Brenntag : Quarterly Statement Q1 2024

January - March 2024

Quarterly Statement

Brenntag reports first-quarter 2024 results impacted by a challenging market environment

Brenntag expects operating EBITA to be at the lower end of the full-year 2024 guidance published in March

Operating gross profit reached EUR 984.4 million in Q1 2024, a decrease of 5.1%* compared with the prior-year figure

Operating EBITA came to EUR 259.7 million, a decline of 24.0%* compared with Q1 2023

The free cash flow of EUR 175.3 million in Q1 2024 was down by 61.0% on the high prior-year figure

EPS stood at EUR 0.97 in Q1 2024 compared with EUR 1.40 in Q1 2023

* Growth rates are adjusted for translational FX effects

Key financial figures at a glance

Consolidated income statement

			Q1 2024		Q1 2023
Sales	EUR m		4,002.6		4,527.1
Operating gross profit	EUR m	984.4		1,045.6
Operating EBITA	EUR m		259.7		345.1
Operating EBITA / operating gross profit	%	26.4		33.0
Profit after tax	EUR m		143.7		217.1
Basic earnings per share	EUR	0.97		1.40
Diluted earnings per share	EUR	0.97		1.40

Consolidated balance sheet

			Mar. 31, 2024		Dec. 31, 2023
Total assets	EUR m		10,684.4		10,337.8
Equity	EUR m	4,542.6		4,356.7
Working capital	EUR m		2,083.0		2,005.8
Net financial liabilities	EUR m	2,226.9		2,186.8

Consolidated cash flow

			Q1 2024		Q1 2023
Net cash provided by operating activities	EUR m	157.7		400.3
Payments to acquire intangible assets and
property, plant and equipment	EUR m		-71.7		-49.7
Free cash flow	EUR m	175.3		449.2

Key data on the Brenntag shares

			Mar. 31, 2024		Dec. 31, 2023
Share price	EUR	78.08		83.22
No. of shares (unweighted)			144,385,372		147,453,837
Market capitalization	EUR m	11,274		12,271
Free float	%	89.30		89.52

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Company profile

Brenntag is the global market leader in chemical and ingredients distribution. The company plays a central role in connecting the chemical industry's customers and suppliers. Through its two global divisions, Brenntag Essentials and Brenntag Specialties, the company provides a portfolio of industrial and specialty chemicals and ingredients, as well as tailor-made application, marketing and supply chain solutions, technical and formulation support, comprehensive regulatory expertise and digital solutions for a wide range of industries.

Brenntag operates a global network spanning around 600 locations in 72 countries. With its workforce of over 17,700 employees, Brenntag generated sales of around EUR 16.8 billion in 2023.

Contents

4	Major events impacting on business in Q1 2024	14	Selected financial information
		15	Consolidated income statement
5	Events after the end of the reporting period	16	Consolidated balance sheet
		18	Consolidated cash flow statement
6	Results of operations	19	Key financial figures by global division
			and reportable segment
10	Financial position
		21	Financial calendar
12	Net assets
		22	Imprint and contact
13	Outlook
13	Opportunities and risks

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MAJOR EVENTS IMPACTING ON BUSINESS

Major events impacting on business in Q1 2024

In February 2024, Brenntag acquired all shares in Rental ­Service Specialty LLC (RSS) based in Broussard, Louisiana, USA. RSS is a provider of specialty rental equipment for the midstream and downstream oil and gas industry. The acquisition increases Brenntag Essentials' market presence in the important North American energy sector.

Also in February 2024, Brenntag acquired the chemical logistics site of Chimica D'Agostino in Bari, Italy. The site increases Brenntag's presence in the southern Italian market and optimizes the site network in the region. This acquisition extends Brenntag Essentials' local services and logistics offering and adds specific functions to the hub and transshipment point.

