LOS ANGELES
,
July 8, 2022
(Industry Intelligence Inc.)
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Veritiv Corp. has merged two paper business segments – Print and Publishing – into a newly combined segment, called Print Solutions. The change provides additional flexibility in how Veritiv serves customers, aligns internal expertise across businesses that operate in complementary industries and better serves the long-term needs of the business, CEO Salvatore Abbate said during Veritiv’s Q1 earnings call on May 9, 2022. "These businesses have served an important role in our portfolio over the years, despite the headwinds of operating in an industry that has been in secular decline for more than a decade," he said. "We have fundamentally changed the business model to reflect the new realities of this industry." In Q1 2022, the newly combined Print Solutions segment generated both record adjusted EBITDA of US$55 million and record adjusted EBITDA margin of 9.2%. Domestic demand for the new segment remains strong and continues to considerably outpace domestic and international supply. “We believe demand will help sustain at least this level of revenue for the balance of the year, but revenue improvement will depend largely on product availability,” Abbate said. “As a result, price and margin improvements are now expected to carry into 2023. We expect our above-market volume performance to continue due to scale advantages and strategic supplier relationships.” An analyst asked about the company’s distribution footprint, particularly as it pertains to Print Solutions. He wondered whether it makes sense to expand into any geographic markets to drive organic growth – or if that’s not even an opportunity that really exists. Abbate said the company’s 2022 restructuring plan rebalanced its footprint “based on what we thought our next three- to five-year capabilities would need. And so we’re, I think, we're pleased with where we are right now.” Veritiv exited roughly 30 facilities and 30 offices from that restructuring plan, a move that “was the right footprint for what we're experiencing now.” He added, “We are covering every major market and most, frankly, minor markets in the U.S. But we are absolutely open to the possibility of growing in other markets if we need to.”
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