Advantage Solutions Inc (ADV) 2023 Q4 法說會逐字稿

Greetings and welcome to the Advantage solutions fourth quarter and full year 2023 earnings call. (Operator instructions) As a reminder, this conference is being recorded.

歡迎參加 Advantage Solutions 第四季和 2023 年全年財報電話會議。（操作員說明） 請注意，本次會議正在錄製中。

It's now my pleasure to introduce Ruben Mella, Vice President of Investor Relations. Thank you, Ruben. You may begin.

現在我很高興向大家介紹投資者關係副總裁魯本‧梅拉 (Ruben Mella)。謝謝你，魯本。你可以開始了。

Thank you, operator, and thank you, everyone, for joining us on advantage Solutions' Fourth Quarter and Full Year 2023 earnings conference call. On the call with me today are Dave Peacock, Chief Executive Officer; Chris Growe, Chief Financial Officer; and Sean Choksi, Senior Vice President of Strategy and M&A. Dave and Chris will provide their prepared remarks, after which we will open the call for a question-and-answer session.

感謝營運商，也感謝大家參加 Advantage Solutions 的 2023 年第四季和全年財報電話會議。今天與我通話的是執行長 Dave Peacock；克里斯‧格羅（Chris Growe），財務長；策略與併購資深副總裁 Sean Choksi。戴夫和克里斯將提供他們準備好的發言，之後我們將開始問答環節。

During this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based upon management's current expectations and involve assumptions, risks and uncertainties that are difficult to predict. Actual outcomes and results could differ materially due to several factors, including those described more fully in the Company's annual report on Form 10-K filed with the SEC. All forward-looking statements are expressly qualified in the entirety by such factors. The Company does not undertake any duty to update or revise any forward-looking statements except as required by law.

在本次電話會議中，管理階層可能會做出聯邦證券法意義內的前瞻性陳述。這些陳述是基於管理階層目前的預期，涉及難以預測的假設、風險和不確定性。由於多種因素，包括公司向 SEC 提交的 10-K 表格年度報告中更詳細描述的因素，實際結果可能會存在重大差異。所有前瞻性陳述均明確且完全受到這些因素的限制。除法律要求外，本公司不承擔更新或修改任何前瞻性聲明的義務。

Please note management's remarks today will contain certain non-GAAP financial measures. Our earnings release issued early today presents reconciliations of these non-GAAP financial measures to the most comparable GAAP measure this call is being webcast and a recording will also be available on the company's Investor Relations website. We will reference a presentation during the prepared remarks are also available on the Events and Presentations section of the IR website.

請注意，管理階層今天的演講將包含某些非公認會計準則財務指標。我們今天稍早發布的收益報告顯示了這些非公認會計原則財務指標與最具可比性的公認會計原則指標的調節表，此次電話會議正在網絡直播，錄音也將在公司的投資者關係網站上提供。我們將在 IR 網站的「活動和演示」部分提供準備好的發言期間參考演示。

And now I'd like to turn the call over to Advantage's CEO, Dave Peacock.

現在我想將電話轉給 Advantage 的執行長 Dave Peacock。

Thanks, Rob, and good morning, everyone, and thank you for joining us. 2023 marks an important year for advantaged solutions as we began to execute a strategy to maximize our full potential as a partner of choice to consumer brands and retailers and drive long-term profitable growth.

謝謝羅布，大家早安，謝謝您加入我們。 2023 年對於優勢解決方案來說是重要的一年，因為我們開始執行一項策略，以最大限度地發揮我們作為消費品牌和零售商首選合作夥伴的全部潛力，並推動長期獲利成長。

At the same time, we remain focused on meeting the needs of our clients and keeping our promise to shareholders by exceeding our adjusted EBITDA guidance in 2023, we were especially pleased to deliver year-over-year adjusted EBITDA growth and margin expansion in the fourth quarter.

At the same time, we remain focused on meeting the needs of our clients and keeping our promise to shareholders by exceeding our adjusted EBITDA guidance in 2023, we were especially pleased to deliver year-over-year adjusted EBITDA growth and margin expansion in the fourth四分之一.

Our success in 2023 centers on our teammates across the enterprise who share a hard for service and a relentless dedication to winning together each day on behalf of the leadership team, I thank them for their efforts.

我們 2023 年的成功取決於整個企業的團隊成員，他們代表領導團隊辛勤服務，堅持不懈地致力於贏得每一天的勝利，我感謝他們的努力。

I want to take a few minutes to review some of our significant actions to date to enhance value for everyone we touch, including our shareholders. We believe these accomplishments will help fortify the long-range plan to create a more unified company with enhanced operational efficiencies through streamlined processes, strategic rigor agility and improved capabilities.

我想花幾分鐘回顧我們迄今為止採取的一些重大行動，以提高我們接觸到的每個人（包括我們的股東）的價值。我們相信，這些成就將有助於強化長期計劃，即創建一家更統一的公司，透過簡化流程、策略嚴謹敏捷性和改進能力來提高營運效率。

In January, we expanded our executive leadership team and welcomed Brian McCloskey as Chief Growth Officer. Brian joined advantage after 17 years with Bain, where he collaborated with executives in the consumer packaged goods industry to solve their toughest strategic challenges. He will be pivotal in shaping our growth strategy, identifying new business opportunities and driving organizational excellence. We have renewed a service provider agreement with a large multinational retailer and as an expansion of our existing relationship advantage will also now be their exclusive experiential partner conducting all sampling and d.e.m.o. events across its many US stores.

一月份，我們擴大了執行領導團隊，並歡迎 Brian McCloskey 擔任首席成長長。Brian 在貝恩工作 17 年後加入 Advantage，與消費品產業的高階主管合作解決他們最棘手的策略挑戰。他將在製定我們的成長策略、發現新的商機和推動組織卓越方面發揮關鍵作用。我們與一家大型跨國零售商續簽了服務提供者協議，作為現有關係優勢的擴展，我們現在也將成為他們的獨家體驗合作夥伴，進行所有樣品和演示。其許多美國商店都舉辦活動。

Our leading capabilities with in-store and digital sampling offerings will help us as we convert more shoppers into buyers as we expand our relationship with this long-standing customer. We executed contracts with several significant customers to continue providing services for them in late 23 and into 2024, demonstrating our long-standing relationships. One example is with a large U.S. retailer specializing in trend for general merchandise. This will mark the 12th year of our exclusive partnership supporting this retailer's beauty category, both in-store and online to provide shoppers with more engaging experience, we feel good about the momentum heading into 2020 for more than 95% of our key enterprise clients re-upped with us this year with the majority, adding new services in many enhancing their respective annual spending.

當我們擴大與這個長期客戶的關係時，我們在店內和數位樣品產品方面的領先能力將幫助我們將更多購物者轉化為買家。我們與多個重要客戶簽訂了合同，將在 23 月底至 2024 年繼續為他們提供服務，這展示了我們的長期合作關係。一個例子是一家專門從事日用百貨流行趨勢的美國大型零售商。這將標誌著我們為這家零售商的美容品類提供獨家合作夥伴關係的第12 個年頭，無論是在店內還是在網上，為購物者提供更具吸引力的體驗，我們對進入2020 年超過95 % 的主要企業客戶的勢頭感到滿意-今年大多數人都與我們合作，在許多方面增加了新服務，從而提高了各自的年度支出。

For example, we signed an agreement to leverage the broad range of services we provide with one of the leading global food, health and beauty CPG companies where we expanded our scope and are launching key pilot programs over the course of the year. We also entered into two new agreements with third party technology companies to help optimize back office costs in the coming years, reduce complexity and enhance the suite of capabilities. We offer clients first with Genpact, a global leader in business and technology services gives us access to their expertise in advanced AI powered technology and automation, which complements our client management capabilities and connectivity across the consumer goods and retail industries.

例如，我們簽署了一項協議，利用我們與全球領先的食品、健康和美容消費品公司之一提供的廣泛服務，我們擴大了我們的業務範圍，並在一年中啟動了關鍵的試點計畫。我們還與第三方技術公司簽訂了兩項新協議，以幫助優化未來幾年的後台成本、降低複雜性並增強功能套件。我們以客戶為先，簡柏特是商業和技術服務的全球領導者，使我們能夠利用他們在先進人工智慧技術和自動化方面的專業知識，這補充了我們在消費品和零售業的客戶管理能力和連結能力。

Separately, we are modernizing our IT support services in collaboration with an award-winning provider of business services, Tata Consultancy Services. TCS is known for its expertise in digital technologies, innovation and commitment to delivering customer value, stable, transform and modernize our IT services to benefit the team clients and customers. We have also completed several divestitures and continue to evaluate opportunities to simplify our operations further, so we can focus more resources on our core businesses and enable growth.

