Avient Corporation · NYSE:AVNT
Avient — PolyOne — Seaport Global Transports & Industrials Conference (March 2018)
38 slides from Avient's conference presentation, March 2018
Slide 1: PolyOne Investor Presentation March 2018
POLYONE INVESTOR PRESENTATION MARCH 2018
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 for
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: Vision and Core Values
VISION CORE VALUES To To be be the the world’s world’s premier premier provider provider of of Collaboration Innovation Excellence specialized polymer specialized polymer materials, materials, services services and and solutions solutions Commercial Excellence Specialization Globalization PERSONAL O
Slide 5: PolyOne 2017 Revenue $3.2 Billion
POLYONE 2017 REVENUE | $3.2 BILLION Segment End Market Geography PolyOne Europe Distribution Transportation Industrial 14% 18% United States Color 34% 16% 59% Additives & Inks 26% Asia 10% Appliance Building & 5% Construction 12% Electrical & Electronics 6% Latin America 9% Specialty Wire & Cable Co
Slide 6: Adjusted EPS Expansion
ADJUSTED EPS EXPANSION $2.21 CONSECUTIVE 8 $1.96 $2.06 $1.80 YEARS $1.31 $1.00 $0.82 $0.68 $0.13 2009 2010 2011 2012 2013 2014 2015 2016* 2017* *Pro Forma for sale of DSS PolyOne Corporation 6
Slide 7: Mix Improvement
EARLY YEARS DEFINED BY SPECIALTY MIX IMPROVEMENT + 25% 76% + 33% 2% 2005 2017 Specialty OI $5M $280M % of Operating Income PolyOne Corporation 7
Slide 8: Proof of Performance & Platinum Vision
PROOF OF PERFORMANCE & PLATINUM VISION 2006 2017 2020 “Where we were” “Where we are” Platinum Vision ROIC* 5.0% 14.0% 15.0% Operating Income % of Sales Color, Additives & Inks 1.7% 15.5% 20%+ Specialty Engineered Materials 1.1% 12.5% 20%+ Performance Products & Solutions 5.5% 10.7% 12-14% Distributi
Slide 9: Investment in Commercial Resources Driving Growth
INVESTMENT IN COMMERCIAL RESOURCES DRIVING GROWTH Largest organic revenue growth Increased commercial headcount since recession R&D / Technical Marketing Sales Revenue in billions of $ $3.2 607 Total + 10% 504 + 20% $2.9 $2.9 149 130 + 15% 660 Organic + 7% 531 + 24% 2014 2017 2015 2016 2017 PolyOne
Slide 10: Free Cash Flow and Improving Returns
FREE CASH FLOW AND IMPROVING RETURNS Free Cash Flow ROIC* (In millions) 15.0% $200 - $220 15.0% $200 14.0% 14.0% $160 $143 12.9% 13.0% $116 $120 12.0% $80 11.3% $50 11.0% 10.8% $40 $0 10.0% 2012 2014 2016 2018 2012 2014 2016 2017 2020 Platinum Vision *ROIC is defined as TTM adjusted OI after tax div
Slide 11: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS OVER $950 MILLION SINCE 2011 Cumulative Share Repurchases Increasing Annual Dividend (In millions) 3-Year Dividend Plan $767M $750 $0.70 $600 $0.58 $0.48 $450 $0.40 $0.32 $300 $0.24 $0.20 $0.16 $150 $0 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 20
Slide 12: Horizons of Development
3 HORIZONS OF DEVELOPMENT INNOVATION Market Create new Transformational markets, target Opportunity for Growth new customer Through M&A ColorMatrix – Liquid needs Color & Additives Gordon Composites/ Polystrand – Composites Service adjacent Adjacent Opportunity for GLS – Thermoplastic Elastomers mar
Slide 13: Innovation Pipeline
INNOVATION PIPELINE Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Breakthrough 10 4 8 8 Platform 13 6 6 2 2 Derivative 10 7 6 5 3 Frame Build Prototype Scale-up & Test Commercial Opportunity Business Case Market Launch (since 2015) Number of Projects 33 17 20 15 5 90 Total Addressable Market - - $800 $1,4
Slide 14: IQ Design Labs
IQ DESIGN LABS Launched in 2014, IQ Design Labs is our in-house industrial design team that focuses on material selection and processing expertise to help with problem solving, enabling our clients to develop higher performance products. 2014 2017 3 to 14 industrial designers $0 to $7M new business
Slide 15: LSS Customer First
LSS CUSTOMER FIRST Enables sales growth by building more intimate customer relationships, giving us insight to customers’ needs, with a service that is not easily replicated Customer Projects Cumulative LSS Projects 2014 2017 2 85 PolyOne Corporation 15
Slide 16: Why Invest in PolyOne?
