Greetings, welcome to Diversey Holdings Limited second 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Grant Graver, investor relations for Diversey Holdings. Thank you. You may begin. Thank you. Hello, everyone, and welcome to Diversey's second 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 definitions and reconciliations to the most closely comparable GAAP measures. Now I'm happy to pass it over to our CEO, Phil Wieland, for his comments. Thank you, Grant, and good morning to everyone. Let me start by saying we're very pleased to report another good quarter, bringing our H1 results in line with our IPO plan, despite a very difficult operating environment. Now I'd like to share four overarching thoughts about our business. Firstly, we see a very bright future for Diversey. As a leading provider of hygiene, infection prevention, and cleaning solutions amidst the pandemic, we are well positioned to capture significant growth due to elevated cleaning standards. Further, through an ESG lens, we see customers getting hungrier and hungrier to save water, labor, energy, and waste, which we are also well positioned to help them deliver. Within institutional, where reopenings are more advanced, we are seeing faster than expected recovery of our base institutional business. Our F&B business had a very strong quarter and first half as we continue to gain share in our core business and realize early success with our water treatment offering. Secondly, raw material inflation continues to be a theme for 2021. In response, we've implemented a series of interventions on top of what we had originally planned for the year, which has led to strong sequential quarter-over-quarter improvements in our margins. One of these interventions is pricing, where we've realized 2.5% top-line growth from pricing actions year to date and expect to reach mid-single-digit% for the fourth quarter. We've also managed costs well, supporting sequential improvement in EBITDA margins Q1-over-Q2, and very pleasing 38% adjusted EBITDA growth versus pre-COVID 2019 baseline. Thirdly, our M&A process is delivering well, and our pipeline remains very strong. Since we last reported, we have completed two deals to enhance our product portfolio and one deal to strengthen our supply chain. Fourthly, we are pleased to report continued progress against our strategic plan, which we laid out during the IPO process and again during our Q1 earnings call. Our new business conversion of our growing pipeline continues to power ahead as our strong product proposition and high service delivery continue to appeal to the market. I will come back to our progress against our strategic plan shortly. First, I want to address two of the short-term challenges which make the operating environment tougher than we planned in 2021. The first operating challenge is inflation. Inflation has been higher than we've experienced in recent years. Associated with the inflation is the challenge of availability of both raw materials and freight carriers. We're seeing extremely tight markets in many parts of the world as competition for constrained resources has increased. This remains an ongoing challenge which our procurement and supply chain team have so far done an excellent job of mitigating. We saw margin expansion quarter-on-quarter as expected, including the benefit of other savings driven by our operational excellence initiatives. We take our responsibility as a market leader to price for inflation very seriously. We have and will continue to take actions to minimize the impact of rising costs and continue to take pricing actions to meet our objective of maintaining and growing our margins. We anticipate pricing actions to step up through Q3, and more significantly in Q4, reaching mid-single digit% increases in Q4. Also this quarter, we signed a lease on a site for our new manufacturing facility in the U.S. As described in our IPO process, we see this as an important step to take customer service to a new level and is critically important to our margin journey. The second environmental operating challenge is, of course, COVID. Here we are very focused on what we call base business performance versus 2019. This is how our revenue, excluding infection prevention, is recovering against the pre-COVID baseline. You may remember that we lost over $400 million of revenue in this area in 2020, and we said we expected this all to recover over the 2021- 2023 period. The first chart on page six shows the performance in the U.S. and the U.K., two of our markets with higher vaccination rates, which have been at the front end of the reopening timeline. It's very encouraging that in countries where reopenings are more advanced, we are seeing faster than expected recovery of our base institutional business with the U.S. already ahead of 2019 and the U.K. tracking rapidly towards it. The second chart shows the same for India and Philippines. Here you see much lower levels of recovery. India started the year with an improving trend, but a massive second COVID wave has required tough lockdowns and a consequential impact on our core revenues. Philippines, like much of Southeast Asia, has seen similar COVID surges with low vaccination levels and prolonged lockdowns. When thinking about reopening around the world, more than 75% of our base revenues come from outside of the U.S. and the U.K. Reopening still has a long way to go on a global view. The takeaway here is that we anticipate our base revenues to recover more quickly than originally planned as lockdowns ease, but to remain subdued whilst lockdowns persist in low vaccination countries. In fact, recovery to pre-COVID levels of base business revenues is not our ultimate objective. We expect to go further. The longer term effects of COVID are very likely to include higher cleaning, hygiene, and disinfecting standards. On page seven, we summarize Diversey Shield. This is a global program designed to ensure that our customers are ready for reopening and the challenges of operating in a COVID world. We support our customers to choose the right product, cleaning regime, and frequency to ensure the appropriate ongoing efficacy. As our customers' awareness and compliance grows, this often results in a broader product portfolio being sold to the customer in order to deliver their hygiene needs for a clean and safe facility. We award the Diversey Shield, which allows customers to demonstrate their cleaning standards to their end customers. This initiative is proving extremely helpful to customers all around the world. Now, let me talk a