Univar Inc., an international distributor of chemicals, is figuring on a fortified digital strategy to help it shake off the financial doldrums it ran into last year. Net sales fell 7.8% year over year for the fourth quarter ended Dec. 31 and 7.0% for all of 2016, resulting in a net loss for the year of $68.4 million.
Univar, based in the Chicago suburb of Downers Grove, distributes “specialty and basic” chemicals used in industrial and consumer products worldwide from a global network of more than 8,000 producers. With a corporate policy of emphasizing a high level of personal service, it relies for most of its revenue on an international team of sales and technical professionals backed by more than 800 distribution facilities across North America, Latin America, Western Europe and the Asia-Pacific region.
But even as it improves its sales force, it will focus more on self-service e-commerce to help trim the cost of processing transactions while also boosting sales, Steve Newlin, chairman, president and CEO, said on a conference call with stock analysts this week.
“We’re moving quickly but thoughtfully, and we’re making the changes needed to build a foundation that delivers consistent, sustainable earnings growth, and we’re doing so with an extreme sense of urgency,” Newlin said on the call,according to a transcript from Seeking Alpha.
In addition to retraining and expanding its team of sales reps, improving its product mix and sharpening its marketing, Univar is upgrading its digital operations under a new senior executive. “We’re investing in digital tools that will accelerate growth through more e-commerce and lower our transaction costs,” Newlin said. He added that Univar recently recruited Eric Foster, a veteran of digital technology operations at such companies as pharmaceutical giant Baxter International, as its new chief information officer “to drive e-commerce and technology strategy.”
Univar, without providing specifics, will upgrade with new features its eBusiness suite of online portals where customers can place and track orders, and retrieve such documents as government-required material safety data sheets with information on how to safely handle chemicals. A year ago, Univar added to its suite of portals with the launch of the Univar Online Store at Store.UnivarES.com, a website for customers of Univar’s Environmental Sciences division who are licensed professionals authorized to purchase and use the pesticides it sells.
Univar doesn’t break out e-commerce sales.
For the fourth quarter ended Dec. 31, it reported:
Net sales of $1.813 billion, down $7.8% from $1.966 billion a year earlier;
Gross profit of $413.3 million, down 1.5% from $419.8 million;
A net loss of $59.2 million, compared with a year-earlier net loss of $2.9 million.
For the full year, Univar reported:
Net sales of $8.074 million, down 0.1% from $8.982 billion in 2015;
Gross profit of $1.727 billion, down 4.0% from $1.799 billion;
A net loss of $68.4 million, compared with net income of $16.5 million a year earlier.
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