AVNT - Earnings call transcript Q2 2020

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Operator

Good morning, ladies and gentlemen, and welcome to the Avient Corporation’s Second Quarter 2020 Conference Call. My name is Sara, and I will be the operator today. At this time, all participants are in a listen-only mode.

We will have a question-and-answer session at the end of the conference.

As a reminder, this call is being recorded for replay purposes. would Salvo, turn Investor Vice I to call Relations. time, Di Joe President, this like the to over At Treasurer, and Please proceed.

Joe Di Salvo

us Good to Thank and on joining Sara. today. the you, call morning everyone welcome

we’d of conference may meaning XXXX. this of beginning, made within Securities Private forward-looking call like that be you Before statements remind Litigation during the statements considered the to Reform Act

management’s give events performance. which statements to will uncertainties, current and on are They’re the expressed those guarantees looking forecasts and future materially or expectations differ number Forward of could a implied forward-looking future not of based risks results of by expectation involve or statement. from in cause business actual of any

in as the and the company’s Some as risks well of release. these filings Exchange Securities found and Commission, today’s be uncertainties press in with can

use today, measures the Avient and to GAAP earnings release will During posted Please financial most company the the financial company the refer the both reconciliation discussion measures. for measures. provides where a describes the GAAP on comparable the non-GAAP and website, non-GAAP

our President today Richardson. is Financial Brad Bob President and Chairman, Executive me and Chief Officer, Officer, Chief Patterson; Joining and Executive Vice

turn the to Now, I over will Bob. call

Bob Patterson

coronavirus. quarter call, support for everyone those morning, welcome Well, and with of acknowledgement to today thanks, by an I'd Joe, good begin who first Avient like been to XXXX our Corporation. and as second earnings ever our impacted call have

and first out the to recovery in continue stakeholders. and and also priority countless a goes they role our to associates, of first our health At heartfelt Our important as Avient, remains effort. customers safety workers an all appreciation the frontline and play responders response

to spread and to preventative adhere well stop government of the to help as other protocols, virus. continue We guidelines as the measures

as supplier the expectations our investor a we we essential do, partner. serve light during XX, June of held pandemic. call in continue on second an and quarter mid-quarter On we our customers which we to As commented

our at believe into in decline XX% with on on Sales these recovering is aiding This the overall region currency sales up efforts second from manufacturer X%, our to was historic markets the we demand enough is or have but from Asia response a specifically reposition the and in a increased the Americas, however, to also but world's Masterbatch are our prior actual of which comparison XX.X% challenging basis. efforts. share delivered of Clariant exclude now for Including expected offering EPS quarter to we in of from shares improvement We the Asia report, $X.XX EPS the our acquisition. year, in Color. the time. and to in we equity the last the was results The provide driven in apples-to-apples the and these in adjusted that second debt expected results, the than financing sales As we the we February by additional two adjusted the leading Sales and the the weaker healthcare impact is not the in products decline Recall and than prior $X.XX, quarter better margins better raised quarter uptake offset an was over in sure, of for That's that $X.XX. Europe the portfolio X% quarter. weeks the May, year. an in emphasis a for greater benefited XX% were a pandemic, respectively packaging. constant in

million in packaging, just benefited know as we growth as they in products they from continue a forward associates slightly we in adjusted COVID deemed And specialized into also recovery of we in for industries, the Like up are bigger And take a EBITDA the markets. were XX% to the an where the second step end sales portfolio. essential QX, they toward while year. of response more and their and didn't acquisition numbers such achieved the Recall themselves, reported and quarter, what business that and masterbatch these Masterbatch, from Clariant care did. achieved even they With speak more prior sustainable serve EBITDA consumer presence their of strong healthcare. approximately the they Asia, us, critical $XX in

have that investors the now, isn't months For a we That been distress buying might be in simply pandemic. from concerned business true.

