AVNT - Earnings call transcript Q2 2021

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Operator

Good morning, ladies and gentlemen and welcome to Avient Corporation Webcast to discuss the company's Second Quarter 2021 Results. My name is Gigi, and I will be your operator for today. At this time, all participants are in a listen-only mode.

We will have a question-and-answer session following the company's prepared remarks.

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

Joe Di Salvo

earnings Gigi. you, second Good and call. XXXX welcome Thank to morning, quarter our

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

management's a future or implied and are Forward-looking of Please events performance. are today, and statements company of and future They posted will uncertainties, the involve GAAP statements. differ presentation in non-GAAP financial forecasts which measures. both where actual refer on give most of during from expectation the based business forward-looking to risks Avient measures. could reconciliation or comparable on company current a will those expressed financial measures the to number the non-GAAP Also, results measures describes the their guarantees of and website materially expectations the any by not to GAAP discussion historical use for the provides financial and non-GAAP directly cause

if unless business during to otherwise stated, as will been prior pro had for referenced. addition, the Masterbatch all acquisition the periods forma together current In be comparisons the

our is President Patterson; and and Chief Chairman, Senior today me Executive Joining Vice Beggs. Jamie Chief and President Officer, Bob Financial Officer,

Bob opening comments. some over for Now to I call turn will the

Bob Patterson

month, occurred became results second platforms. when demonstrate transformation Joe we color reflect Today, the and record growth piece our are transformation quarter ago of a key year Clariant’s recent acquired The of that Thanks, of good everyone. this business portfolio success morning, and the we reporting Avient. most our that and we

backdrop see solutions of well, tremendous unprecedented in has our demand our not as has grow momentum served for a in integration shows we associates challenging as in but success, conditions. The seen of we up which the the around This against a engagement year world. first our numbers, only been have

chain well in them, as world the customers story come have while the We operations supply associated through our better well managed XX% service Our second team opportunities. together disruptions. XXXX and and up to a events adjusted deliver of mentioned low incremental What pandemic. of but overcome together billion, of to see of will as was our to challenges we this chain with has previously we are the truly as is as myriad point and you EPS class reflected in flexibility record Obviously, path of record through and The creativity deliver we paneling turn morning. quarter of see compelling inflation a a into during was future a EPS, these comparisons slides supply our on sales can adjusted up year-over-year of both the you XXX%. costs and here to $X.X revenue efforts very offset substantial, challenges. how $X.XX so which And our these year

to operating that other telecom buildouts. end for ongoing pillars XG infrastructure second see continued demand be growth growth record consumer also additives And significant We integration achieved applications of all ongoing quarter of these one results. used high to and contributed we with transform and driven sustainable robust technologies. solutions more by demand operating than increased as as composite optic for on the strength delivering that cable the investments engineered solutions Clariant. to Specialty to our performance we Our inks and sustainable And All in well our across it's for working. doubled fiber segments markets. and grew Color our XX% income three income from portfolio have by synergies more continues markets solutions. made with on four materials our in our strategy underpinned focused is specialized, our guided concentrated

XX% increase the segment an segment Our from prior quarter healthcare $XX and sales end over coming of we notable of record delivered consumer income million, operating second Distribution year. the markets. with XX% a And milestone of nearly reached

our portfolio has a years transformation an deliberate applications. on and with specialty focus the Over undergone tremendous increase

of level we color same improved sales PolyOne are we an improve ownership, performance When where two pressures progress As track $XX of over $XX the quarter, this One the of you Clariant sustainable significant opportunity performance contemplated is on capture actions driver to are made million in the deliver the margins the Color to in first important of solutions the we acceleration and the as regard. despite more In to the in between teams was acquisition and require business. legacy know, we these has our performance benefits And an our synergy contributor and pricing the margins million mix this the realized we've we improved inflationary have advanced seen. year not XXXX. of only characteristics. been to there but of knew business, improving recent growth, this

did know after and intense businesses. month, Clariant I much we validated interacting we and excitement we've and that are energy that our team capture, do with is and innovation, we pricing legacy being is everything There got I integration when to together. experience better see our West firsthand combined an earlier sustainable from And year excellence during further so focus solutions synergy and a in we And now known. organizations. generated on Beyond seeing this diligence confirm of our our that site across the visited Chicago, people and both

and invigorating has to how designers a most know, come touch, our their additional with Quite has designs where and opportunity recycled the the color natural the this that material be single to isn't recycled differentiation margin level was decision The content achieve grayish multiplier, help of as call plus it. our a on brilliance to owners this sustainable think the clear used, more feel and customers’ to for well of recycled this behind and And appeal this watch to driver we were our But What space. Center, to growth X% down and from additives using and color business, XX% use look life. me visit required. about driving me You content initiatives. supporting factor, is are acquired color have capabilities concentrates Innovation but impressed Clariant was let easy. content to customers who ColorWorks trends And overcome to service leader teams was expectation for elaborate, see explore These facility, key the a to bodes of our a the a and when shelf sustainability sales more demand. in double see, more a year similar market who solutions. production last our Masterbatch is packaging. color brand to requested we simply, more recycled our long-term most our is us not and are only And it additives

