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FOCUS ON GREATNESS
FINANCIALS • AS WELL AS CONVERTING A 2015 QUARTERLY LOSS INTO PROFIT, UNIVAR HAS SIGNED A NUMBER OF NEW DEALS AND UNVEILED A NEW LAB IN FRANCE
UNIVAR HAS REPORTED a second quarter net income of $39.8m, compared to a loss of $12.4m 12 months ago, despite seeing its net sales fall 9.9 per cent year-on-year, from $2.5bn to $2.3bn. “As expected, we continued to face challenges in the second quarter with sluggish industrial demand, negative comparisons in upstream oil and gas and lower average selling prices,” says president and CEO Steve Newlin. “Although quarterly results were in line with our previous
guidance, I am disappointed in our ability to deliver growth, especially in the US.” “Since joining Univar as CEO,” he continues,
“I have spent the past two months assessing our company in-depth and, despite the current challenges, I am excited about the tremendous opportunity in front of us. I am confident that the actions we are taking will get us on track to deliver above-market profit growth in the intermediate and long term.”
GEOGRAPHICAL BREAKDOWN In its home market of the US, Univar saw its sales decrease 12.7 per cent year-on-year, from $1.4bn a year ago to $1.2bn. This, the company says, was “primarily due to lower sales to the upstream oil and gas market and lower average selling prices associated with lower oil prices”. At the same time, gross profit fell 7.4 per cent, from $284.2m to $263.1m, while adjusted EBITDA dropped 24.4 per cent, from $110.1m to $83.2m. Across the border in Canada, net sales fell 9.2 per cent over the period, from $534.6m to $485.4m, with gross profit down 3.8 per cent, from $63m to $60.6m. Nevertheless, adjusted EBITDA increased 3.6 per cent, reaching $31.5m from $30.4m. While net sales also fell in the EMEA region, slipping 1.6 per cent year-on-year to $459.9m, the company’s operations there nonetheless increased gross profit by 4.6 per cent, rising from $98.6m this time last year to $103.1m due, among other things, to “product and customer mix enrichment” and higher sales of pharmaceutical finished goods. Meanwhile, adjusted EBITDA jumped 21.8 per cent, from $27.1m to $33m. However, a less rosy picture emerged in the rest of the world, where net sales fell 12 per cent over the period, from $118.7m to $104.4m; gross profit 13.1 per cent, from $21.4m to $18.6m; and adjusted EBITDA 32.3 per cent, from $6.2m to $4.2m. “We have a strong foundation at Univar and
I am confident we have the right strategy in place,” Newlin states. “However, we face several near-term challenges. We are already implementing changes to improve our execution with a strong sense of urgency. I expect it will take a few quarters to see the real impact of these changes, but I have no doubt we will deliver consistent and superior profit growth. If there’s one thing I’ve learned in my 37 years in the chemical industry, it’s that growth can be achieved in all market conditions by focusing on commercial greatness and operational excellence. These are our clear priorities.”
PERSONAL CARE LAB Meanwhile, in terms of technical excellence, Univar has opened a new laboratory and technical development centre in Versailles,
HCB MONTHLY | SEPTEMBER 2016
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