Univar Solutions Inc.

Good morning, ladies and gentlemen, and welcome to Universal Solutions' first quarter 2021 earnings conference call. My name is Michelle, and I will be your host operator on this call. Currently, all participants are in the listen-only mode. After the presentation, we will conduct a question and answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press star followed by zero. I will now turn the meeting over to your host for today's call, Heather Koss, Vice President of Investor Relations and Communications at Univar Solutions. Heather, please go ahead.

Thank you and good morning. Welcome to Univar Solutions' first quarter earnings column webcast. Joining our call today are David Jukes, President and Chief Executive Officer, and Nick Alexos, Executive Vice President and Chief Financial Officer. Last Friday, we released our financial results for the first quarter ended March 31, 2021, and posted to our corporate website at univarsolutions.com a supplemental slide presentation to go with today's call. The slide presentation should be viewed along with the earnings release, which has also been posted on our website. During this call, as summarized on slide two, we will refer to certain non-GAAP financial measures for which you can find the reconciliations to the most directly comparable GAAP financial measure and our earnings release and the supplemental slide presentation. As referenced on slide two, we will make statements about our estimates, projections, outlook, forecast, and or expectations for the future. All such statements are forward-looking, and while they reflect our current estimates, they involve risks and uncertainties that are not guarantees of future performance. Please see our SEC filings for a more detailed summary of the risks and uncertainties inherent in our business and our expectations for the future. On slide three, you will see the agenda for the call. David will start with the first quarter highlights and end market trends. Nick will walk through our financial update, and then David will close with progress on our S22, next year integration, and business strategy. Following that, we will take your questions. With that, I'll now turn the call over to David for his opening remarks.

Thank you, Heather, and good morning, good afternoon, and good evening to everyone, and thanks for joining our call. We're off to a really good start to 2021, and I'm proud of how the team executed this quarter, overcoming the dislocation in the global supply-demand balance, exacerbated by the severe weather conditions in the U.S. We're building momentum, and the focus on strong operational excellence is paying off as we advance our strategic priorities and complete our next year integration activities. Our Q1 adjusted EBITDA results reflect the successful execution of our strategy and ability to grow market share through an improved operating agility. The strength of our supplier and customer relationships, extensive distribution network, and the extraordinary efforts of our dedicated team members all contributed to our performance as we continued growing together. Key highlights from the quarter are we delivered exceptional Q1 adjusted EBITDA of just over $182 million, with a strong liquidity of $833 million today. As one would expect given our divestiture program and the exit of our Canadian wholesale agriculture business, our headline sales were down versus prior year, but we continued to deliver growth in our core business and executed well on cost management. Our next year of integration work is complete in the USA, with only Canada and Mexico outstanding, and are on track for the $120 million of net savings we originally committed to, We advanced our S22 program, streamlining our business with a disreputable divestiture. We improved our sales performance with another sequential improvement in our win-loss ratio and ending the quarter with our highest customer counts in a year. Our digital investments are bearing fruit, with approximately 40% of our U.S. customers now registered on our e-commerce channels and able to utilize 24-7 self-service capabilities. Additionally, already over 90% of U.S. customers are utilizing our recently launched digital tracking capabilities. And we strengthened our position in our global specialty end market verticals with new supplier authorizations doubling in the past year and expected to deliver around $10 million in annualized delivered gross profits. We do see increasing business activity globally, despite a resurgence in COVID-19 in parts of the world, particularly Brazil and continental Europe. Understandably, given that businesses were either divested or exited in 2020, January sales were down 8%, February sales were down 4%, while March sales were up 4%. The deep freeze in Texas during February, along with the Suez Canal blockage of March, caused unprecedented supply disruption globally on certain chemistries and raw materials, as well as in the transportation market. Once again, we were able to provide existing customers with security of supply in the most difficult of circumstances, as well as support the needs of new customers who had been let down elsewhere. The first quarter saw continued double-digit growth sales in our industrial solutions business, with strong performance in case, lubricants, and industrial cleaning. The case business benefited from a combination of tight material supply and strong consumer demand in construction, automotive, and general coatings. Lubricants are seeing increasing demand in industrial manufacturing applications, as well as the automotive maintenance market. Our consumer solutions business saw double-digit sales growth, led by our beauty and personal care business in North America. We're seeing especially strong demand with skin and hair care applications, where our bespoke formulations and strong supplier partnerships allow us to provide a differentiated value to customers. Our general industrial business continues to see sales growth, and was especially strong in chemical manufacturing and industrial manufacturing applications. Our extensive organic chemistry portfolio has supported growth in these segments, while the ability to leverage our scale enabled us to provide our customers with security of supply during Q1. Although we had our fourth quarter of year-over-year declines within energy and refining, we're now seeing some sequential improvements, and this may present an upside for the remainder of the year. Our services business was down double digits in the quarter, largely due to microchip shortages and manufacturing disruptions within the automotive and airline sectors where we manage chemical waste streams and related recycling programs. That business, though, remains fundamentally strong. For 2021, we still expect to grow at a rate better than industrial production, and with the second quarter starting strongly ahead of our previous expectations, We are providing guidance of $180 million to $190 million and raising our full-year adjusted EBITDA guidance range to $680 to $700 million, with net free cash flow conversion above 40%, which Nick will expand upon shortly. Beyond 2021, we believe the imminent completion of the Nexio integration through the final stages in Canada and Mexico and the actions we are taking to streamline our business have further positioned us for sustainable success. We have the right people, products, tools, and strategy that we expect will deliver the innovative solutions that customers and suppliers value and that will position us to deliver shareholder value. Now let me turn the call over to Nick. He will walk you through our first quarter results and outlook. Then I will share some closing thoughts. Thank you, David.