UNVR - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen. And welcome to Univar Solutions Third Quarter 2021 Earnings Conference Call. My name is Anna, and I will be your host operator on this call. Currently, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. at provided be will that time. Instructions I your host Instructions] of Relations Univar will Kos, now to over Investor Solutions. at Communications meeting the and for President turn Vice [Operator today’s Heather call, ahead. go please Heather,

Heather Kos

and call webcast. earnings you third and good Univar to Thank Solutions Welcome quarter morning.

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

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

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

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

David Jukes

joining thanks Thank evening good to you, and call. good morning, Good our everyone Heather. for afternoon and

all and migration citizen’s its I stride. growing integration report the clearly the by of quarter, delighted work to strong commercial exceptional hard of highlights the acquisition, to an the have And we now further exploring leverage growth realizing opportunities whilst constrained team value liquidity and teaching another growth, largely delivered now $XXX Driven execution am business our Key us, getting well the from we end. growth quarter focus adjusted are With a advantage. of we delivered excellent a by challenges. have that’s behind quarter by operational supply supported year-over-year organic exceptional at despite supply on program and we are and the chain billion are, center EBITDA do, putting cost strong growth, of customer nearing QX on customer focused demand, by driven structure inorganic the fully digital and remaining continued and we with Nexeo $X at million,

has sales Market retention prior customers. ratio versus evidenced up organic year continue in our loss as Our we levels deliver headline and as project Nexeo SAP We one quarter by been yesterday, $XXX integration now net on our Mexico going to of quarter With share were grew by win on completed. the the high new the from migration for positive track live to growth. million our synergies XXXX. entire remain deliver successfully commitments

capabilities. and customers XXxX benefits registered self-service now digital U.S. able Our XX% our utilize delivering our investments real to are of channels on with e-commerce

prepared to supply due rally while demand in to demand demand and double-digit as strong have skin consumer to and and growth, challenges has support will with sales household products, our more talk in digital the metal in as we fronts from key in our quarter-over-quarter. margin bespoke of formulation trend than deliver customers with continue increased XX% food outpacing our of approximately of result towards certain our position and able has large and increased trend Nick the due Unforeseen industrial quarter we prior as are both in in our by authorized And growth With our deleveraging customers Board announce our grow well year a position value detail committed with food about million microchip and both which returned key a market later. in third buyback our and shift part gold new network Personal come validation our options. well we of a In achieved to strong amount our our suppliers. color end and capabilities our through utilizing supplier and customers Additionally, cleaning own been accelerated Despite saw we this several has proposition, tracking stock strategic position. growth. Industrial course digital ingredients extensive ingredients in have working due solutions meatless of in case safely steady in to their We performance supplier industries, $XXX care, in facilities lubes to to automotive new are security exemplified core the shortage, customers’ XX% and the that of and fleet. placed U.S. business for solutions authorizations and in suppliers. and our program, was strengthened strong orders a restaurants, foods quarter. to a our Personal of shortages continued care trucking stewardship product beauty believe in supply capabilities specialty new store found the care to providing and advantage opportunities as sound as and double-digit in market pleased global partnerships. we value our performance clear the cosmetics the preferences our

to manufacturing general the Within chemistries We efforts global with see mix chemistries the from demand a away result extraction suppressants have portfolio, the electronics industrial from ongoing diversify in across seen strong fossil and demand increasing fuels. markets chemical we strength in as of to various industry. mining

segments, growth to extensive has us leverage Our supply. our in these ability to the enables continuity scale customers with organic chemistry of portfolio provide while supported

oil energy oil and levels field see with In now to our are of Texas ways reach chemistry of steadily Although, we not seen in smaller and to a as new rig customers much ensure sustainable for them increased West business, part on partner Brent indices counts growth their ESG and in goals, sector. innovative to turning support since XXXX. could us solutions this

this product full despite to management capacity our services continue to are was impact network services due although in hampering constraints leveraging QX, automotive industry, of waste ongoing market. Our business in has and we performance been our capabilities the to stable challenged the disruptions, in sector lifecycle to provide the

