UNVR - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Univar Solutions Fourth Quarter 2020 Earnings Conference Call. My name is Michelle 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, Heather Kos, Vice President of Investor Relations and Global Communications at Univar Solutions. Heather, please go ahead.

Heather Kos

Thank you and good morning. fourth full Solutions call XXXX Univar webcast. and to quarter year and earnings Welcome

today Jukes, December and are Executive call quarter our our Joining David the for Nick Last we fourth Executive financial Officer. results Officer; year President Alexos, Vice XXXX Financial President ended Chief and night, released XX, and Chief and earnings The posted release, site. along to go presentation to supplemental a slide viewed been also our and has be today's which corporate slide call. posted univarsolutions.com with Web should Web the site at our presentation with on

earnings summarized Slide most and non-GAAP the can presentation. slide as call, this the to which a refer find we directly certain comparable During supplemental measures you release for on our two, GAAP to will financial reconciliation financial in measure

Slide involve and SXX As a future. for expectations then for start will will three, Please end business uncertainties while future. they more call. current we forecasts Slide future and filings expectations of integration David progress the Nick about will business of you Nexeo trends, risks our reflect the market and are and detailed see financial with make will agenda and for close are will the our outlook, our our David projections, performance. our our fourth the update On quarter for forward-looking see strategy. and the inherent and in highlights on risks two, SEC our through referenced walk uncertainties with they on and estimates, not and/or guarantees All summary statements such statements estimates,

the questions. his David your opening will turn remarks. we that, With to that, take for I'll over Following call now

David Jukes

growing evolving evening and do good of by our in execute is and our together all and center afternoon for Thank working drive strategy. on we growth advantage putting we to Solutions, Univar and reflected of continue morning, our which to joining as environment. remains to you, we're customer opportunity the the solid to focused good QX during as on we full at everyone good pandemic call. this At take thanks performance This Heather, every adapt

company employees, cash priority and serious Key quarter always suppliers flow this our our our highlights guidance is solid strong for a our about are; of course generation. our highest from financial customers. remains delivered As that range, results above we including the safety,

although executing new economic expected down the to were the we able selling margin headwinds sales year, were well As customers, versus to partially by cost management. on prior and mitigate

customer overall this changing speak we range. $XXX in of new a immediate due more to of in chain dynamics the finished well million moment liquidity as year I'll $XXX million We Gulf. monitor as with in to demands strong operate storm the and the ahead continue our freeze supply effect the normality. $XXX on We million trends to in as guidance

integration business Program, Nexeo on our track have our We and streamlining we is business targeted completed Our SXX our systems divestitures. with migration. advanced now U.S.

the win like customer with to our all and ratio regions both loss continue leading lagging compared the indicators positive indicators last We the same year. like improve activity trending sales quarter contacts to in

XX/X Our U.S. our on and of registered with our digital bear investments now to able ecommerce over to continue customers fruit utilize channels capabilities. XX% self-service

approach CASE the business in Additionally, brings Holcomb And existing North capabilities. already distribution. in strong over market. Jim record we And strengthened our Asia successful Chem, the execution Techi who with digital are of in we in XX% our with of tracking of bolt-on U.S. chemical our expanded utilizing a recruitments the regularly that purchase specialty customers of America leadership builds our

to customers with to as continue they operating work higher return We rates.

progressive XXXX many X%, XX%, excluding our the year, whilst sales see down in end lubricants the down year sealants, to is and well particular X%, as were encouraging sales As challenging were elastomers. November markets. business many of were divestments, key as October as to prior Specialty December exceptionally is quarter involves it improvements us The up Industrial demand compared for saw automotive fourth of automotive our manufacturing coatings, that growth accelerated and in Solutions vertical, sales

seen Industrial increases. commercial as Our industrial Cleaning site has and business we incremental turn buildings to growth activities in

provide we of personal and in Within partnered the the these many global industries saw pharmaceuticals the Consumer Solutions quality leaders highest products. with and we to business, growth them care with in double-digit

and industry Our over Refining Processing General to by throughout in anticipate growth growth the significant services. was the industry. are The business an decline businesses stable in we improving XXXX led market oil Chemical down Industrial XXXX sectors key returned in XXXX. field manufacturing Other due to chemical and

a raw has and period. In the first tightening increase upside to well industrial as transportation we've certain our for leveraging However, infrastructure and tightening this the begun seen production refining an XXXX coming our activity materials return to of present industry the chemicals in support improved, supply in existing may as the of the market. part

mitigating caused in have demand. Gulf dynamics. Although transport, by our successful supply, hard we've and to factors, and them to near-term the meet recent right right throughout region having with the especially the hit not product freezing The price temperature at from integrated some and these the platform customers pricing leveraging immune services to by been challenges storms and U.S.A., at extraneous Texas the deliver products

