Tag Archives: Brenntag

Brenntag SE included in German Benchmark Index DAX

Germany’s leading Share Index will be expanded from 30 to 40 Companies

As part of a reform of the DAX share index, which gives higher emphasis to the free float market capitalisation of a company, chemicals and ingredients distributor Brenntag SE (Essen, Germany) will be included in the index as of 20. September 2021.

 

Brenntag’s shares have been listed on the Frankfurt Stock Exchange since 2010. During this time, the company’s market capitalization has quadrupled, Brenntag said in the announcement.  Today it amounts to more than EUR 13 bn. The shares are part of the MDAX mid-market index.

 

With Flavours & Fragrances producer Symrise AG (Holzminden, Germany) another company from the broader chemicals sector will be added to the index shortly. The reform of the DAX, which started about 33 years ago on 01. Juli 1988, is a fallout from last year’s WIRECARD scandal, many commentators say. It incudes also more stringent listing rules. Through the additions to the DAX as part of this reform, the MDAX is set to loose about half of its market capitalisation.

 

Source: Brenntag press release, Handelsblatt website

 

HGE – DCG / 06.09.2021

Brenntag raises Operating EBITDA Forecast for FY 2021

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Continued positive Earnings Trend and good Prospects for the Rest of the Year are encouraging to German Distribution Group

Global chemical distributor Brenntag SE (Essen, Germany) last week decided to raise the forecast for operating EBITDA for the 2021 financial year previously published on 10. March 2021. Against a backdrop of strong results Q1-2021 and “the continuation of the postive earnings trend into the second quarter to date, as well as considering the prospects for the rest of the year, Brenntag said it expects an Operating EBITDA in the range of EUR 1’160 mn to EUR 1’260
mn for the financial year 2021 (previously: EUR 1’080 mn to EUR 1’180 mn).

Taking into account organic growth, the expected efficiency gains from the implementation of the transformation program “Project Brenntag” and the contribution to earnings from acquisitions which have already been closed, the new forecast is also based on the assumption that exchange rates will remain stable on the level of the announcement date. The forecast does not envisage any special items and comes with the usual caveat that it is “dependent on any further impact of the COVID-19 pandemic on both the macroeconomic environment and the Group not deviating significantly from the currently known extent.”

Source: Brenntag press release

HGE – DCG / 21.06.2021

Brenntag reports strong Q1-2021 Results despite challenging Market Conditions

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Good Start for recently established global Divisions of leading Distribution Group

Global chemical distributor Brenntag SE (Essen, Germany) has published the Q1-2021 results yesterday. Despite a marginal decline in sales to EUR 3’132.5 mn (down 2.5% from EUR 3’211.3 mn as reported, or +2.7% on a constant currency basis), the group is showing increases in Operating Gross Profit of 1.8% (7.4% on  a constant currency basis) from EUR 750.7 mn in Q1-2020 to EUR 764.5 mn last quarter and Operating EBITDA of 14.2% (20.7% on a constant currency basis) from EUR 263.0 mn in Q1 of the previous year to EUR 300.3 mn.

 

Profit before tax was down 10.8% at EUR 139.3 mn, Profit after tax down  12.9% at EUR 100.2 mn. This results in earnings per share attributable to Brenntag shareholders of EUR 0.63 per share (down from EUR 0.74 per share in Q1-2020). The reduction was mostly caused a “non-recurring, extraordinary increase in provisions related to a tax audit concerning past handling of alcohol taxes”, Brenntag said in the announcement.

 

Working capital increased by 14.8% to EUR 1’545.8 mn (up from EUR 1’346.6 mn at the end of  2020) mostly driven by an increase in Trade Receivables. At a level of EUR 75.6 mn, free cash flow was down significantly from the EUR 161.5 mn realised in Q1-2020.

 

With this quaterly set of data Brenntag for the first time provided feedback on the performance of the new global divisions, Brenntag Essentials and Brenntag Specialties that represent the the destinct market aproach the company switched to effective 01. January 2021.

