PolyOne to Sharpen Business Focus As Next Step in Transformation Plan
October 21, 2003
- Company's strategic emphasis to be Plastics Compounding, Color and
- Three non-core business operations will be considered for sale
- Actions intended to clarify mission and reduce debt
CLEVELAND, Oct. 21 /PRNewswire-FirstCall/ -- PolyOne Corporation
(NYSE: POL), a leading global polymer services company, announced today that
its future focus will be on its global Plastics Compounding and Color &
Additive Masterbatch businesses, and its Distribution business, the units with
the strongest market synergies and potential for success. PolyOne is taking
this step as part of its drive to improve profitability and strengthen its
PolyOne's other business operations -- Elastomers and Performance
Additives, Engineered Films and Specialty Resins -- are being considered for
divestment. The Company has set no deadline for divesting these business
operations, which in 2002 had $617 million of PolyOne's $2.5 billion in annual
sales and contributed $12 million in operating income before special items.
The businesses employ approximately 2,270 people.
"Our Plastics Compounding, Color and Distribution operations have strong
market positions and unique linkages with customers and suppliers, which give
PolyOne significant advantages," said Chairman and Chief Executive Officer
Thomas A. Waltermire. "Most of these units are international in scope, and we
believe they have substantial upside potential."
Waltermire added that PolyOne is making this announcement "so that our
people and investors have a clear picture of the steps we are taking to
strengthen the Company."
PolyOne would use proceeds from its divestiture of the non-core businesses
to reduce debt. In December 2002, the Company stated a goal of reducing its
debt by $200 million to $300 million. To maximize the value of the non-core
operations to shareholders, the Company is implementing improvement plans in
each of these units.
Ultimately, "PolyOne will be a smaller but more focused company than it is
today," said Waltermire. "Our mission will be to provide materials to
plastics processors to help them be competitive on a global basis. These
steps will help us achieve this goal and clarify our position in the
After divestiture, PolyOne's consolidated business operations would
comprise the following:
- Vinyl Compounds, with 2002 sales of $627 million, which represented 24
percent of total Company sales. PolyOne enjoys a strong market
position and strategic material supply agreements;
- Engineered Materials (2002 sales of $332 million, 13 percent of total).
This global business has advantageous market positions in Europe,
steady growth in Asia and attractive market potential;
- Formulators (2002 sales of $180 million, 7 percent of total). This
business, which serves niche plastics and coatings markets, has a
leading market position and opportunities to expand into specialty
molding and coating formulations.
Color and Additive Masterbatch
- Color and Additives ($341 million in 2002 sales, 13 percent of total).
This business has profitable international operations, and the Company
has an action plan to improve the North American operations.
- Distribution ($520 million in 2002 sales, 20 percent of total).
Distribution serves as a low-cost channel to market in the United
States and Canada for PolyOne's manufactured products, broadens the
Company's market reach among plastics processors and deepens its supply
relationships with major polymer producers.
Excluding the expected divestments, 18 percent of PolyOne's 2002 sales
would have been outside North America, in Europe and Asia. To further
strengthen this position, PolyOne's Board of Directors recently approved plans
to build a new masterbatch and compound plant in China -- the Company's third
plant in China and fifth in Asia.
"PolyOne's international operations are among our strengths," said
Waltermire. "They give us a competitive advantage and many opportunities for
The businesses being considered for divestment represent approximately
one-quarter of PolyOne's total sales:
- Elastomers and Performance Additives, with 2002 sales of $364 million,
represented 14 percent of sales.
- Engineered Films, with $153 million in 2002 sales, accounted for 6
percent of sales.
- Specialty Resins, with 2002 sales of $100 million, contributed 4
percent of sales.
Previously, PolyOne identified its equity investments in its Oxy Vinyls,
LP and SunBelt Chlor-Alkali joint ventures as non-core. No decision has been
made on their potential sale.
Waltermire noted that the redefinition of PolyOne's core capabilities is
part of a broader strategy to improve performance and restore profitability.
"This vision of a more tightly focused company complements our ongoing
drive to achieve a competitive cost base, as well as the marketplace
initiatives that we launched earlier this year to strengthen relationships
with customers that have the greatest growth and profit potential," he said.
