Greetings. Welcome to Diversey Holdings, Ltd. first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to Grant Graver, Investor Relations. Thank you. You may begin. Thank you. Hello, everyone, and welcome to Diversey's first quarter conference call. With me today are Phil Wieland, our CEO, and Todd Herndon, our CFO. Our earnings release and the slides we'll reference on this call are available on Diversey's website at ir.diversey.com. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and the associated supplemental materials may include estimates of future performance. These are forward-looking statements, and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our filings with the SEC. On this call, we will reference certain non-GAAP measures. Please see the accompanying slides and our filings with the SEC for definition and reconciliation to the most closely comparable GAAP measures. Now I'm happy to pass it over to our CEO, Phil Wieland, for his comments. Thanks, Grant. It's fantastic to be giving our first earnings update as a public company, having come out of the gate delivering a strong first quarter. Everyone connected with Diversey is proud of our company and its new status as DSEY, and we're driven to see it reach its full potential as a leader in our market. For those of you who invested at IPO, thank you. I hope you've enjoyed the ride so far. What you'll hear today will be consistent with the expectations we set and represent some great progress on our strategic themes. Starting with our first quarter results, we saw 2% top-line growth versus the 2019 pre-COVID baseline, despite very heavy lockdowns impacting many of our customers in most parts of the world. Margins continued to expand, delivering very strong adjusted EBITDA growth of over 75% against the 2019 pre-COVID baseline, and even modest growth against the pre-lockdown 2020, which benefited from significant infection prevention sales. We were, of course, impacted by the Texas freeze, resulting in raw material cost pressure, but we didn't experience any supply disruption. Our procurement and commercial teams have been working incredibly hard to mitigate the financial impact. We've seen significant net new customer wins in both our Institutional and F&B segment, importantly at accretive margin, as customers have valued our product and service offerings. We've been rewarded for our extra efforts during the difficult COVID times by extremely low customer churn. This is also reflected in our customer Net Promoter Score, which is at record levels. Our strategic plan is bearing fruit with meaningful progress in all areas. We've seen some important launches from our innovation pipeline. In particular, in Institutional, we've launched a residual efficacy product to complement our infection prevention range. In F&B, we've launched a system that expands our digital offering by providing real-time insight on both cleaning standards and water and energy usage for our CIP customers. Recognizing that some of you may be new to the Diversey story, I want to cover some information that we shared on the roadshow to ensure everyone has the same baseline, starting on page five of the presentation. Diversey has been growing for almost 100 years. We were a $2.6 billion top-line company in 2020. We grew at constant currency on average over 3% from 2017 to 2019, and then around 2% during the COVID year of 2020. We had adjusted EBITDA margins of around 15% in 2020, having grown on average 160 basis points per annum since 2018. We operate in an estimated $46 billion total addressable market across over 80 countries and have the number one or number two position in almost all markets we serve based on net sales in 2020. Our resilience during COVID was also seen in the 2008, 2009 financial crisis. Central to this is our diversification by geography. We're roughly 1/3, 1/3, 1/3 across North America, Europe, and emerging markets, by end market, and by customer. No customer greater than 2% of our revenue, and the top 50 customers around 25% of our revenue. On the next page, you'll see why we're so excited about Diversey's potential. Firstly, it's the market. We are one of only two global players in a GDP+ growing market with highly recurring revenue and very sticky customer relationships. Secondly, we have real momentum. Our teams are motivated by our mission to protect and care for people. We've made progress in a major transformation plan under which we've invested a lot in our team, our infrastructure, and our values. This, alongside our long heritage in our product, innovation, service, and the environment, is delivering good growth top and bottom line. Thirdly, we are executing against a clear plan to grow our top line through targeted initiatives, adjusted EBITDA margin to our target of 20%, and inorganically, through tuck-in acquisitions that enhance our business and strategic theme. Over the page, you'll see how we serve our customers by delivering business-critical solutions across two segments. Institutional, which is roughly 3/4 of our group revenue, and Food & Beverage, which is the remaining quarter. We win in our marketplace because we have, number one, the broadest product offering across chemicals, dosing, dispensing, plus machines. We believe we are unique in this respect. Two, a superior infection prevention portfolio. Three, service that customers value and can rely on. Four, strong distributor relationships to access all parts of the market cost effectively. Five, a team who are bought into our mission to protect and care for people, and are living our values to be inclusive, customer driven, to always improve, have bias for action, and to be accountable for results. Over on page eight, we describe our marketplace, which is structurally very attractive because firstly, what we do is mission critical for our customers. Secondly, our model of installing equipment that only takes our product and can only be serviced by us produces high recurring revenues. Thirdly, the cost to our customers of a hygiene problem, such as the closing of their facility, far outweighs the cost we represent to their business. Fourthly, customers increasingly want the comfort and security of the respective brands. We compete