjusted EBITDA Margin % Better-than-expected margins 15.8% driven by: 14.8% • Resilient demand for composites and sustainable solutions which improved mix of higher margin applications • Deceleration of raw material inflation • Cost reducti
Slide 12: Q1 EBITDA Bridge
Q1 EBITDA BRIDGE ( T O TA L C O M PA N Y ) Adjusted $ millions EBITDA Q1 2022 Pro Forma $ 176) Demand (48) • Weak demand CAI: conditions in-line Price / Mix 19) with previous Inflation (4) expectations SEM: Price / Mix 6) • Pricing continues to Inflation (4) cover inflation of raw Net Price Benefit
Slide 13: Q1 2023 Segment, End Market and Geography
Q1 2023 SEGMENT, END MARKET AND GEOGRAPHY SEGMENT FINANCIALS END MARKET REVENUE GEOGRAPHY REVENUE Energy Defense Latin America Telecommunications 5% 6% 5% $846M $134M 4% Consumer Asia 18% 17% Building and Construction U.S. & Canada 10% 40% $310M $64M Transportation 11% $537M $91M Packaging 23% Indus
Slide 14: Q1 Sales by Region
Q1 2 023 SA LES BY R EGI ON Yo Y C H A N G E ( E X C L . F X ) US & Canada -12% EMEA Asia -10% Latin America -11% -3% Avient ex. FX -11% FX -3% Total Avient -14% 14 YoY Comparison against 2022 pro forma results
Slide 15: Energy
ENERGY • Aging infrastructure driving need for greater technological advancements and upgrades • Increased focus on strength and capacity of electrical grid plays into further adoption of composites into the market Where Avient Wins: UV, weather-resistance, customized capabilities Best-in-class
Slide 16: Telecommunications
TELECOMMUNICATIONS • Fiber-optic investments from AT&T, Corning, Commscope continue to drive industry toward innovation • $42B BEAD program in Infrastructure Bill to increase cable deployments; well-positioned to capitalize on “Made in America” requirement and “last mile” buildout Where Avient Wins:
Slide 17: Defense
DEFENSE • Fiscal Year 2024 U.S. National Defense budget of $842 billion submitted to Congress in Q1 2023 • European NATO members annual defense spend expected to increase by up to 20% Where Avient Wins: Dyneema® is the world’s strongest fiber™ One of the highest strength to weight ratios of any
Slide 18: Transportation
TRANSPORTATION • Increased EPA regulations requiring improved fuel efficiency, enabled in part by lower-weight vehicles • Automakers preparing for 2/3 of U.S. vehicles to be 100% electric by 2032 Where Avient Wins: Lightweight panels that establish both strength and stiffness resulting in decrease
Slide 19: 2023 Guidance
2023 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,400 $530 $2.40 $845 $130 $0.60 Q2 FY Q2 FY Q2 FY (in millions) (in millions) 19
Slide 20: Cash Flow / Leverage
CA SH FLOW / LEV ER AGE ($ millions) 2023E • Maintaining free cash flow Cash Flow from Operating Activities $ 350 and leverage guidance from February earnings call Less: Run-Rate CapEx (110) • IT investment to further CapEx for IT System Upgrade (25) integrate acquired CapEx for Restructuring (15) b
Slide 21: Long-Term Revenue Growth Drivers
LONG-TERM REVENUE GROWTH DRI VERS Long-Term Growth Drivers Growth Rate Other (GDP Sustainable Solutions Sustainable Solutions 8–12% Growth) 39% 32% Healthcare 8–10% Composites 10% Asia / LATAM 5% Other (GDP growth) 2–3% Healthcare Asia / LATAM 15% 6% Composites Avient 6.5% 8% 21
Slide 22: Sustainability Investor Day
SUSTAINABILITY INVESTOR DAY • Virtual presentation to be held September 20, 2023 • The company will be conducting an investor-focused presentation around our sustainability solutions portfolio Avient Confidential 22 22
Slide 23: Sustainability for a Better Tomorrow
