Univar Solutions (UNVR) 8 Nov 202020 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Univar Solutions' Third Quarter 2020 Earnings Call. My name is Carol, and I will be your host operator for this call. [Operator Instructions]. I will now turn the meeting over to your host for today's call, Heather Kos, Vice President of Investor Relations at Univar Solutions. Heather, please go ahead.

morning. good and you Thank Welcome to Webcast. Earnings and Quarter Solutions' Third XXXX Call Univar

Joining which President Chief David Officer; are ended financial our today call third the Jukes, night, released Alexos, quarter Vice results for with posted along corporate Last XX, slide presentation The and Executive and President our our to a with posted call. earnings at Officer. univarsolutions.com been and XXXX, Financial supplemental be today's September viewed we our also slide website. and website presentation on the Nick release, to Executive has Chief go to

During our measures X, we for earnings supplemental slide release call GAAP reconciliation will financial can summarized you comparable non-GAAP the and find the certain this on which to presentation. and in refer measures Slide the to financial

As involve Nexeo then and for start will X, end business they a we Slide outlook, forward-looking, Please and/or make uncertainties future. more expectations our call. statements Slide and expectations and filings future of David about progress risks the of our the detailed reflect Nick see are will strategy. you integration X, current and trends. forecasts our our performance. for the the statements market risks are estimates, SEC future. business uncertainties financial they with All will agenda and and for close projections, will for not guarantees our while our summary referenced on will our David third update, estimates, On quarter see and the inherent and in highlights on through walk with

David his the questions. your opening call With remarks. will over we now that, Following turn that, take for to I'll

evening and good our and afternoon for Thank and morning, joining you, to good everyone, good call. thanks Heather,

results. challenging which and continue deliver to these our to adapt performance, I'm Our streamline, to mission progress and mission that in Univar to see QX times solid pleased reflected as remains on Solutions grow, innovate and is at we

that priority in to is highlights company and the expectations solid this of challenged our safety, facilities highest I'm a pleased a are: the that from always delivered remain Key report we remains our suppliers our end employees, and upper As earnings beyond for environment. all about quarter serious customers, operational.

the were sales margin were headwinds the we versus selling down customers, disciplined and partially prior to able year, implementing Although economic to new reductions. cost management by practicing mitigate

a changing customer in monitor to $XXX liquidity this more as million speak of strong end the had on continue operate within to and million I'll million We our in $XXX range. to new track we moment. demands on year overall $XXX normality. We trends are guidance

systems we Nexeo progress remains Our on make and our integration on business migration. to track, continue

rounding and to attracting continue digital effectiveness, the specialty the our program, on our progress of global new newly We out advanced launched force grow SXX sale We our streamlining in and more assets. leadership verticals industry customers. with and make business our some nonstrategic capabilities sales our exit

in outages We the weather-affected our continue seek Gulf higher well they as to do with to customers operating rates region. as as the manage they work suppliers return same to with as some

compared As were digits. and Sciences divested year, low to down July Environmental while mid-single was prior excluding business, the down September August teens sales

Canada. and Solutions a business. sector, of in Refining benefited with strong U.S.A. Many September. double-digit robust chemical demand with our Industrial is continue automotive see a from which business both Consumer growth business, experienced in quarter to as be the the markets industries solid our as products return within care significantly protein Solutions core lifting well our of ended accelerated down personal July in We to the a demand in return in We the market. general continue and of pharmaceuticals

the bottom. some count reached we may gives rig have cause optimism data that October for However,

the a the November same of normal and at As an slowdown good do a have period but and we September, insight by into levels seasonal current driven potential expect in sales of as December resurgence continued trading, slower shutdowns. October COVID-XX-related

million range a our million. to $XXX As XXXX $XXX EBITDA is result, adjusted guidance for

to For Longer with to give in detailed do with and we will our the XXXX, expand of takes February, we've upon believe on puts the economic in year-end we the call continues and growth the have the expect will the position future. show taken guidance for but dynamics the more we'll innovative Nick and growth. line to actions SXX solutions year We some customers year that continue shortly. term, deliver share foreseeable sustainable believe that tools, program as will the success our allow right products, and further even business disrupt to for us and deliver that strategy pandemic we life value people suppliers

turn let will highlight me over outlook. key to update close He business call third and CFO, our Streamline Nick our with the through and you our integration XXXX and quarter Now Then progress the strategies. Nexeo will an walk Alexos. our I on results

currency good morning all. am to and share financial down Solutions' our Constant and on Hello, David. to were sales business you, XX.X%. Thank I net you activities. Univar results strong pleased update

year's or Excluding FX, was constant of currency approximately by $XXX to of sales financials on down exclusive results X% Gross XX.X%. Environmental estimate X.X% lower net were depreciation, basis. million Sciences and we profit, from last a

