Q4 2022 ChampionX Corp Earnings Call
Good morning, welcome to champion X Corporation's fourth quarter and full year 'twenty 'twenty.
Two earnings conference call.
For this morning's call is Byron Pope I will turn the call over to Mr. Pope you may begin.
Thank you.
Everyone with me today are selling most of them are syndrome, president and CEO with champion X and Kevin Fisher, Our executive Vice President and CFO .
During today's call Soma will share some of the company's highlights Ken.
Ken will then discuss our fourth quarter results and first quarter outlook before turning the call back to solve that for some summary thoughts.
We will then open the call for Q&A.
During today's call, we will be referring to the slides posted on our website.
Let me remind all participants that some of the statements we will be making today are forward looking.
These matters involve risks and uncertainties that could cause material difference in our results from those projected in these statements.
Therefore, I refer you to our latest 10-K filing and our other SEC filings for a discussion some of the factors that could cause actual results to differ materially.
Our comments today May also include non-GAAP financial measures additional.
Additional details on reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter press release, which is available on our website I will now turn the call over to Soma.
Thank you Brian .
Good morning, everyone I would like to welcome our shareholders employees and analysts to our fourth quarter 2022 earnings call. Thanks for joining us today.
Let me start by saying that 2022, whats a year of strong momentum for <unk> as we delivered robust performance on each of our key metrics, including revenue growth adjusted EBITDA margin expansion free cash flow generation and capital return to our shareholders.
I am grateful to all of our employees for their focus and tireless dedication for delivering value to our customers.
And day out.
Before I touch on our fourth quarter performance on slide number four we always begin our earnings call with our corporate purpose and operating philosophy.
We are passionate about improving the lives of our customers our employees, our shareholders and our communities.
At the heart of our operating philosophy is being relentless advocate for our customers.
On slide number five I could not be prouder of our company for our recently being selected as the very first recipient of Exxonmobil global supplier of the year Award.
This annual award program recognizes suppliers that achieve a high performance standard to meet the Exxonmobil business needs and nominees are evaluated on a variety of criteria, including on time delivery safety responsiveness service quality innovation.
And commitment to sustainability and diversity.
We had an incredibly humbled by this recognition and I want to think of our teams for their continued hard work and commitment to our customers' success now.
Now regarding the fourth quarter, our solid results reflect the positive momentum in financial performance that our company is committed to deliver for our shareholders as the NFC upcycle unfolds to this year and beyond.
Ken will take you through the details of our fourth quarter financial results shortly but let me first touch on three key business highlights which are shown on slide number six.
First EBITDA margin expansion despite.
Despite experiencing a slight sequential revenue decline in the fourth quarter, which was driven by a normal seasonal slowdown in sales in our North America onshore businesses into the year end holidays. Our Q4, adjusted EBITDA margin improved by approximately 190 basis points versus the third.
Water.
Continued pricing realization and favorable mix, we delivered on our target exit 2022, adjusted EBITDA margin of 18% and we remain confident that champion X will achieve our near term goal of an EBITDA margin of at least 20%.
Second free cash flow on our last earnings call. We stated that we expected another strong free cash flow quarter to end the year and we delivered our fourth quarter free cash flow of $169 million represented 94% of adjusted EBITDA.
For the full year 2022, we generated free cash flow of 329 million, which represented 54% of our adjusted EBITDA.
This demonstrate the best in class cash flow generating capability of our capital light portfolio of businesses and illustrates our high degree of confidence of generating 50% to 60% of free cash flow to EBITDA conversion through the cycle.
Third returning capital to shareholders. We have previously shared with our with you our disciplined capital allocation framework and in the fourth quarter. We once again delivered on our commitment to return excess cash to our shareholders in the fourth quarter between our regular cash dividend of $15 million.
And $80 million of share repurchases, we returned 56% of free cash flow to our shareholders.
For the full year 2022, we returned $226 million or 69% of our free cash flow to our shareholders.
We remain committed to return at least 60% of free cash flow to our shareholders through the cycle.
Before I turn the call over to Ken I wanted to give you some more details around our Q4 market activity as seen on slide seven.