At the end of March 2024, Brenntag announced the acqui­ sition of Lawrence Industries Ltd. based in Tamworth, UK. The company supplies high-quality additives, minerals and catalysts to a wide range of markets across the UK and Ireland. This acquisition strengthens Brenntag Specialties' position in Material Science in the Coatings, Adhesives, Sealants and Elastomers (CASE), Construction, Polymer and Rubber indus- tries. In financial year 2023, Lawrence Industries generated sales of around EUR 34 million.

The share buyback program initiated in the previous year was completed in the first quarter of 2024. In the course of the second tranche, 3,068,465 Brenntag SE shares were acquired on the stock market at a total purchase price of EUR 250 million and subsequently canceled.

Objectives and strategy

In the coming years, Brenntag aims to strengthen and further expand its position as the global market leader in chemical and ingredients distribution in a changing global market envi- ronment.

In the first quarter of 2024, Brenntag worked systematically to drive the execution of its "Strategy to Win". Firstly, the core elements of the growth strategy comprised differentiated strategies for the two divisions Brenntag Specialties and Brenntag Essentials, which since the beginning of financial year 2024 have been further developed in the context of the "Advanced Operating Model". Secondly, Brenntag is pursuing a sustainability agenda with the aim of assuming a leading role in the responsible distribution of sustainable chemicals and ingredients. This includes procuring all electricity from renewable sources by 2025, reducing emissions by forty ­percent versus 2020 levels by 2030 and achieving net-zero emissions by 2045. Thirdly, Brenntag aims to drive market consolidation through value-creating M&A activity. Its focus here is on expanding its position in high-growth emerging markets in both divisions, improving technical and strategic capabilities and market positions, augmenting the existing portfolio and expanding the life science business. Fourthly, it is transforming itself into a data- and technology-driven company.

You can find further information on Brenntag's objectives and strategy in the 2023 Annual Report.

Quarterly Statement Q1 2024

Brenntag SE

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MAJOR EVENTS IMPACTING ON BUSINESS

EVENTS AFTER THE END OF THE REPORTING PERIOD

Segment reporting

The Brenntag Group is managed through two global divisions, Brenntag Specialties and Brenntag Essentials, which were previously each managed through geographically structured segments. Since January 1, 2024, the Brenntag Specialties division has no longer been managed regionally; instead, it is now managed globally through the Life Science, Material ­Science and Specialties Other segments. The global Brenntag Essentials division continues to include the reportable segments EMEA, North America, Latin America and APAC. In

addition, a further reportable segment, "Transregional", was introduced in the Brenntag Essentials division in order to manage the international operations of BRENNTAG International Chemicals GmbH (BIC), which buys and sells chemicals in bulk on an international scale without regional boundaries (previously shown under "All other Segments").

"Group and Regional Services" mainly include the central functions for the entire Group, the regional service functions and the activities with regard to the digitalization of Brenntag's business.

Events after the end of the reporting period

In April 2024, Brenntag successfully placed two bonds totaling one billion euros on the European capital market. Brenntag Finance B.V. issued the two EUR 500 million bonds with a maturity of four and eight years and carrying a coupon of 3.750% and 3.875%. The bonds were issued at 99.781% and 99.192% of par, respectively.

At the beginning of May 2024, Brenntag signed an agreement to acquire 100% of the shares in Quimica Delta SA de CV based in Teoloyucan, Mexico. The company is a leading distributor of base chemicals and has a dense service network in central Mexico with access to port infrastructure in Mexico.

Quarterly Statement Q1 2024

Brenntag SE

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RESULTS OF OPERATIONS

Results of operations

Business performance of the Brenntag Group

						Change
in EUR m		Q1 2024		Q1 2023		in %		in % (fx. adj.)1)
Sales	4,002.6		4,527.1		-11.6		-10.9
Operating gross profit		984.4		1,045.6		-5.9		-5.1
Operating expenses		-642.8	-625.2	2.8	3.5
Operating EBITDA	341.6		420.4		-18.7		-18.0
Depreciation of property, plant and equipment and
right-of-use assets		-81.9		-75.3		8.8		9.5
Operating EBITA		259.7		345.1		-24.7		-24.0
Net expense/income from special items		-8.2	4.7		-		-
EBITA		251.5		349.8		-		-
Amortization of intangible assets		-12.4		-17.7		-		-
Net finance costs		-34.1	-35.2		-		-
Profit before tax		205.0		296.9		-		-
Income tax expense		-61.3	-79.8		-		-
Profit after tax	143.7		217.1		-		-