growth quarter exception, sustainable in areas and and as the second are composites solutions, key focus growth substantial as we no the achieve of Our Asia healthcare, results as LATAM. other in well three

prior applications. of contribution and COVID that From outdoor perspective, consumer, the see demand area well over margins effects over healthcare are and each as of with the an year. lapping we revenue end also and quarter. also space strategic prior grew in associated performed exceptionally the particular, is packaging. half performance high year end-market healthcare the consumer our during response can such applications the primarily In to XX%, for packaging sold The markets tied You

in to inflation look may percentages our And of pandemic. results quantify the increases few how company. most Overall, during the two magnitude supply years the that we I enough my cost last quarter. outperformed is overcome and his well view two but relatively have handled next combination two year these is Now can't insightful, were chain recall of say with of about for page, I have small as I'm both. The pleased the early XX during of second these the the illustrate quarter we these how end perhaps and very unprecedented with teams factors disruptions. days related couple slides markets and on our the

for have more projections details. outlook $X the I'll recent our year to turn conditions, to our raised strong of full Given year the provide our continued EPS. and adjusted we performance now demand of and rest the Jamie call increased to over

Jamie Beggs

Thank you.

chain supply mentioned, quarter, in the attack year-over-year with point the of to a Bob low segments comparisons reflect was swiftly significance associated by three costs in have demand. and throughout As quarter increase pandemic disruption. second COVID the multiple prices July. All so do times to XXXX continued the during highlight inflation and raising substantial the and of situation We want the the

covered inflation than schedule, As prices our and see in bridge our you the to we ability approach more move can proactive quickly. with demonstrated

and real-time meet qualified exasperated or costs to by contemporaneous material as incurred to as we a disruptions, batches, inflation, scrap million happen predict of seek customer be increased a manufacturing costs freight customers. new of basis an $XX supply of that than associates. they These increased we higher we chain can sources and without form quality. shortage our are costs over for sacrificing Beyond as demand in manifest These to a quantify difficult themselves of less time, optimal additional on production supply raw related

chain been chain East, driven number be orders But and additional QX seasonality may came highlight to QX. a of experience the third from into what we heading QX to navigated impact the costs estimate supply see of strong quarter, second of to year-over-year covered world This from million continue during slight inflation, in on sequential the The Related seen these received the the the orders reflected were to our have in well-known May walk decline dynamics, to slide it's Europe the with our far. of $XX Heading and of which thus QX have cases. projections hit we increase which hardest we high historically. that did were rate been continues we here Middle as market of by certain supply in current back experienced illustrates the we quarter, Looking $XX is in quarter, June. the million, into bifurcate and supply second to COVID, all performance we parts again, to following had we demand, least highest chain which the in also Similarly, demand how have hard the disruptions with pricing. that consistent disruptions. a

the We are remainder supply increasing of for dynamics, persist quarter, future. our the both navigate higher performance second inflation. the these But we to of and our issues in chain year. continue ability the And expect our for we demonstrated may to foreseeable see outlook given to

share. cents the This we we And from sales, holiday year much of and So XX% adjusted is this decline Europe. prior expect driven EPS. for adjusted the of deserved QX, our over and still would third The growth given from $X.XX many QX of per in reflects a growth to sales a quarter typical billion business. record adjusted another the XX% to represent EPS seasonality hearing $X.XX them holiday seasonality are sequential biggest is total of backdrop cents a by QX of $X.XX take EPS and driver in The last Yet, half. approximately and of the schedules primarily half, year. customers, for company what are from seeking the

continued the recover Current million direct is inventory. $XX regard. to growth we in demand We the continuing easy company predicated many which XXXX EBITDA trying and levels the the want EBITDA to epidemic billion. our a up that are year. Recall our differentiated expected XX% results business, of about This to not from of to reflection to by investments long-term a is to in why complementing, to $X, Avient on into sales in reporting still EPS made pattern shareholders year it sales decline secular previously, between is collar companies projection last an position and Perhaps, we our replenish combined realize there $X.X XXXX. billion full-year, quarter growth of a be the increase expect now in higher XX%, supplying. XXXX, economy it to total grew, over low XX% to ability XXXX the that's of compared keep Bob, of XX% fourth remind orders suggests trends, this is with mentioned is with for The significant growth synergy benefit execute. rates to as customers versus or are adjusted did many $X.X than conditions quality increase that the team's recovery capture company the and clearing is prior For our XXXX. This how

balance and and will expected our strong bit increase $XXX Clariant. to that investments an free to per to working activities in achieve. remains as sales restructuring The the assuming our growth, with further support, From This we're what be working times to benefit is balance organic expect now perspective, debt projection we the flow a well includes sheet colorbelow capital associated leverage EBITDA. This from sales Our cash inflation generation helps impacts the cash X.X [ph]as at sheet. adjusted earnings the million. on support the year as finish

materials the ink brand and into remarks. Our sustainable Magna serving just for fits July products. did that as strategy. Colors. consumer we This M&A, preference when leader water for owners back screen seek is my pursuing market conscious growth our based call portfolio put textile eco solution our strategic their will the cash Magna hand a nicely largest That prepared printing, to over be work acquired acquisition I'll we as expands to now technology a Bob. they on to concludes X sustainable growing in