In the fourth quarter, we experienced normal seasonality in North America with the year end holidays, and some weather related impact, particularly in the Bakken and Rockies.
Felt that in sequentially lower sales in North America.
International activity was strong.
Excluding Russia and cross sales to Ecolab, our international revenues grew modestly on the back office strong 21% growth recorded in Q3.
Growth in Middle East and Latin America were offset by decline in Russia and Asia Pacific.
In production chemical technologies, we recorded a 4% sequential growth in middle East.
In production automation technologies, ESP recorded 10% sequential growth followed by 9% growth in digital offset by weather related weakness in broad lift and plunger lift.
Pete.
Our production automation technologies International revenues grew 3% sequentially.
Drilling technologies International sequential growth was 11% it was more than offset by the temporary destocking from our north American customers as they focused on year end working capital management.
We have already seen order rates rebounding in Q1, and we expect solid sequential growth in drilling technologies.
We have experienced similar phenomenon in drilling technologies in the past.
Let me now turn the call over to Ken to discuss our fourth quarter results and our fourth quarter outlook.
Thank you so good morning, and thank you for joining us today.
We will be commenting on adjusted EBITDA for sequential and year over year comparisons. We believe this metric best reflect the business performance of continuing operations.
Our fourth quarter 2022 revenue was 986 million up 20% year over year.
And 3% lower than our robust third quarter revenues, our two largest businesses production chemical technologies and production automation technologies were relatively flat versus third quarter geographically year over year, North American revenues grew 10% and international revenues.
We're up 37% in 2022.
Included in our fourth quarter revenues were $26 million of cross supply sales to ecolab.
<unk> sales were down 24% sequentially from the third quarter as we have previously communicated we do not recognize EBITDA margin on these sales and the associated revenue is allocated to corporate and other in our financial statements.
Fourth quarter GAAP.
For chemical.
Technologies business segment.
Reflecting the results of our annual goodwill screening test.
This was partially offset by a reduction in restructuring reserves related to our Gary Bill facility contract exit.
As seen on slide 11 champion X consolidated adjusted EBITDA in the fourth quarter was $179 million.
Up 8% versus the previous quarter, and an increase of 30% versus the prior year period in.
In the fourth quarter as expected champion X delivered consolidated adjusted EBITDA margin of 18, 1%. This was up 188 basis points sequentially and an increase of 195 basis points over the fourth quarter of 2021.
Our fourth quarter free cash flow of 169 million reflected strong cash flow from operations and continued focus on working capital management.
Cash from operating activities was 195 million and capital investment was $26 million net of proceeds from asset sales.
Turning to our business segments production chemical technologies generated fourth quarter revenue of 637 billion down 1% from the third quarter and up 29% year over year segment, adjusted EBITDA was $121 million up eight.
18% sequentially and 47% higher than the fourth quarter of 2021.
Volume growth and selling price increases drove the sequential and year over year improvements.
Segment, adjusted EBITDA margin was 19% up 304 basis points sequentially and up 239 basis points from the prior year's period, our pricing and productivity actions during the year helped us deliver above our targeted 2022.
<unk> adjusted EBITDA margin exit rate of 18% in the fourth quarter.
Production and automation technologies fourth quarter segment revenue was $244 million.
1% decrease sequentially year over year revenue was up 20% driven by both activity and selling price increases digital revenue was up 9% sequentially in the quarter and up 23% year over year, we continue to see increasing customer focus on implementing digital technology.
<unk> to reduce emissions and drive operational improvements and cost efficiencies, we expect our future revenues to continue to benefit from this industry trend.
Fourth quarter segment, adjusted EBITDA was 51 million down 3% sequentially and up 29% year over year segment adjusted EBITDA margin was 21%.
Down 30 basis points versus the third quarter and up 134 basis points from the prior year again due to higher volumes and pricing.
Drilling technologies segment revenue was $54 million in the fourth quarter down, 12% sequentially and up 7% year over year, we experienced a decline in order and sales in the fourth quarter as some of our customers acted to manage their working capital and free cash flow for year end as the new year start.
Did we have seen orders return to more normal levels.
