- Brenntag’s robust business model bears fruit; record results once again in 2012
- Earnings per share up by 21.2% to EUR 6.53; dividends increase to EUR 2.40 per share
Brenntag (WKN A1DAHH), the world market leader in chemical distribution, can look back on a successful 2012 at its General Shareholders’ Meeting today. The company realized record results in 2012 which allows for a dividend proposal of EUR 2.40. CEO Steven Holland was satisfied with Brenntag’s performance in 2012: “The robustness of our business model and our broad diversification strategy have once again enabled us to achieve these strong results and to hold our own in the challenging global economic climate.”
A number of important factors shaped fiscal year 2012 for Brenntag. To begin with, the Board of Management was increased from three to four members in April 2012. In addition, the company succeeded in finalizing key strategic acquisitions in the USA, Latin America, and Australia in the second half of the year. A further milestone was the placement of the remaining shares of former majority shareholder Brachem Acquisition S.C.A. in July 2012. Since then, 100% of Brenntag shares have been in free float.
Results in 2012
Sales rose to EUR 9,689.9 million in fiscal year 2012, an increase of 7.7% on the previous year on a constant currency basis (as reported: 11.6%). Another important factor was the 4.6% year-on-year increase in gross profit* to EUR 1,925.7 million on a constant currency basis (as reported: 8.9%). Operating EBITDA** increased by 2.2% to EUR 706.6 million during the period under review on a constant currency basis (as reported: 6.9%). Profit after tax improved by 21.1% to EUR 338.2 million compared with the previous year. This is reflected in the EUR 6.53 earnings per share for Brenntag shareholders (2011: EUR 5.39).
First quarter 2013
In the first quarter of 2013, Brenntag held its own once again with a stable business performance in spite of the challenging global economic climate. Sales increased by 2.1% to EUR 2,419.1 million on a constant currency basis (as reported: 1.4%). Gross profit*, one of the key figures for Brenntag, increased by 1.3% year-on-year to EUR 477.9 million on a constant currency basis (as reported: 0.6%). Given that the reporting quarter had fewer business days than the corresponding prior-year period, gross profit per business day increased by 4.9% on a constant currency basis. Operating EBITDA** saw a more moderate development, declining by 3.3% on a constant currency basis (4.0% as reported) to EUR 164.7 million (Q1 2012: EUR 171.6 million).
Based on the excellent result for 2012, the Management Board and Supervisory Board recommend to the General Shareholders’ Meeting that a dividend of EUR 2.40 per share be paid out, corresponding to an increase of 20%. This represents a payout ratio of 36.8% of the net profit attributable to Brenntag shareholders.
Brenntag expects gross profit and operating EBITDA (before possible one-off effects) to grow in the current year. Owing to the uncertainty of the macroeconomic situation and assuming that the general economic situation will not recover, Brenntag expects a slowdown in growth. Based on the assumption that volumes will increase and that strict cost controls will continue, the company expects growth in operating gross profit to lead to an increase in operating EBITDA (before one-off effects). Brenntag continues to see itself as being very well positioned to take on the still-challenging market conditions.
* While Brenntag reports operating gross profit on segment level, the company reports gross profit on group level. Operating gross profit is defined as sales less costs of material for goods purchased and supplies, services purchased, packaging materials, supplier rebates and increase/decrease in finished goods. Gross profit is defined as operating gross profit less production/mixing and blending costs.
**Brenntag’s segments are primarily controlled on the basis of operating EBITDA, which is the operating profit/loss as recorded in the consolidated income statement plus amortization of intangible assets as well as depreciation of property, plant and equipment and investment property, adjusted for the following items:
• Transaction costs: Costs connected with restructuring under company law and refinancing, particularly the IPO in 2010 and the refinancing in 2011. They are eliminated for purposes of management reporting to permit proper presentation of the operating performance and comparability on segment level.
• Holding charges: Certain costs charged between holding companies and operating companies. On Group level they net to zero.