Univar Solutions Inc., a leading global solutions provider to users of specialty ingredients and chemicals, today announced the Company financial results for the second quarter ended June 30, 2022.

 

The company has reported net sales of $3.0 billion, an increase of 26.0 percent on a reported basis and 30.2 percent on a constant currency basis compared to the prior-year second quarter. Higher sales were attributable to our pricing discipline in inflationary markets and market share gains.

 

Gross profit (exclusive of depreciation) of $736.0 million increased 22.2 percent on a reported basis and 26.0 percent on a constant currency basis. Higher gross profit was driven primarily by our pricing discipline in inflationary markets, operational execution, and market share gains, and partially offset by higher input cost inflation. Gross margin decreased 80 basis points to 24.4 percent compared to the prior-year second quarter, primarily due to higher input cost inflation, partially offset by our pricing discipline in inflationary markets.

 

Net income was $162.9 million, or $0.96 per diluted share, compared to net income of $153.2 million, or $0.90 per diluted share, in the prior-year second quarter. The increase was primarily due to higher gross profit (exclusive of depreciation), partially offset by higher taxes. The 2021 second quarter also reflected a gain from the Distrupol divestiture.  

 

Adjusted earnings per diluted share of $1.00 in the quarter increased from $0.57 in the prior-year second quarter primarily due to higher net income.

 

Adjusted EBITDA of $291.6 million increased $94.1 million, or 47.6 percent, compared to the prior-year second quarter, or an increase of 52.7 percent on a constant currency basis. The increase was primarily driven by higher gross profit, partially offset by higher outbound freight and handling, as well as higher Warehousing, Selling and Administrative (WS&A) costs.

 

Net cash provided by operating activities decreased to $48.2 million from $83.7 million in the second quarter last year, primarily driven by higher net working capital use due to chemical price inflation.

 

Liquidity was $1,011.8 million as of June 30, 2022, inclusive of $234.8 million of cash on hand and availability under committed, asset-based credit facilities.

 

The Company expects Adjusted EBITDA to be between $240 million and $260 million for the third quarter of 2022 as compared to $210.9 million for the third quarter of 2021. For full-year 2022, Adjusted EBITDA is expected to increase to a range of $1,040 million to $1,080 million, as compared to $797.7 million for full-year 2021. Our forecast reflects anticipated continued strong operational execution, market share growth and cost management. Net Free Cash Flow for full-year 2022 is expected to be in a range of $400 million to $450 million.

 

The Company reaffirms its commitment to its objectives and expects to deliver:

 

- Ingredients & Specialties (I&S) organic delivered gross profit growth of greater than 200 basis points above economic consensus

- Chemicals & Services (C&S) organic delivered gross profit growth above economic consensus

- Productivity improvements through Value Capture to maintain WS&A to Gross Profit ratio of less than 50 percent

- Adjusted EBITDA margins of greater than 9 percent

- 50 percent Net Free Cash Flow conversion

- Deliver greater than 15 percent Return on Invested Capital (ROIC)

- Maintain leverage between 2.0x and 2.5x

- Accretive strategic M&A

- Average annual capital return to shareholders of 20 percent to 30 percent of Adjusted Net Income

 

The majority of the Company's debt obligations mature in 2026 and beyond and the Company is in full compliance with the covenants under its credit agreements as of June 30, 2022.

 

"The outstanding results we have delivered for eight straight quarters demonstrate the sound execution of our strategy of putting the customer at the centre of all we do, supported by continued excellent operational execution by our dedicated and talented team," said David Jukes, president, and chief executive officer. "Creating value for both customers and suppliers, we are building robust competitive moats, seeing improvement in our NPS scores and market share gains. Looking forward, we remain focused on the execution of our strategy and delivering market share growth both organically and inorganically. We are confident in our ability to capitalize on evolving global trends as we leverage our asset base, extensive private transportation fleet, digital capabilities, and long-standing commitment to our ESG goals."