Drilling technologies delivered segment adjusted EBITDA of 11 million during the fourth quarter down 6 million sequentially and down 2 million compared to the fourth quarter 2021 level.
Segment margin was 20% in the quarter of 666 basis point decline.
Driven by the aforementioned sales decline higher tooling costs and product mix, we expect that drilling technology margins to improve progressively through the first half of this year to more normalized margins for the second half of 2023.
Reservoir chemical technologies revenue for the fourth quarter was $26 million, which is a decrease of 28% sequentially and 35% down year over year as discussed in our third quarter earnings call. We expect that our fourth quarter revenue to decline given the.
Exit of certain RCT product lines, and the typical year end industry activity slowed out.
This product line exit resulted in lower revenues, but a significant improvement in the margin profile of the business. The segment posted adjusted EBITDA of $3 million during the fourth quarter flat compared to the third quarter and to the corresponding prior year period segment margin was.
13% in the quarter.
A 595 basis points sequential improvement and a 666 basis point improvement versus the prior year period. This again was driven by the product line exit and related restructuring actions.
Moving to our balance sheet as shown on slide 12, we ended the fourth quarter in very strong position with record liquidity of $889 million, including available revolver capacity and cash on hand. This was an increase in liquidity of $78 million versus.
The prior quarter we.
We also continued to pay down debt with 20 million in revolver debt repaid in the fourth quarter.
At December 31.
Our leverage ratio was six times net debt to adjusted EBITDA.
In alignment with our capital allocation framework, we remained committed to the return of surplus capital to our shareholders. During the fourth quarter, we returned 56% of our free cash flow to shareholders in the form of our $15 million regular quarterly dividend.
And $80 million of share repurchases.
For the full year 2022, we returned $226 million or 69% of our free cash flow to shareholders.
We remain laser focused on disciplined capital allocation delivery of operating and free cash flow.
The effective working capital management, and maintaining our strong liquidity and financial position.
Turning to slide 13, and our forward outlook, we expect 2023 to be another year of solid revenue growth and improving adjusted EBITDA margin rate.
Specific to the first quarter, we expect revenue, including Ecolab Cross sales in the range of $952 million to $982 million at the midpoint. This represents a 12% increase versus the first quarter of 2022.
The first quarter sequential change in revenue is primarily driven by the traditional seasonal declines at our chemical sales primarily internationally.
And please see slide 16 in the appendix for the historic trends in North America, We expect a rebound in our North American land business, particularly in drilling technologies coming off the seasonal slowdown at year end.
For adjusted EBITDA, We expect a range of 164 million to $172 million.
This guidance includes a $5 million impact from a one time employee inflation assistance program as well as increased investment in our digital and emissions platform.
At the midpoint. This represents a 35% increase over the first quarter of 2022 and again at the midpoint. This represents a 300 basis points improvement year over year in the period the company adjusted EBITDA margin rate.
From the seasonally low starting point of <unk>, we expect our adjusted EBITDA margin to improve healthily throughout the year targeting an exit 2023 adjusted <unk>.
EBITDA margin rate of 20% up approximately 200 basis points on the 2022 exit rate.
On this slide we have also provided some additional specifics related to our forward outlook. We continue to expect annual capital investments remain in the range of three to three 5% of revenues during 2023.
Wawa in periods of revenue growth, we will see the need for working capital investment we remain confident in our 50% to 60% free cash flow to adjusted EBITDA conversion ratio guidance through the cycle.
We expect strong free cash flow delivery again in 2023 with a free cash flow to adjusted EBITDA conversion ratio of at least 50%.
As a reminder, our free cash flow is generally weighted to the back half of the year.
Thank you and now back to Soma.
Thank you Ken.
Before we open the call to questions I would like to update you on a few key items.
On revenue synergies, we have now more than two years into a merger.
And the cultural alignment is even stronger today than it was on day one hour.
Our pipeline of production oriented joined sell opportunities has continued to expand both in North America and internationally.
As a reminder, our teams delivered $30 million of new customer wins in 2021 $24 million in North America, and $6 million internationally, driven by our revenue synergy efforts.
