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DEFENCE OF THE REALM
Univar Solutions has reported 2019 net sales of $9.29bn, up from $8.63bn in 2018, although operating income fell from $387.4m to $187.3m. The company posted a net loss from continuing operations of $105.6m, as against a net income in 2018 of $172.3m. Comparison of the 2018 and 2019 financial results is complicated due to the acquisition by Univar of Nexeo Solutions, which was completed on 1 March 2019, and the subsequent sale of Nexeo’s plastics distribution business. Nonetheless, Univar is clear that the change has been good for shareholders, with president/CEO David Jukes saying: “I am very
cash flow generation, despite weakness in some of our end markets and lower chemical prices.” Jukes adds. “Our Nexeo integration team successfully achieved important ERP migration milestones and realigned sales territories to increase our market coverage and increase our salesforce effectiveness. We also completed non-core divestitures, delivering on our commitments to focus on our chemical and ingredient businesses and reduce leverage to our lowest level as a public company. We are continuing to position Univar Solutions to deliver long-term profitable growth and shareholder value.”
deflation in the US, Canada and EMEA, lower demand for chemicals and ingredients from global industrial end markets, and overall weakness in the energy markets. “Similar to the third quarter of 2019, the macroeconomic environment in the US segment weakened sequentially during the quarter,” Univar notes. Fourth quarter gross profit surged by 18.4 per cent to $522.2m, again boosted by the Nexeo acquisition, as well as “improving sales force execution and favourable product and end market mix”. For the year as a whole, US external sales grew by 16.6 per cent as a result of the Nexeo acquisition, partially offset by chemical price deflation and lower demand for chemicals. Adjusted EBITDA was up by 15.6 per cent at $102.4m, with improved margins as a result of stronger margin management and a more favourable product and end market mix. The Latin America division also performed well, with external sales up 39 per cent at $126.0m (excluding currency effects), again
pleased at how we have executed successfully against our strategic priorities of integration and synergy capture from the Nexeo acquisition, portfolio management and strengthening our balance sheet. “During the [fourth] quarter and the full year 2019, we earned solid margins and had strong
AROUND THE WORLD Fourth quarter net sales were up 9.8 per cent year-on-year at $2.2bn, driven by the contribution from the Nexeo acquisition and strong operating performance. Sales growth was partially offset by chemical price
showing the impact of the Nexeo acquisition together with growth in sales in Mexico’s energy sector and VAT adjustments in Brazil. There was a strong improvement in gross profits and adjusted EBITDA was up by 63 per cent on a constant currency basis.
RESULTS • THE REASONING BEHIND UNIVAR’S ACQUISITION OF NEXEO SOLUTIONS BECOMES CLEARER IN LIGHT OF THE GROUP’S 2019 FINANCIAL REPORT
HCB MONTHLY | APRIL 2020