and are our given our performance once fourth XXXX, quarter raising and EBITDA migration and and including our million range strong $XXX to asset in execution we the fully guidance now million confidence year adjusted For for capabilities. to guidance private our rearview to and $XXX base, million. year-to-date, systems our mirror adjusted million can full again we leverage EBITDA $XXX with fleet $XXX believe the integration We our digital is

right range shareholder and as improved value. to We XXXX we we strategy, greater expect position commercial will and actions the approach and we such, than believe in of the which sustainable gross are of and for products, strong to skills success to have execution, economy, the profit we us Our long-term general consensus a grow sustainability beyond. deliver further the people, continued our believe XXXX position into streamlined

over the turn and to make questions. me through our closing let we He your will third Now outlook, to our I Nick. comments quarter you and get call walk before results some will

Nick Alexos

activities am basis. pleased all. Good I year. of David. to update and XX.X% provide and results, for financial the QX to currency our outlook up hello business morning the Sales you, on were constant our a Thank Solutions Univar share on rest you

currency the XX.X% from year’s the Canadian net industrial estimate to price profit Distrupol to and agricultural was Excluding gross the primarily of business a prior up due financials, inflation on be basis. and This up exited is results impact we growth higher demand. chemical XX.X%, whereas sales constant of

impacted These million higher was price was and demand efforts currency exited for adjusted all the costs industrial our partially inflation, XX.X% incremental constant the a basis adjusted costs. by driven such WS&A. The offset a by chemical was on of compensation net $XXX.X quarter business synergies, the and higher of by embedded to Third will costs EBITDA. streamline higher quarter, primarily increase by severance adjusting up realization the businesses. costs continued to remediation prior variable WS&A the environmental higher our in reflect certain and similar be EBITDA

an the of period $XXX.X For earnings the Operating net primarily the million a appendix prior for was third the were from demand. at diluted million. for the due versus price schedules quarter, noted were increase and were the in use significant end $X.XX as working prior share $XX significantly in quarter. Net income. flows detailed and was integration higher sales year quarter higher unplanned to a cash adjusted exceptional Capital of year growth capital $X.XX expenses related to per in due inflation Nexeo market result the expenditures million $XX a chemical

businesses. utilization across ROIC below aggregate to reported target On the key four stands largely metrics at year-end price demand. already reporting and times. our we end across from our leverage and higher Except eight Our the reflecting Canada inflation slide geographies, chemical our we higher good for details which segments and strong SXX and benefiting for Canada’s the times, appendix. provide performance in was agricultural from the were exit have was is further the all now XX.X% sales of due X.X quarter market original decline X.X

profit have across strong and regions. gross growth We all adjusted EBITDA

essential were in on to remain are and to across to our costs now products and changes impacts fully execute Canada, margin EMEA and and noted We other end excluding growth on chemical margin our ability to However, XXXX due improvement in higher in due QX lower focused sales greater sold primarily margin costs, XXXX compared strategies. of LatAm product all costs. operating strategies in percentages the markets. higher confident the our were some in geographies as related the teams inflationary

economy, through shortages. at to consensus robust X.X%, customer currently delivered We servicing profit which growth estimated supply disruptions, well chain continue targeted the amidst as we than greater while is have general product demand gross of execute

midpoint guidance for year and in than plus $XXX of yet days fiscal our addition, higher we Accounting mentioned, as for Nexeo as XXXX, Guidance are synergies for shipping is XX% $XXX the from higher continued which $XXX the full performance, initial are slowdown. QX over XXXX expected year the million at David EBITDA net increasing adjusted guidance million reflects as these QX to expected X.X our XXXX. our year has our planned. for million million, from prior In EBITDA and QX million the to year the fiscal adjusted all $XXX our of $XX as million to strong factors, XX midpoint trends guidance range well seasonal for

some our cash for review the of flow outlook. Let’s highlights XXXX

is We use to and by second in continue be with, capital target due there cash capital however, stronger net year net But capital of we following normal prior the source principally will an working sales half in and of year result to foreseen reflecting in trends, our expect a of service continue overall higher values the seasonal through demand line to end higher QX inflation customer have higher driven from the as to versus guidance. of inflation. cash a we principally net requirement the working working chemical the

to paid This expenses variable and summary in use and period $XX flow the $XX be EBITDA not to higher the profits, cash current will source are in typically to a which guided We past. million other sales carried focus integration XXXX. expect up cash our in the due as we in million in have our cash table will included be item of adjusted to have accruals which into line for expected year. the expenses, of be tied QX compensation a are should these Nexeo