on our product impact and customer service. Our estimated core serviceable addressable market is approximately $32 billion and growing at 3%. We have one strong and respected global competitor who we encounter in some parts of the market, and then 75% of the market that's made up of much smaller local and regional competitors. We have also been expanding our market opportunity into an estimated $14 billion of newer markets with such products as residual efficacy infection prevention in Institutional and water treatment in Food & Beverage. On the next page, we describe how sustainability has been central to Diversey's operation for many years. We are focused on people through our mission to protect and care. The planet, by significantly reducing our own energy waste, water, and greenhouse gas emissions. Customers, via the use of our products to deliver energy waste and water reductions at customer site, helping them to meet their own environmental targets. We are driven by a desire to do the right thing, but this strategy also makes sense financially as it supports our retention and margin plan. We expect to issue a refreshed vision in this area later in 2021, reaching further to achieve even greater outcomes. On page 10, you'll see our growth plan is built on four pillars. Firstly, in our Institutional segment, the recovery of around $400 million temporary decline in 2020 revenue due to the COVID impacted sectors. The ongoing benefit of our work over the last couple of years to build and grow in infection prevention, to scale our North American food service business, to enhance our commercial excellence globally, to expand in the fastest growing parts of the market, that's global customers and emerging markets, and to accelerate the right innovation to support customer outcomes. The second pillar in our F&B segment, we intend to accelerate in core geographies where we have a superior proposition, and to cross-sell water treatment to provide a one-stop shop for customers to buy cleaning, hygiene, and water treatment together. In the third pillar, we intend to expand adjusted EBITDA margin to 20% at an expected average rate of 50-100 basis points per annum through improved sourcing, strategic pricing, supply chain improvement, and operational excellence through SG&A cost initiatives. On our fourth pillar, we intend to accelerate M&A by executing the best opportunities within our plentiful pipeline to add, at accretive multiples, businesses that add strategically, whether that's through supply chain capability, product or technology capability, or geography. On the next page, Q1 has been extremely busy and productive, even leaving aside the IPO. In terms of market recovery, reopening has been slower than most people hoped. Whilst the U.S., U.K., and China are progressing positively in Q2, other important markets like mainland Europe, Canada, India, and other emerging markets now appear unlikely to meaningfully reopen until Q3. However, with respect to our Institutional segment growth initiatives, we've completed our infection prevention supply side rollout and seen a large volume of contracts signed. Our global accounts team have been very busy winning significant new annualized business. The hunters introduced in our commercial excellence initiative are responsible for an accelerated win rate. The F&B segment had a very strong quarter. They accelerated on top of a stellar 2020, winning record levels of net new business in Q1 this year. It was also exciting to watch the launch of water treatment, where we have recorded several small wins, and encouragingly, our first global account success. This is ahead of schedule. In terms of margin, we were pleased to see the accretion despite the difficult lockdown environment. We saw early benefit from consolidating supply sources, having completed the first phase of our plan to align formulae. Implementing strong price increases in Q1, with further increases planned thereafter in response to raw material inflation. Continued good progress with our G&A work. Of particular note was the establishment of a new captive finance center in Eastern Europe for the transactional finance processes. We have seen good pipeline progress in M&A, with two deals now in formal diligence processes and a number of others in developed discussions with vendors. I'll pass over to Todd, our CFO, to discuss Q1 financial results in a little more detail. Thanks, Phil. I'm excited to speak with everyone today to review our strong results for the first quarter. In Q1, revenue was 2.2% above pre-COVID 2019, while delivering significant adjusted EBITDA improvement of 77.9%, or $41 million of growth. This was driven by a combination of growth and our long-term focus on margin improvement. Compared to Q1 2020, our organic sales declined 4.4% due to strict lockdowns that are lasting longer than expected, particularly impacting our Institutional segment. As Phil mentioned, the lockdowns in some parts of the world have been tighter and longer than expected, materially impacting our Food Service and Hospitality sectors. We're seeing a smaller impact of lockdowns on our F&B segment, we're also cycling over a tough year-on-year comparison, as a majority of lockdowns didn't start until Q2 2020. We are seeing some mixed pressure at standard margin with Food Service and Hospitality sectors in lockdown, which tend to have higher standard gross margins with a more service-intensive SG&A cost to serve. We've been able to manage our SG&A to effectively mitigate the downward pressure on mix and gross margin to ultimately deliver higher adjusted EBITDA margin in the quarter versus prior year. Our adjusted EBITDA was $93 million, up 0.5% versus prior year. Despite the revenue pressure from lockdowns and higher inflation, we were able to improve adjusted EBITDA margin year-over-year, growing 60 basis points to 14.7%, and versus 2019, growing 630 basis points, thanks to growing infection prevention, pricing, and cost control measures, both in supply chain and SG&A. On page 14, digging into the segments a little deeper, let's talk about our Institutional segment. Institutional revenue of $468 million was 1.7% above Q1 2019, with gains in infection prevention more than