COVID-related as constant depreciation, demand. a driven was from profit, year's X.X% and from excluding XX.X%, gross expanded market driven the in favorable down product estimate and by by XXX mix volume results benefit basis and exclusive on lesser end We nonrecurring Sciences basis margin of when of businesses Environmental currency core our to versus market financials Our margin well. a and last a gross by points more QX

reduction lower cost interim measures. Environmental Canada. offset million markets constant currency in was related on certain due Third SXX mix synergies, lower to EBITDA products, demand $XXX XX.X% a favorable was basis of price in by by Sciences Nexeo decrease and product some quarter deflation expenses and The adjusted globally, in partially divestiture net X.X% the and

constant on Environmental Excluding EBITDA results, Science currency year's adjusted last from the X.X% business basis. was a lower

and gross have our managing lower margins EBITDA as good we volumes are overall our planned, impact cost we margins. While

or of During year-to-date million synergies net $X.X prior income net QX offset versus selling million XXXX. all $XX a in $X.XX the net Nexeo increase warehouse for is captured per share partially total period. of for of $XX due the net approximately lower the the million million integration $XX.X of to compared revised expenses, primarily to a The income $XX year and by million to quarter, was a lower in and administrative we cost related income than of capital earnings expense use share guided distribution Working and on Adjusted year cash our the our EBITDA by of prior our a capital largest receivable. in working second $X.XX during lower and business quarter slight driven lower per lower agriculture share accounts the compared earnings period profit. in Canadian offset timing was in quarter interest to increase our QX taxes. $X.XX aged lower the adjusted we a more as U.S. was call, gross for as taxes

Excluding by we which $XX million, reported. higher lines liquidity, of including ended and in higher and asset-based million. Capital would the exiting cash income. working were of Canadian winding $XX and be partially business, of working offset quarter million. credit XXXX, under impact capital Nexeo XX.X% We of expenses $XXX sales capital The cash the net are distribution agricultural availability our was quarter were versus the have our total with will annualized XX.X% the $XXX down hand net net around expenditures around integration related on for million been

for X.X% was last ROIC XX% Our versus the quarter year.

last grow the the as from the business. the metrics these to ratio in continue integration On as year. appendix. leverage we figures to key well from X.X%, provided X, X capture reporting and expect X.X% We have synergies across improve our stands Slide at as segments down we The detail aggregated marginally

Canada line of In we in overall saw Environmental tailed across trends essential sequentially has QX, in also business a of core down global to solid the XX%, seen top the benefit regions to If continued end decline largest but disproportionate which QX. Am were impact continued markets. in its benefit excluding from range demand. the off, due reflecting exclude approximately U.S. lower trends. divestments Sciences the headwinds the COVID-related Lat improving X sales markets in end each sequential see divestiture, from In energy. U.S., lines energy, of otherwise impact primarily our since Our we of the and EMEA, growth

favorable COVID-related I saw in of we margin product to As contribute a end essential with our the higher gross mix from geographies, mentioned, each lower impact markets. a

inventory we XX basis Our Canada impacted EBITDA reserves. increase agriculture solid the write-down. points. growth margin In by the impact of XX of Am million Total down and a expanded margin adversely adverse Lat as manage U.S.A. inventory Canadian to account the the and due performance. distribution ag basis declined despite contributors $X in adjusted adjusted expanded margins primarily receivable gross Canada, EBITDA margin absorbing segment points EMEA to business. overall write-down were by an was energy

do million Turning key than continued for into going to September to adjusted million increased visibility to the emerged fourth $XXX we QX resurgence. million. of to adjusted COVID performing be year Despite XXXX. expectations, expect EBITDA $XXX highlights $XXX remains rest strong the related momentum We our better our to out our our between to $XXX be and due the limited execution EBITDA of We a quarter in confident uncertainty range third full into to in million the are of in the and quarter. October, having overall