1.01 Business performance of the Brenntag Group

1. Change in % (fx. adj.) is the percentage change on a constant currency basis.

The Brenntag Group generated sales of EUR 4,002.6 million in the first quarter of 2024, a year-on-year decline of 11.6%. On a constant currency basis, sales fell by 10.9%. The decline was due to falling sales prices and was not offset by higher volumes.

The Brenntag Group's operating gross profit came to EUR 984.4 million in the first quarter of 2024, a year-on-year decline of 5.9%. On a constant currency basis, operating gross profit was down by 5.1% on the prior-year figure. The Brenntag Specialties division recorded a slight volume-driven decline in operating gross profit, while Brenntag Essentials achieved an increase in volumes. Operating gross profit per unit fell in both divisions.

The Brenntag Group's operating expenses amounted to EUR 642.8 million in the first quarter of 2024, a rise of 2.8% year on year. On a constant currency basis, operating expenses were up by 3.5% on the prior-year figure. This was largely attributable to the acquisitions made. On an organic basis, there was only a slight increase in costs. This was due primarily to volume-driven increases in costs, higher personnel expenses and higher costs for IT implementation, primarily in connection with the DiDEX initiative. Brenntag sees these additional costs as an investment in the Group's future.

The Brenntag Group achieved operating EBITDA of EUR 341.6 million in the first quarter of 2024, a year-on-year decline of 18.7%, or 18.0% on a constant currency basis.

Depreciation of property, plant and equipment and right-of- use assets amounted to EUR 81.9 million in the first quarter of 2024 (Q1 2023: EUR 75.3 million).

The Brenntag Group's operating EBITA came to EUR 259.7 million in the first quarter of 2024. Brenntag therefore recorded a decrease of 24.7% on the prior-year figure. On a constant currency basis, this represents a decline in earnings of 24.0%. The overall decline in both divisions was driven by the fall in operating gross profit per unit in combination with cost increases and the volume effects described above.

Quarterly Statement Q1 2024

Brenntag SE

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RESULTS OF OPERATIONS

Net expense/income from special items breaks down as

follows:

in EUR m		Q1 2024	Q1 2023
Provision for legal risks		-5.9	-2.7
Reversal of provisions for excise duties		8.4		7.0
Major fire at a warehouse site in Canada		-2.7	-
Other special items		-8.0		0.4
Net expense/income from special items		-8.2	4.7

1.02 Net expense/income from special items

In the first quarter of 2024, provisions of EUR 5.9 million were recognized for legal risks arising from the sale of talc and ­similar products in North America.

Tax returns were submitted in relation to provisions recognized in 2023 for excise duty risks in Sweden. These led to a lower-than-expected tax liability. The reversal of the relevant provisions resulted in other operating income of EUR 8.4 million in the first quarter of 2024.

Further costs amounting to EUR 2.7 million were incurred as a result of a major fire at a warehouse site in Canada in the third quarter of 2023. They comprise costs for repairs, the remediation of the resulting environmental damage and maintaining business operations.

Other special items amounting to EUR 8.0 million mainly include advisory and other one-time expenses related to the legal and qualitative separation of the two divisions Brenntag Specialties and Brenntag Essentials. One-time expenses were also incurred in connection with Brenntag's cost reduction program.

Amortization of intangible assets amounted to EUR 12.4 million (Q1 2023: EUR 17.7 million).

