PQ Group Holdings Inc. (NYSE:PQG) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 11:00 am ET


PQ Group Holdings Inc. (NYSE:PQG) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the PQ Group Holdings Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.

I would now like to turn the conference over to Nahla Azmy, Head of Investor Relations. Please go ahead.

Nahla A. Azmy

Thank you. Welcome to everyone joining us for our second quarter 2020 earnings call. We will start today with formal remarks from Belgacem Chariag, Chairman, President and Chief Executive Officer; and Mike Crews, Executive Vice President and Chief Financial Officer. Then we will follow with a Q&A session.

Please note that some of the information shared today is forward-looking information about the Company's results and plans, including with respect to our anticipated end-use demand trends in light of the challenges presented by COVID-19. This information is subject to risks and uncertainties that could cause the actual results and the implementation of the Company's plans to vary materially. These risks are discussed in the Company's filings with the SEC.

Reconciliations of non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures can be found in our earnings release and presentation materials posted on the Investors section of our website at www.pqcorp.com.

With that, I'm pleased to turn the call to Belgacem.

Belgacem Chariag

Thanks, Nahla, and good morning, everyone. As we begin today on Slide 3, I'm pleased with PQ's impressive second quarter performance, which was marked by multiple achievements across several disciplines.

I'll start with the operational and commercial areas, where we are executing well despite the stiff headwinds at the macro level. I applaud the team for tremendous performance in safety, health, commercial and cost management that shows great commitment and care at all levels of the Company.

In safety, our year-to-date recordable injury rate is a substantial 65% improvement compared to prior year. The safety improvement is even more commendable since we are operating in an environment with increased risks and distractions. The health and safety of our employees remain our highest priority before all other considerations at PQ. And from a human standpoint, we are highly sympathetic to those who have been impacted by the virus, and we hope for a speedy recovery for them, along with all their affected families and friends.

Operationally, I'm pleased to report that year-to-date, we've had no material business interruptions and only minor contained effects from the virus at our operations around the world.

Commercially, our performance reflects our strong customer relationships. We worked closely with customers during the rapidly changing demand conditions in the second quarter, and we will continue to do so through this current period and what is likely to be an uneven demand recovery.

During the quarter, we focused on safeguarding our existing business and securing new contracts. In Performance Chemicals, for example, we solidified our core base business with nearly 15% of our expected future annual volume, now locked in under long-term contracts, incorporating improved commercial terms.

Turning to our financial performance. Both our financial results and financial actions during the quarter were quite