Our of $XX for a accruals adjusted to that which EBITDA, at other occurred we included capital as expected in and expenditures back. use and year-to-date $XX for $XX the $XXX year property expenses to year-end is intend which use. is XXXX lower, which is million million expense, timing integration acquired cash for to a sell million, and million $XX million million, $XXX includes be $XX now already now Nexeo be will our is year of this has million the of which not we lease

spill of any million Canadian We sale target at our we business; SXX distribution of milestones debt agricultural of working to be year-end, cash to million. closing $XXX by $XXX down least pre Key million through an capital. million paydown for divestment business, range in generate orderly available $XX of undertake the mostly QX on with proceeds, the of XXXX liquidity as the in our emergency to over response and $XXX announcing exiting include: continue in we the wind to industrial expect our cash,

week, of close expected we As in this sale which business, have our agreement QX. for services an Canadian of agriculture is to the

additive definitive multiple. available Although it this announced to and paydown time, leverage aren't be of cash our to at million accretive $XXX being debt will terms for

The to integral for exit. as our the is million on impairments related Most asset principally These been the Xx SXX from versus $XX our cash portion cash this charges, XXXX the to charges ag we gave we reduced has is additional We to charges total and XXXX. to The million. guidance are quarter. services year-end and our initiatives noted due ag of SXX last are related $XX included approximately some in to fixed margins. million improving $XX use goodwill distribution however, $XX net by increasing approximately portion change million and to achieving leverage of cash other divestment

XXXX expect guidance we that we our you Although specific and factors EBITDA time, not at EBITDA follows. are this year flow are adjusted may for providing as next impact cash some key

Given line or than breadth economy. grow our in strategies, business and our the organically range will of better

reduction for expected XXXX are Nexeo a results, and in and pickup XXXX, more driven expenses $XX to be of EBITDA and XXXX, compensation absorbing $XX $XX related million SXX essential approximately our next volume Versus incremental X% Our our an margin million end operating operating EBITDA efficiencies million of while towards year. net in end at by will to of variable EBITDA of COVID-related million from incentive products normalized margins by the adjusted $XX a synergies divested target offset to markets. expand

$XX on equally $XXX million. in million to are integration are million to flow. strong in Nexeo in as good range expenditures projects business. $XX the expected the Capital generating cash our to be We million to of we range free focused seeing be of costs Final $XXX ROI are expected are

Separately, our XX% of XX%, the working million. range to normalize $XX will We to of the proceeds of at $XX expected working the realized our and Net million net expected is also be expect from uses stay our $XX distribution, capital client be target are in the cash average ongoing an QX $XXX gross an from liquidation to generate will Canadian million in $XX which additional capital level to the other to to Also, million cash XXXX. proceeds related net of million. remaining agricultural divestments

QX XXXX. company net integration plans. in of in amounts our flow complete execute the of be would Nexeo the Here cash XX% to we approximately I highlight strong like again, our on expected less XXXX SXX realized as conversion and to further free

I all for Before outside solid challenging many sincerely environment. David? want it employees I our this hand as our thank to to well David, the back XX,XXX the as commitments constituents of company during

Nick. Thanks,

milestones Moving during we several obstacles, million I'd to like the to a our successfully integration $XX synergies highlight Despite off processes. delivered COVID-XX now. million year-to-date. milestones progress. while with significant continuing our the integration cost our of and customers wave business the of few Nexeo migration our $XX quarter to on and successfully of optimizing those We systems fourth kicked successfully service are

cash sites remain year. bringing schedule Our total XX. of XXXX, continued, the our total site We December estate of XX site real branches closures cash branches million. approximately in $X million, at with consolidation further finalized to this proceeds plan to in closing Since sale close during have $XX calendar on quarter, least generated sales the X proceeds pretax of X