Nexeo the final our integration expenses. As mentioned this is before, for year

flow are approximately are year, Really guidance. worth from $XXX networking to million offset $XXX of net invest competitiveness. some $XXX midpoint high We prior the cash cash by of million versus ROI capital, for line $XXX items. Consequently, an to capital our a XXXX due the in $XXX of million other free million of use targeting projects expenditures in we in is primarily with partially to for initiatives changes this in million increase line expecting our to additional

five million to times. to in approximately Expectations beyond, is and cash cash stable amounts be the minimum, expect to to net more authorize working X.X related expected we years. viewed announcing environment, program look opportunistically, executive at end lower versus generation, target we to next XXXX will $XXX year buyback over and good we compensation we flow capital are times As The dilution. repurchase a Share for XXXX or continue XX% by share be conversion. flow leverage free pleased and repurchase our SXX original be X.X will now of a

Our execution about are our strong results businesses we outlook in year and excited throughout the full third the quarter for reflect the solid beyond. and

drive also and am day performance good in made challenging we SXX progress reported to growth the pleased and Our have teams continue objectives. to as every I our environments against have

to on continuing run adjusted upcoming Analyst our from our are November plans the to Day XXXX of achieve XXXX and end year margin of to implement provide of a on We EBITDA X% we at the XXth. rate performance expected to details more our by XXXX David? intend

David Jukes

Thank you, Nick.

the SAP successfully net commitments synergies in $X the deliver progress one during to remaining supported of the products authorizations. across delivered North synergies of business We onto to strategy a of Yesterday, new and by our net million and we million of migrated number quarter $XXX the our excited on Mexico in our XXXX. on our are by and quarter, globe, America platform continue quarter grow of track share market of both about business our

end delivering focus value sole for technical more customers the an coupled and customers, suppliers our creates and Our is experience with alike. growth expertise through for that effortless differentiation now market

expect developing our have to $X sales SXX, of well four, Europe from to-date realized our asset is below from pre-tax net principally our acquisitions are we $XXX for X goal end million further most in realize products strong leverage net we area. targeted of gross our expect original we on year earnings million selective in in disposals. Moving proceeds. quarter In specialty strategies approximately proceeds approximately total to the tuck-in times With and

As at talk distributor food a to signed will pharma an more regulatory start Analyst ingredient case about approval, specialty we acquire and Brazil agreement a Day. subject to we have which our in recently

specific We are returning for also pleased shareholders. plans capital to have to now

being continue we we which expect hybrid growth, is to drive as as well share accelerate omnichannel the commitment market approach efficiencies. that working Our a accelerate and today’s digital essential as in to leader environment our

time choose Our commerce its the to delivering and customer self-serve platform select, whatever single univarsolutions.com of customers source we feedback. they to or its enhance capabilities search, digital results integrated and day on continue enables as night based

available. number and for capability minutes. us seeking convenience have real from of visitors we we than in launched of now and success a plan number downloads to instant now recently allowing commerce Northern products sequentially, in products, Americas our XX% the pricing directly online purchase we customers through checkout Based increase platforms the initial across to a For less that time a limited quickly five placed in orders on active see our the XX% the channels, of increase digital expand document but Europe. Quarter-over-quarter and

their these to we customers wherever, whenever capabilities journey, throughout buying and we however advantage want to our digital benefits of competitive buy. source them of sustained they Our as and clear vision is the as are follow realize beginning a meeting

insights invest to the Scores. continue Promoter our experience customer our from in We Net leveraging

good overall the all hitting across score Our highest and September through registered with U.S. regions score. monthly the remained in improvements QX,

