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New strategy and branding for Brenntag

14th November 2022

Submitted by:

Andrew Warmington

At its latest capital markets day, distribution giant Brenntag announced ‘Strategy to Win’, its detailed strategic growth plan including new mid-term targets until 2026. It also unveiled a new brand identity. ‘Strategy to Win’ is the second phase of a planned “transformation journey”.

This follows on from ‘Project Brenntag’, which began in 2020 and saw the company implement a new operating model with two global business divisions: Brenntag Specialties and Brenntag Essentials. All of the targets, including an operating EBITDA contribution of €220 million, were achieved a year ahead of the target of the end of 2023.

Within the new strategy, the aim is for Brenntag Specialties to become “the global go-to service partner for innovative and sustainable solutions”. It has defined five key strategic priorities, which are to:

* Increase its value-added service offering

* Command the most comprehensive and sustainable portfolio

* Expand its global footprint

* Focus on high-growth customers and industries; and

* Accelerate acquisitions

The new target for Brenntag Specialties division is an organic operating EBITA CAGR of 7-9%, as opposed to 4-5% for the more commoditised Brenntag Essentials. Overall, CAGR is expected to grow by 6-8%/year. EBITA will become its main KPI and the company aims for an operating EBITA conversion ratio at group level of 35-37%.

Brenntag also identified its Digital.Data.Exellence system as a growth enabler by transforming the company into “a data- and tech-driven enterprise and industry leader”. It is working with Salesforce and AWS to improve and build its digital business infrastructure, and will invest about €350 million in these activities, aiming for a net EBITA impact of €200 million/year by 2026.

“We will focus on growth through organic re-investments as well as through value-creating M&A activities,” commented CFO Kristin Neumann. As a result, the planned M&A spend will double to about €400-500 million. “At the same time, we will proceed with our financial discipline that has proven to be very successful in the past. We will also make sure that we will integrate the acquired companies properly.”

Other key targets include being a leader in the responsible distribution of sustainable chemicals and ingredients, and shaping the sustainability agenda of the industry. The company is adding net zero carbon emissions by 2045, plus a total recordable incident rate of less than 2.0 and no severe accidents by 2030, in addition to the existing 100% green energy use by 2025.

The new brand has already been introduced in a global internal reveal campaign, including global events at major sites and a virtual New Brenntag platform. It will continue to be rolled out over the next few months, leading to a rebranding of 700 sites and thousands of internal and external touchpoints. This replaces a former logo and design, which had been used for more than 20 years and referred to transport and logistics.

“By contrast, the new brand reflects Brenntag’s development beyond mere chemical and ingredients distribution to providing innovation support, value-add services, application know-how, and sustainable products and solutions on a global scale, as well as its ongoing transformation to a data-driven company with leading digital customer experience,” the company stated.

Shortly before this, Brenntag announced the acquisition of the Life Science & Coatings business from Ravenswood, a specialties distributor of specialities in Australia and New Zealand with particular expertise in blending. The company, which has two sites in Australia, had sales of A$65 million in the financial year to June 2022. Closing should take place in December.

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