Our the and same full system communicated to to committed half having QX realizing We're as Canada up system customers. our XXXX. strong complete with following a stages strategy the we wholly is Mexico the SAP our migration a second behind in the remained quarter. for U.S.A. of but plan of scale early in and The our scheduled last optimizing in time to presence line XXXX, of local remain benefit single

force leverage effectiveness advantaged business driver with a network our sellers digital business strategy our key of we of Moving to as combination our improvement platforms. in Sales progress. remains

first report U.S.A., levels we've the in obstacles equally indicators. the maintained we And retention, margin at the important, in to progress of of half activity We started as growth, year, leading remain we levels and continue trend face-to-face elevated and our those see that management in again half of QX the the the in contacts customer business momentum local pipeline the activity, on average the and new track Even to transactional SXX visits. in first And year, QX customer program good QX. customers. effective underway. continue of In hundreds restrictions the with despite pleased I'm XX% continued to purchased welcomed COVID-XX, at our of is of of The welcomed customers new the returning well level.

with fundamentals introspection the the including Nick good to with the effortless deserve. the to to and customer enjoyable our it's partners, structure, initial customers Solutions done In a and and activities. key our Net Leveraging from optimization doing existing suppliers deliver on highlighted customer customers the In able key excellence easy, center be including to experience customer again firmly suppliers the and the leadership Scores, they appointments. all team attention we've up of of The portfolio grow. the Promoter addition our work leveraging both industry leading learnings externally feedback, develop be dedicated and Industrial Consumer is innovate earlier, made experience specialty following: resources completed put worked process, really will At renowned focus of we've our well. has internal external Powell turn and now to center his professionals ensure verticals, at complete to integration including external our Nick of to we and

of benefits differentiated customers. ensure technical centers specialty to of of knowledge, mix dedicated end of an operate to high Our set commonly expansion ingredients something our depth we and consistently key with important goals. product want. market deep this driver approach provide brings referred specialties of to geography market and partners The whatever customer more enrichment solution expertise ability will chemist's they The by intimacy and suppliers be as level premier portfolio, tell in a breadth is our a us a

competitive supplier for times remain our of especially like a and strong partnerships bedrock business Our source in a advantage, these.

Chemicals, [indiscernible]. support the recognize the the growth. value capabilities last of our to ComStar, America, products of with recognition and the Azotic brilliant expertise or awarded partners we've few chemical such These Novozymes partnerships with from North months, leading authorizations been and how as suppliers our are bring, Daubert Over their a and along digital market product they new end expanding Huntsman,

productivity of we capabilities. build process putting solution our to a Nexeo expand and more externally and in the both look growth. drive portfolio And continue rearview our product developed forward as to customer-centric we've cost approach deployed and deeper We to integration a increased clearly greater we operating end throughout robust mirror, focused by We believe model the the allow will differentiated intimacy an for markets of supported we serve. tools digital adoption customer

channel, expanded current preferences, customers. certain our foundation technical in sales our changing share and where and addressing the innovate customer a podcast we're making chempoint.com, Overall, of we whatever search, to right We our and promote deliver customer tune they choose. us maximize and dedicated reaching regions, stimulate streamline source of to where's another local it or the We recently and as chain, numbers, results, business source accelerate webinar customers better ingredients continued capabilities the customers. as challenged. sales are as to in in do suppliers Meanwhile continue chemicals self-serve step always the for to my as growth that quarter. for received staying customers growth. and customers needs customer-centric market of with preferences. our the strategy continues feature accelerate while approach, presenting in of the to in over traditional select, omnichannel tools in digital-enabled advance reviews day operations consumers' marketplace demand customers all specific with for us supply competitive and digital in a deliver long-standing and advantage with And to night, X,XXX of committed investing footprint sales to offering methods We're confident stuff and time focus easier has our of rave operationalize force Altogether, the earlier, from is launched scale spoke our our I effectiveness digital aimed well growing

