MOSCOW (MRC) -- Univar reported second-quarter net income down 89.0% year-on-year (YOY), to USD1.8 million, on net sales down 22.3%, to USD2.01 billion, said Chemweek.
Adjusted earnings totaled 33 cents/share, down 21.4% YOY and ahead of analysts’ consensus estimate of 23 cents/share, as reported by Refinitiv (New York, New York). Sales declined due to lower demand in industrial end markets, price decreases, and a divestiture.
USA segment net sales fell 27.4% YOY, to USD1.17 billion, while segment adjusted EBITDA was down 25.4%, to USD95.2 million, on lower demand from the industrial end market and the divestiture of Univar’s environmental sciences business. EMEA segment net sales fell 10.5% YOY, to USD409.6 million, while segment adjusted EBITDA was up 3.9%, to USD39.7 million, with lower industrial end-market demand offset by higher demand in other areas.
Canada segment sales decreased 18.1% YOY, to USD332.2 million, while segment adjusted EBITDA fell 25.4%, to USD25.2 million, on reduced industrial demand and energy headwinds. Latin America segment sales were down 15.4% YOY, to USD98.7 million, while segment adjusted EBITDA increased 17.0%, to USD11.0 million, with higher demand partly offset by negative currency impacts.
Univar also announced a reorganization program, aimed at reducing leverage and boosting EBITDA margins by 2022. The program will involve a major emphasis on digital capabilities, as well as operational efficiencies and cost reductions. The company is also adopting “a global approach to certain of the company’s end market verticals."
The reorganization may include sales of some noncore assets, although Univar did not provide further details on any potential asset sales. A leadership reshuffle has been announced as part of the program. Jennifer MacIntyre will assume the role of senior vice president and head of North American operations, while Brian Herington will become senior vice president and head of North American chemical distribution, Nick Powell will take the post of senior vice president/EMEA and APAC and head of consumer and industrial solutions. MacIntyre will also hold the title of chief streamline officer, while Herington will hold the title of chief commercial officer.
Jorge Backup will remain president/Latin America, while Mark Fisher, president/USA and Canada, has stepped down “to pursue other opportunities,” Univar says. Univar expects to incur USD50 million in incremental charges connected with the plan.
MRC earlier said, Nexeo Univar Inc., has announced that it has completed the acquisition of Nexeo Solutions, creating a leading global chemical and ingredients solutions provider. The combined company will conduct business as Univar Solutions, reflecting a commitment to combining the 'best of the best' from each legacy organization.
As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
Univar Solutions is a leading global chemical and ingredient distributor and provider of value added services to customers across a wide range of industries. With the industry's largest private transportation fleet and North American sales force, a vast supplier network, deep market and regulatory knowledge, world-class formulation and recipe development, unparalleled logistics know-how, and industry-leading digital tools, Univar Solutions is a committed ally to customers and suppliers, helping them anticipate, navigate, and leverage meaningful growth opportunities.