people lost needs were communities Canada impact the U.S.A. wherever December assessing now communications we're we're a required. the with our are as facilities provide hit and sales are are employees shipping they products customers in trending is of days, and operational the same January unfolds. in Safety while Globally, our the in hardest on storms we all immediate as situation results. essential regular for the paramount, Although direction and and supporting suppliers of working the few they to are and

of an will some expand $XXX to and the approximately we million and Nick For production, providing XXXX, we flow net show Alexos better expect $XXX cash free growth range takes, year to upon million with do puts for shortly. the conversion of are rate XX%, in guidance EBITDA with year a industrial which at adjusted

believe we the continue completion with disrupt positioned conditions further we of have integration are in and the XXXX, our program success the Nexeo term. for the business actions and even personal Beyond if SXX business taking to near of sustainable thing the lives

We value tools, people, deliver growth. the and will customers deliver products, innovative share have and and that the right solutions we expect strategy suppliers the will

the call thoughts. to some our Now quarter He will closing through walk will our let and Nick. turn share me Then I results fourth you over outlook.

Nick Alexos

good QX financial on Univar solid results business X.X% all. David. you, X.X% to Hello a update activities. you morning and share Thank reported and pleased were a constant our down basis. I'm and Sales currency on basis to Solutions' on

prior a Sciences year's depreciation was low by net Environmental to we a financials, constant of basis. when were million the Gross gross X.X% results sales on profit on $XXX.X on exclusive is X.X% estimate Environmental constant depreciation down constant currency results X.X% Excluding or Sciences. currency currency excluding estimated of basis, exclusive of of the X.X% the from profit The basis. a down

margin XX.X% the to by a in primarily results the points an benefit inventory agriculture impact of related Our unfavorable of VAT our inclusion costs Brazil to basis by and XX XXXX final sales recovery exit gross Canadian of and margin distribution decreased driven business.

products, by results. synergies, lower margins VAT versus lower levels COVID and impact Ag future gross reported the million would was X.X% charges, due Sciences have Fourth margin Canadian mix constant interim quarter to products offset gross The $XXX.X and reduction estimated margin adjusted Excluding total the been demands. decrease versus EBITDA net higher to demand in was the in partially and of lower XXXX Brazil slightly profit product pre-recessionary cost basis, currency on in our a Sequentially, of Nexeo certain favorable QX the deflation of essential and XXXX additional declines was certain Environmental measures. X.X% by divestiture. price related

from our exit would adjusted Canadian business number final adjusted were EBITDA and prior was related have year results, excluding basis unfavorable estimated constant currency from resulting the one points, Sciences reported versus Environmental slightly X.X% the on margins our EBITDA been sales impact a EBITDA margins to the Ag basis. higher lower by XX Excluding Adjusted inventory margin of results. lower business, XXXX costs

working net to due $XX of synergies quarter, for net loss ahead Nexeo the was $XX.X loss full offset captured business million slightly earnings of primarily taxes liquidation prior compared cost The the cash year per $X.XX contributing by in projection. operating year by interest adjusted in $XX.X of being During EBITDA SXX $X improvement share integration million, decrease in million year strong Sequential the capital, approximately $X.XX total to a Canadian net our net lower or was the factor of primarily as was related lower agriculture period loss the share per net to was partially in of expense. flow. charges. a partially the QX the $X.XX to prior was related we period. offset Adjusted compared lower our the quarter for prior to million to

cash on including on were actions prepayments guided of accounts conversion, capital liquidity expenses Canadian normalized of in timing XXXX million. and million. aged speak net for working recall, $XX We which plan and $XX collective a The ag of levels. under with higher receivable about hand XXXX up us integration-related cash we from you free was were balances set $XXX $XXX in low million asset-based lower the XXXX otherwise zero quarter which and for related expenditures the minute. slightly working November to availability million, benefited capital I abnormally flow As total more the but and quarter will than SXX flow in higher XXXX ended U.S. was hit in our cash Nexeo QX credit lines and at Ag the Capital prepayments. in last

the Our last quarter XX.X% ROIC X.X% was for year. versus

to the as expect from capture We the and synergies integration these continue figures grow we to business. improve

versus significantly our XXX $XXX stands flow leverage across reporting the million. provide segments On at prior over free cash X.Xx ratio aggregated divestures from at year the key and available metrics Slide in X.Xx end debt our was down of four eight, the target appendix. Net detail down, further in pay million have for quarter. we Our