which of Nexeo to these capital expect are $XXX EBITDA our The times. remain to identified before customers. year-on-year. cost to pleased million year-end year challenging business. in we leverage our million lower proceeds We than management, to of we We're X% our our towards savings come cost quarter to becoming pre half and delivering cash very We and furthering global $XXX of solid with the during on questions, attractive functional delivered other your We're progress $XXX to deliver on designed end to achieve to of our down margins on the least advantage, needs in SXX tracking million firm track We're exits. We liquidity. track program summarize, So working Xx to on financial from $XX our results in momentum cash and our increasingly and $XX to XXXX, investing strategies from we this core million maintaining control program maintained synergies. on are year, revenue reductions is through additional million of with focused $XXX pay in net to and debt digital the against million well and greater divestments. integration portfolio which delivered growth of at any is by our

and effectiveness the completing it omnichannel in target positioned financial shareholder on the to healthy digital is capture will market and greater focus greater growth your these growth integration, believe operating our XXXX, for approach further And that Please Thank with through we and competitiveness that, as to efforts provide decisive opportunities increase anticipated drive capabilities customers. for We force new Nexeo And SXX By will enhance your continue U.S. to business from and ahead. delivering recovery our you The value. collective and open sales value company we'll operational will and business questions. the attention. systems the serve to safe. and the we flexibility. to stay up agility actions capture better see we migration opportunity

[Operator Instructions].

from America Our of Securities. from comes question first Steve Byrne Bank

Steve. on Washer Luke is This actually for

down in Your the touch quarter. but year-over-year, were up points were XX% sales obviously

So points? kind from you measuring of gaining suppliers? like you I are the you to how touch feel wanted of ask, you're do And these looking share at ratio? Are a effectiveness win-loss other

good sales think at shape I we're think pretty the I the that organization, moment. in

with place that they're are and So how I'm they've sales adapting with adapted changed put how routines to model very in pleased -- a the we to we them. sales

pleased. So I'm pretty organization going. is I'm that never pleased how I'm with happy, but

you some in in look and in But take top we what mindful have line, at line our in which think if our our energy headwind margins, of, at down. that if and our I top business, growth winning have that improvements is improvements actually will mix core be a to you look winning business. the business distribution share you we're

the of business winning that more distribution chemical the good a the and is we're So a for it's of business, quality taking core and business kind company.

So overall, I'm with are how pretty shaping things up. pleased

on synergies. And just one Great. Nexeo another

full like expected remained it same than the But you has you synergies rate before. run quarter, got Nexeo $XXX maybe at million. your the XXXX During looks through more synergies of had

So that? those kind look or Or anything you was more just think for forward like potentially do of synergies? of XQ, you you'd identified at pull opportunities when a this consolidation

million we're commitment. our $XXX No, focused very on and

million QX were we are to we program migration into on we forward some commitment. able we few so pull things systems have a to able committed And through got as focus to couldn't and things to $XXX But that the just no, go earlier.

clearly, SXX our there have business see opportunities we However, the to program, further. And we optimize

focus so is our that now. And also on

question from comes from Bob next Goldman Koort Sachs. Our

I guess partial selling about aligned I struck next growth sales bit ambition guidance out sales year? Why little seems force in out the not next into your your specialty your on bit benefits was it suppliers of to a talking for the assertions to the going with year customers, growth little greater have for organic of economic with traction. and differentiated there. be a development line focus,

the rates do, end But how part we is the see economy going those that's were in grow with what see differentiated starting do working. said, enrichment mix to work. to we We economy or see we but do think things. can we I we better. least greater clearly, Bob, -- on because the strategy the focus it grow at We markets better. believe play And a Well, the

it's line. at of you Maybe Nick, me least line right. in semantics in a But versus my All let ask question.

You of compensation did mention and travel headwind from you some reductions year. big dimensionalize delta year? us a that the in How next of Can a COVID-related the normalizing for this be? could that

for for Thanks and well. the last Bob. night Yes, question, thanks your as note

We dimensionalizing it. aren't necessarily

period, as in think would less that incentive recover, I recessionary tend comp. any expect, to growth comp you pay expense any absorb as incentive and in you And have rate. to your you operating you

So XXXX. will as towards which we in that trying year point the we increase that and see that to people next mean balance that X% target, you we're make that then so increase target might would proportional in just recognize that margin less

one sneak And quick could if last a I in.

big inventory is And in was ag mentioned What that You write-downs why How the that? product? Canadian business. required?

