Earnings Call: Q1 2021

Apr 30, 2021

Good day and thank you for standing by. Welcome to the Q1 2021 Avient Corporation Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joe DeSalvo, Vice President, Treasurer and Investor Relations. Please go ahead. Thank you, Jewel, Good morning, and welcome to our Q1 2021 earnings call. Before beginning, we would like to remind you that statements made during this webcast Maybe considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements will give current expectations or forecast any of which could cause actual results to differ materially from those expressed in or implied by the forward looking statement. Please refer to the investor presentation for this webcast posted on Avient's website for a number of factors that could cause actual results to differ. During the discussion today, the company will use both GAAP and non GAAP financial measures. Please refer to the presentation posted on the Avient website where the company describes non GAAP measures and provides a reconciliation for historical non GAAP financial to their most directly comparable GAAP financial measures. In addition, unless otherwise stated, comparisons to prior year will be pro form a for the Clarion and as if the business had been together during all periods referenced. Joining me today is our Chairman, President and Chief Executive Officer, Bob Patterson and Senior Vice President and Chief Financial Officer, Jamie Beggs. Now I will turn the call over to Bob for some opening comments. Well, thank you, Joe, and good morning, everyone. We have record results to share today as well as increased optimism for the rest of the year as demand conditions are stronger than previously expected. While the world still has a long way to go with respect to combating COVID-nineteen, we are optimistic As an increasing percentage of the world's population receives the vaccination, this too will help drive demand. We start today and begin by reviewing our results for Q1, where we achieved the highest level of organic sales growth in the last 10 years. Certainly, we're benefiting from a pandemic recovery, but our results are also a result of many things and a lot of hard work. Our performance is underpinned by the investments we have made to transform our portfolio to one that is more specialized, focused on sustainable solutions and concentrated on high growth end markets. And our team delivered these results despite Supply chain disruptions that have impacted most everyone in the industry. We thank our suppliers and our own supply chain leaders for exemplary work to make this possible. I'm also pleased we were able to expand operating margins by 200 basis points During a period of inflation, by being on top of pricing, capturing synergies, ahead of schedule and an improving mix of product sales. And this is all translated to adjusted operating income growth of 43% and adjusted EPS growth of 68%. All three of our business segments contributed to our success, each delivering record revenue and operating income for the quarter. Our Color business grew operating income 39% due to robust demand for consumer applications as well as sustainable solutions. We are also benefiting from early synergy capture related to the Clariont Master Batch acquisition. Specialty Engineered Materials expanded operating income 55%, driven by continued strength in sales of our composite technologies as well as new business gains in healthcare and consumer applications. And last but certainly not least, our distribution segment delivered record operating income of $24,000,000 an increase of 26% over the prior year. This was led by strong demand and new business closes in Healthcare and Consumer. Truly outstanding performance by all of our segments to begin the year. It's an understatement to say that we have been investing in sustainable solutions and new technologies such as composites that serve high growth end markets. Over the years, our portfolio has undergone a tremendous and deliberate transformation with an increased focus on specialty applications. Not only has this been an important contributor to our recent growth, But the benefits of improved mix are clearly driving higher margins despite raw material inflation. For investors who followed us in our early years, you know margin expansion was a hallmark of our success. Now as Avient, it is and will be again. When we announced the acquisition of Clariont Master Batch, there were some questions regarding our ability to improve the margins to the level of the legacy PolyOne color business. I'm pleased to report that in the 1st 9 months of ownership, we have made significant progress in this regard, while also seeing an uptick in legacy PolyOne margins. For the legacy Clariant business, we have expanded EBITDA margins from 11.9 percent to 17.4%. I have to say there is so much energy and excitement that is being generated from the combined organizations even in this primarily virtual environment. I've seen a number of integration efforts over the years and couldn't be more proud of how we have come together culturally and operationally for each other and our customers. As our teams continue to work together, we have been able to accelerate our synergy capture and realize $11,000,000 in the Q1. And in addition, we expect the full year realization to be $45,000,000 up from our previous estimate of 