offsetting the negative impact from lockdowns. Compared to 2020, revenue declined modestly in the quarter due to COVID-19 impact, as previously referenced, counterbalanced by continued strength in North America, driven by infection prevention gains. At the bottom right-hand side of the presentation, you see an example of an innovation in the infection prevention space that we are proud to highlight, Degragerm 24 Shield. This product uses advanced polymer technology to provide continuous disinfection of frequently touched surfaces for up to 24 hours. Given higher levels of hygiene standards and infection risk awareness, this product will be a great complement to our existing world-class infection prevention offerings. We believe we are the market leader in infection prevention, and customers come to us for our differentiated products and value proposition. In our Food & Beverage segment, our revenue of $164 million in the quarter grew 1.3% versus Q1 2020 and 3.7% versus 2019, while adjusted EBITDA margin grew 350 basis points versus 2020 and 560 basis points versus 2019. We continue to win accounts in this segment based on our scale, service execution, and technical expertise globally. As an example of our continued innovation, we're very excited to have launched our IntelliCIP digital system. This system translates CIP measured data into statistical proven actions for reduction of water, energy, and cleaning time, while ensuring high-quality food standards. It is being used by customers in all F&B end markets. Feedback has been extremely positive, and we have a list of further implementations booked as customers are excited to take advantage of this offering. We expect to have a solid outlook for growth given our recent success in closing new business around the world, assuming lockdowns don't get stricter as we move through the year and markets reopen. As Phil mentioned, we have been training our teams in water treatment and are starting to see opportunities beginning to percolate as our workforce globally gets trained up throughout 2021. We estimate the water treatment opportunity could be roughly 20% of our core F&B cleaning and hygiene products we sell into existing accounts. Page 16 shows the bridge for Q1 2021 versus Q1 2020. Revenue decline primarily in Institutional is offset by favorable FX, given the weakening US dollar against the euro and other currencies versus prior year. Additionally, we have some marginal inorganic growth coming from the SaneChem acquisition closed in December 2020, and some carry from the Wypetech acquisition, which closed in July 2020. adjusted EBITDA growth of $1 million quarter-on-quarter was negatively impacted by Institutional top line and mix, offset by F&B margin accretion and a small benefit from FX and M&A and corporate management of costs from our earnings improvement program initiatives. Q1 tends to be our weakest quarter from a seasonality perspective, we would expect our adjusted EBITDA to grow throughout 2021 on a quarter-over-quarter basis. Let's shift to the balance sheet, cash flow, and liquidity on page 17. As you'd imagine, the cash flow and balance sheet have some noise in them in Q1 due to our IPO. However, we can highlight the reduction in net debt leverage as we used roughly $650 million of IPO net proceeds to pay down debt, or $720 million, including the proceeds from the greenshoe option exercised in April. Our net debt to adjusted EBITDA ratio was 4.7 x at the end of Q1 and 4.5 x if you include the proceeds from the shoe, which was executed in the first part of April. We expanded our revolving credit facility from $250 million to $450 million in conjunction with going public to expand our liquidity profile to $548 million at the end of Q1. Typically, Diversey tends to utilize cash in the first half of the year due to seasonality builds and tends to generate cash in the back half of the year. We would expect that to be the same in 2021. In 2020, we were able to grow adjusted EBITDA despite the challenges brought on by the pandemic. We believe 2021 full-year adjusted EBITDA will be in line with our expectations at the time of the IPO. While some markets opened a little earlier than expected, helping Q1, other markets have been slower to open, which will influence Q2, bringing our H1 expectations back in line with our original plan. We expect H2, or the second half, to also be in line with our original plan at the time of the IPO. Our outlook with respect to market share gains, growth initiatives, and focus on commercial excellence leaves us positioned to be taking advantage of market recovery and potential tailwinds in the back half of 2021. As previously referenced, we expect adjusted EBITDA growth throughout 2021 on a quarter-over-quarter basis, assuming markets open as expected. We remain committed to margin expansion and expect to show margin accretion in 2021. With that, I'll give it back to Phil for a reminder of our long-term outlook before Q&A. Thanks, Todd. Yes, before Q&A, I'd like to leave you with a quick summary of Diversey's growth algorithm on page 18. We look forward to building on the estimated long-term market growth of around 3%, with market share gains on top from the drivers that I discussed earlier in the call. We target to grow another 2% per annum through accretive M&A, and we target to expand adjusted EBITDA margins to 20% at the average rate of 50 - 100 basis points per annum through our improved sourcing, strategic pricing, supply chain improvements, and operational excellence through SG&A cost initiatives. This should generate strong free cash flow that we can use to delever over time with a medium-term net debt goal of 3x adjusted EBITDA. That concludes our formal remarks. Operator, please will you begin the question-and-answer period? Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please ask one question and one follow-up question and re-queue for additional questions. Our first question is from P.J. Juvekar with Citi. Please proceed. Hey, good morning, Phil and Todd. Hey, good morning. Morning. A question on your North American share and share gains. What's your share now? Can you distinguish between your efforts to gain share with bigger customers, like what you did with Aramark versus smaller mom and pop businesses? What is the bigger opportunity for you? Sure. Let me start there. Look, it's certainly true that we've taken some nice share over the last couple of years, particularly, I'd say, in infection prevention, where we think we've got something like a 20% share of the market in North America. Also taken some nice share outside of that too. Thinking about the overall opportunity in terms of larger customers versus smaller, I think honestly, we target all parts of the market. It was great to win those large customers. As you know, that gave us the ability to put in place the infrastructure and the sales and service force right across North America, and we're using that now as we win other customers. It's also true to say that we're picking up a lot of smaller customers too, and we don't discriminate in that respect. We're keen. As long as the customer has the right attributes, we can build a long-term partnership at the right margins, then we work with all customers. Okay, thank you. It was good to see you got a new global win in water treatment. Can you talk about this win and what's in the pipeline with your Solenis partnership? Thank you. Yeah. Look, we were delighted, honestly. We had a number of smaller wins very early. We hadn't actually expected to start winning by this point. Then, as part of an existing business process, we were able to start a conversation about water treatment with a large existing customer in Africa. Once we explained the proposition, the products and the service, that customer was really excited, and we closed that deal two or three weeks ago. Yeah, look, it's a very promising start. It is only a start. There's a huge amount more work to do. As Todd said, we're rolling out the training right across our F&B workforce. Look, we're ahead of where we planned to be, and I think to some extent, it sort of validates our approach here. Of course, I'll feel much better when we've got a few more under our belt. Great, thank you. Thank you. Our next question is from Vincent Andrews with Morgan Stanley. Please proceed. Thanks. Good morning. Wondering if you can just provide a little bit more color about the segment margins in the quarter. Obviously, Institutional was down a fair amount, both sequentially and year-over-year, whereas Food & Beverage was up a lot, both sequentially and year-over-year. What was the divergence there? You mentioned a few things in the prepared remarks, but could you speak a little bit more specifically about what was happening there and how you expect it to progress across the balance of the year that will get you to margin expansion for the total company? Yeah. No, let me do that. Let me start with F&B, where, as you said, the margins were particularly strong. I said before, we had a really great 2020 in Food & Beverage. We won a lot of new business, and that has carried on into 2021. We actually were able to implement some of these new wins a bit earlier than we originally anticipated. We also saw a bit of reopening in some of the African markets, and that also helped our top line. Actually, this extra top line from those reopenings and also from implementing these wins earlier, that flowed down very nicely, and that's a critical reason why our margins were particularly strong in F&B. On the other side, on Institutional, obviously impacted by lockdown, as we said. We did see the infection prevention opportunity in North America particularly strong. We were able to sell in higher volumes than we originally expected, as some of the markets, like education infection prevention, opened a bit faster. We did incur some additional costs in getting the much higher volumes than anticipated out earlier. We had to, for example, air freight some product around the world. We had to pay some of our third parties some additional overtime costs, et cetera. Those things had a small impact on the Institutional margin progression. Those things were all short-term in nature. They impacted Q1. We've now been able to grow our supply chain so that we can now manage the higher volume levels on a sustainable basis. We don't expect any more of those costs going forward. I hope that makes some sense. Sure. Maybe just as a follow-up, could you give us a little bit of a sense of price versus volume in the segment and what you're anticipating for the balance of the year? Maybe more specifically as it relates to how much price work you think you need to do to offset raw material inflation. No, look, I can certainly do that. Maybe let me start, you were talking about inflation, and come back into price. It's certainly true that we saw real inflation in the market above the long-term averages. We did predict coming into the year some higher inflation, and therefore we came out the gate implementing pricing more than we might otherwise have done. As it's turned out, inflation has been even higher than we predicted, and therefore, we've had to action additional measures to mitigate that. I think it's also worth remembering, though, that if you're looking at the overall input cost inflation, there is a real geographical spread here. The Americas saw the highest inflation. It was obviously the most impacted by the Texas freeze, with lower inflation in emerging markets and also in Europe. Given our business mix, it's important to remember that the U.S. inflation headlines are not necessarily a good indicator of what we're seeing in our overall global position. Remember, the U.S. is only about 25% of our business. To maybe give you a few more numbers, we saw actually in the first quarter, somewhere a bit less than 2% on cost. We saw a similar amount on price. That might drift a little bit up in the second quarter, and then we expect to see that moderating before coming down again in the back half of the year. Probably the other thing I would just say on this topic, it's worth noting that our sourcing initiatives have really been really helpful here. I think we mentioned in the presentation, we've been consolidating formulae, and that's allowed us to bundle volume, which we haven't been able to do before, and therefore move that volume around between suppliers, and that's helped us significantly improve on input