Univar Solutions Inc.

Hello and welcome to today's Univar Solutions second quarter 2022 earnings conference call. My name is Bailey and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Heather Koss, Vice President of Investor Relations. Heather, please go ahead.

Thank you and good morning. Welcome to Univar Solutions' second quarter earnings call and webcast. Joining our call today are David Jukes, President and Chief Executive Officer, and Nick Alexo, Executive Vice President and Chief Financial Officer. Last night, we released our financial results for the second quarter ended June 30th, 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 we can find the reconciliations 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, 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 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 eight straight quarters of outstanding earnings, I'm delighted to report another strong quarter of net income and adjusted EBITDA, thanks to our strategy of putting the customer at the center of all we do, supported by continued superb operational execution by our dedicated and talented team. We're building robust competitive moats, seeing improvements in our MPS scores and gaining market share. We believe the results we achieved this quarter reinforce the fact that we are taking the right steps to grow our business as we gain more momentum despite the ongoing macro challenges. Looking forward, we remain focused on the execution of our strategy and delivering market share growth through organic and inorganic opportunities. We're confident in our ability to capitalize on evolving global trends as we leverage our asset base, extensive private transportation fleet, digital capabilities, and ESG innovations. Moving to key highlights from the quarter, we delivered strong Q2 net income of $163 million and adjusted EBITDA of $292 million. We expanded our market share in the quarter as evidenced by our positive win-loss ratio and higher new customer retention levels. We continue to improve the customer experience as evidenced by our all-time high NPS scores and better on-time delivery performance. We increased sales of ingredients and specialties driven by strong demand and new supplier authorizations. We continue to leverage our digital investments with 49% of our U.S. customers now registered on our e-commerce channels and able to utilize 24-7 self-service capabilities. We made progress on our inorganic growth objectives and yesterday announced the acquisition of Vicon, a specialty chemical distributor headquartered in Spain. In addition, we're evaluating other promising acquisition opportunities. we returned $81 million of capital to shareholders via share repurchases. In the second quarter, we continued our trend of outpacing the prior year, thanks in large part to the lasting customer relationships we're building through technical differentiation and supply chain solutions, as well as the contribution from new supplier authorizations. We believe our ability to provide customers with security of supply reliably and safely coupled with the sound product stewardship we provide to our suppliers has allowed us to win you and retain existing market share. Looking at the end markets, across all four of our geographic reporting segments, we demonstrated impressive sales growth. We believe this is a result of the simple operating metrics we provide to our commercial teams as well as our flexible sales channels that are designed to accommodate changing customer needs. In our global consumer solutions channel, which serves life science markets, we manage through challenging inflationary dynamics with skilled pricing discipline. This kind of execution demonstrates our agility and resilience in difficult macro conditions. In personal care and pharmaceuticals, Our new supplier authorizations, coupled with our technical sales force, enables us to help formulate new solutions for customers. Our food ingredients offering, which is now known as Foodology, recently opened a new innovation kitchen where we're helping customers create recipes to meet the latest market trends, as well as reformulating in response to supply shortages, such as sunflower oil. Turning to our industrial solutions channel, by combining our solvents capabilities with our technical formulations, we grew our lubricants and metalworking offering. Our customers in the coatings industry have come to rely on us for supply, in spite of ongoing supply shortages. And our specialty surfactants and enzymes portfolio has enabled us to grow our household industrial cleaning business. as customers turn to us to formulate solutions that meet the demand for more sustainable and clean label products. 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 and global scale have driven especially strong results in the U.S. and Canadian segments while enabling us to provide customers with continuity of supply. Now, a much smaller part of our business, energy store growth has higher oil prices of accelerated production with increased customer demand for more sustainable solutions in this sector. the ongoing comfort in Ukraine continues to create uncertainty in the marketplace, which is accelerating onshoring, local sourcing, and just-in-case inventory trends. We believe our full line card of solutions, local availability of stock, coupled with our own trucking fleet, has never been more valuable or provided a greater advantage. Add to this our ability to provide full lifecycle chemical product management, and we believe we are a differentiated, and preferred provider for all of our business partners. For 2022, 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 Q3 2022, we estimate an adjusted EBITDA guidance of $240 to $260 million and increase our guidance for the full year 2022 to $1.4 billion to $1.8 billion, with resulting strong cash flows. Looking further ahead to 2023, we continue to expect to achieve the financial targets inclusive of our target of $960 million of adjusted EBITDA, laid out at last November's Analyst Day, delivering a full year ahead of schedule. We believe our focus on market share growth through an ever-improving customer experience as we leverage our technical expertise, 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 believe we are perfectly placed 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 grow our delivered gross profits at rates greater than general economic consensus, and as such believe we're in a strong position to deliver long-term sustainable shareholder value. Now let me turn the call over to Nick. He will walk you through our second quarter results and our outlook before I comment on our key strategies and we get to your questions. Thank you, David.