Diversey Holdings, Ltd.

Greetings, and welcome to Diversity Holdings' third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Grant Graver, Investor Relations. Thank you, sir. You may begin your presentation.

Thank you. Hello, everyone, and welcome to Diversi's third quarter conference call. With me today are Phil Wieland, our CEO, and Todd Herndon, our CFO. Our earnings release and the slides we'll reference on this call are available on Diversi's website at ir.diversi.com. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and the associated supplemental materials may include estimates of future performance. These are forward-looking statements, and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our filings with the SEC. On this call, we will reference certain non-GAAP measures. Please see the accompanying slides and our filings with the SEC for definitions and reconciliations to the most closely comparable GAAP measures. And now I'm happy to pass it over to our CEO, Bill Wieland.

Thank you, Grant, and good morning to everybody. I'm happy to report another quarter of strong progress against our strategic plan. Let me update you on the five key headlines for the quarter. Firstly, the top line. We're showing good momentum in both our institutional and F&B segments. In F&B, our very high win rates during 2020 and 2021 plus the introduction of water treatment are paying dividends. In institutional, the recovery of our base business continues to be encouraging with strong Q3 growth over prior year. This is fueled by share gain from new business wins, investment in commercial excellence, and our global accounts infrastructure, strong innovation, pricing, and, of course, reopening in some markets. Page six of the presentation highlights our progress returning to pre-pandemic levels as we see a strong recovery in North America, an improving position in Europe, and a slower recovery in the rest of the world. Whilst the remaining COVID impacts around the world frustrate our customers, we remain confident in a full recovery, and this will be one of our levers for growth as we head into 2022. We continue to see infection prevention well ahead of 2019, with many countries more than double 2019 on a year-to-date basis, and others with a slightly lower increase versus 2019. This segment of the market has seen normalization from the strong growth we experienced in 2020, but it's still significantly above pre-pandemic levels. Although difficult to judge exact trends given the complexity of the overall environment, we are encouraged by increased hygiene standards and market receptivity to our differentiated infection prevention portfolio as we deepen penetration in North America and expand into new geographies. In summary, we believe we will drive growth in our business in Q4 and acceleration into 2022, and we are increasingly well positioned for long-term growth. The second key element of the quarter is around pricing. Pricing remains critical for us as a result of the cost inflation that we've seen build through the year. We continue to step up pricing in the third quarter and have good pricing momentum for the fourth quarter and into 2022. We've realized roughly 3% top line growth from pricing actions year to date and expect to reach mid single digit percent in the fourth quarter. We expect this increased level of pricing to continue into 2022. The third element, margin. Diversity continues to execute well in a challenging environment, and we are pleased to have increased EBITDA margins from 14.7% in Q1 to 15.6% in Q2 to 16.0% in Q3, as we signaled we would when we last reported. Our margin improvement has been solid and consistent for several quarters now and provides confidence around our longer-term target of 20%. Number four, customer value proposition. We continue to be encouraged by our winning customer value proposition with a stronger than ever pipeline of opportunities, very high customer retention, and record net promoter scores. Based on our progress to date, we remain very confident in our ability to take share and drive long-term operating leverage in the large and fragmented markets we serve. And finally, number five, M&A. we continue to execute against our strategy with M&A. In Q3, we closed the Tasman acquisition in Australia that we announced last quarter, and we've recently closed a deal that we're excited about in Canada. The acquisition pipeline has never been stronger. Now I'd like to highlight progress on ESG. We recently filed our annual sustainability report, which we've done annually for more than 15 years. However, this year, we're resetting our strategy and goals. Our enhanced sustainability strategy is called Protect, Care, Sustain, and it follows the ESG framework commonly used today. It's set out on page eight. Protecting the environment, caring for society, and sustaining good governance will be the focus of our new approach. We are committed to ambitious goals in this area and will measure and report on our progress annually. Throughout our history, our commitment to sustainability hasn't changed. It's deeply embedded in the culture of the company. It defines who we are and what we stand for. I'd also like to state how proud I am of our global teams for the way they're responding to the current global challenges. Our supply chain teams are managing freight issues. Our procurement teams are managing a difficult and fast-changing raw material landscape. and our R&D teams are working tirelessly to reformulate products. All of this is aimed at limiting the impact on our customers, which is being very well handled by our customer-facing teams. This is a time of truly exceptional circumstances. Diversity's deep-rooted behavior of being customer-driven is putting us in a great position to deliver a fantastic 2022. Finally, you'll remember that our medium-term growth algorithm is to grow organic top line faster than the market rate of 3%, to add 2% to the top line through M&A, to expand margins to 20%, and to generate significant cash to de-lever and fuel investments in growth. We're confident that we will enter next year with great momentum due to our market share gains, effective management of inflation through price and cost actions, ongoing market reopenings, higher post-pandemic cleaning and infection prevention standards, and a very robust pipeline of M&A opportunities. And with that, let me pass over to our CFO, Todd Herndon, to discuss Q3 financial results in more detail.