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CHEMICAL DISTRIBUTION
demand from customers in the oil and gas sector and the contraction in industrial production in the US created headwinds”. Nevertheless, while operating EBITDA in the region fell 5.3 per cent over the period, from €98.4m to €93.2m, the company still succeeded in upping its sales and operating gross profit slightly, from €928.4m to €935.1m and from €243.9m to €246.3m, respectively. Hampered by the “very difficult situation”
in Venezuela, the company saw its Latin American sales drop 16.2 per cent year-on- year, from €230.8m to €193.5m. At the same time, operating gross profit declined 15 per cent over the period, from €50.5m to €42.9m, with operating EBITDA dropping 29.2 per cent, from €16.1m to €11.4m.
ONWARDS AND UPWARDS
FINANCIALS • DESPITE A CHALLENGING QUARTER, BRENNTAG IS CONTINUING TO INVEST WITH RECENT ANNOUNCEMENT OF PLANS FOR THE UK AND SOUTH AFRICA
BRENNTAG HAS POSTED a second quarter post-tax profit of €102.1m, down 5.6 per cent on the €108.1m achieved this time last year. Meanwhile, sales dipped 1 per cent over the period to just under €2.7bn. Operating EBITDA, however, increased slightly by 0.2 per cent year-on-year, from €215.4m to €215.8m. “The strong performance in the EMEA and
Asia Pacific regions contributes significantly to offset the underlying weaknesses in North America and volatility in Latin America, demonstrating the group’s resilience in difficult macroeconomic conditions,” says CEO Steven Holland.
THE UK WILL BE ONE FOCUS OF INVESTMENT FOR BRENNTAG, REGARDLESS OF THE BREXIT VOTE
Breaking these figures down, Brenntag
reports that EMEA operations achieved a gross profit of €278.8m, up 5.7 per cent year-on-year from €263.8m, despite seeing its sales contract 0.9 per cent over the period to just over €1.2bn. “This upbeat performance was exceeded by operating EBITDA: at €100.5m, this was 8.2 per cent up on the prior-year figure,” the company says. “This is due primarily to the very encouraging growth in the existing business,” it continues, adding, “acquisitions also made a positive contribution”.
IMPRESSIVE PERFORMANCE Further east, Brenntag Asia Pacific “delivered another impressive performance, posting strong organic growth and benefitted from the successful integration of the acquired TAT Group”. As such, the company finished the quarter in the region with sales worth €247.8m; an operating gross profit of €45.6m; and an operating EBITDA of €17.3m. Respectively, this represents year-on-year increases of 13.3 per cent, from €218.8m; 23.6 per cent, from €36.9m; and 26.3 per cent, from €13.7m. The “continued challenging economic
environment”, however, once again had a negative impact on the company’s results in North America, where “sustained weak
INVESTMENTS AFOOT In other news, Brenntag has revealed plans to invest £50m (€58.2m) in its UK operations over the next five years, including investments in the north of England and Scotland. “Irrespective of the current ‘Brexit’ concerns, the UK represents a significant market for our products and services and will remain an integral part of our European and global growth strategy,” Holland says. Furthermore, Brenntag has also signed
an agreement to acquire South African chemical distributor Warren Chem. Based in Cape Town, Warren Chem primarily serves the country’s food and pharma sectors and last year generated revenues worth €26.6m. “Brenntag’s strategy is to become a leader in the chemical distribution market in South Africa, the largest market in the African region,” says Karsten Beckmann, member of the Brenntag Management Board and CEO of Brenntag EMEA. “The acquisition of Warren Chem perfectly
matches this strategy as it complements our existing business in the country,” he continues. “Together with our subsidiary Multisol and the specialty distributors Lionheart as well as Plastichem, both acquired in 2015, Brenntag now holds a strong foothold in the food, pharma, plastics and rubber and lubricant industries in South Africa. This is an excellent platform for further growth in the country and beyond.” HCB
www.brenntag.com
HCB MONTHLY | SEPTEMBER 2016
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