 

Brenntag Essentials had what the announcement described as “outstanding results”, with an Operating Gross Profit of EUR 472.5 mn, up 1.4% as reported or +7.1% at a constant currency basis. This resulted in an Operating EBITDA of EUR 194.1 mn (representing 64.4% of the total in Q1-2021), up 22.6% as reported or +29.2% on a constant currency basis. Brenntag said that “all regions contributed to the positive performance … , with North and Latin America as well as Asia Pacific being particularly strong. EMEA showed slightly weaker growth rates compared to the very strong development of the recent quarters.”

 

Brenntag Specialties, which is focusing on six selected customer industries: Nutrition, Pharma, Personal Care / HI&I (Home, Industrial & Institutional), Material Science (Coatings & Constructions, Polymers, Rubber), Water Treatment and Lubricants, had an Operating Gross Profit of EUR 284.3 mn, up 1.7% as reported and +7.1% and a constant currency basis, resulting in a reported Operating EBITDA of 119.8 million EUR (+3.5% or + 9.2% on a constant currency basis. Here the regions EMEA and Asia Pacific showed a particularly strong performance across all industries, Brenntag said.

 

With the split into two global divisons, the implementation of Project Brenntag has made good progress so far, the statement said. Designed to be a comprehensive transformation program, it has the main objectives to “expand Brenntag’s position as global market leader and position the company for sustainable organic earnings growth.” Step-by-step implementation of the program’s initiatives is underway and more than 50 of the around 100 site closures have already been completed to date. Since the initiation of the program, around 350 jobs have been reduced, out of approx. 1’300 planned over two years. Brenntag said it is using natural fluctuation, mutually agreed separations, and regular and early retirement schemes in order to realise the adjustments in a socially responsible manner.

 

Brenntag also said that the actions regarding crisis management remain in place as have proven to be effective. The company has successfully limited the impacts of the pandemic on its business and protected the health and safety of its employees and business partners.

 

Against the backdrop of a continued challenging environment and the results of Q1, Brenntag said it confirms its Operating EBITDA guidance to be in the range of EUR 1’080 to 1’180 mn for the full year, with both global division expected to contribute.

 

Source: Brenntag press release and quarterly report; DistriConsult analysis

 

HGE – DCG / 12.05.2021

Brenntag reports Results for an “extraordinary” Year 2020

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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

Brenntag appoints Ewout van Jarwaarde as Chief Transformation Officer

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Management Board expanded with newly created CTO Position

Global chemical distributor Brenntag SE (Essen, Germany) announced  that it has appointed Ewout van Jarwaarde as new Member of the Board of Management and Chief Transformation Officer (CTO). He will assume his role in the newly created position as of 01. January 2021 and will be responsible for the execution of the company’s global transformation program “Project Brenntag”,  which is supposed “to further expand the company´s leading market position and drive sustainable organic earnings growth”.

 

Van Jarwaarde, a 37-year-old Dutchman, will also “be responsible for driving functional excellence, realising digital and data-driven business opportunities as well as developing the group-wide IT and indirect procurement functions”,  Brenntag said in the announcement. Most recently he was CEO of CarNext.com, a marketplace for high quality used cars, part of LeasePlan (Amsterda, Te Netherlands) with operations across Europe. At LeasePlan, he was responsible for its used car business for the development, launch and scaling of CarNext.com. Prior to this position van Jarwaarde was a Partner at McKinsey & Company in Amsterdam focusing on strategy development, commercial and operational excellence transformations and building digital and data-driven capabilities across various industries globally.

 

Source: Brenntag press release

 

HGE – DCG / 21.12.2020

Brenntag releases new Forecast for FY2020

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Operating EBITDA expected to be comparable with FY2019 or marginally higher

Following yesterdays meeting of its Board of Management, global chemical distributor Brenntag AG (Essen, Germany) has published a new forecast for 2020. Due to the uncertainty associated with the COVID-19 pandemic,  the original forecast published in the 2019 annual report was suspended in April.

Brenntag says it has achieved “sound earnings growth in the first half of 2020”, despite the adverse impact of the COVID-19 pandemic on general economic performance,  a result it attributes to “the resilience of its business model”.

