Q1 2021 GCP Applied Technologies Inc Earnings Call
Good day and welcome to the G C P and applied technologies first quarter 2021 earnings conference call.
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And I'd like to turn the conference over to Betsy Chao. Please go ahead. Thank you operator, Hello, everyone and thank you for joining us on today's call with US on the call are Simon and Bates, President and Chief Executive Officer, and Craig Merrill Chief Financial Officer are.
Our earnings release and corresponding presentation slides for this quarter's results are available on our website to download copies of the presentation. Please go to G. C. P. A T dot com and click on the Investor tab.
Some of our comments today will include forward looking statements under U S. Federal Securities laws and actual results may differ materially from those projected or implied due to a variety of factors, including but not limited to the impact of COVID-19.
Please see a full description of information used and forward looking statements and our earnings release.
We will discuss certain non-GAAP financial measures, which are described in more detail and our earnings release and on our website.
Our comments and forward looking statements and non-GAAP financial measures applied both to the prepared remarks and to the Q&A.
References to EBITDA refer to adjusted EBITDA references to EBIT referred to adjusted EBIT and references to margin referred to adjusted gross margin adjusted EBITDA margin or adjusted EBIT margin as defined in our press release.
All revenues and associated growth rates and this discussion are stated on a comparable constant currency basis, which adjusts for the impact of foreign currency.
I will now turn the call over to Simon.
Thanks Betsy.
Everyone and thank you for joining today's call.
And as I've said and our previous discussions we continue to work on our key objectives for D. C. P.
First is improving our customer focus and delivering high quality products and great service.
This is essential to stabilizing market share and revenues.
We have to build our organizational capability to help reduce complexity and improve our cost position.
But we have to drive accountability from our proving performance across the organization and <unk>.
We have to improve our return on the cash we invest and the business.
Craig and I would like to discuss some changes and some progress we've made and delivering on these objectives over the last few months.
As we announced in March we have reorganized our business around three geographies the.
The Americas, Europe, including the Middle East and Asia Pacific.
We believe this creates more focus and accountability and nil.
Allows us to simplify our corporate structure.
As part of this change I would like to welcome Gary D, who started as our leader for Europe, and the Middle East.
Gary has a great track record of improving performance and growing revenues.
We also announced the relocation of our corporate headquarters to the Metro Atlanta area. Following the sale of the Cambridge facility last year.
We believe that Metro Atlanta will provide us with access to a diverse talent pool to enable us to build a new team and improve performance.
We are busy recruiting and Atlanta and have already filled a number of key roles.
And therefore I'd also like to welcome Sherry and Mennenga, who will start next week as our new chief Human resources, she will be instrumental and helping us build our organizational capability and improve our processes for performance and talent management.
Our U S based research and development group will remain and the greater Boston area. So that we can retain key talent and drive continuity.
However, we would like to see a greater return on our significant investments in R&D and globally and.
And therefore I'm also very pleased to announce that dumped to Amy Randall will join US next week and as a new global head of R&D and product development.
In conjunction with relocating our headquarters and we announced a restructuring program aimed at reducing our general and administrative costs, but we still have further work to do to eliminate complexity and duplication.
As mentioned the regional structure is designed to push accountability and decision, making to our local leaders who are closest to the market and the customers. They said.
We have also hired Chris <unk> as head of operations for North America.
He has responsibility for customer service manufacturing and supply chain.
Through these changes, we expect to better service, our customers improve productivity and hence our innovation platform and improve profitability and cash flow.
Although we have more to do we are beginning to see changes within our organization and it has.
Has translated into some positive momentum.
We would like to thank Betsy Cowell for supporting G. C P and the Investor relations role over the last year and would also like to welcome will Kent as our new Vice President of Investor Relations and truly.
With us today.
In summary, we continue to move forward without plans to repair and rebuild G C P and providing a clear path to stabilize revenue growth.
Growing both the top line and the bottom line organically and Inorganically.
I'd now like to turn the call over to Craig its Greg.
Thank you Simon good morning, everyone and thank you for joining us today.
