UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 10, 2018
 
Univar Inc.
(Exact name of registrant as specified in its charter)

 

					
 	 	 	 	 	
Delaware	 	001-37443	 	26-1251958	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(I.R.S Employer
Identification No.)	
 	 	
3075 Highland Parkway, Suite 200
Downers Grove, IL 60515	
(Address of principal executive offices, including zip code)	

Registrant’s telephone number, including area code: (331) 777-6000

Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

¨ Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

	
		
Item 2.02	Results of Operations and Financial Condition	
On May 10, 2018 , Univar Inc. (the “Company”) announced its consolidated financial results for the quarter ended March 31, 2018 . A copy of the Company’s press release and related presentation are furnished herewith on Form 8-K as Exhibits 99.1 and 99.2, respectively. The information contained in Item 2.02, including Exhibit 99.1 and Exhibit 99.2, of this report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and it will not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.

	
		
Item 9.01	Financial Statements and Exhibits	
(d) Exhibits

			
 	 	 	
Exhibit
Number	  	Description	
 	 	 	
99.1	  	Univar Inc. Press Release dated May 10, 2018	
99.2	 	Univar Inc. Fiscal First Quarter 2018 Earnings Presentation dated May 10, 2018	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	

Date: May 10, 2018	 	 	 	Univar Inc.	
 	 	 	 	
 	 	 	 	By:	 	/s/ Jeffrey W. Carr	
 	 	 	 	Name:	 	Jeffrey W. Carr	
 	 	 	 	Title:	 	Senior Vice President, General Counsel and Secretary	

PRESS RELEASE

	
	
FOR ADDITIONAL INFORMATION:	
Investor Relations	
David Lim	
+1 844-632-1060	
IR@univar.com	

Univar Reports 2018 First Quarter Financial Results

First Quarter 2018 Highlights

•	Univar reported net income of $65.4 million , or $0.46 per share, compared to $22.6 million , or $0.16 per share in the prior year first quarter.	

•	Adjusted earnings per share grew 44.8 percent to $0.42 per share from $0.29 per share in the prior year first quarter.	

•	Adjusted EBITDA grew 18.9 percent to $166.3 million driven by solid core business performance, effective operating cost controls, and favorable foreign currency impacts.	

•	Consolidated sales increased 8.0 percent, and gross profit grew 10.7 percent.	

•	All segments reported higher gross profit and double digit EBITDA growth from strong operating leverage.	

•	Univar's leverage ratio improved to 4.2x from 4.9x in the prior year first quarter reflecting growth in Adjusted EBITDA and a $146 million reduction in net debt.	

DOWNERS GROVE, Ill. – May 10, 2018 – Univar Inc. (NYSE: UNVR) (“Univar”), a global chemical and ingredients distributor and provider of value-added services, announced today its financial results for the first quarter ended March 31, 2018 .

Univar reported net income of $65.4 million , or $0.46 per share, compared to net income of $22.6 million , or $0.16 per share, in the first quarter of 2017. Adjusted earnings per share increased 44.8 percent to $0.42 per share from $0.29 per share in the prior year first quarter.

Adjusted EBITDA grew 18.9 percent to $166.3 million from $139.9 million in the first quarter last year and Adjusted EBITDA margin expanded 70 basis points to 7.7 percent reflecting higher gross profit, effective cost management and operating leverage despite increasing investments in sales force, operational and digital initiatives.

Consolidated sales increased 8.0 percent while gross profit grew 10.7 percent to $486.6 million largely due to improvements in the Company's sales force effectiveness, change in product and market mix, chemical price inflation, and favorable foreign currency impacts.
 
“We are pleased with the momentum we are building as demonstrated by our rising profitability and growth over the past few quarters,” said David Jukes, president and chief executive officer. "We have much work ahead of us, particularly in the US, but our teams are energized by excellent growth oppor

tunities as we continue transforming into a company that exceeds our customers’ and suppliers’ expectations, and delivers sustainable double digit profitability growth."

"Our prescription for growth continues to be exceptional execution against our three strategic priorities: Commercial Greatness, Operational Excellence and One Univar,” added Carl Lukach, executive vice president and chief financial officer. “We will be disciplined in making targeted, high return investments in our people, operations and acquisitions, while continuing to strengthen our balance sheet.”

Company Performance
The results of Univar's operating performance are described below and, unless otherwise indicated, are a comparison of first quarter 2018 results with first quarter 2017 results, including Adjusted EBITDA, which is reconciled to reported net income in the accompanying supplemental financial information.