our scale We are Customer using issues analytics experience follow customers’ accordingly, to our tool, the any experience support have all our adjusting process deserve. easier already allows assets, Altogether, accelerated strategic the surfacing. approach building business capabilities listening customers customer XXX accuracy. and for digital us. this and might developments of serves good with individual’s developing and effectiveness of data get turning with To the operating out improvements suppliers advanced and whilst also designed customer-centric prioritizing Insights be for and ahead guide we us is feedback into investments operations to to we our making a and believe Predictive processes of our which to customers maximize an it is and that overall It as effortless XX% do

advance our and ingredients path authorizations new strides made this friendly of our in evidence sustainability put with supplier our and resources. each touches inclusion responsibility, our us, zero world-class in investments stewards XXXX. equity aligns better unconscious planet, the as continued first, commitments, and carbon on we leveraging hiring goals and to continuing a with footprint out by and vision chemical with variety core practices. by ESG, continue with valued all solutions, safety record diversity, more for and includes, program, a of neutrality designed our reduce well by consciousness ingredients quarter have to really to raising find and agenda mitigate the Moving ESG Earth’s to home, by Highlights of from is our towards our safety environmentally net being our to line for as understanding rolling is technology values employee to our training an projects carbon be most it on bias distributed distribution which priority

exceptional questions our come your safe So clean times. to and we focus keep even to communities help fed, we before during summarize, QX healthy, EBITDA, while our and to realizing adjusted delivered challenging

full raised remain time $XXX quarter to again million. to on track our synergies $XXX XXXX. guidance, one EBITDA by to have in of million net million $XXX We this achieve We our year adjusted commitments

we excellence. proceeds, our initially is and furthering share year accretive is with shareholders efficiencies. SXX in as digital a investing combination selective plan The lower to capital fund repurchase. functional increasingly driving toward high end believe to acquisitions to and newly cash through our investments, million use capital initiatives to global of through bolt-on We $XXX ROI announced growth of well return are tracking by as leverage program advantage, well X% very attractive customers, becoming and delivering XXXX divestment EBITDA We which our margins

drive priorities, of our full strategy at and we believe our again, Please right stay upcoming result, And evidence open with company’s on getting of we customer attention. Our plenty to greater all portfolio. the your advantage to causes inorganic plan growth as momentum the our will and XXXX our of on organic We outlook the Virtual We do working beyond is our and it… deliver XXth. well you events working, believe across that, that remains as take center strategy, healthy shareholder every we value decision for enhanced both of focus this opportunity Analyst the opportunities see and November growth. Thank putting at and provide our to to a Day strategic on plans safe.

Operator

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

line Your now open. is

Bob Koort

curious morning. Thank you. Good David I am the… on

David Jukes

Hi, Bob.

Bob Koort

share was it you you the when …on deals, X do I purchase turn what it intimated and look so turn contrast, at a as your tuck-in tuck-in is with and look, -- capital? that X initial to discount to your an versus well, high how or pretty do it’s that stock, compare

David Jukes

Hey. for Bob. the Thanks question,

are First of are our in about we all a that having and I delighted we this conversation with position, we our cash. think that what options are are

in quarter is value that’s we high things. We strong $XXX a and with accretive and buyback two shareholders our about invest tuck-in have and looking We also number. projects liquidity really X.X M&A those a But to end return priority capital being capital position balance maintaining million to encouraging successfully is in deleveraging, growth to priority. ROI for need and opportunities. starting I focus target very mean, and and at how a been on the has X.X year our and this now becomes

on the We just I this but November bit more in Analyst XXth, will talk delighted a am be our in Day to position. that about

Bob Koort

in on done would I hindsight? look it now, Nexeo, on you you ask back you differently what have Can when

David Jukes

did to that instance migrated did. our in. It’s that integrated have systems we that certainly, People that, pretty they wouldn’t off. off. see paying paying are but really that operational see And very now it stride, successfully hit we think -- conditions as we really very of didn’t the we SAP were really benefits the the deal we do could receive given pandemic, global we well successfully. I we during We the

Bob Koort

have ensure, share had national that quantify And permanent how I sales the a one Can competitive you market last a some that some then you taking market capture on of and sales. you you quick, and really think that gives traction those you you maybe opportunity mentioned -- presence post-pandemic you do advantage. didn’t share didn’t unique have

chain So Thanks. market how in problems do you you these convert make share? the gain during supply share this market permanent sure

