Increased profit for Brenntag, which says it will raise the dividend
Brenntag increased its gross profit to just over 2.8 billion EUR in 2019, a 3.4 per cent year-on-year increase on a constant currency basis, it said in its end-of-year update.
The chemical and ingredients distribution company said operating EBITDA reached 1.0 billion EUR, but added that earnings were impacted by the difficult market environment in Europe, Middle East & Africa, and North America. Free cash flow stands were 59.4 per cent above the prior year’s figure, at 837 million EUR. It said the dividend is to rise again, to 1.25 EUR per share, a 4.2 per cent increase.
Chief Executive Officer Christian Kohlpaintner said: “Going forward, we will not only maintain our highly market-centric approach, but also focus to a greater extent on optimizing our processes, procedures and structures and will extend our market position.”
Brenntag generated sales of 12,821.8 million EUR in 2019, in what it described as “a difficult macroeconomic environment”. Sales were therefore on a par with the prior-year figure on a constant currency basis. Operating gross profit rose by 3.4 per cent to just over 2,821.7 million EUR.
Operating EBITDA reached 1,001.5 million EUR, which was a year-on-year increase of 11.3 per cent. It said the earnings growth “is the result of the initial application of IFRS 16, the new financial reporting standard on leases”.
Excluding the effect of 116 million EUR attributable to this IFRS, it said Group earnings were down slightly on the strong prior-year figure.
At 837.3 million EUR, free cash flow was well above the figure for the prior-year period (which was 525.2 million EUR). It said this was primarily to an improvement in working capital, compared with the previous year.
Profit after tax was up slightly on the prior-year figure of 462.3 million EUR to 469.2 million EUR in the 2019 financial year.
Georg Müller, Chief Financial Officer of Brenntag AG, said: “2019 was marked by a difficult macroeconomic environment, with economic downturns, a lack of impetus and weak demand. This was the case primarily in our two large regions, EMEA and North America.
“However, we once again demonstrated the stability of our business model and report operating EBITDA almost on a par with the prior-year figure on a like-for-like basis. The very positive free cash flow performance is encouraging. It shows that we are able to deliver a strong liquidity performance in challenging times.”
For more information visit www.brenntag.com
9th March 2020