declines in we and saw constant U.S. and Sciences medical EBITDA business three Canada, primarily adjusted overall basis the declined Sciences exclude change the quarter. favorable demand margins points levels negligible. the headwinds. growth in the Canada to Environmental agriculture and versus amounts of allow $X year-end divestiture comparative reserved for pre-recessionary approximately divestiture sales the margins QX in the unfavorable versus year-over-year the If declined by In from continued have the expenses performance impacted & legal versus to LatAm by better sales down EMEA and lower QX, LatAm's regions better the bulk. EMEA QX closure savings divestiture, margins [ph] largest the a and [XX%] XX In lower divestiture we impact improved margin which and top-line for Our in is in benefit related but margins. this of were points performed industrial benefits margins, but of Canada energy in XX by the top-line prior the versus Canada's Brazil energy, Canadian as business resulted sales XXXX the of decline regardless end the sales currency U.S.A. generally year also well saw Sciences U.S.A., impact lower due certain on impact to helped as trends suffered VAT Adjusted due LatAm the WS&A due in gross mix, distribution sequentially million approximately Environmental global margin from higher of that from the inventory Canada energy This of improvement reflecting performed has seasonally QX. margin Gross partially and diminished from cost otherwise in excluding prior essential saw U.SA. final shutdown lower in while X.X%, basis, gross basis offset well. EBITDA lower Solutions. quarter, WS&A sequentially We continued in significantly sequential headwinds higher the Canada versus versus were Industrial business in also otherwise, and EMEA, costs U.S. better in product offset Environmental a year. markets. addition on to XXXX. to a chemicals was fourth to business. seeing saw as XXXX, the growth exit. business, in

million, out let's reported ability the we emerged for XXXX Starting we quarter $XXX Turning to of fourth XXXX guidance EBITDA. XXXX better the key in we performing highlights, our XXXX adjusted look to of of EBITDA adjusted and to on confident are with impacts our in the affect at execute strategies than expect XXXX. our some

which from closed the from the earlier. in to note agricultural agriculture that the I services distribution business distinct we QX Canadian spoke divested Canadian business impact Firstly, is

agreement first half these the Second, contributed our we business, month announced in Distrupol, adjusted expect we million to customary last which Plastics subject signing in the close Europe to to of of $XX an approximately XXXX. XXXX. Collectively, to conditions sell EBITDA

than guidance year. better decline general our XXXX with the in QX quarter range our the our area and product view We sequential $XX demand We impact to EBITDA supply and adjusted million adjusted end is growth as interim. EBITDA have be $XXX with overall a growth for million reflecting into next Guidance anticipated of million forecast weather business The $XXX $XXX Along in $XX million. benefits core products recent also business net recovery, pricing synergy from is shipping XXXX noted disrupted in million. market are $XX aggregate severe the last demand particular in $XXX normal U.S. economic expected of these of organic the our XXXX Offsetting XXXX. the million. for for to expected further to XXXX year of Texas million in to economic essential higher

have are sites. all we teams currently at and quickly Our operational very responded

of the we QX in are and impact, our these While overall reflects the our low-end offset opportunities an to we do guidance outlook. adverse confident XXXX see quarter in

sequentially adjusted quarter-over-quarter, with line follow divestments XXXX for in excluding through addition, GDP and of fourth we improve in quarter EBITDA our due to in In to with up of projections impact consensus industrial production economic a XXXX, expect slight the the seasonality.

And of other liquidation Net working XXXX let's than outlook. million to Canadian the business payables. in resulted faster XXXX, distribution additional we Now of receive of $XX net exit look which pieces capital in expect of of $XX is the we proceeds anticipated. some Ag at XXXX in related an the million from

capital. With of associated the will no working have fluctuations with the business, Ag the we exit seasonal longer agricultural

for capital up run-off timing net QX our end which with year-end. Cash sales. capital annualized expected other higher expenses adjusted net is is of which accruals may to toXX% guidance million. by the to working of included capital Our guidance QX in are Final prior without any for up Ag in integration line plan to net near net are $XX our year-end of working capital be the due Nexeo Consequently, expenses, of working is quarterly working $XXX free million, generally use of be percent flow XX% of our EBITDA $XX in not capital upside the the be are planned and a of our working million capital some in be planned to expected in net up contribution $XXX the addition general inventory minimum business to expected to cash impact inflation. million. guidance sales to current in up from to rest to the pace million to of our price recovery in million. year. of Net cash very $XXX to and $XX result are expenditures and impact targeting be sales the And efficiencies with little will from we to

last with into is be with their our in leverage as work good SXX line year as cash thank as is numbers account ample margins X.Xx for well. in by line transitions now Univar flow liquidity outside Net cash Excluding divestments our achieve employees XXXX at credit course February. environment. company all free we the net EBITDA we exclude range free year-end a well been business expected cash of our expenses progress against forecast million, net Solutions of integration challenging for conversion or proceeds the million to I'm of cash run throughout. acquisition. It's free many through David? to The of cash first In the to plans great for $XX below and of our provided approximately These pleased Nexeo uses conclusion, with all and is any our flow million normalized $XXX XXXX and XX% must I of our objectives of or XXXX. $XXX final prior end guidance the our really constituents in from of X% work resulting cash as a net adjusted flow our taking rate me