going quarters, against next It's the year. really that. It's against And that about was few the inventory. that is material don't any just mean, against a will the in We inventory. sell we than of you see it, into quarters. couple working I all of of to capital inventory. will million some but business it that risk next business. decided liquidate essentially, as pursue taking that roughly further next can X/X inventory just is of that Canadian over And expect Yes. orderly orderly small left that a million into part of in less reserved exit the that reserve QX in an through $XX good season $X of appendix, we Part the of there's we

Laurent question from next Our comes Favre Exane. from

first is oil on My question gas. and

magnitude I if there. was give David, sense you decline could of a wondering the of us So

small instance? half, I that. Are how exposure, talking than big first guess, That's we when the talked closest down have worse is more even that's you the we know think about about now the or the so about question. Your, being same I magnitude? How second peer maybe X/X. business for upstream

oil year last on -- about sales. our in last total year, our so total Laurent, in was energy gas business business and X% our of

go this year, X% over we a little sales. oil gas, and probably year. about of that, this upstream As through of our Of just X/X halved that and it's is that's

thoughts. headwind this than any products. sector these from our the year. going $XX what least am business improving So and is that in expect count specialized We we the growing see headwind places, we looking expected double year, of at I to into in said it. honestly, oil I And a we rig it's we in pickup to is other have better start the October, it, maybe to business the It's mix into that. probably that gas. been million that don't pleased days our business said the partially more be more is and little But Whilst little significant for double offset a a at us for a are going going forward, it's built that

had. we margin have a more traditionally we So better than robust feel bit and it's would business

think So bottom. at we're I the

And on integration XXXX was Nexeo question the the step. second

you're not integration, on about of and beginning the cost at to bigger a side, side, on the other of benefits cost So $XX one million benefit of million, We talking at an end. of the to you $XX usually $XX have ratio million. see

also the that what's costs So can related program? are are there you in And us there in actually $XX I'm to just remind that SXX million? $XX some to million wondering,

There's of So comes last number benefits the of beginning there, part is costs in the It the can off don't terms from related a to -- I come when XXXX. systems. there mean, SXX aren't certainly, program. the of legacy turn it, IT big that the chunky to the we and benefits

never IT legacy ago, off I systems, long we keep environment IT that So to alive. have of and the you until can -- got the systems turn X% legacy up

So I can't big the benefit And final that's benefit shut or comes the until XXXX. big through. when that chunky down

quarter, last EBITDA a in you know, is further incremental there's as And that which $XX pickup million. Laurent, the in additive to XXXX

Laurence Our comes Jefferies. next from from question Alexander

-- Could think It's Dan Has a don't be? Laurence. the want it you with news where Or while on on I to I heard from pandemic? during Rizzo mean if we've is it provide color just here? it it wondering in you was ged for suppliers. I a slowed

quite the Dan, I What... didn't catch question. Sorry,

Agreements you suppliers provide the that. something past. you was highlighted if guys I with on in wondering color is can

more we we new used agreements be, complicated have or to we think now progress. announced the a making days it are good but Certainly, business I quarter. Well, is -- X in little X last these than

very a group customers. of that focused their ingredients benefit to will industry focused their end bring products have our chemistries and and all and verticals, for people in required and the We markets end are markets on dedicated

we business a part our team now group that as dedicated dedicated and on Solutions have Industrial of under Powell's and Solutions Consumer So a Nick leadership.

now also about this are they operate in So and suppliers new how normal. thinking --

slightly we prepared I accelerated So continue rate referenced as in see that the a make we've good think in more than to in we'll but XXXX remarks. XXXX, we seen progress

business ag. then about you what's I wondering was on Canadian line And divestitures. mentioned going Okay. with other potential

ongoing getting that's this wondering the going them, -- type color. you where not any Or Just to of Are of in are just you're it started? process. you is something obviously, was I kind is view Now Is completed? but name it almost thing?

that we part -- things divestitures. businesses. it's a We -- we're have that. contributes XXXX. that. well through that can other we helps would the It I get that Dan, precise I never to that. and science, do expect buying on think would track we're I to million on hope $XXX in early we least at business The Well, selling And flagged up of that ag considering. from with be

from question comes McCarthy Kevin next from Research Vertical Partners. Our

for Cory is Kevin. on This

ag deal it was As business, relates to if the what of idea maybe us give wondering of you on timing contributing. so the was I of could guidance can get what margin is the closing we and just EBITDA, of an kind the that some the

