Avient (AVNT) Q4 2023 earnings summary

Executive summary

• Q4 sales were $719M, down 9% YoY; adjusted EBITDA rose 7% to $114M and adjusted EPS rose 24% to $0.52, all above guidance.

• FY adjusted EPS was $2.36, above $2.30 guidance; FY adjusted EBITDA was $501.8M.

• Specialty applications generated 100% of adjusted EBITDA in 2023, versus 87% in 2020 and 7% in 2005.

Financial highlights

• Q4 adjusted EBITDA margin was 15.9%, versus 13.5% in Q4 2022 and 15.8% guidance.

• FY sales were $3,142.8M, and adjusted EBITDA was $501.8M.

• FY GAAP operating income was $196.8M; net income from continuing operations was $76.3M and diluted GAAP EPS was $0.83.

• FY adjusted free cash flow was $186.3M.

Outlook and guidance

• FY 2024 adjusted EBITDA guidance is $505M–$535M; adjusted EPS guidance is $2.40–$2.65.

• Q1 2024 adjusted EPS guidance is $0.68, up 8% from $0.63 in Q1 2023.

• FY 2024 interest expense is guided at $105M–$110M, adjusted effective tax rate at 23%–25%, and capital expenditures at ~$140M.

• Demand is expected to strengthen through 2024 as destocking ends, interest rates abate and consumer sentiment improves.