Group 1 - Avient Corporation plans to release its second quarter 2025 earnings on August 1, 2025, before the market opens [1] - A webcast with a slide presentation will be hosted at 8:00 a.m. Eastern Time on the same day [1] - Participants in the conference call must pre-register to receive the dial-in number and personal PIN for the Q&A session [2] Group 2 - A recording of the webcast and the slide presentation will be available on the company's investor website immediately after the conference call and will remain accessible for one year [3] - Avient Corporation focuses on being an innovator of materials solutions, aiming to help customers succeed while promoting sustainability [4] - The company employs over 9,000 employees globally, leveraging their collective strength to innovate solutions that address customer challenges and capitalize on market opportunities [4]

Group 1 - Avient Corporation has appointed Dr. Ashish K. Khandpur as Chairman of the Board, in addition to his roles as President and CEO, effective May 14, 2025 [1] - Dr. Khandpur's leadership is expected to drive long-term value creation and organic growth for Avient, as noted by the outgoing Chairman Richard H. Fearon [2] - The company aims to amplify innovation and achieve margin expansion under Dr. Khandpur's new strategy [2] Group 2 - Dr. Khandpur has a robust background, having started his career at 3M in 1995 and holding various leadership roles, including Chief Technology Officer and Group President of significant business units [3] - He has overseen substantial R&D investments, with nearly $1.9 billion annually during his tenure at 3M [3] - Avient Corporation focuses on being an innovator of materials solutions, with a diverse portfolio that includes colorants, advanced composites, and engineered materials [4]

Financial Data and Key Metrics Changes - The company reported organic sales growth of 2% in Q1 2025, with adjusted EBITDA increasing by 4% excluding foreign exchange impacts [7][8] - Adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite strong comparisons from the previous year [8] - Adjusted EPS was $0.76, representing a 4% growth when excluding unfavorable foreign exchange impacts [8][15] Business Line Data and Key Metrics Changes - The Color, Additives, and Ink segment saw organic sales growth of 3% and adjusted EBITDA growth of 7%, driven by resilient demand in personal care and food and beverage applications [15][16] - The Specialty Engineered Materials segment's organic sales were flat year-over-year, with adjusted EBITDA declining by 4% due to lower sales in transportation and defense markets [16][17] - The healthcare segment experienced double-digit growth, particularly in medical devices and medical supplies [16] Market Data and Key Metrics Changes - Organic sales in the U.S. and Canada declined by 3%, primarily due to weak demand in consumer and transportation end markets [9] - EMEA region grew by 2%, marking the fourth consecutive quarter of organic growth [9] - Asia reported a 9% increase in organic sales, with growth across most end markets, including transportation [10] - Latin America outpaced market growth with a 17% increase in organic sales, continuing a trend of double-digit growth [10] Company Strategy and Development Direction - The company is focused on cost control and productivity, expecting approximately $30 million in savings from initiatives in 2025 [12] - There is a strategic emphasis on maximizing cash flow and reducing debt, with plans to pay down $100 million to $200 million in debt this year [13][23] - The company aims to prioritize investments in growth vectors, particularly in healthcare and defense, which are expected to outperform the broader market [14][20] Management's Comments on Operating Environment and Future Outlook - Management noted that evolving trade policies have led to uncertainty impacting demand in select markets, particularly in the U.S. [8][20] - The company expects second quarter adjusted EPS of $0.79, representing a 4% growth over the prior year quarter [20] - For the full year, the company models different scenarios, with the low end reflecting flat demand and the high end assuming mid-single-digit growth [22] Other Important Information - The company expects minimal direct impact from tariffs, as most raw materials are sourced and products manufactured locally [19] - The company anticipates 1% to 2% inflation in raw material costs for the full year, with specific trends noted in various materials [84] Q&A Session Summary Question: Defense business outlook after a 5% decline in Q1 - Management expects double-digit growth in the defense business for the first half of the year and high single-digit growth for the full year [27] Question: Transportation market outlook and order books - Transportation is expected to see low negative mid-single-digit growth in the first half, aligning with build rate drops in Europe and the U.S. [28][30] Question: Consumer market weakness in Q1 - The consumer market showed double-digit declines in the U.S. and Canada, with expectations for continued weakness in Q2 [33][34] Question: Share gains in EMEA - Strong performance in healthcare, consumer, and defense markets contributed to share gains in EMEA [35] Question: Packaging segment performance - The packaging segment is driven by strong demand in personal care and beverages, with double-digit growth in personal care applications [39][40] Question: Raw material trends and inflation - The company expects 1% to 2% inflation in raw material costs for the full year, with specific materials trending up or down [84][85]