另外，我們正在與屢獲殊榮的商業服務供應商 Tata Consultancy Services 合作，實現 IT 支援服務的現代化。TCS 以其在數位技術、創新和致力於提供客戶價值、穩定、轉型和現代化 IT 服務方面的專業知識而聞名，以使團隊客戶和顧客受益。我們還完成了多項資產剝離，並繼續評估進一步簡化營運的機會，以便我們可以將更多資源集中在核心業務上並實現成長。

In January, we sold our collection of businesses serving the foodservice industry, most notably Waypoint to prospect filled Growth Partners. The foodservice businesses were combined with key impact sales and systems as a part of that sale, Advantage receive a total gross proceeds of approximately $100 million, representing mostly cash and an ongoing 7.5% stake in the new entity action foodservice sales. Further streamlines our portfolio enables us to partner and core adjacent categories and helps us delever our balance sheet. We've also taken steps to optimize our European joint venture. We reduced our majority stake in advantage, small and limited a joint venture with small and group to a minority stake of 49.6% in exchange for cash and other considerations. This transaction will ultimately simplify our reporting and help advantage reduce back-office complexities and expenses while allowing us to continue our constructive partnership with this molecule.

一月份，我們將服務於餐飲服務業的一系列業務出售給了充滿前景的成長合作夥伴，其中最著名的是 Waypoint。作為此次出售的一部分，餐飲服務業務與關鍵影響力銷售和系統相結合，Advantage 獲得的總收益約為1 億美元，其中大部分為現金以及新實體行動餐飲服務銷售中7.5% 的持續股份。進一步簡化我們的投資組合，使我們能夠合作並核心相鄰類別，並幫助我們去槓桿化我們的資產負債表。我們也採取措施優化我們的歐洲合資企業。我們將優勢、小型和有限與小型和集團合資企業的多數股權減至49.6%的少數股權，以換取現金和其他對價。這項交易最終將簡化我們的報告，並有助於降低後台複雜性和費用，同時使我們能夠繼續與該分子建立建設性合作關係。

Finally, last October, we sold Atlas technology group to Chris, which will empower CPG brands with better data and serve as the data acquisition technology platform for Advantage clients with its cloud-based data-sharing platform. We will collaborate with Chris to offer clients sophisticated supply chain analytics with an expanded retail footprint. All of these transactions from our recent divestitures to new collaborations with world-class providers, we'll make advantaged stronger, more nimble, more competitive and better enable us to drive our brand clients and retail customers' businesses we have a record of success with client relationships that have lasted for decades.

最後，去年10月，我們將Atlas技術集團出售給Chris，這將為CPG品牌提供更好的數據，並透過其基於雲端的數據共享平台作為Advantage客戶的數據採集技術平台。我們將與克里斯合作，為客戶提供複雜的供應鏈分析以及擴大的零售業務。所有這些交易，從我們最近的資產剝離到與世界一流供應商的新合作，我們將使我們的優勢更強大、更靈活、更具競爭力，並更好地推動我們的品牌客戶和零售客戶的業務，我們有成功的記錄持續數十年的客戶關係。

In fact, among our top 100 clients, the average relationship duration is north of 15 years with over 90% retention over time. This track record of client retention and these recent divestitures and collaborations serve as the foundation that will allow us to focus our efforts and reinvest in enhancing our capabilities from talent to technology as a critical accountability lever. Our enhanced processes and platforms will enable us to strengthen relationships and be our clients' strategic partner of choice we know our long-term success is tied to the people we employ and the talent we develop. That's why we're committed to putting people first and building an environment of belonging where our teams can work and win together.

事實上，在我們的前 100 名客戶中，平均關係持續時間超過 15 年，長期保留率超過 90%。客戶保留的記錄以及最近的剝離和合作奠定了基礎，使我們能夠集中精力並進行再投資，以增強我們從人才到技術的能力，作為關鍵的問責槓桿。我們增強的流程和平台將使我們能夠加強關係並成為客戶選擇的策略合作夥伴，我們知道我們的長期成功與我們僱用的人員和我們培養的人才息息相關。這就是為什麼我們致力於以人為本，創造一個有歸屬感的環境，讓我們的團隊能夠共同努力並取得勝利。

Recently news, we recognize advantage as one of America's greatest Workplaces for Diversity in 2024. We are creating a culture that attracts top talent and remains committed to improving retention across our business. We hired over 2,800 net new employees in 2023, supporting continued improvements in our in-store merchandising and demonstration businesses. We continue to prioritize reducing turnover across our enterprise with significant improvements with our part-time employees over the year.

最近有消息稱，我們認識到作為 2024 年美國最偉大的多元化工作場所之一的優勢。我們正在創造一種吸引頂尖人才的文化，並繼續致力於提高整個業務的保留率。2023 年，我們淨僱用了 2,800 多名新員工，支持我們店內推銷和展示業務的持續改進。我們繼續優先考慮減少整個企業的人員流動，並在這一年裡對我們的兼職員工進行了重大改進。

Most notably, the year-over-year turnover rate improved in the fourth quarter by approximately 10% in our sampling and demonstration business and approximately 20% in our retailer merchandising business. We are pleased with these improving trends as advantage employs tens of thousands of teammates, most of whom are on the frontlines with consumers. Our transformation roadmap is based on a comprehensive understanding of the macro environment, market trends and competitive landscape. Nearly every major trend we're seeing in the market today aligns with the services and expertise we offer to our customers.

最值得注意的是，第四季度我們的樣品和演示業務的同比周轉率提高了約 10%，零售商推銷業務的周轉率提高了約 20%。我們對這些改善趨勢感到高興，因為優勢僱用了數以萬計的團隊成員，其中大多數人都在消費者的前線。我們的轉型路線圖是基於對宏觀環境、市場趨勢和競爭格局的全面了解。我們今天在市場上看到的幾乎每一個主要趨勢都與我們為客戶提供的服務和專業知識一致。

Put simply, we are positioned at the intersection of brands and retailers and brick and mortar and e-commerce. We believe we have an unparalleled understanding of the challenges and opportunities our clients and customers face. That means we can provide strategic services and solutions faster, more efficiently and in many cases better than they can themselves.

簡言之，我們處於品牌與零售商、實體與電子商務的交叉點。我們相信，我們對客戶和客戶所面臨的挑戰和機會有著無與倫比的理解。這意味著我們可以更快、更有效率地提供策略服務和解決方案，並且在許多情況下比他們本身更好。

Our depth of experience, agility and speed can help offset some of the headwinds their businesses face while identifying new paths to growth here, some of the trends we are seeing today and advising our clients and customers first from retailers, we see an appetite for innovation and a growing desire to expand private brands with encouraging indicators for the food and personal care industry. This bodes well for our private brands business, which continues to serve as a key partner to dozens of retailers.

我們豐富的經驗、敏捷性和速度可以幫助抵消他們的業務面臨的一些阻力，同時確定新的成長路徑，我們今天看到的一些趨勢，並首先從零售商處為我們的客戶和顧客提供建議，我們看到了對創新的興趣人們越來越渴望擴大自有品牌，食品和個人護理行業的指標令人鼓舞。這對我們的自有品牌業務來說是個好兆頭，我們的自有品牌業務將繼續成為數十家零售商的主要合作夥伴。

Second with broader inflation reverting to more normal levels. Pricing in the food category stabilizing encouraging more typical shopping patterns. In 2024, we expect to focus for CPGs and retailers on unit volume growth given the declines in most categories in 2023. And we are seeing early signs of this with innovation and SKU count increases.

其次，更廣泛的通膨恢復到更正常的水平。食品類別的定價穩定，鼓勵更典型的購物模式。鑑於 2023 年大多數品類都會下滑，我們預期 2024 年消費品和零售商將專注於單位銷售成長。隨著創新和 SKU 數量的增加，我們已經看到了這一點的早期跡象。

Our Q1 2024 advantage Outlook Survey of nearly 100 retailers and CPG manufacturers indicates that almost 80% of manufacturers are planning for unit growth, listing innovation and expanded distribution. As top drivers, our retail merchandising team support both innovation and distribution growth through their unparalleled capabilities and capturing opportunities at retail. Retailers, on the other hand, are less optimistic.