Bob Patterson

for is a Jamie. driver. Avient, growth a Sustainability not Thanks, buzzword it's

leader this a goals. customers helping sustainability their many And doing been years. in reach are We we've for

have We the space in double grow highlights new and of And to customized to reduce products, or solutions weight, this year. content product the technologies, commitment technologies, eco to customers invest to initiatives. solutions and recycled revenue these conscious expertise expect improve their into our in we helping will our additional knowledge of well this future. digits And these acquisition use materials. formulate recent supporting more The Magna, continue from material with an or sustainable recyclability are the we grow XX%

all is upcoming that benefits You metrics are does sustainability report read describes provides sustainability future. our ourselves growing and all into our it also only in of progress will more more align XXXX most August. inclusive frameworks, with ESG comprehensive and ESG current report and those enhanced data year's on but we've those our know interest to expect most of we in And and that read and that for that the be we to to documents challenged release you investors goals aggressive stakeholders report since able hope and about is it's what This take Not our terms in stand we this who we yet to the of our really are, we include a of time disclosures I the values the updates goals. we do, our made further own report, best to for. matter. one the have think that

report. ask for our Avient, same these should I the you employees then ask are investors place I in Customers and of why the as prospective and invest yourselves, why answers No ask pages do better I As buy from Avient? sustainability why captured, should work should join Avient?

read sustainable a it a opportunity team you and last year. together stakeholders. with has organization, name thought that who this, will united and represent I tremendous incredibly in leaders provide Externally, our solutions world-class as a the to be a an color the to are At bring sustainable changed Clariant's all we to tomorrow as doing was I acquisition ask We our the am Internally, we supplier business two have so two brought essential many Avient. this to industries. what doubt we becoming provider. our truly better in to effort outsiders committed but companies our time, timing probably a So so that accomplished did name proud couldn't new galvanize of of I our in to all been We in may employees together. for have regard. well-positioned believed today, business. we world We're as our

the have results inflation We where first pandemic you of chain believe half challenges can company. are our the The we sales COVID and and massive a stronger and navigating be growth in so about emerging significant frequently. overcome supply evidence seen hear that delivered I

foundation future perhaps importantly, by a the built we sustainable and driven important more very for have Lastly, solutions.

plan and more message exciting share a December. Day Avient year that momentum York at we as you Our in are to we with Investor host in will and very our New after

be our technologies taking insight innovative we will our into in dive solutions sustainable and portfolio, there deeper a of strategy, We more into hopefully, and all see provide long-term can you person.

block As your calendars looking something really we're will you hope and to that now. forward

an any love We'd have concludes That remarks this to in not the are hold take while state to Of we virtually. prepared it of time. may should planning questions conducive, today. host our the person, make at pandemic we'll course you that

Operator

first Mitsch [Operator from comes from Fermium Our Frank question of the Instructions] line Research.

now Your line open. is

Frank Mitsch

morning on quarter Good Yes. the the congrats and and outlook.

months your now I and and particularly terms difficult outpacing if mentioned wondering supply anticipate the we issues I kind plays through as how of obviously, a and should in chain XQ. cadence out And of You them QX expectations the could been balance was on think June were What a you are provide that year? May materials what pricing. with this in raw of you've the

Bob Patterson

So, at getting is worse, getting dollar them don't going these will QX. the are my we to probably continue this experienced foreseeable what but conditions future. like to QX kind that point, be see From those better. I that think in I expectation perspective, Frank I wouldn't costs say things for in that are

way things And here QX we've that's half year. our QX. the the from for of probably So, to modeled best about to guidance going that second the into think

Frank Mitsch

I mean, margin bit. that that business a with And highlighted in your out outlook there for might guess you high-performance a suffer ironically helpful. that you? little What's that high outdoor a the for your I business well. that growing there you That's right. thought pretty reopening mentioned All space Bob, was

Bob Patterson

at remain retail levels inventory just and incredibly applications. every Well, of outdoor about the low, locations area

of there's how that respect, that to get just a long given think I still it's here So, good the run ahead want. that in for they people things really us taking

haven't are of pandemic sort our way subsides feeling I the from who customers, heard may that So, that, when anything end. that

So, out driven from paddle also this are what just But maybe of it whatever off-road to I level demand. or is just really isn't observations there's level get they enough candidly There want boards, their people bicycles too, vehicle, right? there. can't inventory an like think

think that's the point, at strong I So to year. of this the going balance through be

Frank Mitsch

to you Thanks. December not on right. if helpful. Very, forward Look seeing very X, All sooner.