costs. That, overall, is going to be really helpful as we go through the rest of this year as well. Okay. Thanks very much. Our next question is from Manav Patnaik with Barclays. Please proceed. Thank you. Good morning. Phil, I just wanted to follow up on the water treatment cross-sell opportunity you called out in the slide. Just hoping you could size that a bit more and kind of how you cross-sell into that cleaning and hygiene category. Yeah. That win is somewhere between $1.5 million and $2 million, once fully rolled out. To be clear, there's none of that revenue in the Q1 numbers. It takes some time to do that. In terms of how we go about it, I think the beauty of the relationship that we have with Solenis is that we are the single point of contact with the customer. What we now effectively have is a full range of the water treatment and wastewater treatment products that we can take customers alongside our other cleaning and hygiene products. It's a real kind of seamless offer with only one touch point for the customer with the Diversey sales team to get the full breadth of the new offer. That seems relevant and significant, and that's certainly been a really interesting dynamic for customers and something that we've had a lot of early positive feedback about. Okay, got it. Todd, I just wanted to follow up. It sounds like the organic growth was slightly worse, driven by Institutional, but then FX and M&A were better. I was just hoping you could help us, what we should be assuming for the M&A contribution for the rest of the year and perhaps how you're thinking about FX as well. Yeah. Let me start with FX. I think clearly, in the year to date, we have favorable FX for the total business. At spot rates, we would expect that trend to continue as we look out into the year. In the first quarter, FX had, you can see in the Q1, I think page 46, in consolidated basis, roughly 2.4% impact favorable on the business in the quarter. I think as we think about M&A going forward, we're excited about the opportunity in M&A. Probably should first start with, we're pleased with how our recent acquisitions are progressing. In particular, we closed on SaneChem at the end of the year, roughly five months ago. That's developing as expected, both in terms of underlying performance and synergies. As a reminder, for those that may be new to Diversey, we look for a number of things in an acquisition beyond the financials. First, strategic control of supply chain for a market so we can deliver with excellence for our customers. Also, product or technology additions for the whole group, or strengthening of a core geography and/or acquiring talent. SaneChem checked the box there on the geographical objective as you've heard, Poland is one of our seven target growth geographies for F&B. In terms of our funnel, we're really happy about where it is right now. We would expect to do some reasonable M&A this year. In our roadshow, we called out long term that we wanted roughly a couple of points of growth, coming out of M&A annually. We're ramping that up as we speak. This is probably the hardest year to do that, because we're ramping. We're extremely excited about the implication of the profile of those types of deals going forward and how they can be extremely shareholder value accretive on a tuck-in basis. We expect to have some positive news in the very near future with respect to M&A. I wouldn't want to comment on those before we close those deals. All right. Thank you. Our next question is from George Tong with Goldman Sachs. Please proceed. Good morning. In your Food & Beverage segment, you mentioned record net new business wins in the quarter. Can you elaborate on what's driving the new wins and how much is coming from water treatment? Yeah. I certainly can. Let me firstly say, water treatment is in the very early days, and as I said, we're ahead of schedule. We've had a number of small wins and one global account win. That is not yet a significant part of what we're winning. If you go back to why are we winning? Look, I think it's a combination of great product and service. A service that we deliver consistently day in, day out, week in, week out to customers. The fact that we are there for them whenever they need us. That builds real trust. Customers more and more are seeing the differentiation that Diversey can offer in that space. We're becoming increasingly good at explaining it to potential new customers, making commitments around that, and we're seeing that having a real impact in the market. We're basically delivering on the promises, and that is, I think, increasingly understood in the market. That'd be really the key reason. Right. I guess just to follow up on that, what specific product areas within Food & Beverage are you seeing the most traction with that's driving the net new business wins? George, the most encouraging thing is that it isn't really specific areas. We're strong in processed food and dairy, in alcoholic beverage, non-alcoholic beverage. We're strong around the world. We've really seen a nice breadth of wins. If I was to point to the most pleasing thing, I would say it's the amount of new business we've won in North America, because that has traditionally been our weakest marketplace. We're working hard there to build up our infrastructure to make sure that we can deliver the best possible service, and that seems to be working. It's true to say that we've won in all of our sectors and in all of our regions. We feel really good about that. Got it. Thank you. Our next question is from Gary Bisbee with Bank of America. Please proceed. Yeah. Hi. Good morning, guys. I guess could you give us a progress update on the global rollout of the infection prevention portfolio? Did all of the capacity you were looking to bring online, is that online for the liquid and the wipes solutions, and how is that going trying to get that out into the market? Yeah, sure. The short answer is yes. We're now able to manufacture and sell right around the world. We've rolled out, in addition to what we were already doing in North America, as you know, we added Wypetech last year. We're now manufacturing in Brazil, in Turkey, in the UAE, India, and China, and of course, in Europe, in the