我們對近 100 家零售商和 CPG 製造商進行的 2024 年第一季優勢展望調查表明，近 80% 的製造商正在計劃銷售成長、上市創新和擴大分銷。作為主要推動者，我們的零售銷售團隊透過其無與倫比的能力和抓住零售機會來支持創新和分銷成長。另一方面，零售商則不太樂觀。

Just 44% are planning for unit volume growth. They're relying on promotions and the expansion of private brands as the drivers. In fact, 60% of retailers in our survey named private brands as one of their top three strategies to deliver value to their shoppers over the next six months and promotions are on the rise. Last year, almost 30% of units sold at retail were on promotion, a number that's risen each year since 2020, but remains below pre-pandemic levels.

只有 44% 的企業計劃增加銷售量。他們依靠促銷和自有品牌的擴張作為驅動力。事實上，在我們的調查中，60% 的零售商將自有品牌列為未來六個月為購物者提供價值的三大策略之一，促銷活動不斷增加。去年，近 30% 的零售單位正在進行促銷，這一數字自 2020 年以來逐年上升，但仍低於疫情前的水平。

Next, we continue to see food away from home pricing outpace food-at-home, given the different cost dynamics and competitive aspects of retail and restaurants. This trend will likely continue and serve as a tailwind for growth in retail food sales.

接下來，考慮到零售和餐廳的不同成本動態和競爭方面，我們繼續看到外出食品的定價超過了在家食品的價格。這種趨勢可能會持續下去，並成為零售食品銷售成長的推動力。

Finally, US consumers appear incredibly resilient. However, there is persistent uncertainty in growing pockets of financially strained shoppers. A return of student loan repayments and high interest rates are expected to continue impacting this segment of the US consumers manufacturers and retailers are recognizing the need to cater to two distinct sets of consumers at the same time, while managing costs, two thirds of manufacturers and retailers surveyed indicate they're satisfied with current staffing levels and plan no meaningful changes over the next 12 months. This requires retailers to scrutinize their shelf sets to meet different consumer needs in different stores, and we are able to help them execute more strategic planograms in store through our retailer services team.

最後，美國消費者顯得異常堅韌。然而，越來越多的經濟拮据的購物者仍然存在持續的不確定性。學生貸款償還和高利率預計將繼續影響這部分美國消費者，製造商和零售商認識到需要同時迎合兩類不同的消費者，同時管理成本，三分之二的製造商和零售商接受調查的零售商表示，他們對目前的人員配置水準感到滿意，並且計劃在未來12 個月內不進行任何有意義的改變。這要求零售商仔細檢查他們的貨架組合，以滿足不同商店的不同消費者需求，而我們能夠透過我們的零售商服務團隊來幫助他們在商店中執行更具策略性的貨架圖。

Let me conclude by stating we are excited about the opportunities ahead in 2024. As we ramp up activities to execute our strategy for growth acceleration. We also expect revenue and adjusted EBITDA growth. Excluding the in-year impact of the completed divestitures. We are steadfast in our mission to generate demand for consumers, brands and retailers converting shoppers into buyers in every way they shop advantage is uniquely positioned at the intersection of CPG brands and retailers, physical retail and e-commerce and national and private brands.

最後，我要指出，我們對 2024 年未來的機會感到興奮。當我們加強活動力度來執行我們的加速成長策略時。我們也預期營收和調整後 EBITDA 將會成長。不包括已完成的資產剝離的年內影響。我們堅定不移地履行我們的使命，即為消費者、品牌和零售商創造需求，以各種購物方式將購物者轉變為買家，我們在消費品品牌和零售商、實體零售和電子商務以及民族品牌和自有品牌的交叉點上擁有獨特的優勢。

We leverage leading capabilities spanning the path to purchase that are essential and sticky. No matter the market conditions and cultivate enduring relationships across the national retail ecosystem serving as a strategic consultant and delivering customized solutions fuel growth. We know that when and demand generation is done right, shoppers turn into buyers.

我們利用跨越購買路徑的領先能力，這些能力是必要且具有黏性的。無論市場狀況如何，作為策略顧問並提供客製化解決方案，在全國零售生態系統中培養持久的關係，推動成長。我們知道，當需求產生得當時，購物者就會變成買家。

With that, I'll turn it over to Chris for more on our financial performance and outline.

這樣，我會將其轉交給克里斯，以獲取有關我們財務業績和概要的更多資訊。

Thank you, Dave. Our recent divestitures and new collaborations underscore the discipline of our talented team in transforming our business I remain excited about what is to come for advantage with 2023 service a strong baseline for the expected growth.

謝謝你，戴夫。我們最近的資產剝離和新的合作凸顯了我們才華橫溢的團隊在業務轉型方面的紀律，我對 2023 年服務為預期成長奠定堅實基礎的優勢仍然感到興奮。

You've seen our financial results allow me to highlight for insights into our performance. First, our team has delivered an improved adjusted EBITDA performance in 2023, especially in the fourth quarter. Adjusted EBITDA was $424 million for the year and $115 million in the fourth quarter. Excluding foreign exchange and divestitures, the year-over-year change was a decline of 1.7% in 2023, an increase of 4.4% in the fourth quarter.

您已經看到了我們的財務業績，因此我可以重點介紹我們的業績。首先，我們的團隊在 2023 年，特別是第四季度，調整後的 EBITDA 業績有所改善。全年調整後 EBITDA 為 4.24 億美元，第四季調整後 EBITDA 為 1.15 億美元。不包括外匯和資產剝離，2023年年比變動為下降1.7%，第四季成長4.4%。

The growth driver came from the marketing segment due to the continued recovery of in-store sampling and demonstrations As a reminder, advantages in most of the largest US grocery and big box retailers and many choose Advantage as their exclusive in-store sampling and experiential marketing provider. In-store event counts increased 21% year over year in 2023, which represented approximately 79% of 2019 total pre-pandemic sampling volume.

由於店內樣品和演示的持續復甦，成長動力來自行銷領域提醒一下，美國大多數最大的雜貨和大型零售商的優勢，許多人選擇優勢作為其獨家的店內樣品和體驗式行銷提供者。2023 年，店內活動數量年增 21%，約佔 2019 年疫情前採樣總量的 79%。

In the fourth quarter event counts reached 83% of 2019 levels, representing nearly 11,000 events per day. We expect 2024 to showcase continued sequential recovery of accounts.Iin a recent retailer study, 91% of shoppers said sampling a product influenced their first decision and approximately two thirds reported making repeat purchases of that item. Second, we implemented pricing initiatives in both segments helped offset the majority of the $120 million of wage and benefit inflation incurred in 2023. These pricing actions represented more than one-third of the revenue growth over the course of the year, excluding FX and divestitures, we feel good about continued pricing actions and the wraparound benefit they will produce in 2024 relative to tapering inflation.

第四季的事件數量達到 2019 年水準的 83%，即每天發生近 11,000 起事件。我們預計2024 年客戶將持續連續恢復。在最近的一項零售商研究中，91% 的購物者表示，產品試用影響了他們的第一個決定，大約三分之二的人表示會重複購買該商品。其次，我們在這兩個領域實施的定價措施幫助抵銷了 2023 年發生的 1.2 億美元薪資和福利通膨的大部分。這些定價行動佔全年收入成長的三分之一以上（不包括外匯和資產剝離），我們對持續的定價行動以及它們將在 2024 年相對於通膨逐漸減弱產生的總體效益感到滿意。

Third, the actions taken to simplify the business had an impact on our comparable financial performance. For context, the in-year 2023 impact from completed divestitures on revenue and adjusted EBITDA, including the deconsolidation of our European joint venture was approximately $532 million and $17 million, respectively. We are actively exploring additional opportunities in 2024 to focus efforts on our core capabilities even further.

第三，為簡化業務而採取的行動對我們的可比較財務表現產生了影響。就背景而言，完成的資產剝離（包括歐洲合資企業的分拆）對 2023 年收入和調整後 EBITDA 的影響分別約為 5.32 億美元和 1700 萬美元。我們正在積極探索 2024 年的更多機會，以進一步專注於我們的核心能力。

Finally, partially offsetting the benefits to our performance was a decline in activity due to budget cuts from a large customer, the intentional exit of a client and the aforementioned inflationary cost pressures. These offsets and the divestitures explain the reported revenue, adjusted EBITDA and margin year over year decline in the sales segment in the quarter and for the full year.