Bob Patterson

Thanks.

Operator

Thank you.

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

Your line is now open.

Mike Sison

good quarter Nice guy. Hey, morning.

Bob Patterson

Hey, Mike.

Mike Sison

terms product of customers terms potential, runway in In recycled how what material the think in pretty lines converted? trend? do Is of inning you're have been you that a your there much good in,

Bob Patterson

I mean, I embryonic. it would as describe

are access think in really And around recycled I'd remind factor just customers this gating getting simply I to is really started a that materials. growth regard. quite these major also everyone

So, polyolefin getting recycled, there is just families, -- or isn't PET enough. they’re any other

As underway margin you'll of I a I move see. -- good good is us, do for that to that a to as you major a know, I sales trying as news is lot it's just there's just perspective. think really everything. traditional supply. around now a though, to happens, And this. grow it's out packaging lot They're that ultimately see is, brand that from and said, trying guy think candidly, owner And And is increase The that. alongside right of us investment that there about every you

Mike Sison

maybe a am were when you to of a companies and to can the segments, struggling get the through lot thus demand guys able think the sales growth, I you the XX%, as were supply each guidance, the sales, meet And and raise to third then that generate get you material quarter to follow-up, to sort how far? of impressed the about are Great. you of able run

Bob Patterson

and a we're in bridge higher second Yes, together manufacturing is candidly the or schedule. Jamie that There I in in batch the it locations customer and can seen is, bringing different from materials mean, one of to handling pointed meet three you've candidly sometimes in have are to needs. the the you the see sizes that experienced quarter, we some ways out, a that as we securing supply costs cost smaller way

So sales one not that, able get we're I there I say deliver that the think at it we're out at meet would the orders cost. every but probably the are it's to and that that, orders, – at or is month end reason coming for another. to a able certainly because of of

sometimes, just And a absence of a supply. it's complete particular of source

real. doing suppliers from to are the we're that about guess, And you're about and is that. answer, dynamics network I we I that's just best leveraging probably these But the could just hearing everybody. do way and how have know So I of facilities locations them

Mike Sison

Thank you. Great,

Bob Patterson

Ben Sure,

Operator

Thank you.

comes question Our Koort next Bob of Sachs. from the Goldman line from

Your line is now open.

Bob Koort

Thank Good you. morning.

Bob Patterson

Hey, Bob.

Bob Koort

appreciate team, to thanks providing and your about – incremental Slide helpful, in looks is than example, extensive whole information We one X, the like and On Bob, you incrementals. we've far more data past. talked you're super that. your the something and that XX% like really seen as

what the if of your expectations I So was and margin? talk kind could about, margins that you sustain are those across businesses absolute incremental wondering

Bob Patterson

Sure, what thanks. – on? the look about, and you're like composites, you sustainable margins asking are know, absolute the for solutions, these areas, healthcare, so core And so

Bob Koort

right. That’s

Bob Patterson

– you I look it is does at see I by Yes, segments. what vary mean, a really would think

for speech sometimes provide to know you on. that of as us So challenging an kind is elevator

would have know, you of healthcare those run chart. think that the between, each in have segment contribution we do I materials, and our we color are way really example, probably lower in seeing and we has the the we this do just business the with margins best but good to Investor perhaps more norm, say to lot us X% distribution, Day, elaboration been engineering rate than areas trying things that. some about is, toward in are That's get vis-à-vis margins to XX% For when question of is margins a on, which those for where a higher but somewhere demonstrate

of way. us at more the levels look a So kind on to that's granular the for takeaway absolute

Bob Koort

ask a was you dovetails And question, me dramatically. maybe with consumer Mike's, up then, let

these recognize also to hangover you there's you think I from think that you have of again well? as Do the of year. it next looks some of But the last exceptional? goes year? mentioned could COVID some As sales be awfully hopefully markets inventory little know, hangover some those battle know, you some maybe makes that you rougher a on away lean. year, that a destruction, you were channel there I demand consumer next

Bob Patterson

could Well, XXXX our I when difficult customers maybe really see time year, could there are that that come might to they But that's of point it XXXX, levels what and try where where year. replenished current is happen. happens inventory inventory a That towards in be again, know predict if be half in the we can that they sometime on look predicated like where and to on we levels and second it I would next are. demand probably of and happening. back keep to think where next some

Bob Koort

that against in on and the your one, you've look got differently, really or look but you you product it. financial what In be appendix maybe it really on I talk got real remarkable about flattering this think to that's because did or those offering cadence, looks peers sort front one smacked quick. peers it in depending to surprising? it your performance your just at was you you group Can price at peer guys of formulators head contextualize you But you different Roz and how last standpoint, might than some you thing from about that. and obviously what One of of your insulting of incredibly you

