UNVR - Earnings call transcript Q2 2018

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Operator

Good morning, ladies and gentlemen, and welcome to the Univar Second Quarter 2018 Earnings Conference Call. My name is Carol, and I will be your host operator on this call. [Operator Instructions] I will now turn the meeting over to your host for today's call, David Lim, Vice President of Corporate Development and Investor Relations at Univar. David, please go ahead.

David Lim

Thank you, and good morning. Quarter Call Second Webcast. Univar's to XXXX and Conference Welcome

Officer. ended President are of Executive a slide Vice which Joining released at posted Financial our quarter slide along today have presentation. with the for Jukes, univar.com. financial with viewed website President morning, and results our Chief Executive our should call Lukach, been be along XXXX, David earnings Chief June the we Carl Officer; and The XX, This supplemental presentation and release, both on

During measures this presentation. slide GAAP release find to call, non-GAAP we earnings will refer supplemental comparable for the to certain the financial financial our the can measures in which you and reconciliation

outlook, filings are of forecasts performance. listing such SEC future risks expectations for more future. risks David on All now our With and our And they current are the see remarks. the the forward-looking. not turn or uncertainties X, expectations guarantees As make future. complete opening over that, of referenced statements projections, Please inherent Slide for statements for they may to uncertainties and involve call business I'll in estimates, our we reflect while and our for the a about estimates, his and our

David Jukes

I'm David, outlook. prior XXXX everyone. you, at Thank and second end good of our pleased quarter the report to morning, earnings upper that were

as we expectations earnings our transform double-digit strong these exceeds and our work to demonstrate paying that continue importantly, for shareholders. sustainable, results off company hard growth deliver More suppliers' that into our our and customers' consistently one is

ago. XX% $X.XX, earned share from Univar per a quarter, of the an increase During earnings of nearly year adjusted

consolidated a performance at million our during to end $XXX strength basis, ratio improving Xx as changing from of by our pay-down. testament our generation to result and strong the first is debt creation. team over the execution Our improved profitable and quarter adjusted prioritizes on This increased growth, in growth EBITDA the X% X.Xx and a of EBITDA strategy, cash value quarter a culture leverage and that to quarter the a

the beyond. Our performance with and well improving the with XXXX our for half sheet, us growth continued first in balance positions year, combined of

we Commercial excellence in are business our tremendously Univar we positive We're are long-term freight, environment to in the are is broadly culture, strength exciting to We trajectory. in excited said, feel global story environment for we in chemical a pressures, and and our operational continue our continuing industrial prices. but to on global about And one. Greatness, while an an that One cost through. our growth driving We managing That with particularly self-help remain supportive opportunities. inflationary invest seeing economy successfully economic enhance a

across and initiatives One our biggest our transformation business. our components of the execution remains commercial improving U.S.A. of

and early We are execution. by encouraged force we're sales in signs still the in of U.S.A. improvement stages, our

U.S.A. working. focused remain the important profitable the since delighted that indication we strategy growth, XXXX, on is many driving I'm to we first While of And to profitable volume growth metric our that's volume understand report of that you. a quarter an growth is in share

structure a can drive reorganized services. we business: and of well discrete our so is bulk end they distribution, and chemical go-to-market markets And provide As reminder, industries, local and insights market deeper focused sellers and distribution our last focuses into with customers technical experts customer partners. engagements. customer products differentiated X approach This this year, supplier on dedicated chemical lines and new resonating

from a care you give me units. recent our business Let personal example

products and is across The small our growing strategy a in features of a uncovered and growing in seller during expertise, our in me challenges. the partners' product important solve unique than formulate differentiate latest our were next how the insights the of support into product understanding skincare X own customer June, to were this they dedicated marketplace. cosmetics, skincare particular, facilities reviewing customers Because personal then These supplier of our benefits had we the developments in needed Conference To opened American it formulation. and Those into told excited technical prestige partners met medium-sized and with them. win exclusively sales a team need hydrating that and of provide ingredients. our While improving approach. experts the development specific understand application marketing also differentiated tapping cost-effective in the to their dedicated able focuses by color application Chemistry to gives trends quarter, knowledge on supplier technical this where and about value finished application of of of approach, analysis another This and industry dedicated experience time through range. our needed innovation are globe, and showcase opportunity customer, launch and kitchens to global to addition the I season's the of sellers Milan, consumer formulation our we Council naturals more and Italy, one with force products care a markets. for the that their our the dozen care number They portfolio In in network execution. attended this center, helping labs ingredients they to depth and personal

