Advantage Solutions Inc (ADV) 2024 Q1 法說會逐字稿

Greetings and welcome to the Advantage Solutions first quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.

歡迎參加 Advantage Solutions 2024 年第一季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce you to your host Ruben Mella, Vice President of Investor Relations. Thank you, Ruben, you may begin.

現在我很高興向您介紹東道主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 first quarter 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 question and answer session.

謝謝營運商，也謝謝大家參加我們的 Advantage Solutions 第一季財報電話會議。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 on management's current expectations and involve assumptions, risks and uncertainties that are difficult to predict. It is important to note that the 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.

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。值得注意的是，實際結果可能會因多種因素而產生重大差異，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。

All forward-looking statements are expressly qualified in their entirety by such factors. The company does not undertake any duty to update or revise any forward-looking statements, except as required by law. We want to draw your attention to the fact that management remarks today will focus on certain non-GAAP financial measures. Our earnings release issued earlier today provides detailed reconciliations of these non-GAAP financial measures to the most comparable GAAP measures.

所有前瞻性陳述的整體都明確受到這些因素的限制。除法律要求外，本公司不承擔任何更新或修改任何前瞻性聲明的義務。我們希望提請您注意這樣一個事實：今天的管理階層演講將重點放在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提供了這些非公認會計準則財務指標與最具可比性的公認會計準則財務指標的詳細調節表。

This call is being webcast and a recording will also be available on the company's Investor Relations website. We will refer to a presentation during the prepared remarks, which is also accessible on the Events and Presentations section of the IR website.

這場電話會議正在網路直播，錄音也將在公司的投資者關係網站上發布。我們將在準備好的發言中參考演示文稿，也可以在 IR 網站的活動和簡報部分存取簡報。

And now I would like to turn the call over to Advantage CEO, Dave Peacock.

現在我想將電話轉給 Advantage 執行長 Dave Peacock。

Thanks, Ruben. Good morning, everyone, and thank you for joining us. As you saw in our results issued this morning, we unveiled our new reporting segments. Branded services, experiential services and retailer services, which we believe provide a clear picture of our business and the drivers of our financial performance.

謝謝，魯本。大家早安，感謝您加入我們。正如您在今天早上發布的業績中看到的，我們公佈了新的報告部門。品牌服務、體驗式服務和零售商服務，我們相信這些服務可以清楚地展示我們的業務和財務表現的驅動因素。

We reported revenues, excluding pass-through costs of $771 million and adjusted EBITDA of $79 million for the quarter, both inclusive of discontinued operations. We also paid down $51 million in debt and bought back approximately 3 million shares in the first quarter and nearly 2 million shares in April, which is consistent with our objective of offsetting dilution and taking advantage of what we believe is an undervalued stock price.

我們報告了本季的收入，不包括轉嫁成本 7.71 億美元，調整後 EBITDA 為 7,900 萬美元，兩者均包括已終止的業務。我們還償還了5,100 萬美元的債務，並在第一季度回購了約300 萬股股票，在4 月份回購了近200 萬股股票，這與我們抵消稀釋和利用我們認為被低估的股價的目標是一致的。

Our financial results for the quarter were in line with our internal budget, and we remain on track to achieve our full year guidance. Experiential services outperformed our expectations in the quarter. Retailers for services also performed well despite holiday timing and a tough comparison.

我們本季的財務表現符合我們的內部預算，我們仍有望實現全年指引。本季體驗式服務超出了我們的預期。儘管處於假期和艱難的比較中，服務零售商也表現良好。

For branded services are decline in client orders due to market softness and higher than anticipated costs drove the year over year decline in adjusted EBITDA. Overall, the Advantage team did a great job implementing our strategic initiatives, transitioning the resignation of two client relationships and executing the expansion of services for our large existing clients for our demonstration services in a challenging market environment.

對於品牌服務而言，由於市場疲軟，客戶訂單下降，成本高於預期，導致調整後 EBITDA 年減。總體而言，Advantage 團隊在實施我們的策略性舉措、過渡兩個客戶關係的過渡以及在充滿挑戰的市場環境中為我們的大型現有客戶擴展服務方面做得非常出色。

Inflation and the rising cost of living continue to pressure a growing segment of our consumers. We believe those macro factors contributed to the market softness in the first quarter as measured in total US and food channels. Our upcoming Advantage outlook survey of nearly 100 retailers and CPG manufacturers provided valuable insights into what they expect in the coming months.

通貨膨脹和生活成本上升繼續給越來越多的消費者帶來壓力。我們認為，從美國整體和食品通路來看，這些宏觀因素導致了第一季市場疲軟。我們即將對近 100 家零售商和 CPG 製造商進行 Advantage 前景調查，為他們對未來幾個月的期望提供了寶貴的見解。

Approximately 40% of retailers surveyed expect to increase online fulfillment labor over the next six months. Retailers tell us they're continuing to lean into private brands as unit volume continues to grow, and their top strategies over the next six months are increasing product facings and displays and adding new items. Retailers also remain focused on promotions to gain share that is followed by an emphasis on impulse items and digital programs.

約 40% 的受訪零售商預計在未來六個月內增加線上配送勞動力。零售商告訴我們，隨著單位數量的持續增長，他們將繼續傾向於自有品牌，他們未來六個月的首要策略是增加產品外觀和展示以及增加新商品。零售商也繼續關注促銷活動以獲取市場份額，隨後重點關注衝動商品和數位計劃。

Our retail services team includes Damon, a leading private brand broker for scores of retailers and our SAS division, which helps retailers with shelf resets, remodels and other in-store services is a perfect partner to address this growing demand for on-shelf support. Our branded services team and their retail merchandising arm that visit stores for CPG firms to ensure on-shelf availability and display execution will also be engaged as retailers seek to increase efforts in these areas.

