Univar Solutions Inc.
Q4 2020 Earnings Call Transcript

Published: 28 Feb 2021

[Operator:]

Good morning, ladies and gentlemen, and welcome to Univar Solutions Fourth Quarter 2020 Earnings Conference Call. My name is Michelle and I will be your host operator on this call. I will now turn the meeting over to your host for today's call, Heather Kos, Vice President of Investor Relations and Global Communications at Univar Solutions. Heather, please go ahead.

[Heather Kos:]

Thank you and good morning. Welcome to Univar Solutions fourth quarter and full year 2020 earnings call and webcast. Joining our call today are David Jukes, President and Chief Executive Officer; and Nick Alexos, Executive Vice President and Chief Financial Officer. Last night, we released our financial results for the fourth quarter and year ended December 31, 2020 and posted to our corporate Web site at univarsolutions.com a supplemental slide presentation to go with today's call. The slide presentation should be viewed along with the earnings release, which has also been posted on our Web site.

[David Jukes:]

Thank you, Heather, and good morning, good afternoon and good evening to everyone and thanks for joining our call. At Univar Solutions, we're focused on growing together by putting the customer at the center of all we do and working to take full advantage of every opportunity to drive growth as we execute on our strategy. This is reflected in our Q4 performance which remains solid as we continue to adapt during this evolving pandemic environment. As a company that is always serious about safety, this of course remains our highest priority for our employees, our suppliers and our customers. Key highlights from the quarter are; we delivered solid financial results above our guidance range, including strong cash flow generation. As expected although sales were down versus the prior year, we were able to partially mitigate the economic headwinds by selling to new customers, executing well on margin and cost management. We continue to monitor changing customer demands as we operate in this new normality. I'll speak more on overall trends in a moment as well as the immediate dynamics in supply chain due to the storm and freeze effect in the Gulf. We finished the year with strong liquidity of $855 million ahead of our $750 million to $800 million guidance range. Our Nexeo integration is on track and we have now completed our U.S. business systems migration. We advanced our S22 Program, streamlining our business with targeted divestitures. We continue to improve our sales activity with both the leading indicators like customer contacts and the lagging indicators like win loss ratio trending positive in all regions compared to the same quarter last year.

[Nick Alexos:]

Thank you, David. Hello and good morning to all. I'm pleased to share Univar Solutions' solid Q4 financial results and update you on our business activities. Sales were down 5.5% on a reported basis and 6.1% on a constant currency basis. Excluding results of Environmental Sciences from prior year's financials, we estimate net sales were down 2.1% on a constant currency basis. Gross profit exclusive of depreciation was low by 7.2% to $484.5 million or 7.7% on a constant currency basis. The estimated gross profit exclusive of the depreciation is down 3.5% on a constant currency basis, when excluding the results of the Environmental Sciences. Our gross margin decreased by 40 basis points to 23.8% driven primarily by the inclusion of a Brazil VAT recovery benefit in 2019 results and an unfavorable margin impact of final inventory sales and costs related to our exit of the Canadian agriculture distribution business. Excluding the impact of the Brazil VAT and the Canadian Ag charges, our estimated total gross margins would have been higher versus 2019 reported results. Sequentially, gross profit margin was slightly lower in Q4 2020 due to declines in margin of certain essential products related to COVID demands. Fourth quarter adjusted EBITDA of $146.4 million was lower by 7.8% and 7.5% on a constant currency basis, future price deflation in certain products, lower demand versus pre-recessionary levels and the Environmental Sciences divestiture. The decrease was partially offset by additional Nexeo net synergies, favorable product mix and interim cost reduction measures. Excluding the Environmental Sciences business from 2019 results, adjusted EBITDA was 4.6% lower on a constant currency basis. Adjusted EBITDA margins were lower by 20 basis points, number one excluding the unfavorable margin impact resulting from final inventory sales and costs related to our exit of the Canadian Ag business, our estimated adjusted EBITDA margins would have been slightly higher versus prior year reported results.

