Avient Corp. posted lower financial results last year, but executives at the materials firm are optimistic about 2024.
Full year sales at Avon Lake, Ohio-based Avient were down 7 percent to $3.14 billion as profit dropped 89 percent to $76.2 million. Much of that gap was from businesses no longer owned by Avient. Sales from continuing operations were down 8 percent to $83 million in 2023.
In a Feb. 14 news release, officials pointed out that Avient's earnings per share for the fourth quarter and for full year 2023 exceeded previous guidance from the firm.
"We delivered year-over-year earnings growth [in the fourth quarter], much of which came from margin improvement in Europe and prudent cost control by our teams," CEO Ashish Khandpur said. Khandpur became Avient's CEO in late 2023, replacing Robert Patterson, who had led the firm since 2014.
Khandpur had been with manufacturing and industrial giant 3M Co. for almost 30 years, most recently as group president of the firm's Transportation and Electronics unit. He also previously served as 3M's chief technology officer. The T&E unit he had been leading prior to moving to Avient has annual sales of almost $9 billion.
In the Feb. 14 release, Khandpur said that customer destocking at Avient "was also less impactful during the [fourth] quarter."
Full year sales at Avient's Color, Additives and Inks unit were down almost 15 percent to a little more than $2 billion, with operating profit down almost 14 percent to just under $260 million. At the firm's Specialty Engineered Materials unit, 2023 sales were up almost 10 percent to more than $1.1 billion, with operating profit up almost 2 percent to $142.5 million.
Looking to 2024, Chief Financial Officer Jamie Beggs said that for the first quarter, Avient "expects demand to continue to improve in our two largest end markets, packaging and consumer, as destocking comes to an end and our sustainable solutions portfolio expands."
She added that demand for Dyneema-brand fiber in defense applications "is expected to be strong," although Avient "continues to see destocking in health care and telecommunications … and we expect weak demand in transportation and building and construction due to higher interest rates."
"We anticipate demand strengthening as we progress through the year, as destocking fully comes to an end, interest rates begin to abate and consumer sentiment improves," Beggs said.
The expected improvement "provides an encouraging backdrop as we begin 2024," Khandpur said. "We believe there are significant opportunities for us to drive profitable organic revenue growth and innovation. … I'm excited to be leading this next chapter for Avient and building upon the great foundation established during the company's transformative years."
Avient continues to refocus after making two major deals in 2022. In April 2022, the firm acquired DSM's Protective Materials business — including Dyneema — for nearly $1.5 billion. The acquired business includes six production facilities, four research and development centers, and approximately 1,000 employees.
Then in August 2022, Avient sold its resin distribution unit — one of the largest in North America — to private equity firm HIG Capital for $950 million in cash. The unit distributes resin and compounds for 21 suppliers. HIG Capital now operates the unit as Formerra in Romeoville, Ill.
In late 2023, Plastics News interviewed leaders of both of Avient's business units by email. "We expect growth [in 2024], with the view that destocking is nearing an end in most end markets," Woon-Keat Moh said. Moh is president of the Americas and Asia regions for the firm's CAI unit.
SEM unit President Chris Pederson added that keys to 2024 growth include continued adoption of sustainable solutions, lightweight composites and government infrastructure programs that support renewable energy.
Avient is one of North America's largest producers of compounds, concentrates, composites and protective fibers. On Wall Street, the firm's per-share stock price was up almost 7 percent to $38.45 in early trading Feb. 14.