Univar Reports 2016 First Quarter Financial Results
3 May 2016
Growth outside USA and higher margins largely offset difficult oil and gas comparisons; CEO leadership transition to take effect on May 31, 2016
First Quarter 2016 Highlights (versus First Quarter 2015)
- Adjusted EBITDA was $134.1 million, or $139.5 million on currency neutral basis, compared to $145.7 million reported in the prior year.
- Reported GAAP EPS was $0.10 per share versus $0.20 per share in the same quarter prior year, reflecting the impact of the higher share count from its initial public offering and changes in foreign currency rates.
- Adjusted EBITDA outside the USA grew 3.8 percent on a reported basis and 13.6 percent on a currency neutral basis.
- Gross margin increased 140 basis points to 21.5 percent, and Adjusted EBITDA margin increased 40 basis points to 6.7 percent. All segments reported higher margins.
- Completed two bolt-on acquisitions, for a total purchase price of $53 million, which provide future growth opportunities in specialty agriculture inputs and waste management services.
DOWNERS GROVE, Ill. – May 3, 2016 – Univar Inc. (NYSE: UNVR) (“Univar”), a global chemical distributor and provider of value-added services, announced today its financial results for the first quarter ended March 31, 2016.
“Despite sluggish global demand and difficult oil and gas comparisons, Univar’s focus on operational excellence enabled us to deliver a solid quarter,” said Erik Fyrwald, President and Chief Executive Officer. “We achieved growth in a number of segments excluding upstream oil and gas and activities related to our restructuring in EMEA. Margins were higher in all segments and we self-funded both acquisitions completed in the quarter.”
Univar reported net sales for the quarter of $2.0 billion, down $300 million or 13.1 percent compared to prior year, largely due to lower demand from oil and gas markets, deflation in certain chemical prices, and foreign currency translation. Globally, volumes grew 2.0 percent excluding the impact of oil and gas and EMEA restructuring. On a currency neutral basis, gross profit decreased $18.1 million, or 3.9 percent compared to prior year. Operating expenses decreased $19.7 million, or 6.2 percent, reflecting lower operating costs, reduced discretionary spending, and foreign currency translation.
Univar’s first quarter Adjusted EBITDA of $134.1 million was higher than its earlier guidance. Univar previously indicated that it expected Adjusted EBITDA for the first quarter to be 10 percent below the $129.6 million of Adjusted EBITDA reported in fourth quarter 2015.
Univar reported GAAP EPS of $0.10 per share based on approximately 138 million shares outstanding, compared to GAAP EPS of $0.20 per share in first quarter 2015 based on approximately 100 million shares outstanding prior to the company’s June 2015 initial public offering.
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Founded in 1924, Univar is a global distributor of specialty and basic chemicals from more than 8,000 producers worldwide. Univar operates more than 800 distribution facilities throughout North America, Western Europe, the Asia-Pacific region, and Latin America, supported by a global network of sales and technical professionals. With a broad portfolio of products and value-added services, and deep technical and market expertise, Univar delivers the tailored solutions customers need through one of the most extensive chemical distribution networks in the world. Univar is Chemistry DeliveredSM.
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
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Scott C. Johnson