little about our progress against our strategic plan, starting with the top line. Central to everything we do is the need to continue to deliver for customers. This underpins our ability to excel at customer retention, whether that's the day in, day out service or innovation that supports improving product efficacy or advances in dosing and dispensing to support operational efficiencies and ESG. This is reflected in our strong and improving customer NPS scores. Our entire organization is obsessed with further excelling in this area. We have described before how we wanted to grow our global accounts muscle under a new and dedicated leader. Following the double-digit millions foodservice win we reported for Q1, we have seen further success with a significant global convenience store operation as well as meaningful wins in contract catering, building service contractors, and quick service restaurants. For North America foodservice, the reopening of the market has meant that future customers are once again active, and so our sales teams have been extremely busy. We have seen our conversion rates climbing again as they were before the pandemic, which is exciting given the size of the pipeline here. For both global account and North America foodservice, our customers continue to see the benefits of our product efficacy combined with sophisticated dosing and dispensing equipment, which means that customers can reliably achieve sustainable cost efficiencies as well as tangible environmental benefits. This is a real differentiator against much of the market. In food and beverage, our focus on our core geographies is progressing well, and we continue to gain share. Further, under our new water treatment proposition, we reported our first global account win in Q1, and we have had further successes since then, both in global accounts and local customers. This initiative is going extremely well, is ahead of expectations, and at this early stage seems to be validating our hypothesis that customers would be excited about our proposition. On infection prevention, we described before an expectation that we would hold onto the majority of our gains and in fact build on them within the healthcare market. This has been the case. I am not aware of any customer losses in this market, and we have continued to win new customers, which gives us reason to believe we can continue to enjoy above-market growth in the healthcare sector. We also said that outside of healthcare, we expect to see some normalization relative to peak COVID sales in 2020. This also looks to be true. Extended lockdowns are impacting disinfectant and sanitizer usage outside of healthcare. Conversations with our customers suggest that non-healthcare infection prevention sales will see accelerated penetration versus pre-COVID expectations in many sectors, including education, office buildings, retail, and foodservice. This reinforces our belief that demands for disinfectants and sanitizers will settle well in excess of pre-COVID levels. The opening of education in Q3 and the expected more widespread return to offices will provide useful insights here. Outside of North America, we saw the build-out of our global infection prevention manufacturing sales platform earlier this year. We are starting to see momentum building in these new markets. In terms of M&A, we've seen very good progress, which is highlighted in more detail on the next page. On the product side, our deal with Halomine provides us the exclusive global rights to this new long-lasting disinfectant technology. This will allow customers to achieve a 30-day efficacy by using this new product alongside a chlorine-based disinfectant. This ultimately helps our customers further protect their working environment and saves customers chemical costs, labor costs, and contributes significantly to their ESG credentials. SURE is a range of plant-based disinfectants, which we've been using for some time in selected geographies. We've now completed a global deal to include this product range in our portfolio. The environmental impact of this are significant. We're very excited about our acquisition of Tasman Chemicals, which operates in the institutional and F&B markets in Australia and New Zealand. Given its location, this can be a challenging geography to deliver the right customer service outcomes and margin profile. Having our own manufacturing operation is therefore an important step, and we expect to deliver significant upsides for customers here. These deals are pro forma deleveraging against our approximately $11 million investment. We have been clear that we are focused in three areas for M&A, adding exciting products to our global portfolio, strengthening our supply chain, and doubling down in important geographies. Our M&A funnel is healthy, and we continue to see this as a real driver of value as we go forward. Now, I'm going to pass over to our CFO, Todd Herndon, to discuss Q2 financial results in more detail. Thanks, Phil. Let me start on page 11 with a summary of our consolidated results. Q2 net sales were up 3.9% versus prior year as reported. The recovery of our base institutional business is better than expected in markets that have reopened. As expected, this was offset by comping over the peak of infection prevention sales last year, while customers were building inventory at the start of the pandemic. Our F&B business also continues to outperform the market while improving margin. In order to see through the temporary ups and downs from COVID, we'll continue to compare 2019 in addition to prior year. In Q2, revenue was 4.4% below our pre-COVID 2019 baseline. As Phil mentioned, the decline was driven primarily by weakness in many parts of the world with lower vaccination rates. While we expect a sharp recovery as lockdown ease, the near-term progression remains uncertain, especially given the uptick in cases tied to the Delta variant. However, the most important takeaway is that Diversey continues to execute against our profit objectives despite the top-line pressure. As expected, our adjusted EBITDA in Q2 versus 2020 was down 4.3% as reported, driven primarily by lapping prior year furlough subsidies, the normalization of infection prevention against the peak in 2020, and short-term raw material pressures. Our Q2 adjusted EBITDA improved 14.1% versus 2019 as recorded, and for the first half were up 37.7% versus 2019. First half 2021 adjusted EBITDA was $194 million, in line with our expectations. Overall, we're very pleased with the progress we're making on our margins, despite a more