Avient Corporation · NYSE:AVNT
Avient — Investor Presentation (March 2023)
39 slides from Avient's investor presentation, March 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) MARCH 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: Avient: Who We Are
AVI ENT: WHO WE A RE Key Financial Data Headquartered in Avon Lake, OH (Cleveland) 2023E Sales $3.45 billion 100+ manufacturing plants 2023E EBITDA $530 million 2023E EPS $2.40 Guidance as of February 15, 2023 Webcast 35 36 24 25,000+ 9 CUSTOMERS 100% of sales • U.S. and Canada • Latin America • Eur
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: February 15, 2023 Webcast
i, ~ FEBRUARY 15, 2023 WEBCAST d
Slide 7: Q4 2022 vs. Guidance; FY 2022 vs. Guidance
Q4 2022 VS. GUIDANCE FY 2022 VS. ( T O TA L C O M PA N Y P R O F O R M A ) GUIDANCE Adjusted EBITDA Adjusted EPS Free Cash Flow $107 $0.42 $293 $100 $0.33 $200 Guidance Pro Forma Guidance Pro Forma Guidance Actual (in millions) (in millions) 7
Slide 8: Debt / Leverage Reduction
DEBT / LEVERAGE R EDUCTION $3.15B • Completed sale of Distribution 2023 Notes $600 and paid down $750M of debt $2.40B in November $2.20B 2025 Notes $650 • Strong free cash flow in fourth $650 $650 quarter reduced leverage and enabled paydown of additional 2026 Term Loan $600 $525 $200M of debt $425
Slide 9: 2022 Transformational Portfolio Enhancements
20 22 TRA NSF OR MATI ONAL PORTFOLI O ENHA NC EMENTS $1.48B acquisition strengthens composites Dyneema® platform Acquisition Significantly improved EBITDA margins $950M divestiture results in 100% specialty sales Distribution Divestiture Strong exit multiple of 10x TTM EBITDA despite EBITDA margins
Slide 10: Growing Composites Platform Contributions to SEM Segment
G ROW I NG C OM PO SI T ES P LAT F OR M C O NT R I BU TI O NS TO S EM S EG ME NT 2016 Sales 2022 Sales Advanced Composites 9% Advanced Composites 51% $560M $1,300M Note: 2022 is pro forma for Avient Protective Materials 10
Slide 11: Composites Portfolio
COMPOSITES PORTFOLIO D Y N E E M A ® E X PA N D S O U R E N G I N E E R E D F I B E R S A N D TA P E S T E C H N O L O G Y LFT Tapes Laminates/Panels Shapes Pultrusion Engineered Fibers 11
Slide 12: Advanced Composites Performance
ADVA NC ED C OM POSI TES PERFORMA NCE Sales EBITDA $668 $169 $212 $41 $84 $51 $10 $4 (1) (1) 2016 2018 2020 2022 2016 2018 2020 2022 ($ in millions) 12 (1) Pro forma for the acquisition of Avient Protective Materials
Slide 13: Portfolio Evolution and EPS Expansion
PORTFOLIO EVOLUTION AND EPS EXPANSION Adj. EBITDA Adj. EBITDA Margins Adj. EPS ($ in millions) $592 $3.04 16.2% $408 $2.67 11.5% 5.4% $142 $0.14 (1) (1) 2006 2018 2022PF 2006 2018 2022PF 2006 2018 2022PF 2006 figures exclude joint venture results 13 2022 pro forma for the acquisition of Avient Prote
Slide 14: Top-Tier Sustainability Performance and Recognition
TO P- TI E R S U S TA I N A B I L I T Y P E R F O R M A NC E AND RECOGNITION Industry Sustainability Standards 90th percentile ESG Ratings Performance 84th 3 1 4 14
Slide 15: People
PEOPL E C ULTU RE IS EVERYTH ING World-Class Safety Diversity & Inclusion 7x Safer than Industry Average Community Service Leadership Development Over $17 million raised since 2010 15
Slide 16: 2022 Results
2 0 2 2 R E S U LT S
Slide 17: Q4 EBITDA Bridge
Q4 EBITDA BRIDGE ( P R O F O R M A T O TA L C O M PA N Y ) Adjusted $ millions EBITDA Q4 2021 $ 132 Demand (50) Russia Import Sales (3) CAI: • Demand contraction Price / Mix 42 especially prevalent in Inflation (20) EMEA and Asia SEM: Price / Mix 14 • Pricing continues to cover Inflation (10) inflat
Slide 18: Proven Track Record of Strong and Improving Free Cash Flow Generation
P ROV E N T R AC K R E C O R D O F S T RO N G A N D I M P ROV I N G F R E E C A S H F LOW G E N E R AT I O N 400 84% 90% 78% 80% 80% 81% 83% 80% • Periods of economic 78% 78% 350 80% weakness have driven 70% higher levels of cash 300 generation due to Free Cash Flow Conversion 60% 250 working capita
Slide 19: Full Year 2022 Performance
FULL YEAR 2022 PERFORMANCE ( T O TA L C O M PA N Y P R O F O R M A ) Sales Adjusted EBITDA Adjusted EPS - 2% - 1% + 1% (+ 4% excluding FX) (+ 5% excluding FX) (+ 9% excluding FX) $3,712 $3,653 $600 $592 $3.02 $3.04 2021 2022 2021 2022 2021 2022 (in millions) (in millions) 19
Slide 20: Full Year 2022 Segment Performance