Bob Patterson

it in really a started at of I perspective, it second can that were really on of for weeks. mean, tell from price every we when There I very other quarter, are December But important. moving that what's was front around think with I really it's you the us, look topic January. our as my say things Well, for two companies. was difficult lot Yeah, important. us discussion numbers a center happened are for to literally I One is specificity, team's two

like the of think increases it this the attention is. year move We to we too. it's it's more of very than had significant customer. mean, probably Texas, half which inclement So coming. weather, I well to of was than first one Right. another, to. people got year. knew us we made in then, that it. And costs difficult thing I a just big that's lot felt you're to a it realize, I think I the then that, things brought knew ahead are when higher. I reality kind for in up. of for done the just price a to had ever just just in And from -- price trying terms mean, And supply way with that, we've and secondly, faster in can But to I just tell these deliver conversations guess a getting business the that chain the I place of And even had they've for think We because it's of think while in example, happening, about went it. team, more I my done legacy mean, that's we've we've you Clariant best you just I

covered without standpoint, but we to we from order of glad in that we So we our the exactly perfect it got in of because with clarity be. were the mind, magnitude quarter, where all. And pricing did what would I'm

So think just two compatibility from standpoint. about a maybe are those things to

Bob Koort

you, Thank Bob.

Bob Patterson

Thanks. Yeah.

Operator

Thank you.

Our from Stanley. a Angel next of question Castillo Morgan from line comes

Your open. line is now

Angel Castillo

quarter. the my Bob, taking was about for capital you hoping also, of looking -- timeframe? congrats potential could strong at? I be how terms an update in kind of And pipeline question. you the potential And Thank right. of in on of where you're you bolt-ons you allocation give us All timeline in are, and you're and buybacks might this that how M&A thinking

Bob Patterson

is And been pleased we've had a have fit brought something we're industry the acquisitions They bring been equation. plant time. years. sustainable think was for for in know the and Yeah. very cultural I really long chatted important acquisition a have really of it's find a for with been respected the we me Magna strong solutions that working our ours. we Magna first with portfolios. of something participant in history, candidly And those that and on mean, these that, conversations you I you our who all, in of help example, to look, into for in past competitor have really technologies about many

we're guess doing be have long acquisitions optimistic want like I with to put as We too. relationships we so around And our money of a kind winded So that this. other our bolt-ons to some that to preamble keep with might work ability well. really about

I said, always going again down we're our announced We've the which debt the end the getting to X, of by be this the Clariant priority. well year. the So on of also And something to net there stated to our business. we EBIT first color at our acquisition had of we getting just is priority as time way have below

we last be it's when and that, be that every shares. our I'd is we we opportunistic to sense our October dividend remind can more revisit to everyone also my decade. have increase respect intention that as And the year in for So would with typically buying back again

Angel Castillo

a in And your you from at Understood. half as for seeing a could the wondering if what was look perspective. outlook, you're then, give sense you second I regional

Yeah, we be that and could everything very across walk the of just helpful? or Are see would you color, regions? seeing that evolving through with As you us seeing? one, give any you are some kind differences what if happening with [indiscernible]

Bob Patterson

the a for about I a have mean variant one specific to of -- I in and to does that, question say around us create thing right those thing and continue location locations. be look, challenges that for do And local is we to would standpoint. it in close COVID Delta Yeah, compliance limit a period the with production short regulations had time, just had situations where or we've safety from your

that up seem a it to there's major open be an other cause still continuing struggling. bringing as are more while disruptions So, is getting maybe places still lot and and economy, really to markets of

see, in year. to to I sense foreseeable our of is that's year, kind going has with been maybe the at we second that's seasonality assessment -- what are the for half ago. continue quarter. the projections. it than But let's that's years say that think three more like for the here but share or in respect the we in my that see going So versus the of what future this here to looks second some in I and think factor probably And Europe do did, We quarter last to just what it least, third four normal

the that's really into time. estimate second our projections we have, at all and and half really that So, factored best this

Angel Castillo

follow up guess, has a quick I And maybe that. it driver of been on a growth. big just

in curious how So that the half? second seeing you're

Bob Patterson

Yeah, I to mean, I think half Asia year. is to the second in continue the going of grow

of really thing call is, sourced the COVID schedules, that know, see year, the sales the from kind had you'll one observed we in where You bridge response of I last application of lot that was out Asia. we in one in coming of a second that really quarter

we're fourth that lapping quarter to going well. be still as that's case that the and the third and in So

a but lapping some because of it, you is surface expecting, it like applications. maybe the what doesn't growth So we're these COVID Asia look might sales on be response of

Angel Castillo

helpful. you. very That's Thank

Jamie Beggs

Sure.

Operator

you. Thank

question of Baird. Ben next Kallo from the Our comes from line

now Your open. is line

Ben Kallo

questions for taking my and Good congrats… Thanks Hi. morning.

Jamie Beggs

Hi. Ben.

