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 second quarter 2024 earnings results conference call. If you would like to ask a question today during the presentation, please do so by pressing the star followed by the number one on your telephone keypad. I will now turn the call over to Christina Jones, Vice President of Investor Relations. Ms. 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 Bren 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.avantoursciences.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 forward-looking statements within the meaning of the U.S. 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. 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 another solid quarter with sequential improvement to all key financial metrics. With reported revenue of $1.7 billion, organic revenue declined 2%, modestly above the midpoint of our guidance, driven by stable conditions in the lab and improved demand in our production business, especially bioprocessing. Compared to the first quarter, Adjusted EBITDA margin increased more than 100 basis points to 17.9%, and adjusted EPS grew double digits to 25 cents, both solidly above our guidance for the second quarter. As Brent will outline in his section, our margin improvement was driven by pricing, improved mix, and realization of savings from our multi-year cost transformation initiative. We also generated $235 million of free cash flow in the quarter, inclusive of cash costs related to achieving our transformation savings. Reflecting our strong working capital performance, year-to-date free cash flow conversion has exceeded 100%. We paid down over $200 million of debt in the quarter and remain committed to bringing our adjusted net leverage ratio below three times. We continue to make good progress with the implementation of our new operating model and are seeing early benefits of aligning our teams with our customers' needs in the lab and production environments. In addition to unlocking significant operating efficiencies and streamlining execution of our operating plan, we're also realizing benefits from ongoing commercial intensity. Highlights from the second quarter include the launch of JT Baker cell lysis solution and JT Baker endonuclease, complementary products to sustainably optimize the gene therapy harvest process. We also launched our MasterFlex MasterSense gear pump which has exciting applications in mRNA encapsulation. We secured several new contract wins and renewals, including with Biopharma and CDMO customers, as well as with leading academic and government institutions. As part of our effort to bolster operational excellence and improve service levels, we recently opened our new North America Customer Service Center in Mexico, which is modeled after similar service centers in Europe and in Asia. Sustainability is core to our strategy, and the value we provide to our customers. We published our annual sustainability report in June, highlighting the progress we have made in the past year under our Science for Goodness platform, including broadening our sustainable products offering and working with our suppliers to create a more sustainable supply chain. Finally, our team continues to execute our multi-year cost transformation initiative, including aligning our manufacturing and distribution footprint with current and future areas of growth and improving our organizational efficiency. Accelerated results from this program drove margin performance above our guidance range, and we are on track to meet our in-year cost savings target of $75 million in 2024. The broader market conditions remain consistent with the first quarter, and the tone of our customer dialogue continues to be constructive. It is clear to me that the power of our channel and our commercial intensity are making a difference in the current environment. In laboratory solutions, Consumables and services continued to perform well, validating the strength of our positioning and relevance to our customers. Equipment and instrumentation trends were stable sequentially, and we are encouraged by continued customer engagement and activity levels. From an end market perspective, we're still seeing pockets of inventory destocking and cautious customer spending from our BioPharma customers. At the same time, biotech funding remains up double digits year over year and well above pre-pandemic levels. The improved funding environment is driving positive customer sentiment and strong commercial engagement on new projects, although we do expect that it will take a few quarters for this to translate into increased sales. In our other end markets, core diagnostic testing demand remains strong, and we saw sequential growth from our higher education and applied customers. In bioscience production, the bioprocessing end market remains healthy with a robust pipeline of new therapies, a favorable regulatory landscape, and strong patient demand. The FDA has approved 21 biologics this year, including 14 new molecular entities across MABS, cell and gene therapy, genome editing, proteins, and vaccines. Customers have largely worked down excess inventory of our products, though some isolated pockets of destocking remain. Production activity is improving, but has not yet returned to levels that match underlying end customer demand, largely a result of elevated finished goods inventory at some form of customers. In line with this backdrop, our bioprocessing business continues to gain momentum with another strong quarter of orders. Importantly, the positive order trends are converting to sales as bioprocessing grew high single-digit sequentially. We saw a solid performance in processed ingredients and a return to growth on a year-over-year basis in our fluid handling platform, which includes our master flex and single-use offerings. Within our healthcare and advanced technology end markets, performance was in line with our expectations. with sustained momentum in aerospace and defense and ongoing recovery of semiconductor demand. Given our performance year to date and current market conditions, we remain confident in our guidance and are reaffirming our full year outlook. Brett will provide additional details later in our prepared remarks. In summary, we delivered another quarter of solid performance and are encouraged by our momentum in bioprocessing. Enabled by the Avantour business system, We are ahead of plan in executing our cost transformation initiative and have delivered exceptional free cash flow generation with year-to-date conversion well over 100%. With that, I'll now turn it over to Brent to walk you through our second quarter results in more detail.