Avient (AVNT) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $850 million, up 3% year-over-year and 5% organically, marking the first consolidated sales growth in seven quarters, with broad-based gains across all regions and both business segments driven by share gains, new product wins, and restocking.

• Adjusted EPS was $0.76, up 21% year-over-year and exceeding guidance by $0.05, supported by organic growth, favorable input costs, and lower interest expense.

• Net income attributable to shareholders rose 52% year-over-year to $33.6 million, with GAAP EPS from continuing operations at $0.36.

• Gross margin improved to 30.3%–32.9%, benefiting from raw material deflation and mix improvement.

• All regions delivered organic sales growth: US/Canada up 5%, Latin America up 19%, EMEA up 4%, Asia up 1%.

Financial highlights

• Adjusted EBITDA for Q2 was $143.3 million, up 9% year-over-year, with margin expanding 100 bps to 16.9%.

• Adjusted operating income was $99.7 million (11.7% of sales), up from $84.1 million (10.2%).

• Net cash provided by operating activities for the first half was $63.1 million, with cash and cash equivalents at $489.4 million as of June 30, 2024.

• Interest expense decreased due to $100 million debt paydown and loan repricing.

• Packaging and consumer end markets grew 8% and 10%, respectively; healthcare sales up 10%.

Outlook and guidance

• Q3 2024 adjusted EPS expected at $0.62, up 9% year-over-year; full-year adjusted EPS guidance raised to $2.55–$2.70, representing 8–14% growth.

• Full-year adjusted EBITDA guidance increased to $515–$540 million.

• Capital expenditures for 2024 projected at $140 million.

• Interest expense for 2024 expected at $105 million.

• Raw material deflation benefit of $35 million in H1 will not repeat; expect $5–$10 million inflation headwind in H2.