	
																			
 	 	(Unaudited)	 	 	 	 	 	 	
 	 	Three months ended March 31,	 	 	 	 	 	% change	
(in millions)	 	2018	 	2017	 	$ change	 	% change	 	excl. currency	
 	 	 	 	 	 	 	 	 	 	 	
External Net Sales	 	 	 	 	 	 	 	 	 	 	
USA	 	$	1,204.4		 	$	1,150.9		 	$	53.5		 	4.6	 %	 	4.6	 %	
Canada	 	313.4		 	307.3		 	6.1		 	2.0	 %	 	(2.6	)%	
EMEA	 	538.6		 	439.7		 	98.9		 	22.5	 %	 	7.6	 %	
Rest of World	 	101.6		 	100.9		 	0.7		 	0.7	 %	 	(3.3	)%	
Total Consolidated Net Sales	 	$	2,158.0		 	$	1,998.8		 	$	159.2		 	8.0	 %	 	3.8	 %	
 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	 	 	 	 	 	 	 	 	
USA	 	$	278.9		 	$	262.9		 	$	16.0		 	6.1	 %	 	6.1	 %	
Canada	 	62.4		 	55.8		 	6.6		 	11.8	 %	 	6.8	 %	
EMEA	 	124.0		 	101.8		 	22.2		 	21.8	 %	 	6.6	 %	
Rest of World	 	21.3		 	18.9		 	2.4		 	12.7	 %	 	9.5	 %	
Total Consolidated Gross Profit	 	$	486.6		 	$	439.4		 	$	47.2		 	10.7	 %	 	6.5	 %	
 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	 	 	 	 	 	 	 	 	
USA	 	$	91.2		 	$	81.3		 	$	9.9		 	12.2	 %	 	12.2	 %	
Canada	 	29.5		 	24.6		 	4.9		 	19.9	 %	 	14.6	 %	
EMEA	 	44.7		 	33.7		 	11.0		 	32.6	 %	 	16.3	 %	
Rest of World	 	7.8		 	6.7		 	1.1		 	16.4	 %	 	13.4	 %	
Other*	 	(6.9	)	 	(6.4	)	 	(0.5	)	 	(7.8	)%	 	(7.8	)%	
Total Consolidated Adjusted EBITDA	 	$	166.3		 	$	139.9		 	$	26.4		 	18.9	 %	 	13.9	 %	
* Other represents unallocated corporate costs that do not directly benefit segments.

Segment Highlights

USA – Adjusted EBITDA increased 12.2 percent to $91.2 million , the fifth consecutive quarter of growth. USA segment sales grew 4.6 percent and gross margin increased 40 basis points to 23.2 percent as a result of improved sales force execution, mix enrichment, and a net benefit from miscellaneous operating items. Adjusted EBITDA margin expanded 50 basis points to 7.6 percent, reflecting higher gross margin and operating leverage to the bottom line from strong expense management.

Canada – Adjusted EBITDA increased 19.9 percent to $29.5 million , and Adjusted EBITDA margin expanded 140 basis points to 9.4 percent, as a result of strong performance in our Industrial Chemical business, strength in Western Canada, tight operating expense management and the benefit of favorable foreign exchange rates. Excluding the impact of currency, Adjusted EBITDA grew 14.6 percent. Gross margin increased 170 basis points to 19.9 percent driven largely by a change in product and market mix.

EMEA – Adjusted EBITDA increased 32.6 percent to $44.7 million due to double digit growth in Focused Industries, solid growth in Local Chemical Distribution, as well as favorable foreign exchange rates. Excluding the impact of currency, Adjusted EBITDA grew 16.3 percent. Adjusted EBITDA margin expanded 60 basis points to 8.3 percent as a result of strong expense management. Gross margin decreased 20 basis points to 23.0 percent, largely due to a change in product and market mix.

Rest of World – Adjusted EBITDA grew $ 1.1 million , or 16.4 percent to $7.8 million driven by growth in Brazil and Asia Pacific. Higher average selling prices and mix improvement led to an increase in profitability. Gross margin increased 230 basis points to 21.0 percent and Adjusted EBITDA margin expanded 110 basis points to 7.7 percent.

Adoption of New Accounting Pronouncements

The Company adopted ten new accounting pronouncements during the three months ended March 31, 2018 , which included two pronouncements that had an impact to prior year information.

As of January 1, 2018, Univar retrospectively adopted a required accounting standard change related to the accounting for pension and other postretirement benefit cost (“retirement costs”). Under this new standard, the Company will continue to report the service component of retirement cost in operating costs and the non-service components of retirement costs will be reported below operating income. Retrospective adoption of the accounting standard resulted in a restatement of the 2017 financial statements, which had no impact on net income but reduced Adjusted EBITDA by approximately $2.4 million for the three months ended March 31, 2017 .
 
The Company also adopted an accounting pronouncement that changes the classification of certain items within the condensed consolidated statement of cash flows. Univar applied the new accounting pronouncement retrospectively, and reclassified $3.2 million of contingent consideration cash payments for acquisitions previously reported as operating activities to financing activities within the condensed consolidated statement of cash flows for the three months ended March 31, 2017 .

Outlook

The Company continues to make progress with disciplined execution against its strategic initiatives while making prudent, targeted investments into its sales force, operations and digitization to drive growth and efficiency gains. For the full year 2018, Univar remains on track to deliver low double digit growth in Adjusted EBITDA and is increasing its outlook for Adjusted earnings per share to a range of $1.65 and $1.85.