uncertain backdrop for top-line growth in the near term. On page 12, let's review our segments, starting with institutional. Institutional revenue declined 7.5% versus Q2 2019. We performed well against our proactive efficiency initiatives as adjusted EBITDA declined just 1.5% over the same period. Our adjusted EBITDA increased 100 basis points to 16.4% at quarter end. Our second quarter revenue versus 2020 is up slightly based on strong customer retention and new business offsetting stronger lockdowns than expected. While our EBITDA was down 5.9% due to the tough infection prevention compare and furlough lap that I've mentioned already. Something we're excited to talk about and I'd like to highlight is our recently launched TASKI AERO 3500, which combines vacuuming and sweeping while driving hygiene and efficiency improvements to customers. You might ask, why is this machine better? It uses TASKI Whisper patented technology, which leads to significantly improved air quality and reduced noise levels. It's also nine times faster than manual cleaning and two times faster than competitors' machines, while picking up debris at high speeds using a single pass. It's a great example of how we're focused on helping our customers deliver fantastic cleaning results alongside operational savings. On page 13, let's review our Food and Beverage segment, where revenue grew by 5.5% compared to the baseline quarter in 2019. More impressive was the 44% growth in our adjusted EBITDA over that period, given our continued scale and focus on cost improvement. As a result, our F&B segment ended the quarter with a strong margin of 20.2%, which was up 540 basis points compared to 2019. Compared to 2020, revenue expanded by 15%, and our adjusted EBITDA grew by 11%, exhibiting the continued momentum we're experiencing closing new business wins around the world, along with any traction and investment in water treatment. One of the innovations I'd like to highlight for F&B is Diversey's ACP, which is a revolutionary new patented accelerating cleaning protocol for the effective cleaning of membranes used in the cold production of skim milk, acid, and sweet whey. By reducing the cleaning steps required, the customer saves water and energy usage, improves production output by reducing cleaning in place or CIP downtime, and reduced emissions to wastewater treatment plants. Page 14 shows our bridge from Q2 2020 to Q2 2021. As mentioned, slower recovery from COVID weighed on our institutional revenues, which was offset by stronger trends in F&B and favorable FX, along with modest impact from M&A. Our adjusted EBITDA declined modestly by $5 million, as explained previously, from furlough subsidy lapse, short-term raw material pressures, and the normalization of infection prevention against the peak in 2020, partially offset by favorable FX. Let me turn to the balance sheet, cash flow, and liquidity on page 15. Beginning with free cash flow, you can see a use of $36 million for the quarter. As a reminder, given the seasonality in our business, Diversey tends to use cash in the first half of the year and then generate cash in the back half of the year. Additionally, we would note that last year included a one-time $50 million cash benefit from the securitization of receivables, which drives a larger year-over-year variance. On net working capital, the quality of our AR is in good shape amidst COVID. In AP, we're continuing our focus on extending our days payable outstanding through ongoing work with sourcing. In the back half of 2021, we have an opportunity for cash flow improvement, as evidenced by our elevated inventories in H1. Inventory increased in the first half of the year as we've invested for reopening that hasn't begun as quickly in many parts of the world as we anticipated. We do not want to compromise service levels when markets recover and our customers need products. With that said, we believe we'll make progress in our working capital in the back half of the year as we reduce inventory, progress on payables with sourcing, and leverage markets opening and stabilizing. Overall, we continue to have strong liquidity profile with over $511 million available as of quarter end, which we view as a strong asset given the fragmented market we operate in and the M&A opportunities Phil noted earlier. Lastly, our leverage remains stable compared to a quarter ago at 4.7x net debt to EBITDA. We're confident that we can delever in the back half of the year as our LTM EBITDA improves, and we expect to generate free cash flow of roughly $100 million net of strategic investments. Let me conclude with some qualitative comments on our outlook for the back half of 2021. We're confident that our base business will continue to improve as markets reopen, along with our ability to continue implementing new businesses that we've won over the last year. We're already seeing this recovery play out in some markets with higher vaccination rates as Phil discussed. For infection prevention outside of healthcare, we're seeing demand lower than the peak of the pandemic, but much higher than pre-pandemic levels. We continue to see strong behavior changes from customers, which will sustain elevated sales in the future. In F&B, we expect to see continued growth in both our core business and newer water treatment portfolio. We also expect to show quarter-on-quarter improvement for the remainder of the year, pending the impact of the Delta variant, change in the pace of reopenings, and potential challenges with raw material and carrier availability. With the current status of delayed reopenings and pricing actions that will build through the end of the year, it's likely that more of our quarter-on-quarter growth will come in Q4 than was originally planned for Q3. We don't want to be too short-term focused, and we continue to make investments in the business for the longer term. Our M&A pipeline is robust, and we expect to make additional acquisitions in the second half. I'd like to turn it back over to Phil for a reminder of our long-term outlook before Q&A. Thanks, Todd. Before Q&A, let me summarize by saying that as a leading provider of hygiene, infection prevention, and cleaning solutions amidst the pandemic, we are well positioned to capture significant growth due to elevated hygiene standards. Whilst we feel that there's too much market uncertainty in the short term to provide specific guidance, we feel very confident in our longer-term outlook. To bring you back to our earnings algorithm on page 16, we look forward to building on the estimated long-term market growth of around 3%, with market share gains on top from our key initiatives, including global accounts, North America food service, global infection prevention, water treatment, and commercial excellence, where we have strong pipelines and excellent conversion. We expect to grow another 2% per annum through accretive M&A. We target to expand adjusted EBITDA margins to 20% at the average rate of 50-100 basis points per annum through strategic pricing, improved sourcing, 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, would you please begin the question-and-answer period? Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. If you'd like to ask a question, you may 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 key. In the interest of time, please limit yourself to one question and one follow-up so we may get to everyone's questions. Our first question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Hi. Thanks for taking our question. This is Angel Castillo on for Vincent. I just wanted to, I guess, ask for a little bit more color, particularly around margins as you think about Q3 and Q4. How should we think about the cadence of potential expansion or, I guess, how should we view it in light of the ongoing pricing action in each quarter? Yeah. Look, thank you for that. Let me give you a few thoughts, and then maybe Todd can chip in. It's certainly clear that inflation has been much higher than in previous years. I'm sure you don't need me to tell you that. We've been working really hard with suppliers to manage down the impact on our business and also with customers to offer them product changes and similar where possible. Our customers would expect us to take these actions. There is, of course, still a significant net inflation that we need to pass on to customers, and we have some good contracts in place that allow us to do that. We've realized about 2.5% incremental revenue from our pricing actions, which is about $30 million in the half year. We're covering dollars of inflation so far this year, and we'll increase pricing throughout the year as it takes some time to implement the pricing with some accounts. Our approach, our objective, our strategy is to cut inflation on a percentage basis, and we're targeting getting there by the first half of next year, depending, of course, whether we get a further significant wave in inflation. We expect the impact of pricing actions to be greater in Q4 than Q3. That's just reflecting the time it sometimes takes to make the changes. By Q4, we think we can get to mid-single digit range for realized revenue, which is obviously going to be supportive of what we're doing with our margin profile. I hope that helps. It does. Thank you very much. Then I was also hoping you could give us more color around the encouraging wins you've been seeing, not only within food service but also it sounds like market share gains in F&B as well. Just more color there, particularly with some global accounts, that would be very helpful. Yeah. No, sure. Let me start with Food and Beverage, perhaps. The really exciting thing here is the ratio of our new business wins to our losses, which is really at an all-time high. We had a fantastic 2020. It was really a step change from what the business had seen before, and that has carried on right through 2021. We've seen a significant number of wins, both global accounts and local accounts, and really very modest on the loss side of the equation. Moving over then onto institutional, again, starting with global accounts, we've seen some really nice wins. We've had one really large right across the world win, so high single-digit millions. We've also had a number of smaller global players that have awarded us one or more regions of their business. That too has been encouraging. Yeah, again, coming back to North America food service, we've had some strong wins there as well. Look, we sit here thinking really around our top-line growth. We're feeling really pretty positive around the strategy that we laid out and how it's rolling out. That's helpful. Thank you. Our next question comes from the line of P.J. Juvekar with Citi. Please proceed with your question. Yes. Hi, good morning, Phil and Todd. Morning. Morning. You talked about market share gains in the past, and you talked about that on the quarter as well today. How do you see that in terms of, you're raising prices and trying to gain share at the same time, does that create an issue for you in terms of sort of gaining new customers? It's a good question, P.J. The short answer is really that it hasn't. It's certainly not easy trying to take price, but as I said before, our contracts do allow us to do it. In a way, the fact that inflation is such a topic in 2021, everyone's talking about it and understanding it means that there's some level of expectation. As long as we do it in a professional way, we're very open and transparent with our customers, we're able to get to where we need to. On the new business wins, where we get this right and we sell the value of what we do, that we can not only deliver the efficacy that customers need, but also the operational savings and the ESG credentials that they need as we save them water, energy, et cetera. Price is not the main topic of conversation. Of course, we need to be market relevant. Actually, we haven't found a particular conflict between those two things, certainly at this stage. Great. Thank you. Phil, can you give us an update on your joint venture with Solenis? Are you getting any new business there? I think it was described as a $50 million opportunity at the time of IPO. Just any update on Solenis? Thank you. Yeah, sure. Look, P.J., so far so good. I think what we said was that we expected a pretty modest impact in the first year, i.e., this year. Perhaps we'd get to double-digit millions of top line next year, much more acceleration in year three. We actually described it as a 20% opportunity, i.e., customers spend $0.20 on water treatment for every $1 that they spend on cleaning and hygiene. I think where we are so far we're really pleased with. The relationship's going very well. The partnership's working. We're coming together to make sure that all of our people are trained. We are the single point of relationship with the customer, there's a level of training that Solenis do behind the scenes that supports us, the proposition is really resonating. As a result, we feel like we're a bit ahead of where we expected to be. We had our first big global account win in Q1. We've had some more wins, and we've got some more