Brenntag Reports 10% Profit Growth For 2011

21 Feb 2012

Drivers were the continuing organic growth of the operating business, increased efficiencies, and improved financing mix as well as the earnings contribution of acquisitions. Profit before tax improved to EUR 419.5 million (2010: EUR 231.8 million).

Feb 21 2012 --- Based on preliminary, unaudited numbers, Brenntag, the world market leader in chemical distribution recorded a 15.4% rise in sales, producing a 10% growth in profit for 2011.

Drivers were the continuing organic growth of the operating business, increased efficiencies, and improved financing mix as well as the earnings contribution of acquisitions.

Operating EBITDA grew by 12.2% year-on-year (based on constant exchange rates) to EUR 660.9 million.

Profit before tax improved to EUR 419.5 million (2010: EUR 231.8 million).

Profit after tax exceeded previous year by more than 90% and reached EUR 279.3 million (2010: EUR 146.6 million). EPS increased by 84% to EUR 5.39 per share.

Strong free cash flow of EUR 511.8 million (2010: EUR 376.1 million) allows for further internal and external growth and dividend payment.

The number of employees increased by 818 to 12,950 at the end of 2011 (full-time equivalents).

Sales increased by 15.4% based on constant exchange rates (13.5% as reported) from EUR 7,649.1 million in 2010 to EUR 8,679.3 million in 2011. Main reasons were higher selling prices and stronger volumes, partly due to acquisitions. More importantly, Brenntag managed to increase gross profit by 10.0% based on constant exchange rates (8.0% as reported) to EUR 1,768.0 million (2010: EUR 1,636.4 million).

Increased efficiencies allowed for an even stronger growth in operating EBITDA, which grew by 12.2% based on constant exchange rates (9.7% as reported) to EUR 660.9 million (2010: EUR 602.6 million). Brenntag thereby slightly exceeded the middle of its guidance range of EUR 650 – 670 million for operating EBITDA in 2011 and marked another record year.

Steven Holland, CEO: “Our final quarter and year end results 2011 reflect the underlying resilience of Brenntag supported by a highly diversified business model which continued to capture growth from the regions around the world whilst maintaining a robust performance in those areas with more serious macroeconomic challenges. Our principle of maintaining strong organic growth aligned with a highly focused acquisition strategy further consolidated our position as global market leader and supported us in achieving a record result in 2011.”

Profit before tax in 2011 grew significantly from EUR 231.8 million in 2010 to EUR 419.5 million in 2011 (+81.0%). This increase is based on the strong operational development and was supported by a significant decline in customer base amortization. Furthermore the improved capital structure and reduction in debt after the IPO in March 2010 as well as reduced financial costs after the successful refinancing in July 2011 helped to improve the profit before tax. The full-year effect of the refinancing will support the financial result for 2012 and beyond.

Profit after tax was at EUR 279.3 million in 2011 (2010: EUR 146.6 million). Thereof EUR 277.4 million are attributable to Brenntag shareholders which allows for a dividend payment.

Main contributor to Brenntag’s free cash flow was the strong increase in EBITDA. Investments in non-current assets (Capex) remained on a usual level of EUR 86.0 million and reflect the limited investment need inherent in the business model as well as the high flexibility. Due to an active working capital management the rise in working capital was limited to EUR 61.0 million despite an increased business activity. In total, these effects yielded in a free cash flow of EUR 511.8 million.

With the expectation of a slower but nevertheless growing world economy and the continuation of the positive trends in the chemical distribution industry, excluding exchange rate effects Brenntag expects a continued positive earnings development in 2012. The company plans to grow all relevant earnings parameters. Efficiency measures continue to be taken where necessary. Financial result will improve further due to the full effect of the refinancing made in 2011. Brenntag will continue its strategy to expand its value added services portfolio, increase market shares especially in growing markets, further improve its position in established markets as well as its focus industries and promote the consolidation in the fragmented chemical distribution industry.

Brenntag will publish its finalized Annual Report for 2011 on March 21, 2012.