marketplace. drive us and be channel Our value partner are to to looking supplier in the increasingly the growth partners to

partners of for desire During a Professional, These new of Chemical, to excite the us. shared dedication growth, and Colonial quarter, including supplier and agreements others. mindset Purdy number their announce to Oil a with opportunities and the customers we distribution demonstrate continue amongst Castrol

careers talents, it's right sellers a in still now That their XXXX, who from force tells U.S.A more The hungry of that at growth sales XX% seller hiring with far force be. attracting nearly improving, Univar. of us want we kind news sales over is XXXX in but execution and mindset to churn turning at levels. Our normalized after is it what can our is good advance we're the our

to hire productive. consistently have months we a become As XX to XX said, new highly takes typically sales

we So to XXXX. continue force head as improve sales expect into we productivity to our

and across win-loss consistently we're ingrain also our need signs and advancing to improving execute encouraged customer of solutions and our others, it enhance are more and We're to We're time, improving. all throughout execution positive. our of instilling U.S., our our showing disciplined, progress into the and contact and are turning rates but of and by pipelines, which organization, including our is especially opportunity they deliver date, Our sales all number We experience. ratios initiatives a network. regions, in growth-orientated investments indicators, digitization culture that still in the amongst to Univar look leading DNA at visits customer pockets process we consistently see we that with strong differentiate U.S.A. digital so close

online us information to customers sales of to allows platform originating omni-channel present channel. Our regardless the

capability continue documents, over proof safety see delivery. types adoption We including and data usage of expanded sheets to to increasing have and include of and XX our MyUnivar.com of

partners patterns. the sales we customers value so extensive technology. Our to make as big digital distributor convenience additional, and offerings consultative prospects can the valued first are tools, and drive in benefits to Chicago data have in of help free throughout transform sellers not and recent choice And growth. demand this the to also only well the worldwide and firsthand range drive where ingredients both and become digital our to as and best connect developing our network new a of week, but we demand Later provide customers our application of increasingly data to analytical digital our to asset will calls The important hosting suite they first AI development supplier investments suppliers. able including world our and our to continue this, suppliers from data company and suburbs, capture them be our for in chemicals marketplace, customers the usage center will into of smart our the beyond most we're most as customers, we the the tools as day to we like see the

Lastly, Earthoil, a and improving. we market. as Kingdom. subsidiary beauty Treatt have leveraged care and can that brand network. of assets our our The acquire leader based to working remains strategy very pipeline company late in The is United To closed are the personal the May, be in active, a our we continue and a our opportunities. In strengthens global natural of on our our of plans acquisition M&A program acquisition position execution to up, solid the also across supports sum and

are reinvest increase our business, our have in by and drive opportunities We and energized our growth, efficiency abundant teams improving performance. our to to

consistently that our becoming growth. on way company well are We delivers double-digit the

who you Lukach, me our turn call our will to the Carl results. second let CFO, over through Now quarter walk

Carl Lukach

X. I'll good David, Slide and everyone. Thanks morning, on begin

David the we our performance second pleased are highlighted, As with in quarter.

number strategy ratio of sales margins points and our more and that as continued proof results rising disciplined our our and improving trend Our such is that from conversion margin against a execution management, show higher of driven force. higher our is progress by ratios a execution win-loss working global

higher Our GAAP lower X.X% million $XXX Adjusted XXXX to earnings grew X.X% XXXX or last from from one-time the EBITDA one-time EBITDA in increased earnings year share, $X.XX $X.XX costs. to $X.XX. a per share to adjusted per basis. costs, currency-neutral And and excludes increased $X.XX XX% which in on XX% from from $XXX million

we May last since we share We today. in portion our financial chemical plan volume targets, of when have growth not sake. billion-plus $XXX growth's we long-term you and market, much for global and focused to presented communicated own we've a low that larger volume we value on a As growth the are distribution single-digit to aim see

on We growth. driving profitable focused are globally

to enrich improve and value Our mix, delivering results. product to reduce market force customer sales actions leakage to our our effectiveness are and

