NEWS
Brenntag sets out new strategy
Distribution giant Brenntag announced ‘ Strategy to Win ’, its detailed strategic growth plan including new mid-term targets until 2026 and a new brand identity at its capital markets day in November . A potential merger with Univar Solutions , since aborted , would have been a key element of this .
‘ Strategy to Win ’ is the second phase of a planned “ transformation journey ”. It follows on from ‘ Project Brenntag ’, which began in 2020 and saw the company implement a new operating model with two global business divisions . 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 .
Under the new strategy , Brenntag Specialties and Brenntag Essentials have targets of an organic operating EBITA CAGR of 7-9 % and 4-5 % respectively . Brenntag Specialties 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
Brenntag also identified its Digital . Data . Exellence ( DiDEX ) as a growth enabler by transforming it 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 .
CFO Kristin Neumann said that the company “ will focus on growth through organic re-investments as well as through value-creating M & A activities ”. This , she said , would see
M & A spending double , to € 400-500 million / year – a figure that a merger with Univar would have blown out of the water as the two had sales of € 14.4 billion and $ 9.5 billion respectively last year .
Brenntag confirmed it was in discussions with Univar in late November . However , the financial markets reacted negatively , with Brenntag ’ s share price falling by 17 %. On 20 December , activist investor PrimeStone , which owns 2 % of Brenntag , wrote an open letter to the management urging it to end the talks .
Instead , Primestone advised them to buy back € 2.5 billion in shares , increase the net debt to EBITDA ratio to about two and look to break itself up into two separate companies . Pursuing Univar , it said , would probably reduce the two companies ’ combined gross profit by 10-20 %, while regulatory review approval would be both long and difficult .
On 3 January , Univar confirmed that Brenntag had terminated the talks . It has subsequently been reported that Univar is in discussions with private equity giants Apollo Global Management and Platinum Equity
Sustainability is also a major part of ‘ Strategy to Win ’ and Brenntag has since announced that it has started to provide comprehensive product carbon footprint data to customers , covering Scope 1 , 2 and 3 greenhouse gas emissions . The company has committed to net zero emissions by 2045 , including a complete switch to green electricity by 2025 .
The new brand has now been introduced and 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 .
6 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981