Financial Data and Key Metrics Changes - The company reported organic sales growth of 2% in the quarter, with adjusted EBITDA growing by 4% excluding foreign exchange impacts [6][14] - Adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite strong comparisons from the previous year [7] - Adjusted EPS was $0.76, representing a 4% growth when excluding unfavorable foreign exchange impacts [7][14] Business Line Data and Key Metrics Changes - The Color, Additives, and Ink segment saw organic sales growth of 3% and adjusted EBITDA growth of 7% [14] - The Specialty Engineered Materials segment's organic sales were flat year-over-year, with adjusted EBITDA declining by 4% [15] - The healthcare segment experienced double-digit growth, driven by demand in medical devices and supplies [15][16] Market Data and Key Metrics Changes - Organic sales in the U.S. and Canada declined by 3%, primarily due to weak demand in consumer and transportation markets [8] - EMEA region grew by 2%, marking the fourth consecutive quarter of organic growth [8] - Asia's organic sales increased by 9%, with growth across most end markets, particularly transportation [9] - Latin America outpaced market growth with a 17% increase in organic sales, marking the fourth consecutive quarter of double-digit growth [9] Company Strategy and Development Direction - The company is focused on cost control and productivity, expecting approximately $30 million in savings from initiatives in 2025 [11] - There is a strategic emphasis on maximizing cash flow and reducing debt by $100 million to $200 million this year [12][22] - The company aims to prioritize investments in growth vectors, particularly in healthcare and defense, which are expected to outperform the broader market [13][20] Management's Comments on Operating Environment and Future Outlook - Management noted that evolving trade policies have led to uncertainty impacting demand in select markets, particularly in the U.S. [7][19] - For Q2, the company expects adjusted EPS of $0.79, representing a 4% growth over the prior year [20] - The full-year guidance for adjusted EBITDA remains unchanged at $540 million to $570 million, with adjusted EPS guidance of $2.70 to $2.94 [22] Other Important Information - The company expects minimal direct impact from tariffs, as most raw materials are sourced and manufactured locally [12][18] - There is a focus on innovation and reformulation to mitigate tariff impacts and enhance customer offerings [53][54] Q&A Session Summary Question: Defense business expectations for the rest of the year - Management expects double-digit growth in the first half and high single-digit growth for the full year in the defense sector, despite a 5% decline in Q1 [26][27] Question: Transportation market outlook - Transportation is expected to see low negative mid-single-digit growth in the first half, aligning with build rate drops, but a potential recovery in the second half is anticipated [28][29] Question: Consumer market weakness - The consumer market showed double-digit declines in the U.S. and Canada, with expectations for continued weakness in Q2 [32][34] Question: Share gains in EMEA - Strong performance in healthcare, consumer, and defense markets contributed to share gains in EMEA, with notable wins in energy infrastructure [35] Question: Packaging segment performance - The packaging segment is driven by strong demand in personal care and beverages, with double-digit growth in personal care applications [39][40] Question: Raw material trends and inflation - The company expects 1% to 2% inflation for the full year, with specific raw materials showing varied trends [84][85] Question: Cash flow and incentive payouts - The cash flow statement reflects a $53 million use of cash related to incentive accruals, primarily from Q1 payouts [80][81]

Core Insights - Avient Corporation reported first quarter sales of $826.6 million, a slight decrease from $829.0 million in the same quarter last year [1][8] - The company experienced a GAAP loss per share of $0.22 compared to earnings of $0.54 in the prior year quarter, primarily due to special items related to an impairment from ceasing the development of a cloud-based ERP system [2][8] - Adjusted EPS remained stable at $0.76, reflecting a 4% growth when excluding the unfavorable impact of foreign exchange [3][8] Financial Performance - First quarter adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite a challenging macroeconomic environment [4] - Organic sales growth was achieved for the fourth consecutive quarter, with notable increases in Asia (9%) and Latin America (17%), while the U.S. and Canada saw a decline of 3% [5][8] - The company maintained its full-year adjusted EBITDA guidance range of $540 to $570 million and adjusted EPS guidance of $2.70 to $2.94 [5][8] Strategic Outlook - The company anticipates continued volatility in demand, particularly in consumer and transportation markets, but sees growth opportunities in packaging and high-profit sectors like defense and healthcare [5][6] - Avient's operational performance aligns with expectations, and the company plans to reduce debt by $100 to $200 million by year-end, supported by a strong cash position [5][6] Special Items and Adjustments - The first quarter results included special items totaling $75.7 million after tax, significantly impacting net income [22][23] - The impairment related to the cloud-based ERP system accounted for a substantial portion of the special items, amounting to $86.3 million [22][23] Segment Performance - Sales from the Color, Additives and Inks segment were $519.7 million, while the Specialty Engineered Materials segment reported $308.4 million [31] - The gross margin for the Color, Additives and Inks segment was $173.1 million, compared to $97.8 million for Specialty Engineered Materials [31]

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 ...