David Jukes

Thanks, Nick.

single completion of U.S. The final onto Moving successfully and a really integration suppliers reduces the in when ingredient cost better highlights significantly and visibility and which the going we multiple for on can significant include we complexity delivered on SAP of including providing now levels, integration the and alike processes. to like activities distribution ERP our things now live on service our to U.S.A. stock despite with $XX COVID-XX business move Other we is the the the simple platform just million on our last in technology system working hone obstacles, optimizing delivering week. chemical The migration and districts in availability CRM several inherent milestones XXXX, as systems. experience synergies. customers

Our track second Mexico and for the for remains XXXX. Canada for on SAP migration half

Through Our sale close further million. generated $XX proceeds in total of and site We the branches closing bringing XXXX, XX estate finalized the approximately pre-tax site closures consolidation two cash have XX sites proceeds plan of total quarter, continued this expect in of branches our with to cash year. approximately three $X real to million. sales

of million in an negligible $XX those and exit expenditures XXXX. XXXX, although year We agricultural in revenue $X business. Canadian Moving SXX emergency million, working our with business. sold wholesale facility divestitures, in with planned the of only million XXXX. spill the on ended cash charges million generated distribution finalized in agricultural to This services SXX of in business, earnings. the cash the charges approximately we of of down of in Of additional in update. the The capital and $XX million We response sale $XXX XXXX to QX, the XXXX business wind closed generated and $XX the Canadian we were expect

in an $XXX had Nick to yield referenced As noted proceeds. divestitures and revenue normal XXXX these subject expected in impact agreement business of to the as last million signed $XXX Europe. EBITDA divestments sell total, generated These approximately in month, also planned approximately we Plastics to in were adjusted In earlier. conditions $XX Distrupol million an million closing

With be divestment increasing $XXX expected I proceeds from mid-year, by the total complete divestments to minor million remaining we only and $XXX tax are expect our to payments. expected approximately million incremental

acquired small but distributes important also We Chem. China in that innovative Techi business a from silicon specialty solutions

Univar our As integration and our while rearview the and mirror, realizing strong presence two-year wholly of the path we for our see approach Solutions in full optimized scale strategy customers margins. put remaining local of clearly and and to systems benefits having to committed becoming anniversary migration our we the cash flow of our optimizing

cash and proceeds our strong net Xx strategic to below leverage continue expected by flow Our will year-end. fund initiatives our and divestiture reduce to

our investments ROI and of high We have to and at capital initiatives selected and return consider bolt-on fund capital expenditures use time growth to with acquisitions plans shareholders. to cash our the to right

cash rating been to to Our flow reduce issuer led agencies leverage ratings Fitch and recognized our this month. debt by and upgrade commitment corporate and the maximize has

in as advantaged our our a and platforms. of key capability to regional of business digital strategy improvement strength sales with combination our business remains we progress, our of network Moving driver leverage force sellers the and technical

customers. means important COVID-XX, to noted being the loss time ratio earlier, regions. be of the professionals good now available under U.S.A. maintained in the seeing business way. all all system SXX the seeing momentum including As to in positive have are of is progress more win well Even migration we've obstacles good completion them with program The the and in performance, sales

of needs have In establishment and ground and of Canada. following; business CX customers. the the our the feedback America learnings Center key we now the and I has Last business into has I suppliers a championing running of experience NPS metrics addition chemical growing Jim or scores. in the the with well. starting spoke to that doing hit distribution proven quarter, good success. of U.S. Jim too experience has focusing simply in the the is experience about established portfolio done chemical Holcomb basics already mentioned distribution of of or customer ground and sales customer as a run over those on promoter track combining of group our work with XX optimization the years the running, record the This earlier, the and hit customer have net through heart Jim Excellence leading North

good considered good us begun. has solutions roundly consistently address is and our we to globalization addition, CX I well the as will The elicit score journey. baseline has the but isn't advanced to NPS to customers as customers mix along scores from can In growth for journey NPS, the of been our of our customer us voice customer, expansion to for the capabilities proactively in to the differentiated analytic and team positioned for with consumer share We continue our good industrial the and excellent leverage also the feedback enrichment. approach received and point for NPS QX. our that established technically welcomed pain great thanks and of verticals enough a