David Jukes

execution. Well, with very, we are very pleased commercial our

operating very, is with we with think I organization focus It’s greater Difficulty] with and operating very agility happy a now [Technical times. the how much are singular today.

on Our we insights experience that NPS become all that customer score to button experience -- predictive sure become a we tools, give those effortless [Technical focus Difficulty] really great that those things are them. customers and make our and the easy for experience,

and ratio accordingly. demonstrate experience adjusting retention loss is win are our focusing knows we their our would share. adjusting how how adjusting selling hybrid because improving, is model. our with customers customer our that’s But environment, selling processes improving, really our then market our So really the And model so our on working us and customers who to going

So that to now them be. to we happens they are meeting buy, want what wherever

opportunity of for driver great a that’s think us. and shared I growth

Operator

Spector Our Josh UBS. ahead, question go today Josh. comes Please from next from

Your line now is open.

Josh Spector

guys. clearly did I Thanks know thinking separately what’s here? in give brought I you I into were thoughts my EBITDA if if on normalized and what’s breaking this. quarter. mean terms you up any you don’t sustainable, apologize that you XXXX? not has But taking Hi, what would for missed say last Yeah. I question. changed of is any

David Jukes

for the thanks Josh, question.

I think that giving guidance.

a guidance our that’s are bit share But QX something not have confidence clearly about inflation more strong continued, today, in got XXXX has remained and We price more demand Day. we chemical we our will execution. since Investor has commercial giving at

million, So $XXX base probably number, would something in range at think the rate it’s give difficult million we where moment. $XXX is exact to a but as we say, an the

Josh Spector

could is of pieces XX%. with XX% meaningfully moving underneath is, I think in that. do of you terms that the I there. of where year-over-year up Is kind and to that that metric? I of and conversion conversion increased guess understanding there’s X% that still perhaps a your implied That’s profit-to-EBITDA point kind your has Great. pretty down something But year-over-year really gross sequentially guess helpful. lot drove related closer execution see you target versus to on average that to there runway sequentially that now And getting step anything ultimately in the there

David Jukes

I to are bit that going at more Investor about we share think, Josh, a the Day. again, Well,

will We base. some a ideas But give some you and that. see opportunity tremendous leverage do asset we metrics to our on

We have an asset base. installed

We further more have our to goals. of see provide support to great solutions as that them to sustainable opportunities particularly we their and leverage own partners fleets and trucks our we providing supply think about with ESG help working

our have share adds We business that incredibly market at growing that much also is to the but our a well. double our more about will specialty very business mean about I All growing fast beauty business care specialty and digits. mix, We end spoke Day. Investor growing business. we food the

Josh Spector

of Got you. Thank that it. forward couple Thanks. event in I a to weeks. look

David Jukes

to forward virtually. albeit seeing look we you And

Operator

you. Thank

from Laurent. today from Our Laurent next Please Exane ahead, Favre Paribas. comes go question BNP

now Your open. line is

Laurent Favre

you Yes. all. number you growth a for, if just specialties or David Good was for I industries morning, about food so-called and a for QX? I guess, overall focused wondering double-digit in beauty. have talked

David Jukes

the for Thanks question. Yeah.

about Investor at and you how Univar that the we Solutions the we don’t think Day. maybe don’t see I know business the share more and that

some are we some interesting with there I think to detail. share you would meaningful in like trends that some and

at about that more Day. think a I lot So Investor will share we

Laurent Favre

peers bit doing your way of the of it? you are most non-specialty a Are I specialty guess versus more around getting disclosure thinking

David Jukes

a Well, I accurate commodity been us think, I it to put it’s it’s description lazy and basket. of the -- in an think

showcasing Investor a have be We to specialty business showing and and the at are substantial Day. that we that going

Laurent Favre

look between, ago And be XXX. … said you. nominated assume mostly as the will Should provided we the conditions the guess, of new which at your that we at I EBITDA midpoint accounts underlying was a I around when three bridge like structural viable Thank the and XXX, the maybe one better follow-up, the Excellent. you accruals months

David Jukes

It we really it demand we Chemical has and ago, operational through the think, hitting the continue our -- inflation into end said will continued I remains moments as like strong. some are XXXX year. Value the very Yeah. of stride. price looks

so more give about us the that confidence those think things And XXXX beyond. will achieve we I and in numbers

Laurent Favre

you, Thank you. Thanks. Thank David.