what is true. Here is

we of acquired business we the December when rate run million, effectively we EBITDA We estimated is a is $XXX achieving announced a acquisition. when have reported what which that in

a and customer service. We very organization and passion innovation talented management team are inheriting for an with a

potential estimate of initial synergy We environment. identified we a COVID validated have believe deliver even and that $XX in million quickly upside our can we

share expect the first per in We our the be earnings together. adjusted accretive third quarter, immediately to acquisition will

Excluding accretion up, EPS presentation expect that goal which not This three-year same Clariant basis deliver expect will December our approximately from $X.XX. a in is $X.XX we add Clariant for EPS amortization step we on of finalized, we will recall cash perspective. approximates have And our QX. this what accretion from

make So, the of an the journey. initial is it quarter, specialty is to going details Brad time us, closing important This some start. for exciting Brad? in great second is is further ownership our provide $X.XX and then in an some on quarter and a inflection remarks. I'll point

Brad Richardson

and very well, morning, Bob, much you everyone. good thank

second America. Europe in discretionary demand America North sales cases was costs sports, excludes contrast the Special primarily charge going share start outdoor Special In per for the of The previously and insurance in XX%, were segments income in I'm EPS with Bob operating the XX% earnings These with the world. sales hope total items X.X%. decline. roadmap primarily and beverage and XX.X% surprise results. compared sales by given the This markets for for were reduced to additives food In place of strong production actions, offset for a As costs, the impacting markets reported sales expense which the the a company XX%, things the regions currency was shutdowns the the the for incurred our much like the offset the for to not North financing our basis. million. Growth Total for Asia We were second ahead consumer performance declined reimbursements is experienced second In after Barrier Automotive foreign noted, applications. by to which operations is company revenue down The continuing by the accessories acquisition. in include in weaker acquisition sales associated with that respectively. such sporting took tax wins the constant with in the and as $X.XX, response, stark impact in healthcare of items discretionary year, serve declined were containment of sales quarter. currencies adjustment. what are XX% consumer restructuring in quarter a by where as other from standpoint, quarter SG&A currencies. the regional due resulted increased prior XX% negatively impact weak partially second GAAP mark-to-market from and North sales was driven to new quarter quarter Asia, second as related a demand currencies certainly accounted due and we prior GAAP and Adjusted was in automotive possible regional the and Lower in electronic pandemic by by of which region's pension and for of on what for in region in Europe high X%. a Unfavorable SEM primarily in quarter apparel. excluding This and packaging. I and reviewing primarily XX% automotive applications foreign in spaces. changes SEM along and and shutdowns in quarter, end Clariant environmental cost net segment retail any automotive wire a America, versus continued April Europe largely overall down used and of leisure $X.X we recovery always impacted year demand sales the business for impacted for May applications. and to foreign our do, performance and can COVID-XX in the $X.XX. were quarter, the XX% cellphone From cable the the industrial automotive

composite declined reduced mix year XX% segment negatively as transportation for and oil respectively. Sales declined. Ink demand Color, quarter. XX% second XX%, were and gas Our which and prior and versus sales operating impacted businesses by income and containment were and improved actions, expense the SG&A Additives also offset Lower for the partially cost

response, commented previously used continued the in packaging we business strong its for COVID-XX as well healthcare applications the As from demand benefited as applications. Color

markets prior nearly driven mix. Masterbatch the provide the year Since sales discussed on included performance were performance include does business. up acquisition segment packaging expected just and business be that Clariant third not segment, than in over these Color better results sales the closed note end Color The the in Color beginning will July by doubled acquired segments I quarter. our the increased in quarter. the second healthcare For a improved X, impact the Please of margins sales X%

were working line the operating flow income shutdowns. sales sales year prior our with which we free SG&A containment cost partially quarter within prior XX% Lower Distribution generated second offset $XX improved segment. Lastly, primarily cash as flow due Again, in earnings. reduced actions, by million and From perspective, and capital offset the lower cash XX% a second mix versus in reduced automotive to of declined year and expense the quarter. XX% the