Yes.

million $XXX two filings, liquidated not broken Cory, being is about which, roughly time. business, distribution a as in ag our SEC revenue was lot said, business, So there's a the is EBITDA. over There's of we contributing out That businesses.

we've that million capital. It's we X/X that's The called accretive that targeting. million $XXX divestiture working details. that multiple. services the leverage this out it's not we're just kind to So week, $XX than proceeds the executed And total the business ag disclosing our of of just less we're basically of

good I for company think and outcome it's So a for the us.

costs Got that I it. logistics think you is for a guys? And risen. how like here. trending are domestic trending? just tack How But costs shipping different costs, shipping have slightly

ago. is Certainly, tighter was third-party a little it than few freight a months

effectiveness do of of most we So there own operating so on of our or freight our but -- have own not X/X fleet. freight can but freight, get our and fleet, that, at on is our most some tightness we our is

manage into I we we The the at third-party we freight is tight how work and moment. have because market prices that sweat are efficiencies fleet can am own But increasing we as And we glad brings assets and of our that that freight. down harder. this that consolidate can

Begleiter from Deutsche next from David Our Bank. question comes

This David. is on for Griffin Katherine

First, out of the some seems the just today, playing to we It much of guidance. quarterly expecting, touch bridge. like you were the better QX I that's wanted given guidance In with did than again. for items in on course, the QX,

the You normal shutdowns more seem negative like more bit a incrementally of potential just little given seasonality. and COVID-related

were and guess puts bridge think about for can and are the given where we things this I'm quarter from where to we 'XX the And you seeing takes some I of So about in 'XX upside? QX, that conservative? being as last like thought just that guidance curious,

chemical we I We're controlling we're and getting think that good good controlling I in we're control we're face, ingredient that I our in performed, Katherine, well. And very that Well, that growth very focusing markets I own the we that we difficulties in is share -- very not all QX, well. expenses business, and those just today. growth given on. core think, mean do our can think we face creditably And what all operate especially

months. locking think down. I had again, line December forward mindful we European closing always turned are markets we good of October, November our September. As QX, down. said are down, But of are already already with a They are in October we we look short some seasonally to and

well. geographies a incidence there's in rising other that cases mindful of are We as

not really we have happen. crystal or ball may great don't So what may about a

are hit. record confident as have we we we we think well. I think QX of that giving we I given that establish So feel guidance in can for a That's guidance -- tried track to what you

And I That's fair. call the to out as of of Okay. the was essential demand market related curious your in about -- COVID-XX. the decline end some

Sorry, can you me? hear

Katherine. you, hear can We Yes.

Okay.

Sorry. Yes.

Just -- across Is like we really little markets, just that kind is that like the out to more treatment? about the the that's the wanted of in sanitizer think call the sanitizers, essential headwind? a of should the water entirely applications bit that ask and decline sales, pharmaceutical how end about equally over-earning So COVID. -- like I

you up think kind central on we yesterday's into where should key related situation our simply a on sell today's markets think I called to comments better-than-normal about the of products we products able margin were to stock prices. on certain we and out it at make supply/demand quarter to X end that certain because Well, of key were able those

some And margin as into level prices demand won't still of that. for there's but more a balance. increase in be and we there are supply end but markets, essential be comes normalized there'll think back higher So demand --

about, And water so are we pharmaceutical, business in I clean, safe. markets spoke keep those that people treatment, mean to healthy and you

don't the to in in that products that won't demand, be those be that you but distort foresee markets QX. supply/demand way go balance in will those opportunity would there so the be margin or And the quite did we into won't there -- the still

comes Michael from question McGinn. Our next

McGinn Mike quarter. McGinn. on for Good Mike

have you like a market, in end you framework. the -- then favorable had it is wanted a the year's market but to EBITDA, essential end with looks that just put mean mentioned I headwind. comp point the you finer uptick So next synergies divestment the the I -- XXXX offsetting in on the

are confirming correct? guys that expecting in EBITDA that be year-over-year Is just up XXXX. to So you