我們的零售服務團隊包括Damon，這是一家為數十家零售商服務的領先自有品牌經紀人，我們的SAS 部門幫助零售商進行貨架重置、改造和其他店內服務，是滿足日益增長的貨架支持需求的完美合作夥伴。隨著零售商尋求加強在這些領域的努力，我們的品牌服務團隊及其零售行銷部門也將參與其中，他們將為 CPG 公司拜訪商店，以確保貨架上的可用性和展示執行力。

Over half of the manufacturers in our surveys say they plan to increase trade dollars, discount depth and frequency of promotion to drive volume with displays, highlighting lower prices and generating new sales at regular prices. These trends align perfectly with our capabilities and branded services as we engage hundreds of retailers on behalf of thousands of clients and selling in new programs at retail headquarters.

在我們的調查中，超過一半的製造商表示，他們計劃增加貿易額、折扣深度和促銷頻率，以提高顯示器銷量，突出較低的價格並以正常價格產生新的銷售。這些趨勢與我們的能力和品牌服務完美契合，因為我們代表數千名客戶與數百家零售商合作，並在零售總部開展新計畫進行銷售。

Our experiential services group will also continue to benefit from the growth both realized and expected in mass, club and grocery channel. We believe our competitive advantage is a differentiated understanding of the entire consumer ecosystem stemming from our unique position at the intersection of brands and retailers, brick-and-mortar and e-commerce and private label and CPG.

我們的體驗服務團隊也將持續受惠於大眾、俱樂部和雜貨通路已實現和預期的成長。我們相信，我們的競爭優勢是對整個消費者生態系統的差異化理解，這源於我們在品牌和零售商、實體店和電子商務、自有品牌和消費品交叉領域的獨特地位。

This gives us a deep understanding of our clients' and customers' challenges and opportunities while positioning us as a conduit to both group's efforts to drive performance. That means we can provide a high return on investment for CPGs and retailers because we have a unique perspective across the entire consumer industry and the technology insights and culture to adapt quickly to market changes.

這使我們能夠深入了解客戶和顧客面臨的挑戰和機遇，同時使我們成為兩個集團努力提高績效的管道。這意味著我們可以為快速消費品和零售商提供高投資回報，因為我們對整個消費產業擁有獨特的視角以及快速適應市場變化的技術見解和文化。

Our business is highly relational. Our teammates are committed to serving with hard and executing relentlessly. Building trust and working to earn it daily is critical to our success and reflected in our reputation as one of newsweek's world’s most trustworthy companies of 2024. This is a great tribute to our 70,000 plus teammates who endeavor every day to earn this distinction.

我們的業務高度相關。我們的隊友致力於努力服務並堅持不懈地執行。建立信任並每天努力贏得信任對於我們的成功至關重要，這也體現在我們作為《新聞周刊》2024 年全球最值得信賴的公司之一的聲譽中。這是對我們 70,000 多名每天努力爭取這一榮譽的隊友的崇高敬意。

The trust we earn has led us to enduring relationships with clients that have lasted for decades among our top 100 clients. The average relationship duration is more than 15 years with approximately 95% retention over time. For example, a leading global personal care product company returned to us after spending time with a lower cost competitor.

我們贏得的信任使我們與 100 強客戶中的客戶建立了數十年的持久關係。平均關係持續時間超過 15 年，隨著時間的推移，保留率約為 95%。例如，一家全球領先的個人護理產品公司在與成本較低的競爭對手合作後回到了我們。

They needed a trustworthy providers to deliver the required services with proper scope, flexibility and productivity and our team is able to do that and deliver in this way, with a high return on investments. Branded services will provide retail merchandising across multiple categories and surge work to double down during critical, seasonal and promotional periods for this client.

他們需要一個值得信賴的提供者來提供具有適當範圍、靈活性和生產力的所需服務，而我們的團隊能夠做到這一點並以這種方式提供服務，並獲得高投資回報。品牌服務將為該客戶提供跨多個類別的零售商品銷售，並在關鍵、季節性和促銷期間加倍努力。

We're excited to have them back and we will prove they made the right decision. We signed a multi-million dollar agreement with a well-known leader in the juice industry after delivering a solid return on investment during a test. Advantage's retail merchandising arm of this branded services team will drive all retail execution and merchandising for this company.

我們很高興他們回來，我們將證明他們做出了正確的決定。在測試期間獲得了可觀的投資回報後，我們與果汁行業的知名領導者簽署了一項價值數百萬美元的協議。該品牌服務團隊的 Advantage 零售銷售部門將推動該公司的所有零售執行和銷售。

We are expanding our relationship with a long-standing branded services client in center store, frozen packaged goods. Our agreement includes headquarter sales, category management and administration across grocery and leading all digital commerce execution. Our collaboration is poised to elevate this brand further as the client leans into new innovations to meet evolving consumer demands.

我們正在擴大與中心商店、冷凍包裝商品領域的長期品牌服務客戶的關係。我們的協議包括總部銷售、雜貨品類管理和管理，以及領導所有數位商務執行。隨著客戶傾向於新的創新以滿足不斷變化的消費者需求，我們的合作將進一步提升品牌。

We successfully renewed two long-standing major big box retailers for our experiential services. One of the deals expands on services we have provided for over a decade and e-commerce executing digital sampling inside monthly beauty subscription boxes for more than 150,000 subscribers. The other big box retailer relies on us for innovative approaches to execute a beauty products, concierge strategy with content, a learning library and a virtual advice program.

我們成功續約了兩家長期存在的大型大型零售商的體驗式服務。其中一筆交易擴展了我們十多年來提供的服務和電子商務，在每月美容訂閱盒內為超過 150,000 名訂閱者執行數位採樣。另一家大型零售商則依靠我們的創新方法來執行美容產品、內容禮賓策略、學習圖書館和虛擬建議計劃。

Finally, Advantage's experiential services continues innovating and differentiating its service offerings and impactful ways to share and deliver member experiences, proving why it has been the number one experiential business in the United States for the last 10 years. We are the primary partner for channel leading clients where we lead all sampling experiences in locations across the US and 12 countries.