we for third prior cash Accordingly, And acquisition strength cash too It from an excellent navigate Clariant During of is our two million sequentially term to with sure. is. our the begin improvement This last July early and In that markets call, I very from for dynamics investment, to to the provide in quarter. plan to What pandemic still when and important XX%. emphasize is specific balance work don't certainly significant $XXX tax down $XXX liquidity. EPS that payments still summary, an of are guidance available we how over it recover. is note July as for the of million in for PP&S are and a made flow you sheet the the have Pro near forma can the on predict for the is the will off important in we position and the companies. we in orders us. QX, month integrating associated tell about our but the year

spending seeing picking as up, discretionary We automotive appear these signs gradually. to consumer business as early returning some are well on discretionary be -- of but items,

accounting. purchase will immediately depreciation of impact quarter. of and And the associated million $X.XX in revenues as Clariant be step $XXX mentioned, adding excludes from Bob add amortization expect the asset accretive up values the it with This of We in will third EPS. the

the complete return are investment. to of is the believe this for price. our investors our purchase We on middle the EPS allocation in our We relevant process immediate to of accretion the cash incredibly assess

what think challenging the relevant some the and an quality we of comments, business economic now also Clariant. update acquired, on it's this its will environment. including Bob during is specialty resiliency provide I composition

Bob Patterson

proud very our at company's pandemic, I'm quarter, history. Brad. Clariant's navigated acquisition COVID-XX the same the completing of the team's Thanks the accomplishments in of Masterbatch while business, time our this largest

clear of it that been have a stronger more to even innovative. two and this purposeful we make integration. joining And And just our in global our is as and We in now better. companies initial more organization that are communications is, early being great even very is

but as better and Clariant can brand. a competitors together new we it and associates a the of new hear emphasize means We've and In it, PolyOne you now The And a the about invention, best I've care were never that rooted Europe, goal of new always important rather innovation, organizations focus life. simply, for means As we're is been for passionate, A, name a company I associates. do. environment of and front Clariant it's now XX cultural is our Clariant, as to Clariant as solutions. which Quite to exactly the brand a in This and have together. I've of is years, we taking about collective service Masterbatch. new brand, a legacy with us I opportunity integration in respected two believe both customer in new with the and X,XXX B, our us. that's new we is for future anything talented, for with the separately, build sustainable the new which for shared areas good Avient a over passion viewed legacy proud of and PolyOne team company acquire been as company. else. what will

other Over is and world harness as legacy forward built is the of important each our come a from pandemic. each and the past several decades, we when Clariant it Masterbatch time success, learn legacy of a we together, strong that have out two This PolyOne path of best the craves organizations. the the and

As begin innovation sustainability, emerge, prioritize once again growth. shoots will green to the and world economic

achieve relationships businesses like create a on our more Having feel ever into our We strong society. to response all to will the closed be brought in on with recovery synergy stakeholders. on by hit complimentary July, plan By the the a on integration and and our call. a help demand running ground on our thorough our than confident plans partnerships are Despite and acquisition we able are rely joining and to and progress will well we before more two of for have next better the incredible provide we We efforts I the inclusive we the Xst position integration one, to synergies pandemic, and future value execute challenges targets. underway. that and update

As we signs. believe there are ahead, we encouraging look economic

versus in Asia other heard reasons. the our You performance

economic were plants consumer up. to around passenger has particular is demand space, and world activity like there in are And China appears growth turned respite of reopening running toward halt be Our customers confines production inventory a off-road the demonstrated outdoors can are second be vehicles. them. as have that plants again, vehicles operational, and products the COVID Automotive people dealers finding commercial In COVID the by the can of picking for return. fully managed a Many as the the the on were really the to to rushed quarter, came short our quarter, in end consumers of but from lockdowns.