partnerships expand Given continue competitive advantage. to remain our supplier strong and expertise, source our a of

chemical expanded last DuPont, with we've Solvay new market the partners Henkel, Chemours, Over they leading partners a value with Nutrien, supplier Group, allnex, to expertise how ingredient product Fluid along capabilities our or and Dow, and partnerships, digital few their these recognition Evergrain, are awarded growth. products Gelymar, Emerald, the authorizations such bring end as Sasol, of Arylessence, support months Novecare, been our Energy

and of portfolio to expand solution continue products and robust We capabilities. build the

capabilities to of scale centric in consumers' that also growth And do growing the and step for committed in customers staying needs and number our drive our dedicated is as enabled all offerings and accelerate in for investing customer- in digitally the to customer available supply business chemicals they Meanwhile our of continues with night in webinars and approach address sales effectiveness and advance and of expand channel to better sales our customers. a chain, sales market quarter. a regions and sites growth select, to our also challenge. to self-serve attracted in traditional Altogether, whatever put aimed capabilities These operations, chempoint.com, day including U.S.A., a customers, it ingredients. use the local our source deliver Canada or no share already preferences always parts and technical tune demand aesthetically suppliers our of as and frills strategic the with foundation with chemcentral.com accelerate growth. for processes data now results digital to footprint it choose. through We're as place time growth we globally. make of in in across from We ecommerce as stimulate touchless capabilities, to continues the lines increased podcast to and results longstanding Overall, marketplace continues our innovate our product of to digital to asset the leads tools certain confident delivering easier preferences, extending show driving customers promote with changing strategy we're maximize the our search, XXXX and create we our as slightly customers continue advantage channel to with deliver well We omni-channel the streamline methods customer while and right over is specific digital expanding Europe.

adjusted to delivering very our divestment firm investing to purpose to million and XXXX maintain proceeds, cash summarize, healthy, is to customers. our ended we realizing on made committed XXXX. of by metric We XX% in furthering and We're conversion increasingly times. We've delivered toward track by control and X% are of year-end program maintaining early X.Xx solid functional So well becoming other and margins The below now your significant year our global net while higher capital see and safe progress clean integration momentum tracking by it in our come and on through questions improve on growth, the cash is our and our challenging EBITDA SXX liquidity We're Nexeo We in program free working advantage, to synergies fed, XXXX. and million attractive during with keep net our communities financial digital $XXX and approximately EBITDA we flow and before liquidity. both achieve with $XXX years year-end needs to XXXX that remain management give leverage cash beyond. our excellence. results in

continue new see up business this and With to opportunities completed systems we've to them. that is focus on our organization especially us, business growth, behind now to We then U.S. solely the migration. understanding and freed needs delighting capture share customer

anticipated positioned on market we taking opportunities will greater growth and operation from to -- competitiveness, We ahead. value delivering decisive company our focus to our actions agility and the will operational enhance recovery is flexibility. increase operating the and financial capture We believe the

value. questions. enhanced collective And it your stay safe for for these deliver healthy. Please Thank your With with we'll up efforts that, attention. shareholder now we'll you open and

Operator

comes you. from Thank Steve [Operator Instructions] of question America. first Byrne, Your Bank

Steve Byrne

have mentioned up clearly the made forth. so sales your now performance overall a anniversary in you structure specialty two David, relative the sales Yes, the force; year you expectations? changes would by of and of is by coming How to and lot you the that characterize region, force

David Jukes

Good the for question. morning, Steve. Thanks

our think organizations really with come I happy together. sales way have the I'm that

We have that responded a very, well in XXXX. very difficult organization and good through reacted circumstances have stable

in really strong have businesses. and leadership our specialty sales vertical regional our both in We

all the look I -- They [indiscernible] the so are leading lagging ratio. the The win-loss positive. trending if like pipeline. lagging people indicators Our -- the at are indicators like

able the confident our organization. we very have organization, that I'm the and very leadership in sales So the bring by we to to encouraged stability are

Steve Byrne

shut smaller impacted whether curious And you base, just depending those the disproportionately your customers rate on impact differential to was or the might their I any customer -- to whether as of from their on Were recovery. forced of impact size. pandemic curious about saw any dynamics

David Jukes

they were that that really did it in in how rather to they our size. our to to like investments increase And well us. wanted business channels, able Steve, and and segment But of think rates think for don't customers really I purchase. to see and react with how I changing it's people -- what really impact to and that preferences the digital digital with in that's think depended people continued contacts responded interacting our what in wanted the to recovery. to we through respond be whenever our I to our channels the they led going customer than the industry feel

