https://www.avient.com/sites/default/files/2023-02/AVNT Q4 2022 Earnings Presentation.pdf
Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: • Disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; • The effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; • The current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows, including, without limitation, any supply chain and logistics issues; • Changes in laws and regulations regarding plastics in jurisdictions where we conduct business; • Fluctuations in raw material prices, quality and supply, and in energy prices and supply; • Production outages or material costs associated with scheduled or unscheduled maintenance programs; • Unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; • Our ability to achieve strategic objectives and successfully integrate acquisitions, including Avient Protective Materials (APM); • An inability to raise or sustain prices for products or services; • Our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; • Information systems failures and cyberattacks; • Amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions; and • Other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates, changes in the rate of inflation and any recessionary conditions Use of Non-GAAP Measures This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures. EPS (1) $0.14 $2.67 $3.04 2006 2018 2022PF 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 A N D R E C O G N I T I O N Industry Sustainability Standards 90th percentile 84th ESG Ratings Performance 3 1 4 10 PEOPL E C U L T U R E I S E V E R Y T H I N G Community Service 7x Safer than Industry Average World-Class Safety Leadership Development Over $17 million raised since 2010 Diversity & Inclusion 11 2 0 2 2 R E S U L T S Q4 EBITDA BRIDGE ( P R O F O R M A T O TA L C O M PA N Y ) 13 $ millions CAI: Price / Mix 42 Inflation (20) SEM: Price / Mix 14 Inflation (10) Net Price Benefit 26 Wage and Energy Inflation (13) Clariant Color Integration Synergies 4 Incentives, Other Employee Costs 21 FX (10) Q4 2022 $107 Adjusted EBITDA Q4 2021 $ 132 Demand (50) Russia Import Sales (3) • Demand contraction especially prevalent in EMEA and Asia • Pricing continues to cover inflation of raw materials, wages and energy 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 14 • Periods of economic weakness have driven higher levels of cash generation due to working capital management • Anticipate continued strong free cash flow generation and conversion despite global uncertainty 78% 78% 80% 80% 81% 78% 84% 83% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2014 2015 2016 2017 2018 2019 2020 2021 2022 0 50 100 150 200 250 300 350 400 F re e C a s h F lo w C o n v e rs io n F re e C a s h F lo w FCF $ AVNT FCF Conversion % S&P FCF Conversion % Note: Free cash flow conversion calculated as (Adjusted EBITDA – Capex) / Adjusted EBITDA. 2020 is pro forma for Clariant Color and 2022 is pro forma for Avient Protective Materials Avient 2011 and 2018 valuations reflect trailing 12 months EBITDA at December 31 of the respective years. 29 EV / 2023E EBITDA Historic Multiple 6.5 8.3 10.0 15.6 13.9 13.7 12.8 9.5 18.0 17.5 12.3 10.2 9.7 8.8 8.4 5.9 A vi e n t (2 0 1 1 ) A vi e n t (2 0 1 8 ) A vi e n t K W R P P G R P M A V Y F U L H X L E C L F M C A S H S C L H U N E M N C E SEGMENT DATA U.S. & Canada 40% EMEA 37% Asia 18% Latin America 5% 2022 PRO FORMA SEGMENT, END MARKET AND GEOGRAPHY GEOGRAPHY REVENUESEGMENT FINANCIALS Consumer 20% Packaging 24% Industrial 15% Building and Construction 10% Telecommunications 4% Energy 4% Defense 6% END MARKET REVENUE (1) Total company adjusted EBITDA of $592M includes corporate costs $2,355M $402M $1,300M $272M Sales EBITDA Specialty Engineered Materials Color Additives and Inks $592M$3,653M (1) Transportation 9% Healthcare 8% 31 C O L O R , A D D I T I V E S & I N K S 2 0 2 2 R E V E N U E | $ 2 . 4 B I L L I O N US & Canada 34% EMEA 38% Asia 20% Latin America 8% END MARKET REGION 32 Packaging 34% Consumer 21% Healthcare 8% Industrial 15% Transportation 8% Building & Construction 11% Telecommunications 1% Energy 2% S P E C I A L T Y E N G I N E E R E D M A T E R I A L S 2 0 2 2 P R O F O R M A R E V E N U E | $ 1 . 3 B I L L I O N END MARKET US & Canada 52% EMEA 35% Asia 13% REGION 33 Packaging 5% Consumer 19% Healthcare 8%Industrial 16% Transportation 10% Telecommunications 10% Energy 9% Defense 15% Building & Construction 8% Packaging 32% Consumer 27% Healthcare 8% Industrial 14% Building & Construction 5% Telecommunications 3% Energy 1% Defense 1% Asia (18% of sales) Transportation 9% 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 B Y E N D M A R K E T Packaging 27% Consumer 14% Healthcare 5% Industrial 17% Building & Construction 10% Energy 5% Defense 8% EMEA (37% of sales)Transportation 11% Packaging 13% Consumer 24% Healthcare 12% Industrial 15% Building & Construction 13% Energy 5% Defense 5% US & Canada (40% of sales) Transportation 7% Packaging 56% Consumer 23% Healthcare 4% Industrial 7% Building & Construction 4% Telecommunications 1% LATAM (5% of sales) Transportation 5% Telecommunications 3% Telecommunications 6% 34 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 attributable to Avient shareholders, excluding special items, to assess performance and facilitate comparability of results.