[David Jukes:]

Thanks, Nick. Moving onto our integration activities and despite the COVID-19 obstacles, we successfully delivered on several significant integration milestones in 2020, including delivering $46 million of cost synergies. Other highlights include the completion of our SAP system migration in the U.S.A. with the final districts going live just last week. The U.S. chemical and ingredient distribution business is now on a single CRM and ERP technology platform which significantly reduces the complexity inherent when working on multiple systems. The simple visibility to things like stock availability and service levels, we can really hone in on providing the better experience for our customers and suppliers alike as we now move to optimizing processes. Our SAP migration for Canada and Mexico remains on track for the second half for 2021. Our site consolidation plan continued closing three branches in the quarter, bringing total closures to 28 and expect to close approximately 10 branches in total this year. We finalized the sale of two further sites with cash proceeds of approximately $3 million. Through 2019, our real estate site sales have generated pre-tax cash proceeds of $73 million. Moving on to the S22 update. We ended the year with S22 charges of $92 million, although only $9 million of those charges were cash expenditures in 2020. We finalized the exit of the Canadian agricultural wholesale distribution business. This business generated approximately $281 million of revenue in 2020 with negligible earnings. The wind down of the facility to working capital generated $52 million in cash in 2020 and we expect an additional $25 million in 2021. Of the planned divestitures, in 2020, we sold our emergency spill and response business, and in Q4, closed the sale of Canadian agricultural services business. As noted last month, we also signed an agreement subject to normal closing conditions to sell the Distrupol Plastics business in Europe. In total, these divestments were expected to yield approximately $180 million in proceeds. These planned divestitures generated approximately $162 million in revenue and had an adjusted EBITDA impact of $20 million in 2020 as Nick referenced earlier. With the remaining divestments expected to be complete by mid-year, we are increasing our total expected divestment proceeds from $200 million to approximately $240 million and I expect only minor incremental tax payments. We also acquired a small but important business that distributes innovative specialty silicon solutions in China from Techi Chem. As we approach two-year anniversary of becoming Univar Solutions and put systems migration and integration in our rearview mirror, we clearly see the path to realizing the full benefits of our optimized scale while remaining wholly committed to our strategy of having the strong local presence for our customers and optimizing our cash flow and margins. Our expected strong cash flow and divestiture proceeds will continue to fund our strategic initiatives and reduce our net leverage to below 3x by year-end. We have plans to use our cash to fund our growth initiatives with high ROI capital expenditures and investments and at the right time to consider selected bolt-on acquisitions and return of capital to shareholders. Our commitment to reduce leverage and maximize cash flow has been recognized by the rating agencies and led Fitch to upgrade our corporate issuer and debt ratings this month. Moving to our business strategy progress, the strength and capability of our sales force remains a key driver of business improvement as we leverage our advantaged network of technical and regional sellers in combination with our digital platforms. As noted earlier, the completion of the business system migration in the U.S.A. means sales professionals now have more time available to them to be good customers. Even with the obstacles of COVID-19, we've maintained momentum and are seeing good progress in performance, including seeing the all important win loss ratio being positive in all regions. The S22 program is well under way. In addition to the business portfolio optimization work we have done the following; as I mentioned earlier, Jim Holcomb is now leading our chemical distribution business in the U.S. and Canada. Jim has over 25 years of chemical distribution experience and a proven track record of success. Jim has hit the ground running, focusing on growing sales in North America and championing the needs of the customers. Last quarter, I spoke about the establishment of a customer experience or CX Center of Excellence combining our learnings with those of key suppliers and customer feedback into the net promoter or NPS scores. This too has hit the ground running and the group have already established metrics that run through the heart of good customer experience starting with simply doing the basics well. In addition, the CX team will continue to elicit the voice of the customer, for our NPS scores as well as leverage our advanced analytic capabilities to proactively address pain point along the customer journey. We established our baseline for NPS, thanks to the feedback we received from customers in Q4. I can share that our NPS score is considered good but for us good isn't good enough and the journey to great and also excellent has begun. The expansion of a consistently technically differentiated approach to customers with the globalization of our consumer and industrial solutions verticals has been roundly welcomed and positioned us for growth and mix enrichment. Given our expertise, our strong supplier partnerships continue to expand and remain a source of competitive advantage. Over the last few months we've been awarded new or expanded product authorizations with supplier partners such as allnex, Arylessence, Chemours, Dow, DuPont, Emerald, Evergrain, Fluid Energy Group, Gelymar, Henkel, Nutrien, Sasol, Solvay Novecare, these partnerships, along with the leading chemical and ingredient products they bring are a recognition of how our partners value our end market expertise and digital capabilities to support their growth. We continue to build and expand the robust portfolio of products and solution capabilities. We also continue to accelerate our omni-channel approach to better address customer preferences as we expand our podcast and customer webinars offerings to promote the technical capabilities of and stimulate demand for certain chemicals and ingredients. These attracted over 1500 customers across all regions in the quarter. Meanwhile chempoint.com, our longstanding dedicated digitally enabled sales channel continues to advance in the marketplace with traditional sales methods a challenge. We put processes in place to drive growth including extending our touchless ecommerce capabilities, driving increased sales leads from our sites and expanding our product lines globally. Overall, our digital footprint continues to deliver results as we use data as a strategic asset to create aesthetically digital advantage through search, select, source and self-serve capabilities for a growing number of customers, whatever the time of day or night they choose. And our chemcentral.com no frills channel continues to show growth in the U.S.A., that is now also available and already delivering results in Canada and slightly parts of Europe. Altogether, our digital foundation and committed customer- centric strategy is aimed to maximize the effectiveness and scale of our operations, as well as make it easier for customers and suppliers to do business with it and deliver market share growth. We're confident we're investing in the right tools to streamline our supply chain, innovate with customers and accelerate growth in step with consumers' changing preferences, while always staying in tune with the specific local needs of customers. So before we come to your questions and to summarize, we delivered solid financial results in both adjusted EBITDA and liquidity while realizing our purpose to keep our communities healthy, fed, clean and safe during challenging times. We're maintaining firm control of our working capital and other cash needs and ended the year with $855 million of liquidity. We maintain momentum on our Nexeo integration program and are on track to achieve $120 million net synergies by early 2022. We're investing in furthering our digital advantage, it is becoming increasingly attractive to our customers. The S22 program is tracking very well toward delivering higher divestment proceeds, growth, and 9% EBITDA margins by year-end 2022 through global and functional excellence. We remain committed to give our approximately 40% net free cash flow conversion in 2021 and improve on that metric in years beyond. We've made significant progress with our cash management and now see leverage below 3.0x by year-end 2021. We continue to see opportunities to capture new business and share growth, especially now that we've completed the U.S. business systems migration. With this behind us, our organization is freed up to focus solely on understanding customer needs and then delighting them. We will focus on delivering operation -- operating agility and taking the decisive actions to enhance our competitiveness, we will increase our operational and financial flexibility. We believe the company is positioned to capture greater value from the anticipated market recovery and growth opportunities ahead. With these collective efforts we'll deliver enhanced shareholder value. Thank you for your attention. Please stay safe and healthy. And with that, we'll now open it up for your questions.