As a reminder, all sales and associated growth rates and my comments are on a constant currency basis, I will discuss <unk> preliminary first quarter results, including comments on each of our business segments.
Lastly, I will provide commentary on second quarter, and a general outlook for the year.
Starting with the preliminary first quarter financial results.
G C piece constant currency sales of $219 6 million were one 3% higher than prior year.
While volumes were soft at the beginning of the quarter demand did pick up in March.
Quarterly revenue growth was driven by strong residential sales due to demand for our roofing products and timing of promotional activity.
Sales volumes improved in both Asia, and Latin America, as construction activity improved versus the negative impacts of the pandemic and the first quarter 2020.
Commercial construction activity in North America, and Europe continue to be constrained, which we expected where we saw a decline in revenues and our product lines versus first quarter of 2020 per.
Price per the quarter was essentially flat compared to first quarter 2020 coming off a deflationary 2020.
However, <unk> gross margin increased 60 basis points to 38, 8%, primarily due to operational productivity, partially offset by product and geographic mix.
Selling general and administrative costs of $66 6 million decreased 2% during the quarter due to a favorable net effect of the shareholder activism expenses in 2020, Q1, and lower employee related costs, resulting from our restructuring programs.
G C P. As income from continuing operations attributable to G. C. P shareholders totaled $1 5 million compared with $2 million for the first quarter 2020.
The reduction of about half a million dollars was due to additional restructuring costs and tax expense, partially offset by higher gross margin and lower general and administrative costs.
G C Pes adjusted EBIT shown on page seven of the earnings presentation totaled $16 9 million compared to $15 4 million and prior year quarter up approximately 10% adjusted.
Adjusted EBIT margin improved 50 basis points to seven 6% attributable to higher SPM operating income, partially offset by lower FCC operating income and.
Adjusted EBITDA margin was 12, 7% for the first quarter or 50 basis points higher versus the same period and 2020.
Net cash provided by operating activities from continuing operations. During the first quarter 2021 was approximately 700000 compared to $14 3 million.
For 2020.
The timing of sales with a strong March adversely affected accounts receivable performance versus prior year and inventory.
<unk> increased during the quarter to support March and Q2 sales volumes.
Pre buys we're also instituted on raw material inventories once we expected higher prices in Q2 and Q3 on raw materials.
First quarter is generally our weakest cash generation quarter, and we do not expect this to impact our cash performance for the year.
Looking at the specific performance of our two segments for the first quarter on pages eight and nine.
FCC's constant currency sales were down approximately two 1% to $122 $8 million attributable to lower sales volumes in North America, and Europe, partially offset by stronger sales volumes in Latin America and Asia Pacific.
Asia Pacific demand for our products exceeded our expectations as the market had a strong quarter as Chinese new year and other holidays were shortened due to the COVID-19 restrictions we.
We expect North America demand to progressively improve as the market opens up and the second half of 2021, and our year over year and North America comparisons will improve for FCC as we move through the year.
Commercial construction activity continues to be spotty across Europe. However, we are pleased with march's activity and performance.
Scc's gross margin declined year over year by 140 basis points to 36, 6% during the first quarter of 2021 due to the unfavorable impacts of product mix, partially offset by lower costs, resulting in improved productivity.
FCC gross margins will be unfavourably impacted throughout the year and comparison to 2000 and 'twenty due to the inflation headwinds and raw material prices globally.
FCC segment operating income was $6 1 million with segment operating margin of four 9% a decrease of 190 basis points compared with the prior year quarter, primarily due to lower gross margins on volume leverage.
Turning now to the SPM segment for the quarter.
S. P M sales constant currency totaled $96 8 million during the first quarter, a 6% improvement versus the first quarter of 2020.
North America residential sales increased 62% due to strong roofing demand and the timing of promotional activities.
Building envelope and specialty construction products volumes declined due to lower commercial construction activity.
We do expect improvements and these product lines as we move through the year well at a modest pace.
<unk> gross margin increased 290 basis points to 41, 9% compared to the first quarter of 2020 due to improve raw material utilization operations efficiencies and higher sales volumes favorably impacting fixed cost absorption.