SUSTA INAB ILITY F OR A BETTER TOMOR ROW Revenue From Sustainable Solutions* 2016-2022 ($ in millions) $1,175M Lightweighting $915M Eco-Conscious $790M Recycle Solutions VOC Reduction $550M $455M Sustainable Infrastructure $405M $340M Human Health & Safety Reduced Energy Use Bio-polymers 2016 2017 2
Slide 24: Sustainability Needs by Market
SUSTA INAB ILITY NEEDS BY M ARKET Increasing Single-Use Plastic Regulation B&C Healthcare Automotive Consumer Packaging • Eco-Conscious • Carbon footprint • Light weighting • Recycle Solutions • Recycle Solutions • Carbon footprint • Bio based content • Recycled Content • Light weighting • Light wei
Slide 25: Investing in Innovation: Sustainability Portfolio
I NV ESTI NG I N INNOVATI ON SUSTAIN AB I LI TY PORTFOLIO 25
Slide 26: Avient
YX AVIENT
Slide 27: Appendix
APPENDIX
Slide 28: Raw Material 2022 Annual Purchases
RAW MATERIAL 2022 ANNUAL PURCHASES Performance Additives 16% Other Raw Materials 33% • Cost inflation Pigments decelerating, 12% particularly for Non-hydrocarbon hydrocarbon-based based materials raw materials Styrenic Block TiO2 Copolymer 10% 5% Polypropylene Dyestuffs 5% Nylon 2% 6% Polyethylene 1
Slide 29: Segment Data
SEGMENT DATA SX<AVIENT
Slide 30: 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 Latin America 4% 6% Telecommunications 5% $3,653M $592M 4% Asia Building and Consumer 18% Construction 20% U.S. & Canada 10% 40% $1,300M $272M Transportation 9% $2,355M $402M Indus
Slide 31: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2022 REVENUE | $2.4 BILLION END MARKET REGION Telecommunications 1% Energy Latin America Building & 2% 8% Construction US & Canada 11% 34% Transportation Packaging 34% Asia 8% 20% Industrial 15% Healthcare 8% Consumer 21% EMEA 38% 31
Slide 32: 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 9% Defense Asia 15% 13% US & Canada Telecommunications 52% 10% Packaging 5% Building & Construction 8% Consumer 19% Transportation EMEA 10% 35% Healthcare Industrial 8% 16% 32
Slide 33: 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 Defense Energy Energy Defense 5% 5% 5% 8% Telecommunications Packaging Telecommunications 6% 13% 3% Building & Construction Packaging Building & 10% 27% Construction 13% US & Consumer Canada 24% EMEA Transportation (37% of sa
Slide 34: Peer Comparisons
PEER COMPARISONS SX<AVIENT
Slide 35: Avient Is Asset Light
AV I E N T I S A S SE T L I G H T Capex / Revenue 2023E (%) 9 7 6 5 5 5 4 4 3 3 3 3 3 2 FUL RPM HXL ECL SCL ASH CE PPG KWR AVY FMC HUN EMN Avient Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of April 28, 2023 Note: Avient reflects 2023 estimate
Slide 36: Free Cash Flow Conversion
F R E E C A S H F LOW C O N V E R S I O N 2023E(%) 90 87 83 81 79 79 77 76 76 73 73 69 60 22 RPM PPG AVY FUL HXL ECL EMN SCL ASH CE Avient KWR FMC HUN Avient Specialty Other Specialty / Formulators Chemical Companies Source: Peer data per Bloomberg as of April 28, 2023 Note: Free cash flow conversio
Slide 37: Multiple Expansion
M U LT I P L E E X PA N S I O N EV / 2023E EBITDA 18.7 Historic Multiple 17.4 14.6 13.7 13.0 11.9 11.8 9.9 10.0 9.7 8.8 9.1 8.3 8.0 7.9 6.5 RPM ECL HXL SCL PPG KWR AVY EMN (2011) (2018) (2023) FUL ASH CE FMC HUN Avient Avient Avient Avient Specialty Other Specialty / Formulators Chemical Companies S
Slide 38: 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 39: Reconciliation to EBITDA and Adjusted EBITDA
Three Months Ended March 31, Reconciliation to EBITDA and Adjusted EBITDA: 2023 2022 Net income from continuing operations – GAAP $ 21.3 $ 64.7 Income tax expense 7.7 20.0 Interest expense, net 28.8 16.9 Depreciation and amortization 50.5 37.6 EBITDA from continuing operations $ 108.3 $ 139.2 Specia