Arconic Corporation

Good day and thank you for standing by. Welcome to the Arconic Corporation Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Shane Rourke, Director of Investor Relations. Please go ahead.

Thank you, Lori. Good morning, and welcome to the Arconic Corporation first quarter 2022 earnings conference call. I'm joined today by Tim Myers, Chief Executive Officer, and Eric Asmussen, Executive Vice President and Chief Financial Officer. After comments by Tim and Eric, we will have a question and answer session. For those of you who would like to follow along with the presentation, the slides are posted under the Investors tab on our website. I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that may cause the company's actual results to differ materially from the projections presented in today's presentation and earnings press release in our most recent SEC filings. In addition, we've included some non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's earnings press release and in the appendix in today's presentation. With that, I'd like to turn the call over to Tim.

Thank you, Shane, and good morning, everyone. I'll start on slide four with some key takeaways. In the first quarter, we grew adjusted EBITDA by 15 percent over last year and 17 percent sequentially. which is our best quarter as a company since separation. We are well on pace to deliver a second consecutive year of double-digit growth, and we are raising our full-year adjusted EBITDA outlook. I am incredibly proud of our team delivering these strong results, despite several headwinds, once again demonstrating our resilience and agility in challenging times. Most notably, steep inflation across a range of our inputs lingering semiconductor issues, temporarily shutting down some of our automotive customers, and managing the complex effects of the conflict in Ukraine vis-a-vis our operations in Russia. Against those headwinds, we are successfully countering inflation through a combination of price increases and cost savings initiatives. And we continue adapting to weakness in automotive build rates by pivoting capacity to other markets wherever possible. Moving to slide five, I'll provide some more details on how we performed across our key markets. So what stands out? Organic revenue in the quarter growth was led by packaging, aerospace, and building and construction, but all for different reasons. Building and construction was a very strong segment for us in the quarter and a very pleasant surprise as we start up the year, driven by a series of pricing actions, and growing construction activity, particularly in North America. Packaging was driven by a ramp-up in Tennessee, which continues to be right on track. And how about our aerospace segment? It's clear that destocking in the supply chain has occurred, and order activity is continuing to accelerate. Now let's go around the horn on the bottom right corner of the slide. In total, organic revenue was up 9% over last year. Sales in the quarter grew 2% sequentially, following 13% sequential growth in the fourth quarter of last year. Ground transportations declined 10% organically from first quarter 2021 due to the ongoing impact of the semiconductor shortage. In the first quarter, some of our key automotive customers continued to have temporary shutdowns related to semiconductor availability. Despite the ongoing challenges, we remain excited for the outlook for automotive production in the near to medium term due to depleted, dealership inventory levels, and pent-up consumer demand. First quarter sales in the industrial market increased 10% organically year over year. As we've discussed, organic revenue growth in the industrial market is driven predominantly by the strong pricing environment, particularly here in the United States. In the building and construction market, sales increased 22% organically year over year. This very strong growth is a result of pricing actions to offset inflation, as well as a return to growth in North American non-residential construction spending, and this was well above our expectations. Sales in the packaging market grew 37% organically year over year due to the ongoing ramp-up at our Tennessee facility. However, sales were flat sequentially as increased production in Tennessee was offset by the impacts of the conflict in Ukraine on our operations in Russia. Finally, as I mentioned above, first quarter aerospace sales were up 32% year-on-year on an organic basis. If you look back at the last several quarters, year-on-year organic growth is accelerating. Our aerospace shipments declined by double digits in the first half of last year. They were down 4% organically in the third quarter of 2021, before returning to organic growth of 19% in the fourth quarter, now up 32% year on year in Q1, and our outlook for Q2 year on year is even better. As a result, we believe we have reached the end of destocking, and we continue to expect aerospace revenues to reach pre-pandemic levels sometime in 2024. We continue to believe that our well-balanced portfolio is a competitive advantage. While semiconductor issues reduced sales in our largest key market, we were able to grow organic sales 9% because of very strong volume and pricing across the rest of them. I'll now turn it over to Eric to discuss the first quarter results in more detail.