- Operating EBITDA of EUR 602.6 million grew by 25.5% over 2009 and exceeds guidance range of EUR 570-600 million
- Gross profit grew by 12.1% to EUR 1,636.4 million/sales increased by 20.2% to EUR 7,649.1 million
- Profit after tax reached EUR 146.6 million
- Earnings per share of EUR 2.93 allow for dividend payment proposal of EUR 1.40 per share
- All regions contributed to the positive results / outstanding development in Asia Pacific
- Expected growth in all relevant earnings parameters in 2011
Brenntag (WKN A1DAHH), the global market leader in chemical distribution, continues its growth path and concludes the financial year 2010 with record results. Compared with 2009, Brenntag achieved significant growth rates in all key performance indicators. Drivers were the organic growth of the operating business combined with increased efficiencies, and an improved capital structure as well as the earnings contribution of acquisitions.
In 2010, sales increased by 20.2% (15.3% based on constant exchange rates) to EUR 7,649.1 million (FY 2009: EUR 6,364.6 million). Gross profit* reached EUR 1,636.4 million (FY 2009: EUR 1,459.5 million), corresponding to a growth rate of 12.1% (7.6% on constant exchange rates). Operating EBITDA improved even stronger by 25.5% (20.2% based on constant exchange rates) to EUR 602.6 million (FY 2009: EUR 480.3 million). Brenntag exceeded its guidance range of EUR 570 – 600 million and marked another record year. Also profit after tax enhanced and amounted to EUR 146.6 million in 2010 (FY 2009: EUR 0.5 million). These figures reflect earnings per share of EUR 2.93. Based on the strong results, Brenntag’s Management and Supervisory Board will propose the General Shareholders’ Meeting on June 22, 2011 to pay a dividend of EUR 1.40 per share.
Stephen Clark, CEO of Brenntag: “We are looking back at a very successful year 2010 when we could further strengthen our global No.1 position in the chemical distribution industry. The excellent results in all key performance indicators in financial year 2010 demonstrate the sustainability of our strategy and the quality of the services our entire team delivers. Both of which will be further pursued under Brenntag’s designated CEO Steven Holland.”
All regions contributed to the positive development of Brenntag’s results in the financial year 2010. Especially Asia Pacific once again showed a very strong development with exceptional growth rates.
Pleasing development in Europe
Brenntag showed a clearly positive development in Europe in the financial year 2010. Operating gross profit* improved by 6.9% from EUR 807.6 million in 2009 to EUR 863.0 million in 2010. Operating EBITDA increased in comparison to the financial year 2009 by 14.3% from EUR 250.6 million to EUR 286.5 million in the previous year. Overall, Europe recorded pleasing double-digit earnings growth compared to the year 2009, which was already a strong year for Brenntag’s business on the continent.
Significant growth in North America
North America reported excellent results in the financial year 2010. Operating gross profit* increased substantially in 2010 by 14.0% to EUR 613.0 million compared to EUR 537.7 million in 2009. At constant exchange rates, operating gross profit grew by 6.8%. Operating EBITDA reached EUR 264.4 million in the previous year after EUR 196.8 million in 2009, corresponding to a growth rate of significant 34.3%. Excluding exchange rate benefits, the growth amounted to 26.2%. Overall, Brenntag’s earnings parameters grew substantially in North America in 2010. Brenntag further strengthened its market position in North America in the financial year 2010 through the acquisition of the industrial chemicals business of Houghton Chemical Corporation.
Strong results in most Latin American countries
In Latin America Brenntag’s operating gross profit* improved from EUR 123.3 million in 2009 by 11.8% to EUR 137.8 million in 2010. Adjusted for exchange rate effects, the growth rate amounted to 2.5%. Operating EBITDA grew by 8.5% to EUR 45.9 million in 2010 after EUR 42.3 million in 2009. At constant exchange rates operating EBITDA remained stable. Main reasons for Brenntag’s lower growth rates in Latin America were political developments in Venezuela and the financial policy, which influenced Brenntag’s business negatively. Excluding Venezuela, the Latin American segment achieved significant growth rates of about 10% in both operating gross profit and operating EBITDA on a constant currency basis in 2010.
Outstanding growth in Asia Pacific supported by Brenntag’s acquisition of EAC Industrial Ingredients
The Asia Pacific region developed outstandingly during the financial year 2010. Brenntag’s results were significantly influenced both by the performance of the acquired companies of the EAC Group and the already established Brenntag subsidiaries in this segment. Operating gross profit* substantially increased and reached EUR 45.7 million in 2010 after EUR 14.5 million in 2009. This corresponds to a growth of more than three times the result of 2009 as well as more than two times the result of 2009 adjusted for exchange rate effects. Operating EBITDA more than quadrupled from EUR 4.1 million in 2009 to EUR 17.6 million in 2010. Excluding exchange rate benefits the growth in operating EBITDA more than tripled.
