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USA

Pivoting for Growth

It was a year of significant change in our USA business segment — shifting to the strategy-driven focused-industry sales model, implementing supply chain optimization, and launching our digital customer portal, MyUnivar. We also invested heavily in advanced training and development of our sales and marketing teams and launched a new sales compensation framework. This new approach transforms our USA commercial organization from transactional “farmers” to “hunters” — consultative, value-driven partners focused on growth with our customers.

Changes of this magnitude often take a year or more to gain traction, but their combined impact helped the USA business accelerate to double-digit EBITDA growth during the fourth quarter. Customers in the food, pharmaceutical, personal care and coatings and adhesives industries welcomed the additional value provided by our focused-industry experts. We not only grew our business profitably with many established customers, but we also added new customers eager for the specialized assistance of sales, application and technical experts with the experience and know-how to provide valuable support. We also won several new supplier authorizations, partly due to the focused-industry approach.

By year end, our supply chain optimization had started to reduce operational costs, and customer adoption of MyUnivar was growing rapidly with almost 60% growth in MyUnivar revenue and nearly a nine-fold increase in customer registrations between the third and fourth quarters. Initial returns on all three of these major investments contributed to an increasingly profitable year of transition for Univar USA.

Moving forward, we will continue to strengthen and expand our industry-focused go-to-market approach, targeting markets where we can create and capture the most value. Univar USA will also continue to rapidly evolve our digital commerce platforms in order to further enhance customer experience, and we will continue to improve supply chain efficiency for all our customers.

  • 56%

    of Univar Net Sales

  • $351.1M

    Adjusted EBITDA (USD)

  • 5.6%

    2017 Year-Over-Year Adjusted EBITDA Growth

  • 22%

    of Univar Net Sales

  • $138.1M

    Adjusted EBITDA (USD)

  • 16.3%

    2017 Year-Over-Year Adjusted EBITDA Growth

EMEA

EXPANDING ON SUCCESS

Univar’s Europe-Middle East-Africa (EMEA) operating segment achieved another year of exceptional double-digit growth and profitability— 16.3% EBITDA growth over 2016—leveraging the proven industry-focused go-to-market model initiated there in 2014. Within our focused industries, Food, CASE (Coatings-Adhesives-Sealants-Elastomers), and Personal Care all performed very well, winning several new supplier authorizations and opening a new personal care laboratory in Milan, Italy.

The Univar EMEA team strengthened our supplier relationships, resulting in new supplier authorizations across the EMEA region. Working with our core suppliers, we expanded our food focused industry into the Middle East and began selling food ingredients in the Balkan countries. Growth with established suppliers also allowed us to expand our portfolio and increase our presence in Scandinavia, Iberia, Turkey and Greece. In addition, we have successfully leveraged new supplier relationships in order to grow in several other countries, including France, Spain and Italy.

A faster, more efficient sample-delivery process for suppliers and customers is in place for EMEA following completion of our EMEA samples hub. Designed with the requirements of our highly demanding and discerning focused-industry customers, all sample requirements are now stocked, processed and fulfilled from one central hub.

Univar EMEA also implemented an improved Transport Management System, previously installed in the USA. This sophisticated system optimizes trucking routes, streamlines transport procurement and carrier management, and improves invoicing and track-and-trace capabilities.

Finally, in January 2018, we completed the acquisition of Kemetyl Industrial Chemicals, first announced in December 2017. Kemetyl not only strengthens Univar’s presence in Norway and Sweden, but also improves our competitive position in the European pharmaceutical and water treatment end markets.

  • 22%

    of Univar Net Sales

  • $138.1M

    Adjusted EBITDA (USD)

  • 16.3%

    2017 Year-Over-Year Adjusted EBITDA Growth

CANADA

Growth in the
Face of Adversity

Univar Canada finished 2017 with strong sales and EBITDA growth of 10.9% over 2016 despite the worst drought in 134 years on the Canadian prairies. Lower profits in our large Univar Agriculture business were more than offset by significant growth in many other end markets, including personal care, pharmaceuticals, coatings-adhesives-sealants-elastomers (CASE), chemical manufacturing, energy, mining, forestry and cleaning products.

Synergies from the recent NexusAg and Future Transfer acquisitions, expansion into new markets, several new supplier authorizations and a greater focus on high-value markets provided the diversity to overcome the temporary downturn in the agriculture sector. Univar Canada’s industrial chemicals business delivered strong growth while penetrating deeper into a wide range of end markets. These results are a good Indication of both market share growth and value-pricing progress across many Canadian industries.

Univar Agriculture demonstrated resilience and undiminished spirit. We continued to build upon the recent NexusAg and Future Transfer acquisitions to strengthen our valuable custom formulation and specialty blending business for agricultural chemicals. The acquisition of Tagma Brasil Ltda. also marked the first time Univar Agriculture expanded operations beyond Canada—our first step toward expanding Univar’s role in the agriculture value chain to cover the Americas.

Moving forward, Univar Canada will be investing in further growth and profitability by focusing on high margin opportunities, continuing supply chain optimization and introducing the MyUnivar digital commerce platform.

  • 17%

    of Univar Net Sales

  • $115.3M

    Adjusted EBITDA (USD)

  • 10.9%

    2017 Year-Over-Year Adjusted EBITDA Growth

  • 5%

    of Univar Net Sales

  • $28.7M

    Adjusted EBITDA (USD)

  • 7.1%

    2017 Year-Over-Year Adjusted EBITDA Growth

REST OF WORLD

Operational &
Commercial Excellence

Univar’s business in the Latin America and Asia-Pacific (APAC) regions had a good year in 2017, demonstrating resilience against stiff competition and significant progress in both operational and commercial excellence.

We won several new authorizations in Latin America with leading suppliers for household and institutional cleaning, agriculture, paints and coatings, and other end markets. Our Mexican team rallied from economic turbulence, an earthquake and product shortages caused by hurricanes in North America. We reduced costs while maintaining high service levels through facility reorganization and rationalization.

Univar Brazil achieved double-digit operational savings while launching Lean Six Sigma training and reaching several safety milestones. The personal care business was especially strong in Brazil thanks to significant new business wins, value pricing and a higher ratio of specialty-product sales. Excellence in commodities management supported profitable growth in industrial chemicals, helping Univar Brazil to achieve record overall profitability growth.

The acquisition of Tagma—a Brazilian specialty formulation and custom blending company for agricultural chemicals—not only strengthened Univar’s presence in the large Brazilian agriculture market, but also expanded our successful Canada-based agricultural formulation and blending business to offer this valuable service across a broader footprint in the Americas.

After many years of profit losses, Univar’s APAC business finished with a profit in 2017. Univar will continue to build on this profitable growth trajectory by leveraging the strength of the Univar brand, as well as our value-added distribution service model.

  • 5%

    of Univar Net Sales

  • $28.7M

    Adjusted EBITDA (USD)

  • 7.1%

    2017 Year-Over-Year Adjusted EBITDA Growth