Avient (US:AVNT)2023-02-21 16:00Financial Performance - Avient Corporation reported sales of $3.4 billion from continuing operations in 2022, with approximately 61% of sales coming from customers outside the United States[5]. - Sales increased by $81.4 million, or 2.5%, in 2022 compared to 2021, with acquisitions contributing 4.0% and foreign exchange negatively impacting sales by 5.6%[66]. - The company reported total sales of $3,396.9 million for the year ended December 31, 2022, an increase from $3,315.5 million in 2021, representing a growth of 2.4%[126]. - Net income from continuing operations decreased by $68.5 million, or 45.2%, from $151.6 million in 2021 to $83.1 million in 2022[65]. - Net income for Avient Corporation reached $703.4 million in 2022, significantly up from $230.6 million in 2021, marking an increase of 204.5%[128]. - The earnings per share attributable to Avient common shareholders for total operations was $7.71 in 2022, compared to $2.53 in 2021, indicating a growth of 203.5%[126]. - The company reported an operating income of $243.3 million in 2022, down from $279.7 million in 2021, a decrease of 12.9%[126]. - The company's gross margin decreased to $882.7 million in 2022 from $943.8 million in 2021, reflecting a decline of approximately 6.5%[126]. - Total assets increased to $6,085.0 million in 2022, up from $4,997.2 million in 2021, representing a growth of approximately 21.8%[130]. - Total equity increased to $2,352.8 million in 2022 from $1,790.5 million in 2021, reflecting a growth of approximately 31.3%[130]. Operational Highlights - The company operates 104 manufacturing sites globally, enhancing its ability to serve a diverse customer base across various end markets[5]. - Avient's strategy includes a four-pillar approach: Specialization, Globalization, Commercial Excellence, and Operational Excellence, aimed at enhancing competitive positioning[9]. - The company has a diverse product portfolio, including specialty engineered materials, performance fibers, advanced composites, and color and additive systems[59]. - Avient's manufacturing and warehousing operations are globally distributed, supporting its international sales strategy[59]. - The company employs approximately 9,700 people, with 34% located in the U.S. and Canada, and 35% in Europe, the Middle East, and Africa[17]. Research and Development - Avient's investment in research and development was $84.9 million in 2022, reflecting a commitment to developing new product formulations[15]. - Avient's research and development centers are equipped with state-of-the-art technology to support rapid translation of new technologies into products[15]. - The company is focused on developing new products and technologies to meet evolving customer needs and market trends[60]. Sustainability and Compliance - The company focuses on sustainability and performance advantages of specialized polymers, which are increasingly replacing traditional materials across various applications[7]. - The company is committed to environmental compliance, with a disciplined program to manage safety and health regulations[25]. - Avient is committed to sustainability, investing in technologies that improve recyclability and support a circular economy, and has joined the Alliance to End Plastic Waste, committing over $1.5 billion to combat plastic waste[60]. - The company faces risks related to compliance with environmental laws, which could result in additional costs or liabilities[26]. Financial Risks and Liabilities - The company is exposed to disruptions in global credit and financial markets, which could limit access to capital and adversely impact financial results[40]. - Future regulatory developments related to climate change may increase operating and compliance costs, potentially affecting the company's financial statements[39]. - The company recognizes environmental liabilities related to the former Goodrich Corporation Calvert City site, with costs based on the best estimate of future expenditures, which may be revised as new information becomes available[96]. - The company is subject to various covenants in its debt agreements that could limit operational flexibility and require compliance with financial maintenance tests[41]. Acquisitions and Investments - The company completed the APM Acquisition for a total consideration of $1.4 billion, financed through borrowings and the issuance of notes[62]. - The total consideration for the APM Acquisition was $1.4 billion, net of cash acquired, financed through $575 million in borrowings and $725 million in Senior Notes[163]. - Business acquisitions in 2022 amounted to $1,426.1 million, significantly higher than $47.6 million in 2021[132]. Employee and Board Diversity - The company has a strong commitment to diversity, with 42% of its Board of Directors being female or racially diverse, and 60% of the CEO's direct reports sharing similar diversity[22]. - The company maintains a competitive pay program to attract and retain talent, aligning compensation with associates' interests[23]. Market Conditions and Economic Factors - The ongoing conflict between Russia and Ukraine has led to volatility in energy prices, impacting operational costs[30]. - The COVID-19 pandemic has had and may continue to have adverse impacts on the company's operations, including production slowdowns and supply chain disruptions[45]. - Fluctuations in foreign currency exchange rates could materially affect the company's ability to sell products competitively and control costs[40]. Internal Controls and Governance - The company maintained effective internal control over financial reporting as of December 31, 2022, with no material weaknesses identified[111]. - The audit of internal control over financial reporting did not include APM, which was part of the consolidated financial statements[112].