U.S. based Distributor shows Growth in all Regions except EMEA and is pleased with its Performance
Global chemical distributor Univar Inc. (Downers Grove, IL – United States) yesterday reported the financial results for the first quarter 2020. Consolidated net sales were USD 2’211.2 mn, up 2.4% (+3.6% at constant currency) compared with USD 2’160.0 mn in Q1-2019. Growth in the USA of 3.8%, Canada of 4.4% and particularly in LATAM (= Latin America) of 12.9%, was partially offset by declining sales in the EMEA (=Europe, Middle East & Africa) region (-4.8%). Univar attributes the growth in sales partially to the effects of the Nexeo acquition, but also to a higher demand for products in what the group calls “essential end markets” (= “products and services that are esssential for maintaining clean drinking water, waster water treatment, home, industrial and health care facility sanitization, and that are used in the manufacturing of food and pharmaceuticals”).
Adjusted EBITDA came in at USD 161.6 mn, up 0.9% (+2.6% at constant currency) from the USD 160.1 mn realised in the first quarter of last year. EBITDA growth was particularly strong in LATAM at +45.6%, followed by the Canada at +25.8. Int he USA profit was essentially flat at -0.5% while EMEA showed a decline at -4.3%.
Overall this resulted in net earnings of USD 55.9 mn or earning per diluted share of USD 0.33, which compares with net loss of USD 63.9 mn and earnings per diluted share of USD -0.43 in Q1-2019, respectively. Adjusted net income was USD 52.3 mn, compared to USD 49.7 mn in Q1-2019 and adjusted earnings per diluted share decreased slightly to USD 0.31 in the quarter from USD 0.33 in the first quarter of the prior year.
The Leverage Ratio increased to 3.7x at the end of March 2020, up from 3.3x at the end of December 2019, but lower that the 3.9x posted on 31. March 2019. Drivers were a sesonal increase in working capital, partially offset by “working capital efficiency”, Univar Solutions said. Capital expenditure plans have been reduced, from a previously anticipated level of USD 120 to 130 mn to a range of USD 95 to 115 mn. Univar stated that is has sufficient liquidity of ca. USD 750 to 800 mn in cash and available lines of credit at the end of Q2-2020. This position is expected to increase by end of the year. The company also stressed that it has no significant debt maturities until 2024 is in full compliance with its credit agreements.
Univar has withdrawn its full year guidance for Adjusted EBITDA a few weeks ago. The company plans to provide an update “as appropriate”, once it has obtained greater clarity regarding the impalications of COVID-19 and the impact this pandemic will have on its future business. It is monitoring the situation and will take expense reduction measures beyond some already initiated, if needed.
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Source: Univar press release
HGE – DCG / 12.05.2020