Operator

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

now Your line open. is

Kevin McCarthy

a anticipated Yes. My the your quite have came bit better in obviously, than relates question first you morning. Good early would August. quarter to cadence, third results in earnings

am I down you regions or or that it higher than to August particular macro had the are be you much your expected calling that product on top so anticipated? level are it forces case And virtually there a of or lines have wondering, rather in businesses a September worth the that performed is better would out would than basis lifting all

David Jukes

I Kevin. Thanks think, question, look, executing the all for mean, are I of business. across we very well our lines

our of give course, and is advantage, trucks and chain installed base does us supply fleets and them an of great relationships is supply our gives days incredibly dislocated. our gives really asset really -- strong Our when commercial advantage these execution us an

something have got it is it Hurricane And also QX. Ida Now worse. into itself didn’t anticipate which dislocated we supply going unblocked and chains, didn’t

so to in -- record -- a we to and think were are just think of very what performance. are now we commercially a we make good deliver operationally and we were that position was I I position very And the agile good enough best

Kevin McCarthy

different and follow up, you million million. at decline I a fourth in of quarter, is your season pattern a that are suggest? $XX between describe as the -- on for portfolio headwinds based sequential than as or see configured seasonality there would normal normal create or as the particular a now tailwinds seasonality would $XX Would then if EBITDA look to it that sequential seems that imply And you guide

David Jukes

days very X.X strong No. are good in would continued demand, -- and in typical that. number good Kevin, got QX still and we the had challenged another see we although execution seasonality clearly less I than supply chains rough-ish and QX think, we continued on million add $XX

those a would what rate. if run you slightly normal above two, we are So be actually take

Kevin McCarthy

very much. Thank Okay. you

Operator

Thank you.

Deutsche from Please Begleiter next from go Our David question Bank. today ahead, David. comes

is line now open. Your

David Begleiter

you, inflation have and the is chemical of missed do you Dave. It’s EBITDA, back? if this it. it The you to I morning. but chemical sort give and adding all Thank may again, year, added or price that what when happens do rollover, Good or moderate think prices

David Jukes

the Hi, put year. chemical to I on a mean, number price David. for it’s inflation hard this Thanks for question.

million, comp. our one-time or of I kind we but think some guidance stock $XXX kind profits of executive costs some with benchmark, are normalized of of offset and some guidance plugged $XXX by within not higher thinking some million

profits those some go business. and we have got stock still can of year, our away but continue grow into So, we think offsets we to some next

that what now particularly think agile. particularly we are commercially and agile right I is

stock profits is built of into comp cost So that’s higher down, feel in of very some way and there that baseline. well the of way offsets is about clearly confident the kind million up. manage factored on the $XXX up our price executive as and price way on the the one-time we to of some number, but But as have I million kind managed to $XXX on ability

David Begleiter

capital Very good. capital source of working what much year year? And working a how expect -- just next would next be

Nick Alexos

David. that, will I Well, take

of expect off flow we use target next quarter. certainly target get a our and last adjusted free that plus will of over a in sales on have of to The item, be obviously call into we increase which normalized From strong quarter’s period the price driven next We benefiting us working other the which current obviously we is working XX% flow XX% above in XX% then into the capital and of inflation we we year conversion a some normalized by chemical a to year the an But much to capital next out each cash expect reference have will EBITDA, annualized as this sheet. that the our elements puts the spoken capital we the balance realization would a expense sales, either is benefit in level. the Next to and and working in the more very we performance, to the year. this but go quarter, expect standpoint do other to be from is takes year, quarter.

range year We of get end expect by to XX% next below year. stay and that into the down that going in the

David Begleiter

you Thank much. very

David Jukes

Anna, any questions? do we more have

Operator

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

Your line is open. now

Dan Rizzo

taking It’s for Good morning. Dan Thanks question. on Lawrence. Rizzo the for

we in still is of environment look achievable next year? XXXX, a you for EBITDA if hit do margin deflationary As that X%