最後，由於大客戶削減預算、客戶有意退出以及上述通膨成本壓力，導致活動減少，部分抵銷了我們業績的收益。這些抵銷和資產剝離解釋了銷售部門報告的收入、調整後的 EBITDA 和利潤率在本季和全年的同比下降。

Moving to our balance sheet, we continue to prioritize opportunities to reduce the net leverage ratio in a higher interest rate environment. For the fourth quarter, our net debt to adjusted EBITDA was approximately 4.2 times relative to the 4.5 times at the beginning of 2023.

轉向我們的資產負債表，我們繼續優先考慮在較高利率環境下降低淨槓桿率的機會。第四季度，我們的淨債務與調整後 EBITDA 比率約為 4.2 倍，相對於 2023 年初的 4.5 倍。

Our long-term objective is to reduce the net leverage ratio from current levels to below 3.5 times. We continue to emphasize working capital management, which allowed us to convert approximately 101% of adjusted EBITDA to adjusted unlevered free cash flow for 2023.

我們的長期目標是將淨槓桿率從目前水準降低至3.5倍以下。我們繼續強調營運資本管理，這使我們能夠將約 101% 的調整後 EBITDA 轉換為 2023 年調整後的無槓桿自由現金流。

In line with the prior quarter, our debt profile remains healthy and we have no meaningful maturities in the next three years. During the quarter, we voluntarily repurchased approximately $57 million in a combination of term loans and secured notes at an attractive discount, and will continue to monitor opportunities to deploy capital that deleverages the balance sheet while generating a favorable rate of return. As of December 31, our total funded debt outstanding was approximately $1.9 billion with nearly 89% of that debt hedged or at a fixed interest rate.

與上一季一致，我們的債務狀況保持健康，並且在未來三年內沒有有意義的到期日。本季度，我們以極具吸引力的折扣自願回購了約5700 萬美元的定期貸款和擔保票據組合，並將繼續關注部署資本的機會，以實現資產負債表去槓桿化，同時產生有利的回報率。截至 12 月 31 日，我們的未償債務總額約為 19 億美元，其中近 89% 的債務進行了對沖或採用固定利率。

Turning to our outlook for this year, we remain pleased by the deliberate steps to improve our financial discipline, combined with a steady economic backdrop. As such, we are planning for low single-digit growth in revenues and adjusted EBITDA, after considering the impacts of the completed divestitures. We currently expect adjusted EBITDA performance to be weighted towards the second half of the year due to accelerated investments in technology and talent. In the first half.

談到今年的展望，我們仍然對改善財務紀律的審慎措施以及穩定的經濟背景感到高興。因此，在考慮完成剝離的影響後，我們計劃實現收入和調整後 EBITDA 的低個位數成長。我們目前預計，由於技術和人才投資的加速，調整後的 EBITDA 表現將在下半年有所體現。上半場。

Our guidance contemplates the continued realization of pricing, which we believe can help offset persistent wage inflation, which is currently running at a low to mid single-digit rate. We expect to grow in-store sampling and demonstration events as we recover toward pre-pandemic levels in 2019, we continue to assess our portfolio to ensure we leverage our core strengths for profitable growth.

我們的指導考慮了定價的持續實現，我們認為這有助於抵消持續的薪資通膨，目前薪資處於低至中個位數的水平。隨著我們在 2019 年恢復到大流行前的水平，我們預計將增加店內採樣和演示活動，我們將繼續評估我們的產品組合，以確保我們利用我們的核心優勢來實現盈利增長。

To that end, we've chosen to exit two client relationships in the first quarter. These client exits will weigh on revenues and have a more muted impact on adjusted EBITDA throughout 2024 and for the avoidance of doubt, incorporated into our outlook for the year. As a reminder, our operational scale is unmatched with more than 3,500 CPG brand clients across over 15 trade channels.

為此，我們選擇在第一季退出兩個客戶關係。這些客戶退出將給收入帶來壓力，並對整個 2024 年調整後的 EBITDA 產生較小的影響，為避免疑義，將其納入我們今年的展望中。需要提醒的是，我們的營運規模無與倫比，擁有超過 15 個貿易管道的 3,500 多個 CPG 品牌客戶。

We support nearly 100,000 stores, allowing us to evaluate retailer needs and effectively enable them to address their priorities. Despite the benefits of this breadth of offering, there are times in which we view client exits as necessary and economically attractive for us to achieve our long-term strategic goals.

我們為近 100,000 家商店提供支持，使我們能夠評估零售商的需求並有效地幫助他們解決他們的優先事項。儘管提供如此廣泛的服務有許多好處，但有時我們認為客戶退出對於我們實現長期策略目標是必要的，並且在經濟上具有吸引力。

Our guidance also considers the completed divestitures in 2023 and year to date. However, our guidance does not include the impact of additional divestitures that may be contemplated, simplify the business. Further share repurchases remain part of our capital structure strategy, mainly to offset employee incentive related dilution and to take advantage of what we believe is an undervalued stock price. In 2023, we repurchased approximately 2 million shares for $6.4 million and traded a small foreign asset for over 2 million incremental shares in the fourth quarter, we've repurchased more than 2.5 million shares so far in 2024.

我們的指引也考慮了 2023 年及年初至今完成的資產剝離。然而，我們的指導不包括可能考慮的額外剝離、簡化業務的影響。進一步的股票回購仍然是我們資本結構策略的一部分，主要是為了抵消與員工激勵相關的稀釋，並利用我們認為被低估的股價。2023年，我們以640萬美元回購了約200萬股股票，並在第四季度用少量外國資產交易了超過200萬股增量股票，2024年迄今我們已回購了超過250萬股股票。

2024 will be the beginning of a three-year period, investment to modernize, differentiate and transform the organization under our new shared services model and plan to build technology platforms for data modernization, cloud-based capabilities, including AI and other tools to improve operating efficiencies. A significant portion of the planned investment is to upgrade old systems to enable enterprise-wide operations compared to the siloed way we operate in the past and my greater information to the cloud.

2024 年將是三年期的開始，在我們新的共享服務模式下投資對組織進行現代化、差異化和轉型，併計劃構建數據現代化、基於雲端的功能的技術平台，包括人工智慧和其他工具，以改善營運效率。計劃投資的很大一部分是升級舊系統，以實現企業範圍內的運營，而不是我們過去的孤立運營方式以及將更多資訊傳輸到雲端。

The largest of those initiatives will be an ERP upgrade as our current systems approaching the end of its useful life. We expect to complete the implementation sometime in 2026, and we believe the upgrade is necessary to ensure that we deliver best-in-class service to our clients. Once complete, we expect a fully integrated modern system to simplify internal operations and improve our responsiveness to our clients. We believe the system upgrade will result in a DSO reduction along with cost savings and business efficiencies by 2026.

其中最大的舉措將是 ERP 升級，因為我們目前的系統已接近其使用壽命。我們預計在 2026 年某個時候完成實施，我們相信升級對於確保我們為客戶提供一流的服務是必要的。完成後，我們期望建立一個完全整合的現代系統，以簡化內部營運並提高我們對客戶的回應能力。我們相信，到 2026 年，系統升級將減少 DSO，並節省成本並提高業務效率。

In terms of upfront financial considerations, we expect to spend approximately $160 million to $170 million of CapEx related to all these technology initiatives through 2026. As a result, we expect CapEx this year to be $90 million to $110 million, compared to the $46 million spent in 2023. This represents enhanced spend related to the aforementioned ERP program and other IT initiatives, including the data modernization and AI capabilities, retail execution platforms, the Genpact and TCS outlays and ramp up related to our new sampling demonstration account.

就前期財務考量而言，我們預計到 2026 年將花費約 1.6 億至 1.7 億美元的資本支出與所有這些技術計畫相關。因此，我們預計今年的資本支出將為 9,000 萬至 1.1 億美元，而 2023 年的支出為 4,600 萬美元。這代表了與上述 ERP 計劃和其他 IT 計劃相關的支出增加，包括資料現代化和人工智慧功能、零售執行平台、簡柏特和 TCS 支出以及與我們新的抽樣演示帳戶相關的支出增加。

We expect capital expenditures to taper in 2025 and return to historical levels in 2026 as project related IT spending diminishes. The total investment for the ERP project is estimated to be $70 million to $80 million, split 75-25 between capital and operating expenses. The majority of which will occur as onetime expenses. This investment will be phased in over the next three years with over 40% of total spend occurring in 2024.