With current business performance in line with the Board of Management’s expectations and an operating EBITDA in July and August 2020 slightly above the prior-year figure on a constant currency basis, Brenntag now expects operating EBITDA for FY2020 to reach a level of EUR 1’000 mn and EUR 1’040 mn. This compares to EUR 1’001.5 mn reached in 2019.

 

Brenntag said its new forecast is based on the assumption “that there will be no further significant government measures to contain the pandemic and related negative effects on the economy”. “[The] forecast does not envisage any special items or significant changes in current exchange rates in the further course of the year. It includes the contributions to earnings from acquisitions” the statement said.

The interim report for the results of Q3-2020 is scheduled to be published on 04. November 2020.

 

Source: Brenntag press release

 

HGE – DCG / 16.09.2020

Brenntag reports solid Q1-2020 Results and makes Progress on Holistic Analysis of Business

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Operating Gross Profit and Operating EBITDA increase despite flat Sales

Global chemical distributor Brenntag AG (Essen, Germany) has published the Q1-2020 results, showing increases in Operating Gross Profit of 8.3% (7.1% on  a constant currency basis) from EUR 688.2 mn in Q1-2019 to EUR 745.2 mn and Operating EBITDA of 10.1% (8.7% on a constant currency basis) from EUR 238.8 mn in Q1 of the previous year to EUR 263.0 mn. Sales was “flat” at EUR 3’206.1 mn, +0.7% (-0.3% on a constant currency basis), not really different from the EUR 3’182.3 mn realised in Q1-2019. 

Profit before tax was up 8.9% at EUR 156.6 mn, Profit after tax up 9.3% at EUR 115.0 mn This results in earnings per share attributable to Brenntag shareholders of EUR 0.74 per share (up from 8.8% from EUR 0.68 per share). Working capital decreased slightly to EUR 1’752.8 mn (down from EUR 1’767.7 mn at the end of  2019). At a level of EUR 161.5 mn, free cash flow was down slightly from the EUR 166.3 mn realsied in Q1-2019.

In EMEA the company experienced a good quarter with increased demand, as most of the company’s customers were able to maintain business operations, despite COVID-19 related issues. Sales were up 3.3% as reported and on constant currency basis to EUR 1’391.9 mn. On the Operating EBITDA level, the EMEA region increased by 20.9% as reported to EUR 406.3 mn (+21.2% on a constant currency basis).

North America remained difficult territory for the company. The region even reported an decrease of the Operating EBITDA, -1.7% to EUR 110.1 mn (-4.6 % on a constant currency basis). Sales were down -2.5% (-5.2% on a constant currency basis) to 1’146.5 mn. Despite positive trends in some industry segement, Oil & Gas with it’s “clear declines in business” drove earnings down, the company said.

Latin America reached an Operating EBITDA of EUR 13.8 mn, up 20.0% as (+25.1% on a constant currency basis), despite  what Brenntag described as “a continued volatile and difficult market environment” in the region”. Sales in the region were EUR 217.1 mn, up 3.1% or 6.4% on a constant currency basis.

Asia Pacific contributed an Operating EBITDA of EUR 26.3 mn, up 22.3%  (+20.1 % on a constant currency basis) This increase is due in particular to the acquisition of Tee Hai Chem Pte. Ltd., closed during 2019, Brenntag said in the statement. 

As Brenntag said earlier in the year, it is currently examining its internal structures, processes and organisational forms along the value chain, where it sees potential for improvement in harmonisation and standardisation. This initiative, dubbed “Project Brenntag” is making good progress, the CEO later said in the earnings call.

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

HGE – DCG / 08.05.2020

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

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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

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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

Brenntag reports 2019 Results, plans to raise Dividend

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Operating EBITDA passes EUR 1 bn Mark, driven by initial Application of IFRS 16 Rule on Leases

Global chemical distributor Brenntag AG (Essen, Germany) has published the annual results for 2019 today. Except for EMEA, all regions (i.e. North America, Latin America and Asia-Pacific) reported growth in Sales and Operating Gross Profit. Earning per share rose slightly to EUR 3.02 per share (up from EUR 2.98 per share).  This allows for a further increase of the dividend to EUR 1.25 per share or equivalent to a payout ratio of 41.4% of the Profit after Tax attributable to Brenntag’s shareholders, subject to approval by the AGM in June.