profit as had dollar EBITDA. operating to million less incremental We leverage was That's adverse timing Adjusted net of the net mix. our the per of of a for at to capital, delivery of profit operating change continue the holidays. EBITDA a XX% the of the gross first quarter strong in impact less second end higher adjusted flowing gross through working delivered the adjusted cash CapEx, pound improve to quarter EBITDA our and increase quarter. we flow the of growth in $XXX our with cash reversal Our inflow reflecting continue Easter

decrease of was of quarter X. Slide quarter-end of then from the XXXX. from $XXX and at billion, a June Turning to a XXXX nearly million roughly of $XX debt decrease $X.X million first Net

just at reported was and important ratio was calculation. leverage our Xx, quarter-end basis Our a it under Xx for on covenant debt

spread a outstanding and the term result LIBOR our loan over lenders, third points the decrease basis on by will as with As for XX our $X.X agreed billion quarter.

superior We investment. on continue to a return earn

and ROCE increased from basis ROIC, to from metric, deployed other All on year increases our XXX ago. Univar assets on value-added points internal as metrics, similar year return capital increases. a our XX.X% Our show a XX% ago return like EBITDA

over actions Turning on driven end increased million, $XXX consolidated to inflationary sales environment. markets to win in profitable Slide results Gross pricing business, to X. dollars steady our an chemical last our year demand and by X% force profit

sales and bottom Our where value matures our increased our uncovers for as basis customers the add execution generated and force second adjusted XX EBITDA operating can solve targeted more the points. problems. control is margin areas cost our to improving line Disciplined in quarter as we good leverage their

also growth as plan. strategic to high-return our long-term out We roll execute continued drive to investments we

our EBITDA take now million, of X. sixth U.S.A. EBITDA grew beginning with our of Let each on Slide to the me consecutive quarter X% U.S.A. growth. adjusted segments you $XX through

we Our our David volume on the dollars year-on-year performance the to U.S.A. are quarters adjusted profitable reflecting pleased since XXXX. margin in in growth, decline the from consecutive leverage as improving EBITDA That X.X%, strong business. of we management report, incremental grew mentioned, ends fracking and the during volume U.S., reflects quarter. ratio in U.S.A. operating market first share quarter in our win-loss growth volumes through pullback XX that of the remain in growth our delivered marking profit upstream our the of actions. XX% flowed to while quarter and the focused And gross an

of and sellers the of in new value market. we Going our forward, share supplier product Strong shift market the quarter. industrial U.S.A. margins resulted our slightly proportion being the line year. chemical quarter in below U.S.A. U.S.A. chemical partner distribution our authorizations the will increase second business more the fragmented increased last compared to year's rising win-loss with from ratios bulk of coming of demand mix from in This pipeline, last in sales our second

improve costs is higher quarter, In of in tightness additional fully to our execution marketplace. terms we capturing the the and inflation execution second was that the for us. are Since acceptance and have surcharges headwinds in changes a we our to improving. in transportation are the we in made We market challenge seeing early market May transportation ensure seen implemented the then, of

by Adjusted and In is our our segment season, mix significant Turning turning to margins Canada What was improving our X. in we the margins months fungicides Eastern growth Slide the expect business. key markets and and we business, strong Western in in our ag for business last continued Canadian profit force to the EBITDA purchasing double-digit growth markets, gross thought execution and results These coupled be Canadian record Plains. would in business. double-digit X such less our in sales to higher industrial with profit a a personal due chain. carryover volume Canada season sales compressed The ag with EBITDA be on Canadian our for now gains, be fell in from gross this growth strength X%. leading and enrichment, growth gross crop Despite weaker-than-expected however, moisture on last Farmers than demand the value entire low chemicals weather-related the softer inventory were across than year. more increased industrial the total ag out Central the held year, to margins of in offset agriculture ago back large challenges minimal care and due levels. EBITDA summer, as has produced adjusted coatings also to ag market drought protection products precipitation the to

our growth with of rates. adjusted mix, focused industries, with our strong in Slide relationship our opportunities double-digit Canada momentum sales segment execution of and force on as FX is X, supplier in our Europe, Africa We our robust. EBITDA well our favorable XX% tailwind result a grew and new a as as in are improved In remain and customers partners gaining East pipeline Middle

profit, FX, as of Excluding adjusted EBITDA conversion and the all impact the gross grew margins Gross XX%. expanded EBITDA our favorable ratio. profit delivered did

continue our on go-to-market see authorizations new strong acceptance building our supplier We to and and of extensions. are with strategy momentum

