Nouryon reports full-year 2022 results with strong revenue growth led by the Americas and pricing actions across the Company

Full-Year 2022 Highlights

• Revenue of $5.8 billion, an increase of 17 percent versus 2021
• Adjusted EBITDA¹ of $1.2 billion, an increase of 15 percent versus 2021
• Free cash flow² of $882 million, an increase of 13 percent versus 2021

Nouryon today reported full-year 2022 results with revenue of $5.8 billion, an increase of 17 percent year over year, primarily due to price increases. Excluding impacts from foreign exchange, revenue grew 24 percent. Adjusted EBITDA increased 15 percent year over year, driven by strong price increases throughout the year. These price increases were partially offset by significant cost headwinds from raw materials, energy, logistics, and Selling, General and Administrative (SG&A), along with considerable headwinds from foreign exchange.

“Nouryon’s 2022 full-year financial performance highlights the resiliency of our specialty portfolio in a challenging macro environment,” said Charlie Shaver, Nouryon Chairman and CEO. “In 2022, pricing was up significantly and more than offset the raw material cost headwinds from 2021 and 2022. These pricing actions drove our strong adjusted EBITDA growth.”

In the Performance Formulations segment, revenue grew 20 percent to nearly $4.15 billion, and adjusted EBITDA increased 22 percent to $922 million. Revenue growth was driven by increased pricing across the company, as well as particularly strong growth in Natural Resources and Agriculture and Food business lines. Adjusted EBITDA margin in Performance Formulations was 22.2 percent.

Revenue in the Technology Solutions segment increased 11 percent to over $1.6 billion, primarily driven by higher pricing in both Polymer Specialties and Renewable Fibers business lines. Segment adjusted EBITDA increased by 3 percent to $335 million, with selling prices fully offsetting higher costs for raw materials and energy. The Technology Solutions segment adjusted EBITDA margin was 20.6 percent.

In 2022, Nouryon earned an EcoVadis Platinum rating for its sustainability achievements, having achieved a score that placed it in the top 1 percent of companies then rated by EcoVadis, the world’s largest provider of business sustainability ratings. Another sustainability highlight in the year was Nouryon achieving carbon neutrality at five manufacturing sites.

Nouryon continued to invest in growth opportunities throughout 2022 including acquiring an alkoxylates plant in Singapore to better serve growing demand in Southeast Asia and announcing the acquisition of ADOB (completed in January 2023) which broadens Nouryon’s crop nutrition portfolio.

^{This release contains financial measures presented on a non-IFRS basis, including adjusted EBITDA, free cash flow, and adjusted EBITDA margins. Management believes that, when considered together with reported amounts, these measures are useful to third parties and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These metrics should be considered in addition to, and not as replacements for, the most comparable IFRS measure. Refer to the reconciliations below of non-IFRS financial measures to the most directly comparable IFRS measures.}

1. ^{Adjusted EBITDA consists of (loss)/profit for the period before financing income and expenses, results from joint ventures, income taxes, depreciation and amortization, non-operating income or expenses items, the impact of certain non-cash, or other items that are included in profit for the period that we do not consider indicative of our ongoing operating performance. A reconciliation of adjusted EBITDA to (loss)/profit for the period is presented below.}
2. ^{Free cash flow is calculated using Adjusted EBITDA less capital expenditures, in Property, Plant and Equipment and Intangible Assets for continuing operations, for the applicable period and is a measure we utilize to assess our operating performance and to assess the amount by which our operating cash flows exceed our working capital needs and capital expenditures. A reconciliation of free cash flow to (loss)/profit for the period is presented below.}
3. ^{Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the applicable period.}

^{Adjusted EBITDA reconciliation ($ in millions)}

^{* Loss for the period of $455 million in 2021 was primarily driven by non-cash financing expenses resulting from foreign exchange movements impacting our long-term debt of $534 million and the related impact from fair value movements of derivative financial instruments related to that debt of $300 million.}

1. ^{Transaction related costs: Eliminates (i) purchase accounting impacts and transaction fees incurred as part of the acquisition of Nouryon by Carlyle/GIC, (ii) certain third-party fees incurred in connection with the implementation of strategic initiatives, and (iii) the costs associated with the energy hedge redesignation and (iv) gain or loss on divestment of (or part of) business, a site or property, plant and equipment.}
2. ^{Impairment: Eliminates impairments of property, plant and equipment, right-of-use assets, intangible assets and goodwill.}
3. ^{Stock based compensation: Eliminates costs associated with the management equity plan for the Company.}
4. ^{Transition, transformation and integration expenses: Eliminates costs related to the Nobian Spin-Out for the year ended December 31, 2021 and costs related to the initial public offering for the years ended December 31, 2021 and 2022. These costs also include transition consulting, technology infrastructure and other expenses related to achieving our standalone company infrastructure. Furthermore, these costs include expenses related to the restructuring and transformation of our business following the separation from AkzoNobel, mainly related to the strategic alignment of our business and functional organizations, including enhancements in our technology.}
5. ^{Restructuring: Eliminates charges resulting from restructuring activities principally from the Company’s cost reduction efforts.}
6. ^{Other adjustments: Eliminates other non-cash and non-recurring costs to the business including costs for environmental clean-up, gain on sales of land use rights, and management fees to the principal shareholders. Includes the release of a provision for U.S. retiree welfare benefits and net gain arising from hyperinflation in Argentina.}