in the pipeline. Actually, we've got a number of local wins that have rolled out, too. Look, I don't want to get ahead of myself. I certainly don't want to declare victory, but at this stage, we feel like it's working, and it's a little bit ahead of where we thought we might be at this stage. Our next question comes from the line of Gary Bisbee with Bank of America. Please proceed with your question. Hey, guys. Good morning. Good morning. You talked about the institutional recovery in the markets where reopening has happened well, it's trending well, it's better maybe than you would've expected, but the markets broadly haven't opened as quickly. It sounds like somewhat of a timing issue there. I guess, a partial offset to reopening that you've discussed was infection prevention, some of that excess falling off. I guess I didn't hear you comment on is the pace at which that's falling off versus last year in line with the expectations you had, worse, better? Can you comment on that part of it, please? No, look, I can. Just to remind you, we grew about $400 million of infection prevention last year. This wasn't for us just a reaction to COVID. We'd actually had several years of market share gains as we've been investing in this space. To understand where we're tracking, you've got to split it into two parts. Firstly, in healthcare, which was about 1/2 of that $400 million growth last year. We said that we thought in healthcare that we would hang on to the majority of the growth, and so far that's the case. We've been pretty successful. Again, I'm not aware of any customers leaving us, and we have added some new customers. We feel on that half, which is healthcare, that we're in a really good place. Outside of healthcare, we expected some normalization. It's certainly true, based on what we've seen so far, that that's going to happen. Levels are certainly below the 2020 peak, but also they're well above 2019, before the pandemic. It's actually really tough at this moment to say where is this going to shake out, because we've still got really high lockdowns. That means that there's some businesses that would be buying outside of healthcare that aren't because they're closed. We've also not yet got the return to offices, which is another large group of customers. Finally, U.S. education, as you'd know better than me, is just at the point of resuming and therefore, again, that's a big non-healthcare market for us, so it's very hard to see the buying pattern there. I think in the coming months we'll get a much better read on where this is going to land. From what we've seen so far, below 2020, well above 2019. In trying to think through sort of the back half, I was looking at the two-year growth rate and trying to adjust for currency and M&A given us that data, and it seems like it's all over the place. I guess maybe what I wanted to ask is, when we get on the other side of these headwinds you're facing, is the seasonal revenue pattern that you had in 2018 and 2019 a good longer-term guide for the business? Understanding it may be different in the short term, is there really a strong case for significant step-up in Q4, given what we know now, Delta variant, some of the things moving on? I'm just trying to gauge relative to prior expectations. Tom, let me give a few thoughts, and then I'll hand over to you. Look, I think ultimately we are going to get back into the same kind of seasonality as we have before. I think what we're seeing is, we expected the $400 million we lost in the base to come back over time, and we expected, though, a big chunk of that to come back in a step change that might have happened around the middle of this year. We now know because of Delta in the U.S., but also other things like lockdowns in other markets, that is going to be later. The question is when? Is that going to be in Q4, or is it going to be a little bit later? That is just the really tough question to answer right now. Todd, did you want to add something? Yeah, maybe I'll just add a historical perspective from my view is that 2018, 2019 would be a more normalized view of the seasonality of the business. Typically, Q1 would be our lighter quarter, and then as hospitality and lodging and vacations happen, in particular in Europe, in Q2 and Q3 you'd see some seasonality there, and then a little bit of tail back off in Q4. This year, I think we're stating pretty clearly that we do expect sequential growth on an actual basis quarter-on-quarter, both in terms of revenue and margin enhancement. It is a tricky environment to predict, but we're confident that quarter-on-quarter growth is expected both in dollars and margin and revenue as we go through this year. I do think it is fair to say that there is some seasonality in this business when normalization returns. That's helpful commentary. Thanks, guys. Thank you. Our next question comes from the line of Jeffrey Zekauskas with JP Morgan. Please proceed with your question. Thanks very much. Versus what you thought you would earn for 2021 three months ago, do you now think you're going to earn something lower, the same, or higher? Jeff, the very short answer to your question is that it's incredibly difficult to say. As Todd was just saying, what we do know is that we're going to grow quarter-on-quarter, both at top line and at EBITDA. What we also know is that on the controllables, we feel like we're in a great place. We're winning more new business. We feel our margin expectation of growing 50-100 basis points will deliver this year despite all of the challenges of inflation that are in the market. We feel that the M&A that we've reported this quarter will likely to deliver some similar M&A going forward. On the controllables, we feel like we're in a great place ahead of where we expected. On the uncontrollables is really the pandemic. It's really tough and all we can keep doing is taking the actions that we are and making sure that as each market reopens, we do a fantastic job, as I think we've done in the U.S. and the U.K. per those charts. When each country opens is obviously outside of our control. Our focus now is making sure that in the same way as we grew Q2 over Q1, we're going to grow Q3 over Q2, and then Q4 over Q3. Okay, great. Maybe for Todd. Your cash flow from operations is negative $100 roughly for the first two quarters, and last year you were flat. I don't think your working capital is going to change all that much over the next two quarters because your business is accelerating. Is your cash flow from operation much less than it was last year? Are you going to