最後，Advantage 的體驗式服務繼續創新並差異化其服務產品以及分享和提供會員體驗的有效方式，證明了為什麼它在過去 10 年中一直是美國排名第一的體驗式企業。我們是通路領先客戶的主要合作夥伴，我們在美國和 12 個國家的地點提供所有採樣體驗。

Our global footprint often gives us a leg up and opens the doors to new opportunities. Building off the success of our unique experiential offerings in Japan, we have launched teppanyaki carts in more than 100 locations in Canada. These carts allow us to offer an exciting approach to sampling food items and a new way to engage with shoppers.

我們的全球足跡常常為我們提供優勢，並為新機會打開大門。基於我們獨特的體驗式產品在日本的成功，我們在加拿大 100 多個地點推出了鐵板燒車。這些購物車使我們能夠提供一種令人興奮的食品採樣方法以及與購物者互動的新方式。

It also opened sampling opportunities for more products such as meat, fresh produce and frozen food. The first week of the Canadian launch generated an average sales lift of over 150% for the products we sampled, and we're excited about what the future holds as we explore expanding into the US. As we look to the road ahead, we are energized by Advantage's untapped potential as we invest in talent tools and technology.

它還為肉類、新鮮農產品和冷凍食品等更多產品提供了品嚐機會。在加拿大推出的第一周，我們抽樣的產品的平均銷量增長了 150% 以上，當我們探索向美國擴張時，我們對未來的前景感到興奮。展望未來，我們在人才工具和技術方面進行投資，為 Advantage 尚未開發的潛力所鼓舞。

In the area of technology, we are focusing on commercial capabilities while also exploring partnerships where we can leverage leaders in other industries to enhance our ability to serve clients more effectively. The centerpiece of our modernized technology capabilities is our relationship with Genpact.

在技​​術領域，我們注重商業能力，同時也在探索合作夥伴關係，利用其他行業的領導者來增強我們更有效地服務客戶的能力。我們現代化科技能力的核心是我們與簡柏特的關係。

We are already using generative AI to deliver new and innovative solutions with greater speed and accuracy within the order-to-cash and back office administration functions, unlocking value and creating a competitive advantage for 500 clients and counting. There is much more to come as our relationship evolves and grows.

我們已經在訂單到現金和後台管理功能中使用生成式人工智慧以更高的速度和準確性提供新的創新解決方案，為 500 家客戶釋放價值並創造競爭優勢。隨著我們關係的發展和發展，還會有更多的事情發生。

Separately, we are investing in establishing our own AI core competency center, which aims to weave AI where it best benefits our business from applications and serve customers such as contract management and routing merchandisers to those that serve internal needs like HR, workflow and certain analysis of large datasets.

另外，我們正在投資建立自己的人工智慧核心能力中心，旨在將人工智慧編織到最有利於我們業務的應用程式中，並為合約管理和路由採購商等客戶提供服務，以滿足人力資源、工作流程和某些分析等內部需求。

Our evolution as a future focus insights-driven strategic provider requires us to be high touch, high tech and high value, and we will continue to invest in leading edge capabilities and partnerships. Advantage recently entered into an agreement with a retail technology company specializing in image recognition to provide real-time inventory tracking and retail.

我們作為未來焦點洞察驅動的策略提供者的發展要求我們具有高接觸性、高科技和高價值，我們將繼續投資於領先的能力和合作夥伴關係。Advantage最近與一家專門從事影像辨識的零售技術公司簽訂了一項協議，以提供即時庫存追蹤和零售服務。

We are co-developing solutions that enable us to make faster smarter decisions about what is happening on the shelf. Together, we will enhance retail execution by combining our reach across the industry with their high speed analytic capabilities. We're also enhancing data visualization tools to fuel our omni-commerce efforts and capabilities.

我們正在共同開發解決方案，使我們能夠針對貨架上發生的情況做出更快、更明智的決策。我們將共同透過將我們在整個行業的影響力與他們的高速分析能力相結合來增強零售執行力。我們還增強了數據視覺化工具，以推動我們的全商務努力和能力。

Competitors often rely on third-party data to inform decisions. Once complete, our modernized tech tools are expected to offer a significant point of difference. For example, we expect to overlay 600 million points of proprietary data to share detailed analytical dashboards with real-time insights on performance by category region and store to our clients.

競爭對手經常依賴第三方數據來制定決策。一旦完成，我們的現代化技術工具預計將提供顯著的差異。例如，我們希望涵蓋 6 億個專有資料點，以便與我們的客戶共享詳細的分析儀表板，其中包含按類別區域和儲存對效能進行即時洞察的資訊。

In the not-too-distant future, we will be able to visualize in seconds what took days or weeks in the past and pinpoint root causes immediately to solve potential problems and capitalize on higher return opportunities for our brand clients and our retail customer team. For this year, we are focused on testing these capabilities and based on the results begin the implementation phase with our team.

在不久的將來，我們將能夠在幾秒鐘內想像出過去幾天或幾週發生的事情，並立即找出根本原因，以解決潛在問題，並為我們的品牌客戶和零售客戶團隊利用更高回報的機會。今年，我們的重點是測試這些功能，並根據結果與我們的團隊開始實施階段。

We are complementing our scale region relationships with modern technology to better deliver our breadth of services so that brands and retailers can truly differentiate themselves in the marketplace. We will continue to evaluate opportunities to leverage technology for the benefit of our clients. With more leading edge commercial capabilities and an integrated operating model.

我們正在利用現代技術來補充我們的規模區域關係，以更好地提供我們廣泛的服務，以便品牌和零售商能夠真正在市場上脫穎而出。我們將繼續評估利用科技為客戶謀取利益的機會。擁有更領先的商業能力和一體化的營運模式。

We are confident Advantage will continue to lead as a strategic provider of choice to deliver the speed and precision required to convert more shoppers into buyers. That is why our strategy to simplify the business matters, aligning Advantage's time, talent and resources with its core capabilities is crucial to the company's long-term success. Our recent announcement of the sale of Adlucent represents another step towards that vision as well as reducing debt to optimize our capital structure.

