Avient Corporation · NYSE:AVNT
Avient — PolyOne — Gabelli & Co Specialty Chemicals Conference (March 2018)
33 slides from Avient's conference presentation, March 2018
Slide 1: PolyOne Investor Presentation
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 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
What We Do Specialty products & services driving customer value FORMULATION EXPERTISE SERVICE INNOVATION IQ Design Labs OEMs Expertise in Polymer InVisiOSM Color Brand Owners Materials, Services Services and Processers LSS Customer Solutions First Assemblers POLYONE CORPORATION 4
Slide 5: PolyOne At a Glance
PolyOne At a Glance 2017 Revenue – $3.2 billion $2.21 $2.06 $1.96 $1.80 Specialty PolyOne $1.31 Engineered Distribution Materials 34% $1.00 19% $0.82 $0.68 Color Performance Additives Products & & Inks Solutions $0.13 26% 21% 2009 2010 2011 2012 2013 2014 2015 2016* 2017 Europe Packaging Building &
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 2017 Specialty OI $5M $87M $280M JV’s Performance Products & Solutions Distribution Specialty Mix Distribution and Contract Manufacturing Businesses *Operating Income excludes corporate
Slide 7: Proof of Performance
Proof of Performance 2020 Platinum Vision 2006 2017 2020 “Where we were” “Where we are” Platinum Vision ROIC* 5.0% 14.0% 15% 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% Distrib
Slide 8: Free Cash Flow and Improving Returns
Free Cash Flow and Improving Returns Free Cash Flow (in millions) ROIC* 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 9: Returning Cash to Shareholders
Returning Cash to Shareholders Since 2011, we have returned over $950 million to shareholders Cumulative Share Repurchases (in millions) Increasing Annual Dividend 3-Year Dividend Plan $767M $767M $750 $0.70 $600 $0.58 $0.48 $450 $0.40 $0.32 $300 $0.24 $0.20 $0.16 $150 $0 2011 2012 2013 2014 2015
Slide 10: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return
Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, Repurchased 2.0 marketing, and million shares technical capabilities in 2017 Investing in Repurchased 20.8 operational and LSS million shares initiatives since early 2013 ~60 - 70% of capital
Slide 11: Innovation Drives Earnings Growth
Innovation Drives Earnings Growth Research & Development Spend Vitality Index Progression* ($ millions) Target ≥ 35% $52 38% $20 12% 2006 2017 2006 2017 *Specialty Platform revenue from products introduced in last five years Innovation Pipeline Potential Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Frame
Slide 12: Key Innovation Growth Platforms
Key Innovation Growth Platforms Total Sales ($millions) 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 2017 2021 Drive to prevent oxygen, light and UV rays
Slide 13: Strengthening Relationships: Customer First Through World-Class Service
Strengthening Relationships: Customer First Through World-Class Service Providing LSS services to small/medium sized customers – have trained over 30 customers in LSS methodology Providing Industrial design and color services to small/medium sized customers On time delivery above 95% POLYONE C
Slide 14: Why Invest In PolyOne?
Why Invest In PolyOne? The New PolyOne: A Specialty Growth Company 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 15: Segment Highlights
Segment Highlights
Slide 16: Color, Additives & Inks
Color, Additives & Inks At a Glance 2017 Revenue: $0.9 Billion Operating Income % of Sales 20%+ 16.7% Latin 14.7% 16.0%15.5% Europe America Asia 15% 12.2% 31% 4% South 9.7% America 8.1% 7.2% 2% 4.6% 5.1% 5.5% Canada United 2% 1.7% States 46% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 17: Specialty Engineered Materials
Specialty Engineered Materials At a Glance 2017 Revenue: $0.6 Billion Operating Income % of Sales 20%+ 14.7%14.3% Asia Europe 12.1% 12.5% 22% 28% 9.6% 9.3% Canada 8.0% 8.6% 2% 5.1% 3.4% United 1.1% 1.3% States 48% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 Platinum Vision Key E
Slide 18: Performance Products & Solutions
Performance Products & Solutions At a Glance 2017 Revenue: $0.7 Billion Operating Income % of Sales 12-14% 11.1% 10.7% Canada Latin 16% 8.3% America 6.9% 7.2% 7.7% 5% 6.3% 5.5% 5.5% United 3.8% 4.3% States Asia 3.6% 77% 2% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 Platinum Vis
Slide 19: Distribution
Distribution At a Glance 2017 Revenue: $1.2 Billion Key Suppliers Industrial Consumer 18% 15% Appliance 7% E&E Healthcare 6% 22% B&C 4% Transportation Packaging 23% 3% W&C 2% ROIC* Operating Income % of Sales 38% 6.6% 6.4% 6.3% 6.5 - 7.5% 6.4% 5.9% 6.1% 5.6% 4.6% 4.0% 3.5% 3.0% 2.6% 4% 2006 2007 200
Slide 20: Target End Markets & Application Examples
Target End Markets & Application Examples
Slide 21: 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 POLYONE CORPORATION 21
Slide 22: 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 POLYONE CORPORATION 22
Slide 23: Target End Markets… Consumer
Target End Markets… Consumer Elastomeric Grips and Handles Polymer Colorants Thermally Conductive Components Structural Composite Components POLYONE CORPORATION 23
Slide 24: 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 POLYONE CORPORATION 24
Slide 25: 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 26: 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 26
Slide 27: 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 27
Slide 28: 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 28
Slide 29: 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 30: 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 31: 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 32: 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 32
Slide 33: 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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