Avient Corporation · NYSE:AVNT
Avient — PolyOne — RW Baird Global Industrial Conference (November 2017)
35 slides from Avient's conference presentation, November 2017
Slide 1: PolyOne Investor Presentation
PolyOne Investor Presentation November 2017
Slide 2: Forward Looking Statements
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 expectations or f
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include: adjusted EPS, Specialty platform operating income percentage, adjusted operating income, and return on inves
Slide 4: What We Do
Driving customer value What We Do Specialty products & services FORMULATION INPUTS EXPERTISE SERVICE VALUE Base resins InVisiOSM Color OEMs Expertise in Services Additives Polymer Brand Owners Materials, IQ Design Labs Modifiers Processers Services and LSS Customer Pigments Solutions First Assembler
Slide 5: PolyOne At a Glance
PolyOne At a Glance Specialty PolyOne Engineered Distribution Materials 2016 18% 34% $2.06 Revenue by $1.96 $1.80 Segment Color Additives Performance and Inks Products & 26% Solutions $1.31 22% $1.00 $0.82 $0.68 Europe 15% Canada $0.13 7% 2016 2009 2010 2011 2012 2013 2014 2015 2016* Revenue by Unit
Slide 6: Mix Shift Highlights Specialty Transformation
Mix Shift Highlights Specialty Transformation 100% % of Operating Income* 80% 60% 40% 76% 20% 43% 0% 2% 2005 2010 3Q 2017 Specialty OI $5M $87M $275M** JV’s Performance Products & Solutions Distribution Specialty Mix Distribution and Contract Manufacturing Businesses *Operating Income excludes corpo
Slide 7: Driving Growth
Investment in Commercial Resources Driving Growth Commercial Resource Additions* • Refreshed training curriculum for sales force • Upgraded capabilities to generate and capture new business leads • Expanded R&D resources to focus on key platforms 2014 2015 2016 2017 Sales Opportunity Funnel (in bill
Slide 8: Proof of Performance & 2020 Platinum Vision
Proof of Performance & 2020 Platinum Vision 2006 YTD 2017 2020 “Where we were” “Where we are” Platinum Vision ROIC* 5.0% 13.8% 15% Operating Income % of Sales Color, Additives & Inks 1.7% 16.4% 20%+ Specialty Engineered Materials 1.1% 13.1% 20%+ Performance Products & Solutions 5.5% 11.4% 12 - 14% D
Slide 9: Free Cash Flow and Improving Returns
Free Cash Flow and Improving Returns Free Cash Flow ROIC* (in millions) >$200 $200 15.0% 15.0% $160 $137 14.0% 13.8% $120 $116 13.0% 12.9% $80 12.0% $50 11.3% $40 11.0% 10.8% $0 10.0% 2012 2014 2016 2017 2012 2014 2016 3Q 2017 2020 Platinum Vision *ROIC is defined as TTM adjusted OI after tax divide
Slide 10: 7 Consecutive Years of Increased Dividends
7 Consecutive Years of Increased Dividends Annual Dividend Announced 30% increase 3-Year Dividend Plan to dividend in October $1.00 2017, reflecting strong and $0.90 sustainable cash flow as $0.80 well as confidence in future $0.70 $0.70 earnings growth $0.60 $0.54 $0.50 $0.48 Expect to increase
Slide 11: Returning Cash to Shareholders
Returning Cash to Shareholders Cumulative Share Repurchases (in millions) Since 2011, we have $767M returned over $950 million $750 to shareholders $767M $600 $192 million returned through dividends $450 $767 million returned through share $300 repurchases $150 Have repurchased 20.8 million
Slide 12: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return
Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, Repurchased 2.0 marketing, and million shares technical capabilities YTD 2017 Investing in Repurchased 20.8 operational and LSS million shares initiatives since early 2013 ~60 - 70% of capital
Slide 13: Innovation Drives Earnings Growth
Innovation Drives Earnings Growth Total Specialty Addressable Market of over $2.6 Billion Research & Development Spending Vitality Index Progression* ($ millions) Target ≥ 35% $54 42% $20 12% 2006 2016 2006 2016 *Specialty Platform revenue from products introduced in last five years Innovation Pipel
Slide 14: Key Innovation Growth Drivers
Key Innovation Growth Drivers Polymer formulation and process engineering create a pipeline for next generation materials Composites Drive to replace aluminum and steel with plastics without compromising on strength Drive to prevent oxygen, light and UV rays from affecting contents in PET Barr
Slide 15: Customer First Through World-Class Service
Customer First Through World-Class Service Strengthening relationships: Providing LSS services to small/medium sized customers 54% of associates trained in LSS, with over 125 active black belts Have trained over 30 customers in LSS methodology Providing training in Customer Centric Selling S
Slide 16: Why Invest In PolyOne?