我們預計，隨著專案相關 IT 支出的減少，資本支出將在 2025 年逐漸減少，並在 2026 年恢復到歷史水準。ERP專案的總投資預計為7,000萬至8,000萬美元，資本支出和營運支出各佔75-25。其中大部分將作為一次性費用發生。這項投資將在未來三年內分階段實施，到 2024 年將佔總支出的 40% 以上。

The investments and actions we plan to take will not only heightened CapEx in the near term, but also OpEx and onetime expense implications likely resulted in unfavorable comparisons to last year for net income and EPS. But for the avoidance of doubt, our adjusted EBITDA guidance does contemplate these investments.

我們計劃採取的投資和行動不僅會在短期內提高資本支出，而且對營運支出和一次性費用的影響可能會導致淨利潤和每股收益與去年相比不利。但為避免疑義，我們調整後的 EBITDA 指引確實考慮了這些投資。

Despite the significant capital outlays, which we view to be critical to our business, we expect to make significant progress toward our long-term net leverage target over the course of 2024 and 2025. We are looking forward to an exciting year in 2024 as a reminder, we plan to report financial results with our three new segments experiential branded and retailer services on our next quarterly earnings. Thank you for your time. I'll now turn it over to Dave.

儘管資本支出龐大（我們認為這對我們的業務至關重要），但我們預計在 2024 年和 2025 年期間將在實現長期淨槓桿目標方面取得重大進展。我們期待 2024 年令人興奮的一年，作為提醒，我們計劃在下個季度的收益中報告我們三個新細分市場體驗式品牌和零售商服務的財務表現。感謝您的時間。我現在把它交給戴夫。

Thanks, Chris. The people of Advantage have done tremendous work, growing the company to what it is today. Our teammates wake up daily, focusing on serving the brands we represent and retailers where they were while enriching lives in our communities, it's our job to enable their efforts and help them realize their personal and professional goals critical step to becoming the employer of choice we endeavor to be, but we are always proud to celebrate our strengths and successes. We remain unsatisfied that healthy tension creates the energy and momentum we need to realize a better future for advantaged solutions.

謝謝，克里斯。Advantage 的員工付出了巨大的努力，使公司發展到了今天的水平。我們的隊友每天醒來，專注於為我們所代表的品牌和零售商提供服務，同時豐富我們社區的生活，我們的工作是支持他們的努力並幫助他們實現個人和職業目標，這是成為我們首選雇主的關鍵一步我們努力做到這一點，但我們總是自豪地慶祝我們的優勢和成功。我們仍然不滿意，健康的緊張局勢創造了我們需要的能量和動力，以實現優勢解決方案的更美好未來。

We will now take your questions. Operator?

我們現在將回答您的問題。操作員？

(Operator instructions)

（操作員說明）

Greg parrish, Morgan Stanley.

格雷格·帕里什，摩根士丹利。

Hey, good morning. Thanks for taking my questions and thanks for the slide on the divestiture detail as well as enhanced guidance slide. Those are helpful. And I just wanted to start with a strategic review or portfolio review. I guess more specifically, you've done a lot in a short amount of time. And I don't mean to minimize that, um, but these were there clearly non-core assets, at least from the outside. So as from here. Do you think the portfolio optimization is largely complete and it's maybe only small diversification here that is that premise not correct at all?

嗨，早安。感謝您提出我的問題，並感謝有關剝離細節的幻燈片以及增強的指導幻燈片。這些很有幫助。我只想從策略審查或投資組合審查開始。我想更具體地說，你在短時間內做了很多事。我並不是要最小化這一點，嗯，但這些顯然是非核心資產，至少從外部來看是如此。所以從這裡開始。您是否認為投資組合優化已基本完成，而這裡可能只是小規模的多元化，而這個前提根本不正確？

Greg, this is Dave Peacock. Thanks for the question. And I would say that's probably not correct. We're continuing to go through a portfolio. We see opportunities in areas as we refine what our core business capabilities are. And obviously, I don't want to comment on any on. You know, processes are activities underway on, but I would say that is it is probably not true that we only have smaller divestitures going forward.

格雷格，這是戴夫·皮科克。謝謝你的提問。我想說這可能不正確。我們正在繼續審查投資組合。當我們完善核心業務能力時，我們看到了一些領域的機會。顯然，我不想對任何內容發表評論。你知道，流程是正在進行的活動，但我想說的是，我們未來只進行較小規模的資產剝離可能是不正確的。

Greg, I'd just add -- it's Chris Growe. Really, I just want to add a comment, but we're being prudent as we go through the portfolio. And certainly a lot of things can affect that, I think to focus on the core refining businesses that are not such a distraction to management.

格雷格，我想補充一下——我是克里斯·格羅。真的，我只是想添加一條評論，但我們在審查投資組合時會保持謹慎。當然，很多因素都會影響這一點，我認為專注於核心煉油業務不會讓管理層分心。

And then I just want to be clear that, you know any sort of proceeds would come from divestures would be used for debt paydown. So just to reiterate that point, yes.

然後我想澄清一點，你知道任何形式的資產剝離收益都將用於償還債務。所以只是重申這一點，是的。

Okay, great. That's helpful color. So thank you. I wanted to ask about the systems investments here, I guess one point of clarity. So the I guess this is slide 15, the $160 million to $170 million, that's all inclusive. So that's inclusive of the ERP as well and clarify that. And then I guess second part of it, how are you thinking about payback on this, right? It's kind of a big investment and you see payback just on the efficiency side where you have a huge expense base, obviously. So maybe it's bringing that down or do you need to see some of the revenue opportunities. I think you put on the slide here, unlocking value of data and analytics and creating new opportunities. So do you need does that come through to kind of see payback on those things?

好的，太好了。這是有用的顏色。所以謝謝。我想問這裡的系統投資，我想有一點要清楚。所以我想這是第 15 張投影片，1.6 億美元到 1.7 億美元，這就是全部費用。所以這也包括 ERP 並澄清這一點。然後我想第二部分是，你如何看待這方面的回報，對吧？這是一項巨大的投資，顯然，您會在效率方面看到回報，因為您有龐大的支出基礎。所以也許它會降低這一點，或者你是否需要看到一些收入機會。我認為您在這裡放了幻燈片，釋放數據和分析的價值並創造新的機會。那麼你是否需要透過這些事情來看到回報？

Yeah, to some degree, yes, Greg, I think you've got a couple of things going on. First, the ERP system, which is going to significantly streamline our financial processes, improve our speed in voice and really just improve the information flow within our finance groups. That then goes out to our business groups and business units for quicker decision better decision making, I think and then when you look at the well haul data modernization, which is the daily on cloud migration and some of this comes in the avoidance of expenditures on costly data centers and equipment when you're using the cloud on. And then a lot of it comes from enabling things like AI. And I know that's a buzzword right now but and so we're already doing that in areas like for employees for concert, we're looking at payroll and inquiries and policies from accelerate our candidate screening, the quicker we can get the higher the better as it relates to both attraction and retention, contract management. And then for customers, there's a lot we can do as it relates to the validation of the work we do on and using AI and photos in a more in a more advanced way than we are today on just determine patterns and help with our routing of personnel so we get more efficiency on that as well.

是的，在某種程度上，是的，格雷格，我認為你已經發生了一些事情。首先，ERP 系統將顯著簡化我們的財務流程，提高我們的語音速度，並真正改善我們財務團隊內的資訊流。然後，我們的業務團隊和業務部門可以更快地做出更好的決策，我認為，然後當您查看井道資料現代化時，這是雲端遷移的日常，其中一些是為了避免在您使用雲端時，資料中心和設備成本高昂。其中很大一部分來自於人工智慧等技術。我知道這是現在的流行詞，但是我們已經在員工音樂會等領域這樣做了，我們正在研究工資單、查詢和政策，以加速我們的候選人篩選，我們越快獲得越高越好因為它與吸引和保留、合約管理有關。然後對於客戶來說，我們可以做很多事情，因為這涉及驗證我們所做的工作，並以比我們今天更先進的方式使用人工智慧和照片來確定模式並幫助我們路由人員，因此我們在這方面也獲得了更高的效率。

Greg, I can just add a little bit more color there on maybe what some of the financial side, just at the level of spending. We put it in the release and the script, the sup over 40% of the spend is going to be this year. So it'll taper in '25 and again in my '26 year, essentially back to historical levels.

