Avantor, Inc.

Good morning. My name is Emily and I'll be your conference operator today. At this time, I would like to welcome everyone to Avantor's fourth quarter 2023 earnings results conference call. After the presentation, there will be the opportunity for any questions, which you can ask by pressing start, followed by the number one on your telephone keypads. I will now turn the call over to Christina Jones, Vice President of Investor Relations. Mrs. Jones, you may begin the conference.

Good morning. Thank you for joining us. Our speakers today are Michael Stubblefield, President and Chief Executive Officer, and Brent Jones, Executive Vice President and Chief Financial Officer. The press release and a presentation accompanying this call are available on our investor relations website at ir.avonturesciences.com. A replay of this webcast will also be made available on our website after the call. Following our prepared remarks, we will open the line for questions. During this call, we will be making some forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made. We do not assume any obligation to update these forward-looking statements as a result of new information, future events, or other developments. This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the press release and in the supplemental disclosure package on our Investor Relations website. At our investor day in December, we announced a transformation of our operating model. As of January 1st, 2024, we have transitioned from our former regional structure to our two new business segments, laboratory solutions and bioscience production. The fourth quarter of 2023 is our last quarter of reporting based on geographic segments, and we will report business performance under the new structure beginning with Q1 2024 results. In order to assist with comparability and modeling, this morning we released a Form 8K with recast historical data following the new segment structure. We have also published an incremental supplemental disclosure package that is also available on our investor relations website. With that, I will now turn the call over to Michael.

Thank you, CJ, and good morning, everyone. I appreciate you joining us today. I'm starting on slide three. We delivered fourth quarter business results at the high end of our guidance across all key financial metrics, including a core organic revenue decline of 4.8 percent, adjusted EBITDA margin of 17.5 percent, and adjusted EPS of 25 cents. Our free cash flow conversion was over 120 percent in the quarter, and we delivered approximately $725 million of free cash flow in the year. This exceeded our guidance range and enabled us to pay down approximately $850 million of debt. As anticipated, market conditions in the fourth quarter were similar to conditions in recent quarters, as inventory destocking and cautious customer spending continued to impact demand. Despite these industry-wide headwinds, we are encouraged by the relative stability we have seen over the past couple of quarters across our end markets. Our continued execution of our growth strategy led to a number of notable accomplishments in the fourth quarter. We won several new customer accounts in biotech and biopharma, and our sustained commercial intensity in higher education led to new relationships with multiple renowned academic and medical research institutions. Our focus on providing discovery to delivery solutions drove scope expansion with several biopharma customers, including services and bioprocessing contracts. In addition, we renewed multi-year agreements with two significant semiconductor customers. We also launched innovative new products, including our JT Baker viral inactivation solution to address a critical regulatory need in bioprocessing and next generation coatings and custom resins for 3D printing as a part of our new cell high purity silicone platform. Additionally, we continue to realize the impact of investments in our digital capabilities. For the full year, Our multi-channel approach resulted in a double-digit increase in traffic to our e-commerce platform, and our inventory manager digital solution drove a double-digit increase in product pull-through. As a part of our continued commitment to sustainability, we set new science-based climate targets and progressed our renewable energy strategy with several solar projects coming online in multiple locations around the world. Looking ahead to 2024, While we do see early signs of a recovery and are encouraged by healthy customer activity levels and a modest improvement in our bioprocessing order book, we have not yet seen a clear inflection point. Given limited visibility regarding the timing and shape of the expected recovery, our initial guidance is based on a continuation of trends from the last several quarters, giving us upside if a recovery does materialize within the year. Brent will walk you through our 2024 guidance in more detail later in the call. Our focus for 2024 is executing on our business model transformation and growth strategy for laboratory solutions and bioscience production, as well as driving our cost savings initiative that is expected to generate approximately $300 million of annual run rate savings by the end of 2026. We will continue to be agile as we navigate the current environment to ensure we are well positioned to achieve our long-term financial targets. I'll now turn it over to Brent to walk you through our Q4 and full year 2023 results and our 2024 guidance.