David Jukes

Hi, for Dan. the question. Thanks

with We are its and pleased very the are the executed out way we into and is business commercial operational strides. pleased riding its strides with very how

very about margin that feel we target. So X% confident achieving

Dan Rizzo

I mean, dividend there of is with been as talk the more pivoting about with And you at just share you sticking balance sheet kind are then all repurchases? cash to of in has and want. your are a you Board with M&A line what deployment or just

David Jukes

be some priorities to ago, about on just the to enjoy we will target schedule priorities are said delighted of first, to And I get and be will and I our that. in take think, cash to our moment a moments I to Investor very and position as a takes Day. Well, this -- priorities, mean, more share should we our ahead moment this is credible

inorganic an share on part Brazil. through tuck-in capital good that engage prioritize that’s as will be initial dividends with The we But growth, part will strategy. for high we we shareholders regulatory the in buyback share something hope announced, process. then will as just we consider and buyback of as the like share allocation get of -- approvals our more that capital will We acquisitions opportunities we the We one such is investments. we ROI completing see

Dan Rizzo

Thank much. you very

Operator

comes today from go Steve ahead. Please question next Our Byrne.

is open. line Your now

Steve Byrne

to you. relationships that towards maybe more have some a the trend you less you? outsourcing you have for your And suppliers a a was third-party Thank whether have and ask more Yeah. been distribution. with coatings I are I companies to is whether trend for outsourcing time, had long curious that frustrated because the or and you, I what of whether favorable transfers transportation issues and more seeing view and ask David, in-house distribution that’s there’s wanted pulled

David Jukes

for for A the see yeah. who think Thanks couple producers. outsourcing the think, do question. I more do difference things, Steve, That their own fleets and asset parties us who I know -- own the the distributors marketplace. opportunities between from to so-called to We a that out own of to for distinct third and those fight we distributors third-party. go out our have who light advantage gives all in go that fleet.

so have there. think And we advantage distinct I a

I recent distinct have advantage power a bit we with partners supply the of are think also we demonstrating that Having strategies. months. supplier helping our in our ESG

have, we for an to as base really I And make trucks them and so we well our as fleets how chains think having sustainable installed of asset is about that us. realign align, we are how supply more advantage we thinking

Steve Byrne

from can by comment to your effective platform, to to or wallet you you share end your for you customers? your suppliers your for the products more more as customer of well end, supplier as on than and is And share convincing which to gain the allocate more of end the -- pursue both gains trends share

David Jukes

and only because area I card it with almost those -- mean, drive supplier the lot so Steve, to or growth. the line opportunities maybe you molecule as exclusive, specialty a we that a But new formulation an we are have annuity, you hit and authorizations, -- in your are as an if gives be instant a have of so that full ingredient and a take and get chemistry maybe an where because specified only growing in customers. comes we you of those us growth of solutions. particularly what runway the we like will

have we really So both. do to

us, suppliers customer by supply appreciate have suppliers. growth with those strong having We sides. our that you by in as more it’s relationships on but business having We grow a can’t also they competitive customers, both to and it from won’t come satisfy otherwise stay marketplace, enables to

to game. have to sides, really every just really value up demonstrate able can’t create and -- we to be have value both wake you both because create one on at we about So sides, and be side we on we day of how thinking

Steve Byrne

you. Thank

Operator

comes Our next Michael Please from from Fargo. today ahead. McGinn go Wells question for

now open. is line Your

Michael McGinn

I you the about you that about or sales fixed EBITDA in whereas now quarter. creep your how and framework plays led morning, the that’s for nature completion everybody. the questions. guys into or Thank following Good dollar Great full previously to that guidance? Hey. costs SG&A is more integration a have was wondering $X.XX think ask if there a ERP, could margin I of fixed your of long-term more would

David Jukes

Hi, Michael. the question. Thanks for

Okay.