In 2022, we generated $45 million of new customer wins, representing a 50% increase year over year with the $37 million of these wins in north.
Erica and $8 million internationally.
In addition, the total pipeline of identified potential opportunities has grown 47% at the end of 2022 compared to prior year setting up continued momentum in our revenue synergy realization in the coming years.
I want to acknowledge our global sales team as they have worked collaboratively and thoughtfully.
Executing these revenue synergies we are encouraged by customer receptivity to our production solutions approach and we expect our revenue synergy opportunities will continue to grow this year and beyond.
Next on digital on emissions, we will continue to invest actively in talent and capabilities in this area in 2023 <unk>.
We experienced 36% growth in our digital revenues, including emissions in 2020 to be.
We expect another solid year of growth in 2023.
Finally, we continue to see favorable demand tailwind in our businesses that support our constructive multiyear outlook for our sector. We remain focused on delivering solid earnings growth margin expansion and strong cash generation, we are committed to creating value for our shareholders through a disciplined.
<unk> capital allocation framework with clear priorities of our capital, including high return investments and returning cash to shareholders champion X is well positioned to help our customers maximize their value of their producing assets <unk>.
<unk> and efficiently.
With that let me. Thank all of our 7300 that champion X employees around the world for their tireless dedication to our purpose of improving the lives of our customers our employees, our shareholders and our communities.
You inspire me daily.
Lastly, we look forward to seeing many of you at our first Investor day as champion X on March seven in New York City with that I would like to open the call for questions.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
You will hear three Tom prompt acknowledging our request and your questions will be pulled in the order the RBC.
Should you wish to decline from the polling process. Please press star followed by the Q.
If you are using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Your first question comes from David Anderson of Barclays. Please go ahead.
Hi, good morning Shlomo.
Good morning, Dave.
I was wondering maybe we could start on the offshore markets and.
And how you see that impacting the PCT business this year and what's in the guidance.
I believe it's around 40% of your segment.
This resurgence across the offshore market. So just a question of when does that kind of turning to increased chemical demand and start to hit the top line.
Yes, Dave.
We are excited about the offshore market and particularly our positioning in the market and we saw the benefit of the offshore market growth as we move into the second half of the year.
You may recall, we have.
Well over 25% international growth in the third quarter.
In.
Got it.
The PCT business and.
Yes.
A big part of that was driven by our the offshore markets and if you look at it in Q4, we saw.
We have a relatively stayed flat at that higher level and so we expect in 2023 that offshore market to be continued to be a positive tailwind for us.
Okay, and then maybe if I could shift over to the <unk> business could you maybe break out just in the North America market, how you think too.
The ESP business versus the rod lift.
It is going to play out this year I think you said if I heard you right sequentially DSP groups on nine I think 10%, but rod lift and the rest were down sequentially. How does that kind of play out we're starting to see the rig count maybe maybe starting to peek here. So so can you talk about how you see those two businesses moving.
Yes so.
The Q4 phenomenon, what we saw in <unk>.
In Rod lift so ESP grew 10% sequentially.
Digital grew 9% sequentially, the rod lift plunger lift weakness is.
Primarily driven by two factors one is the seasonal slowdown as you know rod lift driven by daily service activity.
And so we normally see a seasonal slowdown in the fourth quarter with the Rod lift and then the other factor, which impacted what's the weather and particularly in Bakken in.
And Rockies area. So those two those two items impacted the Q4 now as we move into Q1, you will see sequential improvement in all of the artificial lift product line, including Rod lift plunger lift so when I look at 2023, I think given the.
Very constructive market environment, we expect ESP to continue to grow and then we expect to rod lift plunger lift to also grow and particularly.
Rod lift production spending continues to stay strong and the conversion things continue to come through so we saw a.
Nice growth in 2022 in Rod lift and we expect to see a nice growth in 2023.
Great. Thank you very much.
Sure.
Thank you.
The next question comes from Alex Chabot Hoffler of Stifel. Please go ahead.
Alright, Thank you and good morning, everyone. Thanks for taking my question.
Sure Alex.
So yes, so just to kick us off here. So I was wondering if you could provide any updates or additional color on your methane detection business and I guess, just how we should think about growth in income statement impact in 'twenty three 'twenty four.