bring down your capital expenditures and your dosing and dispensing equipment, or leave them where you aspire to? Can you talk about your cash flow from operation this year? Yeah, maybe I'll try to give you a little color. Thanks. First of all, on the comp, couple of things. I think it was in the slide. We had a one-time $50 million securitization benefit last year. Yep. As you do the rec quarter-on-quarter, that's a one-time lap. We do tend to burn cash in the first half historically and generate cash in the second half. I think in our commentary, we said we do expect to generate $100 million roughly of free cash flow. I'd say net of any major strategic investments that we might do outside of our plan. I would say, we do expect primarily in inventory to make progress in the back half of this year. We do have significant initiatives focusing on cash flow, recognizing that we are in control of a number of those things. As mentioned in the commentary, we did build inventory in the first half, honestly, consciously. It was a discussion with our leadership teams, more focused on making sure we capture the market as the market opens, and to make sure that given all the challenges, as you've heard, in raw material supply and other raw material-related matters, that we're in a position to optimize our revenue as those markets reopen, which as Phil mentioned, is pretty tricky right now. The other thing I'd say, this year, as part of the IPO, there was $30 million in cash LTIP that was paid out in the first half. IPO costs of roughly $11 million that were part of the first-half cash flow. Exiting the private equity management fee was roughly $20 million in the first half. That kind of explains the year-on-year first half cash flow that you referenced it at - $100 million. As you think about the full year, if you take first half and the second half $100 million, and you adjust for the one-time, the kind of IPO cash LTIP items I mentioned. The cash flow from operations is going to be roughly $50 million-$60 million this year. As we look forward, we're quite enthusiastic about the cash generation of this business. Maybe a little longer-winded answer than you want, but we're actively working. We've had some consultants in to work on our sales and operation planning process in the first half to get our demand and our inventory levels lined up, to get to service level improvements. We're working with our sourcing group to continuing to work with our vendors on supplier payment programs that we think will generate some significant benefit in the back half as well. I think our working cap as a% of LTM sales was about 10.6% in the first half, which is actually not a bad marker for us as a business. The quality of our AR now is better than it was pre-COVID. I want you to take away from this, we're controlling what we control and actively managing it. I do think you will see some significant inventory take down in the back half. You're going to generate $100 million in free cash flow. If your CapEx and your dosing and dispensing equipment is about $100 million, that would mean your cash flow from operation is $200 million. Is that the way to understand your comments or no? No, I don't think so. I think if we were down $100 million in the front half. Yeah We're going to be up $100 million in the back half. In that, there's $50 million or $60 million of one-timers, I'd say, this year that are related to the IPO, cash LTIP, IPO costs, and exiting management fees that are one-time in nature. That's an adjusted number of some kind. I think you need to look at it that way to understand the base business, right? Okay The IPO. Yep. Okay, thanks. Yep. Our next question comes from the line of Kevin McVeigh with Credit Suisse. Please proceed with your question. Great. Thank you. Hey, sounds like you're making a lot of progress, new client wins and retention. Can you help us frame where the retention is today, and who are you winning from? Because it sounds like, if we heard you right, your wins are at an all-time high and your losses are at an all-time low. Maybe just help us frame where the share shift's coming from and what the retention looks like. Sure. Look, our retention numbers last year on large accounts was about 99%, and it continued in the same ballpark this year. Extremely high retention. I think we're winning from all over the market. Our proposition, our products, our service, the operational efficiencies that we can drive are very relevant to small customers through medium and to larger customers. I wouldn't say at all it's concentrated. It's really at all parts of the market where our proposition makes sense. Got it. Just on the new product innovation, looks like new machines introduced. Any way to think about what that initiative can generate, from a revenue perspective, how we should think about that maybe in 2021, just as you think about the model longer term? Sure. Look, maybe start by saying, our machines business is around 10% of our overall institutional business. It's somewhere maybe just a bit below $200 million. This is one of a number of innovations that we're in the process of releasing. We've got another big wave coming out later this year, which, at the right time, we'll come back and talk to you guys about. Look, we think that we can get really significant growth out of the machines business. Somewhere between mid and high single-digit growth, once we've sort of normalized for COVID. These innovations are a big part of that. Got it. Just to follow up on that point, Phil, is there any benefit with this infrastructure bill that is going to boost that as well, just from an ESG perspective? Sorry, just say that one more time. With the infrastructure bill that just passed in the U.S., does that help boost? Sale of any of those machines as well? Sorry, when you talk about the infrastructure, are you talking about the new U.S. factory that we talked about? No. Just the infrastructure bill, the stimulus bill, the $1 trillion that just passed the Senate. Oh, sorry. Makes it to the House. Todd, do you want to pick that up? Yeah, sure. Clearly, I think there's a number of benefits from the infrastructure bill that may come our way. Phil mentioned the concentration that we have in education. Clearly, education, I think will be a benefit of the infrastructure bill in terms of funding for local and universities. These machines would be used in those environments. Also, just the general infrastructure build will increase the need for equipment. It's probably important to add we're not in the big industrial sweeper