Univar Solutions Inc.

Good morning ladies and gentlemen and welcome to Univars Solutions third quarter 2021 earnings conference call. My name is Emma and I'll be your host operator on this call. Currently all participants are in 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 call 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 Coz, Vice President of Investor Relations and Communications at Univar Solutions. Heather, please go ahead.

Thank you and good morning. Welcome to Univar Solutions' third quarter earnings call and webcast. Joining our call today are David Jukes, President and Chief Executive Officer, and Nick Alexos, Executive Vice President and Chief Financial Officer. Last night, we released our financial results for the third quarter ended September 30th, 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 2, we will refer to certain non-GAAP financial measures for which you can find the reconciliations to the most directly comparable GAAP financial measure in our earnings release and the supplemental slide presentation. As referenced on slide 2, we will make statements about our estimates, projections, outlook, forecasts, and or expectations for the future. All such statements are forward-looking, and while they reflect our current estimates, they involve risks and uncertainties and 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 third quarter highlights and end market trends. Nick will walk through our financial update, and then David will close with progress on our 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. Good morning, good afternoon, and good evening to everyone, and thanks for joining our call. With the hard work of integration and systems migration now well behind us, I'm delighted to report another exceptional quarter delivered by a business and a team that's clearly hitting its operational stride. Driven by strong commercial execution and supported by growing customer demand, We delivered strong year-over-year growth despite constrained supply and supply chain challenges. With a focus on growth by putting the customer at the center of all we do, we are fully realizing the value of the next-year acquisition and S22 program. And whilst remaining laser-focused on continued organic growth, we are now exploring inorganic growth opportunities to further leverage our cost structure and digital advantage. Key highlights from the quarter are we delivered exceptional Q3 adjusted EBITDA of $211 million with liquidity nearing $1 billion at quarter end. Our headline sales were up versus prior year as we continued to deliver organic growth. Market share grew in the quarter as evidenced by our positive win-loss ratio and higher retention levels for new customers. With Mexico going live yesterday, our entire SAP migration project has now been successfully completed. We remain on track to deliver on our commitment of $120 million of net synergies from the Nexio integration by quarter one 2022. Our digital investments are delivering real benefits, with 41% of our U.S. customers now registered on our e-commerce channels and able to utilize 24-7 self-service capabilities. Additionally, approximately 23% of U.S. customers are utilizing our digital tracking capabilities, and the amount of orders placed through our digital storefront increased by more than 38% quarter of a quarter. And we strengthened our position in our global specialty end market verticals with several new supplier authorizations in the quarter. With our strong performance and deleveraging goal achieved, we're pleased to announce that the board has authorized a $500 million stock buyback program, which Nick will talk about in detail later. In the third quarter, we continued our trend of outpacing prior year in both sales and margin, due in large part to our committed market position in key products, as well as our extensive network of facilities and the advantage of our own trucking fleet. We believe this quarter was a clear validation of our core value proposition, providing security supply safely to our customers and sound product stewardship to our suppliers. Industrial solutions saw accelerated double-digit growth with strong performance in lubes and metalworking and household and industrial cleaning due to demand and our strategic supply position. Despite challenges in automotive coatings as a result of the microchip shortage, we found new opportunities to grow our case business and deliver new solutions for our customers and suppliers. Personal care and food ingredients continued their trend of double-digit growth. Personal care demand has returned in color cosmetics and skin and beauty care, while in food, growth has come from increased demand in prepared foods and restaurants, as well as the steady shift of consumer preferences towards meatless options. Unforeseen shortages in certain key ingredients have really exemplified our value to customers in both industries, as we've been able to support them with our bespoke formulation capabilities and strong supplier partnerships. Within the general industrial portfolio, we've seen strong demand across the various markets with ongoing strength in chemical manufacturing and the electronics industry. We see increasing demand in mining chemistries from mis-suppressants to extraction chemistries as a result of global efforts to diversify away from fossil fuels. Our extensive organic chemistry portfolio has supported growth in these segments. while the ability to leverage our scale enables us to provide customers with continuity of supply. Although now a much smaller part of our business, we did see growth in energy and oil field chemistries as oil rig counts steadily increased and Brent and West Texas indices reached levels not seen since 2014. In support of their ESG goals, customers are turning to us for new and innovative ways to partner with to ensure sustainable solutions in this sector. Our services business was stable in Q3, despite the ongoing impact of automotive disruptions hampering our performance in this sector. And although waste services has been challenged due to capacity constraints in the industry, we are leveraging our network capabilities to continue to provide full lifecycle product management to the market. For 2021, given our confidence in our execution and our strong performance year-to-date, our adjusted EBITDA guidance for the fourth quarter is $180 to $190 million, and we're once again raising our full-year adjusted EBITDA guidance range to $770 to $780 million. We believe with integration and systems migration in the rearview mirror, we can now fully leverage our asset base, including private fleet and digital capabilities, our improved commercial execution, approach to sustainability, and our streamlined 2022 actions to further positions that continue success into 2022 and beyond. We believe we have the right people, products, tools, and strategy, which we expect will grow our gross profit at rates greater than general consensus of the economy. And as such, we believe we're in a strong position to deliver sustainable, long-term shareholder value. Now let me turn the call over to Nick. He will walk you through our third quarter results and our outlook before I make some closing comments and we get to your questions.