Netherlands. We've got the supply chain now that we wanted, and we're starting to see sales happening, too. It's tough launching some of these businesses around the world in a fully locked-down environment, particularly in Europe. You see a lot of people you want to be speaking to, the businesses are not operating with people on furlough, et cetera. We are starting to see some really quite interesting upturns in our sales. Yeah, we feel really well positioned actually, as the markets reopen, to leverage both the selling teams and the manufacturing infrastructure, and the regulatory approvals that actually a significant amount of work went into last year. Yeah, we feel quite well set. Just digging a little deeper into that, is the play really to sell these better offerings into the existing base of customers and relationships and maybe replacing something you were providing or having it be incremental, or are there other market segments that are the key users of these products where you need to build new relationships to really drive the growth penetration of that product category? Yeah, good question. It's really both. For example, with existing customers, let's take, for example, the business service contracting segment. There, we are helping those customers to further differentiate as they look to compete in their market. We're able to build new propositions for them to help them win using the AHP technology. Then there are other areas. We've had some nice success with distributors, for example, in their warehouses as they are using our products increasingly. Many of those are new customers to us. They've been really interested in both the efficacy and the safety of our product, as it's being used in a high-intensity environment. Look, it's both. We're pushing hard on both actually at the moment. Yeah, we expect that to continue to accelerate. Thank you. As a reminder, in the interest of time, please ask one question and one follow-up question and re-queue for additional questions. Our next question is from Andy Wittmann with Baird. Please proceed with your question. Great. Thank you for taking my questions. Good morning. I guess, where do I want to start? We were just talking about net new and the Food & Beverage side. Maybe, Phil, if you could just touch on what you're seeing on the Institutional side of the business. I heard some comments in your prepared remarks overall about great retention levels. Clearly, that was a factor all through last year. It sounds like it's a factor here. No comments on the net new on that side. I thought I'd give you a chance to talk about what you're seeing there. Yeah, Andy. Look, thanks for that. Look, Institutional's been going strongly on that front, too. If I look at the new wins, compared to any losses, there's a very significant ratio there. In fact, I struggle to point at any significant losses that we've been seeing. On the new win side, we've really seen some nice food service wins. I don't just mean the North America business. We had a very significant win in Europe, a double-digit million win there that we completed over the first few months. Also, we've been pushing more and more into care homes. We're having some nice success there. Again, none of this is in our numbers. As you know, these things take some time to implement. It does suggest that the proposition's working well, and it does suggest that we're building some really nice momentum. That's helpful. Then just for my follow-up, maybe Todd, this one's for you. You've talked here, others have been questions on the margins. Raw materials obviously is focused on people's minds, but I wanted to go a little bit different direction. Just talk about given that we're still a little bit under a COVID cloud here, at least in the quarter, was there anything in the margins that would be unusually beneficial? There were some challenges that lots of companies had furloughs and other things like that. I was wondering if there's anything in the quarter this year that you did that would be considered a little unusual that would come back next quarter or maybe next year at this time, just that you had to do because some of the COVID challenges. Certainly, travel's been something lots of companies have called out. I was wondering if there's anything besides that's notable in the margin profile here. Yeah. Maybe it's worth talking just for a moment about gross margin. You've heard Phil talk about how we're dealing with raw material inflation and pricing. Actually, I think when you look down at the gross margin mix in the quarter, you'll see some degradation v. PY Year-on-year. That's really driven by mix. Certain sectors like Food Service and Hospitality, given the lockdowns, tend to have higher gross margins because they also have some higher service requirements on those applications. That probably has the most to do with the gross margin challenges in the quarter, along with some of the weather-related and supply-related challenges to get our customer service in North America on infection prevention. Those were the two main drivers of gross margin in the quarter. As a result, at times of significant mix changes, it's less informative to look at gross margin because we also then had much more favorable SG&A management, as you'll see, which allowed us to improve 60 basis points year-on-year in Q1 with, I'd say, really good cost discipline. There was a charge related to the IPO that had an 80 basis point impact approximately on gross margin negative in the quarter in relation to comp charges related to the IPO. That's worth noting the other way versus what you're saying. I think that's probably the color. I would agree, as that $400 million in the base comes back, we will need to add some discretionary spend like T&E back into the business. The bulk of the furlough is out of the numbers right now. It was mainly supportive last year in Q2 and some into Q3. I just think we had a pretty disciplined quarter that balanced some of that mix change with the cost to serve in those application service intense kind of sectors. Does that make sense? It does, very much. Thank you very much for the context there. Have a good day, guys. Yep. Thanks much. Our next question is from Jeff