我們相信 Advantage 將繼續作為首選策略供應商處於領先地位，提供將更多購物者轉變為買家所需的速度和精度。這就是為什麼我們簡化業務問題、將 Advantage 的時間、人才和資源與其核心能力結合的策略對於公司的長期成功至關重要。我們最近宣佈出售 Adlucent，這代表我們朝著這個願景又邁出了一步，同時也減少了債務以優化我們的資本結構。

With that, I will now pass the call over to Chris to review our financial performance.

現在，我將把電話轉給克里斯，以審查我們的財務表現。

Thank you, Dave, and welcome to all of you joining the call today. My comments regarding our financial performance will include discontinued operations. Foreign exchange had a minimal impact on our first quarter results because of the deconsolidation of the [Venezuelan] European joint venture.

謝謝戴夫，歡迎大家今天加入電話會議。我對我們財務業績的評論將包括已終止的業務。由於[委內瑞拉]歐洲合資企業的解散，外匯對我們第一季業績的影響很小。

In addition to our new reporting segments, we will also discuss our revenue performance, excluding pass through costs, which provides a clear picture of our top line performance and is similar to our peers information. Consolidated revenues were $771 million, excluding approximately $135 million in pass-through costs.

除了我們的新報告部分之外，我們還將討論我們的收入表現（不包括轉嫁成本），這可以清晰地顯示我們的營收表現，並且與我們的同行資訊類似。合併收入為 7.71 億美元，不包括約 1.35 億美元的轉嫁成本。

Revenues increased by 1% when excluding divestitures and the impact of foreign exchange, adjusted EBITDA was $79 million, representing a 10.2% margin on revenues, less pass-through costs. We expected a decline in adjusted EBITDA in the first quarter. However, the margin drag was more than planned as robust growth in experiential services and a good performance from retailer services were offset by softer performance in branded services.

排除資產剝離和外匯影響後，營收成長 1%，調整後 EBITDA 為 7,900 萬美元，扣除轉嫁成本後，營收利潤率為 10.2%。我們預計第一季調整後 EBITDA 將下降。然而，由於體驗服務的強勁成長和零售商服務的良好業績被品牌服務的疲軟業績所抵消，利潤率受到的拖累超出了計劃。

We continue to focus on achieving pricing in relation to inflation across our business, which we did in the first quarter, but we cannot fully cover the inflationary pressures, especially in January and February. Our financial performance improved in March and early results in April were favorable. Our investments and initiatives are designed to enhance the delivery of our services to current clients and customers and attract new business.

我們繼續專注於實現與整個業務的通膨相關的定價，這是我們在第一季所做的，但我們無法完全應對通膨壓力，特別是在一月和二月。我們三月的財務表現有所改善，四月的早期業績也不錯。我們的投資和措施旨在增強我們向現有客戶和顧客提供的服務並吸引新業務。

While that has increased costs year over year by approximately $10 million in the quarter, the new organizational structure will allow us to improve operational efficiencies and further optimize our cost structure under the new shared services model. This will be complemented by the expected benefits of collaboration with Genpact and Tata Consultancy Services.

雖然這使本季的成本比去年同期增加了約 1000 萬美元，但新的組織結構將使我們能夠提高營運效率，並在新的共享服務模式下進一步優化我們的成本結構。與簡柏特和塔塔諮詢服務公司合作的預期收益將補充這一點。

The leadership team takes its fiduciary duty seriously and managed our costs and capital appropriately focusing on achieving efficiency for our business clients and customers. We will share more details as these efforts take hold.

領導團隊認真對待其受託責任，並適當地管理我們的成本和資本，並專注於為我們的商業客戶和客戶實現效率。隨著這些努力的落實，我們將分享更多細節。

I want to take a few minutes to review our performance by segment, beginning with branded services. Revenues, excluding approximately $50 million in pass-through costs, as well as the impact of FX and divestitures declined approximately 3% to $314 million. Adjusted EBITDA was $41 million.

我想花幾分鐘時間按細分市場回顧我們的業績，從品牌服務開始。扣除約 5,000 萬美元的轉嫁成本以及外匯和資產剝離的影響，收入下降約 3%，至 3.14 億美元。調整後 EBITDA 為 4,100 萬美元。

There were three factors that drove the performance. First, we worked to complete the transition of two client resignations in the quarter, which impacted revenues, but also cost to a greater degree, ideally retain the reduction of expenses associated with the conclusion of services. Timing is not easy, and we absorbed more cost and expected in the quarter.

驅動性能的因素有三。首先，我們努力在本季度完成兩名客戶辭職的過渡，這影響了收入，但也在更大程度上增加了成本，理想情況下保留與完成服務相關的費用減少。時機並不容易，我們在本季吸收了更多的成本和預期。

Second, the soft market conditions, Dave mentioned, especially early in the quarter, were partially driven by shipment timing to retailers and a decline in client orders.

其次，戴夫提到，市場狀況疲軟，尤其是在本季度初，部分原因是向零售商發貨的時間和客戶訂單的減少。

Third, the investments to implement several of our strategic initiatives outside of the ERP upgrade were higher than planned. We do not expect to offset those investments later in the year.

第三，實施 ERP 升級以外的多項策略措施的投資高於計畫。我們預計今年稍後不會抵消這些投資。

Moving to experiential services revenues, excluding $85 million in pass-through costs, as well as the impact of FX increased nearly 21% to $228 million. Adjusted EBITDA was $17 million, a 150% increase over the prior year. Our event count reached 88% of 2019 pre-pandemic levels. Daily event activity measured in thousands per day increased by approximately 13%.

體驗式服務收入（不包括 8,500 萬美元的轉嫁成本）以及外匯的影響增加了近 21%，達到 2.28 億美元。調整後 EBITDA 為 1700 萬美元，比上年增長 150%。我們的事件數量達到 2019 年大流行前水準的 88%。每日活動活動量（以千計）增加了約 13%。

And our teams did a terrific job leveraging our current infrastructure to support the volume growth in the quarter, which drove the improvement in adjusted EBITDA margin over the prior year. Now let's turns to retailer services revenues declined approximately 6% to $229 million. Adjusted EBITDA was $20 million, an approximate 16% decline over the prior year, an earlier Easter holiday limited in-store activities for our teams as retailers focus on execution, the timing of the holiday reverse in April, which will benefit the second quarter.

