Financial Performance - Avient Corporation reported sales from continuing operations of $3.2 billion in 2024, with approximately 60% of sales coming from customers outside the United States[12]. - Sales for 2024 were $3,240.4 million, an increase of 3.1% compared to $3,142.8 million in 2023[205]. - Net income from continuing operations increased by $94.4 million, or 123.7%, totaling $170.7 million in 2024[113]. - Earnings per share attributable to common shareholders increased to $1.86 in 2024 from $0.83 in 2023, reflecting a 123.9% increase[113]. - Operating income rose by $132.5 million, or 67.3%, in 2024 compared to 2023, reaching $329.3 million[125]. - Gross margin improved to 32.6% in 2024 from 28.4% in 2023, primarily due to raw material deflation and lower environmental remediation costs of $34.6 million[115]. - Comprehensive income attributable to Avient common shareholders was $79.1 million in 2024, compared to $64.1 million in 2023, an increase of 23.4%[207]. Research and Development - The company invested $98.7 million in research and development in 2024, up from $90.3 million in 2023 and $84.9 million in 2022[28]. - Avient's strategic focus includes amplifying innovation to address evolving market and sustainability needs, supported by a technical workforce of around 1,100 employees[28]. Operational Footprint - Avient operates 102 manufacturing sites globally, with a workforce of approximately 9,200 employees as of December 31, 2024[12][32]. - The company operates globally with 102 manufacturing sites across North America, South America, Asia, Europe, the Middle East, and Africa, indicating a strong operational footprint[83]. Sustainability and Environmental Commitment - The company emphasizes sustainability and performance advantages of its specialized polymers over traditional materials[20]. - Avient maintains a strong commitment to sustainability, aiming to help customers meet their sustainability goals through technologies that improve recyclability and reduce carbon footprints[108]. - The company is subject to extensive environmental, health, and safety regulations, which could lead to increased compliance costs and potential liabilities[59]. - The company may incur additional costs or liabilities due to increasingly strict environmental regulations and potential claims related to plant emissions[46]. Financial Position and Debt - Total debt as of December 31, 2024, was $2,067.0 million, a decrease from $2,080.0 million in 2023[140]. - The company maintains a senior secured revolving credit facility with a maximum borrowing size of $500.0 million, with remaining availability of $211.4 million as of December 31, 2024[144]. - Future obligations total $3,164.6 million, with $247.0 million due in less than one year[148]. - The company has a revolving credit facility that requires compliance with specific financial tests, which could impact borrowing capacity if not met[70]. Cybersecurity - The company has experienced targeted and non-targeted cybersecurity attacks in the past, although no incident has had a material impact on its business to date[63]. - The Chief Information Security Officer (CISO) oversees cybersecurity risk management, reporting directly to the Chief Information Officer (CIO)[78]. - The company emphasizes cybersecurity education for employees and imposes security requirements on third-party service providers[76]. - The company has established a Cyber and Data Incident Response Team (CDIRT) to manage responses to cyber incidents effectively[82]. Market Risks - Fluctuations in foreign currency exchange rates may adversely impact the company's financial results, affecting competitiveness and cost control[67]. - The company manages market risks, including interest rate and foreign currency exposure, through regular operating and financing activities, including derivative financial instruments[176]. - There would be no material impact on interest expense or cash flows from a 100 basis point increase or decrease in market rates of interest on outstanding variable rate debt as of December 31, 2024[177]. Employee Engagement - The company conducts annual employee engagement surveys, with participation from employees in over 40 countries, to support ongoing engagement efforts[44]. Strategic Focus - Avient's refined strategy focuses on intersecting high-growth markets and maximizing the impact of existing business, supported by four strategic drivers: Portfolio Prioritization, Amplify Innovation, Digital for Operational Excellence and Growth, and Leadership, Talent and Culture[107]. - Long-term trends that provide opportunities for Avient include improving health and wellness, protecting the environment, and increasing the need for power and electricity[109].