S. P. M segment operating income totaled $19 $4 million with operating margins at 19, 6%.
Our 420 basis point improvement versus prior year.
The improvement was due mainly to higher gross margins.
Now looking forward to the second quarter.
We remain positive on our product offerings to the residential end markets and we see signs of commercial activity improvement as financing remains favorable construction activity resumes on these larger projects and social distancing requirements are relaxed as vaccinations ramp up.
In addition revenue comparisons between the second quarter of 2021, and the second quarter of 2020 favorite 2021 due to the onset of the pandemic across the globe and 2020.
As in prior discussions our best views are short term in nature and we are pleased with the demand for our products and April and our bookings, which have been solid throughout the first part of the second quarter.
Based upon today's best information, we estimate <unk> will be up and revenues for the second quarter 2021 year over year by approximately 25% and constant currency and adjusted EBIT is expected to approximately double in the second quarter of 2021 versus second quarter of 2000 and.
And 'twenty.
As mentioned during the March earnings call, we expect inflation to impact the second quarter and the second half of 2021 in.
In response, we have announced price increases and all of our product lines and have shifted prioritization to materials and logistics productivity.
And price will start to come through in Q2, but to a lesser degree than Q3, and Q4 as contracts and project committed pricing rolls over as we move through the year.
Gross margins will compress in the latter half of quarter, two and in quarter three versus prior year, and then stabilize and quarter four as price absorption catches up with the inflation impact.
The impact on gross margins will have a slightly more unfavorable impact on the FCC segment versus the S. P M segment.
We expect to overcome current inflation trends with price by the end of the first half of 2022 and.
Adjusted EBIT, and EBIT and margins, even with the compressed gross margins should end the year approximately equal to prior year with the support of price and volume leverage overcoming the inflation impacts on margin by the fourth quarter.
Operating expenses for the second quarter of 2021 will be slightly higher versus prior year due to the timing of incentive compensation costs and the rent for the Cambridge facility.
Full year 2021 operating expenses are expected to be approximately flat with the same period of 2020, and the announced restructuring program and March mostly impacts 2022, with a $10 million to $12 million reduction in operating expenses expected in 2022.
We will continue to place significant emphasis on cash generation and expect results on operating cash metrics similar to 2020.
Capital expenditures for the year 2021 are on track to be approximately 4% of sales consistent with spending levels in 2020 and much lower than 2018 and 2019.
In closing we.
We remain on track to our original 2021 planned financial performance objectives and have implemented a number of management actions to overcome the newly forecast impacts of higher global inflation on raw materials and and logistics.
Over the past six months, we have identified significant opportunities within the core business to drive efficiencies related to an overall improvement and business process freight optimization sales pipeline management and manufacturing productivity.
Our strong balance sheet will continue to strengthen throughout the year and is providing significant flexibility and opportunity to deliver on our short and long term objectives.
Focused on growth and value, both organically and inorganically to create shareholder value.
With that I now turn it back over to Simon.
Thanks, Craig and thank you all for the time today.
Although we see some significant cost inflation for the rest of the year. We are pleased with the progress we have made and objectives and our plans for 2021.
Implementing positive change will continue to be our primary focus and we intend to be transparent and our progress with you our employees investor community and our shareholders.
Our goal is to make <unk>, a stronger and more competitive company.
Thank you for joining our call and we look forward to taking any questions.
Operator, you can now begin the question and answer session.
Thank you we will now begin the question and answer session.
To ask a question you May Press Star then one of your Touchtone phone.
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Please pickup your handset before pressing the keys.
And your question. Please press Star then two.
Today's first question comes from Mike Harrison with Seaport Global Securities. Please go ahead.
Hi, good morning.
Good morning, Mike.
Simon maybe we can start.
And the restructuring.
<unk> has been through multiple programs since becoming a public company and I'm sure you're aware of that can you walk us through.
Your approach to this restructuring it seems like you're making a number of pretty major changes all at once obviously one of those being the relocation of the headquarters to the Atlanta area.