35 a few months ago. During our February webcast, we provided a bridge on the key drivers behind our 2021 growth projections, which included sustainable solutions, healthcare, composites and growth outside the U. S. And emerging regions. We've updated this bridge for Q1 performance, and you can see how these drivers contributed to our Q1 results. And these are the same areas that you will continue to hear us refer to when discussing our ability to grow in excess of the market over the long term. From an end market perspective, our largest segments, which are tied to long term growth platforms, performed exceptionally well during the quarter. In particular, healthcare and consumer applications led the way With 22% 24% growth, respectively. You may look at packaging and question its relative performance, but don't. This simply reflects how well packaging did in the early days of the pandemic last year and specifically in Asia, which was impacted most in Q1 in 2020. The health of our focused end markets are a big reason. We are delivering record levels of revenue and operating income. Combined with the optimism from the ongoing vaccine rollout, it gives us growing confidence in the economy and our ability to deliver. So as you read in our news release this morning, we have increased our outlook for the year, which Jamie will now cover as part of her remarks. Jamie? Thank you, Bob. We are pleased to provide an update on our Q2 and full year projections for 2021 as things have improved since our last outlook we provided back in February. Just as we finished the Q1 with strong results, we are seeing robust demand for our formulations continue into the 2nd quarter. So for Q2, we expect total company sales of $1,100,000,000 which is an increase of approximately 26% over the prior year. As we saw in Q1, we expect the healthcare and consumer end markets to drive a large portion of this growth. This is truly impressive when you consider that total company healthcare Sales increased by 12% in the Q2 of last year and now we will see double digit growth in the Q2 of this year. Recall that last year, our healthcare sales benefited from COVID response applications such as face masks. Well, this year, we expect healthcare sales to grow Growth to be driven by new business gains and applications such as glucose monitoring devices, antigen test kits and drug delivery applications. We also see recovering demand for applications used in elective procedures such as lab wear and medical equipment. Consumer sales will benefit from continued underlying demand for specialty technologies used in outdoor high performance applications. This would include things like off road vehicles and sporting equipment. All in, we expect adjusted EPS for the quarter to be approximately $0.80 per share, which is a 90% growth over the prior year. For the full year, we now expect total company sales to increase 14% to $4,300,000,000 Current demand patterns would suggest a continued recovery into the 3rd quarter as our customers are still trying to keep up with their orders and replenish low levels of inventory. We expect seasonally lower sales in the 4th quarter consistent with our views we mentioned in our last earnings call. The 14% sales growth combined with $45,000,000 of synergy capture that Bob previously mentioned is expected to result in an adjusted EPS of $2.80 per share, which is 45% growth over the prior year. The increased sales and earnings will also benefit our free cash flow generation, which we now anticipate to be $275,000,000 up from the $250,000,000 we previously estimated. This includes the investments in working capital to support our sales growth as well as restructuring activities to capture synergies associated with the Clariant Master Batch integration. From a leverage perspective, we expect to finish the year at 1.9 times net debt to adjusted EBITDA. This is an organic projection assuming cash remains on the balance sheet. Our preference though will be to put that cash to work pursuing strategic M and A with a focus on specialty engineered material opportunities and particularly on composite technologies. Composites are just one technology in our growing portfolio of sustainable solutions. We have a sustainability strategy that's broad and we're very proud to be leading. We We'll be continuing to share sustainability updates and information with our investors throughout the year. And I'll now turn the call back over to Bob for more on that and some concluding comments. Thank you, Jamie. Sustainable solutions are at the forefront of Avian. It's our future and it's how we will differentiate ourselves. But sustainability at Avian is about more than just our material solutions. We are committed to investing in each of our 4 Ps, People, product, planet and performance. These investments are already paying off as you have seen. Our commitment to people and building our culture has resulted in employee engagement scores that now have us among the top workplaces in the world. For the 2nd consecutive year, We achieved a perfect score on the corporate equality index of the Human Rights Campaign. And we were recently recognized in Newsweek as one of America's most responsible companies. These improvements not only help us as an employer of choice, But they also are important as the world moves toward becoming more sustainably conscious, with the