On the completed year. the in have M&A of Chemetall January integrated front, this now acquisition closed of in acquisition May Earthoil fully the we on we and

We improving strike, help Rest in and and the from had in to Despite prices personal performance to segment adjusted as force of EBITDA currency. Moving in million, higher movements from execution our drivers' in margins then certain Mexico driven by nearly business X. doubled, Tagma strong Brazilian increased and the strong by EBITDA quarter contributions the and World doubled on Slide during Brazil, May for the sales $X nearly quarter some truck acquisition. our demand specialty our higher care products products, driven

improved gains saw actions. of as Mexico in result also productivity management We margin a profitability and

it's sales working quarter elevated capital. was seasonality still in net cash markets the of of Canadian flow sequentially decreased a but industrial net the in XX. percentage first to XX.X% by higher million. normal XX.X%, now on Moving ag inflow in cash Slide working from second capital working Change quarter to and Net as $XX in a capital by

We to roughly guidance million the $XXX $XX to in a $XXX working remains our full for unchanged. continue year, capital investment expect CapEx million and of million

taxes. on Moving to

continue track cash taxes the year. $XX towards We in to million for

tax Our higher effective to mix of than income. rate the XX% for EPS in last headwind of The in tax higher share due a change was largely pretax the year, per rate quarter in $X.XX geographic the adjusted quarter. of was

full our For be EPS tax expect for we near year, to XX%. the effective adjusted rate now

the on to We're Let's for Slide transformation our progress outlook pleased turn XX. making on we're then with our XXXX plan.

and working execution are is initiatives Our our improving.

double-digit share absorb $X.XX track we of per we carry rates year. second $X.XX and growth as on to exchange variances in the foreign year, softer-than-expected season adjusted full compared the negative share low per current to what be we through adjusted ag And to earnings EBITDA Canada. will expect For the last deliver remain if half, FX

I'll EBITDA With you, turn For growth. double-digit the adjusted low we third that, back to it expect quarter, David.

David Jukes

Carl. Thanks

consecutive created momentum and strengthens continued quarter multiyear successfully second of seventh our our plan. quarter executing a the positive confidence growth, Our we've transformation results, in further

Canadian in our much weather-related of opportunity seeing our really profitability We're large to of ahead about metrics the business, in building with it. market front Outside of our up questions, transformation We're than in exciting at segments KPIs, we're excited unique plan marketplace I us better minds. outside work a capitalize they've currently size time to lot and many impacts the and call U.S. long us. the we're very ag are an opportunity is of the of a are industry grow is is U.S. growth performing both momentum. in And and topics and of an a let fundamentally our There have still the the accelerating before on the supplier in signs in energized me relationships we in that Univar tariffs. showing were of growing in and been and strong. demonstrable of about the to open and innings know the couple your early forefront address the a and talk We that well, improvement and We're

only in you remind for me majority the us. geographies, we as anticipate are long are impacts around business. advantage imported we the seen from of local China, In our meaningful products do we vast distribute which a Let the competitive their products produced have on we respective the not X% distribute and any U.S., that of specifically,

pressures inflationary our in business. some seeing are we Finally,

costs are is and are elevated it productivity people from it, and prices understand, prices increasing. of mitigate are like own and improvement Customers and not paying don't hearing hiring better and but chemical our just Whilst they're us. We can higher. they Fuel well. pushing also them this, transportation some

handle freight fleet, we productivity. increase our our the half and to marketplace. the well continue advantage, our positioned invest we and in We in us a with U.S., in clear cost over which gives And are service internal ways to

fully to protect and our up for to customers and it our intend and open environment continue execution value improve attention. and are We unrivaled while the And current that, Thanks need in questions. steps to we'll taking grow supplier your with our we the margins partners. for delivering

Operator

our And ahead. Please [Operator Instructions] comes from today Goldman Koort go Bob Sachs. first from question

Dylan Campbell

year profile This kind XQ single of guidance in is a questions of clarification level. slide Dylan deck. guidance growth the quarter and on full of A Bob. fourth provided growth mid-to in seem couple Campbell EBITDA the the to for on The imply digits guidance high

And Just correct. want this if the lower to restated that to that's is confirm separately, growth just confirm EBITDA, off correct?

Carl Lukach

right, You're that's Dylan, correct.

