Avantor, Inc.

Hello everyone and thank you for standing by. Avantor's first quarter 2026 earnings results conference call will be beginning in one minute. We thank you for your patience. Good morning. My name is Emily and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's first quarter 2026 earnings results conference call. After the presentation, there will be a question and answer session and you may ask a question by pressing start followed by the number one on your telephone keypad. I will now turn the call over to Chris Felix, Vice President of Investor Relations. Chris, you may begin the conference.

Thank you, operator. Good morning and thank you for joining us. Our speakers today are Emmanuel Ligner, President and Chief Executive Officer, Brent Jones, Executive Vice President and Chief Financial Officer, and Steve Eck, Senior Vice President and Chief Accounting Officer. The press release and our presentation accompanying this call are available on our investor relations website at ir.avantoursciences.com. Following our prepared remarks, we'll open the call for questions. A replay of the call will be made available on our website later today. During this call, we will make forward-looking statements within the meaning of the US 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 may 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 on the press release and in the supplemental disclosures package on our investor relations website. With that, I will now turn the call over to Emmanuel.

Good morning, and thank you for joining us today. Let me begin with a few financial highlights for the quarter. First quarter result exceeded our expectations due to improved execution in bioscience and medtech product segments, and we have reaffirmed our full year guidance. VWR distribution and services generated $1.15 billion of revenue in the first quarter, down 5% organically versus the prior year. This performance was in line with our expectations despite soft market conditions in Europe and adverse winter weather in the US. I'm pleased to report that in the quarter, the VWR e-commerce platform showed green shoots of improved performance in traffic, conversion, and revenue growth following multiple upgrades as part of our digital roadmap, as well as the successful relaunch of VWR.com. Importantly, Q1 results provide evidence that the VWR segment is stabilizing with financial performance in line with our expectations. Turning to BNP, BNP revenue was $431 million in the first quarter, down 2% organically versus the previous year. This was ahead of our expectations due to better than expected execution from processed chemicals and new seals. Brent will discuss the detail in his remarks, but TAFCOM had a heavy influence on a year over year growth metrics. I'm pleased to report that revival efforts are already taking hold in BNP. In Q1, we saw modest improvement in BNP operational performance, and we also saw strong commercial performance given the enhanced focus with which our team are working. BNP had a book to build of more than 1.1 times in the quarter. Other elements of the P&L, including margins, were generally in line with expectations and we generated 17 cents of adjusted EPS in the quarter ahead of our expectation. There are three key messages I want to convey about the first quarter. First, revival is already having a positive impact on Aventor. Across the organization, we see a clear improvement in execution and increased accountability. Our team has a more intense focus on serving customers, and we are taking a data-driven approach to measure their performance. Second, improved execution has translated into improved and more stable operational performance. most notably within the VWR platform and BNP manufacturing. Improved execution is also reflected in the strength of our order book and demand funnel. Third, we believe that we are turning a corner financially. We believe that VWR's growth rate reached a bottom in Q1 and that BNP's growth rate will reach a bottom in Q2, which positioned Aventor for organic revenue growth in the second half of this year. We moved the company forward in the first quarter and I'm encouraged by the momentum and positive energy across the organization. In the interest of continued transparency, I want to share two examples of action that we have taken as part of Revival. Please turn to slide number four. Revival begins and ends with people. And for Revival to be successful, we must have the right talent in place. One of the first things we have done is move with speed to recruit exceptional leaders and enhance our leadership structure. This slide summarizes the changes we have made to the senior leadership team, defined as my direct reports plus their direct reports. We have moved quickly to refresh approximately 25% of this leadership group, filling positions such as Chief Operating Officer, Chief Procurement Officer, Head of VWR Sourcing, and Head of VWR Pricing. Recently, we welcomed James Finn, our Chief Digital Officer, who joined us from Medline. And last week, we announced that Ludovic Brollier will join us from Cytiva to lead BMP and serve as our Chief Transformation Officer. We expect to announce the addition of other high-impact leaders soon. Many of those talent investments are self-funded with increased productivity. Year-to-date, our overall headcount is down approximately 2%. I had a very clear vision on how the leadership team should be constructed and, in short order, we have supplemented internal talent with external talent. We have a diverse set of leaders in place whose skills and experience will allow us to best execute the revival agenda. Please turn to slide five. Enhancing operation is one of our foremost priorities, so I wanted to dig deeper into action underway within this important revival pillar, which is led by our COO, Mary Blen. In the first quarter alone, we completed over eight weeks of Kaizen events across our operational network. I participated in several of those Kaizen events, as did other senior executives. In parallel, we established a CapEx Council that meets monthly to plan, review, sanction, and monitor our capital commitments, with one eye focused on near-term needs and the other eye focused on long-term strategic requirements. Our CapEx Council has sanctioned 12 projects recently, one of which is depicted in this slide. This project focuses on a downstream production process at an important North American manufacturing facility where the current workflow is a people intensive process with scope for improvement. We reimagined the process during Kaizen and as a consequence are moving forward with a project to install modular automation equipment in a previously unused space in the facility. The before and after images on this slide demonstrate how this automation project will radically simplify workflows. Furthermore, this investment will enhance quality, compliance, and throughput. It will reduce our cost per unit, and it will free up capacity for the team to focus on higher value activities. We expect to earn highly attractive returns on the capital we deploy. This is just one example of the approach we are taking globally. In all our projects, including the $20 million of incremental investment we announced previously, we use tools such as Lean and Kaizen to rethink the way in which we work. And we are marrying that with rigorous data-driven analysis to measure the financial consequence of our investments. I will conclude my opening remarks with a few words about the news that Brent will depart Advantor next month. Brent, we are all deeply thankful for your leadership and contribution to Advantor, including the developments of a deep and talented finance team. I wish you and your growing family nothing but the best in the future. Thank you, Ben.