responsibility of corporations playing a crucial role in the communities where we operate. Disclosing our activities in environmental, social and governance areas has also been a focus for our teams. Our sustainability report is a comprehensive document that highlights our efforts in these areas. We continue to make improvements in telling our story, which recently was recognized by Sustainalytics, who ranked us top quartile in our industry this month. For us, Sustainability isn't just about taking care of the planet. It's a growth driver. As revenue for our sustainable solutions portfolio has grown from $275,000,000 in 2016 to $560,000,000 last year. As we look to the future, You can expect that we will continue to focus on our customers' needs in this regard. We do this in areas like improving recyclability, In our most recent sustainability report, we included goals that we are working to achieve by 2,030. And these are goals that will benefit the planet and the people of the world, while at the same time adding value to Avient's stakeholders. Before we take some questions, we have included a few other slides related to peer comparisons that I think are helpful to better think about Avient and our value. As companies report their earnings this year and compare to 2020, there will be many stories of significant growth being delivered. But think about this as a differentiator. I'd like you to recall that for the full year last year, our EBITDA did not decline versus 2019, it grew. And our EBITDA projections for 2021 are 27% higher than 2019. And that's because of the end markets we serve and how we serve them. We are an asset light, high touch business and we generate lots of cash. Our expertise is in formulation, Increasingly in sustainable solutions where we expect double digit sales growth for the foreseeable future. As our financial performance and projections have improved, I expect our valuation will do the same. We are certainly not out of the woods with respect to COVID. As the recent increase in cases in India reminds us, We keep this top of mind at all times everywhere around the world. And 1st and foremost, we have to take care of our associates, our customers And each other's health and safety and supply challenges abound. That is well known. But am I optimistic? You bet. More so than I've ever been in my 13 years here. I knew we were embarking on something special when I joined the company in 2,008 At the early stages of then PolyOne's transformation, and I know it now, as Avient and as a specialty company with an inspired and energized team. With that, I'll open it up for questions. Thank you. Our first question comes from Bob Koort with Goldman Sachs. Your line is now open. Thank you very much. Bob, I wanted to ask you maybe tying into that last enthusiastic outlook you've got. Slide deck is helpful. You show that you guys aren't very So why delever below 2 turns? Why not just start buying back your stock before the market recognizes what you see? Yes. I mean, look, we have a number of acquisitions that we are looking at. And I do see some momentum in that regard. Obviously, I think last year things Stalled out a bit and just in terms of our ability to move some discussions forward. So I'm optimistic that We can gain some traction and that really would be our preferred use of cash is to put that to work as Jamie mentioned Today really in the Engineered Materials segment and hopefully something in composites. And then on Clarion, I think at the time of the deal, the margins there were maybe 500 bps lower than what you've got The legacy PolyOne color business or Avient's Polycolor business, that's closed that gap now to $360,000,000 something like that. Can you fully close it? What's the timeframe on doing that if you can? Or if you can't quite close it, what's the hindrance? Yes, I mean, I think we can close it. I think that with the continued capture of synergies, Particularly as we get to the next phase of that next year, that will go a long way towards doing that. As you know, there are some mix Differences between the two businesses that structurally have some differences, but I think they're going to be very close when it's all 1st and foremost, we have to capture these synergies. And second, the combined organizations are doing job of managing inflation right now and getting price, improving mix. And I think that's going to go a long way towards doing just that. Thanks very much. Thank you. Thank you. Our next question comes from Mike Sison with Wells Fargo. Your line is now open. Hey, good morning. Really nice start to the year and outlook. Bob, in terms of revenue from sustainable solutions, I guess it was 5, 16, 2020 We're approaching 600 plus in 2021. In terms of growing that business, Do you need to or can you expand capacity to accelerate that? And I know one of your goals in one of the slides said 100% of the products, the packaging will be Recyclable or usable. Can you maybe just walk us through how much capacity you have in that type of area and then what you can do to grow it? Yes, I mean, look, we have for the most part, our capacity and if I just focus on the Color business, It's primarily driven by personnel. We really do have more than adequate capacity to grow. And obviously, by bringing The legacy Clariant and legacy PolyOne organizations together, that's only improved. So I don't look at