And and maybe just talk about whether you are your plan at this point is from this to be the last restructuring program.
And it'll be needed at G. C P for for a long time.
And Mike for future reference old difficult questions to be directed at great place.
And now I'm happy to add to that Mike.
And.
Look I think the day to speaks for itself and when we look at prior restructurings that company has done.
And they have not impacted the bottom line and and and the way we would want.
So.
The restructuring is really built around a reorganization to the three principal geographies, we operate in and.
And the idea really is to D complicate the organization and push decision, making and accountability into the regions.
That provides us with the opportunity to really D complicate or uncomplicated.
Uncomplicate, our corporate structure, which has from a from a G and a basis has been a significant but and on the organization and so we're trying to.
Do two things.
Push decision, making or speed of decision, making and accountability locally.
And we are trying to simplify and corporate structure and moving to Atlanta and enables us to do that and probably quicker and also enables us to refresh and build and.
Some more organizational capability.
As to is it the last restructuring I can't say that at this point, but I would suspect it's more of an iterative process.
And a gradual process from here on in as opposed to major restructuring programs.
Is that all right and Mike Yes, that's very helpful. Thank you.
And.
And just in terms of Asia, I think you referenced that that came in.
Better than you anticipated I know that as we look at last year, the pace of recovery and in some of the countries, where you operate had been slowed by COVID-19 and by.
Restrictions on access, but it seems like that activity is picking up what are you seeing there.
And I think there's a there's a couple of things as you May know China is our most significant market and India APAC region.
Secondly, one of our major production facilities as close to Wuhan.
And so it would have been the parts of our business that was most quickly impacted last year from the COVID-19 pandemic and so I think what we are seeing is a fast the post COVID-19 recovery in APAC, particularly with strong revenues and our.
Coming from from China, and and other countries in that region.
Alright, and then the residential business.
60, I believe you said, 62% improvement in North America.
Can you walk through some of the product lines that drove that improvement and I believe you mentioned some promotion timing.
Just maybe how should we think about the sustainability of that residential strength as we go into Q2 and the rest of the year.
Yeah. So the majority of our SPM business is in North America, and as Youre aware and might we have three product lines waterproofing fireproofing and roofing underlayment business.
And.
We saw a slowdown and commercial new construction and Q1.
And in terms of the project lifecycle and building envelope or waterproofing business is most quickly impacted and so we did see a reduction in revenues for our building envelope business and fireproofing business remained resilient and that tends to be on.
Operating different slightly different geographies, some differences and the type of projects, but actually the fireproofing goes on much later and the project cycle. So those revenues remain robust and are why we really saw the improvement was in our roofing underlayment business, which Mike as you're aware.
And he's residential new construction and residential repair and remodel primarily so strong residential market, yes, the timing of the winter buy we moved for some of our customers out of Q4 last year into Q1, this year, which is more comfortable for the customers.
And there was more time and attention spent on the SPM business from a production standpoint in Q1, which partly accounts for the improvement and margin. So we would expect some continued challenges and S. B M. North America. This year for our building envelope business, but we have a strong <unk>.
<unk> pipeline and we just need to work that pipeline well and we would.
Specs the residential business for the roofing underlayment to remains strong and at the moment the pipeline for fireproofing and is also robust.
Okay, and Michael maybe maybe I'll just add that the bookings are bookings for residential and.
Our strong and in April.
So April people strong and are bookings going into and they are strong. So we do expect the residential on the underlayment to continue with good strength and we see that we're.
And we're quite happy with that because that's an area, where we struggled as far as the product lines most of its the underlayment and the roofing underlayment and flashing by core some of the window flashing that we sell and those type of products that are kind of residential refit redo those kind of products. There. So they are really strong.
Yeah.
Alright, and then.
And the FCC business, you mentioned that mix was a negative there can you maybe give a little more color.
What was going on with mix and if that was.
A one off or something that's gonna be lasting.
Longer into the year.
So it was a it was a little bit of a one off.