I sized right quarters. the sequence of think it the you terms in have of

Dylan Campbell

And that impacted which little exposure the margins talk segment and specialty about Can have for chemicals, how about quarter. you higher then the a growth trended bit chemicals mix your year-over-year? U.S.A. you specifically may how talked for bulk in for was volume

David Jukes

Sure.

me force people you are their grow I that to Their Let a a business now. Univar. rate with sales and try execution and think help And more of mean, sales last little a year. our looking much churn - on that. careers having focusing what their who is I and large hungry sellers having better is on our sellers are normalized number bit churned we force, really organized we

differentiated over are which and easier about into for products do So it season - that they going are a people more fungible come. experience more is next than what may the and more season formulated and next that customers. It's their specialized products relationships first because are to building they're the chemistries, quicker new the natural to building sell then sell product to

non all quickly that's growth products we on a execution the more in segments, but across in of its chemistries. the the now So our growing maturity. effectiveness really organization sales fungible much sorry, seeing force improving growth our - - than in right the our and the are is of driving differentiated function sales all But

coming months. out that see You'll balance the over

Operator

from question Wells go Please Fargo. ahead. comes Allison Poliniak from next Our

Allison Poliniak

quantify, But number Can switches of a benefits 'XX how of authorizations? from we about start Is successes we but of see like turned and how going on. probably these can't - more Could a You've we're walk to talk little had flow you how authorizations? can it's not that us Obviously, a bit the late we to the more that this through there. start expect of benefit works? through? a event to to sort

David Jukes

And bit Sure, a morning. apology, Allison. this croaky I'm

up, I'm selected, future voice are break it's were of my being in are be pan-European move tears, struggling Often, at is the we're else I I'm deselected just if we drive I country Europe player deselected number is more when Generally, this mean, So player really we a and a we in they're or with as morning. they deselected are authorizations, to else's someone being not as Yes, chosen important being regionals, finding deselected. the some national a player. someone or to growth.

have couple And a so we of things. to do

period work We have to through. let notice the

have We effective well. let to empty have as transition we chain an supply have to the and turnover, and

and I assigned the normally XX-month So new don't in between it really a then if know, X-, lag authorization numbers. through there's a, come X-, even seeing being

start to see we'll some impacts these it'll immediately, and you selling of the the really come and products be through. be these benefits So but of before 'XX growing

Allison Poliniak

quarter, cost given into challenges. think growth are of rate then very just given path the should on now? a about reinvesting through, your high we there, pulled How And that just of this you business some that back sustainable

Carl Lukach

quarters I is despite the increases really productivity in Allison, think And of in seeing you're driving what there's we've over work the results of a there, also improvements quarters. last for transportation. initiatives number been X that rate

efficiency warehouse improving. Our is

Our indirect been has as well. spend improving

in leverage going there forward. But the line, the gross the XX% at that's especially XX% had of in overall see to of to out, I dollars increased along same And mix, we the bottom we high That's sort leverage operating you think the to as spending operating we for line, OpEx. us, U.S. move so you're for that growth expect delivered digital. strong very profit in visible prime call increased the a our company. with we - in focus and to have in as And spending bottom

Operator

Our of Steve from go next question comes from ahead. Bank Please America. Byrne

Steve Byrne

Do now as you got you So to conviction? such there that what And in you digital platform market have than EBITDA into some at range example, much the average? they or get your are X%. that higher For margins can margin think up would creeping the give what above double-digit inherently paths particular that a is products are point? structure

Carl Lukach

this and of the productivity avenues here. We are our track driving our just different And momentum David more Steve, is year targeting question. years in and that Thanks But our by from our better where it chance in markets is over had sales mix that a uplift the about we from in Investor - for of that leakage eliminating start a cost can ago, comes I'll focus. side digital that price the that of Day. including productivity one-third you're capture ago the Carl. seeing what off in digital. give in as same our I'd very inaugural do much that efforts since GP that of that in the see explained margin trucks, the of coming growth through the from we our in the of increase double-digit enrichment selling, we rate the increasing a two-third the in and double the The year plan, the and us that line drivers have lands value we're warehouses, those we that by outcome the routing and the effort; X X-point-something plans, digit; of say EBITDA. that territory two-third to X of underway are: X-year plan in output about initiatives

David Jukes

Yes, Steve.