我們的團隊在利用現有基礎設施來支援本季銷售成長方面做得非常出色，這推動了調整後 EBITDA 利潤率比上一年有所改善。現在讓我們來看看零售商服務收入下降了約 6% 至 2.29 億美元。調整後的EBITDA 為2000 萬美元，比上年下降約16%，較早的復活節假期限制了我們團隊的店內活動，因為零售商專注於執行力，假期時間安排在4 月份，這將有利於第二季。

We also faced a tough prior year comparison when we completed in store remodel activities that did not repeat this quarter. We were able to offset some of these factors by implementing price increases, managing costs and improving working capital management.

當我們完成本季沒有重複的商店改造活動時，我們也面臨著與去年的艱難比較。我們能夠透過實施提價、管理成本和改善營運資金管理來抵銷其中一些因素。

Moving to our balance sheet last month we repriced our $1.1 billion term loan from SOFR + 450 basis points, SOFR + 425 basis points, we are pleased with the demand from investors who support the work we are doing to advance our strategic objectives. The 25 basis points reduction is expected to save approximately $3 million in annualized interest expense at current debt levels.

上個月我們的資產負債表上，我們將11 億美元的定期貸款從SOFR + 450 個基點重新定價為SOFR + 425 個基點，我們對投資者的需求感到滿意，他們支持我們為推進我們的戰略目標所做的工作。以目前的債務水平，25 個基點的減少預計將節省約 300 萬美元的年化利息支出。

During the quarter, we voluntarily repurchased approximately $51 million in secured notes, an attractive discount. As of March 31, our total funded debt outstanding was approximately $1.8 billion with nearly 90% of our debt hedged or fixed interest rates. Our net leverage ratio was approximately 4.2 times, inclusive of discontinued operations.

本季度，我們自願回購了約 5,100 萬美元的擔保票據，折扣頗具吸引力。截至 3 月 31 日，我們的未償債務總額約為 18 億美元，其中近 90% 的債務是對沖或固定利率的。我們的淨槓桿率約為 4.2 倍，包括已終止的業務。

As we announced last quarter, our long-term target is to reduce the net leverage ratio to below 3.5 times. We were active in the quarter with about $12 million in share repurchases and additional $8 million in April. We repurchased nearly 5 million shares to offset employee incentive related dilution and take advantage of what we believe is an undervalued stock price.

正如我們上季所宣布的，我們的長期目標是將淨槓桿率降至3.5倍以下。我們在本季非常活躍，回購了約 1,200 萬美元的股票，並在 4 月額外回購了 800 萬美元。我們回購了近 500 萬股股票，以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。

The first quarter was busy with investments to execute our strategic objectives. Capex was approximately $16 million, which was below our expectations, but still in line with our plan to spend $90 million to $110 million this year. We are creating technology platforms for data modernization, cloud-based capabilities, including AI and other tools to improve the operating efficiencies Dave described earlier.

第一季忙於執行我們的策略目標的投資。資本支出約 1,600 萬美元，低於我們的預期，但仍符合我們今年支出 9,000 萬至 1.1 億美元的計畫。我們正在創建數據現代化、基於雲端的功能的技術平台，包括人工智慧和其他工具，以提高戴夫之前描述的營運效率。

Despite these investments, we generate approximately $40 million in adjusted unlevered free cash flow or 50% of adjusted EBITDA, inclusive of discontinued operations represented another quarter of solid cash conversion. We reaffirm our guidance for 2024 with revenues adjusted EBITDA expected to grow by low single digits.

儘管進行了這些投資，我們仍產生了約 4000 萬美元的調整後無槓桿自由現金流或調整後 EBITDA 的 50%，其中包括已終止的業務，這代表了又一個季度的穩健現金轉換。我們重申 2024 年的指引，調整後收入 EBITDA 預計將以低個位數成長。

This means growth from a lower revenue adjusted EBITDA base in 2023 due to the announced Adlucent sale to BarkleyOKRP creating the capacity to further prioritize core capabilities to clients with best-in-class services. Our guidance does not include the possible impact of future divestitures as we continue to evaluate opportunities for additional actions to focus on our core capabilities and pay down debt.

這意味著 2023 年收入調整後 EBITDA 基礎較低的成長，原因是 Adlucent 宣佈出售給 BarkleyOKRP，從而有能力進一步優先考慮為客戶提供一流服務的核心能力。我們的指導不包括未來資產剝離可能產生的影響，因為我們將繼續評估採取額外行動的機會，以專注於我們的核心能力和償還債務。

Given the accelerated investments in technology and people and the impact of wage inflation, we now expect a greater weighting towards the year's second half to deliver our full year adjusted EBITDA. Our guidance for book interest expense, unlevered free cash flow and CapEx remains in place. The recent refinancing of our term loan will lead to lower interest expense, although this is captured within our guidance range.

鑑於對技術和人員的加速投資以及薪資通膨的影響，我們現在預計下半年將有更大的權重來實現全年調整後的 EBITDA。我們對帳面利息支出、無槓桿自由現金流和資本支出的指導仍然有效。我們最近的定期貸款再融資將導致利息支出降低，儘管這在我們的指導範圍內。

As I mentioned, last quarter, 2024 as a year of investment to transform advantage. We accomplished a lot in the first quarter. Progress on our IT transformation remains on track and we continue optimizing our business to improve execution and operational efficiency. What is underappreciated is that our plan to grow revenue and adjusted EBITDA contemplates planned investments and actions to simplify the business.

正如我上個季度提到的，2024 年是投資轉型優勢的一年。我們在第一季取得了很多成就。我們的 IT 轉型進展順利，我們將繼續優化業務以提高執行力和營運效率。未被充分認識的是，我們增加收入和調整 EBITDA 的計劃考慮了簡化業務的計劃投資和行動。

Our core values include leading with insights and executing relentlessly, I can think of a better testament to our team of daily work and to enhance capabilities. Then for us to achieve growth in a year of significant change to advance our strategic goals.