The New PolyOne: A Specialty Growth Company Why Invest In PolyOne? Addressable market exceeds $40 billion Strong performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with strengths Innovation and services provide differentiation, in
Slide 17: Segment Highlights
Segment Highlights POLYONE CORPORATION 17
Slide 18: Color, Additives & Inks At a Glance
Color, Additives & Inks At a Glance Operating Income % of Sales 20%+ 16.7% Asia 16.0% 16.4% 15% 14.7% 2016 Europe Latin 12.2% 33% America Revenue: 5% 9.7% $0.8 Billion Canada 7.2% 8.1% 2% 5.5% United 4.6% 5.1% States 1.7% 45% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 2017 Plati
Slide 19: Specialty Engineered Materials At a Glance
Specialty Engineered Materials At a Glance Operating Income % of Sales 20%+ 14.7% Europe 14.3% Asia 13.1% 27% 12.1% 2016 20% 9.6% 9.3% 8.0% 8.6% Revenue: Canada 2% $0.6 Billion 5.1% 3.4% United 1.1% 1.3% States 51% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 2017 Platinum Vision
Slide 20: Performance Products & Solutions At a Glance
Performance Products & Solutions At a Glance Operating Income % of Sales 12-14% 11.1% 11.4% Canada Latin 8.3% 2016 16% America 6.9% 7.2% 7.7% 4% 5.5% 6.3% Revenue: United 5.5% States Asia 3.8% 4.3% $0.7 Billion 78% 2% 3.6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2020 2017 Platinum
Slide 21: Distribution At a Glance
Distribution At a Glance Industrial Consumer 18% 15% Appliance 6% 2016 E&E Key Revenue: Healthcare 5% 22% Suppliers $1.1 Billion B&C 4% Packaging Transportation 4% 24% W&C 2% ROIC 36% Operating Income % of Sales 6.6% 6.5 - 7.5% 6.4% 5.9% 6.1% 6.4% 6.6% 5.6% 4.6% 4.0% 3.5% 3.0% 2.6% 4% 2006 2016 2006
Slide 22: Target End Markets & Application Examples
Target End Markets & Application Examples POLYONE CORPORATION 22
Slide 23: Target End Markets… Healthcare
Target End Markets… Healthcare Elastomeric Grips and Handles Structural Composites Chemical Resistant Technologies Thermally Conductive Technologies Polymer Colorants Antimicrobial Technologies Anti-Counterfeiting Technologies POLYONE CORPORATION 23
Slide 24: Target End Markets… Automotive
Target End Markets… Automotive Under-hood Components Interior Structural Components Sound & Vibration Management Roof Systems Air Management Electronics and Cameras Lighting Fluid Handling Interior Trim Exterior Trim Braces & Brackets Fasteners Seals & Flaps POLYONE CORPORATION 24
Slide 25: Target End Markets… Packaging
Target End Markets… Packaging UV Light Barrier Technologies Cap & Closure Colorants Laser Marking Additives Oxygen Scavenger Technologies Antistatic Technologies Process Optimization Technologies Antioxident Technologies Density Modified Technologies POLYONE CORPORATION 25
Slide 26: Target End Markets… Consumer
Target End Markets… Consumer Structural Composite Components Elastomeric Grips and Handles Thermally Conductive Components Polymer Colorants POLYONE CORPORATION 26
Slide 27: Luxury Packaging
GravitechTM Density Modified Polymers Luxury Packaging Impart weight, sound and metallic finish to caps and closures for cosmetics and spirits applications Elevate quality and prestige perceptions among high-end consumers Eliminate time and cost associated with secondary operations and assembl
Slide 28: Optimize Color Usage
OnColorTM Super Concentrates Optimize Color Usage Eliminate costs by increasing pigment density Enhance color performance without altering form and formulation Increasing design capabilities by reducing weight and layer thickness POLYONE CORPORATION 28
Slide 29: Combat Bacteria Formation
WithStandTM Antimicrobial Technology Combat Bacteria Formation Inhibit microbial growth on polymer surfaces Enhance value or products and devices Highly versatile concentrate with the ability to be incorporated into a wide variety of products POLYONE CORPORATION 29
Slide 30: Medical Device Housings
Chemically Resistant Engineered Polymers Medical Device Housings Durable, long-lasting products stand up to the most aggressive disinfectants Minimize environmental stress cracking and discoloration One of the broadest medically approved polymer and colorant portfolios POLYONE CORPORATION 30
Slide 31: Color & Design Services
Color & Design Services Greater control of color development and supply chain Work across entire design process from concept to commercialization Inspire creativity in the use of polymer materials, colors, and effects Innovative brand differentiation Faster development timelines POLYONE CO
Slide 32: Outdoor Applications
Outdoor Applications Leading provider of high performance specialty materials for the recreational and sports & leisure industry Well positioned across all segments to address market needs Metal to Polymer Conversion Lightweighting Thermal Management Impact Performance POLYONE CORPORATIO
Slide 33: Fiber Colorants
Fiber Colorants ColorMatrix Fiber Colorant Solutions Proprietary advanced liquid color formulations and equipment enable greater efficiency and productivity Eliminates aqueous dyeing and its associated wastewater treatment Solid Color Concentrates Extrusion-spun fibers colored via solid ma
Slide 34: Smart Home Devices
ResilienceTM Vinyl Solutions Smart Home Devices High flame retardancy to meet strict UL standards Greater processing and design flexibility Specialized additives provide long term color stability Diffusive lens materials improve light dispersion POLYONE CORPORATION 34
Slide 35: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Senior management uses comparisons of adjusted net income from continuing operations attributable to PolyOne common shareholders, adjusted earnings per share (EPS) attributable to PolyOne common sh
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