Brenntag shows Continued Growth and confirms Guidance for FY 2018
Global chemical distributor Brenntag AG (Essen, Germany) has published results for Q3-2018 earlier this week. Sales were up for the existing business and a number of acquistions added again positive contributions.
Brenntag’s sales in the third quarter were EUR 3’221.8 mn, +11.4% as reported and +12.1% on a constant currency basis when compared the same quarter last year. (Operating) Gross Profit was EUR 678.0 mn, an increase of 7.2% as reported, and +7.9% on a constant currency basis. Overall, the group generated a third-quarter Operating EBITDA of EUR 224.5 mn (equivalent to a 6.97% Return on Sales / ROS), 3.9% up on a year-on-year comparison as reported (an increase of 5.0% on a constant currency basis).
Profit after tax was up EUR 9.7 mn at EUR 110.5 mn. This results in earnings per share attributable to Brenntag shareholders of EUR 0.72 per share.
Working capital increased to EUR 1’846.5 mn, again up from EUR 1’790.7 mn at the end of the previous quarter and up 22.5% since the end of 2017. At a level of EUR 150.4 mn in the third quarter of 2018, free cash flow was slightly up compared to the prior-year figure of EUR 146.0 mn. Increasing prices for many chemicals have led to this continued increase in working capital during Q3-2018, Brenntag said.
Across the geographic regions, the picture continues to be mixed. On the Operating EBITDA level, the EMEA region increased by 5.8 % as reported to EUR 95.9 mn (+8.1% on a constant currency basis). North America reported a higher relative increase of +8.0% to EUR 111.9 mn (+7.5 % on a constant currency basis. Virtually all customer segments contributed to this increase. Brenntag said. Latin America reached EUR 11.2 mn, up 5.7% as reported but +13.0% on a constant currency basis in what Brenntag called a “volatile environment”. Asia Pacific came in at EUR 17.8 mn, -5.3% as reported and -4.8% on a constant currency basis, despite an increase in sales to EUR 372.9 mn (up from EUR 299.6 mn) and a higher Operating Gross Profit. Brenntag highlighted that it kept investing “in the expansion infrastructure and human resources” in that region.
Brenntag sees a more challenging environment ahead, but in view of the “demonstrated resilience” of its business model, maintains its guidance for full-year 2018, at a forecasted Operating EBITDA in the range of EUR 870 to 900 mn.
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HGE – DCG / 07.11.2018