 

Brenntag’s sales in 2019 were EUR 12’821.8 mn, +2.2% as reported and -0.3% on a constant currency basis when compared with last year. (Operating) Gross Profit was EUR 2’821.7 mn, an increase of 6.0% as reported, and +3.4% on a constant currency basis. Overall, the group reported an Operating EBITDA of EUR 1’001.5 mn,  up 14.4% from the EUR 875.5 mn in 2018 as reported (an increase of 11.3 % on a constant currency basis). However, Brenntag noted that the change in the IFRS 16 accounting rule regarding treatment of leasing obligations had a positive impact of EUR 116 mn on the Operating EBITDA. Discounting that effect, the increase was +1.1% to EUR 885.5 mn only.

 

Profit after tax was up sightly by EUR 6.9 mn at EUR 469.2 mn. This results in earnings per share attributable to Brenntag shareholders of EUR 3.02 per share (up from EUR 2.98 per share).

 

Working capital decreased slightly to EUR 1’767.7 mn (down 2.2% from EUR 1’807.0 mn at the end of  2017). Declining chemical prices during 2019 helped here. At a level of EUR 837.3 mn in 2019, free cash flow was EUR 837.3 mn, up almost 60% from the EUR 525.2 mn realised in 2018, amongst other things helped by  a reduction in Net Working Capital, Brenntag said.

 

In EMEA weak demand and a lack of economic drive during the whole year 2019 created a difficult operating environment. On the Operating EBITDA level, the EMEA region increased by 5.4 % as reported to EUR 406.3 mn (+5.6% on a constant currency basis). However this includes a positive effect of EUR 46 mn from IFRS 16, Brenntag said.

 

North America had a good start into the year, but later the market environment got more difficult for the company. The region reported an increase of the Operating EBITDA, +15.9% to EUR 474.8 mn (+10.1 % on a constant currency basis).  The positive impact from IFRS 16 is EUR 53 mn (equivalent to a 13 percent-points, leaving a operational contribution of 2.9 percent-points). Particularly Q4 was weak in that region, with a decline of Operating EBITDA of EUR 17 mn (-16% when compared with the same quarter in the previous year).

 

Latin America reached an Operating EBITDA of EUR 55.9 mn, up 41.1% as reported from EUR  39.9 mn (+38.0% on a constant currency basis), despite  “a continued volatile and difficult market environment” in the region”. The figure includes a positive effect of EUR 9 mn from IFRS 16.

 

Asia Pacific contributed an Operating EBITDA of EUR 101.1 mn, up 29.8% from the EUR 77.9 mn reported for 2018 (+24.7 % on a constant currency basis. The IFRS 16 effect was a positive EUR 9 mn (or ca. 11 percent-points). Main driver was the positive contribution from acquisitions, Brenntag sai in the statement. 

 

Brenntag said it expects a “positive performance at Operating EBITDA level in 2020, assuming  that exchange rates remain stable. The company is operating in a macroeconomic environment of considerable uncertainty. The outlook is based on the assumption that the effects of the macroeconomic risks and, in particular, the effects of the crisis regarding the new coronavirus remain very limited.”

 

Brenntag’s new CEO, Dr. Christian Kohlpaintner, who took office at the beginning of the year 2020 commented that “Brenntag is a strong brand with a good reputation in its markets. Our company offers great potential for organic profitable growth. My Board of Management colleagues and I will therefore make every effort to unlock more of this potential. Going forward, we will not only maintain our highly market-centric approach, but also focus to a greater extent on optimizing our processes, procedures and structures, thereby creating the conditions crucial to long-term organic growth.”

 

The company is currently examining its internal structures, processes and organisational forms along the value chain, where it sees potential for improvement in harmonisation and standardisation. Besides a “stringent internal execution of initiatives and measures”,  Brenntag also intends to further expand its already very customer-centric approach.

 

Additional details can be obtained via the links below:

https://www.brenntag.com/media/documents/news/news_2020/20200304_pm_fy2019_en_final.pdf

 

https://www.brenntag.com/media/documents/investor_relations/2020/brenntag_annualreport_2019.pdf

 

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

 

HGE – DCG / 04.03.2020