Brenntag : Investorenpräsentation Mai 2024

Investor Presentation

May 2024

Investor Presentation

1. Investment Highlights
2. Chemical Distribution Business Model
3. Industry Dynamics
4. Horizon 1-3: Transformation Journey
5. Brenntag Essentials
6. Brenntag Specialties
7. Sustainability
8. Financials Q1 2024
9. Outlook

Investment Highlights

Brenntag is the undisputed leader in a structurally expanding market, delivering reliable earnings growth

Our unique platform

Delivering on our strategy

Global leader with superior offering	Operating	EBITA	Resilient and reliable growth with
in attractive markets	~7% Op. EBITA CAGR since IPO

Unparalleled product portfolio,	COVID-19
application know-how and
innovation capabilities
Unique distribution network,	Financial
Crisis
combining global reach with
last mile ownership

Asset light business model with consistent ROCE ≥ 14%

EUR 10.0bn cumulative FCF since IPO, with around EUR 3bn1) returned to shareholders

Trusted partner to suppliers and customers at the center of a digitally-enabled ecosystem

M&A track record with EUR ~3.5bn spent on >100 acquisitions since IPO

Easiest to

do business with

Customer Net Promoter Score

48 (vs. 36 in 2020)

-100			0		+100

Customer Effort Score

1.8 (vs. 2.1 in 2021)

7	6	5	4	3	2	1

Employee Net Promoter Score

16 (vs. -1 in 2021)

6,5 cm

-100			0		+100

4 1) EUR 2.4bn dividends and share buyback of EUR 500m until FY 2023

Two global divisions:

Brenntag Specialties and Brenntag Essentials

Brenntag Specialties

EUR 1.5bn		EUR 551m
FY 2023 Op. Gross Profit		FY 2023 Operating EBITA
1,000's		~100k
Suppliers		Customers
78		>400
I&ACs globally		Sites and value-added facilities

Highly specialized performance chemicals & ingredients

 Industry focus

 Attractive supplier portfolio

 Strong customer relationships  Innovation capabilities

 Value-added services

 Application and formulation expertise

 Regulatory expertise  Brand awareness

5

Brenntag Essentials

EUR 2.5bn		EUR 849m
FY 2023 Op. Gross Profit		FY 2023 Operating EBITA
1,000's		~150k
Suppliers		Customers
>70		~100
Countries		Last Mile Service Operations

Process chemicals

• Cross-industryproducts
• Global product & market intelligence
• Local market know how & Cost- efficient last mile excellence
• High barriers to entry with a broad global asset base
• Broad and in-depth regional supply chain network with Inter-regional connectivity
• Strong service excellence mindset
• Regulatory expertise

Brenntag operates a highly diversified global footprint with around 600 sites in 72 countries

Global

coverage

Largest geography

Serving multiple

industries

Largest end market

Several

thousand

> 20,0001)		~ 180,000

(Op. Gross Profit FY23)

APAC

(Op. Gross Profit FY23)

Various

< 30%

< 20%

< 10%

EMEA

9%

52% Americas

39%

manufacturing 19% 16% Food

Other end			11%	Energy
		Services
markets
<5%			9%	Water
6%	6%	7%	Treatment
Personal Care	6%6%
Pharma			CASE
Lubricants	Chemical processing

Multi-supplier

approach

~ EUR 4,000

Ø order size

Very diversified client portfolio

Share of Top 102)

6	1)	Chemical substances, including the quality grade and concentration level (in the case of diluted products) or the product form (in the case of solid substances), are recorded as chemicals
2)	Suppliers share as % of purchase value, Products share as % of Op. Gross Profit and Customers share as of % sales (all FY23)

Track record of sustainable, resilient and accretive growth

Op. EBITA and ROCE1)		Op. EBITA
in EURm		ROCE

									CAGR
									~ 7%			22%
					18%		17%						1,512	18%
		18%		19%				16%		16%		16%		1,265
						17%	14%
						17%				14%
												1,082
											14%
									717	754	758	805
							699	695
			519	572	611	597	627
325	399	398
2007	Financial	IPO				2015					COVID-19	2022	2023
	Crisis

• Consistent growth profile
• Ability to protect profitability even in macro downturns
• ROCE significantly above WACC (~6-9%)
• Countercyclical cash flow profile
• Recurring bolt-on M&A compounds earnings growth

1. Return on Capital Employed = EBITA/(the average carrying amount of equity + the average carrying amount of financial liabilities - the average carrying amount of cash and cash 7 equivalents)

M&A is a core part of the growth story

Compounding value creation over time1)

EUR ~5.5bn of acquired revenue

EUR ~3.5bn spent on >100 acquisitions

~8x average EBITDA pre-synergies multiple

~3% annual Op. EBITA growth contribution

M&A since implementation of new operating model2)

Essentials		Life Science		Material Science

3)

	3)
EMEA	3)

Chemex

Packaged Product

Chemicals division

North

America

3)

APAC

>400 potential targets in the M&A pipeline for BES & BSP

1)	2010 - 2024 YTD February, including signed and closed deals
2)	2020 - 2024 YTD February, including signed and closed deals
8 3)	Categorized as BES following portfolio shift

Capital allocation framework

Capital allocation framework

Shareholder returns

Leverage

Capex		 Reinvestment in the business through annual Capex of EUR 300-400m
		Capex guidance also including DiDEX investments
M&A		 Continued investment in value-generating bolt-on M&A where strategically attractive
		EUR 400-500m annual M&A spend, implies contribution of ~3% annual Op. EBITA growth

 35-50% of consolidated profit after tax is paid to shareholders as dividend on an annual basis  Additional capital returns will be considered if value-maximizingfor our shareholders

Investment grade credit rating		Target leverage: ~2.0x		Current leverage: ~1.4x1)

9	1) As of FY 2023, Net Debt / LTM Op. EBITDA

Our growth formula for 2027

Key components contributing to our Op. EBITA CAGR

Chemicals		Growth multiplier		Divisional
market growth		from outsourcing		growth
					initiatives

2-4%

≤1%

2%

Organic CAGR: 7-9%

Total CAGR: 10-12%

10

Group cost and

efficiency initiatives

2%

M&A

Contribution

3%