think - I absolutely that's Carl right. is

not see - hope, a double-digit plan. a this So do see It's achievable. entirely as we as territory we it's

out with more is consistent GP. driven total us it's So do initiatives. our line, becoming laid Also grow will from part also by but digital think We help GP of last our a is digital year. of Part help it's we value our efficiency which that that company. driven initiatives, creation plans the efficient

and more about company And is outcome it is around. think efficient I much a net all double-digit effective of So territory. the that becoming

hope, said out consistent plans It's I laid that the not a plan. As it's a year. it's last we with

Steve Byrne

comments, just on the follow-up your a operations. And Carl, Canadian about

of seeing disintermediated high-channel crop inventory comments, that headwind levels distributor, Is You risks from digital you any chemicals. those And in follow-up the going on ag a FPN? into next mentioned just are year? of a online being

Carl Lukach

On it's spring year's farmer not seeing, less dry after in the universal the the this that is drought behavior is of of across now crop condition question, not we areas, plane, last year, - low and the of what in many late moisture because heavy the first Steve, and investing levels, are the all. soil but

how we areas of it We'll overall, and of in into. that less year's crop So the in make go see season develops. particular buildup receptivity fire in Canada weeks how remaining But season. a But into it's are investing the see inventory we next and could here sell hard to the carry months, the call now. those right right now, farmers the this

shop the both it's the for our certainly costs. operations lowering supplier and as the back science. well evolving and customer in our an As very We're transaction on digitizing focused more, as digital, own on and front, on front

make call. to hard So that

David Jukes

see new - Yes, an our interesting it's an interesting I moment. the any marketplace, any that so or I It's is the see impacts don't We mean, not at business concept. we FPN do unique don't - from a on one.

businesses long to the going are technology, to operations. suppliers world. it our right bring going to customers bring across I as in making can because it's couple, even overall. then and digital really And transform so that's some roll going us made future. multilingual, digital transform complementary I and And today, really asset into us And help have. leverage in MyUnivar just own and name other it AI tangential But value that we're a now multicurrency think one smart to that the our of to and efforts. the platform, leadership in the we and a or So that's launched Canada think actually, our we investing are business to business taken investments help model we're we've can think our unrivaled all investment We operations. throughout I

Operator

Our Jim Please from comes next SunTrust. question from Sheehan go ahead.

Jim Sheehan

increasing $XXX the market talked market. You about your billion share,

market have mind? You share a in target

David Jukes

Jim, not in we have, I'm sure particular.

- One our and through of It size we to the important on valued think and shareholders. improve by Univar. We our valued chemicals most marketplace. profitability both I That's aim by the customers, ingredients Commercial excellence vision growing operational word. and or large our and means our valued want being our be is our by Valued is valued our an our planet and business distributor Greatness, the to valued people suppliers, ambition. a by in on the

I have mind. So on valued number see That's That's what and us the planet. focus to don't the most ingredients chemical distributor I the just drive be is. want what a is. in the

Carl Lukach

And our that it it. by and you share look increase down can participation of segment our break there then look how at market. those today we I way strategic plans single-digit plans, mean, the and if market. we at low spaces our market And we end-user by it, in comprehend

we end markets. all If could up, we guess, to But a I get disaggregate that down to added it you number. actual the

Jim Sheehan

ago? accelerating. looks in this about have say, like authorizations? supplier talk And let's has this far so really can year What year, changed what increase your from, a is you it driven factors

David Jukes

X that very X kind Well, business. Europe, I ago What That local the ago. then business, of we a X, moves if moved business: think bulk lines us to don't of is focused focused you so model know, the years what those that - very, business company. like, from a conglomerate, years ago we one-size-fits-all the this to we in I year organized mirrored chemical was industries, services the business did X and our into

have best we people in the be be they ingredients group or America, wake North is of morning about, how they we best distributor. personal wake And all So you'd and worry the or think every in who about, who about to all up Brazil. another food worry how in people day have every distributor and up Europe care

wake people we'll about group another have how You of in and win Milwaukee. worry who up

That's geographies. consistently marketplace many means execute tight a focus, Now something that can multiple differentiate in not very do. the can our there's really which offering and people we over

suppliers, resonating using focus, And finding of of them in with well digital trends. that so is commitment with only supplier partners. and marketplace, our customers is to very usage chosen to to to with share that And supplier degree partners our data, that something the visibility but both to not give partnership we're commitment of

Operator

next Alexander from Our question Jefferies. comes from Laurence go Please ahead.

