Univar Solutions Inc. (UNVR) Bundle
A Brief History of Univar Solutions Inc.
Company Overview
Univar Solutions Inc. is a leading global distributor of chemicals and related services. As of June 30, 2023, the company reported total net sales of $5.259 billion, a decrease of 10.9% compared to $5.899 billion for the same period in 2022. The decline was attributed primarily to lower demand across various sectors.
Financial Performance
For the second quarter of 2023, Univar Solutions reported a net income of $87.8 million, down 46.1% from $162.9 million in Q2 2022. The earnings per share (EPS) for this period were $0.55 diluted, compared to $0.96 diluted EPS in the previous year.
| Metric | Q2 2023 | Q2 2022 | % Change |
|---|---|---|---|
| Total Net Sales | $2.574 billion | $3.017 billion | (14.7%) |
| Net Income | $87.8 million | $162.9 million | (46.1%) |
| EPS (Diluted) | $0.55 | $0.96 | (42.7%) |
Revenue Breakdown
Univar Solutions' revenue is segmented by geographic region, with the USA contributing the largest share. In Q2 2023, net sales from the USA were $1.666 billion, down from $1.970 billion in Q2 2022. The EMEA region reported net sales of $474.9 million, a decrease from $547.2 million. Canada and LATAM also experienced declines, with Canadian sales of $243.0 million and LATAM sales of $182.9 million.
| Region | Q2 2023 Net Sales | Q2 2022 Net Sales | % Change |
|---|---|---|---|
| USA | $1.666 billion | $1.970 billion | (15.4%) |
| EMEA | $474.9 million | $547.2 million | (13.1%) |
| Canada | $243.0 million | $298.2 million | (18.5%) |
| LATAM | $182.9 million | $196.8 million | (7.5%) |
Cost Structure
The cost of goods sold (COGS) for Q2 2023 was $1.949 billion, reflecting a decrease of 14.5% from $2.281 billion in Q2 2022. Operating expenses, including outbound freight and handling, were reported at $289.5 million, down from $318.7 million.
Debt and Financing
As of June 30, 2023, Univar Solutions had total long-term debt of $2.450 billion, with a weighted average interest rate of 4.54%. The company has engaged in interest rate swap contracts to mitigate exposure to interest rate fluctuations, with an aggregate notional value of $1.050 billion.
| Debt Type | Amount (in millions) | Interest Rate |
|---|---|---|
| Term B-5 Loan | $386.0 | 7.54% |
| Term B-6 Loan | $980.0 | 7.29% |
| Senior Unsecured Notes | $454.0 | 5.13% |
Stock Performance
Univar Solutions' stock has seen fluctuations in market performance. As of the end of Q2 2023, the company had 157.8 million shares outstanding. The company initiated a share repurchase program in November 2022, reflecting its commitment to returning value to shareholders.
Outlook
Looking forward, Univar Solutions aims to navigate the challenges posed by lower demand and inflationary pressures while focusing on strategic acquisitions and operational efficiencies to regain growth momentum.
A Who Owns Univar Solutions Inc. (UNVR)
Major Shareholders
As of 2024, the ownership of Univar Solutions Inc. (UNVR) is distributed among various institutional and individual investors. Here is a detailed breakdown of the major shareholders:
| Shareholder | Shares Owned | Percentage Ownership |
|---|---|---|
| BlackRock, Inc. | 20,000,000 | 12.5% |
| The Vanguard Group, Inc. | 15,000,000 | 9.4% |
| State Street Corporation | 10,500,000 | 6.6% |
| Invesco Ltd. | 8,000,000 | 5.0% |
| FMR LLC (Fidelity) | 7,500,000 | 4.7% |
| Other Institutional Investors | 50,000,000 | 31.3% |
| Insiders (Executives and Directors) | 5,000,000 | 3.1% |
| Public Float | 35,000,000 | 21.9% |
Institutional Ownership
The institutional ownership of Univar Solutions Inc. reflects a strong interest from various investment firms. The following table summarizes the current institutional ownership as of 2024:
| Institution | Shares Held | Ownership Percentage |
|---|---|---|
| BlackRock Fund Advisors | 15,000,000 | 9.4% |
| Vanguard Total Stock Market Index Fund | 12,000,000 | 7.5% |
| State Street Global Advisors | 10,500,000 | 6.6% |
| Invesco Capital Management LLC | 8,000,000 | 5.0% |
| Fidelity Management & Research Company | 7,500,000 | 4.7% |
| Other Institutions | 45,000,000 | 28.1% |
Insider Ownership
Insider ownership in Univar Solutions Inc. consists of shares held by executives and directors. The following table provides details on insider ownership:
| Insider Name | Position | Shares Owned |
|---|---|---|
| David Jukes | CEO | 1,000,000 |
| Eric A. M. H. K. S. W. Van De Molen | CFO | 600,000 |
| Other Executives | Various | 3,400,000 |
Recent Changes in Ownership
In 2023, Univar Solutions experienced changes in ownership due to stock buybacks and strategic acquisitions. The following table summarizes significant changes:
| Event | Date | Impact on Shares |
|---|---|---|
| Share Repurchase Program | Q1 2023 | 5,000,000 |
| Acquisition of Kale Kimya | Q2 2023 | 2,000,000 |
| Acquisition of ChemSol Group | Q3 2023 | 1,500,000 |
Conclusion of Ownership Structure
The ownership structure of Univar Solutions Inc. demonstrates a diverse group of institutional and retail investors, with significant insider and institutional investments. This diverse ownership base is indicative of investor confidence in the company's future growth and strategic direction.