After tax profit with remarkable increase
Profit before tax in 2010 showed a remarkable development, increasing from EUR 47.1 million in 2009 to EUR 231.8 million in 2010 (+392.1%). In addition to the significant growth in operating EBITDA, profit before tax grew due to noticeably lowered interest costs resulting from the improved capital structure and reduction in debt after the IPO in March 2010. The full-year effect of these improvements will show in the financial result for 2011. In addition to the positive effects from the growth of business and the improved capital structure, a decreased customer base amortization had a positive impact.
Active working capital management limits increase in working capital
Brenntag’s free cash flow amounted to EUR 376.1 million in 2010 compared to EUR 646.8 million in 2009. While the free cash flow benefited from the growth in EBITDA, the overall decrease of the free cash flow is mainly attributable to the change in working capital. Due to an active working capital management the increase in working capital was limited to EUR 136.4 million despite a strong increase in business activity. In 2009, significantly reduced sales resulted in a liquidity inflow from changes in working capital, an effect that has partly been inverted by rising business activity in 2010.
Net financial liabilities further reduced
In the financial year 2010 Brenntag further reduced net financial liabilities to EUR 1,420.9 million after EUR 1,833.7 million (excluding the shareholder loan) in 2009. The total leverage ratio of Brenntag measured as net financial liabilities / operating EBITDA, was reduced from 3.6x end of 2009 to now 2.4x. Due to the strengthening of the company’s equity base as a result of the successful IPO and the continuing positive results, the equity of the group increased to EUR 1,617.9 million.
Prospects: Brenntag plans to grow in all relevant earnings parameters
Supported by a further growing global economy in 2011 and benefiting from the favorable trends in chemical distribution, Brenntag plans to grow in all relevant earnings parameters. Brenntag is excellently positioned in the world wide chemical distribution market and will continue to focus on attractive growth segments.
|Financial figures at a glance (in EUR m)|
|Consolidated Income statement||2010||2009|
|Operating EBITDA/Gross profit (in %)||36.80||32.90|
|Profit after tax||146.6||0.5|
|Earnings per share (in EUR)||2.93||-|
|Consolidated Balance sheet||Dec. 31, 2010||Dec. 31, 2009|
|Consolidated Cash flow||2010||2009|
|Cash used for/provided by operating activities||150.3||490.3|
|Investments in non-current assets (Capex)||- 85.1||- 71.8|
|Free cash flow||376.1||646.8|
|Europe (in EUR m)|
|Operating gross profit*||863.0||807.6|
|Growth in operating gross profit (in %)||6.9|
|Growth in operating EBITDA (in %)||14.3|
|North America (in EUR m)|
|Operating gross profit*||613.0||537.7|
|Growth in operating gross profit (in %)||14.0|
|Growth in operating gross profit (in %, fx adjusted)||6.8|
|Growth in operating EBITDA (in %)||34.3|
|Growth in operating EBITDA (in %, fx adjusted)||26.2|
|Latin America (in EUR m)|
|Operating gross profit*||137.8||123.3|
|Growth in operating gross profit (in %)||11.8|
|Growth in operating gross profit (in %, fx adjusted)||2.5|
|Growth in operating EBITDA (in %)||8.5|
|Growth in operating EBITDA (in %, fx adjusted)||0.0|
|Asia Pacific (in EUR m)|
|Operating gross profit*||45.7||14.5|
|Growth in operating gross profit (in %)||215.2|
|Growth in operating gross profit (in %, fx adjusted)||173.7|
|Growth in operating EBITDA (in %)||329.3|
|Growth in operating EBITDA (in %, fx adjusted)||291.1|
* 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.
** 2009 including shareholder loan
45472 Mülheim an der Ruhr
Telephone: +49 (208) 7828-7701
Fax: +49 (208) 7828-7220
Georg Müller, Stefanie Steiner, Diana Alester
45472 Mülheim an der Ruhr
Telephone: +49 (208) 7828-7653
Fax: +49 (208) 7828-7755
Brenntag is the global market leader in full-line chemical distribution. Linking chemical manufacturers and chemical users, Brenntag provides business-to-business distribution solutions for industrial and specialty chemicals globally. With over 10,000 products and a world-class supplier base, Brenntag offers one-stop-shop solutions to about 160,000 customers. The value-added services include just-in-time delivery, product mixing, formulation, repackaging, inventory management, drum return handling as well as extensive technical support. Headquartered in Mülheim/Ruhr, Germany, the company operates a global network with more than 400 locations in nearly 70 countries. In 2010 the company realized global sales of EUR 7.6 billion (USD 10.1 billion) with more than 12,000 employees.