Dan Rizzo

Dan It's for Rizzo Laurence. on

should something mentioned could intend higher, intend said fluctuations fracking. I or at you stay? completely being about in a where be upstream the different, potentially to You different level? Is I that a think to prices price profitable mean, just an out you is think energy - that what guess, we - as area they I it given How you trend that? about of

Carl Lukach

as not decline the said demand Let did you decline, fracking. drastically out What clarify. I - of And the pulled U.S., decreased the XX me our space. was but our was market quarters could We're our in that, on the from business. really, that volume reflective of of argue the commenting in market back, which upstream pullback through

In getting customer that we fact, in the - our increased growing investment base now. the there very utilization of we're quite path, and more and But end-market selective much users past we're that in that. conscious versus it's nicely made of

So I'm we to have sure very opportunities that, space have. we not careful on of just clear we're resources how and efforts we into as - market out a we're it to at the our that our look all other compared we're and make going at deploy market. the that

David Jukes

making that's to invest We're ways absolutely get And then on a profitable we're give sake. money marketplace into to find growth on in or not those us going a the I capital. a true. return I in don't volumes' we markets. think we and certain markets, interested good good invest but growth share selling on in business. us we're return to share not We're go in going profitable make capital we to we that don't those product. markets for and where in the the going can chemicals really give in We're are money that in compete mean, rush

the value chosen we profitable together it. And build share bring to that to where in happy our and then have growth do so of relationships we with can degree markets any the to can we them, and sell I'm that customers

Dan Rizzo

mind, we some quarter kind and inflection the in in in you the this now that reach we're ever moving is from I to volumes you done? said. With business up out slicing the were at guess, as Have point? wanted - got Are volume done like on point, shedding us focused we if of here you

David Jukes

Mr. if Yes. I mean,

and he'd never right. had you done be he'd tell pruning he was that Newlin here,

never so up. the pruning, always done you're always average it's beauty going is - of And you've

someone think of So improve don't we ago But profitable on to What focused The business look few did the overall. was absolutely are growth. it is, to a year described we way deforestation. continue is finished. quality our laser pruning. the of we as The will last pruning share deforestation I weeks

Operator

question Partners. next Please from comes from Our Kevin go Vertical Research McCarthy ahead.

Kevin McCarthy

segment U.S.A. Slide your X. on Question on margins

mix margins effect given about have freight pass-through surcharges had segment two there. those product the the your think you the You cost each on those do also margins? in what costs, implementing and the the well. inflation impact. latter referenced mix? obviously, to on things, as a you've an the imagine could speak impact freight Can And And talked you of I

David Jukes

Sure.

at stab a it I'll and Carl take let in. me dive Let

things. So you're to X right reflect the

at product mix, firstly. look Let's the

that of changing skincare ones question, As organization, our sales need are over opportunities, out the or that been sell kind going sales or of were they earlier quickly, products for able building and next its more are the that transfer its a the I soup able building that the think you that into season's an and differentiated about fungible to it about year, next relatively that effectiveness, improving organization, customers is throughout into products formulating be. with season's immature we've said quickly, understandable relationship to run may to if customers, more a talking pipeline whatever it having force sales now

that a mix. So you're piece seeing of

seeing that. of a You're piece

more X picking force years, in that X in products the sales really share years our up fungible seeing XX, You're even. really had XX we months, last haven't maybe

of May. mix. On if in in headwind, And affecting We slightly. And then price margin that's did we through June. a just pushed So that's of our move than start terms better are of the at the end through. of much towards the look the probably they quarter numbers in freight in the I the kind increase pushing depressed they quarter, freight are the

month I a the think So now well maybe were we're but probably late board. we on into party,

well elements. We service managing both control. successfully and costs the have the freight under We're

high is in want XX%, to way we So a now in customers be. where to up our service it the our

So think thinking have we way, a now center. much a very freight product And more a I in that as we're cost managed. as about different than

to where continue ourselves the preparing are trends freight the on fall, autumn we so further in, listening to or if And the in you're push depending this.

think And control. and so that now that well of top we're really have on we under well,

Kevin McCarthy

impact especially second on may, strike year-over-year I was if then broadly, very segment. in the well if And more the on Brazil, your done And any? question, ROW What the you've of basis. a there,

your simple talked EBTIDA be, personal this would is my view, sustainable, the run question the in single-digit et cetera. of comments, some acquisitions, care about range? sort guess, You I But high rate in