[Operator:]

Thank you. Your first question comes from Steve Byrne, Bank of America.

[Steve Byrne:]

Yes, David, you mentioned the two year anniversary is coming up and clearly you have made a lot of changes in the overall sales force; the structure by region, by specialty and so forth. How would you characterize the performance of that sales force now relative to your expectations?

[David Jukes:]

Good morning, Steve. Thanks for the question. I think that I'm really happy with the way our sales organizations have come together. We have a good stable organization that have reacted and responded very, very well through difficult circumstances in 2020. We have really strong sales leadership in both our regional and in our specialty vertical businesses. Our people are -- if I look at the lagging -- so the leading indicators like the pipeline. The lagging indicators like the win-loss ratio. They are all trending positive. So I'm very confident in our sales organization, very encouraged by the leadership that we have and the stability we are able to bring to the organization.

[Steve Byrne:]

And I was curious about whether you saw any differential impact from the pandemic on your customer base, depending on their size. Were smaller customers disproportionately impacted or forced to shut their -- just curious as to whether any of those dynamics might impact the rate of recovery.

[David Jukes:]

I don't think that it's going to impact the rates of recovery. Steve, I think it depended really what industry segment people were in rather than the size. But I think that our people responded really well to what we did see with the changing customer preferences and how they wanted to be in contacts and how they wanted to purchase. And that's -- really led to the increase in our business through our digital channels and our continued investments in our digital channels, to able to react and respond to that for customers whenever they feel like interacting with us.

[Steve Byrne:]

Just one last one, are you pushing price in anticipation of higher purchasing cost from your suppliers?

[David Jukes:]

We manage price. I think we manage price pretty well these days. And as you'll appreciate it's a fast-changing and a very dynamic market. So yes, I mean price increases are order of the day at the moment and our teams are all over it.

[Operator:]

And your next question will come from Kevin McCarthy from Vertical Research.

[Kevin McCarthy:]

David, if we were to see a sharp and sustained environment of selling price inflation across the chemicals industry, would that have a positive effect on your EBITDA margins or a negative effect or no effect? I'm trying to get a sense as to whether that sort of environment would make it easier or more difficult for you to achieve your Streamline '22 EBITDA margin improvement goal.

