Through Streamline 2022 (S22), the distributor is renewing focus on operational efficiency and cost reduction with a greater emphasis on digital capabilities. Univar expects S22 will improve operational agility, drive faster sales growth, particularly in North America, reduce leverage to 3.0x by the end of 2021 and improve EBITDA margins to 9% by the end of 2022.
Univar did not provide any more details on potential sales other than saying expected cash proceeds would be greater than $200 million.
It may, however, incur incremental charges related to S22 of up to $50 million in 2020.
The move also sees some changes to its leadership team with Univar’s president of USA and Canada Mark Fisher stepping down to “pursue other opportunities”. Jennifer McIntyre, senior vice president, chief streamline officer and head of North American operations, will drive the completion of the Nexeo integration, as well as S22 cost and productivity efforts.
Brian Herington, senior vice president, chief commercial officer and head of North American chemical distribution, will steer improvements in commercial practices worldwide and lead the business in USA and Canada.
Nick Powell, senior vice president, president of Europe, the Middle East, Africa and Asia-Pacific and global head of consumer and industrial solutions, will focus on performance consistency for customers and suppliers in all geographies as well as new growth opportunities.
Jorge Buckup will continue his role as president of Latin America.
Author: Elaine Burridge, Freelance Journalist
Q2 sales hit by Covid-19
The launch of S22 came as Nexeo announced a significant fall in second-quarter sales and earnings, primarily from lower demand due to the coronavirus pandemic.
Net sales dropped 22.3% year on year to $2 billion, driven by lower demand in industrial markets, such as US and Canadian refining, which were only partially offset by higher demand for essential products, such as health care, pharmaceuticals and sanitization. Adjusted EBITDA declined 18.8% to $163.2 million.
President and CEO David Jukes said he was pleased with Univar’s operating and financial performance given the challenging times. Nevertheless, he noted that market conditions and customer preferences were changing, hence the S22 program, which is part of the company’s strategy to Streamline, Innovate and Grow.
“Looking ahead, accelerating our strategy through the Streamline 2022 program will ensure we continue to enhance our competitiveness, advance our digital capabilities to better serve customers, increase our operational and financial flexibility, and capture greater value from the market recovery and growth opportunities for both the near- and long-term,” Jukes said.
