US Univar boosts digital channels as customers avoid in-person contact; virus hits Q2 sales

Author: Stefan Baumgarten

2020/08/07

HOUSTON (ICIS)--Univar is investing to boost its digital sales and marketing capabilities as customers are changing the way they want to interact with the US-based international chemicals distribution major in the wake of the coronavirus health crisis.

In “the Covid-19 world”, customers were seeking to avoid in-person meetings, Univar CEO David Jukes said on Friday, citing a customer survey the company conducted.

An old strategy such as having "more sellers in front of more customers, more often" was "probably not" the best approach when customers do not want to see or meet sellers in person in the current environment, Jukes said.

“A mix of more virtual and less in-person interactions than previously will be the preferred norm,” thus confirming Univar’s “omni-channel approach”, he said.

That approach includes 24/7 ordering and self-serve capability, as well as a Univar’s rapidly expanding retail “no frills” channel, called ChemCentral.com.

Univar needed to be open and accessible whenever and however customers choose to interact with the company, Jukes said.

The company needed to build as many doors to its business as it can, and then provide customers with a streamlined way through its organisation, he said.

In the US, Univar’s customers can now access the company’s entire catalogue, request quotes and quickly purchase products, as well as track their orders with a “Where’s my stuff?” feature – all online, Jukes said.

In addition, Univar is holding more customer webinars to promote its technical capabilities and stimulate demand for the chemicals and ingredients it distributes and sells, he said.

DIGITAL, BUT NOT A TRANSACTION ENGINE
However, while the company is pushing to rapidly expand its digital channels, Univar will not evolve into "just a transaction engine" or "market place model",  Jukes said.

"Handling dangerous chemicals, handling hazardous chemicals is a core value of ours, that's something we do very, very well", and suppliers and customers are relying on Univar in this area, he said.

Safety, sustainability and compliance, in a highly regulated industry, were at the core of what customers expect Univar to deliver, he added.

Univar is making the digital move in conjunction with the "Streamline 2022" (S22) programme, announced on Thursday, as it seeks to boost its earnings before interest, tax, depreciation and amortisation (EBITDA) margin to 9% by the end of 2022.

Q2 RESULTS
Jukes made the remarks while briefing analysts on Univar’s results for the three months ended 30 June, when the company saw sales and profit fall due to pandemic-induced demand declines.

In many markets, such as US and Canadian refining, demand fell significantly. This was only partly offset by strong demand in health and personal care.

The company partially mitigated the coronavirus negatives by selling to new customers, by “disciplined margin management”, and through cost reductions, Jukes said.

Univar, Q2:

(in million $) Q2 2020 Q2 2019 % change
Sales 2,009.2 2,584.6 -22.3
Gross profit 489.1 577.3 -15.3
Adjusted EBITDA 163.2 201.1 -18.8
Adjusted EBITDA margin 8.12% 7.78%

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Thumbnail photo: Univar CEO David Jukes