For the second quarter of 2018, Univar expects the solid core business performance of its first quarter to continue, but with growth tempered by a weather-induced delay in demand from the Canadian agriculture market compared to last year, as well as higher global freight costs. Overall, the Company expects high single digit Adjusted EBITDA growth in the second quarter.

Univar to Host Webcast on May 10, 2018 at 9:00 a.m. EDT

The Company will host a webcast with investors to discuss the first quarter results at 9:00 a.m. ET on May 10, which can be accessed on the Investor Relations section of its website at http://investor.univar.com . Following the event, an archived version of the webcast and supporting materials will be available on the same website.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted earnings per share

The Company monitors the results of its operating segments separately for the purposes of making decisions about resource allocation and performance assessment. The Company evaluates performance on the basis of Adjusted EBITDA, which it defines as its consolidated net income (loss), plus the sum of interest expense, net of interest income, income tax expense (benefit), depreciation, amortization, other operating expenses, net (which primarily consists of employee stock-based compensation expense, restructuring charges, other employee termination costs, business optimization, acquisition and integration related expenses, and other unusual or non-recurring expenses), loss on extinguishment of debt and other income (expense), net (which consists of gains (losses) on foreign currency transactions and undesignated derivative instruments, debt amendment costs, non-operating retirement benefits, and other non-operating activity). Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA conversion ratio is Adjusted EBITDA as a percentage of
Gross Profit. The Company believes that Adjusted EBITDA is an important indicator of operating performance because:

•	The Company reports Adjusted EBITDA to its lenders as required under the covenants of its credit agreements;	
		
•	The Company considers gains (losses) on the acquisition, disposal and impairment of assets as resulting from investing decisions rather than ongoing operations;	
		
•	Adjusted EBITDA excludes the effects of income taxes, as well as the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization expenses and therefore more closely measures our operational performance;	
		
•	The Company uses Adjusted EBITDA in setting performance incentive targets in order to align performance measurement with operational performance; and	
		
•	Other significant items, while periodically affecting the Company’s results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of its results.	

The Company has incorporated an Adjusted net income and Adjusted earnings per share metric as a complementary metric to GAAP earnings per share to provide additional transparency to ongoing performance. Adjusted net income excludes the same items as Adjusted EBITDA, except for stock-based compensation expense and non-operating retirement benefits.

Use of Non-GAAP Measures

The Company’s management believes that certain financial measures that do not comply with accounting principles generally accepted in the United States (“GAAP”) provide relevant and meaningful information concerning the ongoing operating results of the Company. Such non-GAAP financial measures are used from time to time herein but should not be viewed as a substitute for GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in Schedules A and D.

About Univar 
Founded in 1924, Univar (NYSE: UNVR) is a global chemical and ingredients distributor and provider of value-added services, working with leading suppliers worldwide. Supported by a comprehensive team of sales and technical professionals with deep specialty and market expertise, Univar operates hundreds of distribution facilities throughout North America, Western Europe, Asia-Pacific and Latin America. Univar delivers tailored customer solutions through a broad product and services portfolio sustained by one of the most extensive industry distribution networks in the world. For more information, visit www.univar.com.

Forward-Looking Statements
 
This press release includes certain statements relating to future events and our intentions, beliefs, expectations, and predictions 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. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. 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,” “comfortable with,” “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 we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

###

Univar Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	
									
 	 	Three months ended
March 31,	
(in millions, except per share data)	 	2018	 	2017	
Net sales	 	$	2,158.0		 	$	1,998.8		
Cost of goods sold	 	1,671.4		 	1,559.4		
Gross profit	 	$	486.6		 	$	439.4		
Operating expenses:	 	 	 	 	
Outbound freight and handling	 	79.3		 	71.0		
Warehousing, selling and administrative	 	241.0		 	228.5		
Other operating expenses, net	 	13.6		 	19.8		
Depreciation	 	31.4		 	35.9		
Amortization	 	13.4		 	16.7		
Total operating expenses	 	$	378.7		 	$	371.9		
Operating income (loss)	 	$	107.9		 	$	67.5		
Other (expense) income:	 	 	 	 	
Interest income	 	1.2		 	0.9		
Interest expense	 	(36.1	)	 	(36.7	)	
Loss on extinguishment of debt	 	—		 	(0.8	)	
Other income (expense), net	 	2.6		 	(6.7	)	
Total other expense	 	$	(32.3	)	 	$	(43.3	)	
Income before income taxes	 	75.6		 	24.2		
Income tax expense	 	10.2		 	1.6		
Net income	 	$	65.4		 	$	22.6		
Income per common share:	 	 	 	 	
Basic	 	$	0.46		 	$	0.16		
Diluted	 	0.46		 	0.16		
Weighted average common shares outstanding:	 	 	 	 	
Basic	 	140.9		 	139.4		
Diluted	 	142.0		 	140.8		

Univar Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

	
									