if specialty flag to commerce it will They business farewell expect or Clariant and likely highlighted be gradual. for our three we expect behaviors have technology help of shutdowns have but when the will the can a that a shareholders. addition them. believe the what certainly attitudes second take The really first And call. Avient. we and the for we be that Now this the we pre-COVID performance was great the end is following it's they the the Unlike specialty because Europe any attracted I value of and signs. no when the place. are investment I'm company, to the happy And And in us recovery we That spread to recovery I rapid in of place With last materials factor managed, thing consistent you. said, associates and this yet, waving relearned the they this growth people then Thank and suing these considerable and main an business questions take virus U.S. have have, one of and are positive Americas, opportunity creation us is together, recovery cyclical and for and the market being will kind months, year. of for the decline swiftly throughout work anyone new more in drastically. our the poised say that, to one and consumerism learned time. is less markets. on any leading The are individual levels. And there half and during vary from because pandemic are we the our have and I pandemic to that's about individual make higher there's level a that comment comfort and returned Europe

Operator

line Instructions] from Thank are question Global. call the [Operator Seaport lines Harrison you. of Mike The with comes first open. Your now

Your now is open. line

Mike Harrison

Hi, good morning.

Bob Patterson

Hey, Mike.

Brad Richardson

morning. Good

Mike Harrison

little on? restocking walk some point, the there some comment let end inventory essentially just can that customer your any know key have I seeing? know seeing don't you to still feel a is some you you're there's this on going there on, bit just you're what real-time the destocking through if wondering like shelves. At do in dealers seeing was going or of that enough maybe the on you markets things or places keep maybe and levels. I inventory demand, you're been mentioned and stores Bob, demand us Is

Bob Patterson

and seeing what sort two we're Yeah. two aligned vehicles, we're Maybe highlight areas also because automotive and off-road in short where inventory. you on then just -- those with on I'll specifically with off-road of are it's that vehicles, said dealers where being running

in those immediate of not as those and still And to demand the do that was which. a As But through an in quarter. a result reopen inventory a system towards lag pick to say, on to of inventory inventory being some during on operations that's up in there began I which of pick having think or didn't see estimation quarter, the an is, difficult result that having third hand suppliers whether other It's that, was customers is begin and we see end that. the or our in was in worked up the the a the production. and is network there demand startup, we'll

Mike Harrison

some control you have demand outlook? key then think other QX? or And $X.XX But adding it then the maybe just perform where really variables levers can EPS or reluctant the maybe you starting pandemic the a Is know you how QX feel accretion kind guidance, related, right. related to some give of about I some you from All in talk are over areas of and or can point Clariant. more there of like the I in where was, is you're

Bob Patterson

course, world, keep of and areas there really in primary look, muted. certain of in mean, of of well continue could as cases the to demand the is surge as that extent unknown, is a has you the recovery if pace aware, will, recovery, the you I -- been

of really I And that's the shoots driver that's today. not primary description, about mean, second quarter. consumer the biggest in around the automotive areas off-road vehicles there discretionary, as see think I of unknown. the I we really which third quarter, think things some in better green do sort that of the some of a did lack just for are emerging in So,

So, really QX, think down the July at comparison uptick When of that as Mike. we little I being some better XX%, bit look a a that year-over-year reflects in positive. and that's than orders I demand, in view

Mike Harrison

All right.

much. Sounds very good. Thanks

Bob Patterson

Yeah.

Operator

Thank you.

Vincent Andrews the next of Our question Stanley. from comes with Morgan line

now is Your line open.

Vincent Andrews

Thank you and good morning, everyone.

Bob Patterson

Vincent. Morning,

Vincent Andrews

be If clarify synergies $X.XX or that quarter in you towards or $X.XX that from what else? also that $X.XX a is anything And it includes not? you that run in of the just whether the run higher indicative be comment Clariant, So, about sort $X.XX there rate? something rate that $X.XX could could would of of just particular third on $X.XX, -- seasonality or would just make goal, the than lower or that is the terms would

Brad Richardson

is probably really million and just thing acquisition to that first $X.X on day about by did terms synergies acquisition. so begin administrative the costs one, Yeah, not in the with the there's there design respect in with employees of of

say, the the a bit to first It think own where the So, number. way is second is that right stronger is there number, the And Clarinat that up year Masterbatch obviously then working half step business. that's to of toward excludes It's and again, on get to than the half. look, we're our bigger respect amortization the in the quite as similar we very will about seasonality I'd year. big get $X.XX a not the With that of end the now.