我們的核心價值包括以洞察力引領和不懈執行，我能想到更好地證明我們團隊的日常工作和能力提升。然後我們將在重大變革的一年中實現成長，以推進我們的策略目標。

Thank you for your time. I will now turn it back over to Dave.

感謝您的時間。我現在將其轉回給戴夫。

Thanks, Chris. Over the last six months, we have diligently and consistently worked to simplify our business and enhance our capabilities so we can better serve our CPG firms and retailers rely on us every day to win in the market. While this work will continue, I cannot thank our team enough for their focus, dedication and persistence and staying on task.

謝謝，克里斯。在過去的六個月裡，我們一直不懈地努力簡化我們的業務並增強我們的能力，以便我們能夠更好地為我們的消費品公司和零售商提供每天依賴我們贏得市場的服務。雖然這項工作將繼續進行，但我對我們的團隊的專注、奉獻、堅持和堅持任務表示感謝。

We remain on track to achieve our objectives this year across the organization, we are implementing the right plans to expand our competitive advantages and become our clients and customers strategic provider of choice. Our scale capabilities and deep understanding of the consumer industry position us to win, which ultimately will drive growth and value creation for our shareholders.

我們仍然預計在整個組織內實現今年的目標，我們正在實施正確的計劃來擴大我們的競爭優勢，並成為我們的客戶和客戶的首選策略提供者。我們的規模能力和對消費產業的深刻理解使我們能夠獲勝，最終將推動股東的成長和價值創造。

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）

Joe Vafi, Canaccord Genuity.

喬‧瓦菲 (Joe Vafi)，Canaccord Genuity。

Good morning. This is [Paula Chan] on for Joe. Thanks for taking our questions. My first question is on the macro. Is it fair to say that your clients are incrementally more cautious but there are still prioritizing strategic initiatives like private label, digital programs, et cetera. And are you seeing any changes to the pace of implementation of these programs, given the more cautious outlook here, perhaps.

早安.這是喬的[Paula Chan]。感謝您回答我們的問題。我的第一個問題是關於宏觀的。可以公平地說，您的客戶越來越謹慎，但仍優先考慮自有品牌、數位計畫等策略性舉措。考慮到這裡的前景可能更加謹慎，您是否看到這些計劃的實施速度有任何變化？

Thanks for the question. I think you know, we saw a couple of things from a macro standpoint in the market. Obviously, there's economic uncertainty in the market. And I would argue that a lot of consumers, especially a little bit on the lower end of economic spectrum are being pinched by the current environment of continued inflation and just challenges within the economy that has driven private-label growth in the business.

謝謝你的提問。我想你知道，我們從市場的宏觀角度看到了一些事情。顯然，市場存在經濟不確定性。我認為，許多消費者，尤其是經濟範圍較低端的消費者，正受到當前持續通膨的環境和經濟內部挑戰的擠壓，這些挑戰推動了自有品牌業務的成長。

We're seeing unit growth overall in private label and in a strong business there, I'd say when you look at the branded services side of our business, we saw some destocking at the retail level as well as a slowdown point of sale, product or volume movement or dollar movement overall on and this is time at the entire consumer category.

我們看到自有品牌的整體單位成長和強勁的業務，我想說，當你看看我們業務的品牌服務方面時，我們看到零售層面的一些去庫存以及銷售點的放緩，產品或數量的變動或美元的整體變動，這是整個消費者類別的時間。

So I think fundamentally that some of that is short term in the sense that the retailers are reducing inventory, and that's not going to continue throughout the year. They do that over kind of a onetime period and that had an impact on revenues or the branded services area. But from a client standpoint, we see them aggressively trying to drive on unit growth from a CPG standpoint and really from a retailer standpoint. So there's actually a little bit of convergence in objective between our CPG clients and our retailers.

因此，我認為從根本上來說，其中一些是短期的，因為零售商正在減少庫存，而且這種情況不會持續一整年。他們在一段時間內這樣做，這對收入或品牌服務領域產生了影響。但從顧客的角度來看，我們看到他們積極嘗試從消費品和零售商的角度推動銷售成長。因此，我們的 CPG 客戶和零售商之間的目標實際上有一點趨同。

Hey, Paul. I might just add a quick comment to that. Just said there was a as Dave mentioned a little softer start to the year. We did see that improve though throughout the quarter. So I think that's just one thing to keep in mind. And secondarily, we've talked about and you can see it in the experiential business, a nice improvement there in volume and the early execution on our part. But beyond that, really just an increase in volume overall. So we are seeing some of that activity investment, if you will, from our clients that we're benefiting from. On the other side, on the expansion side.

嘿，保羅。我可能只是對此添加一個簡短的評論。剛剛說過，正如戴夫提到的那樣，今年的開局有些疲軟。我們確實看到整個季度情況有所改善。所以我認為這只是需要記住的一件事。其次，我們已經討論過，你可以在體驗式業務中看到這一點，我們在數量和早期執行方面取得了很大的進步。但除此之外，其實只是整體數量的增加。因此，如果您願意的話，我們可以從我們的客戶那裡看到一些活動投資，我們也從中受益。另一邊，擴張的一邊。

Thanks Dave and Chris. That's helpful. And just a follow-up to that, Chris, what what type of growth is embedded in your '24 outlook for experiential services?

謝謝戴夫和克里斯。這很有幫助。克里斯，您的 24 世紀體驗式服務展望中包含了哪些類型的成長？

So we're not going to give guidance by segment. And I think this is obviously that's the first time we're showing you the segments, and we'll have more information to move forward on that. I would just say that we are seeing a nice recovery here and continued recovery in volume, and we're also seeing strong price realization in that business.

因此，我們不會按細分市場提供指導。我認為這顯然是我們第一次向您展示這些細分市場，我們將獲得更多資訊來推進這項工作。我只想說，我們在這裡看到了良好的復甦，銷售持續復甦，我們也看到該業務的價格強勁。

I know we're really focusing more on metrics in that business to denote profitability. But I would just tell you that in the quarter, we were like 88% of 2019 volumes in demonstration business and experiential business. So we saw a nice sequential increase in level of activity in that business. And let me give you some feel for the rate of growth throughout the year, we should do expect it to continue to grow. It was sequentially through the year.