Core Viewpoint - Avient Corporation reported strong earnings growth in Q4 2024, with adjusted earnings surpassing estimates, although revenue fell short of expectations Financial Performance - Earnings from continuing operations for Q4 2024 were 52 cents per share, up from 30 cents a year ago [1] - Adjusted earnings for the quarter were 49 cents per share, beating the Zacks Consensus Estimate of 48 cents [1] - Revenues for Q4 2024 were $746.5 million, a 4% increase year over year, but missed the Zacks Consensus Estimate of $751.2 million [2] - Organic sales increased by 5% year over year, driven by growth across all geographic regions [2] Segment Highlights - Sales from the Color, Additives and Inks unit were $467.7 million, up approximately 2% year over year, but below the consensus estimate of $479 million [3] - Specialty Engineered Materials recorded sales of $279.7 million, an 8% increase year over year, exceeding the consensus estimate of $277 million [3] Full-Year Results - For FY 2024, earnings were $1.84 per share, up from 83 cents per share a year ago [4] - Net sales rose around 3% year over year to $3,240.4 million [4] Financial Position - At the end of 2024, cash and cash equivalents were approximately $544.5 million, unchanged year over year [5] - Long-term debt was around $2,059.3 million, down about 0.5% from the previous year [5] - Net cash provided by operating activities for FY 2024 was $256.8 million, a 27% increase year over year [5] Outlook - The company expects full-year 2025 adjusted earnings in the range of $2.70-$2.94 per share, representing an 11% growth excluding unfavorable currency impact [6] - Projected adjusted EBITDA for the full year is between $540-$570 million [6] - First-quarter adjusted earnings are anticipated to be 76 cents per share, indicating a 6% growth excluding currency impact [6] Stock Performance - Avient's shares have increased by 8.8% over the past year, contrasting with a 3.2% decline in the Zacks Chemicals Diversified industry [7]

Financial Data and Key Metrics Changes - In 2024, organic sales for the total company increased by 4% with adjusted EBITDA margins expanding by 20 basis points to 16.2% [12][34] - Adjusted EPS grew by 13% for the year, including the impact of foreign exchange [12][34] - The fourth quarter saw organic sales growth of 5% year-over-year, with adjusted EBITDA and adjusted EPS slightly down due to variable compensation accruals [25][26] Business Segment Data and Key Metrics Changes - The Color, Additives and Inks (CAI) segment grew organic sales by 3%, while the Specialty Engineered Materials (SEM) segment saw a 6% increase [12][30] - Adjusted EBITDA margins expanded by 90 basis points for CAI and 110 basis points for SEM [12][31] - SEM segment posted 8% sales growth and 13% EBITDA growth, excluding foreign exchange, driven by demand in healthcare and construction applications [28][29] Market Data and Key Metrics Changes - Organic revenue growth was achieved in every region, with significant growth in the U.S. and Canada, Asia, and Latin America [10][11] - EMEA faced a challenging macro environment but still contributed to overall growth [10] - The company reported a 5% dividend increase, marking the 14th consecutive year of annual dividend growth [16] Company Strategy and Development Direction - The company articulated a new purpose to be an innovator of material solutions while enabling a sustainable world [8] - Focus on organic top-line growth with margin expansion, leveraging customer intimacy and innovative offerings [9][30] - A new incentive compensation plan was rolled out to align employee focus with strategic execution [13][106] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming headwinds from a strong U.S. dollar and challenging comparisons from the previous year [24][34] - The company anticipates mid-single-digit growth in defense for 2025, acknowledging the lumpy nature of defense orders [72][74] - Despite uncertainties in the macro environment, the company remains focused on controllable factors and expects to achieve adjusted EBITDA of $540 million to $570 million for 2025 [38][39] Other Important Information - A decision was made to cease the implementation of the S/4HANA ERP system due to increased costs and complexity, resulting in a noncash impairment charge of approximately $71 million [21][22] - The company expects free cash flow to be between $180 million and $200 million, with a CapEx estimate of around $120 million [109][113] Q&A Session Summary Question: Impact of Generation 3 Dyneema product and expectations for Defense - Management highlighted that the new Dyneema product is a significant upgrade and is expected to help maintain or increase margins while winning market share [45][46] - Defense sales were steady at 7% of overall sales, with expectations for mid-single-digit growth in 2025 due to tough comparisons from 2024 [72][74] Question: Insights on the decision to pause SAP S/4HANA implementation - The implementation was in the early stages, and the decision was made due to high costs and complexity, with alternative solutions expected to deliver similar benefits more efficiently [60][63] Question: Strength in healthcare segment and future trends - Healthcare was a strong focus area with double-digit growth in 2024, driven by new business wins in remote monitoring and drug delivery devices [66][68] Question: Demand in China and automotive end markets - China saw 7% growth in Q4, with expectations for continued strong performance in 2025, particularly in the EV market [116][120]