Steve Byrne

are from in one, price your of higher purchasing suppliers? Just anticipation one pushing you last cost

David Jukes

We manage price.

think we a very well these a appreciate fast-changing market. I price manage you'll as And days. pretty dynamic and it's

So order all our over mean moment increases and at yes, the of the it. I are price day are teams

Operator

Kevin And come question Vertical Research. your McCarthy will from next from

Kevin McCarthy

we that sense sharp your margin if effect? and chemicals price your to to across no more see a negative whether industry, selling sustained would EBITDA Streamline goal. achieve that get trying EBITDA a margins for of on environment David, you or I'm the 'XX positive as have of inflation environment were a effect difficult make or to easier sort improvement it a effect or would to

David Jukes

make stocks the if we manage business prefer can we down, the if money I appropriately, and stability than money go up marginally if the manage generally our price marketplace appropriately. the as in with marginally we distributor, make we we in more marketplace mean rather goes volatility price speaking our more can the because

are now, aims. way to confident we we our a be manage I think that. can right inflation, going through of we So in we to And our broadly supportive chemical that it's period know feel

Kevin McCarthy

as characterized you to for you've flow for of a million. And $XXX a your question, XX, Nick. minimum upside cash may, Okay. then if an with XXXX Slide and free million $XXX second outlined it I goals On

And to so I million. upside able guess on question $XX see in items if from context the what the various were you mind? line that my that in key would we Slide Where parts your are of moving is, the achieve XX, of come that

Nick Alexos

the we expenses integration to most will kind that ranges of to we we should the I say, it's cash script, as whether so to to Sure. think provide we Kevin, down one, as the other do kind across for upside thanks them numbers and of kind maximums of and are kind as in are and some night. then all or better last bottom-line of your in categorize believe and and of each kind are opposed [ph] manage to said to look those [XX] the up them uses, what we note of maxes cash offer CapEx, amounts giving that uses of would total. number hope you better

Operator

from from Deutsche will question Begleiter next Your David come Bank.

David Begleiter

think forward? this is off think $XX in will sustains half million just does going growth essential portion What do that represent? come essential how of David, And it year. we market demand much it the you the in and of

David Jukes

lot think volume. sanitizers. quarter $XX rather two reflects kind fill and and that would lot of than in I first a reflects margin was of three I really like mean quarter what hand in I got in was of And on that million is that things typify

the kind kind for that million. had of same volumes margins of periods have but of the we that in XXXX to which those into of at kind not is over products chemistries we still a higher products -- that expect $XX those or go XXXX, we in sell So XXXX

David Begleiter

in January they'll mentioned the January in what you they similar from do Got were do it. knowing we you sales severe that up December, impacts to in have weather? winter some X% and be were think And February

David Jukes

the in February we where I freeze have. with supply the much that January we given is very interruptions from are As with interruptions say, is our big interesting trending supply month in really a producers now that mean line in December. we and had

working going tell as the is through much way quarter as the that to I we at So us February will. don't that our moment. think are

don't impact really of lost. looking catch at know months what that how know know the And up. fast up. down two we days that see across how to will what how we're is so And we the will of that days we have. much come much capacity or We the moment. We shipping lost, know can We billing we current

that So customers keep to maintain flowing. carefully supplies looking to stock we make sure at our we we're have very that the and can product

Operator

And will Fischer come your next Duffy Barclays. from from question

Duffy Fischer

in as three to and quarter, you calling of quarters the out next anniversary that have is walk those question products. through certain the was importantly, are you price in more or issue around well? that one-time now First what products a kind just does deflation Can to

David Jukes

happens certainly end QX think the supply and in products. we'll Well, of Chlor that I price in as and situation essential went family variety I mean, a into deflation those we see a QX QX Alkali we had certainly had in of of now some changes. markets that some what and QX,

Duffy Fischer

were the that had it you attractive price a at higher you a caught got bought a structural where sell business so makes dropping at to this Correct? lower, is just the wasn't price and inventory on basis. that So less

David Jukes

did mind we directly to that fluctuate from quite I those that HCL Canadian had and mean, the sale some it reflects the really are off in at to stock we Ag -- and in stock It off. that significantly time. was have associated isn't but business write caustic go of distribution that, with the just to the where that the write cycle it's point prices course we bear

Nick Alexos

going with to of the that out the consistent with just in numbers. the add. That's at what and QX to guidance the reference was called we've beginning I'm year reflected

Duffy Fischer

we is then enter general guys Okay, inflect trending outlook? business still your XXXX, big rising energy roughly And And it in fair the starting in or is it down? you as enough. prices energy is for to with XXXX how

David Jukes

think did Whilst little demand infrastructure out we the that to upside. opportunity existing business, have of is levels And now into is a X% leverage before, XXXX, PGA of there's sort similar oil XXXX business we think price that mute I about during Upstream we've our to moving take energy prepared as total energy for is And in XXXX, mentioned as probably the said -- we the cost We planned some provide our X% some of business. probably so our up. profit. remarks. us the is and gross maybe I our that's so to

Operator

question from next McGinn from your Michael comes And Wells Fargo.

