CEO Letter FY2019

Dear shareholders,

For just over two months now, I have been Chief Executive Officer of Brenntag AG and delighted about this demanding role at the global market leader in chemical distribution. I have already had the opportunity to acquaint myself better with numerous colleagues and employees as well as processes and operating procedures around the globe. This confirmed once again that the company is very well positioned. I see numerous opportunities for its continued positive development.

Before I go into this in greater detail, I would like to give an appraisal of last year. In 2019, a financial year marked by a generally difficult market environment, Brenntag achieved results that were not entirely satisfactory. The Group reported operating gross profit of EUR 2,821.7 million, a rise of 3.4% on a constant currency basis. Operating EBITDA came to EUR 1,001.5 million, a slight decrease on the prior-year figure on a like-for-like basis.

In particular, earnings in the two large regions, EMEA (Europe, Middle East & Africa) and North America, were adversely affected by the difficult macroeconomic conditions. Here, there was a lack of momentum in demand throughout 2019 and a further downturn in the environment towards year-end. The Latin America region, on the other hand, posted good results with organic growth in a highly volatile environment. Asia Pacific also reported higher earnings due largely to acquisitions.

As planned, Brenntag was once again very acquisitive during the past year. In all regions of the world, it made nine acquisitions that strengthen the business and improve its competitive position.

Even though it did not quite achieve the growth targets set for 2019, the Group demonstrated its resilience overall.

Free cash flow was on a positive track last year. At EUR 837.3 million and having risen by around 60%, it was well above the prior-year figure. Here, Brenntag demonstrates the strengths of its business model, which enables high cash inflows even in a difficult environment. Overall, profit after tax increased slightly to EUR 469.2 million. Earnings per share rose to EUR 3.02. This, too, underscores the solidity of our company.

The dividend at Brenntag has risen continuously over a number of years and we would like to pay our shareholders a higher dividend again this year. We will therefore propose a dividend of EUR 1.25 at the General Shareholders’ Meeting in June. This represents a rise of 4.2% on the previous year and is the ninth consecutive increase since our stock market flotation in 2010.


Above all, though, I would like to take a look forward. My aim is to work together with the entire management team to achieve sustainable and profitable organic growth.

Brenntag is the global market leader in chemical distribution and our focus is on extending this position. To do so, we must make better use of our size and increase internal collaboration across national and regional boundaries. This also means further harmonizing our business processes and making them more efficient.

Brenntag has always placed its customers front and centre. We will maintain this principle unchanged going forward and focus to an even greater extent on creating added value for our customers. We are currently evaluating our business model in detail with a view to leveraging further potential.

My Board of Management colleagues and I are aware that measures and initiatives undertaken by the Group in the past with the aim of improving efficiency ought to have been better executed. I will place particular emphasis on systematically implementing the measures that we decide upon. This will be the benchmark by which we measure ourselves.

Sustainability has played an important role at Brenntag for many years. I see sustainability as a driver of innovation, profitability and growth. As the largest chemical distributor, we aspire to be the leader in this area too.

2020 will be a year of change for Brenntag. Our company offers great potential for profitable growth. We will invest in order to leverage this potential. Macroeconomically, we still see a challenging environment and do not currently expect a turnaround. In addition, the spread of the coronavirus crisis creates greater short-term uncertainty. It is particularly difficult, therefore, to issue a firm forecast. Assuming that the effects of this risk remain very limited, the Group currently expects an increase in operating EBITDA in 2020.

On behalf of the entire Board of Management, I would like to thank all stakeholders in advance for your support and the confidence placed in our company.


Essen, March 3, 2020


Dr Christian Kohlpaintner
Chief Executive Officer