World Kinect Corporation

Thank you for standing by and welcome to World Kinect Corporation's second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star. I would now I'd like to hand the call over to Braulio Medrano, Director of FP&A and Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to WorldConnect's second quarter 2026 earnings conference call, which will be presented alongside our live slide presentation. Today's presentation is also available via webcast on our Investor Relations website. I'm Braulio Medrano, Senior Director of FP&A and Investor Relations. With me on the call today is Ira Birns, Chief Executive Officer, John Rau, President, and Mike Tejada, Executive Vice President and Chief Financial Officer. And now, I'd like to review our safe harbor statement. Certain statements made today, including comments about our expectations regarding future plans and performance are forward-looking statements that are subject to a range of uncertainties and risks that could cause actual results to materially differ. Factors that could cause actual results to materially differ can be found in our most recent form 10-K and other reports filed with the Securities and Exchange Commission. We assume no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in our press release and can be found on our website. We will begin with several minutes of prepared remarks, which will then be followed by a question and answer period. At this time, I would like to introduce our Chief Executive Officer, Ira Birns.

Thank you Braulio and good afternoon everyone. We delivered an exceptional second quarter. Adjusted earnings per share was $1.29, the highest quarterly adjusted EPS in our company's history. While favorable market conditions contributed meaningfully to the quarter, our teams executed exceptionally well and converted those opportunities into strong results. More importantly, the quarter provides further evidence that the actions we have taken over the past several years to simplify the portfolio, strengthen our core businesses, and Improve Returns are translating into stronger performance. Aviation and Marine each delivered record quarterly gross profit supported by favorable market conditions, including continued volatility associated with the conflict in the Middle East. During periods of disruption, customers place an even greater premium on certainty of supply, operational execution and trusted relationships. That is where our supply relationships Local market knowledge and global platform become especially valuable. Our teams did an outstanding job converting those market opportunities into results by staying close to customers, managing risk carefully, and executing with discipline. Just as important, LAND continued the improvement we discussed coming out of the first quarter, providing further evidence that the actions we have taken to simplify the portfolio and improve returns are working. Over the past five weeks, I spent a significant amount of time with our teams across Europe. Those visits reinforced something I believed since becoming CEO. The strength of this company starts with our people. Across our businesses, I saw teams that know their markets, understand their customers, manage risk carefully, and take tremendous pride in what they do. The execution we delivered in the second quarter was a direct reflection of those strengths. In June, we also brought our commercial leaders together in Miami. As we reviewed opportunities across our businesses, what struck me most was the enthusiasm around the opportunities under discussion. Many of these opportunities are expected to create value in 27 and beyond, giving us increased confidence in our long-term growth outlook. Moving on to the segments, I will cover the highlights and Mike will provide the financial details. Aviation performed exceptionally well, and we saw strong execution across the business, solid contributions from our fuel offerings across the globe, and continued benefits from the universal trip support acquisition. Aviation continues to demonstrate the value of building a broader platform around our core fuel distribution capabilities, and the team delivered an absolutely terrific quarter. Moving on to Marine, our strong execution was especially clear. Marine delivered one of the strongest quarters in the history of the business. Continued volatility drove favorable market conditions, which created opportunities much greater than what we anticipated at the beginning of the second quarter. And our teams converted those opportunities through disciplined execution, strong customer and supplier relationships, and careful risk management. This was an outstanding performance by the Marine team. Land is also an important part of the story this quarter. because it reflects the progress we have made transforming this business over the past several years. With the sale of our North American tank wagon business completed in June, we have largely accomplished the portfolio simplification objectives we set out to achieve. The benefits of those actions are increasingly evident in our results, and for the full year we remain on track to deliver approximately twice the operating income we generated in 2025. After effectively completing our land segment transformation, card lock and retail now represent the core of our land portfolio. Today, we serve approximately 3,100 retail customers, up from roughly 2,900 a year ago, but still representing a relatively modest share of a highly fragmented market in the U.S. Importantly, our retail growth strategy is increasingly focused on higher margin opportunities that should drive stronger earnings growth and solid returns over time. Given our relatively modest market share today, we believe the opportunity ahead could be quite significant. In the second quarter, we delivered exactly what we expected. Land produced strong results, including a substantial year-over-year improvement in operating profit, and year-to-date operating margin was more than 20% better than last year, providing clear evidence that the business is moving in the right direction. The portfolio is simpler, more focused, and performing better, and the progress we have made through the first half of the year reinforces our confidence in the outlook for the business. Taken together, the quarter gives us real confidence in the direction of the overall business, with a more focused portfolio, stronger execution, and greater operating discipline. We should also be clear that this was an exceptional quarter, and not every quarter will look like this. Our teams did an outstanding job converting market opportunities into results. And while the second quarter is clearly not a normal run rate, we are extremely proud of what we accomplished during the quarter. As we look ahead, we are not assuming the market conditions we saw over the past few months will repeat. That is why our focus remains on what we can control. Thank you for joining us today.