我知道我們確實更專注於該業務中表示盈利能力的指標。但我只想告訴你，在本季度，我們的 2019 年銷量的 88% 是在演示業務和體驗業務上。因此，我們看到該業務的活動水準出現了良好的連續成長。讓我給大家介紹一下全年的成長率，我們確實應該預期它會繼續成長。這是按順序進行的。

Great, thanks. Thanks for the color, Chris. And just last one from me. You've been pretty active in simplifying the portfolio over the last six months or so. How do you see the composition of the portfolio now? Is there opportunity for further refinement here? Thanks.

萬分感謝。謝謝你的顏色，克里斯。這只是我的最後一張。在過去六個月左右的時間裡，您一直非常積極地簡化投資組合。您現在如何看待投資組合的組成？這裡還有進一步細化的機會嗎？謝謝。

Yeah, there is. And we continue to be active in that space. And as you're seeing, probably that there's our movement to get to our core business. And I think as we get through this process and especially get into the summer, that will become even more clear. And I think we'll be able to speak a lot more openly about what that core businesses and where actually we see it going.

是的，有。我們將繼續活躍在該領域。正如您所看到的，我們可能正在採取行動來實現我們的核心業務。我認為，當我們完成這個過程，特別是進入夏天時，這一點將會變得更加清晰。我認為我們將能夠更公開地談論核心業務以及我們實際看到它的發展方向。

But I can assure you that the resources that we are devoting to growth acceleration and cost management are really focused on the core businesses as we're simultaneously, you know, looking at our portfolio and as you said, making some decisions to simplify and sell off some business.

但我可以向您保證，我們致力於成長加速和成本管理的資源確實集中在核心業務上，因為您知道，我們同時審視我們的投資組合，正如您所說，做出一些簡化和銷售的決定關閉一些業務。

Great. Thanks again.

偉大的。再次感謝。

Faiza Alwy, Deutsche Bank.

Faiza Alwy，德意志銀行。

Yes, hi. Thank you. I think that's me Faiza so I wanted to ask about the higher cost that you mentioned. And it sounds like it was a function of a higher planned investments. I think there was some inflation in there and then maybe higher costs that were not absorbed because of the divestitures, but just give us a bit more color around that. And I think you mentioned sort of cost improving through the course of the year. So maybe talk about how we should think about about all of that.

是的，嗨。謝謝。我想那是我，Faiza，所以我想問你提到的更高的費用。聽起來這是更高計畫投資的結果。我認為那裡存在一些通貨膨脹，然後可能會因為資產剝離而沒有吸收更高的成本，但只是給我們更多的色彩。我認為您提到了這一年中成本的改善。所以也許可以談談我們該如何思考這一切。

Yeah. I appreciate the question. So I think you're probably focused on the branded services area. So I think you hit on a couple of key theme is, one you've got and a lot of the transformation and some of the portfolio work, frankly, going on in that segment, as you noted. And then like you said, a lot of that was planned. And then I think the other thing we had client exits and not necessarily divestitures were client exits that were intentional that occurred in the quarter.

是的。我很欣賞這個問題。所以我認為您可能專注於品牌服務領域。因此，我認為您觸及了幾個關鍵主題，坦率地說，正如您所指出的那樣，您已經進行了很多轉型，並且坦率地說，該領域正在進行一些投資組合工作。然後就像你說的，其中很多都是計劃好的。然後我認為我們有客戶退出（不一定是資產剝離）的另一件事是本季發生的故意退出。

And I think the timing of that because they were even kind of intra-quarter if you will on what made it so that we had no cost absorption issues relative to taking the costs out related to those client exits. And as you can imagine, these are largely people businesses. So we've got to serve those clients on and serve them well up until the day of exit.

我認為這樣做的時機是因為它們甚至是季度內的，如果你願意的話，這樣我們就不存在與消除與這些客戶退出相關的成本相關的成本吸收問題。正如你所想像的那樣，這些企業主要都是以人為本。因此，我們必須繼續為這些客戶提供服務，並為他們提供良好的服務，直到他們退出的那一天。

And when you you do that, it obviously can impact on your timing as it relates to rationalizing the organization. So really that was the issue. And we do anticipate costs improving as we go forward based on actions that we're taking or have already taken, for instance, on those client exits, we've really adjusted the workforce to reflect that going forward. I'm very early in the second quarter.

當你這樣做時，它顯然會影響你的時間安排，因為這關係到組織的合理化。這確實是問題所在。根據我們正在採取或已經採取的行動，我們確實預計成本會隨著我們的前進而改善，例如，在那些客戶退出時，我們確實調整了勞動力以反映未來的情況。我在第二季還很早。

Okay. And then you mentioned wage inflation is we haven't really heard that from a lot of other companies in terms of inflation sort of maybe reaccelerating. So just wanted to talk about that like are you talking about? I know you mentioned maybe you might have used the word persistent. So give us a sense of where we are and wage inflation and you need to be expecting incremental pricing? Because you said price realization did not fully cover those inflationary pressures and you know where and when should we we should be see that?

好的。然後你提到薪資通膨，我們還沒有真正從很多其他公司那裡聽說通膨可能會重新加速。所以只是想談談你在說什麼？我知道你提到也許你可能用過「持久」這個詞。那麼，請讓我們了解我們的處境和薪資通膨情況，您需要期待增量定價嗎？因為你說價格實現並沒有完全覆蓋那些通膨壓力，你知道我們應該在何時何地看到這一點？

Right. So when you look at our business, obviously, as we've described a minute ago, it's a lot of people. And we also actually have a lot of transportation as it relates to workforce moving around, if you will, to just to service the business. And so you look at a couple of cost areas on wage inflation was continued to be percent, it was persistent was higher than we expected.