[David Jukes:]

I mean generally speaking with the distributor, we prefer volatility in the marketplace rather than stability in the marketplace because we can make marginally more money as the price goes up and we can make marginally more money if the price go down, if we manage our business appropriately, if we manage our stocks appropriately. So we know right now, we are in a period of chemical inflation, we feel confident that we can manage our way through that. And I think it's going to be broadly supportive to our aims.

[Kevin McCarthy:]

Okay. And then a second question, if I may, for Nick. On Slide 10, you outlined your free cash flow goals for 2021 and you've characterized it as a minimum of $250 million with an upside to $300 million. And so my question is, if you were able to achieve that upside of I guess $50 million. Where would that come from in the context of the various line items that we see on Slide 10, what are the key moving parts in your mind?

[Nick Alexos:]

Sure. Kevin, and thanks for your note last night. I would say, as you look down and we said in the script, most of the cash uses are kind of up to amounts whether it's CapEx, integration expenses or other cash uses, those are kind of what we think are kind of the maxes and so we believe that we will manage to offer better numbers across all of them and that should provide some upside to the bottom-line number as opposed to giving ranges to each one, we kind of categorize them as kind of maximums and then hope to do better in total.

[Operator:]

Your next question will come from David Begleiter from Deutsche Bank.

[David Begleiter:]

David, just in the $35 million in essential market demand we think will come off this year. What portion of the growth does it represent? And is it half and how much of that essential do you think sustains going forward?

[David Jukes:]

I mean I think really got that reflects lot of that $35 million was in quarter two and quarter three and reflects what I would typify is kind of first fill on things like hand sanitizers. And a lot of that was in margin rather than in volume. So we expect to have still higher volumes for the kind of products that go -- kind of chemistries that we sell into those products over 2019, but not at the same kind of margins that we had in 2020 or in those periods of 2020 which is a $35 million.

[David Begleiter:]

Got it. And you mentioned sales in January were similar to December, were they up 8% in January and what do you think they'll be in February knowing that we do have some impacts from the severe winter weather?

[David Jukes:]

As we say, I mean January is trending very much in line with December. February is a really interesting month given where we are with the interruptions in supply that we had from the big freeze and now interruptions in supply that our producers have. So we are working our way through that at the moment. I don't think that February is going to tell us as much as the quarter will. And so we're looking really across the two months to see what impact that will have. We know what billing days we lost, or shipping days we lost. And we know how much of that we can catch up. We know how much of the current capacity is down at the moment. We don't know how fast that will come up. So we're very carefully looking at the stock that we have to make sure that we can maintain supplies to our customers and keep product flowing.

[Operator:]

And your next question will come from Duffy Fischer from Barclays.

[Duffy Fischer:]

First question is just around you calling out price deflation in certain products. Can you kind of walk through what those products are and more importantly, was that a one-time issue in the quarter, or does that have to anniversary now to the next three quarters as well?

[David Jukes:]

Well, I think we had price deflation in a variety of products. I mean, certainly some of those that went into essential end markets that we had in Q2 and Q3, certainly some of the Chlor Alkali family and we'll see now what happens in Q1 and Q2 as a supply situation changes.

[Duffy Fischer:]

So wasn't it that you got caught where you bought inventory at a higher price and had to sell at a lower, this were just the price is dropping so that makes the business less attractive on a structural basis. Correct?

[David Jukes:]

It isn't that we had to write stock off. I mean, bear in mind that we did have to write some stock off to go that was associated with the Canadian Ag distribution business directly from that, but really it's caustic and HCL where the sale prices fluctuate quite significantly and it just reflects those -- the point in the cycle that of course we are at the time.

[Nick Alexos:]

I'm just going to add. That's consistent with what we've called out at the beginning of the year with reference to the guidance and that was reflected in the Q4 numbers.

[Duffy Fischer:]

Okay, fair enough. And then in general as we enter 2021, roughly how big is the energy business for you guys in your 2021 outlook? And is it starting to inflect with energy prices rising or is it still trending down?

[David Jukes:]

And so as we -- I think we've said before, our energy business, probably our energy business is about 8% of our total business. Upstream is 3% of that's PGA so the gross profit. We planned into 2021 to have similar sort of levels as 2020, now that the oil price is mute a little and demand is moving up. Whilst we did take some cost out during 2020, there's probably the opportunity for us to leverage our existing infrastructure to maybe provide some upside. And I think we mentioned that in the prepared remarks.