Yes.
Yes.
This is.
This is a business which is in its.
In infancy, and with regulatory changes and.
Our customer.
To continue to reduce particularly methane emissions.
So we play primarily today in the methane emissions.
And.
If you look at today this business is.
Growing nicely and.
We got into the space in July of 2021, and if you look at from that point onwards to now we have today well over 600 sites.
Our continuous monitoring equipment, that's installed and working.
So customer adoption and this continues to improve so we expect 2023 to be another year of solid growth and that's why in the prepared comments, we talked about the continued investments in this area. Because we believe this market will continue to grow for many years.
Tom.
As you know there are different types of.
Emission detection technology, the <unk> technology, the drone based technology the satellite based technology and then the ground based continuous monitoring technology and we offer all of the technologies, except the satellite.
But we believe the biggest growth opportunity will come in.
More than the continuous.
Monitoring drone based monitoring technology, because as you can imagine the rest of the technologies are very episodic that is kind of if you have if you want to continuously monitored and quantify technologies you have to make sure that you install continuous monitoring technologies.
We are investing nicely in this and we will continue to invest in people talent organizational capabilities. So I expect to end 2003 to see.
A nice growth in this.
From everything we can see today, we have the leading position in the upstream oil and gas markets when it comes to continuous monitoring.
Great Great. That's excellent color I appreciate it and just one more if I could squeeze one in just I was wondering if you have any additional comments on some of the raw material cost for your PCT business.
Just how we should think about that in 2003, and if pricing has caught up to a level, where you feel comfortable with margins going forward.
Yes.
Alex we have talked about this before that raw material prices, particularly in 2022 has been really difficult to predict right and so the forecast.
Those have been.
In 2022 has been somewhat difficult to predict but what we saw in the fourth quarter. We did see some favorability in our raw material.
And so going forward, what we have is we do believe that.
That raw material prices.
At a minimum stabilized.
And possibly well May show.
Current view is possibly May show some relief.
So what we have built into our guidance.
Guidance.
Our forecast here is the raw material favorability, what we saw in Q4, we have we have built into our.
Our forecast and guidance and I think that we believe is that a very reasonable assumption because we have seen.
Stabilization in the raw material prices and so we have built that into our forecast. So that's what I would say.
Excellent excellent. Thanks again, thanks again for taking my questions sure.
Sure.
Okay.
Thank you.
Next question comes from Sara.
Bank of America. Please go ahead.
Hi, good morning, Soma and Ken.
Just sticking to production chemicals, so as to.
So I think on the last quarterly call we were talking about.
Topline in PCB growing.
Mulder plays are oil volume growth rate and you walk through on the reasons why it would be multiples of oil volume growth rate, but just looking back at 2022, I think you grew PCB topline 758 times on volume growth and we know the blood also pricing dynamic going on both could also in net rate. So how should we think about.
How much of a multiple we should see the BCP topline in 2023.
Yes.
I think this is one of those things we will detail out more in the upcoming Investor day.
So, but we do expect 'twenty to 'twenty three to be another year of solid growth.
Because we believe production spending.
Our production volume will also increase.
So we do expect it to be.
Solid a solid growth and we will.
<unk> talked about in the call how much was pricing how much was.
Actual volume growth, so I don't expect our pricing to grow like it did in 2022. So if you look at it it should be another good multiple of growth.
I'm not necessarily saying what it is can it be a low double digit growth as possibly can be.
Going forward, but again.
It's a short cycle business right, it's really hard to predict what happens in Q3 or Q4, but we do believe it will be a solid growth going forward.
One thing I want.
And one thing I wanted to remind us out of business.
It's still part of this business right. So yes.
That will be.
Depending on what happens with Russia in the year that will be.
That can impact the top line.
Okay perfect perfect. So my God, one on drilling technologies, but before that just a quick follow up on production chemicals. It seems like with your 20% exit rate margin guidance listing is it is it fair to assume.
40% for BCD as well because I know that was your intermediate term target is it fair to assume 20% for BCD bipolar.