格雷格，我可以在一些財務方面添加更多的色彩，只是在支出水平上。我們把它放在版本和腳本中，超過 40% 的支出將在今年進行。因此，它將在 25 年逐漸減少，並在我的 26 年再次減少，基本上回到歷史水平。

So that will get us there. So there's a bit of a surge this year, a little bit more next year and then a little this year, I should say, will next year incrementally, and then we'll be back to normal in 26. And there are efficiencies that come from this. There's DSO improvement is this will help support our cost reduction programs. But this is also, as Dave said, an enabler, right? This is going to help us on really better support our customers and our business. And that's where the key area of upgrading the previous system. That's going to really, really kind of hopefully support incremental growth of the business.

這樣我們就能到達那裡。所以今年會有一點激增，明年會多一點，然後今年會一點點，我應該說，明年會逐漸增加，然後我們將在 26 年恢復正常。由此帶來了效率。DSO 的改進將有助於支持我們的成本削減計劃。但正如戴夫所說，這也是一個推動因素，對吧？這將幫助我們更好地支持我們的客戶和我們的業務。而這正是對原有系統進行升級的關鍵。這真的非常有希望支持業務的增量成長。

I think beyond that just that the level of spending will be a little higher this year and then you will see less investment going forward.

我認為除此之外，今年的支出水準會更高一些，然後你會看到未來的投資減少。

Okay, great. Thanks. The some help on that. And I guess one more for then. I just wanted to ask about the client access. I think you called out two more this quarter is a big one last year. Would you give some color on those? Are they 100% initiated from year end? Kind of what are the competitive dynamics that are at play? I know you call them client exits but I assume competitors are still competing on cost as they've done in the past and do kind of that, are they ramping up on their sort of cost competitiveness and you do that as a risk going forward? Thanks.

好的，太好了。謝謝。對此有一些幫助。我想那時還有一個。我只是想問一下關於客戶端訪問的問題。我認為你本季又召集了兩個人，這是去年的一個大事件。你能給這些顏色一些顏色嗎？它們是從年底開始100%啟動的嗎？正在發揮作用的競爭動力是什麼？我知道你稱它們為客戶退出，但我認為競爭對手仍在像過去那樣在成本上競爭，並且確實這樣做了，他們是否正在提高成本競爭力，而你這樣做是作為未來的風險嗎？謝謝。

I would just add Chris Growe here. Greg, I would just say that we've talked about a relatively calm and competitive environment and it remains that way. Frankly, these are decisions we made internally to exit clients that will have an effect on the business. So I'd just say that I think of the kind of top line effect in less than 2% of revenue. But it's a meaningful enough number you want to call it out. I just think you're going to see less of an effect on EBITDA as a result, and it might help explain why there some decisions you made here on some of these client exits.

我想在這裡添加克里斯·格羅。格雷格，我只想說，我們已經討論過一個相對平靜和競爭的環境，而且現在仍然如此。坦白說，這些都是我們內部為退出客戶所做的決定，會對業務產生影響。所以我只想說，我認為這種所得效應佔收入的比例不到 2%。但這是一個足夠有意義的數字，你想把它喊出來。我只是認為您將看到對 EBITDA 的影響較小，這可能有助於解釋為什麼您在其中一些客戶退出方面做出了一些決定。

Right. That's helpful. Thank you, guys.

正確的。這很有幫助。感謝你們。

Thanks, Greg.

謝謝，格雷格。

Joseph Vafi, Canaccord Genuity.

約瑟夫‧瓦菲 (Joseph Vafi)，Canaccord Genuity。

Hey, guys, good morning. Thanks for all the information in the release and presentation. Some maybe we just start at a high level. And maybe just Dave, go back to your prepared remarks around and where you sit at the intersection of some of these businesses just wondering where are you where you would kind of largely bucket?

嘿，夥計們，早安。感謝您提供發布和演示中的所有資訊。有些可能我們只是從高水準開始。也許戴夫，回到你準備好的言論，你坐在其中一些企業的交叉點上，只是想知道你在哪裡，你會在哪裡大部分桶？

Yes, our revenue that touches e-commerce today and how you see how you might define that bucket of revenue and maybe compare and contrast it to other pieces of business in terms of growth opportunity and and things you're seeing. And obviously, you're just bringing in a new Chief Revenue Officer as well. So that may tie in to this question as well. And then I'll have a follow-up.

是的，我們的收入涉及當今的電子商務，以及您如何看待如何定義該收入桶，並可能在成長機會和您所看到的方面將其與其他業務進行比較和對比。顯然，您還引入了一位新的首席營收長。所以這也可能與這個問題有關。然後我會跟進。

No, appreciate Joe. Some so on e-commerce, a couple of things. First, on kind of maybe around, if not a little less than 10% of revenue. If you look at either or through e-commerce, it is an area where I think we have a lot of opportunity. And it's an area where we're investing some. And this would kind of be in what I'd say is our normal kind of IT investment level. So in other words, as Chris said, we've got increases for ERP data monetization, which will also help our e-commerce efforts is the data monetization. And then we have some CapEx increases to keep up with our on the demo business, but I'm both very bullish on e-commerce right now. What I will say, though, which is interesting as e-commerce has returned back to sort of that 10% growth rate dipped a bit in the fourth quarter overall, not just for us, I'm talking about overall industry and it's still a pretty small share of total and grocery sales if you will.So the share growth is pretty de minimus. And as we've done, we've put up done research with our CPG partners and a lot of our retail partners. And I got to say e-commerce kind of comes in fit fix as far as what they see as a lever to drive growth.

不，欣賞喬。有些是關於電子商務的，還有一些。首先，即使不是略低於收入的 10%，也可能是約 10%。如果你看看電子商務，我認為這是一個我們有很多機會的領域。這是我們正在投資的一個領域。我認為這屬於我們正常的 IT 投資水準。換句話說，正如 Chris 所說，我們的 ERP 數據貨幣化有所增加，這也將有助於我們的電子商務工作，即數據貨幣化。然後我們增加了一些資本支出，以跟上我們的簡報業務，但我現在都非常看好電子商務。不過，我要說的是，這很有趣，因為電子商務已經恢復到10% 的成長率，總體而言，第四季略有下降，不僅僅是我們，我說的是整個行業，它仍然是一個如果你願意的話，它在總銷售額和雜貨銷售額中所佔的份額相當小。因此，份額增長非常小。正如我們所做的那樣，我們與我們的消費品合作夥伴和許多零售合作夥伴一起進行了研究。我不得不說，就他們所認為的推動成長的槓桿而言，電子商務是恰到好處的。

So we see a lot of opportunity there. We think we've got a lot of headroom in the industry and on an opportunity, frankly, to hopefully capture share in that space. At the same time, I think we have to be realistic to the fact that brick and mortar still critical both to the industry and to our business.

所以我們在那裡看到了很多機會。我們認為我們在該行業擁有很大的發展空間，並且坦率地說，我們有機會佔領該領域的份額。同時，我認為我們必須現實地認識到實體對於產業和我們的業務仍然至關重要的事實。

Fair enough. That's good color. And then secondly, I just wanted to drill down a little bit. I know I think maybe it maybe was it Chris mentioned employee turnover was down pretty strongly in Q4. I'm just wondering, were there any specific changes you did there to bring that employee turnover down or just how you see that employee turnover outlook here in 2020 for things like that. Thanks.

很公平。這顏色真好啊其次，我只是想深入了解。我知道我想也許是克里斯提到第四季員工流動率大幅下降。我只是想知道，你們是否做了任何具體的改變來降低員工流動率，或者你們如何看待 2020 年員工流動率前景。謝謝。

Joe. Yes, yes, I would say we're on the front edge of a lot of our work relative to high volume talent turnover is improving. I'd say a lot of that is macro market on the labor markets are loosening a little bit. They're still tight tighter on a historic basis, but they're loosening a little bit. And there have been there's been less job growth in kind of the retail and professional services spaces in the last most recent quarters are more kind of broadly in the US, which is probably giving us a more availability of labor.

喬.是的，是的，我想說，相對於大量人才流動率的改善，我們在許多工作上都處於領先地位。我想說，很大程度上是勞動市場的宏觀市場正在稍微放鬆一下。從歷史上看，它們仍然更緊，但正在放鬆。在最近幾個季度，美國零售和專業服務領域的就業成長有所減少，這可能為我們提供了更多的勞動力。

But there's a lot of initiatives we have underway and I mentioned speed, the hires are critical, and we're looking a lot at doing things around first, 90 days. I mean, like most businesses, you can imagine in a high-volume talent base. If you can keep someone 90 days, your likelihood of retention is much higher on. So there are a number of initiatives we have against that. So we're very bullish about the ability to leverage better talent management to drive retention.