business, in terms of cleaning roads and that kinds of thing. We do think the investment in CapEx and infrastructure and funding will positively impact the business and multiple industries across the U.S. here. Thank you. Our next question comes from the line of George Tong with Goldman Sachs. Please proceed with your question. Hi, thanks. Good morning. In your institutional business, you mentioned that the longer lockdowns are weighing on revenue performance with reference to India and the Philippines. Are there additional markets that you'd call out where you're seeing lockdown headwinds? Can you elaborate on evidence that you're seeing in the base business that would show that it's recovering better than expected in the markets that are open? Yeah, look, George, if you'll allow me, maybe I can just very quick view on what we're seeing here because it is such a mixed picture, and it is so important to the institutional business. Let me start quickly in North America. Clearly, we've shown you in the chart that we're trading back above 2019 levels, that it's largely reopened. It's also fair to say that our food service proposition has been focused on contract catering, which means that offices and education are important to us. We're very keen to see what happens there. Obviously, some risk around Delta, some offices that were planning to open up for Labor Day, now pushing that back a little bit later. Education about to open in the U.S. and in Canada at the start of September. How is that going to play out? Whilst we're really pleased with where the U.S. is, or North America is, we are also a little bit nervous about what's going on here with Delta variant. If I look at LATAM, real lockdowns across the continent. The situation is easing a little, but vaccination rates are low and cases relatively high. We see that the full reopening not likely to happen for quite some time. Into Europe, obviously, fully locked down for the majority of H1. The U.K. started to reopen, and we showed you the chart on that. Vaccination rates in Europe are getting better. Other countries are following suit. I could give you example of France and Denmark that in July are kind of following suit. There's others that are tougher. If you look at the Germanic countries, if I look at Finland, somewhat further behind. As I go further east into the Middle East, high lockdowns. There's been some easing, but there's still a long way to go, really, outside of Turkey, Israel. India remains pretty tough. North Asia, interestingly, if you go to China, our food service business has bounced back, is well ahead of 2019 as the local market has reopened. International travel is still problematic for our hospitality business, and we don't expect that international travel into China is going to happen anytime soon. Two really tough impacted places, Southeast Asia and Australia, New Zealand. The lockdowns here right now are more significant than they were in 2020. These markets are really in quite a tough spot and it could be some time before we see reopening there. Got it. That's helpful. You discussed cost inflation with raw materials and freight carriers as well as actions to offset with pricing. Looking at 2Q in the second half of this year, how does the rise in input costs compare with the pricing increases? Look, my expectation is that there will be further increases in costs, but I am hoping that the rate of increase is going to slow. As we said, particularly in Q4, the rate of price increases is going to increase. That is why our belief and our ambition is that our exit rate from Q4 into next year is going to be in quite a strong place, and that is why we said that we hope that the first half of next year, we are going to have covered the inflation on a% basis, not just a dollar basis. We think it is going to get better, but most of that improvement is going to be Q4 rather than Q3. Got it. Very helpful. Thank you. Thank you. Our next question comes from the line of Andrew Wittmann with Robert W. Baird. Please proceed with your question. Yeah, great. Thank you. Most of my questions have been asked and answered. I thought it'd be helpful to talk about the M&A program and try to get a little bit more detail out of you. I think in the prepared remarks, Phil, you mentioned that you thought the deals were deleveraging. I guess the implication there is that you paid less than your leverage multiple. I just wanted to confirm that. Todd, if you could give us any details as to the amount of acquired revenue that you expect to acquire from the three acquisitions that you noted here on the conference call, just for the people that keep model, maybe the revenues on an annualized basis or something to that effect would be helpful. Thank you. Hey, Todd, do you want to pick this one up fully? Yeah, maybe just start with a general comment on M&A. We're pleased with the progress of the M&A platform. As Phil mentioned, we've closed three transactions in the last 30, 45 days here. One, Tasman Chemicals in Australia. We're excited about that. It gives us a real strategic supply chain benefit, and you know that's one of our three drivers of what we look for. Service levels will improve, and it'll really help our scale in Australia in terms of investment in a manufacturing capability there. The other two are product portfolio transactions. One, HaloFilm, which gives us disinfectant residual technology that's best in market globally, and the other one is an extension, actually, of an arrangement we had on a product line called SURE, which is a plant-based complete range of 100% biodegradable kind of building care, kitchen care, and personal care products. We've invested about $11 million so far in these three transactions. Our growth algorithm is to, as we've indicated, to try to generate 2% top line per annum. We started this up and invested in it. We've added resources to our internal team. We may or may not get to 2% in year this year, but we'll absolutely be exiting, we think, at that top line kind of rate as we enter into 2022 here. We think that we're generating about $20 million of revenue in terms of 2022 impact and $7 million of EBITDA on those three transactions. Clearly, out of the box, they may not be delevering, but within 2022, we clearly will be below our current net debt leverage. It is pro forma delevering for us going forward. Okay. That's helpful. Thank you. Thank you. Our next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed with your question. All right, thanks for taking my question. I guess I'm just trying to get a little bit more