IMCD N.V.

Your lines will be on listen only. However, you will have the opportunity to ask questions. And this can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any time, please press star 0 and you will be connected to an operator. And I will now hand you over to your host, Pete Vandersligger, CEO, to begin today's conference. Thank you.

Thank you, Courtney, and welcome everybody. I'm here with my colleague Hans Corremans traditionally, and we will be pleased in a minute to answer your questions. You will have seen that the first quarter results were very strong with EBITDA growth of 59% to almost €140 million. Most of the growth was organic and based on strong demand, increasing prices, an ability to strengthen our margins, and expansion of our business with new product lines. All regions and business segments contributed to the growth. Supply chains and lead times remain challenging. Also, in this quarter, we have been able to execute our strategy by doing acquisitions to complement business segments and regional presence. In this respect, I want to mention that we acquired a business in China in the attractive personal care markets. In Central America and Mexico, we have quickly obtained a strong position, which will be an engine for future organic growth. I want to emphasize again that notwithstanding the quarterly excitement of a listed company, we consistently over the years are building a global company, which is focused to serve the top suppliers in the world and to help our customers to formulate their products. IMCD has unique knowledge of many applications in various market segments, which is supported by an extensive network of application labs and technicians across the world. It makes us robust in downturns and, as we see today, extremely successful under favorable market conditions. Through all cycles, we will continue to focus on organic growth and we will continue to be a consolidator. We continue also to invest significantly in our IT and digital infrastructure, which will help us to manage the global business and connect with our customers in their preferred way. Finally, we have many sustainability initiatives running, both aimed at reducing our own footprint, but also helping our customers to use more sustainable products. So with that, we remain optimistic about the immediate and long-term future, and I will now give over to Hans to guide you through the quarter one numbers.

Hans? Thank you, Peter. Good morning, ladies and gentlemen, and as usual, a short summary of IMCD's first quarter 2022 results, whereby I will start on page 9 of the analyst call presentation. And as Peter indicated, we are happy to report another quarter with strong growth on most of the financial key figures. Forewick suggested revenue increased 32% and gross profit increased 36% in the first quarter of this year compared to the same period of last year. This growth profit increase was a combination of 31% organic growth and 5% as a result of the first-time inclusion of the companies that we acquired in 2021 and 2022. All in all, this was the fifth quarter in a row with more than double-digit organic growth profit growth. Growth profit in percentage of revenue improved by 0.7% to 25.1%. This increase in percentage was a combination of product mix effects, changes in local circumstances, and successful internal gross margin improvement initiatives. Forex-adjusted operating EBITDA increased 54% to 140 million, and most of this increase was organic growth. The operating EBITDA margin increased by 1.7% to 12.6%. The conversion margin, calculated as operating EBITDA in percentage of gross profit, was 50.4%, which is 5.8% point better than the same period of last year. And in all regions, we saw an improvement of this ratio. Forex adjusted net result increased 62% to 79 million. The free cash flow, Free cash flow increased 5% and was, as you might have seen in the press release, impacted by additional working capital, which is an obvious and logic consequence of very strong revenue growth in the first quarter. Further, we finished this quarter with a strong order book leading to additional stock. Net working capital translated in days of revenue were 58 days, four days more than the first quarter of last year. And the clear logic behind this increase is the substantial revenue growth, which automatically leads to higher debtor position. As you might remember, reported debtor days, a low 60 number, are typically higher than average working capital days. So, substantially increased sales automatically leads to higher debtor positions and increased working capital days. Year-to-date cash earnings per share were 1 euro and 65 cents. an increase of 56% compared to the same period of last year. And on the last line of this page, you could see an 80% increase in our number of employees. And this increase is a combination of organic growth and the first-time inclusion of acquisitions. On the next slide, slide 10, you will find gross profit, EBITDA, and conversion margin for operating segments. AMEA reported 37% Forex-adjusted growth profit growth and 56% operating EBITDA growth. Operating EBITDA and percentage of revenue improved 2% to 13.3%. And as most of the acquisitions in this region were relatively small, it's fair to assume that the impact of the acquisitions is limited and most of the growth is organic. A bit of a similar story in the second column with America's Q1 figures. Forex adjusted gross profit in the Americas increased 36% and operating EBITDA increased 51%. Most of the EBITDA growth is organic. Reported growth numbers in Europe were even more impressive due to some currency tailwind. Asia Pacific in the third column reported 34% gross profit growth and 40% operating EBITDA growth. Like the other segments, most of the reported growth is organic. Operating EBITDA in percentage of revenue and conversion margin further improved. And then in the last column, the cost of the holding companies, and this includes, as you know, all non-operating companies, including the head office in Rotterdam and the regional support offices in Singapore and the US. On page 11, a summary of IMCD's free cash flow. Adjusted operating EBITDA increased with 53 million, which is in line with reported operating EBITDA growth. Then 2 million of CAPEX, followed by 75 million working capital investment. And as mentioned before, this working capital investment was mainly the result of increased business activities. Then on page 12, a short update on net depth and leverage, reported leverage ratios and leverage based on the definitions in the loan documentation slightly decreased to 2.2 and 1.5 times LTM EBITDA, respectively. The 1.5 times leverage ratio is well below the 3.5 times leverage threshold in the IMCD's loan documentation. In March, IMCD issued a 300 million rated corporate bond loan with institutional investors. This five-year senior unsecured bond, maturing in March 2027, has a fixed coupon of 2.1.25%, and the proceeds of this bond loan issue will be used for general corporate purpose, including the refinancing of existing indebtedness. And then last but not least, on page 14, you will find our outlook for 2022. So far, the short summary of our year-to-date financials, and Pieter and myself are happy to answer your questions. I would like to hand over to the operator.