Tag Archives: 2020

Brenntag reports Results for an “extraordinary” Year 2020

Operating EBITDA for the Group grows, despite Decline in Sales, particularly in North America

Global chemical distributor Brenntag AG (Essen, Germany) has published the annual results for 2020 today. Sales declined, but Operating Gross Profit for the group and in most geographic regions increased, except for North America. Earning per share remained constant at EUR 3.02 per share.  Brenntag is planning for an 8.0% increase of the dividend to EUR 1.35 per share. This is equivalent to a payout ratio of 44.7% of the Profit after Tax attributable to Brenntag’s shareholders. The dividend payment is subject to approval by the AGM in June.

Brenntag’s sales in 2020 were EUR 11’775.8 mn globally , -8.2% as reported and -6.0% on a constant currency basis, when compared with last year. (Operating) Gross Profit was EUR 2’850.4 mn, an increase of 1.0% as reported, and +3.3% on a constant currency basis. Overall, the group reported an Operating EBITDA of EUR 1’057.5 mn,  up 5.6% from the EUR 1’001.5 mn in 2019 as reported (an increase of 8.3 % on a constant currency basis). Both, Profit before Tax at EUR 663.3mn (EUR 633.4% in 2019) and Profit after Tax at EUR 473.8 mn (EUR 469.2 mn in 2019), remained virtually flat. This results in Earnings per Share attributable to Brenntag shareholders of EUR 3.02 per share, the same level as reached in 2019.

Net Working Capital decreased significantly from EUR 1’767.7 mn at the end of 2019 to EUR 1’346.6 mn at the end of last year. Based on this development, working capital turns improved from 7.0x to 7.3x during 2020. At a level of EUR 1’054.6 mn in 2020, free cash flow was up 26.0% from the EUR 837.3 mn realised in 2019, mostly driven by the reduction in Net Working Capital, Brenntag said.

Sales were impacted by a very challenging macro-economic environment and extraordinary economic conditions triggered by the COVID-19 pandemic. Brenntag said it went into “crisis management mode” early on in the pandemic and managed to maintain uninterrupted supply chains throughout 2020.

In EMEA sales declined by 4.0% (-2.7% on a constant currency basis) to EUR 5’027.5 mn. On the Operating EBITDA level, the EMEA region increased significantly by 17.1% as reported to EUR 475.9 mn (+19.0% on a constant currency basis). Well performing sectors were Personal Care, Cleaning, Pharma and Coatings & Construction, Brenntag said. 

North America suffered from soft demand, particularly in Oil & Gas and Lubricants, with sales declining by 12.5% (10.6% on a constant currency basis) to EUR 4’191.0. The region reported also a decrease of Operating EBITDA, -8.5% to EUR 434.4 mn (-6.6 % on a constant currency basis).

Latin America reached an Operating EBITDA of EUR 63.5 mn, up 13.5% as reported from EUR 55.9 mn (+26.9.0% on a constant currency basis), despite  declining sales at EUR 819.4 mn, down 4.1% as reported (+6.0% on a constant currency basis). 

Asia Pacific contributed an increased Operating EBITDA of EUR 123.8 mn, up 22.5% from the EUR 101.1 mn reported for 2019 (+25.9 % on a constant currency basis. Brenntag said that “after being hit by the pandemic early in the year, the Asia Pacific region recovered sequentially, with particularly China seeing a quick and strong recovery. Almost all countries and many industries contributed to the very good results.” 

As part of the comprehensive transformation program dubbed “Project Brenntag”, which was launched by CEO Christain Kohlpaintner in mid-2020, the company has started to follow a new operating model based on two global divisions named Brenntag Essentials and Brenntag Specialties. Amongst other things, the project comprises programs for the site network optimisation (a reduction of the number of sites globally by 100, of which 30 were closed already in 2020) and a workforce reduction initiative (headcount reduction in 2020 was ca. 200 FTEs).  These, as well as other efficiency measures, are expected to generate a total increase of EUR 220 mn in Operating EBITDA by FY2023, ramping up year by year. In 2020 the initial contribution was approx. EUR 15 mn. 

Providing an outlook for 2021, Brenntag said it expects an Operating EBITDA for the current year between EUR 1’080 and 1’180 mn, assuming  that exchange rates remain stable. The group sees itself operating in a macroeconomic environment of considerable uncertainty, particularly in the first half of the year. The outlook also includes expected efficiency gains from the restructuring measures being currently implemented as part of Project Brenntag and full-year contributions from several acquistions closed during 2020, the announcement said. 

Additional details can be obtained via the links below:

https://www.brenntag.com/corporate/en/media/news/brenntag-shows-strong-performance-in-the-extraordinary-year-2020-that-underlines-the-resilience-of-its-business-model.html

https://www.brenntag.com/corporate/documents/investor-relations/2021/gb-ar2021/brenntag_annualreport_2020.pdf

Source: Brenntag press release, earnings call and annual report; DistriConsult analysis

HGE – DCG / 10.03.2021

IMCD reports continued Revenue and EBITA Growth in 2020

Acquisitions allow for Compensation of  Market Headwinds at IMCD

Specialty Chemicals distributor IMCD N.V. (Rotterdam, The Netherlands) last week reported on the performance for 2020. Sales (or revenues in IMCD terminology) were EUR 2’774.9 mn, up 3% from EUR 2’689.6 mn posted in 2019. IMCD said the reported growth is an amalgmate of effects from the first-time inclusion of acquisitions (+6%) and  an adverse currency exchange effect at -3%.