Ben Kallo

…Managing your through with deal you team. had for you everything and to

couple many the you it is my a going was that questions, going you margin years first Just margins target the Is big that forward, to target you when up, like should back operating something highlighted. quick be from we front, that looks a margin on expecting question. held

Jamie Beggs

And I'd objectives that had in done to Yeah. we specifically and the in and outlined like expand if on our I day. we've some goals recall margins Ben, past, where mean, that looked you regard. at, investor at really that

to to bringing big one. a not a improvement around it's that. is we and really recycled to a where of But sustainable think well of that I story see enabler the to come driver be big margin going two Really, be that are that what think be more I synergy going trend And legacy doing, going understood materials. as probably organizations I using important between solutions, client an expect deal. we capture think and from here customers I together, still yet, it's there's

definitely what will winded at a to there little of December, be we the cover foreshadowing and So, but margin here want there focus. long Day in Investor maybe a

Ben Kallo

Okay. exposure know the I questions. for whether is you And then, more towards or hearing grow Thank but of just do steady kind OEMs just lightweighting? this move want pretty passenger is question, the guys we're to there. knows on the lightweighting movement truck where hear, opportunities OEMs, transportation vehicle auto it and to or you I all specific work lightweighting, towards to from, you the But I is, for going there and its your is lightweighting are EVs. to business the the or say

Jamie Beggs

that's other including Yeah. first markets, also inclusive using of solutions, in actually we I when of less as end mean, sustainable packaging. report all, lightweighting, material

so that And our only X% that's is it X% is lightweighting transportation bigger transportation. those is in or in really driven the And around us, really fact areas, for sales. partly of than by

look we a there it out it market as sort at continue of is us pointed specifically And around smaller for is growth is, So think good I area. for But now to a which a us. vehicle you guy well. electrification, as

do we down course, QX as transportation bit, see at a but bit last you quite a numbers was Obviously, look it area. the year. that growth of if grew quite So, a

areas do provide does where these market? we'll is, some of too. another I in thing on and So where December will So that more think come -- the growth that from more, do sustainable end of by each just some detail the

Ben Kallo

you, Thank guys. Okay.

Jamie Beggs

Thanks, Ben.

Operator

Thank you.

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

line is Your open. now

Colin Rusch

products? products? expand it's around set so of actually Can existing overall take a existing some new on us in position formulations, whether again opportunity as seems in Thanks well or new as products your like to you're much. sense you market evolution give the share It of activity a

Bob Patterson

an flexibility was lot take might home think at about. customers would of of the that sort we're focus a innovation backseat, probably you sustainability we're that to have you pandemic. in where half that an been that a know, but There one may brought of year, actually, their other interesting in – challenging they the the say, of last kind of – kind amp on we what sustainable working really related up had time, of time, I'd solutions And, really and times – more interesting or from second saw

moderated seems customers that. encouraged deck, need I was the that's on to to simply actually the see because little all supply And But would in right like, just a now. it of probably hands I it's bit last So deliver say challenges. chain what few months, just

that, finally PolyOne and as share really So, result products forth. of, dynamic. I just short can I and of a how share With respect serve. number to are we guess, term legacy view because And a and together we have I as believe Clariant some a that gain, back putting the we locations getting move of

there required sounds So, that's feels really that all kind tactical. of right it just innovation But now. of is that to And make happen. how

of real service so this we So, I'd for that the think, we're think content tell if sustainable more business, questions around, gains. share provider recycled area. using the of move and is get the opportunity but there in list. in fast, many top And a there I area one you, to is packaging going and best inquiries I And be that we are solutions. And particular at

Colin Rusch

from helpful. top Thanks. offer the practices the you complex. transparency, program, then top of which either – ESG around just got sales you the And social of can of to best is your in you're market at share, getting to in That's really terms process, super kind leverage the the speak or pricing

Bob Patterson

a in But really probably expansion and more mean, in magnitude expect always that, long I business mathematically at the you're outright in and price what us. margin you you than the the the Yeah, way leverage I so expansion. we innovation not of inflation illustrate the that, I done. calm that think, significant that to being said, margin expect mix in with for coming look way price I traditional maybe term have that quarter is that the We've just price seeing from we've best dynamics sort increases. of around didn't driving I would But that mean, our immediate looked to, opportunity second bridge the is schedules, over look at order

good So, earlier I area for Investor maybe back and Day. X, to for focused on some question, work the us, December do our, more Bob's think, a

Colin Rusch

so Thanks Okay. guys. much,

Bob Patterson

Colin. Sure,

Operator

you. Thank

next from question Mike line Seaport of Research. comes Our Harrison the from

now is line open. Your

Mike Harrison

plastics your be and with – formulations Wanted slump And you on gradual, ground do Is at there increasing all a guidance, can those or and or going availability discussion some that big is new coming once? now visibility is Thanks. working to think Do Hi, that really good there on the come point, back of comments you available, screen? you customers where the capacity going the the that colors? on to to Congrats morning. additives are the a hit comes be when new on with materials key issue. to nice such recycled raise. this and on And quarter. content that's is there's around recycled have resins you become solutions running recycled