(in millions, except per share data)	 	March 31,
2018	 	December 31,
2017	
Assets	 	 	 	 	
Current assets:	 	 	 	 	
Cash and cash equivalents	 	$	115.9		 	$	467.0		
Trade accounts receivable, net	 	1,288.5		 	1,062.4		
Inventories	 	921.9		 	839.5		
Prepaid expenses and other current assets	 	174.6		 	149.6		
Total current assets	 	$	2,500.9		 	$	2,518.5		
Property, plant and equipment, net	 	983.8		 	1,003.0		
Goodwill	 	1,809.2		 	1,818.4		
Intangible assets, net	 	279.0		 	287.7		
Deferred tax assets	 	30.3		 	22.8		
Other assets	 	91.1		 	82.3		
Total assets	 	$	5,694.3		 	$	5,732.7		
Liabilities and stockholders’ equity	 	 	 	 	
Current liabilities:	 	 	 	 	
Short-term financing	 	$	8.5		 	$	13.4		
Trade accounts payable	 	1,011.7		 	941.7		
Current portion of long-term debt	 	20.5		 	62.0		
Accrued compensation	 	74.6		 	100.7		
Other accrued expenses	 	330.7		 	301.6		
Total current liabilities	 	$	1,446.0		 	$	1,419.4		
Long-term debt	 	2,683.5		 	2,820.0		
Pension and other postretirement benefit liabilities	 	252.5		 	257.1		
Deferred tax liabilities	 	45.8		 	35.4		
Other long-term liabilities	 	100.8		 	110.7		
Total liabilities	 	$	4,528.6		 	$	4,642.6		
Stockholders’ equity:	 	 	 	 	
Preferred stock, 200.0 million shares authorized at $0.01 par value with no shares issued or outstanding as of March 31, 2018 and December 31, 2017	 	—		 	—		
Common stock, 2.0 billion shares authorized at $0.01 par value with 141.3 million and 141.1 million shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	 	1.4		 	1.4		
Additional paid-in capital	 	2,308.8		 	2,301.3		
Accumulated deficit	 	(868.4	)	 	(934.1	)	
Accumulated other comprehensive loss	 	(276.1	)	 	(278.5	)	
Total stockholders’ equity	 	$	1,165.7		 	$	1,090.1		
Total liabilities and stockholders’ equity	 	$	5,694.3		 	$	5,732.7		

Univar Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	
									
 	 	Three months ended
March 31,	
(in millions)	 	2018	 	2017	
Operating activities:	 	 	 	 	
Net income	 	$	65.4		 	$	22.6		
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	
Depreciation and amortization	 	44.8		 	52.6		
Amortization of deferred financing fees and debt discount	 	2.0		 	2.0		
Loss on extinguishment of debt	 	—		 	0.8		
Deferred income taxes	 	(3.0	)	 	(3.3	)	
Stock-based compensation expense	 	9.4		 	6.4		
Other	 	0.4		 	0.5		
Changes in operating assets and liabilities:	 	 	 	 	
Trade accounts receivable, net	 	(219.4	)	 	(142.4	)	
Inventories	 	(80.1	)	 	(66.4	)	
Prepaid expenses and other current assets	 	(14.1	)	 	(18.9	)	
Trade accounts payable	 	67.3		 	79.9		
Pensions and other postretirement benefit liabilities	 	(11.6	)	 	(9.0	)	
Other, net	 	(0.1	)	 	(1.9	)	
Net cash used by operating activities	 	$	(139.0	)	 	$	(77.1	)	
Investing activities:	 	 	 	 	
Purchases of property, plant and equipment	 	$	(16.2	)	 	$	(20.9	)	
Purchases of businesses, net of cash acquired	 	(8.9	)	 	(0.5	)	
Proceeds from sale of property, plant, and equipment	 	2.2		 	—		
Other	 	—		 	(0.3	)	
Net cash used by investing activities	 	$	(22.9	)	 	$	(21.7	)	
Financing activities:	 	 	 	 	
Proceeds from issuance of long-term debt	 	$	141.8		 	$	2,264.0		
Payments on long-term debt and capital lease obligations	 	(320.1	)	 	(2,211.5	)	
Short-term financing, net	 	(6.6	)	 	(5.2	)	
Financing fees paid	 	—		 	(4.4	)	
Taxes paid related to net share settlements of stock-based compensation awards	 	(2.7	)	 	(6.0	)	
Stock option exercises	 	0.8		 	23.8		
Contingent consideration payments	 	—		 	(3.2	)	
Net cash (used) provided by financing activities	 	$	(186.8	)	 	$	57.5		
Effect of exchange rate changes on cash and cash equivalents	 	$	(2.4	)	 	$	5.5		
Net decrease in cash and cash equivalents	 	(351.1	)	 	(35.8	)	
Cash and cash equivalents at beginning of period	 	467.0		 	336.4		
Cash and cash equivalents at end of period	 	$	115.9		 	$	300.6		