let’s just we think, have a business didn’t the pandemic. the that and in teeth crater in SAP did celebrate I we that moved the onto Americas of the process and

that’s thing. a I think great

SAP. optimize can We we how have look to that. see we now Now

next that the of did. work we are we that’s So -- phase

I intervention think benefits processes. already by manual our platform. get opportunities to had we tremendous have some that operating But out SAP taking through through see we leverage

business, to efforts, streamline margin our of digitization can our continue as to part this really reduce the so customer really experience. that focused on gross in Now, OpEx our grow we we but

to think buy and So that but as I there’s streamline our also cost, to easier reduces we opportunities it makes real from. our processes streamline processes for us our

So that’s it thing to for entirely a a virtuous becomes right now. and priority do us key

Michael McGinn

end you more a year you the ramp still of Great. seen strong Canadian sequential have historically, or recent that modeling given factor business. Do here divestitures? potentially less question. simplistic momentum talk -- with the a see a with pricing And then it of is Can into you your

David Jukes

in to prepayments I you longer was cash business, no we Well, are own. the and that ag think, which relating

see So won’t that. we

now everything day. and every and and about business, ingredients our chemicals So managing that is better better core business sequentially

Michael McGinn

on a may customer times delivery someone or could sneak gap been relative ads, characterize your past. account the topic times a freight your on-time sparked far, have industry thus has and one in maybe if to then And the big the way I transit strategic lead the Okay. any has been to in more who for conversations that spot-buy

David Jukes

-- has But suppliers hasn’t. this to customers delivery on-time through deteriorated delivery think, I mean, I year. on-time So, has our into us been from

think we We and a keep remain products operations keep happy. of challenged we have move us. have customers internationally, long whole I that challenged. nationally very supply customers I into to and network coming mean, by been So can But to we distances

chain first against investments lot really is Our is experience last on and of assets to the that that very of NPS have us delivery for our imperfect to at. comment, well on-time That’s a think the we an we supply against chain improve track customers. as part a managing the comment metric score key that and as complexity of and so we customer a important time and turn I proposition well ingredient chemical of do -- perfect business on-time to into value supply

Michael McGinn

time. the Thank you. Appreciate

Operator

McCarthy from Kevin. Please ahead, is follow-up next Our Instructions] Vertical go question a [Operator Kevin from Partners. Research

open. is Your now line

Kevin McCarthy

I Great. sequential five look what I Thanks X% of follow-up. ask X%. quarter a about last have balance. inventory so to happened decline If the or increase sequential seen a between of third for my typically your wanted this time at years taking and X%, is what we was the and in

or basis some effect the levels you question about? been help able my of that the supply unit inventory that a talking ease of at everyone’s through, constraints Nick, So all to is, is were inflation just simply on rebuild flowing to

Nick Alexos

of then and differential years year, Yeah. the A versus which it’s the our seasonal ag, got Kevin, otherwise have prior been the chemical for has of one, had value in things, you couple which inventory. satisfy the to effect expectations the can a significant marketplace close in in We customer making variability demand demand, going sure certainly levels manage as very the tightly, needed we very beyond any expect we historical don’t reflected our forward. and inventory inflation,

Kevin McCarthy

had period that? pace execution would on different I a of of see the splitting, risk of intended to or press it then, program, repurchase pace And at that question clarification is the and your hair authorization your to your way. is new five of the years is something the a of validity execution than by reference be great a that Okay. the references release, and In which simply

Nick Alexos

say, Well, for again. Kevin, Nick this company. the has foremost, milestone first it’s a and would I been great

operating position pleased our a with a very to to be our execution in our begin of flow shareholders. returning to program cash and We are leverage, capital

our other virtual other at a in we it couple also about would I as be weeks will its which for capital operationally just balance we David face talk we considerations, while on Clearly, take represented. as mentioned Day. expect opportunistic, requirements So Investor of earlier, as all the strategically, company, well to as

Kevin McCarthy

in. All very right. We you much. shall tune Thank

Nick Alexos

Kevin. Thanks,

Operator

We questions further no currently have today.

So I call any hand Kos to will for Heather the back remarks. closing

Heather Kos

interest your on Day Analyst you our for Univar to gentlemen, and in many see We ladies of hope you, XXth. Thank Solutions. at November Virtual

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

Operator

joining Thank call. you for today’s

your disconnect now lines. may You

Univar Solutions (UNVR) 2 Nov 212021 Q3 Earnings call transcript