Brenntag (BNR) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales reached EUR 4.1 billion, up 1% year-over-year, with operating gross profit up 3% to EUR 1.02 billion, but operating EBITA declined 5% to EUR 281 million and EPS dropped to EUR 0.82 from EUR 1.18, mainly due to the sale of Raj Petro Specialties.

• Free cash flow for Q3 was EUR 247 million, down 44% year-over-year, reflecting higher working capital and investment outflows.

• The business environment remained highly competitive, with ongoing geopolitical challenges, weak consumer confidence, and subdued demand in chemical markets.

• For the first nine months of 2024, sales declined 4.9% to EUR 12.25 billion, operating EBITA fell 14.5% to EUR 837.9 million, and EPS dropped to EUR 2.82 from EUR 3.80.

• Full-year 2024 operating EBITA guidance is confirmed at EUR 1.1–1.2 billion.

Financial highlights

• Operating gross profit margin expanded sequentially to 25%, with Q3 operating EBITA margin at 27.6% (down from 30.3% last year).

• Net finance costs increased to EUR 48 million, mainly due to higher net financial liabilities, which stood at EUR 2.7 billion (net debt/EBITDA: 1.8x).

• Tax rate guidance for 2024 is 26%-28% after internal legal entity optimization.

• Free cash flow for 9M 2024 was EUR 579.6 million, down 56% year-over-year.

• Working capital turnover improved to 7.7x.

Outlook and guidance

• Full-year 2024 operating EBITA guidance is confirmed at EUR 1.1–1.2 billion, with expectations at the lower end of the range.

• Challenging business environment expected to persist, with continued pressure on industrial chemical prices and subdued demand.

• Cost-out program expected to deliver EUR 50–60 million in 2024, doubling in 2025, and reaching EUR 300 million annual savings by 2027.

• Tax rate expected at 26–28%; CAPEX planned at EUR 350 million.