As the Asia market picked up a matter of fact, we had our strongest volumes in Asia and Latin America from a growth perspective year over year. They tend to have slightly lower gross margin.
And then the North American and European business.
And theres less operating cost under it but they do have slightly lower gross margin. So that's where the mix came in and we were pleasantly surprised and Asia.
And how are you know, Singapore, Hong Kong, China, All came back as Simon mentioned, and so that that kind of just offset us a little bit from our forecast and and versus prior year.
Alright, thanks very much.
Thanks, and our next question today comes from Rosemarie <unk> Gabelli with G research.
Right.
Thank you good morning, everyone.
As Murray.
I was you mentioned that you were doing that Oh, and you are seeing better trends on the commercial side.
Is this because oh from large projects picking up again I mean, we starting at me as a puppet Tim at least starting or is it that you are actually seeing a new.
And new new construction and the commercial side, which is kind of surprising considering that there is a glut of office buildings and two I'm. So if you see a pickup can you talk about Oh D and we actually are you actually seeing it.
So if you wanted to Simon are sure sure.
And for US Rosemarie last year for the SPM business in North America, and we were most impacted them in the northeast and the West coast.
And that was a combination of.
Some cancellations of projects and some postponements of projects.
Some areas of the country remained pretty robust in terms of that demand and.
And we still saw strong growth and the southeast and in Texas for example.
And in terms of our pipeline, we are seeing a number of projects restarting.
And the north east seems to be picking backup foster and the west coast and we are seeing a combination and New York for example of projects restarting and new projects, starting wage and provides us with some optimism and it.
It remains to be seen it's something that we manage very carefully and very closely and we review monthly without teams.
All right. Thank you.
Could you talk about.
The percentage increase you are seeing on the raw materials side, Oh, and whether it is mostly shortfall from raw material or is it more of a delivery issues you know and the transportation side and then what type of price increases are you anticipating.
David.
Yeah, Rosemarie, it's Craig how are you.
I am good thanks, how are you.
So.
Generally we're looking at around 6% to 10% increases and raw materials, depending on the product line.
I would say spm's more and the 4% to 7% on raw materials FCC tends to be up around the 10 per cent. Unfortunately, so we are going to have some margin compression on the FCC side.
As we go through Q2, and three and we're hoping to get that back on price and Q4 and into Q1 and next year.
SPM has less inflation, although we have gone up from price for both glue.
Globally are almost every product line.
And generally the prices have been anywhere from 3% on the low and right up to 10 or 15%.
Products like fibers, and the probably appropriately and there and they got hit by oil.
<unk> increased price and some supply chain issues.
Some of those are 10, and 15% price or raw material increases.
I would say.
We have a lot of different raw materials and a lot of unique products.
But and a general sense I would say about half of it right now seems to be supply chain related whether that shortage because of COVID-19 last year for that type of thing and then the other half I would say is more the dynamic of the industry with the oil prices up and just.
Dreams coming in at a higher price to make the raw materials, and so but I'm not an expert on that but I would say probably for us, it's probably half and half I would have expected about a 5% inflation.
And we forecasted.
Three to give you an idea.
So I would expect maybe five of the top end and unfortunately, it so you know somewhere between six and 10.
And our prices are in line with what the raw material increases are I will say everybody has gone up for price increase I think you've probably found it and your home life. I mean prices are all going up everywhere and everybody seems to be accepting that to some extent the prices are going up so that is a good sign that we think we will get the price. It's just a question of time.
Okay. Thanks.
Certainly helpful.
And I was wondering also if it is too early to for you to start looking at M&A. I mean, you ended the quarter with a positive net cash position, but you're also in the middle of doing a lot of things.
So is and when do you have time.
And to look at M&A or is it something that we would see more and you know towards the end of 2020 two when the when the dust settles on all of your projects.
So.
When we met with the board in January and we highlighted some of the opportunities for the for the business Rosemarie and one of the opportunities, there's really two strength and and.
And our product portfolio in North America, and really prioritizing the SPM business and.
Because of the outlook for residential construction and also because of the significant margin that we own and that business. So actually we have been very active I'm looking at the landscape.