 

Gross Profit increased by 8% from  EUR 599.3 mn in 2019 to EUR 647.5 mn (+11% on a constant currency basis), Operating EBITA 13% from EUR 224.8 mn in 2019 to EUR 253.5 mn in 2020 (+16% on a constant currency basis) . This represents a return on sales of 9.1%, up from the 8.4% of the previous year and a conversion margin (= Operating EBITA as percentage of Gross Profit) that increased to a level of 39.2 % (up 170 Bps from the 37.5% achieved in 2019). This was based on better Gross Margins as well as lower operational expenses due to COVID-19 restrictions and targeted cost optimisation efforts.

 

The resulting in Cash Earnings per Share (i.e. before amortisation) were  EUR 3.22, an increase of 13% when compared with the result for 2019 at EUR 2.85. Free cash flow increased by EUR 59.8 mn, from EUR 222.2 mn in 2019 to EUR 282.0 mn for 2020. IMCD plans to propose a dividend of EUR 1.02 per share in cash (2019: EUR 0.90 per share).

 

As in previous years, IMCD’s (geographical) operating segments showed a mixed picture, in 2020 mostly driven by strong M&A activities in Asia-Pacific.  EMEA (defined as Europe, Turkey and Africa) posted revenues of EUR 1’326.9 mn, up 1% from EUR 1’314.6 mn as reported for 2019 (+3% on a constant currency basis). After  a slight decline in  2019, Operating EBITA in the region increased 4%  from EUR 126.3 mn to EUR 131.2 mn (+6% when adjusted for currency effects). At 9.9% of sales, the EBITA-Margin was close to double-digit level.

 

In the Americas  revenues were EUR 945.1 mn, down 4% compared to the EUR 983.0 mn as reported for 2019 (unchanged when adjusted for currency effects). Organic revenue development was -1%. The acquisitions made in 2019 (Unired and DCS Mexico) and 2020 (VitaQualy, Millikan and Banner Quimica) contributed 1 percentage-point of growth. Unfavourable currency trends deducted 4 percentage-points. Operating EBITA was EUR 86.0 mn, up 11% from the EUR 77.8 mn in the previous year (a growth of 16% at constant currency).

 

Asia-Pacific generated revenues of EUR 502.9 mn (significantly up from EUR 392.0 mn, +28% as reported, +33% in constant currency). Organic growth contributed 11 percentage-points, the effect of acquisitions completed in 2019 and 2020 was 21 percentage points. Negative exchange reate effects contributed a minus of 4 percentage points.Operating EBITA in that region came in at EUR 52.9 mn, which compares with EUR 35.7 mn in 2019, up 48% as reported and 53% when adjusted for currency effects.

 

As support functions were strengthened, structural cost increased by EUR 1.6 mn, resulting in an Operating EBITA for the “holding companies” (i.e. the head office in Rotterdam and regional head offices in Sinagpore and New Jersey, United States of America) of EUR -16.6 mn (compared to EUR -15.0 mn in 2019).

 

The original press release can be accessed via the link below:

 

https://www.imcdgroup.com/-/media/imcd/imcd-group/investors/investor-news/investor-news-2021/press-release_imcd-full-year-2020-results.pdf

 

Source: IMCD press release

 

HGE / DCG – 01.03.2021

 

 

Brenntag to switch to a “virtual” Format for General Meeting of Shareholders in June

German Distributor keeps Date for General Meeting of Shareholders and confirms Payment of Dividend

Global chemical distributor Brenntag AG (Essen, Germany) announced  General Shareholders’ Meeting of Brenntag AG will take place as planned on 10. June 2020. However, due to the spread of COVID-19, this year’s meeting will be held as a purely virtual event, without the physical presence of shareholders, the company said.


Brenntag’s Board of Management and the Supervisory Board also confirm their intention to pay out the proposed dividend of 1.25 EUR per share for the financial year 2019 in full, subject to the approval of the shareholders.

 

Source: Brenntag press release

 

HGE – DCG / 30.04.2020

Brenntag suspends 2020 Forecast for COVID-19 Reasons

Business Performance in Q1-2020 not significantly impacted by the Pandemic

Global chemical distributor Brenntag AG (Essen, Germany) has taken the decision to suspend the forecast for financial year 2020 published in the 2019 annual report due to “the considerable uncertainty about the future effects of the COVID-19 pandemic on global economic performance.”

According to the announcement, “Brenntag’s business performance in the first quarter was not significantly impacted by the pandemic. With a few exceptions, the Brenntag sites are currently fully operational. At the present time, however, it is not possible to give a reliable estimate of Brenntag’s business performance over the further course of the year due to the current spread of the pandemic in Europe and North America in particular and the containment measures decided by governments. Since the report on expected developments was prepared at the beginning of March 2020, the uncertainty around the expected effects has increased considerably.
The forecast will be updated as soon as it appears that the pandemic has been contained and the effects on Brenntag’s further business performance in 2020 can be reliably determined.”

Brenntag stressed that the company “has taken extensive measures to protect employees and business processes. The Group has a robust, diversified business model, a high level of liquidity and access to extensive, contractually agreed credit facilities.”

Source: Brenntag press release

HGE – DCG / 07.04.2020