"Our intent is to establish PolyOne as the most reliable low-cost global
supplier of plastics compounds and color additives. By playing to the
strengths among our businesses, we can help ensure PolyOne's transformation as
a successful, profitable company."
PolyOne Conference Call
PolyOne will provide more detailed information on its new strategic focus
during a conference call at 9 a.m. Eastern time on Thursday, October 30, 2003,
following the release of its third-quarter results after the markets close on
Wednesday, October 29, 2003. The conference dial-in number is 888-489-0038
(domestic) or 706-643-1611 (international), conference topic: PolyOne
Conference Call. The replay number is 800-642-1687 (domestic) or 706-645-9291
(international). The conference ID for the replay is 6571867. The call will
be broadcast live and then via replay for two weeks on the Company's Web
site: http://www.polyone.com .
PolyOne Corporation, with annual revenues approximating $2.5 billion, is
an international polymer services company with operations in thermoplastic
compounds, specialty resins, specialty polymer formulations, engineered films,
color and additive systems, elastomer compounding and thermoplastic resin
distribution. Headquartered in Cleveland, Ohio, PolyOne has employees at
manufacturing sites in North America, Europe, Asia and Australia, and joint
ventures in North America, South America, Europe, Asia and Australia.
Information on the Company's products and services can be found
at http://www.polyone.com .
PolyOne Investor & Media Contact: Dennis Cocco
Vice President, Investor Relations
In this press release, statements that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements give current expectations or forecasts of future events and
are not guarantees of future performance. They are based on management's
expectations that involve a number of business risks and uncertainties, any of
which could cause actual results to differ materially from those expressed in
or implied by the forward-looking statements. You can identify these
statements by the fact that they do not relate strictly to historic or current
facts. They use words such as "anticipate," "estimate," "expect," "project,"
"intend," "plan," "believe" and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance.
In particular, these include statements relating to future actions;
prospective changes in raw material costs, product pricing or product demand;
future performance or results of current and anticipated market conditions and
market strategies; sales efforts; expenses; the outcome of contingencies such
as legal proceedings; and financial results. Factors that could cause actual
results to differ materially include, but are not limited to: (1) an inability
to achieve or delays in achieving or achievement of less than the anticipated
financial benefit from the initiatives related to restructuring programs,
including cost reduction and employee productivity goals; (2) a delay or
inability to achieve targeted debt level reductions through divestitures or
other means; (3) the effect on foreign operations of currency fluctuations,
tariffs, nationalization, exchange controls, limitations on foreign investment
in local businesses and other political, economic and regulatory risks; (4)
changes in U.S., regional or world polymer and/or rubber consumption growth
rates affecting the Company's markets; (5) changes in global industry capacity
or in the rate at which anticipated changes in industry capacity come online
in the polyvinyl chloride (PVC), chlor-alkali, vinyl chloride monomer (VCM) or
other industries in which the Company participates; (6) fluctuations in raw
material prices, quality and supply and in energy prices and supply, in
particular fluctuations outside the normal range of industry cycles; (7)
production outages or material costs associated with scheduled or unscheduled
maintenance programs; (8) costs or difficulties and delays related to the
operation of joint venture entities; (9) lack of day-to-day operating control,
including procurement of raw materials, of equity or joint venture affiliates;
(10) partial control over investment decisions and dividend distribution
policy of the OxyVinyls partnership and other minority equity holdings of the
Company; (11) an inability to launch new products and/or services within the
Company's various businesses; (12) the possibility of goodwill impairment;
(13) an inability to maintain any required licenses or permits; (14) an
inability to comply with any environmental laws and regulations; (15) an
inability or delay in finding buyers of non-core assets for reasonable and
We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and
inaccurate assumptions. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate, actual results
could vary materially from those anticipated, estimated or projected.
Investors should bear this in mind as they consider forward-looking
We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related
subjects in our Form 10-Q, 8-K and 10-K reports to the Securities and Exchange
Commission. You should understand that it is not possible to predict or
identify all such factors. Consequently, you should not consider any such
list to be a complete set of all potential risks or uncertainties. (Ref.
SOURCE PolyOne Corporation
CONTACT: Dennis Cocco, Vice President, Investor & Communications of
PolyOne Corporation, +1-440-930-1538
/Web site: http://www.polyone.com