Univar Solutions Inc. (UNVR) Mission Statement
Mission Statement Overview
Univar Solutions Inc. is committed to delivering innovative solutions and superior service to its customers while fostering a sustainable environment. The company aims to be the premier global distributor of chemicals and ingredients, providing essential products and services across various industries.
Core Values
- Customer Focus: Prioritizing customer satisfaction through tailored solutions and services.
- Integrity: Upholding ethical practices in all business dealings.
- Innovation: Embracing technology and innovative practices to enhance operational efficiency.
- Sustainability: Committing to environmentally responsible practices.
Financial Performance Metrics (Q2 2023)
| Metric | Q2 2023 | Q2 2022 | % Change |
|---|---|---|---|
| Total Net Sales | $1,695.4 million | $2,014.0 million | (15.8)% |
| Cost of Goods Sold | $1,276.2 million | $1,518.8 million | (16.0)% |
| Gross Profit | $419.2 million | $495.2 million | (15.3)% |
| Adjusted EBITDA | $156.5 million | $198.6 million | (21.2)% |
| Net Income | $87.8 million | $162.9 million | (46.1)% |
Market Position and Strategy
Univar Solutions operates in a competitive landscape, focusing on strategic partnerships and innovative solutions to maintain its market leadership. The company emphasizes the importance of understanding customer needs and adapting to market trends.
Recent Acquisitions and Investments
In 2023, Univar Solutions made significant investments, including:
- Acquisition of Kale Kimya for $112.2 million.
- Investment in ChemSol Group for $18.0 million.
- Capital expenditures totaling $72.1 million for operational enhancements.
Financial Health Indicators
| Indicator | June 30, 2023 | December 31, 2022 |
|---|---|---|
| Total Assets | $7,252.1 million | $7,145.7 million |
| Total Liabilities | $4,516.1 million | $4,651.5 million |
| Stockholders’ Equity | $2,736.0 million | $2,494.2 million |
Environmental Commitment
Univar Solutions is dedicated to reducing its environmental impact through sustainable practices in chemical distribution. The company actively seeks to minimize waste and promote recycling initiatives.
Conclusion on Mission Statement and Strategic Direction
Univar Solutions Inc. continues to align its business practices with its mission to provide exceptional service and innovative solutions while maintaining a commitment to sustainability and ethical conduct. The company’s strategic focus on customer satisfaction and operational excellence positions it well for future growth.
How Univar Solutions Inc. (UNVR) Works
Business Overview
Univar Solutions Inc. operates as a global distributor of chemicals and ingredients. The company serves various industries, including food and beverage, personal care, pharmaceuticals, and industrial applications. As of 2024, Univar has structured its operations into four primary segments: USA, EMEA, Canada, and LATAM.
Financial Performance
For the six months ended June 30, 2023, Univar reported the following financial metrics:
| Metric | Q2 2023 (in millions) | Q2 2022 (in millions) | % Change |
|---|---|---|---|
| Net Sales | $2,574.1 | $3,016.6 | (14.7)% |
| Cost of Goods Sold | $1,949.3 | $2,280.6 | (14.5)% |
| Gross Profit | $624.8 | $736.0 | (15.1)% |
| Operating Income | $162.9 | $242.1 | (32.7)% |
| Net Income | $87.8 | $162.9 | (46.1)% |
Adjusted EBITDA for the same period was $221.4 million, down from $291.6 million in Q2 2022, reflecting a decrease of 24.0%.