fixed assets or machines as a hindrance in any way. For us, it really is about investing in innovation and tackling some of these changes. And that's why You'll see in our 2,030 goals that the preponderance of innovation is going towards sustainable solutions right now. I kind of view that as The primary area of focus and investment for us to drive that growth. Right, great. And then in terms of your organic growth outlook for 'twenty one, pretty impressive. It's Sort of a step change. I understand you have easy comps in 2Q. What do you think beyond 'twenty one, the sustainable growth rate organic growth rate for Avian is going forward? Yes. I mean, look, I think for now, it's really good Continue to reference these growth drivers that we've had in our materials over the last 6 to 9 months focused on Sustainable solutions, composites and healthcare, all that lending itself to 6.5% growth rate. Obviously, we're seeing better than that right now, but I think that's still the right way to think about that. And I'm Pretty sure our assumption there and was a GDP number of sort of 2% to 3%, if you will. So better than GDP, those being the primary drivers. Great. Thank you. Thank you. Our next question comes from Frank Mitsch with Fermium Research. Your line is now open. Yes. Good morning and thanks for posting the slides concurrently with the release. Much appreciated. I wanted to follow-up on the distribution business. You posted a record here in the Q1, but yet you did suffer Some logistic issues during the quarter as well. I was curious if you could size that and how much of a tailwind might that be for the Q2 in the distribution business? Yes. I can't put an exact number on that, but I can say that I do think the distribution business could have had a better Q1 had it not been for some of these supply chain challenges. Those continue right now. And so I'm not sure it's necessarily moves immediately, just take what we didn't get done in Q1 and add it Q2 because at this point those supply challenges persist in May through the Q2. So at the moment, I wouldn't Classify that as a tailwind. I think the team would look at it as we still got some work to do to catch up to match Demand, right? I mean, look, it's a good thing that we have these orders out there and there is so much demand. It's a very challenging time right now to meet that. So I guess that's the best way I would characterize that, Frank. Got you. I was almost going to ask Jamie since you didn't have an exact number, maybe she did, but I'll pass for now. And then if I think about your guide for the Q2, it's below the Q1 and historically PolyOne would see a modest increase in the Q2 versus the Q1. Are you being conservative here? Well, number 1 is that, I think that with the increased presence that we now have in Europe as a result of the Clarionet Masterbatch acquisition that does actually tilt seasonality more towards the Quarter than it has in the past. Combine that with the sale of PP and S 18 months ago, which always had its Strongest quarter in Q2. So I think we need to see this play out a bit and how seasonality really factors into our quarters. But like as I said, we've got very strong orders and demand out there with some of the supply chain challenges we have to overcome that to deliver And we'll see how the quarter plays out. Thank you so much. Thank you. Our next question comes from Vincent Andrews with Morgan Stanley. Your line is now open. This is Angel on for Vincent. Just if I could expand on that last question about conservatism. I As we look at 3Q and 4Q, obviously, there's some seasonality in the Q4, but it seems like the back half is, Based on your guidance meaningfully below kind of where we're at in the first half. So could you just provide a bridge as to how we go from kind of that $0.80 in 2Q to kind of 3Q levels that you're kind of implying in the guidance? Yes. Look, I think there certainly is a Seasonality element to that and also probably very consistent to what we said back in February And our first call for the year, which is that I think we're being conservative with respect to the second half of the year. So I mean, when you just look at the sales growth projections implied for the second half visavis the first half, I think that would certainly say that's the case. So I I think we'll have a better read on what the second half looks like as this quarter progresses. And hopefully, we are being conservative and can do better than what We've projected so far. And if I could, I guess, just expand on that a little bit. You had a very helpful slide on raw materials. I guess, How are you thinking about that? Is part of that conservatism based on, I guess, what we're seeing in terms of inflation? And do you feel that you will be able to kind of offset that with pricing or how you view on kind of the overall dynamic? Yes, I mean, I think the team has done a great job of doing that So far to start the year and feel confident about that for the Q2. Whether or not some of these Supply chain disruptions and other things that may be driving some of this inflation persistent in the second half of the year remains, But our team is really planning for it like, hey, look, we've got to go out, capture pricing where we need to, Same thing with respect to freight and freight surcharges, and we've added that to our businesses where we need to as well. So I feel