Avantor, Inc. (AVTR) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 28, 2023 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's First Quarter 2023 Earnings Results Conference Call. [Operator Instructions]

I will now turn the call over to Christina Jones, Vice President of Investor Relations. Ms. Jones, you may begin the conference.

Christina Jones

Good morning. Thank you for joining us. Our speakers today are Michael Stubblefield, President and Chief Executive Officer; and Tom Szlosek, Executive Vice President and Chief Financial Officer. The press release and a presentation accompanying this call are available on our Investor Relations website at ir.avantorsciences.com. A replay of this webcast will also be made available on our website after the call. Following our prepared remarks, we will open the line for questions.

During this call, we will be making some forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings.

Actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made. We do not assume any obligation to update these forward-looking statements as a result of new information, future events or other developments.

This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the supplemental disclosures package on our IR website.

With that, I will now turn the call over to Michael.

Michael Stubblefield

Thank you, CJ, and good morning, everyone. I appreciate you joining us today. I'm starting on Slide 3. Our first quarter operating results were in line with our expectations with reported revenue of $1.78 billion and adjusted EPS of $0.29. Market dynamics played out as anticipated, including ongoing destocking of customer inventories and a downturn in semiconductor demand resulting in a core organic revenue decline of 1.8%.

We continue to leverage the Avantor Business System to drive execution of our plan and enhance operational rigor and efficiency. Reflective of strong contributions from commercial excellence and productivity, adjusted EBITDA margin was 19.4%, at the high end of our expectations. Also, free cash flow increased approximately 50% compared to Q1 last year, and free cash flow conversion was approximately 100% in the quarter, reflecting our focus on improving working capital performance.