color on the outlook. You noted that there's some uncertainty in the near term for Q3, just given Delta as well as some price cost headwinds from inflation. Also Q3 should be sequentially higher. Just looking into 2022, do you expect to hold onto some of these price increases that you're implementing right now? Does that indicate maybe you make up this shortfall in Q3 in 2022? Thanks. Yeah, look, great question. The short answer is yes. As I say, everything we're doing, controlling the controllables, we feel that we're on or ahead of our plan. This environmental challenge with the pandemic is short term. It's going to catch up at some point. We think the data we shared with you around what happens as the country reopens to our business is great evidence for that. The only thing we're really unclear about is at what point does it catch up, which is to do with when the Delta variant is sorted in the U.S. and when the other markets kind of reopen for the first time here following the pandemic. Yes, there's nothing in here that gives us any cause or make this doubt our thesis on where we're heading in 2022, just the timing of this Corona-related stuff. Okay, great. Just on the share gains, presumably some of your smaller competitors may be more affected by the inflation and disruptions. Have you seen any acceleration in your share gains, I guess, with increases on inflation and the Delta variant? Is that an encouraging sign? Is there any possibility that maybe you're a little bit more positive on the 2022, 2023 outlook? Well, look, I think your underlying point is a great one. If you step back and think about this environment, pandemic, inflation, availability in raw materials and freight, floods in Europe, unrest in South Africa, fires in Turkey. These are all real challenges that all of our competitors are seeing, and our customers are seeing. We think actually this plays to our strength. As we saw last year, where we delivered in tough times for customers, they showed us loyalty in return. Actually this cocktail of challenging situations right now is similar. If we can continue to step up as we have been and deliver for customers through these tough times, I think it's going to hold us in really good stead. Yeah, I feel really positive just once we've worked through these things and gotten behind us. Thanks. Our next question comes from the line of Laurence Alexander with Jefferies. Please proceed with your question. I have two questions. First, can you give a sense for how you think the other side of this inflation cycle might play out? Would we see sort of some reversal of the share gains offset by margin expansion, or would you be passing the normalization of the supply chain through to customers? Just what's the current sketch of that? Secondly, just on your last comment, I'm kind of curious about the reference to the fires in Turkey. Was there an operational disruption that you've seen there, or is there a sort of an indirect supply chain issue? Look, on your first question, I think honestly, it's too early to tell. If you look at all of the forward views of the feedstock indices, what's really happened this year is they've said, "Well, there's going to be a peak, and then it's going to moderate and it's going to reduce, and everything's going to come back to a more stable situation." Every month that graph has just been pushed to the right. We haven't yet seen any of that moderation. Therefore, our view certainly is that until we actually see that happening on some kind of permanent basis, we got to keep going exactly as we are. We've got to plan, and we've got to price that all of this stuff is permanent, and that's certainly what we're doing. On your second question, no, my reference to Turkey really was only as the holiday spots in Turkey, which is a huge market, reopened from COVID, so the forest fires hit, which dampened that overall market. It didn't have a direct supply chain impact on us, just a challenge for our customers, and therefore for us in that market. Got it. Thanks. Our last question comes from the line of John Roberts with UBS. Please proceed with your question. Thank you. Infection protection is somewhere between the second quarter of 2019 and the second quarter of 2020, but that's a really wide range. Do you have a sense of where normal is, and how far away from normal are you right now? John, it's very hard to give you any more precision for the reasons that I've said. We just don't know what's going to happen as education reopens, as offices come back. I think we feel quite positive about some of the underlying data points, but I don't want to give any false forward view based on those data points because they're incomplete. I do think in the next quarter, we will get a lot of new data that's going to be really helpful. That's why I appreciate it's a wide range. We're well ahead of 2019, but we're off 2020. That's about as much as we can say with confidence at this point. How about some of the other big categories like floor care? Is it down much more than the average in the segment? Do you have any other areas that might be away? If I take floor care in the U.S., we're coming to the end of floor care season, if there is such a thing. We've had a fantastic trading there. Some challenges on some of the raw material availability, but we got through that. The teams did a great job. We've actually been back above 2019 levels with our floor care business there. Yeah, look, that's come back strongly. I could equally give you examples of our retail business, which is performing very strongly. Really the dip now on the institutional side is the hospitality and food service, which is sort of impacted by the lockdowns globally, as I described earlier. Thank you. I'd like to hand the call back to Mr. Wielan for closing remarks. Guys, look, thank you for joining. I apologize that we're over time. In summary, I would just say, look, we feel great about the market. We believe the pandemic is going to leave us with higher cleaning standards. Against that, we're controlling the controllables. We're ahead on our plan of where we expected, which feel good about the 50-100 basis points that we told you about. M&A is going well and gathering pace with a great pipeline. This tough environment is real. It's going to impact the timing of the recovery of this $400 million, but everything we see tells us the $400 million is coming back, and it will do so over the coming quarters. Thank you all for listening and for your questions. Have a good day. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.