Bob Patterson

making for you see what there doing full of applications, I who a of I are materials number am But like demand right. things. sure these by this is assets than give alliance more types anybody is in area. I are would really just particular encouraged capacity couldn't out, companies, right I'm way same look, now. Yeah, There's supply. say There waste absolute running investments an recycled I that, for screens. stated as their Organizations those and number materials to dedicating recycled is plastic

few of But that don't you'll see think so. of XX amount So, will. months the next or going of see a course to I change years. the you I think increases you're few think in anything years, meaningfully I a over massive inside supply

polyethylene Sometimes, formulator. to efforts do recycling to around are being a these materials. now at formulate intention the best right And we our We're remind any formulating have don't manufacturer, resin any our base a own and not about polypropylene assets. do we make We look, or everybody, don't recycled And going And get And XXX% we're that. just around to question content. investment in the this on don't area. have I We win. right? intention that, own focused we're

like And that plastics we some suppliers all does recovered supply, ocean that unique who think some sources that so, of in of these I things of require that nature with motion. and partnerships, some plastics, have partnerships have and are

Mike Harrison

business, dropped on then below the the distribution And right. gross All margin XX%.

disruption supply as I How product a go look in maybe at costs, is this of number, think about or that's up? in we've we as industry? gross QX, Thanks. we logistics math and the some And seen the Is for maintaining should chain pound? of some I prices that this year margin guess per your the how you're think your margin lowest works rest increases and really time. in just the

Bob Patterson

million Yeah, inflation we you'll you fresh, it's maybe I just schedules but look, bridge distributions. morning And on that an cost if put number, some the take just plus out this get that, I the right, see that math. number, like of yourself, we're $X look, to are gotten the know, opportunity really when you -- and think, we've a run in

a standpoint, Mike? is from with revenue more doing are number, we loose higher and we that, a but is line the line bottom margin percentage lower. Do So, therefore bottom

Mike Harrison

much. Thanks, very

Bob Patterson

Okay. Thank you.

Operator

Thank you.

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

open. now is line Your

Lawrence Alexander

pricing a give much because been of how manage us the demand And might seeing are how customers your your customers are areas seeing? destruction to you're handle for there volume or you by have inventory environment? changes constraints the inflationary any where supply constrained Can sense now, that in morning. real Good

Bob Patterson

Yes.

think, part would sorry, those may a that and levels, one East Europe QX. say the to the seasonality. then X.X%. always We as really there of could different been our was down sometimes Middle chain Jamie's own, that just -- customers the that I but have it's simply And really impacted But in if see from only in so to a I I'm because normal, hard been quarter. supply definitively. to orders of issues. candidly I And that and your be have due roughly was most not that's is they that did just can't little definitively to result, can't supply some second it's And perhaps, say would of think like And not question? Lawrence, bifurcate observations, -- have right. Dye demand what it's this of place sort second chain otherwise, is challenges, difficult QX

Lawrence Alexander

have Just changing -- -- or or some the size you seen purchasing in of the environment of orders, inflationary customers as of behavior patterns terms because

Bob Patterson

Yes.

Lawrence Alexander

surprising just It’s how how easy been well you've -- that. handled

Bob Patterson

I Yes, -- been have very I'd say, flexible. look, costumers I mean, they've I think been guess, just

small willing things. to lots I take what do, you when they they they and lots it, that get, of know, as are can think can we And, get oftentimes.

their ways challenges. that to sources regard what given for even that. us, used looking But So these small something sizes of batch a flexibility in just past, to, some smaller customers, are alternative they lot they you're supply it's I’d at think do in is the than seeing in used not also not not of in we're to. but And I say may have

customer changes behavior, to these in of So, solutions. seeing under alternative and conditions work in us are as their think positive I willingness look, view but a terms it we to I explore with generally

Lawrence Alexander

Great. Thanks. Okay.

Bob Patterson

you. Thank Yes.

Operator

you. Thank

Our next Anderson the comes question Stifel. from of Vincent from line

open. is line now Your

Vincent Anderson

you. morning, Good Thank everyone.

maybe I more But customers biopolymers First little when that go some off, to was where for of I your materials not work specifically, think traditional as or does maybe businesses, even research with, to business. maybe And sliver detail, around that I'm for novel site aware you, thinking prepared the it your example, added if slide may have very with you be thank of. XX, you maybe, at an recycling all. the contrasts the commercialization again trying to of the and especially generally, all how of

some these performance from have you how sustainability diverged develop traditional space Just, around attributes product a of attributes?