And we have to active targets, we're considering and.
And you know I think it would be a great achievement for the business. If we could close on one of those and 2021.
And can you touch on the potential size.
These opportunities are we talking I mean really substantial type of acquisitions or more of the.
Holton.
We're looking and we've looked at a range Rosemarie and that's about as far as I'm prepared to go and this conversation can you talk about the range.
And Robin no.
Alright, Thanks fair enough and if you could give us an update lastly on unverified and have you seen some pick up as the economies are reopening and North America.
Particularly the U S yeah and.
You know the the outlook for verify a from a revenue standpoint is very strong and that's partially because of the delay and.
And fulfilling contracts that we signed in 2019, which are now being fulfilled as they as the various parts of the world come out of the pandemic.
And partly because.
The significant interest.
In the product and so we would expect to see some very healthy growth.
And the revenues from a very fine this year.
And I think.
And where it plays extremely well and is both and driving productivity for the end user, but also driving sustainability and a demonstrable improvement and things like fuel timing and C. O. Two footprint. So we would expect the demand from verified to.
Remain robust.
Thank you very much.
And our next question today comes from Laurence Alexander with Jefferies. Please go ahead.
Good morning. This is Dan Rizzo on for Laurence how are you, hey, very well and what are you doing good you mentioned.
Hiring and Atlanta, because it has a robust pipeline I was just wondering just overall given what we're seeing and hearing from others in terms of labor availability and labor costs. If you could provide color vs, making things more difficult and what you expect going forward.
Yeah, I think particularly and our manufacturing operations and particularly in North America, we've seen some significant challenges and and recruitment for hourly folks and also for salaried folks within the operation.
And as regards more senior.
<unk> management and I think the war on talent is Uh huh.
Hi.
And and therefore, probably takes us a little bit longer than we want.
But I would tell you we have been very pleased with the quality of candidates that we've been able to higher over the last few months.
Okay.
That's helpful. And then you mentioned a little bit about sustainability I was wondering just in terms of the push for energy efficiency and buildings well connect what that can mean to you guys in the coming years, particularly probably gets free SPM business.
So with I guess, the wind and win business Waterproofing and I just hope it's really yeah.
When when I think about the image and the positioning of G. C P.
And I think there's a much much stronger story for us to tell around sustainability and that goes and for our FCC business, where we just talked about verify them, but also for example, as cement additives and have proven and improve.
Months to drive a reduction and C. O. Two I think we could do a better job of highlighting and selling that.
And as we think about our SPM business I have in my mind, we we would be proofing structures and.
And proofing against the elements, but also driving energy efficiency through the system and the products that we that we sell so I think we can do a better job of promoting it but I think we also have to do some infill and terms of our SPM product range to be able to push that and better.
Alright, Thank you very much.
And our next question today comes from Chris Shaw and partners. Please go ahead.
Good morning, everyone. How are you doing well.
Well thanks.
I wanted to follow up I guess on the answer you were given to one and Rosemary as questions about some of the pockets of strength and commercial construction.
Since we talked with the North east, but there was some new projects and I guess in general and kind of figure out where looking forward, where there might eventually be and pick up and commercial construction and just.
Having a hard time thing or whatever that might be you were saying there were some new projects that we're actually getting coming on board I think and the north East and.
What's your sense at what areas are those coming from but I can't you know unless theres going to be a large you obviously the government infrastructure.
Bill or spending outside of that and obviously, that's very much in our office and it would be pretty weak and with a lot of the other institutions like universities hospitals would be undergoing some large projects right now with the projects that you're seeing that or do where they pre funded I mean, and I just I'm trying to a sense of what might be coming back first and commercial construction and looking forward I know and 12.
And he came aboard and North American specifically, yeah look I think there's a combination and too I think everybody would have some skeptic skepticism about office space in the near future and but we are seeing projects that were postponed.
B, a coming back online and.
But we are also seeing that the health care sector and the federal sector and for example, some elements of infrastructure such as data centers that there is a robust pipeline of new work coming through and we've had to shift our focus.