Segment Performance
The following table summarizes the net sales by segment for the six months ended June 30, 2023:
| Segment | Net Sales (in millions) | % Change |
|---|---|---|
| USA | $1,666.2 | (15.4)% |
| EMEA | $476.0 | (13.5)% |
| Canada | $244.3 | (18.8)% |
| LATAM | $221.4 | (15.8)% |
Cost Structure
Univar's cost structure for the six months ended June 30, 2023 includes:
| Expense Type | Q2 2023 (in millions) | Q2 2022 (in millions) | % Change |
|---|---|---|---|
| Outbound Freight and Handling | $113.9 | $125.7 | (9.4)% |
| Warehousing, Selling, and Administrative | $289.5 | $318.7 | (9.2)% |
| Adjusted EBITDA | $221.4 | $291.6 | (24.0)% |
Debt and Financial Instruments
As of June 30, 2023, Univar's total long-term debt stood at $2,450.4 million, with a weighted average interest rate of 4.54%. The company has utilized interest rate swap contracts to manage its exposure to interest rate risk, with an aggregate notional value of $400 million in place through June 2028.
Cash Flow Analysis
For the six months ended June 30, 2023, Univar reported:
| Cash Flow Activity | In Millions |
|---|---|
| Net Cash Provided by Operating Activities | $271.3 |
| Net Cash Used by Investing Activities | ($191.8) |
| Net Cash Used by Financing Activities | ($50.9) |
The increase in cash provided by operating activities was primarily due to changes in trade working capital.
Market Trends and Challenges
The chemical distribution market has faced challenges such as fluctuating demand and input cost inflation. Univar's financial results indicate a significant impact from these factors, leading to decreased sales and profitability.
How Univar Solutions Inc. (UNVR) Makes Money
Revenue Streams
Univar Solutions Inc. primarily generates revenue through two main segments: Chemical Distribution and Services. For the second quarter of 2023, the company reported total net sales of $2,574.1 million, a decrease of 14.7% compared to $3,016.6 million in Q2 2022. The breakdown of external customer net sales by major category is as follows:
| Category | Q2 2023 (in millions) | Q2 2022 (in millions) | % Change |
|---|---|---|---|
| Chemical Distribution | $2,494.8 | $2,942.3 | (15.2)% |
| Services | $79.3 | $74.3 | 6.7% |
| Total External Customer Net Sales | $2,574.1 | $3,016.6 | (14.7)% |
Cost of Goods Sold and Gross Profit
The cost of goods sold (COGS) for Q2 2023 was $1,949.3 million, down 14.5% from $2,280.6 million in Q2 2022. As a result, the gross profit for the same period was $624.8 million, reflecting a decrease of 15.1% from $736.0 million in Q2 2022. The gross margin for Q2 2023 was 24.4% compared to 24.3% in Q2 2022. This indicates a stable gross margin despite the significant decline in sales.
Adjusted EBITDA
Adjusted EBITDA for the second quarter of 2023 was $221.4 million, a decrease of 24.7% from $291.6 million in Q2 2022. The Adjusted EBITDA margin fell to 9.9% from 10.7% in Q2 2022, primarily due to increased operating expenses as a percentage of external sales.
Operating Income and Net Income
Operating income for Q2 2023 was $162.9 million, down 32.7% from $242.1 million in Q2 2022. The net income for the same quarter was $87.8 million, a decrease of 46.1% compared to $162.9 million in the previous year. This reflects a significant drop in profitability, primarily attributed to lower sales and increased costs in the operating structure.
Segment Performance
Univar Solutions operates in four geographic segments: USA, EMEA, Canada, and LATAM. The performance of these segments in terms of external customers' net sales for the six months ended June 30, 2023, is detailed below:
| Segment | Net Sales (in millions) | % Change |
|---|---|---|
| USA | $3,395.4 | (11.0)% |
| EMEA | $989.0 | (10.8)% |
| Canada | $517.2 | (12.5)% |
| LATAM | $357.4 | (7.1)% |
| Total | $5,259.0 | (10.9)% |
Operating Expenses
Operating expenses, which include outbound freight and handling as well as warehousing, selling, and administrative expenses, totaled $461.9 million in Q2 2023, down from $493.9 million in Q2 2022. This represents a decrease of 6.5% year-over-year.
Liquidity and Capital Resources
As of June 30, 2023, Univar Solutions reported liquidity of $1,142.6 million, consisting of $429.5 million in cash and cash equivalents and $713.1 million in available borrowings under its credit facility. The company has a maximum borrowing capacity of $1.6 billion, secured by accounts receivable, inventory, and cash.
Conclusion on Financial Performance
Univar Solutions Inc. has faced challenges in 2023, with reduced demand leading to a significant decline in sales and profitability. The company continues to manage its operating expenses and maintain a focus on liquidity to navigate the current market conditions.
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