in the looking is be when it business we at than helps. than were year, accretion bringing that that basis, the half in would rate, So, is just over that second first of it that think it their on if the half and higher I if run about

Vincent Andrews

to and there like in costs just in having things later like And mind in helpful. that model? anything the else for anything that very follow-up. that as come return will or That’s the Are quarter have keeping should a or you've whatever year, avoided back second any our closed be sales we with just that

Bob Patterson

we nation, mean, attended you mean, balance I suppliers of about again again but quarter I I trade as shows I would completely prior that's and I or are of entertainment China, mean, part result the probably customers the has there's costs seeing spent in of look Look that lockdowns. the inside travel look, -- But I is in. just that Yeah. most year. typical are and travel will. what would face participated inter year-over-year, that mean and meeting second say no almost face, $X.X the doubt related if a million in and to what stopped. are down for we have versus people the if

in Now, don't I is, to At to don't new quarter. of will, in as figure but come world what back the future. the least level I'm what back it foreseeable expect that actually third travel, ever time, same normal the the sure point get to at some out in tries the we not

So, hopefully of QX. any that puts that in that perspective. We in back don't come to expect

Vincent Andrews

Okay. much, guys. very Thanks

Bob Patterson

Yeah.

Operator

you. Thank

comes from with Mike next Fargo. line Our Wells question the of Sison

Your open. line is now

Mike Sison

year a for for have give us quarter on color that well year-over-year? full $XX XQ the more bit. like quite of that's your maybe done Clariant background guys. you was the million up give -- Can Just why pretty just us business Hey better. -- they much and doing really Color sounds given down some impressive there. a little they're for Nice Anything bit

Bob Patterson

second in between The in quarter in the really then very us Yeah. I their sales mean, good XX% are staples end were market packaging and markets really and of the actually Mike, consumer healthcare. discretionary also. into to as comes was the Color exposure, Those look, performance difference down two quarter our and for of it our well up consumer segment second items. primary businesses

that a I bringing why of the improvement know, portfolio. mean, do kind differentiate them Clariant considerably, are again, our in things is And exactly and us. say back [ph] was that company, from also thesis that in a we then to really inks down were the those buying screen hearkens of exposure in auto. printing our the we investment interested and you business I'd As large have two to

for candidly had good the thing, quarter it biggest the to did very Asia exposure that's in second and So, plus us. as them there, quarter a Asia for

Mike Sison

And then it. a Got quick follow-up. as

You $X.XX, good that. talked about about the feeling

You help maybe thus to And reminder? -- number same EBITDA longer as a that you timeline the just how even also initially us given is thought, had you done $XXX it far, is still term. quick Clariant walk maybe in understand it million or again, Can a the maybe accelerated? as

Bob Patterson

we I to in capture, mean, our respect that Yeah. next look, and expectations. update million we're very our $XX confident timeline preliminary candidly the ability there's to very call, our on synergy between be In the have organizations, even going with reviews COVID plan to to and two continue give environment. to capture an to synergy a in been The our number. positive upside all

timing. But think $XXX and getting in respect and to related -- about where still that timeframe. to feel course, leaves ultimately about on pandemic respect recovery $X.XX, very the order to number, there's with believe comfortable that ultimate a I with feel our the achievable really million Mike, the performs. I that's underlying and the candidly So, I'm that of same to very is, legacy EBITDA we comfortable of magnitude what accretion

Mike Sison

you. Great. Thank

Operator

you. Thank

question from of the comes with Research. Frank next Our Fermium Mitsch line

open. now is line Your

Frank Mitsch

one of the guys guys follow-up was I and that Good XX paying areas had you heritage Clariant can If on that giving things one you clearly, PolyOne. just the ROS synergy that's gentlemen. purchase morning, that's price mean, side. and the on the there'll is Is you're be going indicated between look quote be for confidence candidly to a of sourcing upside you I an that that candidly, early key your could the on at synergies. that upside and