但我們正在進行很多舉措，我提到了速度，招募至關重要，我們正在考慮在第 90 天左右做很多事情。我的意思是，像大多數企業一樣，你可以想像擁有大量的人才基礎。如果你能保留某人 90 天，那麼你保留某人的可能性就會更高。因此，我們採取了許多措施來反對這一點。因此，我們非常看好利用更好的人才管理來提高人才留任率的能力。

And I think the other thing, and you had you didn't ask it, but I think it comes up a lot is on the wage side. Obviously, wage inflation still is high relative to historic averages. We do see it on improving a bit on our overall wage inflation is kind of in line with broader retail from an ROE standpoint. But there are opportunities for efficiency as far as the processes, what we do on in-store. And obviously, if we can reduce our turnover, we bring our recruiting costs down pretty dramatically, which is really perfect.

我認為另一件事，你沒有問過，但我認為它經常出現在工資方面。顯然，薪資通膨相對於歷史平均仍然較高。從股本報酬率的角度來看，我們確實認為整體薪資通膨有所改善，這與更廣泛的零售業是一致的。但就流程、我們在店內所做的事情而言，還有提高效率的機會。顯然，如果我們能夠減少營業額，我們的招募成本就會大幅下降，這真的是完美的。

Great. Thanks a lot, guys.

偉大的。非常感謝，夥計們。

Thank you.

謝謝。

Faiza Alwy, Deutsche Bank.

Faiza Alwy，德意志銀行。

Yes, hi. Thanks and good morning. So I wanted to talk about the three pieces that you had previously mentioned that are branded retail and experiential. And I think, Chris, I heard you say that next quarter we're going to start getting and you said that you're going a segment on that basis. So just curious if you can give us an overview of how those individual pieces have performed and in '23 and what the expectation is for '24?

是的，嗨。謝謝，早安。所以我想談談您之前提到的品牌零售和體驗式的三件作品。我想，克里斯，我聽到你說下個季度我們將開始獲得，你說你將在此基礎上進行細分。所以只是好奇您能否向我們概述一下這些單獨的作品在 23 年的表現以及對 24 年的期望是什麼？

Yes. So we'll give that information in the first quarter, Pfizer and I just would say that the business, as we rounded out the year within the old format will have the newbie on the new segments going forward. I should say that the sales segment, as you think about it largely aligns with branded services with some pieces that would go into retailer services. And then experiential is a chunk of the marketing segment. So I think you're just going to it's going to be kind of pieces of each one that then move into each segment. And I don't have information I can share with you on the 2023 performance. I know we have a slide in the deck that outlines kind of the rough revenue breakdown by segment, but I think until we report that way, and frankly, we'll cut the numbers that way. I'll hold off in giving you much perspective on those individual segment performances.

是的。因此，我們將在第一季提供這些信息，輝瑞和我只是想說，當我們以舊格式結束這一年時，該業務將在新的細分市場中迎來新人。我應該說，正如你所想，銷售部門在很大程度上與品牌服務一致，其中一些部分將進入零售商服務。體驗是行銷領域的重要組成部分。所以我認為你只是將它作為每個部分的一部分然後進入每個部分。關於 2023 年的表現，我沒有可以與您分享的資訊。我知道我們有一張幻燈片概述了按細分市場劃分的粗略收入細分，但我認為在我們以這種方式報告之前，坦率地說，我們會以這種方式削減數字。我將暫緩向您提供這些單獨部分的表現的更多看法。

Okay. That's fair. And then just on like Slide 5, where you talk about where you show the data around sampling and demonstration. It sounds like was there was a tick down and how are you thinking those trends are we I guess, are we at a at a more normalized level now?

好的。這還算公平。然後就像幻燈片 5 一樣，您將在其中討論在何處顯示採樣和簡報的資料。聽起來好像出現了下降，我猜您如何看待這些趨勢，我們現在處於更正常化的水平嗎？

And we are continuing to see event recovery with some of our key customers, although we've made a lot of progress and we have some key customers where we're well over 90%, which is great. And those are the customers that kind of turn those businesses back on, if you will or if you will earlier. So when different customers chose to kind of reengage on experiential services on varied a little bit?

我們繼續看到一些關鍵客戶的事件恢復，儘管我們已經取得了很大進展，並且我們有一些關鍵客戶的恢復率遠遠超過 90%，這很​​棒。這些客戶可以讓這些業務重新啟動，如果你願意的話或如果你更早願意的話。那麼，當不同的客戶選擇重新參與體驗式服務時，會略有不同嗎？

So on, I'll be honest, we were very optimistic about this business. It performed very well for us in 2023, and we're optimistic around 2024 from a lot of initiatives, as I mentioned against the high-volume talent, which affects that area, a lot more talent we can get in and keep the better our execution rate is and as we progress into some reporting out first quarter of 24 and forward, we're going to start sharing information. That's not just a look back at how we compare to 2019. We're going to go through and it's been almost five years. So we're getting to a point where and we have to look at maybe a little bit other data and others are going to have new segments it gives a better indication of how those businesses are performing.

所以說實話，我們對這個業務非常樂觀。它在 2023 年對我們來說表現非常好，我們對 2024 年左右的許多舉措感到樂觀，正如我所提到的，針對影響該領域的大量人才，我們可以引進更多人才，並保持更好的水平執行率是，隨著我們進入24 日第一季及以後的報告，我們將開始分享資訊。這不僅僅是回顧我們與 2019 年的比較。我們要經歷這一切，已經快五年了。因此，我們已經到了這樣一個地步，我們可能必須查看一些其他數據，其他數據將有新的細分市場，它可以更好地表明這些業務的表現如何。

But I can just add a little color there. If I go back to Joe's question about turnover and the other side of that, the retention, it's the less turnover, obviously, more employees. It allows us to execute more of these events more of this in-store work. So there's a direct benefit to the Company by having less turnover, having more employees on the payroll. And we did make good progress in the fourth quarter. We got over 80% of that or 83% as we sort of ended the year on events versus 2019 as base that is that the right measure, I think there's other ways to better measure that business. But we got back to 83%. I just would say that in 2024, we should exit the year probably somewhere in that 90% range. So we'll make progress throughout the year.

但我可以在那裡添加一點顏色。如果我回到喬關於人員流動和另一方面的問題，即保留率，那就是人員流動減少，顯然，員工數量增加。它使我們能夠執行更多此類活動以及更多店內工作。因此，減少人員流動、增加員工數量會為公司帶來直接的好處。我們在第四季度確實取得了良好的進展。我們得到了超過 80% 或 83% 的數據，因為我們以事件為基礎，以 2019 年為基礎，這是正確的衡量標準，我認為還有其他方法可以更好地衡量該業務。但我們又回到了 83%。我只是想說，到 2024 年，我們應該會在 90% 的範圍內結束這一年。所以我們全年都會取得進步。

And then I just also want to add that there's we talked about in our prepared remarks a new customer, a large customer that where the experiential partner for them so that that will be ramping throughout the year, in fact, for this part of our capital that we're spending this year. So I just want make sure I make that note there. So there's some really good progress there, and that will be a continued growth driver in 24.

然後我還想補充一點，我們在準備好的發言中談到了一個新客戶，一個大客戶，他們是他們的經驗豐富的合作夥伴，因此事實上，我們這部分資本將在全年不斷增加我們今年的支出。所以我只是想確保我在那裡做了筆記。因此，這方面取得了一些非常好的進展，這將成為 24 世紀的持續成長動力。

Great. Okay. And then just going back to the client exits, are they in a particular area or particular service areas or the retailer. Can you give us a bit more color around sort of what type of services you're providing, where you know they were very where you're finding that you're not getting a great time.

偉大的。好的。然後回到客戶出口，他們是否在特定區域或特定服務區域或零售商。您能否給我們更多關於您所提供的服務類型的信息，您知道這些服務非常適合您，但您卻發現自己並沒有享受到愉快的時光。

Thanks, Faiza. I would say it's primarily in areas that is in the retail merchandising space, not exclusively, but primarily. And and as you're looking at what we have is a hybrid model of both dedicated teams where they're dedicated to a specific client and then you've got syndicated teams. It's really optimizing on the routing and frankly, the kind hours of those syndicated teams on where we're tracking this down to sort of our utilization on detail. And that's when those exits are determined and they're done obviously, in conjunction with the clients. It's not something where we we pull the rug out from under them. We have kind of detailed conversations and ultimately come to the decision to move on and ensure that we're going focusing and taking care of the clients that were.

