Brenntag

06/20/2012

Brenntag proposes significant dividend increase

In 2011 Brenntag’s growth strategy continued to pay off and enabled record results
Brenntag started into the fiscal year 2012 with continued earnings growth and expects further growth in all relevant earnings parameters for the remainder of the year
Significantly increased dividend of EUR 2.00 per share (2011: EUR 1.40) proposed

In today’s General Shareholders’ Meeting Brenntag (WKN A1DAHH), the global market leader in chemical distribution, looks back at a successful year 2011.

The year 2011 was marked by numerous important events. In the first half-year Brenntag focused on its financing structure. Both rating agencies Standard & Poor’s and Moody’s had raised their ratings. Subsequently Brenntag refinanced nearly all of its existing debt and achieved extended maturities, a high degree of financial flexibility and significant margin improvements. In the second half-year Brenntag closed two major acquisitions: The Multisol Group in UK expanded Brenntag’s product portfolio with high quality base oils and lubricant additives. With the acquisition of a majority stake in the Zhong Yung Group Brenntag achieved its strategic market entry in China.

Results 2011

All key performance indicators showed strong growth rates. Sales increased by 15.4% based on constant exchange rates (13.5% as reported) to EUR 8,679.3 million in 2011. More importantly, Brenntag managed to grow gross profit* by 10.0% based on constant exchange rates (8.0% as reported) to EUR 1,768.0 million. Increased efficiencies provided for an even stronger growth in operating EBITDA** which rose by 12.2% based on constant exchange rates (9.7% as reported) to EUR 660.9 million. One of Brenntag’s key profitability indicators – the ratio of operating EBITDA** to gross profit* – further improved from 36.8% to 37.4% in 2011. Thereby the company once again managed to continuously improve efficiencies within the group. All regions contributed to the positive development in 2011. Profit after tax enhanced by 90.5% and amounted to EUR 279.3 million, reflecting earnings per share attributable to Brenntag shareholders of EUR 5.39 (2010: EUR 2.93).

First quarter 2012

Brenntag continued to grow earnings in the first quarter of 2012. This development was supported by organic growth as well as through the contribution of acquisitions made in 2011. Sales increased by 10.4% based on constant exchange rates (12.1% as reported) to EUR 2,384.8 million. More relevant, gross profit* reached EUR 475.0 million and thereby increased by 7.4% based on constant exchange rates (9.3% as reported). Operating EBITDA** improved to EUR 171.5 million which corresponds to a currency adjusted growth rate of 6.3% (8.5% as reported). Although Brenntag reported positive growth rates in the first quarter of 2012 in Europe, it implemented efficiency-enhancing measures in answer to the generally lower economic growth expectations for Europe. The implementation of these efficiency-enhancing measures had a negative impact on operating expenses in the first quarter of 2012, but will lead to lower expenses as the year progresses.

Expansion of the Management Board

In recognition of the continued development within the region and further growth opportunities Jürgen Buchsteiner, CFO of the Group has taken over responsibility for the region Asia Pacific on the Management Board in addition to his on-going responsibilities for the Group’s Mergers & Acquisitions function worldwide.

Georg Müller, who joined the Management Board effective April 1, 2012 after working for the company for almost ten years and being instrumental in building Brenntag’s excellent reputation in financial markets and with investors worldwide, will take over the role as CFO from Jürgen Buchsteiner as of July 1, 2012.

Steven Holland, CEO Brenntag AG: “For years now we follow our strategy of being a global chemical distributor and expanding our geographic coverage. In future Jürgen Buchsteiner, who has been pivotal in Brenntag’s acquisition strategy in Asia-Pacific, will manage the integration and development of our pan-Asian network both operationally and through acquisitions. The appointment of Georg Müller as additional member of the Management Board and future CFO of the Group underlines our successful personnel development and ensures the continuity of our strategy. With this expanded Management Board we will even better be able to achieve our ultimate goals: to be the safest, fastest growing, most profitable, global chemical distributor and preferred channel for both specialty and industrial chemicals.”

Dividend proposal

Based on the strong results in 2011, Brenntag’s Management Board and Supervisory Board propose the General Shareholders’ Meeting to pay a dividend of EUR 2.00 per share which constitutes a strong increase over the previous year, when EUR 1.40 per share was paid out. This dividend proposal represents a dividend payout ratio of 37% of net profit attributable to Brenntag shareholders.

Positive outlook to the remaining year 2012

With view to 2012 the three performance indicators gross profit, EBITDA and profit after tax show positive trends and Brenntag expects to achieve growth in all three. CEO Steven Holland: “The high degree of diversification in our business model with a wide geographic coverage, various customers, suppliers and products in different industries is one of our key strengths.” Brenntag considers the chemical distribution market to grow, also in the long term, both as a result of momentum from the development of the global economy and the sustained trend towards chemical producers outsourcing their distribution activities to distributors. Brenntag’s broad market presence will enable the company to participate in this trend in the next few years and, by focusing on attractive growth segments and steadily enhancing the efficiency, Brenntag expects an above-average benefit from this trend.

* 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.

About Brenntag:

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 more than 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 an der Ruhr, Germany, the company operates a global network with more than 400 locations in 68 countries. In 2011 the company realized global sales of EUR 8.7 billion (USD 12.1 billion) with nearly 13,000 employees.

This press release may contain forward-looking statements based on current assumptions and forecasts made by Brenntag AG and other information currently available to the company. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Brenntag AG does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.

Press contact:

Hubertus Spethmann

Brenntag AG

Corporate Communications

Stinnes-Platz 1

45472 Mülheim an der Ruhr

Germany

Telephone: +49 (208) 7828-7701

Fax: +49 (208) 7828-7220

E-Mail: hubertus.spethmann@brenntag.de

Financial media:

Stefanie Steiner