Bob Patterson

we I in Yeah, think get cost is quickest we will that mean, synergies, in everybody though, where the categories is with those all potential around see we -- upside sourcing of there, Frank. I mean, December. Initially three and the that shared we initially

of that's best correct, second here, way So, the year. the this about particularly half think I to in and that think

Frank Mitsch

was talk upper I the for if had could the about June And business, Terrific. indicated implies XX%, right. down pace April down that of that All in guys heritage down that was XX% May you was PolyOne, April teens.

you're XX%. saying is that down July So,

-- things impressive July that is up PolyOne? to seeing seeing you're -- clearly, like? that are yeah, Clariant So, the was point What's Clariant's on Clariant less second And quarter. in you getting what's looking heritage bad the heritage

Bob Patterson

to -- business make sure were some, the look, of EBITDA Masterbatch up in the sales from there but I clear was that, Well, first was want just Clariant the down all, perspective, slightly. I quarter second

some or so is are So, but on X% And there to probably there. down positive EBITDA going was sales be mix our about effect still QX, their expectation that in contribution the side. in

Brad the reference that legacy right the businesses. And is -- in was or gives for PolyOne to July sales legacy clear said to PolyOne some just the their legacy you in heritage So, performance that perspective relative business, seeing when orders on hopefully that what we're now which about XX%. I'd be

Frank Mitsch

that correct? No. is Understood. is what better But -- page was, than that you

Bob Patterson

Yes. Yes. Correct.

Sorry.

Frank Mitsch

worries. right. Thanks All so No much.

Bob Patterson

Yeah.

Operator

you. Thank

Our next with Jefferies. question the of Alexander line comes Lawrence from

is now line Your open.

Lawrence Alexander

Good morning.

requests feel packaging types that which a channels? the for you're in and and particularly you're innovation So, can you give degree us of seeing automotive the change seeing, any the the to

Bob Patterson

Yeah.

Lawrence Alexander

working a are you of pivot Are seeing on? projects types into people the

Bob Patterson

that current in hadn't, dynamic office. versus change reduced just there was actually return, and a increase an Yeah. think for maybe It into level interesting almost it's quarter activity they organizations significant was all we more mode, went of of initially the to industries when an would was just it -- were of pretty that everyone requests. lot all revisit basically, we right? home but that there is because of And not a some to were a in tried our silence, long sure, everyone extent, about lockdown really long-term continue maybe the projects say afforded in labs working And on And think focus -- say I out how Lawrence, innovation. in what it take But we industries. I'd found to to in the business these was didn't to seeing from innovation. in customers to to second opportunity on provide supply, very We're activity figure around the essential particularly that

So, said less the pretty past, sustainability industries. lightweighting seen I just automotive saw, the thing because those lightweighting Maybe those were broadly is be simply in in shutdowns, what sustainability. the consistent the around which that other around we of say and on but themes same with common themes, however, we've can for again, packaging, and other so example. And industries, for and really side

Lawrence Alexander

or evidence at landscape disarray opportunities when And have salespeople about versus of are in acquisition? of where like of your of dust settles seen years? a pool you the talent and you how of competitors the you couple the researchers, significant be or in the to How would or any think sort pool talent available opportunities you sense and -- shifts in

Bob Patterson

mean, type that of care we of proud commitment say, trying all, first organization reiterated the just have I may culture create here. our I'm of taken associates, let to our the through pandemic, them we're the and have well, really and we to that

opportunity areas, a demand layoffs for that industries for retention. be from or you technical to respect positively in composites, I'm that Potentially first that an And off could dislocation, a seeing that and speak result that massive contemplating will. are are could example. in I'd or so a to perspective our a comment reductions I'm sure not with if own certain significantly be force. in as us So, certain anything such disarray and

can I else comment much that say not regard. but really -- in or So

Lawrence Alexander

Okay. Thank you.

Bob Patterson

Yeah.