Avient Corporation AVNT Fourth quarter and full year 2024 results 2025 financial guidance FEBRUARY 13, 2025 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 forecasts of future events and are not guarantees of future performance. They are based on management's expect ...

Avient Corporation (NYSE:AVNT) Q4 2024 Earnings Conference Call February 13, 2025 8:00 AM ET Company Participants Joe Di Salvo – Vice President-Treasurer and Investor Relations Ashish Khandpur – President and Chief Executive Officer Jamie Beggs – Senior Vice President and Chief Financial Officer Conference Call Participants Frank Mitsch – Fermium Research Mike Harrison – Seaport Research David Huang – Deutsche Bank Michael Sison – Wells Fargo Steve Haynes – Morgan Stanley Kristen Owen – Oppenheimer Kevin E ...

Core Insights - Avient reported revenue of $746.5 million for the quarter ended December 2024, reflecting a 3.8% increase year-over-year, but fell short of the Zacks Consensus Estimate of $751.23 million by 0.63% [1] - The company's EPS was $0.49, down from $0.52 in the same quarter last year, but exceeded the consensus estimate of $0.48 by 2.08% [1] Revenue Breakdown - Specialty Engineered Materials sales reached $279.70 million, surpassing the average estimate of $277.15 million by analysts, and showing a year-over-year increase of 7.7% [4] - Color, Additives and Inks sales were reported at $467.70 million, below the average estimate of $478.58 million, with a year-over-year change of 1.8% [4] - Corporate sales reported a loss of $0.90 million, worse than the estimated loss of $0.60 million, representing a significant year-over-year increase of 350% [4] Operating Income Analysis - Operating income for Color, Additives and Inks was $59.80 million, lower than the average estimate of $62.84 million [4] - Specialty Engineered Materials reported an operating income of $34.60 million, slightly above the average estimate of $33.50 million [4] - Corporate operating loss was $8.80 million, significantly better than the estimated loss of $37.50 million [4] Stock Performance - Avient's shares returned +0.4% over the past month, compared to a +3.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Avient reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, but down from $0.52 per share a year ago, representing an earnings surprise of 2.08% [1] - The company posted revenues of $746.5 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.63%, compared to year-ago revenues of $719 million [2] - Over the last four quarters, Avient has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - The immediate price movement of Avient's stock will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - Avient shares have increased by approximately 2.2% since the beginning of the year, while the S&P 500 has gained 2.9% [3] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.76 on revenues of $850.08 million, and for the current fiscal year, it is $2.87 on revenues of $3.35 billion [7] - The estimate revisions trend for Avient is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Chemical - Diversified industry, to which Avient belongs, is currently in the bottom 12% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Avient's stock performance [5]

Core Insights - Avient Corporation reported a significant increase in earnings per share (EPS) for both the fourth quarter and full year of 2024, with GAAP EPS at $0.52 and $1.84, respectively, compared to $0.30 and $0.83 in the previous year [1][11] - The company achieved a full year adjusted EPS of $2.66, reflecting a 13% increase over the prior year, driven by organic sales growth and margin expansion [2][3] - Avient's organic sales grew by 5% in the fourth quarter and 4% for the full year, with notable growth across all geographic regions [3][11] Financial Performance - Fourth quarter sales increased by 4% to $747 million, while full year sales rose by 3% to $3,240 million [11] - The adjusted EPS for the fourth quarter was $0.49, exceeding the guidance range of $0.46 to $0.50, despite a $0.01 unfavorable impact from foreign exchange [11] - The company reported adjusted EBITDA margins expanding by 90 and 110 basis points for its Color, Additives and Inks and Specialty Engineered Materials segments, respectively [3] 2025 Outlook - Avient projects first quarter adjusted EPS to be $0.76, which aligns with the prior year quarter, indicating a 6% growth when excluding foreign exchange impacts [4] - The full year adjusted EBITDA is forecasted to range from $540 million to $570 million, with an adjusted EPS range of $2.70 to $2.94, representing an 11% growth at the midpoint [4][11] - The company aims to grow organic sales by 100 to 200 basis points above GDP while expanding margins through innovation and leveraging digital technologies [4] Operational Highlights - The company achieved its safest year in history in terms of safety performance, indicating a strong commitment to operational excellence [3] - Avient's strategic focus on customer engagement and innovation has been pivotal in navigating a challenging macroeconomic environment [3][4]

