Avient Q3 Earnings Call Highlights

Key Points

• Avient beat Q3 earnings expectations, reporting adjusted EPS of $0.86, up 23% year over year, and organic sales growth of 10.6%. Adjusted EBITDA margin reached a record 17.3%, aided by pricing, higher-value product mix and productivity gains despite volume growth of about 1%.
• The company raised its 2026 outlook to adjusted EPS of $3.22–$3.32, adjusted EBITDA of $593–$603 million, and adjusted free cash flow of $215–$230 million, while citing ongoing macroeconomic uncertainty and raw-material inflation.
• New CEO Mike Frank plans to accelerate profitable growth through faster deployment of innovation and supply-chain and procurement improvements. Avient also resumed share buybacks, repurchasing about $10.9 million of shares in Q4 to date, while continuing to reduce debt.

Avient NYSE: AVNT raised its full-year earnings outlook after third-quarter adjusted earnings exceeded expectations, as pricing and demand for higher-value materials helped offset modest volume growth.

The materials company reported adjusted earnings per share of $0.86, beating its expectation by $0.06 and rising 23% from a year earlier. Organic sales increased 10.6%, while adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 16%.

Adjusted EBITDA margin expanded 80 basis points to a third-quarter record of 17.3%, supported by a more favorable product mix and productivity initiatives, executives said.

New President and CEO Mike Frank, who said he had been with Avient for three weeks, described the company’s strategy as sound but said his board mandate includes accelerating growth. “This is not a turnaround story,” he said.

Pricing and product mix drive growth

Chief Financial Officer Joe Di Salvo said total volume grew approximately 1% in the quarter, with pricing and product mix accounting for the balance of organic sales growth. Demand for functional additives, including chemical foaming agents used in building materials and barrier technologies used in food and beverage packaging, contributed to the favorable mix.

“While volume growth may appear modest, we are selling more value-added differentiated products, leading to profitable sales growth,” Di Salvo said.

Color, Additives & Inks posted 8% organic sales growth and 15% EBITDA growth. Its EBITDA margin rose 120 basis points to 20.1%, as higher sales and productivity actions offset inflation and increased variable compensation. The segment’s volume was down approximately 1%, which Di Salvo attributed largely to weaker demand in Europe.

Specialty Engineered Materials grew organic sales by 15%, with volume up approximately 3%. Its EBITDA margin expanded 140 basis points to 21.3%. Defense and consumer sales grew by double digits, as did healthcare sales, which had been affected in the first half by customer inventory rebalancing.

Asia delivered 20% organic sales growth, following 18% growth in the second quarter. Growth in Europe, the Middle East and Africa was comparatively muted amid weaker consumer, industrial and transportation demand.

Full-year outlook raised

Avient raised its 2026 adjusted EPS guidance range and increased the lower ends of its adjusted EBITDA and adjusted free cash flow ranges. Its updated forecasts are:

• Adjusted EPS of $3.22 to $3.32.
• Adjusted EBITDA of $593 million to $603 million.
• Adjusted free cash flow of $215 million to $230 million.

The outlook accounts for macroeconomic uncertainty, including demand pressures related to inflation and higher interest rates, Di Salvo said. Avient also updated its capital expenditure forecast to approximately $120 million, above the $107 million invested in 2025.

Di Salvo said the company expects mid-single-digit inflation across its raw-material basket for the year, with much of the increase coming from hydrocarbon-based materials. Avient has priced in line with raw-material costs and offset the increase, he said.

CEO targets faster innovation and supply-chain savings

Frank outlined opportunities to bring innovations to more customers faster, improve collaboration between Avient’s two segments and optimize the company’s supply chain. He said his near-term measures of success will include profitable sales growth, adjusted EBITDA margin and free cash flow.

The CEO said Avient is taking a fresh look at its manufacturing footprint and sees potential procurement savings from using its global scale and technology, including artificial intelligence. It is too early to announce any restructuring program, he said.

Frank also said Avient does not need more innovation staff, but needs greater focus on how its technologies are deployed across business units. He expects to provide more detail on the timing of his growth plans when the company discusses its 2027 operating plan and guidance at its fourth-quarter earnings call.

Buybacks resume as debt declines

Avient repaid $50 million of debt during the third quarter, bringing its total debt reduction over the preceding 18 months to $250 million. The company expects to end 2026 with net leverage of 2.2 to 2.3 times, compared with 2.6 times at the end of 2025.

So far in the fourth quarter, Avient has repurchased 281,000 shares for approximately $10.9 million, its first buyback activity since 2022. Di Salvo said the company expects a balanced approach to additional debt repayment and opportunistic share repurchases.

Frank said maintenance capital spending and dividends remain priorities. He does not expect meaningful mergers and acquisitions in the near term, though he said acquisitions could compete with other uses of capital as Avient continues to reduce leverage.

About Avient (NYSE:AVNT)

Avient Corporation NYSE: AVNT is a global provider of specialized and sustainable polymer materials. The company develops, formulates and manufactures engineered materials, colorants, additives and performance-enhancing solutions used to improve the appearance, durability, processing and functionality of plastic products.

Its offerings include specialty polymer formulations, thermoplastic compounds, color and additive concentrates, advanced composites, barrier technologies and recycled or bio-based material solutions.

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