Scienza e Tecnologia
Univar Solutions Reports Strong 2022 Second Quarter Financial Results and Raises Full-Year 2022 Guidance
Univar Solutions operating performance results are described below and, unless otherwise indicated, are a comparison of second quarter 2022 results with second quarter 2021 results.
Univar Solutions 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:
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 Company will host a webcast with investors to discuss second quarter 2022 results at 9:00 a.m. ET on , which can be accessed on the Investor Relations section of its website at http://investors.univarsolutions.com. After the live webcast, a replay of the webcast will be available on the same website until August 2 , 2024.
Univar Solutions (NYSE: UNVR) is a leading global specialty chemical and ingredient distributor representing a premier portfolio from the world's leading producers. With the industry's largest private transportation fleet and technical sales force, unparalleled logistics know-how, deep market and regulatory knowledge, formulation and recipe development, and leading digital tools, the Company is well-positioned to offer tailored solutions and value-added services to a wide range of markets, industries, and applications. While fulfilling its purpose to help keep communities healthy, fed, clean and safe, Univar Solutions is committed to helping customers and suppliers innovate and focus on Growing Together. Learn more at www.univarsolutions.com.
In this press release, the Company's financial results are provided both in accordance with accounting principles generally accepted in the United States of America (GAAP) and using certain Non-GAAP financial measures. In particular, the Company presents the Non-GAAP financial measures of gross profit (exclusive of depreciation), gross margin (defined as gross profit (exclusive of depreciation) divided by net sales on a consolidated basis and by external sales on a segment level, as applicable), delivered gross profit (defined as gross profit (exclusive of depreciation) less outbound freight and handling, Adjusted EBITDA, Adjusted EBITDA margin (defined as Adjusted EBITDA divided by net sales on a consolidated basis and by external sales on a segment level, as applicable), Adjusted net income, Adjusted earnings per diluted share, leverage ratio, net free cash flow, ROIC (defined as the last twelve months ("LTM") Adjusted Net Income divided by Net Assets Deployed) and results on a constant currency basis. The Non-GAAP financial measures are included as a complement to results provided in accordance with GAAP because management believes these Non-GAAP financial measures help investors' ability to analyze underlying trends in the Company's business, evaluate its performance relative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company's core operating results. Additionally, the Company has used, and may continue to use, Adjusted EBITDA and Adjusted earnings per diluted share in setting performance incentive targets to more closely align management compensation with operational performance.
The Company evaluates its results of operations on both an as reported and a constant currency basis. The constant currency presentation is a Non-GAAP financial measure, which excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing information on a constant currency basis provides valuable supplemental information regarding its results of operations, consistent with how it evaluates its performance. The Company calculates constant currency percentages and other information by converting its financial results in local currency for a period using the average exchange rate for the prior period to which it is comparing.
The Non-GAAP financial measures noted above are not calculated in accordance with GAAP and should not be considered a substitute for any other measure of financial performance presented in accordance with GAAP. Additionally, other companies may calculate Adjusted EBITDA and other such metrics differently than the Company does, limiting their usefulness as comparative measures. For further information related to the Company's use of non-GAAP financial measures, and reconciliations to the most directly comparable GAAP measures, see the schedules attached hereto.
This press release includes certain statements relating to future events and our intentions, beliefs, expectations, and outlook for the future, which are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the impacts of the effects of COVID-19 on the Company, the Company's anticipated future results and financial performance, liquidity position and cash flows, actions regarding expense control and cost reductions, expected net synergies from the Nexeo acquisition, capital expenditures and other statements regarding the Company's Streamline 2022 Program and other initiatives. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company's control. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions. A detailed discussion of these factors and uncertainties is contained in the Company's filings with the Securities and Exchange Commission. Potential factors that could affect such forward-looking statements include, among others: general economic conditions, particularly fluctuations in industrial production and consumption and the timing and extent of economic downturns and potential recoveries the sustained geographic spread of the COVID-19 pandemic; the duration and severity of the COVID-19 pandemic; current and new actions that may be taken by governmental authorities to address or otherwise mitigate the impact of the COVID-19 pandemic; the potential negative impacts of COVID-19 on the global economy and our employees, customers, vendors and suppliers; the overall impact of the COVID-19 pandemic on our business, results of operations and financial condition; significant changes in the business strategies of producers or in the operations of our customers; increased competitive pressures, including as a result of competitor consolidation; significant changes in the pricing, demand and availability of chemicals; our indebtedness, the restrictions imposed by and costs associated with our debt instruments, and our ability to obtain additional financing; the broad spectrum of laws and regulations that we are subject to, including extensive environmental, health and safety laws and regulations; potential business disruptions and security breaches, including cybersecurity incidents; an inability to generate sufficient working capital; increases in transportation and fuel costs and changes in our relationship with third party providers; accidents, safety failures, environmental damage, product quality issues; delivery failures or potential hazards and risks related to our operations and the hazardous materials we handle, potential inability to obtain adequate insurance coverage; ongoing litigation; potential product liability claims and recalls and other environmental, legal and regulatory risks; challenges associated with international operations; exposure to interest rate and currency fluctuations; risks associated with integration of legacy business systems; possible impairment of goodwill and intangible assets; an inability to integrate the business and systems of the companies we acquire, including failure to realize the anticipated benefits of such acquisitions; negative developments affecting our pension plans and multi-employer pensions; labor disruptions associated with the unionized portion of our workforce; our ability to attract or retain a qualified and diverse workforce; our ability to execute on our strategies related to environmental, social, and governance matters, and achieve related expectations may be impacted as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing and changes in carbon markets; and the other factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 , as well as other filings with the Securities and Exchange Commission. We caution you that the forward-looking information presented in this press release is not a guarantee of future events or results, and that actual events or results 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, "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 the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
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