like we're on it. I think we got it covered. I really couldn't say for certain how long that lasts for the balance of the year. It's very helpful. Thank you. Thank you. Our next question comes from P. J. Juvekar with Citi. Your line is now open. Rick Petrie on for P. J. Hi, Mark. I've been watching some of the sustainable solutions Portfolio offerings that you're doing like Rejoin, Color Matrix were down. Could you just talk about how sales growth are And those buckets and peak sales and then kind of give a sense of what the larger drivers are in your Yes. So I mean, you may have seen in Plastics news, I think that came out this week. We're just highlighting some of the recent technologies that were out there. So In those particular areas, those are all new technologies and just getting started. When we look at the areas for Sales growth this year, if I were to broadly categorize them, they are in the areas of barrier, which includes Food and beverage containment and enabling the use of less materials. Secondly, would be around light weighting. For a broad range of applications, perhaps most focused on transportation, it's probably being the 2 key leaders. Right now, there's a lot of attention given to sort of what I described as eco conscious materials or bio based materials. That's still pretty small. I think the growth rate opportunity is there, but that's when I just look at delivering revenue this year, That's still a pretty small component of what we expect. Okay, helpful. And then secondly, your Immersion Sales growth was pretty strong with 20% plus income margins. Could you discuss what regions delivered that growth in the end markets? Yes. So I mean, look, for the most part, that's coming out of Asia and by far and away had the highest Sales growth in the company, think about that last year, it was about 13% of total company sales. This year, it's about 17%. So Asia has grown quite a bit. Latin America was up only about 4%. To some extent, we actually think that's COVID related and having some supply chain disruptions as well. But when I really think about where that growth is coming from, it's certainly By far and away strongest in Asia. Thank you. Thank you. Our next question comes from Colin Rusch with Oppenheimer. Your line is now open. Thanks so much. As you guys are looking at your pipeline of acquisition Can you speak to how much of that is really within your existing segments or how much is going to move into some of the adjacent areas that that are next year businesses. Yes. I mean, everything that we're looking at right now, I'd say, Look, my sort of philosophy on that is you don't want to get too far away from your core competence with respect to Considering acquisitions, so I think everything is very close to what we do. Maybe 1 or 2 Can be described as an adjacency, but not too many not more than probably one turn away from what we do today. But look, there's a number of things we're looking at primarily in Engineering Materials. Great. And then as you think about growth and having kind of a foundation Could you talk about organizational capacity that you need to add and manufacturing How you evaluate adding manufacturing capacity? Yes. I mean, look, from a capacity standpoint, This is kind of consistent with a comment I made earlier around sustainable solutions. We have plenty of capacity with respect to footprint and machines. The real dynamic that's challenging for us right now and I think a lot of companies are experiencing this is just getting Enough people, right? And some of this is COVID related, some of this is demand related as other industries have grown as well. So For us, the primary gating factor really is human resource related and getting enough associates into our facilities to meet that demand. Okay. Thanks so much guys. Yes. Thank you. Our next question comes from Ben Kallo with Baird. Your line is now open. Okay. Good morning, guys. Hi, Ben. Congrats on the results. Thank you. So what I heard you say is that second half, you're being very conservative Because numbers don't make sense to me. You said they don't make sense to you? No, no. Just I mean like the seasonality, You usually have a very strong quarter in Q4. You did last year as well, but we have to have a big tick down in the second half Can I get within your guidance? Yes. I'm not exactly sure if all the words you replayed right there. Sorry, I had a hard time hearing you. But Yes, I mean, I do think we're being conservative in the second half. And I really do hope that as more of the world gets vaccinated and We do get control of COVID that there continues to be really good demand through this. There was a I mean, another way of thinking about this, there was a Good report that I read yesterday on one of our customers in the outdoor industry and just how little inventory there is right now and how long it's going to take to catch up. And I think we're being conservative in that regard as well. So if that's true and these consumer industries continue to do well, We could do better in the second half than what we have projected right now. And then just two questions. So EM, it looked like Your margins are good there. And maybe that has something to what you just alluded to about outdoor equipment. But maybe also could you talk about the composites and what you're seeing there from that side? And then my last question is