NACD Releases 2014 Productivity Report

The National Association of Chemical Distributors (NACD) released its 2014 Company Productivity Report (CPR), showing that industry firms reported higher sales growth in 2013 than the previous year when measured by pounds of chemical products moving through warehouses. The report also illustrated lagging profitability given the slowly recovering economy.

When measured by actual physical throughput of pounds of chemicals moving through warehouses (without third party), sales growth in 2013 was 3.5 percent for liquid product emphasis (LIQ) firms (as compared to a 2.1 percent growth in 2012), while factory packaged product emphasis (FPP) firms grew 5.2 percent (up from a 2.6 percent gain in 2012) and balanced product mix (BFP) firms reported a 1.8 percent advance (down from a strong 5.2 percent growth in 2012).

While NACD member company sales growth was up from the previous year, overall industry profitability for 2013 was lower than in 2012. For the second consecutive year, only one of the three industry segments included in the report demonstrated higher profitability levels. In particular, the performance ratio “before tax return on net worth” (i.e., net profit before tax as a percent of net worth, or owner’s equity) for 2013 was 34.1 percent, 29.3 percent and 16.3 percent for the LIQ, FPP and BPM groups respectively. This compared to 30.0 percent, 39.6 percent and 24.7 percent for the three groups in 2012.

“Accounts receivables days outstanding” (i.e., “average collection period on receivables”) were higher for all three industry segments, from 38.1 days in 2012 to 40.9 days in 2013 for LIQ firms, from 36.4 to 39.4 days for FPP firms and from 39.3 to 40.0 days for BPM firms. “Sales per employee” increased in the aggregate among survey participants during 2013, going from $1,191,940 in 2012 to $1,200,010 in 2013. “Total payroll expense (including fringe benefits) as a percent of sales” increased from 9.3 percent in 2012 to 9.5 percent in 2013, based on all NACD participants in the aggregate. However, this payroll cost performance tended to be much lower than that of most other wholesale distribution industries tracked by Industry Insights.

For more information, visit www.NACD.com

 

 

 

 

 

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