Avantor Results Presentation Deck

Use of Non-GAAP Financial Measures To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles ("GAAP") with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in reports filed with the SEC in their entirety and not rely solely on any one, single financial measurement or communication. The non-GAAP financial measures used in our earning presentation and in this supplemental disclosure package are sales growth (decline) on an organic basis, sales growth (decline) on a core organic basis, adjusted gross profit, adjusted SG&A expense, Adjusted EBITDA, adjusted net income, adjusted EPS, adjusted net leverage and free cash flow. • . ● • Sales growth (decline) on an organic basis eliminates from our reported net sales growth (decline) the impacts of earnings from any acquired or disposed businesses that have been owned for less than 1 year and changes in foreign currency exchange rates. Sales growth (decline) on a core organic basis eliminates from our organic growth (decline) the impacts of any COVID-19 related net sales. We believe that these measurements are useful a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. Adjusted Gross Profit eliminates from reported gross profit the impacts of certain non-cash purchase accounting adjustments to record inventory from recent acquisitions at fair value and one-time Masterflex integration expenses. We believe this measurement is useful as a way to analyze the underlying profitability of our business consistently across the periods presented. Adjusted SG&A expense eliminates from selling, general & administrative expense the impact of amortization, acquisition and integration related expenses, purchase accounting adjustments, other stock-based compensation expense, restructuring & severance charges, and impairment charges. We believe this measurement is a useful way to analyze our expenses consistently across periods. Adjusted EBITDA is to measure and evaluate our operating performance exclusive of interest expense, income tax expense, depreciation, amortization and certain other adjustments. We believe that this measurement is useful as a way to analyze the underlying trends in our business consistently across the periods presented. Adjusted net income is our net income or loss first adjusted for the following items: (i) amortization of acquired intangible assets, (ii) net foreign currency remeasurement gains or losses relating to financing activities, (iii) losses on extinguishment of debt, (iv) charges associated with the impairment of certain assets, (v) other costs or credits that are either isolated or cannot be expected to recur with any regularity or predictability. From this amount, we then add or subtract an assumed incremental income tax impact on the above noted pre-tax adjustments, using estimated tax rates, to arrive at Adjusted Net Income. We believe that this measurement is useful as a way to analyze the business consistently across the periods presented. 4. 5. 6. 7. 8. 9. Adjusted EPS is our adjusted net income divided by our diluted GAAP weighted average share count adjusted for anti-dilutive instruments. Prior to the first quarter of 2022, Adjusted EPS was our adjusted net income divided by the normalized shares outstanding. The normalized shares outstanding reflected for all periods (i) the total number of shares of common stock outstanding following our initial public offering, plus (ii) the dilutive effect of the assumed exercise or conversion of instruments (including our 6.250% Series A mandatory convertible preferred stock assuming the lowest rate of conversion into common stock). We believe that this measurement is an additional way to analyze the underlying trends in our business consistently across the periods presented. Adjusted net leverage is equal to our gross debt, reduced by our cash and cash equivalents, divided by our trailing 12-month Adjusted EBITDA (excluding stock-based compensation expense and including the expected run-rate effect of cost synergies and the incremental results of completed acquisitions as if those acquisitions had occurred on the first day of the trailing 12-month period). We believe that this measurement is a useful way to evaluate and measure the Company's capital allocation strategies and the underlying trends in the business. Free cash flow is equal to our cash flow from operating activities, excluding acquisition-related costs paid in the period, less capital expenditures. We believe that this measurement is useful as it provides a view on the Company's ability to generate cash for use in financing or investment activities. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this supplemental disclosures package. Note the following footnotes are applicable on page 4 through page 12. Also note that subtotals throughout the package may not tie due to rounding. 1. Represents the amortization of the purchase accounting adjustment to record inventory acquired from Masterflex and Ritter at fair value for disclosures through 3Q22. For 4Q22, disclosure represents adjustments for one-time Masterflex integration expenses. 2. Represents legal, accounting, investment banking and consulting fees incurred related to the acquisition of acquired companies. 3. Represents non-recurring direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition. Represents the non-cash reduction of contingent consideration related to the Ritter acquisition. Reflects the incremental expenses incurred in the period related to initiatives to increase profitability and productivity. Typical costs included in this caption are employee severance, site-related exit costs, and contract termination costs. Represents charges and legal costs in connection with certain litigation and other contingencies that are unrelated to our core operations and not reflective of on-going business and operating results. Related to impairment of Ritter asset group Related to the disgorgement of disallowed trading profits from Goldman Sachs, which was a related party until December 31, 2020. Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the amortization of the purchase accounting adjustment to record inventory acquired from Masterflex and Ritter at fair value. Navantor™ 2