謝謝，法伊札。我想說，這主要是在零售銷售領域，不是專門的，而是主要的。正如您所看到的，我們擁有的是兩個專門團隊的混合模型，他們致力於特定的客戶，然後您就擁有了聯合團隊。它確實在路由上進行了優化，坦白說，這些聯合團隊的工作時間我們正在追蹤這一點，以了解我們對細節的利用。那時，這些退出就被確定了，而且顯然是與客戶一起完成的。這不是我們把地毯從他們下面拉出來的事情。我們進行了詳細的對話，最終決定繼續前進，並確保我們將重點放在並照顧以前的客戶。

Got it. And then just last one for Chris. I know you haven't provided a cash flow guide. And just curious, given sort of you're going to incur some of these one-time charges around technology investment, how should we think about kind of free cash flow conversion in '24?

知道了。最後一張是克里斯的。我知道你還沒有提供現金流量指南。只是好奇，考慮到您將在技術投資方面產生一些一次性費用，我們應該如何考慮 24 年的自由現金流轉換？

Yes. So we did offer a free cash flow guidance for this year. So I know it's the first time we've done that. So maybe that caught you by surprise, but a lot of activity has high. And that's okay enough. So I'm happy to give you some color on that either. So we're going to call it 55% to 65% of our EBITDA will be unlevered free cash flow. So incorporate all that incremental CapEx.

是的。因此，我們確實提供了今年的自由現金流指引。所以我知道這是我們第一次這樣做。也許這讓你感到驚訝，但很多活動都很高。這已經足夠了。所以我很高興為您提供一些資訊。因此，我們將 55% 到 65% 的 EBITDA 稱為無槓桿自由現金流。因此，將所有增量資本支出納入其中。

And I also want to add that for the year, we've assumed that our DSO holds constant. And look, I want to reiterate, we had great progress on working capital in 2023, by the way on this metric of unlevered free cash flow, we were 101% of EBITDA in '23. So a lot of that being driven by this really strong working capital performance. So it's going to be hard to lap that. No question, but there's a lot of process change and and real emphasis and focus internally on improving our DSO to hopefully drive stronger working capital performance again, and I just don't want to commit to that just yet as we're doing some work and we made some great progress in '23.

我還想補充一點，今年我們假設 DSO 保持不變。我想重申一下，2023 年我們在營運資本方面取得了巨大進展，順便說一句，按照無槓桿自由現金流指標，我們在 23 年的 EBITDA 達到了 101%。因此，這很大程度上是由強勁的營運資本表現所推動的。所以要超越它會很困難。毫無疑問，但有很多流程變化，並且真正強調並集中在內部改進我們的 DSO，以期再次推動更強勁的營運資本績效，我只是不想在我們正在做一些工作時致力於這一點我們在23 年取得了一些重大進展。

So I think you'll still see a very good unlevered free cash flow performance for the year, even inclusive of the CapEx we're going grow our EBITDA and what we're spending on this and on this capital and we're going to we're going to we're going to have very strong, I think, unlevered free cash flow.

因此，我認為您仍然會看到今年非常好的無槓桿自由現金流表現，甚至包括我們將增加 EBITDA 的資本支出以及我們在這方面和資本上的支出，我們將我認為，我們將擁有非常強勁的無槓桿自由現金流。

So thank you so much.

非常感謝。

No worries. Thanks. Bye.

不用擔心。謝謝。再見。

Taylor Pierce, BNP Paribas.

泰勒·皮爾斯，法國巴黎銀行。

Hey, good morning. Thanks for taking my questions, guys on very promising to see your leverage target here, you had alluded to continued debt paydown, but any reason to prioritize your notes going forward as they trade at a larger discount relative to your term loan. Thanks.

嗨，早安。感謝您提出我的問題，夥計們非常有希望在這裡看到您的槓桿目標，您曾提到持續償還債務，但有任何理由優先考慮您的票據，因為它們相對於您的定期貸款以更大的折扣進行交易。謝謝。

So the answer to that is we'll kind of assess the market conditions, like I said, that way as we go through the year and as you'll see in the fourth quarter, we did repurchase some notes that basically the idea that the trading levels allowed us to do that and it made for the proper return in relation to our first lien term loan.

因此，答案是我們將評估市場狀況，就像我說的那樣，隨著我們度過這一年，正如您將在第四季度看到的那樣，我們確實回購了一些票據，這些票據基本上是這樣的想法：交易水平使我們能夠做到這一點，並且它為我們的第一筆留置權定期貸款帶來了適當的回報。

So I would just say that throughout the year, we'll assess that. And I would just say that we're looking at all of that. I do want to reiterate that we'll use cash. We have ended the year at $126 million-plus of the cash. We'll use internal cash flow generation through the year and debt proceeds all of those will be earmarked or kind of pointed towards debt reduction through the year. So we'll have those opportunities to make those choices as we go through and through. And we'll look at that kind of trading level to determine that.

所以我只想說，我們將在這一年中對此進行評估。我只想說我們正在考慮所有這些。我想重申我們將使用現金。截至年底，我們的現金已超過 1.26 億美元。我們將利用全年的內部現金流產生和債務收益，所有這些都將指定用於全年的債務削減。因此，當我們經歷一次又一次的過程時，我們將有機會做出這些選擇。我們將透過觀察這種交易水平來確定這一點。

Great, thank you. And just one more in kind of the context of the year, your answer there, you know, how should we think of a minimum cash balance as we go forward?

太好了謝謝。還有一個關於今年背景的問題，你的答案是，我們應該如何考慮未來的最低現金餘額？

Yeah, I think that in the range we're in today or a little below that is probably a realistic level of cash for us. So I think that sort of $100 million-plus range is probably the best way to think about that. I don't see us necessarily dipping below that we always could, of course, we have an ABL as well. We can tap into for cash flow needs. So we've got a lot of flexibility here today and again, not to reiterate it again, but just no real maturities here in the short term. So we've got the ability to be a little bit more aggressive on that. So I think the I think the $100 million range is a good level to think about.

是的，我認為在我們今天所處的範圍內或略低於這個範圍可能是我們現實的現金水平。所以我認為 1 億美元以上的範圍可能是考慮這個問題的最佳方式。我不認為我們一定會跌破我們總是可以的水平，當然，我們也有 ABL。我們可以利用現金流需求。因此，今天我們在這裡再次擁有很大的靈活性，不再重申，但短期內沒有真正的成熟度。所以我們有能力在這方面採取更積極的態度。所以我認為 1 億美元的範圍是一個值得考慮的好水準。

It's cool. Thank you, guys. Great quarter.

這很酷。感謝你們。很棒的季度。

Thank you.

謝謝。

Thank you. There are no further questions at this time, I would like to turn the floor back over to Dave Peacock for closing comments.

謝謝。目前沒有其他問題，我想將發言權轉回戴夫·皮科克 (Dave Peacock) 進行結束評論。

Thank you, operator. We believe there is so much value to unlock here in the band So led by a great team of committed people, which is a competitive advantage for our company. We have a right to win with essential services, talented teammates, deep relationships, significant upside to grow the business and create more value for our stakeholders. Together, we're making swift progress in implementing the right plans to enable this organization to evolve and grow, focusing on simplifying our structure and processes, enhancing our capabilities and strengthening our financial discipline and analytical rigor.

謝謝你，接線生。我們相信，在一支由忠誠的員工組成的優秀團隊領導下，有如此多的價值可以釋放，這對我們公司來說是一個競爭優勢。我們有權憑藉基本服務、才華橫溢的隊友、深厚的關係、發展業務並為利益相關者創造更多價值的顯著優勢來贏得勝利。我們共同努力，在實施正確的計劃方面取得迅速進展，使組織能夠發展和壯大，重點是簡化我們的結構和流程、增強我們的能力以及加強我們的財務紀律和分析嚴謹性。

So thank you again for your time today and look forward to speaking further on our first quarter call in May.

再次感謝您今天抽出寶貴的時間，並期待在五月的第一季電話會議上進一步發言。

This concludes today's teleconference. You may disconnect your lines at this. Thank you for your for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。