Univar Solutions Inc.

Good morning, ladies and gentlemen, and welcome to Univar Solutions' first quarter 2022 earnings conference call. My name is Emily and I'll be your host operator on this call. Currently, all participants are in a 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 start 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 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 first quarter ended March 31st, 2022, 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 a reconciliation to the most directly comparable GAAP financial measures in our earnings release and the supplemental slide presentation. As referenced on slide two, we will make statements about our estimates, projections, outlooks, 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 quarter highlights and end with 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, and good morning, good afternoon, and good evening to everyone, and thanks for joining our call. Coming off a tremendous 2021, I'm delighted to report record net income and adjusted EBITDA for the quarter thanks to our resilient business model and a hardworking, talented team. Driven by solid commercial execution and centered on the customer experience, we delivered strong year-over-year growth despite the challenges of constrained supply, dislocated supply chain, and the pandemic, and expect to deliver a strong second quarter. remains focused on continued organic and margin growth, maximizing cash flow, as well as inorganic growth opportunities to further leverage our cost structure, strong regional distribution infrastructure, operating assets, and digital technologies. Before reviewing our quarterly highlights on behalf of the company, I want to extend our support to the people of Ukraine and the surrounding areas who are either suffering through the ongoing conflict or providing aid to those who are in need. We are horrified by the destruction and moved by the generosity, empathy and support being shown by people and companies all around the world. We too have made our own contribution to the International Committee of the Red Cross to aid refugees in the region. From a business perspective, we fully support the international trade sanctions that have been imposed, and we have already exited our Russian operations, which were less than 1% of our sales. Moving to key highlights from the quarter, We delivered record Q1 net income of $181 million and adjusted EBITDA of $319 million. Market share expanded in the quarter as evidenced by our positive win-loss ratio and high retention levels for new customers. Our sales of higher margin ingredients and specialties increased, driven by strong demand and new supplier authorizations. Our digital investments are yielding real benefits, with 47% of our U.S. customers now registered on our e-commerce channels and able to utilize 24-7 self-service capabilities. We continue to evaluate M&A opportunities that we could grow at a high organic rate by leveraging our infrastructure on global scale, and return $24 million of capital to shareholders via share repurchases. In the first quarter, we continued our trend of outpacing the prior year, in large part due to our committed market position in key products, as well as utilizing our extensive network of facilities and the advantages of our owned trucking and rail fleet. We believe our core value proposition of providing security supply safely to our customers and sound product stewardship to our suppliers has allowed us to win new market share. Looking at the end markets, we saw impressive sales growth across all four of our geographic reporting segments. In our ingredients and specialties channel, beauty and personal care revenue growth has accelerated with ongoing product shortages impacting price, particularly within the skin and hair care industries. Pharmaceuticals continue to deliver strong results from new product authorizations and increased demand for high-purity solvents, excipients, and active pharmaceutical ingredients. Within our case portfolio, we saw persistent demand for paints and coatings and construction-related chemistries, supported by our extensive line card and technical capabilities as the market expands around more sustainable solutions. Specialty surfactants within our home care and industrial cleaning, along with our enzyme portfolio, are delivering year-over-year growth as is both our lubricants and food business. Our value to customers continues to evolve as we formulate solutions that meet growth trends in the market and support the demand for more sustainable solutions and clean label ingredients. Within our chemicals and services channel, we saw strong growth across a variety of industrial end markets with continued strength in chemical manufacturing, water, and mining chemistries driven by ongoing supply tightness and higher market demand. Our extensive organic chemistry portfolio has supported growth in these segments, while the ability to leverage our scale has enabled us to provide customers with continuity of supply. Although now a much smaller part of our business, energy store growth has higher oil prices and accelerated production, with increased customer demand for more sustainable solutions in this sector. Our primary strategy across all markets is to leverage our distribution capabilities and provide full lifecycle chemical product management. For 2022, and amidst growing macroeconomic uncertainties, we remain focused on factors we can control. We're confident that our chosen strategic priorities, coupled with our operational execution abilities, will drive expected market share growth and deliver strong results. even as chemical pricing levels stabilize through the year. Accordingly, for Q2 2022, we estimate an adjusted EBITDA guidance of $270 to $290 million and increase our guidance for the full year 2022 to $1 to $1.05 billion, with resulting strong cash flows. Looking further ahead to 2023, and whilst not getting firm guidance at this point, We expect to bring forward the financial target laid out at last November's Analyst Day, delivering the full year ahead of schedule. We believe our dual focus on the customer experience and market share growth, as we leverage our asset base, our extensive private transportation fleet, digital capabilities, and our long-standing commitment to our ESG goals, positions us for continued success. We are perfectly positioned to capitalize on the evolving global trends, such as local sourcing, sustainable solutions, and digitization, and believe we have the right people, products, tools, and strategy to deliver gross profits at rates greater than general consensus of the economy, and as such believe we are in a strong position to build a long-term, sustainable shareholder value. Now let me turn the call over to Nick. He will walk you through our first quarter results and our outlook before I comment on our key strategies and we get to your questions. Thank you, David.