Zekauskas with JP Morgan. Please proceed. Thanks very much. Why are your inventories up so much? That is, it looks like they went up 12% sequentially, and maybe they're 40% up year-over-year, and your volumes are down. What's going on there? Yeah, Phil, maybe. Yeah. Yeah, yeah, Todd, you go. go. You go. Yeah, I was going to say, maybe I could take that one. I'd say to you that the uneven demand and extended lockdowns related to COVID have not helped our inventory situation. Our number one objective is to service our customers. We, during this time, have wanted to make sure that we had the right inventory specific to those COVID-related type SKUs. Also, I'll come back to my introductory point on seasonality. Q1 tends to be our lighter quarter, and so we always have a build quarter -on -quarter. Especially this year, as there's some uncertainty to the pace at which markets reopen, we've chosen to invest in inventory so that as those markets open, we're able to relatively quickly service the demands of those sectors that have been down. We've made it a priority to be ready, have the right products in the right place at the right time, when our customers need it. I would also caveat that by also saying, by the second half, we would also expect to make progress in bringing that inventory down prior to year, and is reflected in how we're thinking about cash flow for the year. Okay. In your outlook, you said that your 2021 full year will be in line with your expectations at the time of the IPO. Can you remind me what your expectations were, and what are your expectations for the year in terms of EBITDA? We didn't provide specific guidance on absolute numbers in that respect. We just talked about the fact that what we'd expect on the top line, and that we'd expect that margins would continue to expand. I think the point of describing it as we did was to explain to you that we are trading in the first quarter above our expectation. Whilst the lockdowns are going to be tougher in Q2 than we expected, we think that'll balance out and we'll still be making the progress as we hit the halfway point of the year, that we expected. Really to make sure that you understand that overall, the lockdown situation, we don't think is something that's going to cause us ultimately more pain this year. The high input costs or Texas freeze isn't something that we can't overcome this year. We feel good about managing through both of those situations. The only thing that we did add was that we grew 18% in 2020 versus 2019, and we expect to see some further growth in 2021 of adjusted EBITDA versus 2020. Of course, we'll continue to give you updated view on that as we go through the year. Great. Thanks so much. Our next question is from Laurence Alexander with Jefferies. Please proceed. Good morning. Could you just give updated views on how quickly you'll grow your sales force this year and over the next three years? Also how you're thinking about the degree of differentiation you have in chemistry software or machinery for the water treatment value proposition? Yeah, sure. Let me start. Look, in terms of the sales force, we've had a significant strategic driver on commercial excellence. That is leading us to really more change the mix of our sales force. Really between what we call farmers and hunters. That doesn't necessarily result in a significant increase in the number of people in our core business, just a mix in the skills and talent and experience of those people. There are, though, some areas where we do expect to increase the number of salespeople. In our global accounts area, we would expect to grow a little bit. In some of the emerging markets, we think we have a real opportunity and also, we've identified seven geographies in the Food & Beverage business where we expect to grow. We're not talking about enormous increases in cost overall. They're pretty targeted and focused where we think we can get a really great return on that. I come to your second question, which I think was around the differentiation in water treatment. I think we feel really, really well positioned in the whole of the Food & Beverage area in respect of what we bring to customers. I talked about the service a bit earlier, but if I look at the OnGuard system that we have that we get from Solenis, if I look at the IntelliCIP that Todd mentioned that we launched, where we feel really well-positioned against a lot of competitors. Well, thank you. Thank you. Our next question is from Arun Viswanathan with RBC Capital Markets. Please proceed. Right. Thanks for taking my question. Congrats on a good first quarter here. I guess I don't know if this has been addressed yet, apologies. I was just looking at slide 29, many of the improvement plans you have for margins longer term, I think, going to that 17% range. Could you provide an update on how you're tracking on some of those? I think it was $100 million in total, and if COVID and some of the lockdowns or maybe even the reopenings have affected that trajectory at all. Thanks. Hey, Todd, do you want to pick that one up in the first instance? First I'd start with we're making the margin progression that we hoped to in the first quarter. We saw that improvement at the bottom line to 60 basis points. This year starting out in that range of 50 - 100 basis points that we suggested we would target. That's going to change quarter on quarter depending on different variables. We're off to a start there that is in line with what we expect. We do believe that, as we stated earlier, our long-term EBITDA margin target is 20% or above, which is roughly 500 basis points higher than where we landed in 2020. We have high confidence in making meaningful headway towards our long-term potential in the next three to four years. We do have strong capabilities in place to drive gross margin expansion through strategic pricing and sourcing. We also have a detailed plan to drive supply chain savings through additional insourcing and optimizing delivery frequency through better order patterns and fulfillment discipline. You're right to reference page 29. That gives you more detail about some of the specifics that we're working on. With respect to sourcing, Phil mentioned progress with formula