正確的。因此，當你看看我們的業務時，顯然，正如我們一分鐘前所描述的那樣，有很多人。事實上，我們也有很多交通，因為它與勞動力流動有關，如果你願意的話，只是為了服務業務。所以你看一下薪資通膨的幾個成本領域仍然是百分比，它持續高於我們的預期。

Some it wasn't necessarily higher than in past quarters or maybe even maybe last year, but was higher than we expected. And then you have things like gas prices that you've seen more recently to kind of tick up in certain markets and a lot of markets. So those are the areas where we see the inflation flow through. And for us, it's just making sure that we're managing the business one to be as cost efficient as possible when those situations arise.

有些不一定高於過去幾個季度，甚至可能高於去年，但高於我們的預期。然後你會看到最近在某些市場和許多市場上看到的天然氣價格有所上漲。因此，這些就是我們看到通膨流經的領域。對我們來說，這只是確保在出現這些情況時我們的業務管理盡可能具有成本效益。

And then two as you said, in the areas where we're able to realize a price for that. And obviously in parts of our business, we actually have a contract structured where it could be a cost-plus situation for a commission situation where pricing is not really the issue. And so there's kind of a natural price flow-through, if you will. And depending on the revenues for our clients when it's commissioned situation or the specific costs, some of the cost environment we may be facing in funds.

然後，正如您所說，在我們能夠實現價格的領域，有兩個。顯然，在我們的部分業務中，我們實際上有一份合約結構，在佣金情況下，這可能是成本加成的情況，而定價並不是真正的問題。因此，如果你願意的話，就會出現一種自然的價格流動。根據委託時我們客戶的收入狀況或具體成本，我們可能在資金方面面臨一些成本環境。

If I can just add to that, I would just say that in the first quarter, there were a number of I'll call it regulatory changes that did support increased wages in the quarter. Those all happened January 1. And as I look across our business, the labor inflation was persistent, not an acceleration or reacceleration simply persistent.

如果我可以補充一點，我只想說，在第一季度，有一些我稱之為監管變化的舉措確實支持了該季度工資的增長。這些都發生在 1 月 1 日。當我縱觀我們的業務時，勞動力通膨是持續的，而不是簡單持續的加速或再加速。

And we're looking at the year, as you know, with the rate of inflation in that, let's call it low to mid-single-digit level. And in last year, we were definitely in the mid-single digits. And I think you in the first quarter kind of continuing into that mid-single-digit area.

如你所知，我們正在關注這一年的通膨率，我們稱之為低至中個位數水準。去年，我們的業績絕對處於個位數中間。我認為第一季的業績將繼續進入中個位數區域。

So I guess the point I'd make is just that there's inflation that was a little higher level than we thought we think at a level of it from here. Now most important is how we're attacking that, right? So we're looking at our costs, obviously, and David mentioned that we're looking at we actually have pricing initiatives in place that we can use to offset some of that. We're looking at managing our mix, all the things we can do in our in Austin, that suite of tools. We have tried to manage that inflation across the year.

所以我想我想說的是，通膨水準比我們想像的要高一些。現在最重要的是我們如何攻擊它，對吧？因此，顯然我們正在考慮我們的成本，大衛提到我們正在考慮實際上已經制定了定價舉措，我們可以用它來抵消其中的一些成本。我們正在考慮管理我們的組合，我們在奧斯汀的這套工具中可以做的所有事情。我們一直在努力控制全年的通貨膨脹。

Okay, got it. And then just last one, you mentioned improved results in March, which appear to be continuing in April, sort of what's driving that? Is it just that you're done with sort of the inventory rationalization or is there something else from a macro perspective or something else that's unique to you?

好，知道了。最後一個，您提到了 3 月份業績的改善，這種情況似乎會持續到 4 月份，是什麼推動了這種情況？您是否已經完成了某種庫存合理化工作，或者從宏觀角度來看還有其他事情，或者您有其他獨特的事情嗎？

I think you've hit the nail on the head. I mean, inventory rationalization, while it may be occurring a bit as I mentioned on earlier is that it can be a bit transitory, right. Once you adjust your inventories, you sort of operate from that base going forward. And so we're seeing overall better shipments for our clients collectively on we talked about in the retailer segments that there was an Easter shift.

我認為你說得一針見血。我的意思是，庫存合理化雖然可能會發生一點，正如我之前提到的，但它可能有點短暫，對吧。一旦你調整了你的庫存，你就可以在這個基礎上繼續運作。因此，我們看到我們的客戶整體出貨量有所改善，因為我們在零售商領域談到了復活節的轉變。

And so that that business a big part of our business can be affected by the timing of Easter and it moved into first quarter and the work some of the work they do in store. Frankly, it reduces pretty significantly right ahead of holidays and so that we saw a reversal of in the month of April. So it's another example in different segment and retailer segment where we saw that.

因此，我們業務的很大一部分可能會受到復活節時間的影響，並且它進入了第一季度，並且他們在商店中所做的一些工作。坦白說，它在假期前夕大幅減少，因此我們在四月看到了逆轉。這是我們在不同細分市場和零售商細分市場中看到的另一個例子。

And then I mentioned earlier as well that we've taken actions on the cost side. It really reflects the client exits that we had in the first quarter. And so that should flow through as we go forward in the second quarter, and we're starting to see some of that in the early numbers for April.

我之前也提到過，我們已經在成本方面採取了行動。這確實反映了我們第一季的客戶退出情況。因此，隨著第二季的進展，這一點應該會得到體現，並且我們開始在四月份的早期數據中看到其中的一些內容。

Excellent. Thank you so much.

出色的。太感謝了。

Thank you.

謝謝。

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

謝謝。目前沒有其他問題。我想請戴夫·皮科克（Dave Peacock）發表結束評論。

Thank you, operator. We appreciate your time this morning and your interest in Advantage Solutions. We are excited about our prospects this year and look forward to updating you on progress to expand our competitive advantages as a partner of choice with clients and customers. Thanks again for your time today.

謝謝你，接線生。感謝您今天上午的寶貴時間以及您對 Advantage Solutions 的興趣。我們對今年的前景感到興奮，並期待向您通報最新進展情況，以擴大我們作為客戶和客戶的首選合作夥伴的競爭優勢。再次感謝您今天抽出時間。

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