WHY INVEST IN POLYONE? THE NEW POLYONE: A SPECIALTY GROWTH COMPANY Growing leadership position in attractive markets Innovation, technology and service are differentiators Capital management is a strength: Record-setting cash generation to continue for years Expand ROIC while increasing inve
Slide 17: Segment Highlights
SEGMENT HIGHLIGHTS PolyOne Corporation 17
Slide 18: Color, Additives & Inks: End Markets & Solutions
COLOR, ADDITIVES & INKS END MARKETS & SOLUTIONS Industrial Packaging 14% 27% Textiles 12% Solid Liquid Colorants Colorants Appliance 3% Electrical & Building & Electronics Construction 3% 10% Healthcare 6% Wire & Cable Consumer 10% 7% Transportation 8% Performance Screen Additives Printing Inks Poly
Slide 19: Color, Additives & Inks 2017 Revenue
COLOR, ADDITIVES & INKS 2017 REVENUE | $893 MILLION Revenue by Region Operating Income & Margin (in millions) 15.5% 150 18.0% 140 Canada 12.2% 16.0% 1% Europe 130 32% 14.0% 120 $139 United 110 12.0% States Asia 100 46% 15% 90 5.5% 10.0% $104 80 8.0% Mexico 70 4% 6.0% 60 Brazil 50 0.9% 4.0% 2% 40 30
Slide 20: Specialty Engineered Materials: End Markets & Solutions
SPECIALTY ENGINEERED MATERIALS END MARKETS & SOLUTIONS Transportation Consumer 19% 20% Building & Construction 3% Appliance Electrical & 4% Electronics 15% Engineered Advanced Thermoplastic Packaging Formulations 7% Composites Elastomers Industrial Wire & Cable 8% 13% Healthcare 11% PolyOne Corporat
Slide 21: Specialty Engineered Materials 2017 Revenue
SPECIALTY ENGINEERED MATERIALS 2017 REVENUE | $624 MILLION Revenue by Region Operating Income & Margin (in millions) 90 12.5% 14.0% Canada 80 12.0% 2% Europe 28% 9.3% $78 70 10.0% Asia United 60 8.0% 22% States 48% 5.1% $57 50 6.0% 40 4.0% 0.1% 30 2.0% $21 20 0.0% 2005 2009 2013 2017 PolyOne Corpora
Slide 22: Performance Products & Solutions: End Markets
PERFORMANCE PRODUCTS & SOLUTIONS END MARKETS & SOLUTIONS Industrial Building & 18% Construction 30% Specialty Vinyl Flame Retardant Solutions Polymers Healthcare Transportation 1% 16% Electrical & Electronics 3% Consumer 5% Packaging Wire & Cable 5% Appliance 15% Healthcare Smart Device 7% Formulati
Slide 23: Performance Products & Solutions 2017 Revenue
PERFORMANCE PRODUCTS & SOLUTIONS 2017 REVENUE | $721 MILLION Revenue by Region Operating Income & Margin (in millions) 100 16.0% 10.7% Canada 90 14.0% 16% 80 7.2% 12.0% United 70 $77 States 77% 10.0% 60 3.6% 50 $56 8.0% 4.6% 40 6.0% Mexico $40 5% Latin 30 America $33 4.0% 2% 20 2.0% 10 0 0.0% 2005 2
Slide 24: Distribution
DISTRIBUTION END MARKETS & SUPPLIERS 2017 Revenue | $1.2 Billion Operating Income & Margin Transportation (in 75 millions) 6.3% 7.0% 23% Healthcare 22% 6.0% 65 5.9% $73 5.0% 55 Wire & Cable 4.0% 2% $63 4.0% Packaging 45 3% 3.0% 2.9% Building & Industrial 35 Construction 18% 2.0% 4% 25 Electrical & 1
Slide 25: Target End Markets & Application Examples
TARGET END MARKETS & APPLICATION EXAMPLES PolyOne Corporation 25
Slide 26: Target End Markets: Healthcare
Target End Markets… Healthcare Structural Composites Elastomeric Grips and Handles Antimicrobial Technologies Thermally Conductive Technologies Anti-Counterfeiting Technologies Catheter Technologies Chemical Resistant Technologies Polymer Colorants
Slide 27: Target End Markets: Automotive
Target End Markets… Automotive Roof Systems Interior Structural Components Exterior / Interior Trim Seals & Flaps Fasteners Lighting Under-hood Components Electronics and Cameras Braces & Brackets Air Management Sound & Vibration Management
Slide 28: Target End Markets: Consumer
Target End Markets… Consumer Elastomeric Grips and Handles Polymer Colorants Thermally Conductive Components Structural Composite Components
Slide 29: 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 Antioxidant Technologies Density Modified Technologies
Slide 30: 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 31: Optimize Color Usage
OnColorTM Super Concentrates Optimize Color Usage Eliminate costs by increasing pigment density Enhance color performance without altering form and formulation Increase design capabilities by reducing weight and layer thickness
Slide 32: 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
Slide 33: 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
Slide 34: 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
Slide 35: 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
Slide 36: 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 37: 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
Slide 38: 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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