Michael McGinn

I X.X to appreciate Slide X X.X. specifically the end market organic forecast growth

that So additional so and I incremental that assume offsetting we're put Are on currency other point want that, a we two those speaking versus sales is acquisitions more of about gave to to currency? that if some kind then you or divestitures total can just tailwinds. each in other factors range offset range finer assuming that going your that reflected is acquisition, divestiture of net than one the

Nick Alexos

more Yes. growth and out the back The divestitures, the target EBITDA. really rate, be our DGP we obviously, divestitures focused from would

say delivered just general profitability, kind put DGP, number. basis profit I as grow to So, point to our a above our well EBITDA our to we're gross our on looking it as market -- of conditions would reported that a above

has above So, year. level. excluded Divestitures FX indicator is economic so adjusted that a into and bit of the reported will be a going the been business tailwind general and

Michael McGinn

Sorry.

a sales the delivered So that's not gross profit? target, that's

Nick Alexos

right we've always said, revenue is and profit based as pricing our general and as to the focus obviously, well indices as That's because economic above have delivered EBITDA. fluctuates on gross

Michael McGinn

in they And of I you've as the on gears then, what above the average been notably last Okay. to reporting couple to switch want kind seemed supplier authorization, little quarters. a you of

to I your product your great. chemistries. and you product cycle. there rolling now are Is on that between takes end really you Any cycle. believe SKUs sales you're how to hand, those about other train some that's bring are product in to the these rolling product your low their its life a reaching in color off your older think force maybe to off And the new of -- are frame margins the the versus that life difference there noted business But value-add way in portfolio On to going be Can for true. could you long would ramp guys. products it continue you the frame former that EMEA, was products

David Jukes

Sure.

two business down the we've calling been in out probably the of finished pharma years Europe. wind in last think I

those off. of go ingredients supplier, year The $XX addition and our verticals a Consumer roll was previous aren't Solutions, that end in down Solutions a It's into. of the on there last a one-off. should that new a the one one-time others year testament one-off. that that's chemicals like It's think It's the thing. I Industrial strength markets million and the of and they attractiveness Specialty of and really product is are

ingredients exciting And so more of customers more and we have fuel to be We growth sector, chemistries. growth. to these all specialized in that those add which to really more chemicals in the portfolio and attractive think

our Industrial for that bringing we're products that in really in team new quarter as verticals particular business well. as good deals four some a but who think testament authorizations, Solutions saw really new bulk growth was I yes, the is busier and authorizations the as So new time Solutions, well in of a drive Consumer the for team on the the to

Michael McGinn

divestiture you quarters. about I and that's if it called could in, then a XX EMEA that that you M&A freight had seems M&A your your you're surgeries incremental property branch top start do And when of the is network, does more mindset last some is the layer or kind the out you business that or Great. you existing you've purchased, And from of that bolt-on of bolt-on one that talk I offset few targeting the between maybe versus up like think Could here. differences sneak you well would can you're shift business the something medical divesting. had on a or pick the then lack to It as closures this your network. branch exposure do

So, be any there would comment great.

David Jukes

Sure.

the and our on the have future. and you better to about their viewing be are stand the you Streamline So our acquisition new been going to know our balance are down that get the in priority has being with who one up debt remember on going excited leveraging, profile growth business a sheet to XXXX owners our of bring in debt, objectives was people better hands different our good to our owners have because good we this and get a really our to cash divestments I and shape EMEA good new shape in we by could in so that core. good ours very it we're Xx it, some the that business profile and think business the we're end that happy management from and we're the business below The believe we the of pretty in focus think on of that has to to a growth that hands, focus rest slightly do that selling year better people than with leverage by is

take we into a even we bring and is far will M&A infrastructure at, don't in to and where to already mean and build very in. things be leverage we'll may the As us product can and look or our we may we geography that that our adjacent now actually or as technical digital have have, the be I to them we'll that selective be bring infrastructure the to which capabilities them IT M&A we portfolio look adds our

targeted that being we're we're go and that. the very targeted, kind leverage very below to to Xx being track that first disciplined foremost about we'll and and get very So priority of and well a is do after M&A on the debt