just on light weighting, because it's a big deal for people asking us about The auto industry and electric vehicles and everything. And how much lightweighting growth that you guys are seeing for Different applications out there might be a year from now or 18 months or 2 years, but is that picked up at all? Thank you very much. Yes. I mean from a composites really has been the key one of the key growth drivers In the Engineered Materials segment, I think when I start to bifurcate composites versus the rest of our solutions, that's probably half The growth that you see in the quarter, as you recall from the past, because of how much investment we have made in composites, The growth there is driving, I think, a disproportionate amount of the margin expansion, which is a good thing. Lightweighting is certainly an element of that. Actually, I think the lightweighting has even more opportunity when the transportation industry can Really pick up, everyone's aware of supply chain challenges impacting it as well. And I think when that recovers, We can do even better from a composites perspective. So look, I think there's a good level of demand primarily in consumer Right now, but longer term, we view this as a double digit grower for us, just again based on replacing heavier, Less structurally, let's say, design friendly materials with these composites. So We like it a lot as you know. I think it's got really good growth projections. Great. Thanks. Thank you. Our next question comes from Laurence Alexander with Jefferies. Your line is now open. Good morning. Two questions. One, can you talk a little bit about how your firm handles labor inflation Rather than commodity inflation, I think you've done a good job passing through the feedstock inflation. And secondly, on the sustainability side, should we be thinking about this as a fairly steady CAGR over the next Few years or are you seeing a difference in the scale of decisions that customers are contemplating given the shift in Yes. I mean, so first, with respect to how we think about pricing, we take all of the Our cost of production and freight into consideration and setting that, and that does include our labor costs. I think what I would highlight though is that, look, we are a great place to work. And I think that part of being a great place to work is Paying a competitive wage to coincide with where people live and the work that they're doing. And we are moving that Forward and up where we need to be competitive in the areas where we are. I mean, there really are labor shortages and challenges in so many places that, That is an increasing cost for the business, but I believe we have that covered from a pricing standpoint. With respect to your second question, I think that consumer there's so much consumer excitement and pull for Sustainable solutions that brand owners are getting all over this and that's a good thing for us with respect to working with us to help develop So I think that's factored into our growth rate assumptions, but it could get even Better as things get adopted more quickly. So I think with our sort of projections right now around 10% growth, that's a good way to think about that, but could be even better as there's greater consumer adoption or OEM brand owner adoption. Okay. Thank you. Certainly. Thank you. Our next question comes from Mike Harrison with Seaport Global. Your line is now open. Hi, good morning. Can you hear me okay? Yes, Mike. Great. Wanted to ask about the Clariant Synergy number and the increase that you made there, does that mean that you're finding additional projects or should we think about it more as An acceleration of the savings that you were expecting. And can you maybe also comment on whether you're seeing some revenue synergies from the Clarion business. Yes, I mean, right now, I'd say it's just an acceleration of our Capture rate, if you will, I mean, starting the year, I would have said it would be maybe around 8 or 9 for the quarter. We're going a little Better than that is we had in our bridge schedule. And look, right now, I'd say, the primary focus of our commercial teams is just taking care of our customers, Right. We just dropped 2 really big organizations together. We want our customers to genuinely believe and feel like it's business as usual Or if not, then better. That's number 1. And then I think we can start to move forward on some of the revenue synergies, Particularly to Lawrence's last question around sustainable solutions, I think that's the greatest opportunity for synergies between the two organizations is focusing On those sustainable solutions, particularly in the area of packaging. All right. And then speaking of packaging, think you kind of addressed that, hey, it's a 5% grower this quarter when other areas are double digits. And obviously, that's because you're up against more challenging comps. With the reopening that's going and Going on in the vaccine rollout, are we going to see that business come up against challenging comps And maybe be one of the weaker growers and can you maybe also discuss your share Position in that market and whether you've gained any share over the past few quarters? Thanks. Yes. I mean the first way I think about our packaging End market exposure is one that is very stable, right? I mean, obviously, necessary, important, a lot of demand for it And played well during the