Net finance costs came to EUR 34.1 million in the first quarter of 2024 (Q1 2023: EUR 35.2 million). The net interest expense component of net finance costs improved slightly year on year to EUR 24.9 million (Q1 2023: EUR 27.2 million) due to lower debt. Conversely, other net finance costs included an opposite effect of a similar amount arising on the translation of foreign currency receivables and liabilities.

Due to the lower profit before tax, income tax expense fell by EUR 18.5 million year on year to EUR 61.3 million in the first quarter of 2024.

Profit after tax stood at EUR 143.7 million in the first quarter of 2024 (Q1 2023: EUR 217.1 million).

Quarterly Statement Q1 2024

Brenntag SE

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RESULTS OF OPERATIONS

Business performance in the global divisions and reportable segments

							Group and		Brenntag
			Brenntag		Brenntag		Regional
in EUR m		Specialties		Essentials		Services		Group
Operating gross profit
Q1 2024		286.3		698.1		-		984.4
Change versus Q1 2023 in %	-10.0		-4.0		-		-5.9
fx. adj. change versus Q1 2023 in %		-8.3		-3.8		-		-5.1
Operating EBITA
Q1 2024	107.5	186.2		-34.0	259.7
Change versus Q1 2023 in %		-24.8		-23.1		-14.8		-24.7
fx. adj. change versus Q1 2023 in %	-22.8		-23.2		-14.8		-24.0
					1.03 Business performance in the global divisions
Brenntag Specialties
			Life		Material		Specialties		Brenntag
in EUR m		Science		Science		Other		Specialties
Operating gross profit
Q1 2024		200.2		80.2		5.9		286.3
Change versus Q1 2023 in %		-9.0		-11.0		-27.2		-10.0
fx. adj. change versus Q1 2023 in %	-6.3		-9.6		-39.8		-8.3
Operating EBITA1)
Q1 2024	80.3	30.2		-2.3	107.5
Change versus Q1 2023 in %		-21.7		-18.8		-176.7		-24.8
fx. adj. change versus Q1 2023 in %	-19.4		-17.7		-181.4		-22.8

1. 1.04 Business performance in the reportable segments / Brenntag Specialties

2. The difference between the sum total of the reportable segments and a particular division is the result of central activities which are part of the division but not directly attributable to any one segment.

Operating gross profit in the Brenntag Specialties division was down by 10.0% on the prior-year figure to EUR 286.3 million in the first quarter of 2024. On a constant currency basis, it showed a decrease of 8.3%. This change was due especially to falling operating gross profit per unit, while volumes almost reached the prior-year level. All segments contributed to this result.

Operating EBITA in the Brenntag Specialties division came to EUR 107.5 million in the first quarter of 2024, a decrease of 24.8% on the prior-year figure. On a constant currency basis, this represents a decline of 22.8%. All segments of the Brenntag Specialties division were affected. The decline was due in particular to the aforementioned performance at operating gross profit level. The increases in costs were largely driven by the new acquisitions. On an organic basis, there was only a slight increase in costs. A decline in variable personnel expenses was offset by inflation-driven increases in costs and the internal allocation by "Group and Regional Services" of further costs in connection with the DiDEX initiative. These are costs from previous years which had previously remained in "Group and Regional Services" and were only charged on this year when various products went into operation.

Quarterly Statement Q1 2024

Brenntag SE

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RESULTS OF OPERATIONS

Brenntag Essentials

				North		Latin				Trans-		Brenntag
in EUR m		EMEA		America		America		APAC		regional		Essentials
Operating gross profit
Q1 2024		246.9		376.1		37.3		34.4		3.4		698.1
Change versus Q1 2023 in %		-6.4		-1.9		-5.8		9.2		-63.4		-4.0
fx. adj. change versus Q1 2023 in %	-7.3		-0.7		-9.5	13.9		-63.4		-3.8
Operating EBITA1)
Q1 2024	70.8	111.1	0.9	2.7	1.9	186.2
Change versus Q1 2023 in %		-25.6		-13.4		-90.4		22.7		-75.2		-23.1
fx. adj. change versus Q1 2023 in %	-26.6		-12.5		-91.0	28.6		-75.0		-23.2

1. 1.05 Business performance in the reportable segments / Brenntag Essentials

2. The difference between the sum total of the reportable segments and a particular division is the result of central activities which are part of the division but not directly attributable to any one segment.