FULL YEAR 2022 SEGMENT PERFORMANCE CAI SEM Pro Forma ($ in millions) - 2% - 2% - 1% - 2% (+ 4% excluding FX) (+ 4% excluding FX) (+ 5% excluding FX) (+ 2% excluding FX) $2,402 $2,355 $1,308 $409 $402 $1,300 $278 $272 Sales EBITDA Sales EBITDA 20
Slide 21: Pro Forma Full Year EPS Bridge
PRO FORMA FULL YEAR EPS BRIDGE Pro Forma 2021 Adjusted EPS $ 3.02 Foreign Currency (0.23) Russia Import Sales (0.07) Outdoor High Performance (0.13) Color, Additives and Inks 0.18 Specialty Engineered Materials 0.24 Corporate Costs / Other 0.03 Pro Forma 2022 Adjusted EPS $ 3.04 21
Slide 22: Full Year EBITDA Bridge
FULL YEAR EBITDA BRIDGE ( P R O F O R M A T O TA L C O M PA N Y ) Adjusted $ millions EBITDA Full Year 2021 $ 600 Demand (99) Russia Import Sales (9) • Demand primarily impacted CAI: by China lockdowns, 4th Price / Mix 247 quarter industrywide Inflation (176) destocking and declining SEM: consumer s
Slide 23: 2023 Guidance
2 0 2 3 G U I DA N C E
Slide 24: 2023 Guidance
2023 GUIDANCE Sales Adjusted EBITDA Adjusted EPS $3,450 $530 $2.40 $845 $125 $0.55 Q1 FY Q1 FY Q1 FY (in millions) (in millions) 24
Slide 25: Cash Flow / Balance Sheet
CA SH FLOW / BALANCE SHEET ($ millions) 2023E Cash Flow from Operating Activities $ 350 • IT investment to further Less: integrate acquired Run-Rate CapEx (110) businesses and capture CapEx for IT System Upgrade (25) operational efficiencies CapEx for Restructuring (15) Total CapEx (150) • Restructu
Slide 26: Key Growth Drivers and Transformed Portfolio
KEY GROWTH DRIVERS AND TRANSFORMED PORTFOLIO
Slide 27: Growth Drivers: Proven Success
GROW TH DR IVER S: PROV EN SUCC ESS (Sales in $ millions) SUSTAINABLE SOLUTIONS COMPOSITES HEALTHCARE ASIA/EMERGING REGIONS Organic CAGR Organic CAGR Organic CAGR Organic CAGR $1,175 11% 10% $668 11% 12% $830 $293 $726 $790 $231 $358 $108 $113 $265 $455 $212 $340 $84 $51 (1) (1) (1) 2016 2018 2020 2
Slide 28: Leveraging Our Transformed Portfolio
L E V E R AG I N G O U R T R A N S F OR M E D PO RT F O L I O Specialty Formulator Leading Positions Diversified Industries Sustainable Solutions Energy $1,175M 4% Telecom. 4% Defense Transportation 6% 9% Healthcare Industrial 8% $790M 15% (1) 2022 PF $3.65B $455M Building & sales $340M Construction
Slide 29: Peer Comparisons
P E E R C O M PA R I S O N S
Slide 30: Avient Is Asset Light
AV I E N T I S A S SE T L I G H T Capex / Revenue 2023E (%) 7 7 6 5 5 5 4 4 4 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 February 13, 2023 Note: Avient reflects 2023 estim
Slide 31: 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 79 81 79 76 77 76 75 73 73 64 59 33 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 February 13, 2023 Note: Free cash flow conver
Slide 32: Multiple Expansion
M U LT I P L E E X PA N S I O N EV / 2023E EBITDA Historic Multiple 18.0 17.5 15.6 13.9 13.7 12.8 12.3 10.0 10.2 9.5 9.7 8.8 8.4 8.3 6.5 5.9 RPM HXL ECL SCL PPG KWR AVY EMN (2011) (2018) FUL ASH CE Avient FMC HUN Avient Avient Avient Specialty Other Specialty / Formulators Chemical Companies Source:
Slide 33: Raw Material Overview
i, ~ RAW MATERIAL OVERVIEW d
Slide 34: Raw Material 2022 Annual Purchases
RAW MATERIAL 2022 ANNUAL PURCHASES Performance Additives 16% Other Raw Materials 30% Pigments 12% Non-hydrocarbon based materials Styrenic Block Copolymer TiO2 5% 11% Polypropylene 6% Dyestuffs Nylon 2% 6% Polyethylene 12% ~40% hydrocarbon based (Grey shaded materials are hydrocarbon based, includes
Slide 35: Segment Data
SEGMENT DATA SX<AVIENT
Slide 36: 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% 5% $3,653M $592M Telecommunications 4% Asia Building and Consumer 18% Construction 20% U.S. & Canada 10% 40% $1,300M $272M Transportation 9% $2,355M $402M Indus
Slide 37: Color, Additives & Inks
COLOR, ADDITIVES & INKS 2022 REVENUE | $2.4 BILLION END MARKET REGION Telecommunications 1% Energy Latin America 2% Building & 8% Construction 11% US & Canada 34% Packaging Transportation 34% Asia 8% 20% Industrial 15% Healthcare 8% Consumer 21% EMEA 38% 37
Slide 38: 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 Asia Defense 9% 15% 13% US & Canada 52% Telecommunications 10% Packaging 5% Building & Construction 8% Consumer 19% Transportation EMEA 10% 35% Healthcare Industrial 8% 16% 38
Slide 39: 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