pandemic last year. That's an important way of thinking about it. The way that I played out last year, candidly, was a little lumpy in terms of looking at some spikes in demand at the end of March and in April of last year, Maybe a little bit again in the fall in different regions. But so some of that will play out in the comparisons as it already did in the Q1. But I don't think it's going to really be anything we would view as a negative. And I again, certainly look at our presence in that end market as a positive. We've got confidence in our projections here for the Q2, which are very strong. And so I don't view that as a headwind of any kind. And the share gain? Look, I think at the moment, I think, again, as I maybe was just commenting earlier around Bringing Legacy Clariant and Legacy PolyOne together, and this is kind of how I feel about the pandemic in general. I really think customers have just been so focused on surety of supply, ensuring that they have quality On time delivery, which is so difficult right now, I can't really point to something and say there's been some immediate Share gain outside of what might just be related to these supply disruptions where we've been able to step in and serve them better. But I think it's been a small number so far this year. All right. Thanks very much. Thank you. Our next question comes from Jaydeep Alembia with On Field Research. Your line is now open. Thank you. Firstly, can you just explain to us like what are the main sort of Areas that you serve into healthcare and like as we see vaccine rollout, what are the areas that you're sort of benefiting from? Is it Really wild. Are you at all linked to some of these packaging material for critical material for vaccine? So we'll be very curious to know what's going on in your healthcare portfolio. The second question is really just around the 5 gs rollout for your cables business. Is it more 2022, 2023 story for you? Or is this really going to kick in, in the second half of this year? That's my second question. And then just thirdly, when you look at the Clarion portfolio and you're doing a great job on the cost side of things. But when you look at the fundamental growth side of things, what are the most exciting areas for you in terms of growth opportunities as Avient now? Thanks a lot. Yes. Sorry about that. My phone just sounded off for some reason. I had it quiet, but certainly not. So I may have you replay the second question, but I'll take the first one. And that is around healthcare. And I mean, look, there are probably 15 different sort of submarkets, if you will, inside of healthcare when we look The biggest being medical devices, drug delivery devices and packaging around those that can include Files and testing and test kits and related packaging, there's really it's It's interesting because for us healthcare is so similar to the broader business, right, where each application is pretty small. But some of our healthcare customers or some of our biggest customers in an array of different applications like that. What do we think we're seeing? Obviously, last year, we had really strong demand for face masks. We don't think that replays to the Same level this year, but it's being more than offset by, I think, more elective procedures. Certainly, some of the testing that's going on right now Is doing that, but I think that's where that growth is coming from. Can you repeat the second question for me? Again, I'm sorry I didn't Sure. No, that's fine. It was just related to 5 gs and your fiber optic cable business. Have you started seeing growth already this year or is it more a 2022, We are seeing growth in that. And actually, I think that when I look at growth this year to some extent, Look, wire and cable industry in general last year was impacted by shutdowns related to COVID, Not necessarily anything related to demand, but just being able to operate facilities. So I think this year with those facilities being fully operational, We're going to have good growth related to 5 gs and for our Fiber Line business. So we have a really long way to go With respect to participating in app market and the growth related to it. As we sit here today and we see 5 gs pop up on our phone, It's really not all the way there yet because it's really still using 4 gs infrastructure and there's so much investment yet to take place. If you just think about the really 1,000 and perhaps millions of mini towers and antenna that are yet to be installed, That's going to be a growth driver for us for the next 7 to 10 years easily. Historically, when I look at our participation in that market, that's 8% to 10% sales growth this year and in the past, I think that will continue to be the case. Outside of that, like when I think about these areas where I'm most excited about growth, it really comes back to The bridge schedule that we've been using to articulate how we think about 6.5% sales growth, which is really by End market, of course, healthcare, we capture consumer, a lot of that's in the composite space. And from a technology standpoint, because composites and sustainable solutions Are really at the top of the list. Okay. Thanks a lot. Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Bob Patterson for closing remarks. All right. Well, thank you, and thanks to everyone who was able to join us on the call today. If we don't see you at a conference