Schedule A
Univar Inc.
Reconciliation of Adjusted EBITDA to Reported Net Income
(Unaudited)

	
																									
(in millions)	 	USA	 	Canada	 	EMEA	 	Rest of
World	 	Other/
Eliminations	 	Consolidated	
Three Months Ended March 31, 2018	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales:	 	 	 	 	 	 	 	 	 	 	 	 	
External customers	 	$	1,204.4		 	$	313.4		 	$	538.6		 	$	101.6		 	$	—		 	$	2,158.0		
Inter-segment	 	35.1		 	2.0		 	1.4		 	0.1		 	(38.6	)	 	—		
Total net sales	 	$	1,239.5		 	$	315.4		 	$	540.0		 	$	101.7		 	$	(38.6	)	 	$	2,158.0		
Cost of goods sold	 	960.6		 	253.0		 	416.0		 	80.4		 	(38.6	)	 	1,671.4		
Gross profit	 	$	278.9		 	$	62.4		 	$	124.0		 	$	21.3		 	$	—		 	$	486.6		
Outbound freight and handling	 	49.9		 	10.4		 	17.0		 	2.0		 	—		 	79.3		
Warehousing, selling and administrative	 	137.8		 	22.5		 	62.3		 	11.5		 	6.9		 	241.0		
Adjusted EBITDA	 	$	91.2		 	$	29.5		 	$	44.7		 	$	7.8		 	$	(6.9	)	 	$	166.3		
Other operating expenses, net	 	 	 	 	 	 	 	 	 	 	 	13.6		
Depreciation	 	 	 	 	 	 	 	 	 	 	 	31.4		
Amortization	 	 	 	 	 	 	 	 	 	 	 	13.4		
Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	34.9		
Other income, net	 	 	 	 	 	 	 	 	 	 	 	(2.6	)	
Income tax expense	 	 	 	 	 	 	 	 	 	 	 	10.2		
Net income	 	 	 	 	 	 	 	 	 	 	 	$	65.4		
Total assets	 	$	3,356.1		 	$	1,821.5		 	$	1,034.0		 	$	247.4		 	$	(764.7	)	 	$	5,694.3		

																									
(in millions)	 	USA	 	Canada	 	EMEA	 	Rest of
World	 	Other/
Eliminations	 	Consolidated	
Three Months Ended March 31, 2017	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales:	 	 	 	 	 	 	 	 	 	 	 	 	
External customers	 	$	1,150.9		 	$	307.3		 	$	439.7		 	$	100.9		 	$	—		 	$	1,998.8		
Inter-segment	 	31.2		 	1.8		 	1.3		 	0.1		 	(34.4	)	 	—		
Total net sales	 	$	1,182.1		 	$	309.1		 	$	441.0		 	$	101.0		 	$	(34.4	)	 	$	1,998.8		
Cost of goods sold	 	919.2		 	253.3		 	339.2		 	82.1		 	(34.4	)	 	1,559.4		
Gross profit	 	$	262.9		 	$	55.8		 	$	101.8		 	$	18.9		 	$	—		 	$	439.4		
Outbound freight and handling	 	46.8		 	9.2		 	13.4		 	1.6		 	—		 	71.0		
Warehousing, selling and administrative	 	134.8		 	22.0		 	54.7		 	10.6		 	6.4		 	228.5		
Adjusted EBITDA	 	$	81.3		 	$	24.6		 	$	33.7		 	$	6.7		 	$	(6.4	)	 	$	139.9		
Other operating expenses, net	 	 	 	 	 	 	 	 	 	 	 	19.8		
Depreciation	 	 	 	 	 	 	 	 	 	 	 	35.9		
Amortization	 	 	 	 	 	 	 	 	 	 	 	16.7		
Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	35.8		
Loss on extinguishment of debt	 	 	 	 	 	 	 	 	 	 	 	0.8		
Other expense, net	 	 	 	 	 	 	 	 	 	 	 	6.7		
Income tax expense	 	 	 	 	 	 	 	 	 	 	 	1.6		
Net income	 	 	 	 	 	 	 	 	 	 	 	$	22.6		
Total assets	 	$	3,640.2		 	$	1,975.5		 	$	908.2		 	$	227.9		 	$	(1,155.8	)	 	$	5,596.0		

Schedule B
Univar Inc.
Other operating expenses, net
(Unaudited)

									
 	 	Three months ended
March 31,	
(in millions)	 	2018	 	2017	
Stock-based compensation expense	 	$	9.4		 	$	6.4		
Restructuring charges	 	0.5		 	1.7		
Other employee termination costs	 	2.4		 	1.7		
Business transformation costs	 	—		 	9.1		
Acquisition and integration related expenses	 	0.4		 	0.2		
Other	 	0.9		 	0.7		
Total other operating expenses, net	 	$	13.6		 	$	19.8		

Schedule C
Univar Inc.
Other income (expense), net
(Unaudited)