harmonization in Q1, which is helping us migrate through this time of interesting challenge with some inflation and providing us offset there. I would also suggest that roughly 70% of those four buckets will end up supporting improvement in gross margin going forward. With respect to the supply chain, we're making significant progress on looking at our footprint, which is where we see some significant opportunity to, number one, insource and put things in places where they should be to optimize not just COGS in terms of the product cost, but also logistics optimization around freight and warehousing. That's moving on as planned. Our earnings improvement program, which is really more focused on general and administrative kind of opportunities is on track versus our plan for this year. The COVID markets haven't affected that at all. We've been able to focus down. COVID's actually presenting some new ideas for us because we're now learning how to operate honestly with our customers in a more remote fashion, which going forward should also provide some real opportunities in how we service customers, leveraging some technology that we have to provide remote service. Which over time is another opportunity for us to really improve our efficiency in the business. Overall, I'd say we're on track. We haven't changed our outlook on the opportunity, and we hope to deliver, as we said in upfront margin accretion this year, consistent with our guidance. Great. Thanks a lot. Our next question is from Kevin McVeigh with Credit Suisse. Please proceed. Great, thanks so much. Hey, if you could talk to, if I have the numbers right, the potential water opportunity is 20% of the core F&B. Any sense of how that comes in, I guess number one, the margin impact of that and then how does the water opportunity impact the Institutional? If you're only looking at about, if it's 20% of potential F&B, how should we think about that within the context of the Institutional business? Look, we have an existing water business in Institutional. There's certainly more we could do working with our partner, but we made a very conscious decision to start with F&B where we thought the opportunity was the most significant. That's what we've done. We may well together come back and push harder into Institutional, but we thought that it was right to start in F&B. That's what we've done. Just remind me the first part of your question? Just, Phil, any sense of, because it sounds like it could potentially, the opportunity is 20% of the existing F&B business. Any sense of how that comes in? Is that a three-year build, a five-year build? Just how should we think about the scale? Yeah, sure. As I said earlier, the fact we've won a first global account is a little bit ahead of what we expected. We think this'll take time. Because we've focused initially on existing customers, and a significant amount of our business is large global accounts, they tend to be under contract, for maybe on average two or three years. Therefore, it will naturally take some time for us to have the opportunity to win all of our global account business. I think at the same time as we feel enormously excited about the proposition and what it's going to do for us, I wouldn't be assuming that this is going to be tens of millions in the first year or even the second year. I think this is going to take some time, and build somewhat modestly, and then really start to accelerate as we get into the third year. That's helpful. Could you put some numbers as to the impact of the Texas freeze in the quarter, maybe around revenue or just margin? Just any thoughts on that and if there's any lingering impact that'll be sold over the balance of the year? Yeah. Look, as I said earlier, the overall input cost inflation was somewhere between 1.5% and 2% in the first quarter. We think it may go up a little bit from there. It's pretty hard for me to determine the impact of the Texas freeze versus other things going on. I guess to some extent it doesn't matter, but that's what we saw in Q1. I do think it'll get a touch more in Q2, which is why we've been out making sure that we're adjusting prices accordingly. We think it'll abate as we get more into the third and particularly the fourth quarter. Great. Thank you. Our final question is from John Roberts with UBS. Please proceed. Thank you. On slide 25, if I compare the middle renormalization bridge with the left side 2020 surge bridge, it looks like the personal care or hand sanitizer comes down more on a percentage basis as it renormalizes. Is that just because hand sanitizers went up more on a percentage basis? Maybe in other words, did hard surface and personal care both go up similar percentages in 2020? Look, I think the way to think about this is that in the hard surface space, we have a very differentiated product. It remains, in my view, the market leading product. Therefore, the growth that we saw there, I think is very sticky. Okay? On the personal care side, I think the products in general are less differentiated. We did a really good job with availability of product last year. We organized our supply chain, adjusted it very quickly, and therefore, we were able to take advantage of that expanding market. I think though, it's also harder to retain all of that growth given the products in general are just less differentiated than what we see on the hard surface side. All right. I'll leave it there. Thank you. Thank you. We have reached the end of our question-and-answer session. I would like to turn the conference back over to Phil for closing remarks. Look, thank you. Thank you all for joining us today. I would just say, I know we're slightly over time. In conclusion, we feel really good about the quarter that we've posted. We're managing the challenges of COVID and the Texas freeze/input costs appropriately. We're really making some nice progress on delivering the strategic plan that we laid out again for you today, and we feel we're really firmly on track to deliver the 2021 plan and to deliver further adjusted EBITDA growth on top of the 18% that we delivered last year. With that, I'd like to thank you all and wish you all a good day. Thank you. Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.