Earnings Performance - Fourth quarter GAAP earnings per share (EPS) were $0.52, up from $0.30 in the prior year, while full year EPS was $1.84 compared to $0.83 previously[2]. - Full year 2024 adjusted EPS was $2.66, reflecting a 13% increase over the prior year, driven by sales growth and margin expansion[3]. - The company expects 2025 adjusted EPS to range from $2.70 to $2.94, representing an 11% growth excluding foreign exchange impacts[4]. - First quarter adjusted EPS is projected to be $0.76, which includes a $0.04 foreign exchange headwind, translating to 6% growth excluding this impact[6]. - Earnings per share attributable to Avient common shareholders (diluted) for continuing operations was $1.84 for the year ended December 31, 2024, up from $0.83 in 2023[23]. Sales and Revenue Growth - Fourth quarter sales increased 4% to $747 million, and full year sales rose 3% to $3,240 million[4]. - Organic sales growth was 5% in the fourth quarter and 4% for the full year, with all regions contributing positively[4]. - The company achieved organic sales growth in all regions, with Latin America leading at 14% growth[4]. - Sales for the three months ended December 31, 2024, were $746.5 million, an increase of 3.5% compared to $719.0 million in the same period of 2023[23]. - Total sales for the three months ended December 31, 2024, increased to $746.5 million, up from $719.0 million in the same period of 2023, representing a growth of 3.9%[33]. Profitability and Margins - Gross margin improved to $259.5 million for the three months ended December 31, 2024, up 24.2% from $208.9 million in the prior year[23]. - Operating income for the year ended December 31, 2024, was $329.3 million, representing a 67.1% increase from $196.8 million in 2023[23]. - Adjusted operating income for the year ended December 31, 2024, rose to $350.7 million, compared to $312.8 million in 2023, marking an increase of 12.1%[35]. - The adjusted gross margin as a percentage of sales for the year ended December 31, 2024, improved to 32.6%, up from 30.9% in 2023[35]. - Adjusted EBITDA margins expanded by 90 and 110 basis points in the Color, Additives and Inks and Specialty Engineered Materials segments, respectively[5]. Net Income and Cash Flow - Net income attributable to Avient common shareholders for the year ended December 31, 2024, was $169.5 million, compared to $75.7 million in 2023, reflecting a 123.1% increase[23]. - Cash dividends declared per share increased to $1.0425 for the year ended December 31, 2024, compared to $1.0000 in 2023[23]. - Net cash provided by operating activities for the year ended December 31, 2024, was $256.8 million, an increase from $201.6 million in 2023[29]. - Cash provided by operating activities for the year ended December 31, 2024, was $256.8 million, compared to $201.6 million in 2023, an increase of 27.3%[36]. - Adjusted free cash flow for the year ended December 31, 2024, was $155.7 million, down from $186.3 million in 2023, reflecting a decrease of 16.4%[36]. Safety and Environmental Performance - The company reported its safest year in history for safety performance in 2024[5]. - Environmental remediation costs for the year ended December 31, 2024, totaled $35.0 million, a decrease from $69.7 million in 2023[25]. Asset Management - Total assets decreased to $5,811.1 million as of December 31, 2024, from $5,968.5 million in 2023[27]. - The company reported a decrease in cash and cash equivalents to $544.5 million at the end of 2024, down from $545.8 million at the end of 2023[29].

Wall Street expects a year-over-year decline in earnings on higher revenues when Avient (AVNT) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 13. On ...