									
 	 	Three months ended
March 31,	
(in millions)	 	2018	 	2017	
Foreign currency transactions	 	$	(0.1	)	 	$	(2.1	)	
Foreign currency denominated loans revaluation	 	1.2		 	(3.0	)	
Undesignated foreign currency derivative instruments	 	(1.3	)	 	1.0		
Debt amendment costs	 	—		 	(4.2	)	
Non-operating retirement benefits	 	3.5		 	2.4		
Other	 	(0.7	)	 	(0.8	)	
Total other income (expense), net	 	$	2.6		 	$	(6.7	)	

Schedule D
Univar Inc.
GAAP Net Income to Adjusted Net Income and Adjusted EBITDA Tabular reconciliations
(Unaudited)

																	
 	 	Three months ended
March 31,	
 	 	2018	 	2017	
(in millions, except per share data)	 	Amount	 	per share (1)	 	Amount	 	per share (1)	
Net income	 	$	65.4		 	$	0.46		 	$	22.6		 	$	0.16		
Exchange (gain) loss (2)	 	(1.1	)	 	(0.01	)	 	5.1		 	0.04		
Derivative (gain) loss (2)	 	1.3		 	0.01		 	(1.0	)	 	(0.01	)	
Transformation costs (2)	 	—		 	—		 	9.1		 	0.06		
Restructuring charges (2)	 	0.5		 	—		 	1.7		 	0.01		
Other employee termination costs (2)	 	2.4		 	0.02		 	1.7		 	0.01		
Debt amendment costs (2)	 	—		 	—		 	4.2		 	0.03		
Loss on extinguishment of debt	 	—		 	—		 	0.8		 	0.01		
Acquisition and integration related costs (2)	 	0.4		 	—		 	0.2		 	—		
Other (2)	 	1.6		 	0.01		 	1.5		 	0.01		
Benefit from income taxes related to reconciling items (3)(4)	 	(1.3	)	 	(0.01	)	 	(5.1	)	 	(0.03	)	
Other non-recurring tax items (3)	 	(9.0	)	 	(0.06	)	 	—		 	—		
Adjusted net income	 	$	60.2		 	$	0.42		 	$	40.8		 	$	0.29		
Stock-based compensation expense	 	9.4		 	 	 	6.4		 	 	
Non-operating retirement benefits (6)	 	(3.5	)	 	 	 	(2.4	)	 	 	
Interest expense, net	 	34.9		 	 	 	35.8		 	 	
Depreciation	 	31.4		 	 	 	35.9		 	 	
Amortization	 	13.4		 	 	 	16.7		 	 	
All remaining provision for income taxes (3)	 	20.5		 	 	 	6.7		 	 	
Adjusted EBITDA	 	$	166.3		 	 	 	$	139.9		 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	140.9		 	 	 	139.4		 	 	
Diluted (5)	 	142.0		 	 	 	140.8		 	 	

	

(1)	Calculation based on dilutive share count.	
		
(2)	Reconciling items represent items disclosed in Schedule B and Schedule C included in this document, excluding stock-based compensation and non-operating retirement benefits.	
		
(3)	Total benefit from income taxes reconciles to the amount reported in the Condensed Consolidated Statement of Operations for each respective period. Tax on reconciling items is calculated using the effective tax rate adjusted for significant non-recurring tax items.	
		
(4)	Immaterial differences may exist in summation of per share amounts due to rounding.	
		
(5)	Diluted earnings per share is calculated using net income (loss) or adjusted net income (loss) available to common shareholders divided by diluted weighted average shares outstanding during each period, which includes unvested restricted shares. Diluted earnings per share considers the impact of potential dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.	
		
(6)	Includes the non-operating retirement benefit items currently disclosed in Schedule C. These items were previously reported in warehouse, selling and administrative (operating expenses) that have moved to other income (expense), net as part of the adoption of the FASB retirement benefits accounting pronouncement.	

First Quarter 2018 Earnings Call May 10, 2018

 

Forward-Looking Statements This presentation includes certain statements relating to future events and our intentions, beliefs, expectations, and predictions 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. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this presentation 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 presentation. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook," "guidance," “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negatives or variations of these terms. Forward-looking information contained in this presentation is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward- looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. Regulation G: Non-GAAP Measures The information presented herein regarding certain unaudited non-GAAP measures does not conform to generally accepted accounting principles in the United States (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Univar has included this non- GAAP information to assist in understanding the operating performance of the company and its operating segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information related to previous Univar filings with the SEC has been reconciled with reported U.S. GAAP results. 2

 

