Brenntag reports outstanding results in the third quarter 2021 in still persisting exceptional market conditions. Both divisions continue to deliver strong results with Brenntag Specialties in particular showing an excellent performance. The company’s transformation program Project Brenntag progresses according to plan and already contributed around 70 million EUR of additional operating EBITDA since the inception of the program.
Christian Kohlpaintner, Chief Executive Officer of Brenntag SE, said: “In the third quarter of 2021, Brenntag achieved outstanding results with both our two global divisions Brenntag Essentials and Brenntag Specialties contributing strongly to this performance. The unusual and challenging market conditions continued in Q3, and we expect to see them persisting well into 2022. To secure availability of products and keeping customers operating remain key priorities for Brenntag in this environment. We want to thank all our employees for their great performance and strong commitment in these special times.”
In the third quarter 2021, Brenntag generated sales of 3,738.2 million EUR. Operating gross profit rose by 23.7% to 862.3 million EUR compared to 695.2 million EUR in previous year’s quarter. Operating EBITDA reached 342.9 million EUR, a strong year-on-year increase of 29.7%. Earnings per share totaled 1.02 EUR compared to 0.76 EUR a year ago which is an increase of 34%.
Georg Müller, Chief Financial Officer of Brenntag SE, said: “In the third quarter 2021, Brenntag continued on its successful path. While we achieved strong results in both of our global divisions, we are particularly delighted about the development of our Earnings per Share, which rose strongly by more than 34% to 1.02 EUR compared to 0.76 EUR in the third quarter 2020.”
Both divisions continue to deliver strong results
In the third quarter, Brenntag Essentials again showed a strong performance. In line with the long-term expectations, Brenntag Specialties grew stronger than Brenntag Essentials and delivered excellent results.
The Brenntag Essentials division which markets a broad portfolio of process chemicals across a wide range of industries again delivered strong results in the third quarter 2021. The division reached an operating gross profit of 520.2 million EUR (+19.5%). Operating EBITDA increased by 28.7% to 210.3 million EUR compared to the prior-year period. The EMEA, Latin America and particularly North America regions contributed to this positive performance. The business development in Asia Pacific was severely impacted by renewed and strict COVID-19 lockdowns in countries such as Thailand, Vietnam, and Indonesia, as well as dual control measures in China to reduce specific energy consumption and greenhouse gas emissions.
The Brenntag Specialties division which builds on Brenntag’s position as the largest specialty chemicals distributor worldwide, again delivered excellent results in third quarter 2021. The division achieved an operating gross profit of 334.3 million EUR (+30.1%). Operating EBITDA rose by 42.3% to 152.9 million EUR compared to the previous year’s quarter. These remarkable results are due to a broad-based positive performance across all focus industries. In the Americas region, Brenntag Specialties showed particularly strong results.
Project Brenntag makes very good progress
The implementation of the comprehensive transformation program Project Brenntag is going according to plan and makes very good progress since the launch of the new operating model in January 2021. Since its inception, Project Brenntag already contributed around 70 million EUR of additional operating EBITDA which is expected to ramp up to 220 million EUR annually by 2023. Additionally, the optimization of Brenntag's global site network is ongoing. Of the around 100 planned site closures, 68 have been completed to date. Furthermore, since the initiation of the program, more than 740 jobs have structurally been reduced out of approximately 1,300 planned over two years in a socially responsible manner. Brenntag is in close dialogue with the works councils in the different countries.
Chief Financial Officer Georg Müller not to extend his mandate
Georg Müller, Brenntag's long-standing Chief Financial Officer, has informed the Supervisory Board that he will not extend his mandate beyond his current term ending March 2022. Georg Müller has been a constant for the company holding various management positions over the last almost 20 years, thereof ten years as CFO. Brenntag is, also thanks to his work, the global market leader in chemicals and ingredients distribution. In particular, he contributed extensively over many years to Brenntag’s financial strength and its excellent reputation in the equity and debt capital markets. The Supervisory Board is currently conducting a structured and thorough succession process.
Outlook confirmed despite critical disruptions in global supply chains
Brenntag confirms its operating EBITDA guidance to be in the range of 1,260 million to 1,320 million EUR for the financial year 2021 (previously: 1,160 million to 1,260 million EUR). The guidance was raised twice this year, and takes into account organic growth, the expected efficiency gains from Project Brenntag, and the contribution to earnings from already closed acquisitions at the time of the guidance increase. It is based on the assumption that exchange rates will remain stable on the level at the time of the guidance upgrade. Brenntag expects the exceptional and challenging market conditions persisting well into 2022.