[Operator:]

And your next question comes from Michael McGinn from Wells Fargo.

[Michael McGinn:]

I appreciate Slide 9 specifically the end market organic growth forecast 4.8 to 5.6. So I just want to put a finer point on that, if we're assuming some additional divestitures and then incremental currency tailwinds. Are those two factors offsetting each other so that we can assume that your total sales is kind of reflected in that range that you gave about that range or is one going to offset more than the other speaking of acquisition, net divestiture acquisitions versus currency?

[Nick Alexos:]

Yes. The divestitures, our target really would be growth rate, more DGP focused and obviously, we back out the divestitures from the EBITDA. So, I would say we're looking just to kind of put a point to it to grow our profitability, our DGP, our delivered gross profit as well as our EBITDA above -- on a reported basis above that general market conditions number. So, FX is a bit of a tailwind going into the year. Divestitures has been adjusted and excluded and so the reported business will be above that general economic indicator level.

[Michael McGinn:]

Sorry. So that's not a sales target, that's the delivered gross profit?

[Nick Alexos:]

That's right because obviously, as we've always said, the revenue fluctuates based on pricing and our focus is to have delivered gross profit above general economic indices and as well as EBITDA.

[Michael McGinn:]

Okay. And then, I want to switch gears to the supplier authorization, they seemed a little as you notably above average on what you've kind of been reporting in the last couple of quarters. On the other hand, you noted a former product in EMEA, I believe that was rolling off its product life cycle. Is the way to think about your business that you're going to continue to bring in these value-add chemistries. But there are some older products SKUs in your portfolio now that are reaching the end of their life cycle. And could you frame -- that's true. Can you frame the difference between those products and maybe how long it takes to ramp your sales force to train on your new product versus are the product rolling off really low margins for you guys. Any color there would be great.

[David Jukes:]

Sure. I think in the last probably two years we've been calling out the wind down of finished pharma business in Europe. I think last year was $50 million down on the previous year and that's a one-off. It's a one-time thing. It's a one-off. It's one product and there aren't others that are like that that should roll off. The addition of new supplier, chemicals and ingredients is really a testament of the strength of our Specialty Consumer Solutions, Industrial Solutions verticals and the attractiveness of those in the end markets they go into. And so these all add to the portfolio of chemicals and ingredients we have to be more and more attractive to customers in that sector, which really fuel growth. We think exciting growth in those more specialized chemistries. So yes, I think quarter four was a busier time for new authorizations, but that really is the testament of the team in the Consumer Solutions, Industrial Solutions verticals in particular for the new authorizations and products that we're bringing on as well as the team in our bulk business who saw some really good a new deals to drive growth as well.

[Michael McGinn:]

Great. And then if I could sneak one more in, you called out bolt-on M&A and I think that's kind of the shift from the divestiture mindset that you've had the last few quarters. Could you talk about when you do bolt-on M&A or a property that you purchased, is that incremental or does it offset your 10 branch closures or is this something you can layer on top of your freight network, your existing branch network. And then the differences between maybe the business you're targeting versus the EMEA business that you're divesting. It seems like that had some medical exposure would do well as a lack of surgeries start to pick up here. So, any comment there would be great.

[David Jukes:]

Sure. So you know on the viewing stand up our priority has been to get our balance sheet in better shape and to bring down our debt, leveraging, you remember that one of our Streamline 2022 objectives was to get our debt leverage below 3x by the end of this year and I think we're in pretty good shape to do that by good cash management and some the divestments that we have to focus on our core. The business in EMEA that we're selling we believe that that has a good growth profile in better hands than ours better hands, being people who could focus on it, because it is a slightly different business from the rest of the business and we think the new owners are going to be happy with our acquisition and the people in that business are going to have a really good growth profile with the new owners and so we're very excited about their future. As far as the M&A that we will now look at, I mean we'll be very selective in the M&A that we have and we'll look to things that actually adds to our product portfolio or bring the technical capabilities we don't have, or may be even take us into a geography which is adjacent to where we may be already and we can leverage our IT infrastructure and our digital infrastructure to build them and bring them in. So we're being very targeted, being very disciplined and very targeted about the kind of M&A that we'll go after and the priority is first and foremost to get that a debt leverage below 3x and we're well on track to do that.

[Operator:]

Your next question comes from Laurence Alexander from Jefferies.