First Quarter 2018 Highlights Strong start to the year Q1 GAAP EPS(1) $0.46 vs. $0.16 prior year Ÿ Reported net income of $65.4 million vs. $22.6 million in the prior year Q1 Adjusted EPS(1)(2) $0.42 vs. $0.29 prior year Ÿ Adjusted EPS growth of 45% Ÿ Reported adjusted net income of $60.2 million vs. $40.8 million in the prior year Q1 Adjusted EBITDA(1) $166.3 million vs. $139.9 million in 2017 Ÿ 19% Adjusted EBITDA growth driven by double digit growth in all segments Ÿ Solid core business performance, especially outside the USA Ÿ Strong cost controls and favorable foreign currency translation Ÿ Net benefit from miscellaneous operating items Adjusted Operating Cash Flow(1)(3) ($82.1) million vs. ($9.9) million in 2017 Ÿ Reflects seasonal increase in net working capital, amplified by higher sales, and higher net working capital in Canada Ag (1) Variances to Q1 2017. (2) Adjusted Net Income / Diluted Weighted Average Shares Outstanding. Adjusted net income excludes the same items as Adjusted EBITDA, except for stock-based compensation expense and non-operating retirement benefits. (3) Adjusted EBITDA plus cash flows from changes in accounts receivable, inventory, and accounts payable, less capital expenditures. 3

 

Univar – Consolidated Highlights Improving execution ($ in millions) KEY METRICS drives profitable growth Three months ended 2018 2017 Y/Y • Win/loss ratios improving March 31, • Favorable product and market mix Net Sales $2,158.0 $1,998.8 8.0% drive margin expansion Currency Neutral -- -- 3.8% • EBITDA margin and conversion ratios increased Gross Profit $486.6 $439.4 10.7% • Will reinvest operational productivity Currency Neutral -- -- 6.5% savings into sales force and digital Gross Margin 22.5% 22.0% +50 bps initiatives Adjusted EBITDA $166.3 $139.9 18.9% Currency Neutral -- -- 13.9% Adjusted EBITDA Margin 7.7% 7.0% +70 bps Conversion Ratio (1) 34.2% 31.8% +240 bps (1) Conversion Ratio defined as Adjusted EBITDA / Gross Profit. 4

 

USA – Highlights USA transformation in ($ in millions) KEY METRICS early phase Three months ended 2018 2017 Y/Y • Adjusted EBITDA growth driven by March 31, sales force execution, mix enrichment and net one-off benefit Net Sales $1,204.4 $1,150.9 4.6% • Strong operating expense Gross Profit $278.9 $262.9 6.1% management • Managing through a tight freight Gross Margin 23.2% 22.8% +40 bps market • Targeted investments in sales force Adjusted EBITDA $91.2 $81.3 12.2% and digital initiatives Adjusted EBITDA Margin 7.6% 7.1% +50 bps 5

 

CANADA – Highlights Strength in Industrial ($ in millions) KEY METRICS Chemicals and Western Three months ended 2018 2017 Y/Y Canada March 31, • Adjusted EBITDA growth driven by Net Sales $313.4 $307.3 2.0% improving win/loss ratio and strong operating expense management Currency Neutral -- -- (2.6)% • Margins and conversion ratio expanded Gross Profit $62.4 $55.8 11.8% • Slow start to Ag season Currency Neutral -- -- 6.8% • Benefited from long, cold winter Gross Margin 19.9% 18.2% +170 bps Adjusted EBITDA $29.5 $24.6 19.9% Currency Neutral -- -- 14.6% Adjusted EBITDA Margin 9.4% 8.0% +140 bps 6

 

EMEA – Highlights Solid execution ($ in millions) KEY METRICS • Adjusted EBITDA growth driven by Three months ended 2018 2017 Y/Y Focused Industries and Local March 31, Chemical Distribution performance Net Sales $538.6 $439.7 22.5% • Cold winter led to increased sales of de-icing products Currency Neutral -- -- 7.6% • Strong operating expense Gross Profit $124.0 $101.8 21.8% management Currency Neutral -- -- 6.6% Gross Margin 23.0% 23.2% -20 bps Adjusted EBITDA $44.7 $33.7 32.6% Currency Neutral -- -- 16.3% Adjusted EBITDA Margin 8.3% 7.7% +60 bps 7

 

REST OF WORLD – Highlights Focus on profitable growth ($ in millions) KEY METRICS • Adjusted EBITDA growth driven by Three months ended 2018 2017 Y/Y strength in Brazil March 31, • Business and product mix Net Sales $101.6 $100.9 0.7% improvement Currency Neutral -- -- (3.3)% • Strong operating expense management Gross Profit $21.3 $18.9 12.7% Currency Neutral -- -- 9.5% Gross Margin 21.0% 18.7% +230 bps Adjusted EBITDA $7.8 $6.7 16.4% Currency Neutral -- -- 13.4% Adjusted EBITDA Margin 7.7% 6.6% +110 bps 8

 