Operator

Thank you.

the question with Rusch comes next Oppenheimer. of line Colin from Our

now open. Your line is

Colin Rusch

And coming you're same I any high thread potential Thanks to much, terms in inputs. from of guys. materials polyethylene, curious performance on want sourcing you recyclable premium chain the look on around about materials you're for potential so advanced those that that for recycled guys innovation I'm material? a to what supply as or for you there hopeful seeing polypropylene, are follow-up at and that recycled incremental products the get with premium

Bob Patterson

because of projects improve organization will lot we're that and mean, actually and into to given plastic that really invest companies recycling and I issue have much waste participation of to a goals years and of to they a of is significant in thing insight capture the infrastructure member in our supply and Waste, achieve in Alliance supplied. End it. recycled is has to ultimate in resolve Plastic a the I by helping access provide mentioned really terms content, want future. with the of But founding to Yeah. respect look, some first to stating there how is, that are drive first, the pretty really certain us we and good first

think Indonesia, think will important I that's have necessary into content. there projects I higher Southeast is infrastructure and most will a will a observation that recycled a a I albeit, you for going Asia, slower like So, is important underway continued COVID. drive as the But supply. case, little that. necessary of the number very think of places, result think see are I Those perhaps provide that's degree When example, that of that

Colin Rusch

There's now? back are fibernet. seeing opportunity? you potential Great. XG growth, a little different bit of where are And from lot just you in but what here shifting views acceleration seeing the starting that with your of the right on some but half, a gears customers on cadence for XG There's

Bob Patterson

- Company … cadence XG Representative Unidentified A growth. of The

Colin Rusch

Yeah.

Bob Patterson

I My hear didn't here hear that well. Thanks. do. than colleagues I very better

yeah. So,

than So, the because year. a has a home a right? more there's with but technology wasn't world potential as to fashion of the need past with There's other, at each has here the utilize with bandwidth, in it faster, I better it business, for connect connections. there worked decline, a broader slowdown half in respect XG to what need And for in from a we it, the ever significant. was such and definitely there our for look And actually line first upside year-over-year sales example, fiber we and was view experienced if respect

drive an I guy think U.S., to that's of the good infrastructure real for build acceleration going which a is XG and us. in out

that So, our we're customers. hearing from

are I think Candidly, or trend don't a draw. conclusion go think I to way reasonable to traditional that's in the to anytime people back going soon. traveling

Colin Rusch

so Thanks much. Great.

Operator

Thank you.

with Sheehan SunTrust. Jim of line the from comes question next Our

is now open. Your line

Jim Sheehan

Thanks my for taking question. morning. Good

XXXX you maybe also adjustments So, that legacy and the the about quarter on respect on didn't for the the there, of synergies the expect also Clarinat compare pandemic first to Color that Masterbatch are how performance to PolyOne business? you you making maybe could to with business, talk make? of what And

Bob Patterson

Yeah.

until up for segment consistent you the say was I'd down if April. know a results in That of you're experience were most with was our as was for actually impact as that their much first looking sales in -- the pretty Color at slightly. but So, EBITDA really well. way quarter, the results slightly, And really for us we part, pandemic didn't

these align the in of looked first we fortunately, an to automotive between market think we businesses. Clariant staple look some can preponderance of our seen respect With the at products, there same end this assessment of the be that and very going were pandemic two in equation, in much at impact, we've but And to packaging, the consumer sales our the the that by consumer of anything have there for way type own I into side quarter. impact discretionary. on because not extent businesses the it the So,

Frank, will sales in think his estimation that to other industries there to, third in But that business sort us. not be their I mentioned quarter. are I seeing impacting of our the that a we're extent the of So, again, questions one of decline. about

Jim Sheehan

any experiencing. maybe raw also Terrific. material you're tailwinds could you then address And that

could how on you but have to I inventory think well. key still as do that you comment stop have -- some regard tailwind materials declined masterbatch raw to being for maybe and in a year-to-date, maybe through business materials raw go much the you before

Bob Patterson

Yeah.

were we pretty good what with material first million, So, consistent second slight saw $X order guy $X in magnitude a probably costs quarter, in the quarter. of the to million, us lower raw of in

fast. Our turns pretty inventory over

we experienced maybe other again, So of down, I'd spend there's lot base that move a of of or focus preponderance thing some our point special to though, one that. ingredients on the always go is the specialty formulation. out really But extent the is that the into But the all resins. in a prices in up majors of

experiencing up majors, slightly. we're those trend while maybe in downward So, other things are flat to

I the a So, here quarter. in see third small to expect still benefit

Jim Sheehan

masterbatch well? Does that go as for the business

Bob Patterson

Correct. Yeah.