[Laurence Alexander:]

And so, just a follow on the M&A question. Can you give us a sense, as you're coming out of the, it's going to more normal environment about your regional ambitions. So how you're thinking, particularly about Asia, the need to change your scale there and also opportunities in Europe?

[David Jukes:]

We have a small acquisition in China at the moment. That's legacy from Univar and then we added on to that a legacy position from Nexeo Solutions when we bought them. We've added another small piece onto that now, which is really building the specialty portfolio around some key suppliers. I think our M&A strategy will be looking -- concentrating those in the areas that we already are rather than a rush to new geographies. So I think that looking at whether there are things that we can add in Latin America to become a real powerhouse there and build on the success that we have there, whether there is more opportunity for us in EMEA, where we have some dark spots across the EMEA landscape or where there is more things in North America, which can add to our specialty focus and capabilities, I think that would be our priorities in the near term.

[Operator:]

And your next question will come from Laurent Favre, Exane.

[Laurent Favre:]

I've got one question left on the logistics side. I was wondering if David, you could remind us of I guess the exposure you have to your own fleet versus third-party fleets in Europe and in the U.S. And I mean, are you experiencing any difficulty in touching on the higher cost to your customers or logistics issues so much -- so high for your customers that they are actually prepared to pay more. And how is the discipline in the industry in that regard? Thank you.

[David Jukes:]

I'm not sure I can speak to the discipline in the industry, I can speak to the discipline with us alone. Thanks for the question. Yes, I think in Europe, we're about 80/20; 80% third-party fleet, 20% our own fleet. And in the U.S., it's more like -- or North America, it's more like 50%, 50%. So we have certainly in North America, we have good control over that last mile and that local distribution tends to be into branch and bulk products and where we partner with the third-party whole year. And yes, there's been some interruption and yes, there's been some inflation in those prices, particularly over the recent weeks. But we do feel confident in our ability to react quickly. I think we focus a lot on our operating agility. And so we react quickly and proportionally to an inflationary environment to make sure that we are remaining competitive supporting our customers but not funding any increases in transport that we may have.

[Operator:]

And your next question comes from Michael McGinn.

[Michael McGinn:]

Appreciate the follow up. I don't want to keep this call on a little longer I guess. So you mentioned the divestiture proceed, taking that up to 240. I think a 180 is what you have kind of already what you're going to realize. With regards to your guidance, are you assuming -- and your interest expense, are you assuming that you get the incremental fixed fee and that feeds into your debt pay down and interest expense line item, or is that something that would, if you do complete that additional 60 would drive interest expense lower, kind of how you're working through the mechanics of your EBITDA, your just general guidance.

[Nick Alexos:]

Sure, Michael. Yes. Our assumption is that those divestitures occurred in the early part of this year and are marginally reflected in reducing the interest expense. There is a little bit of the EBITDA in the guidance, but we're talking a few million dollars this way or the other way in terms of impact. So it's not material to the overall EBITDA guidance. It's not material to the overall interest expense. But it is assumed that we will be done with our divestitures in the first half of the year.

[Michael McGinn:]

Okay. And then I don't know if this was asked, can you talk to regionally, you mentioned the taxes shut down, but outside of that, outside Q1, where are you still feeling the best in terms of your core growth prospects?

[David Jukes:]

Look, I think we feel pretty good about the whole business at the moment. Our EMEA business has been on a good growth track and stays on that. Our Latam business has also been on a good track and stays on that. Our U.S. business is delighted to have the SAP migration behind it. I think that's a huge step. I think that's a massive step that we've taken there. It was a very busy, but a very good year last year and I think you've got a lot of good things done. We've set those in good stead now to grow in the U.S. and I'll think our Canadian business and now it's clear of the agriculture fees. We'll continue to show a really strong performance. So I feel very good about our -- notwithstanding whatever extraneous things may be going on in the Gulf right now, I feel very good about where we are. I feel very confident in our strategy and our ability to execute on that strategy. We have a good team, stable team, good strong leaders in the right places. So I'm very confident about our growth prospects.

[Operator:]

Thank you. That brings us to the end of our Q&A session for today. I'll turn the call back over to Heather Kos for closing remarks.

[Heather Kos:]

Thank you, ladies and gentlemen, for your interest in Univar Solutions. If you have any follow-up questions, please reach out to the Investor Relations team. This does conclude today's call.

[Operator:]

Thank you everyone. This will conclude today's conference call. You may now disconnect.