Cash Flow Highlights Three months ended March 31, ($ in millions) 2018 2017 Y/Y Adjusted Operating Cash Flow (1)(2) ($82.1) ($9.9) NM Net Working Capital (2) ($232.2) ($128.9) 80.1 % Capital Expenditures (3) ($16.2) ($20.9) (22.5)% Cash Taxes ($13.5) ($12.1) 11.6 % Cash Interest (net) ($37.8) ($44.3) (14.7)% Pension Contribution ($8.8) ($7.2) 22.2 % Acquisitions ($8.9) ($0.5) NM Other (2) ($3.7) ($12.9) (71.3)% (1) Adjusted Operating Cash Flow equals Adjusted EBITDA plus cash flows from changes in trade accounts receivable, inventory, and trade accounts payable, less capital expenditures. (2) Excluding the impact of the adoption of the FASB revenue recognition pronouncement the cash outflows would be $57.2 million, $206.2 million, and $28.6 million related to adjusted operating cash flow, net working capital, and Other, respectively, for the three months ended March 31, 2018. (3) Excludes additions from capital leases. 9

 

Balance Sheet Highlights LTM ended March 31, ($ in millions) 2018 2017 Y/Y Net Debt (1) $2,596.6 $2,742.5 ($145.9) Leverage (2) 4.2x 4.9x -0.7x Interest Coverage (3) 4.8x 3.8x 1.0x Return on Assets Deployed (4) 23.8% 19.8% 400 bps (1) Net Debt defined as Total Debt (Long term debt, inclusive of debt discount and unamortized debt issuance costs, plus short term financing) less cash and cash equivalents. (2) Net Debt divided by last 12 months (LTM) of Adjusted EBITDA. (3) Interest coverage defined as LTM Adjusted EBITDA / LTM Cash Interest (net of interest income). (4) LTM Earnings before Interest, Taxes and Amortization (EBITA) divided by trailing 13 month average of net PP&E plus net working capital (accounts receivable plus inventory less accounts payable). 10

 

OUTLOOK EXPECTATIONS Q2 2018 & Full Year 2018 2018 Full Year 2018 Advance Commercial Greatness, Adjusted EBITDA Operational Excellence and One Univar Low double digit % growth initiatives versus 2017 (1) Selective commercial and technology investments Q2 2018 Strategic, selective and disciplined Adjusted EBITDA acquisition approach High single digit % growth Continue to de-leverage the balance sheet versus Q2 2017 (2) Transformation into a growth company (1) Assumes growth of 2017 Adjusted EBITDA of $603.7 million, restated for the adoption of the FASB retirement benefits pronouncement or $593.8 million. (2) Assumes growth of Q2 17 Adjusted EBITDA of $160.9 million, restated for the adoption of the FASB retirement benefits pronouncement or $158.5 million. 11

 

Full-Year 2018 Guidance Year ended December 31, ($ in millions, except per share data) 2018 2017 Adjusted EPS $1.65 - 1.85 $1.39 low double digit Adjusted EBITDA $593.8 (1) % growth Cash Interest (net) ~($125) ($136.3) Tax Rate on Adjusted EPS ~20 - 25% 16.3% Pension Contribution ~($42) ($38.2) Change in Net Working Capital ~($50 - 100) ($52.6) Capital Expenditures ~($115) ($82.7) Debt Amortization ~($17) ($89.2) (1) Restated to reflect the adoption of the FASB retirement benefits pronouncement. Note: Cash inflow +/ Cash outflow - 12

 

Appendix A - Q1 2018 Adjusted Net Income and Adjusted EBITDA Reconciliation Three months ended March 31, 2018 2017 ($ in millions, except per share data) Amount per share (1) Amount per share (1) Net income $65.4 $0.46 $22.6 $0.16 Other operating expenses, net (excluding $4.2 $0.03 $13.4 $0.09 stock-based compensation) Other income (expense), net (excluding $0.9 — $9.1 $0.06 non-operating retirement benefits) Loss on extinguishment of debt — — $0.8 $0.01 Benefit from income taxes related to ($1.3 ) ($0.01 ) ($5.1 ) ($0.03 ) reconciling items Other non-recurring tax items ($9.0 ) ($0.06 ) — — Adjusted net income $60.2 $0.42 $40.8 $0.29 Stock-based compensation expense $9.4 $6.4 Non-operating retirement benefits ($3.5 ) ($2.4 ) Interest expense, net $34.9 $35.8 Depreciation and amortization $44.8 $52.6 All remaining provision for income taxes $20.5 $6.7 Adjusted EBITDA $166.3 $139.9 (1) Immaterial differences may exist in summation of per share amounts due to rounding. 13

 

Appendix B - Adjusted Operating Cash Flow Three months ended March 31, ($ in millions) 2018 2017 Adjusted EBITDA $166.3 $139.9 Change in: Trade accounts receivable, net ($219.4) ($142.4) Inventories ($80.1) ($66.4) Trade accounts payable $67.3 $79.9 Capital expenditures ($16.2) ($20.9) Adjusted operating cash flow (1) ($82.1) ($9.9) (1) Excluding the impact of the adoption of the FASB revenue recognition pronouncement, the cash outflow related to adjusted operating cash flow would be $57.2 million, which includes adjusted EBITDA of $165.2 million, cash outflows of $171.1 million and $88.5 million for trade accounts receivable, net and inventories respectively and a cash inflow from trade accounts payable of $53.4 million for the three months ended March 31, 2018. 14