And then just on that 20% number right how should we think about that 20% margin.
Being a peak margin being mid cycle or normalized margin how should we think about that you don't have enough history on the production chemical front.
So just give us a little context on how should we think about that number for <unk> versus normalized.
Yes.
I think the.
Again, if you go back in the history of production chemicals.
Because the historical numbers, obviously, when they are part of ecolab.
Yes.
The cost structure at ecolab and being part of a bigger company I think.
I'm not quite sure that's fully represented in our guidance, but I don't I'm not sure. It's fully representative of the margin potential of this portfolio.
Especially over production business, so going forward right to answer your first question on Q4, we do we expect.
<unk> exited that target rate of 20% in Q4, and we do feel that as more opportunities for us to build on it our teams have done a really great job in working through the pricing working through the productivity. We are laser focused on driving productivity.
Our network optimization operational excellence. So I do believe that that is more opportunities to go beyond 'twenty.
But right now we are focused on making sure that we exited at the 20%.
Margin rate in Q4.
Okay. Okay Soma perfect no. That's a good answer a quick follow up on the drilling technology side of things I know you said in your prepared remarks, you are seeing a solid recovery.
In January and customers are coming back and ordering more condos.
Just so that.
I appreciate the magnitude of the recovery how should we think about.
How do you get back to.
Third quarter revenue run rate in the first quarter in the second quarter, and then just related to that on the margin front I know absorption does move the margins pretty quickly in this business right. How should we think about margin going forward and drilling technology and I know.
The mix has been shifting between Qatar and bearings, so keeping all that in mind, how quickly should we expect a recovery in the top line and how should we think about margin trajectory through 2023.
Yes.
Sort of on the on the on the on the top line again I wanted to.
What we saw was a temporary destocking.
And we have seen this before.
We have seen this before what I mean by that is even in a constructive environment. Sometimes you find in Q4, particularly in drilling technologies you will see this type of an impact sometimes because.
Customers.
Focused on some year end working capital management items, So I would refer back.
In the deck as you know we have that.
Chart, where we show that Destocking.
The restocking.
That chart I think it's on page 17 dependent number and if you look at a couple of quarters. If you want to have a reference point go back and look at Q4 2011.
In Q4, 2013, and then looked at the rebound in Q1 of 2012 and Q1 of 2014. The subsequent quarters, you will see that similar phenomenon and what we're experiencing is that similar phenomenon even in a constructive market environment Youll see this type of phenomenon. So we are not.
Concerned about that because we have seen in January so what you would see as a solid sequential growth.
And.
And we are seeing that now coming to margins. So.
As Kent mentioned in the prepared remarks, so we are experiencing some higher tooling costs. So if you look at our Q4 margins. The reason the margin is down to 20%.
It's because one is the volume but the other issue is we are experiencing higher tooling costs.
Particularly in our high pressure new products.
So our teams are working on it.
So we are very focused on delivering on the.
The products so that is happening, but we are experiencing higher tooling cost. So the teams are working on it and we have already seen in January that we are starting to see some improvement in it but it's going to take us couple of quarters to get to the normalized margin.
So going forward when you put this together along with the mix issue of bearings and I think what you should do is what you should see in the second half of 2020.
2023 years, we are returning back to that 30% level of margin and then we can grow from there. So that's what I would say.
Okay perfect. That's perfect. Thank you hi, there has done it back.
Thank you Sarah.
Thank you.
Question comes from Eddie Modoc of Goldman Sachs. Please go ahead.
Hi, good morning.
Just wanted to touch on guidance for <unk>.
What are the drivers of the low and high end of the revenue and EBITDA guidance, how should we think about the moving parts is it just a.
Function of the degree of seasonality or are there other elements across the segments that we can think about.
Yes.
It's primarily a function of seasonality.
And that's primarily.
In our chemical technology business.
So say it the other way that you will see the seasonal piece.
<unk> and the seasonal and Q4 to Q1.
Our PDP business starting to grow.
Our North American land business, starting to get back and you will see our drilling technologies as we already talked about right. So it's primarily a chemical technologies business and primarily international phenomena and that's why we provided.
The historical perspective in the chalk.