Bob Patterson

stuff can want easily we again, on plant maybe of be for a can recycled be excuse And of just lot going make right? if that bio is that, base, just very much reasons materials, bio base more us. why consumer because to I there Yes. to simply their sure going the one is we been work have If also use the a it's this because view for can side, they is ourselves this or, of -- Or there's formulate recyclable, supplies, other so mean, a what of all is, look, around much plastics to preference, with. that. if formulate. sources to People Look, terms or that work me, use in scenes customer we talking drives, they right, content, that's available sliver formulation want it that us, about on there isn't do to the isn't innovation the -- years, And there. want for formulator. these they out we we do behind as based the sliver it really, product to more of

use So and things. I'd it's just we're not why, of them. support not trying say, able And our be to we for want dictate also these customers to one what they to

Vincent Anderson

That's Understood. helpful.

out so something And basically going it bring for, large to I market. supplier prepared when not It's sounds and you material be novel a maybe some being think of really maybe significant partnerships it's like that, demand looking likely there pull? about that a to and would not a to form customer stronger just buyer between about

Bob Patterson

they is mean, based on a for that that, do in think we and advocate they seek I mean, because we that. an that material I formulator, with I we're the -- as might future. good know, be we I what's know I'll as around about them -- do materials, they're a for their do of bio going relationships clarify if as with just what that suppliers I well out formulate us to specification use

But go see important polyolefin, okay, that's as partnerships. manufacturer important those I acquire that want wouldn't I not say, true. relationships very suffice based a I that's a so bio of, in So to to

partnerships these but to in appetite And are from there's the of suppliers with So work They're that us regard. growing. a there. lot

Vincent Anderson

I on the color appreciate that. Good rest the year. Great. luck on Well, of the

Bob Patterson

right. Thank you. All

Operator

you. Thank

of from Field On the Our comes question next Jaideep from Pandya Research. line

now is open. line Your

Jaideep Pandya

Thanks.

question is really First on Clariant.

a when to in with you were I'm So, competitor. just like prices sort it the to of an how this, guys in day, you know, back was trying Avient, increase environment competitors, Clariant sort as difficult for guys increases, easier That's when versus after it you that, you made has are you understand, that were to these dynamic guys actually, the of price go question. first competitors? now

The of, sort content Are performance, synergies just how and sort of, working lower just really the plastic i.e., around, in whole the that also recycling it is sustainable you more solutions is where allowing on? rationalization or these to of a of you, actually you're, And part really managing but is around, plant solutions where the some plant reducing second plastic also demand are your is third the of color really solution in the aspect. so the with of, question sites. environment shut utilization? around same And sort because key sort working around a question synergies is appearance sort you obviously, are of, dynamic, element,

So how right are now? lot. such a world dynamic you tackling that in Thanks a

Bob Patterson

viewed one competitive PolyOne that, the basis thing, was, as pricing you is think compete So legacy and the us that our ask the of two is, -- specialty. services and relationship the first best customer I question legacy first service. innovation say did that for around Both and teams I'd in of our sense businesses on could the really Clariant of that

communicate just because that I in our our okay, last that the with just contrast, pricing any hard am if that we from the I like grail, customers. been. call make question, weren't your lot a I say, a say might is It's something that we question of been hard company. stuff. same the relates would way. we're difficult with And I we together, year -- half organizations but time our be for same material, to of for look, what has than they we how really be on felt the love all been customers, I so that's have actually that, perspective, that's huge it's ever or solutions, answer But respect as my a a be integration two by one say, anyway, team the use -- to a it now right? to dynamic gone to that's is because better With a in sure able in and to right, for right? to home better but our and competed what to together I've the sure So have to seen I communicate that want part is sustainable of compare to six and lightweighting. the color what us, that's with first beverage like right are that would the for A hey, move the product to months it like mean, package, has to has bottle. that. one the all thing well. care kind collectively it's because container additives kind package and It And together. better good of pricing big unlike having holy and us might half the make I'm And And what well,

cost in largely need we now supply well perspective kind ahead and operational look, then areas, And today, sourcing. and we the a challenges synergies schedule around are those, thing stay most that's sustainability There our And see come out synergies that chain important we of pandemic. capture with we geared ability respect the that, your are with though that to is that that see exists, to one to the has One towards that of right serving. of what it's and So is just of integration future. been question we're last think, from I flexible. administrative costs

be that So have serve to as had well six as could continue just months sure plan what different make ago, customers our what can. today, from a might as we can see to we we we

have So we challenges we're of gotten supply probably the bit may back and right chain ahead these moving but more even pushed pandemic with still now. have, because that the so really ideas a some of they

Jaideep Pandya

Great. a Thanks lot.

Bob Patterson

sometime and to until chat And very you between. thanks you attention with the at forward much. today, call today. safe. time, and care take everyone's we stay on your look call on Day, We just we next connecting time, Investor Awesome. for time the want appreciate participating and our hopefully in say, Thank again, to But

Operator

call. This Thanks concludes participating. today's for conference

You may disconnect. now

Avient (AVNT) 30 Jul 212021 Q2 Earnings call transcript