David Jukes

has been performer. - think particular I good don't our I consistently in a Brazil business Well, in

clear understand team down their We have to there business incredibly a have well and They great the have down whatever chemistries They conditions. value market differentiated grow proposition. there. the a very successfully continued

the the down great technical So I got and development feel labs great We've have there. really marketplace good a think a customer base, we a of knowledge great some assets. for fabulous team with

of everybody, got It showing that's differentiated of very, to think we It in pain. can I - don't was in be our a So down really to numbers able But that way delivered. and phase a it is a And managed have chemistries that the rivals our strike they there way we've lasted very that compete They with. sell was people successfully. deliver. through week. was the nationwide. It few

Now, our customers hurt. weren't

did down I business every have every our our a So confidence, team confidence America. there in job. Latin fantastic in

Carl Lukach

lot also warehousing. product improvements add, in good that this lines we around of there quarter, with news margin we results initiatives just actions that our and I'd had in a took Mexico, productivity continued specific contributed managements, to of very certain the positive

both of out Mexico it a news result. in great gave well us that came as great quarter So the together and

In and rate, terms Mexico of in and markets, expectations we have for Brazil. continued continued both success run growth high

Operator

question go [Operator from Instructions] Our ahead. comes from Barclays. Please Fischer Duffy next

Duffy Fischer

of level. I and XX% salesperson, average across your between And the take level then XX know a around to outperform to over base - there long question the the base force. for level? XX% it sales get them when that's So the XX you established new that's X years? peak X that look you said it to the a your part or kind does a takes to But and already delta XX% of peak to how get And what's that next level? significantly, that does months

David Jukes

question, Duffy. granular a That's

Let would XX XX value, for - build me months mean, think to I of they of learn clear they that our their once that we've about that may kind sellers one to and closure When it to to that take second. they to to again. XX while a build their it need bring grow. they the business credibility customers, on X and to continue X our territories really with years, grows been that, XX really for need that, have typically, a their start successful take close certain opportunities the we'll years, pipeline to need learn they to continue once their will they'll a build then things. X size, that's and to and And company They the months. pipeline to takes learn it and customer Once split and then base. very

talents company bringing us, through building relationships, is learning just bit some number a quickly, - moment. We its they bring absolutely grow, bringing getting back, the super energy of is there delivering are see. great an which it's to with to spring a into force sales step a force and here swagger the the in now go magic into at for organization. energy talents, can great the a It and careers sales sales sellers, seeing seeing some state some and development, their isn't so some progress they We're Univar. And and turn some in a managers,

Duffy Fischer

can on U.S., And XX% sales you a came analyze new about from monitor I say, of talked XX% of the basis, that much were the granularity how much kind how that? established? can you of But you that the volume was that guess, X.X% guys term? you that over in is kind that next of churned folks that the And do from have granular

David Jukes

we of So course, do.

reps. We have by by down seller, service customer by individual individual seller, granularity a inside

see well. check, that have how see they as they performance, granularity. absolute have performing peers their commission in and their in well we all see as against So they're SIP it it it they They because their

through our exactly So every how yes, we That's management performance develop is basis, individual how a performing. our and them management know people organization. we sales on

Duffy Fischer

So again.

with those So the question folks? - new year at I mean, progressing the you are rates a ago the the have versus old folks assumed would

David Jukes

And of I'm marketplace a from in part performance its great the with sellers But organization. to swagger I'm is an going talents. means to pleased people getting we are our - sales the performance I'm think organized and this have. a to the way progressing. good with pleased reduced I really which pleased going customers. response pleased old upgrade the step, then rate its myself. our folk with significantly, to always and and talents think into in they're That's organization, we churn and of We've that see the with energy upgrade that spring been back being we're old I'm are how established, really I really, Look, continue our within more I'm the folks, quality see deserves an management. backed we to the our people. about that pleased do. having We're quality the - to really having new those bringing hiring

back, customers bringing. we're starting is Our recognize that starting Univar to the recognize are to really value

couldn't I to the So of lie be that excited about in us. more opportunities front

Operator

queue conference our conclude Thank much. does this at in And questions further this no Please time. disconnect. call. you very have We

David Jukes

Well, everybody. thanks,

Univar Solutions (UNVR) 5 Aug 182018 Q2 Earnings call transcript