Jim Sheehan

you. Thank

Bob Patterson

Yeah.

Operator

Thank you.

Our question Morbelli of comes Rosemarie with Research. from next line the G.

line is open. Your now

Rosemarie Morbelli

Thank morning, you. everyone. Good

Bob Patterson

morning. Good

Rosemarie Morbelli

wondering the How post which is changed pandemic the have -- your in pandemic? Europe, if ones of way U.S., a have forward company are and the forward, you changes the whether during going go how stay was you to you as business. I you stronger it adjusted those Bob, Asia, run you making

Bob Patterson

-- phone entirely our or course, to video. Yeah, between mean, connection on state the obvious, has the been I I associates by just mean, of

technology our course, that on I What and candidly, and to probably more and I to I how an in-person I the efficient the miss, spend contact, of a is use going smarter effect with think got in-person. that time else to organization everybody's to infinitely us the customers make that's think get everyone future. associates in

some are we I hope at do so, And that some connections of get travel level in-person can back point, important. because to so those

in think I think market also from from standpoint, standpoint. time and in speaks think, has better for look, products many And and than market have us, specialty reinforced our healthcare and an performed commodities strategy for exposure itself. to want we of products end end the a I our where pandemic I focus packaging course, attention Specialty cases.

a anything of of So, message as as the pandemic out perhaps much it's else. more reinforcing

Rosemarie Morbelli

look time. when lot have a at the that's off. well, understand we people a of All now choice, counting lockdown but And as resulted time Europe, taking, right. it, in Thanks. vacation has as didn't I They

that it we whether not Clariant this does that Europe hasn’t in for or shutting So, going half of mean are is of down, year, changed? to really you, see that August

Bob Patterson

to We're a But to change. seen. I really of not remain planning be have that does on much a say

versus down right Given in that now, terms being us, of third expecting reasons demand. one of still we're is the European effect demand quarter typically QX, seasonal are for there where in that levels the a which is

point, expecting not here next the at plays out I'm So, weeks. how any couple see change, of in but we'll this this

Rosemarie Morbelli

you. make make one if more. All right. I Thank And -- just

down lower Your level, permanent? going not the will you to was we of and you be SG&A previous And XX% much more third SG&A coming it going of is X% XX% forward, or in year-over-year. going Are think stay looking forward? how that that said do either back or at that to or quarter. less much going is But back XX% to

Bob Patterson

Well, -- element the in last and total, have lower of and We tradeshow travel benefits costs, of SG&A, year-over-year personnel are which decline I related do I year this mentioned lower the incentives, sort mean, that. the year. cost than in including

XXXX. longer the going we'll level benefits the for that drive see not expense, respect QX performance most I to obviously, what with incentives, our ever travel and related we're tradeshow in And in tradeshow term, but have change So, in I'm and travel will think part, basically is any of then to at least in the side. not saying that same don't

is, So, the we maybe all don't future. way the normal, in that gets back case, will when that the but the world be it to whatever see foreseeable

Rosemarie Morbelli

you. Thank

Bob Patterson

the now. Clariant next and dial-in We for for update the integration, forward Take further a look time on your everybody call. call Okay. And providing our for performance care. Thanks your to our thanks to questions on Bye and to everyone today. also our Rosemarie. synergies

Operator

concludes this call. conference participating. and gentlemen, for Ladies today's you Thank

disconnect. now may You

Avient (AVNT) 22 Jul 202020 Q2 Earnings call transcript