And as an organization into a moving away from maybe what may maybe a more traditional targets and segments to those segments that are growing.
Okay that makes sense and that just you.
You know looking at the SEC business, it's hard to tell and you know you guys talked a little bit of the story, but.
And just looking at the numbers.
And this quarter, it's hard to tell.
What the progress that's being made there obviously you know margins came down and some of that was mix some of it sounds like volume deleveraging.
Sales were strong in Asia, and Latin America, but some of that you know it sounds as though you had an easy comp versus the maybe COVID-19 last year I mean, what what should we be you know it's.
And just not coming through the numbers what should what do you Wanna tell there that's really happening that we should be excited about going forward with that business.
Well I'll answer that Chris.
We did have a little weaker January February and North American and what we wanted so hence the reason why the mix not just the Latin America, and Asia coming up but.
We had less demand and February because of Texas and I think we mentioned that on the call actually the last call for the Q4 call and then we got a little bit of volume back in March.
So that's why the mix was a little bit different and where you expected, but that doesn't answer your question.
Long term question is.
Done quite a bit of work actually on the pipeline and working with our sales management team globally.
And to work on getting some of our share back or at least starting to gain share.
As you know we were soft and that area for with SCC. We did a lot of work around exiting countries and then getting the margin up over the past couple of years, which we've done by a couple of hundred basis points.
And now we have to work on getting share. So we have had some small wins recently.
Recently on that we had won in Canada, We had one recently and in Asia and April against some of our competitors. So I think we'd like to get a little more stabilization of the revenue going forward. So we can have a little more consistency and that business moving.
Moving forward on the volume and then there is quite a bit of productivity in.
In that area on free freight lanes and formulation relative to the inflation that's coming through.
And so I think we've made some changes there we've got sales force and as the pipeline management tool and we've got some a little bit changed Simon's change some of the structure on the sales side and I think the regional structure is going to help too.
On the on the stabilization and I was writing yeah look I think each.
Each geography has different elements and different challenges be it from a competitive sets or.
Kind of edge product portfolio, I would say broadly where historically the organization has done well and is in the cement additives that we have a highly competitive offering from a product standpoint, and from a technical knowledge standpoint, and I am pleased at the progress that we are making.
And that globally and I see us growing share this year when it comes to the concrete attitudes and it's quite different by geography.
Latin America I've been Super impressed by the same and Latin America, both stabilizing share and I think we will see growth of share in Latin America. This year, I think and North America.
Concrete additives, the team's done well over the last year or two and stabilizing share I think what's crucial and North America, as we build out and product portfolio and we get back on the front foot and get more competitive and enable share take I think.
And the historically, where we've been most challenged them on the concrete additive side and is.
As in Europe, and you know, bringing a new team on board in Europe in terms of Gary D. Joining we'd like to see that we get back on the front foot and particular on the on the concrete attitude side and get more competitive.
We have very good products broadly, we have fantastic technical support and technical knowledge and I think it's down to us to be more competitive and front of the customer and go get some of that share back.
And then just a quick one it looks like that had a slight decline and pricing I know you're going after pricing is it just does it just take too long I mean, I thought we'd see a little bit and the first quarter as it is it just to flow the way the business works to see net and sort of price increases and the first quarter GAAP.
Most of our price went out too.
To take effect in and in April So we didn't expect to see much price in Q1 honestly. So it's just a timing.
And then we're wanting to see it in Q2, we will see the most price and Q3 and four.
It's just more of a timing and and when we went out we.
Did go out early on cement, but sometimes that takes a little while probably takes 30 or 60 days to take and effect. So we haven't seen a lot of that and Q1 either okay.
Okay got it thanks, so much.
And ladies and gentlemen, this concludes our question and answer session I'd like to turn the conference back over to Betsy Cowell for any final remarks. Thank.
Thank you I'll call. We appreciate your call today, and everyone, who joined us and have a great afternoon.
Thank you Ma'am. This concludes today's conference. We thank you all for attending today's presentation. You may now disconnect and have a wonderful day.
Yes.