Operating gross profit in the Brenntag Essentials division decreased by 4.0% year on year to EUR 698.1 million in the first quarter of 2024. On a constant currency basis, operating gross profit was down by 3.8% on the prior-year figure. This was due to a fall in operating gross profit per unit in all seg- ments. In the APAC segment, the fall in operating gross profit per unit was more than offset by higher volumes - both on an organic basis and including the new acquisitions - as a result of which the segment achieved growth in operating gross profit. With the exception of the Transregional segment, all other segments likewise achieved an increase in volumes both on an organic basis and including the new acquisitions.

Operating EBITA in the Brenntag Essentials division dropped by 23.1% year on year to EUR 186.2 million in the first quarter of 2024. On a constant currency basis, it showed a decrease of 23.2%. This was due, firstly, to a fall in operating gross profit in the EMEA, North America and Latin America segments. All segments saw volume-driven increases in transport costs. In addition, costs in connection with the DiDEX initiative were allocated internally from "Group and Regional Services". These are costs from previous years which had previously remained in "Group and Regional Services" and were only charged on this year when various products went into opera- tion. This trend in expenses was an additional factor depressing operating EBITA in the EMEA, North America and Latin America segments. On a constant currency basis, the APAC segment achieved significant growth in EBITA due to the aforementioned increase in operating gross profit.

Group and Regional Services

In addition to the central functions for the entire Group, "Group and Regional Services" also include the regional service functions and the activities with regard to the digitalization of Brenntag's business. In the first quarter of 2024, Brenntag recorded a significant year-on-year reduction in costs. This was achieved mainly as a result of the higher allocations of costs for the DiDEX initiative to the two divisions Brenntag Specialties and Brenntag Essentials. These are costs from previous years which had previously remained in "Group and Regional Services" and were only charged on to the two divisions this year when various products went into operation. Before cost allocations, the costs in "Group and Regional ­Services" were roughly in line with the prior-year figure.

Overall, the operating EBITA of "Group and Regional Services" came to EUR -34.0 million in the first quarter of 2024, an increase of 14.8% on the prior-year figure.

Quarterly Statement Q1 2024

Brenntag SE

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FINANCIAL POSITION

Financial position

Cash flow

in EUR m		Q1 2024		Q1 2023
Net cash provided by operating activities		157.7		400.3
Net cash used in investing activities		-133.4		-58.4
of which payments to acquire consolidated subsidiaries, other business units and other financial assets		-65.6		-11.3
of which payments to acquire intangible assets and property, plant and equipment		-71.7	-49.7
of which proceeds from the disposal of non-current assets		3.9		2.6
Net cash used in/provided by financing activities		-89.4	-534.2
of which repayments of/proceeds from other borrowings	160.7		-504.8
of which payments to acquire treasury shares		-250.1		-29.4
Change in cash and cash equivalents		-65.1	-192.3

1.06 Cash flow

At EUR 157.7 million in the first quarter of 2024, net cash provided by operating activities was significantly lower than in the same period of the previous year. This was due mainly to a slight increase in working capital, whereas a decrease was recorded in the prior-year period.

Of the net cash used in investing activities in the first quarter of 2024, EUR 71.7 million comprised payments to acquire intangible assets and property, plant and equipment. ­Payments to acquire consolidated subsidiaries and other business units relate mainly to the acquisition of all shares in Lawrence Industries Ltd. based in Tamworth, UK.

Net cash used in financing activities amounted to EUR 89.4 million in the first quarter of 2024 and resulted not only from bank loans taken out and repaid as well as lease and other financial liabilities repaid, but also and above all from the settlement in full of the liability for the second tranche of the share buyback program.

Quarterly Statement Q1 2024

Brenntag SE

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