The following is a summary of the Advantage Solutions Inc. (ADV) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Advantage Solutions exceeded its adjusted EBITDA guidance in 2023 and delivered year-over-year adjusted EBITDA growth and margin expansion in Q4.

• The company completed several divestitures, receiving gross proceeds of approximately $100 million from selling their Foodservice businesses, and reduced its majority stake in Advantage, Smollan Limited to a minority stake.

• The adjusted EBITDA of the company for the year was $424 million and $115 million in the fourth quarter, with a YoY increase of 4.4% in the fourth quarter.

• Despite budget cuts from a large customer and inflationary pressures, the implementation of pricing initiatives helped offset around $120 million of wage and benefit inflation for the year 2023.

• The company reduced its net debt to adjusted EBITDA ratio from 4.5x at the start to 4.2x in Q4, with a long-term target to reduce this ratio below 3.5x.

Business Progress:

• Over 95% of key enterprise clients renewed their contracts, with many enhancing their annual spending. The company also renewed a service agreement with a large multinational retailer.

• Signed contracts with several significant customers, ensuring the continuation of services into 2024.

• Advantage Solutions is investing in back-office optimization and is enhancing its e-commerce capabilities to capitalize on steady growth in the sector.

• The company plans to modernize its IT support services and accelerate investment in the cloud infrastructure, AI technologies, and automation in the next year.

• The company plans to build new technology platforms for data modernization and cloud-based capabilities, and is set to invest heavily in IT infrastructure, data modernization, retail execution platforms, and new sampling demonstration accounts in 2024.

More details: Advantage Solutions IR

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