Univar Solutions Inc.

Q4 2022 adjusted EPS was $0.47, down from $0.60 in Q4 2021. Full-year adjusted EPS was $3.40, up 53% year over year. Q4 cash from operations was $376 million; full-year cash from operations was $546 million, up 88% year over year. Q4 adjusted EBITDA was $175 million, and full-year adjusted EBITDA exceeded $1 billion. Q4 sales on a constant-currency basis were up approximately 7%, while gross profit was down 2.5%; for the full year, constant-currency sales were up 24% and gross profit was up 19%. Management guided to Q1 2023 adjusted EBITDA of $200 million-$220 million and full-year 2023 adjusted EBITDA of $900 million-$930 million. They also guided to 2023 adjusted EBITDA margins of 8.2%-8.4%, net free cash flow of $435 million, capital expenditures of about $155 million, and year-end net working capital of 14.0%-14.5% of annualized quarterly sales.

David Jukes framed 2022 as evidence that the company’s transformation is working, saying Univar is now a leading value-added solutions provider with growth across healthcare, nutrition, electronics, and other end markets. He emphasized the company’s customer-centric model, strong ROIC, and disciplined capital allocation, and highlighted that the business is better positioned to handle a weaker macro backdrop than in the past. His tone was confident but measured, especially when discussing 2023, where he stressed continued destocking and softer demand before a return to margin expansion over time.

Nick Alexos said the quarter reflected solid sales growth but lower gross profit because customer destocking and higher cost of goods sold outweighed pricing benefits, especially in the U.S. and EMEA. He cited Q4 adjusted EBITDA of $175 million, full-year adjusted EPS of $3.40, full-year operating cash flow of $546 million, leverage of 2.0x, and ROIC of 20.7%. He also pointed to $409 million returned to shareholders in 2022, about $40 million of annual cost savings expected in 2023, $155 million of capex, and $435 million of estimated 2023 net free cash flow, with 30% of debt floating rate and higher interest expense expected.

Analysts focused on destocking, pricing versus raw materials, the mix shift between Ingredients & Specialties and Chemical & Services, and capital allocation. Management said Q4 destocking likely reduced EBITDA by about $25 million, volumes were down, and no exceptional pricing profit is assumed in 2023 guidance. On M&A, they said the two announced acquisitions are not included in guidance on a proceeds basis, but could add about $10 million-$15 million on a reported basis, with roughly $20 million-$25 million on a full-year basis depending on timing. On the dividend and the transaction review, management declined to comment on any potential deal timing and said the board is still assessing a dividend, with no current commitment beyond continuing to evaluate it.