Going back several years.
So this is something we.
We normally see so in terms of guide.
Cadence range.
So what can make it better obviously.
The activity level in Q1 is better than we anticipate.
It can it can be better right and.
And that's what I would say so I think it's a seasonal aspect so and we are seeing that trend in January in our drilling technologies and all of that rebounding.
From the seasonal slowdown in Q4, so so as we get into Q2, you will see our production chemical business continues to pick up its growth.
Great. Thanks for the thanks for the color there.
When you mentioned one area of focus for the Investor day, but can you help us understand what your primary areas of focus will be across the business.
What should we be looking for in March.
Yes, so I think I'm.
I'm glad you asked we are excited about the upcoming March Investor day, right and.
This is our first investor day.
Since we.
Have the transformational merger in 2020. So this is our first investor day as champion X.
So.
What we want to accomplish in this investor day is first and foremost we want to make sure that we provide a deeper understanding of our portfolio, particularly our chemical technologies business.
No because I think the chemical technologies businesses.
Is new in our portfolio since 2020, and it's our largest business today. So we really want to provide a deeper understanding of our chemical technologies business, including.
Why is the subtract the production chemicals why is it attractive what are the key drivers of growth what are the key drivers of cost and make sure that we provide a good understanding of our <unk>.
Portfolio, particularly our chemical technologies business.
We want to.
So our positioning of the business our portfolio of <unk> and why is it attractive in their emerging world of oil and gas.
So we really wanted to show the attractiveness of the portfolio for the future in oil and gas.
Third as we wanted to detail out our high impact organic growth opportunities because we.
We have talked about some of this before the intensity of <unk>.
<unk> chemistry is increasing that acquired multiple watershed left one of the one of the.
The emerging.
Discussions is about well productivity and particularly in places like Permian, we want to talk about how does our portfolio, particularly production chemicals and artificial lift how does that help customers deal with this well productivity issues because those at all.
I would say.
Attractive factors for our production chemistry.
And.
And artificial lift businesses. So we really wanted to detail out those high impact both the other aspect I would mention is in production chemicals, we sometimes talk a lot about.
The production volume growth in particularly oil volume growth, but we will also demonstrate it does not just dependent on the oil volume growth is also dependent on total fluids produced because as as this well start producing more water that is more chemistry is a quiet as well to treat those water.
Right. So we really wanted to detail out the high impact organic growth opportunities and then we want to highlight and assure so our view of the new development of technologies, new emerging technologies, particularly in emissions and digital as well as the new technologies. We are focused on in our article.
He'll lift and production chemicals, which helps customers produce efficiently and reduce their carbon footprint right. So that's kind of.
What I would say that.
What the crux of our Investor day would be.
Great. That's awesome color. Thank you so much and really looking forward to and I'll turn it over.
Thanks Avi.
Thank you.
There are no further questions at this time.
I'll turn the call back to Mr. Polk for closing remarks.
So thank you everyone again for your continued interest in champion X and we look forward to seeing you on our March 7th Investor Day in New York, Thank you and have a great day.
Yes.
Ladies and gentlemen, this does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines.
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Yes.
Yes.
Okay.
Okay.
Okay.
Okay.
Okay.
Sure.
[music].
Okay.
Okay.
Yes.
Yes.
Thank you.
Right.
<unk>.
Sure.
Yes.
Right.
Thank you.
Yes.
Okay.
Yes.
Okay.
Yes.
Okay.
Yes.
Okay.
Sure.
[music].
Yeah.
Yes.
Okay.
Sure.
Thanks.
Sure.
Okay.
Yes.
Sure.
Yes.
Okay.
Okay.
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Yes.
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Yes.
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Yes.
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Thanks.
Yes.
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Yes.
Yes.
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Yes.
Yes.
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Sure.
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Yes.
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Yes.
Okay.
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Yes.
Yes.
Yes.
Thanks.
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Yes.
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Yes.
Yes.
Yes.
Yes.
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Yes.
Okay.
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Yeah.
Yes.
Yes.
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Yes.
Yes.
Sure.
Okay.
Okay.
Okay.
Yes.
Yeah.