we're at February guidance give not look some comes What we the elements giving when moment, to on call. on the that. we're XXXX at XXXX. guidance Well, our it trying to We'll you do thinking as into give is

any growth are to? Is it railcar what you guys end Okay. manufacturers calling major with is in industrial benchmarking chemical volumes? growing market, But the you on market metrics internally? are or out that Can maybe the what production? line -- the Chem

and of key what But look production and I to us. think mean for industrial are variety Yes. happen. it's They're view drivers mean GDP production. to the GDP we we are metrics a industrial on look. try at a going and kind people of I get things that whole

have to Okay. in And difference the there in Is some IOCs I of consolidation general you where with And if positioned you're operators? energy just your more whether general smaller then can noticeable refining. one industry between thoughts larger sneak then or exposure, some exposure on your any larger on you're and players?

remember few out some may that of you we kind of away as extricated ourselves a from Mike, backed the players of of the Well, years some ago markets. larger we energy

ago. couple would have we had we a with have it's players, the larger much -- years business a So we still of of have but level lower some

where we within Solutions, longer we some is marketplace, But because markets, of refinery about of are for grow really and marketplace. there's how our a it's And place business a overall, going some carefully and underfunding. there about Solutions, industrial certainly, consolidation there can kind ability us which feel to think I those grow are to in other at Consumer -- our feel the across we of very in general be energy Industrial that clearly, focus very is in look and difficulty much markets retain debt one kind very, outstanding and more the then confident place term. we robust some that we that's that confident specialty that

Instructions]. [Operator

from from Burlton Our Berenberg. next comes Tom question

points couple follow-up really. of me a Just for

relates you to XXXX very gave as EBITDA. First around the helpful adjusted us those points one

the as go savings getting expansion You missed year. cost around that sort called of million that prior the margin crystalized it particular, $XX of you're apologies the And I a if the sense savings year, give comment could into this you've you out SXX wondered which half XXXX. if of just related in -- cost -- you your of thinking target. of us boasting about quantum towards I for

going on this So just on year-over-year around as follow-up estimate into 'XX? some run sort quantifying then please? of the XXXX, helpfully ended sort point head into And any sort of we energy, you sort appreciate headwind the of that's I an see ever of gave And us a cost energy of that savings for headwind But the the business. world as as we you shrinking year. part best the of the rate today? what's guidance

Sure, Tom. Thanks.

savings, you if we're the cost that think pieces. bits you give some I to at look trying and

for doing on can that market. and ahead and we grow of moment plans. trying that hard our general XXXX we're because So our at really the budgets 'XX a to our We're not maths nail still view least our at internal down number and

$XX savings, of of those would you into the least million at million million If the think reoccur -- $XX year. about I cost following $XX mean

costs than So gone which have are rather those costs we just think which are flexed.

going And our our a in so number of thinking of part -- you can that have it's as at we forward. number kind look

a pieces differentiated energy chemistries. don't more We see Solutions. of do Univar energy the those interesting we of the terms In really growth energy have as some market, being market, for market

We have work who technical a things. of and kind those technicians team experts of on

But safely. chemicals -- market like of the in nor growth safely markets, really business, robust So house much operating a more staffing Solutions market. better it's of We've markets growth local that leverage back staffing that. don't We growing kind some lubricants food, see robust get markets, we energy share see coatings, the incredibly pharma, are more we we handle Consumer markets other don't those What we in as energy our through we business as bounce for markets, within care, -- the resilient those a got more have are just now assets, Solutions some can is assets. through though personal expect much and for opportunities chemicals Industrial we assets. good incredibly network well cleaning, and those like to fabulous or

that local as our So business business. we're as services well as very well focused on

we And our other oil growth good really just for on places. lots really anymore. aren't betting and opportunities of the bubble see chips we gas in all So

like turn for Kos This comments. our call. would Q&A final it to back And Heather to portion the concludes of I

Thank Solutions. you, Univar for in gentlemen, interest ladies and your

the out If to please team. you have today's does Relations questions, conclude Investor This any reach call. follow-up

Thank you. participating. again this call. you Thank the gentlemen, conference conclude Ladies and for once indeed does

You may disconnect. now