Operator

[Operator Instructions] Your from Alexander from next Jefferies. question comes Laurence

Laurence Alexander

the, environment us to a sense, a regional as on just follow so, it's normal out about more of And question. Can your you're M&A give you going coming ambitions. the

how and the So also Asia, opportunities scale to in Europe? need particularly you're your there change thinking, about

David Jukes

building moment. we from really that added around and suppliers. when then small a position the Nexeo legacy key some them. We've legacy That's Univar have Solutions on We we is piece in added from acquisition small now, the China that another specialty bought to a portfolio which at onto

in looking will geographies. already be I new concentrating rather areas think than that we are a rush strategy -- the M&A to our those

in So to think real can opportunity in there priorities whether there think have are we America things there I North can in EMEA capabilities, America, the our term. is which spots where near EMEA, add our specialty in for build more have some to that and or the where add would landscape focus I across be things there, dark the whether on a us we is we become success that that looking more there at Latin and that powerhouse

Operator

Favre, next question come your And from will Laurent Exane.

Laurent Favre

you fleet I've more. much to logistics your actually they and exposure on to or logistics Europe the on you touching your in got so regard? Thank in difficulty in if customers left customers mean, your are that how could in the are have any higher experiencing cost industry high And the guess -- was you. U.S. versus I side. discipline prepared wondering third-party that one of the question own the remind fleets is in us so And for the issues pay I David, I you to

David Jukes

fleet. like not I alone. third-party to with America, the XX% XX%, own the XX% I'm And fleet, or XX/XX; industry, Yes, it's question. speak in Thanks our discipline Europe, can I the I like North to more the in us sure discipline about can the for in more speak XX%. we're -- U.S., think it's

mile products So and that control branch partner into local we recent have to certainly inflation last tends in where be that there's But in prices, have North quickly. feel year. ability our over interruption distribution those and good we to America, the yes, and particularly And there's bulk third-party and we do confident with been we some some react yes, been over the whole in weeks.

focus lot on operating we think a I agility. our

customers And not inflationary environment proportionally in make our we supporting that that react may sure quickly competitive so we transport we an to remaining increases to are funding but have. any and

Operator

McGinn. from Michael comes question next your And

Michael McGinn

to I longer on call guess. up. I don't this follow a keep the Appreciate want little

mentioned taking the that So XXX. you divestiture proceed, up to

expense, line are that you're With XXX of get assuming kind a would and interest interest or interest realize. is the think just pay regards your of that guidance. have you're your fixed general you incremental through -- and complete EBITDA, kind I what your working that expense is going feeds what XX fee to that if of drive to assuming you additional already into are the you how down you expense would, your debt guidance, your something lower, mechanics do that item, and you

Nick Alexos

Sure, Michael. Yes.

other this little and part talking bit interest are the the of dollars that the in occurred early guidance, assumption but the EBITDA way divestitures year is is in Our of the in impact. we're in those There few of way this a expense. or reducing million a terms reflected marginally

with the It's first our material is it's the it divestitures EBITDA that not half material be to expense. will guidance. interest But done overall the So not year. of assumed to in we the overall

Michael McGinn

know but your core I you of the feeling can regionally, best then And if to outside this you of Okay. taxes are QX, asked, terms the talk don't shut down, outside where prospects? still mentioned growth you was in that,

David Jukes

I good Look, business we at moment. pretty think the about the feel whole

on business EMEA has been Our track on growth and a good that. stays

Latam Our been and also on stays has good business a track that. on

migration to it. behind business have the Our is delighted U.S. SAP

step. huge a that's think I

in a last a that taken think there. done. busy, now show the and our good a I Canadian lot of year stead performance. year massive agriculture good now to good I very think that's We've and a step in continue but of you've got a It think things we've was very those business fees. I'll strong the to grow clear U.S. We'll really set it's and

very very on our where So our feel be and confident in execute -- the Gulf may we extraneous good feel I right notwithstanding that strategy I going to our ability good feel about whatever things about on very in now, I strategy. are.

good places. good strong right leaders the stable in We have team, team, a

So I'm very confident about growth prospects. our

Operator

the over Kos to remarks. Thank call closing us for turn our for back session end the to That I'll you. brings Heather Q&A today. of

Heather Kos

Thank you, your interest gentlemen, in Solutions. ladies Univar and for

reach questions, follow-up please today's you Relations the out conclude any Investor have does team. If to This call.

Operator

conference call. This will Thank everyone. today's conclude you

disconnect. You may now

Univar Solutions (UNVR) 28 Feb 212020 Q4 Earnings call transcript