Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brenntag SE (BNTGF, Financial) maintained a stable operating gross profit of EUR4.03 billion despite a challenging market environment.
- The company generated a strong free cash flow of EUR893 million, demonstrating effective cash management.
- Brenntag SE (BNTGF) proposed a stable dividend of EUR2.10, marking the 14th consecutive year of maintaining or increasing dividend payouts.
- The company successfully executed eight acquisitions in 2024, enhancing its market position and growth potential.
- Brenntag SE (BNTGF) achieved significant sustainability milestones, including winning the ICIS Best Digital Innovation Award 2024 and receiving a Platinum rating in the EcoVadis Sustainability Assessment.
Negative Points
- Sales for the full year 2024 were EUR16.2 billion, a 3% decline compared to the previous year.
- Operating EBITA decreased by 13% year over year, reaching EUR1.1 billion, which was at the low end of the guidance.
- Earnings per share fell to EUR3.71 from EUR4.73 in the previous year, impacted by the sale of Raj Petro Specialties and other special items.
- The company faced intense competition and pressure on industrial chemical selling prices, affecting gross profit per unit.
- Operating expenses increased by 4.7% compared to the prior year, driven by inflationary effects and higher volume-related costs.
Q & A Highlights
Q: How should we think about the price and volume mix through 2025, and what are your thoughts on the phasing throughout the year?
A: Christian Kohlpaintner, CEO: We expect a slight sequential improvement in volumes and pricing throughout 2025, similar to the trends seen in 2024. This improvement is expected to be consistent quarter-by-quarter rather than being concentrated in the second half of the year.
Q: Can you discuss the underlying assumptions for Essentials versus Specialties growth within your EBITA guidance for the full year?
A: Christian Kohlpaintner, CEO: We expect progression in both divisions in 2025. Life Sciences within Specialties is showing positive development, while Essentials faces undefined variables due to political and geopolitical uncertainties. The lower end of guidance could be impacted by continued pricing pressure and weaker volume growth in Essentials.
Q: Why did higher transport costs impact your earnings if they are typically passed through to customers?
A: Kristin Neumann, CFO: Higher transport costs were volume-driven and came on top of increased volumes. The pressure on gross profit per unit numbers, combined with higher operating expenses, led to a decline in overall results.
Q: What are your expectations for Q1 2025 compared to Q4 2024 in terms of EBITA?
A: Christian Kohlpaintner, CEO: We expect a similar quarterly pattern as seen in previous years, with Q1 typically being slightly higher than Q4. There are no major changes anticipated in the absence of geopolitical shocks.
Q: Can you provide more details on the cost base and moving parts for 2025, especially regarding advisory and audit expenses?
A: Kristin Neumann, CFO: Advisory costs include DiDEX-related expenses and disentanglement project costs, which are expected to decrease next year. DiDEX costs will be slightly lower, while running costs remain stable. The cost-out program is expected to yield EUR100 million in savings for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
