Brenntag Se · XETR:BNR
Brenntag — Investor Day (December 2023)
72 slides from Brenntag's investor day presentation, Dec 5, 2023
Slide 1: Our path to Horizon 3 - Capital Markets Day
0) RS = = ny & oo | S > Wy my ny zal | =i Our path to Horizon 3 Capital Markets Day December 5, 2023 (> BRENNTAG
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by Brenntag SE and other information currently available to the company. Various known and unknown risks, uncertainties and other factors could lead to material differences between the
Slide 3: Agenda
Agenda Capital Markets Day 2023 Introduction Thomas Altmann, SVP Investor Relations Driving execution while creating optionality Dr. Christian Kohlpaintner, CEO Financial framework Resilience and growth Dr. Kristin Neumann, CFO Brenntag Essentials Unleashing the true potential of the platform Ewout
Slide 4: Driving execution while creating optionality
Driving execution while creating optionality
Slide 5: Our path to Horizon 3
Our path to Horizon 3 CMD 2023 wl Our path to Horizon 3 Fostering divisional independence and autonomy Accelerate growth through differentiated steering Align divisional portfolios with business drivers and » market requirements Implement DiDEX: Brenntag Essentials . a Unleashing the true potential
Slide 6: Brenntag is the undisputed leader in a structurally expanding market
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 in attractive markets Unparalleled product portfolio, g application Know-how and innovation capabilities Uniqu
Slide 7: Continuing our transformation journey
Continuing our transformation journey 2026+ Horizon 3 Sos Horizon 2 Horizon 1 “Leader across all dimensions” Pre-Horizon . “Strategy to win” “Proj ” « » Project Brenntag = Disentanglement resulting in Legacy Model « Differentiated divisional distinct, high performing strategies accelerating organic
Slide 8: Horizon strategy: Delivering on our commitments
Horizon 2 strategy: Delivering on our commitments Differentiated steering DiDEX Sustainability M&A = Lean board structure - clearly aligned with strategic vision = Increased divisional independence and autonomy = Industry shaping strategic partnerships formed & woredty. aws project) = Growth and pro
Slide 9: Continuing to lead the sustainability agenda
@) Continuing to lead the sustainability agenda Unique carbon management progra: Carbon footprint calculator "CO2Xplorer" Global living wage policy il Improve handprint UT ) CJ Reduce footprint (©) Ww, Customers = Salaries of all employees must meet GHG Internal + BRENNTAG fad footprint regional liv
Slide 10: Distinct, high performing businesses aligned with business drivers and market requirements
1 Distinct, high performing businesses aligned with business drivers and market requirements ©O Ewout van Jarwaarde Dr. Christian Kohlpaintner — Dr. Kristin Neumann Michael Friede Chief Executive Officer Chief Executive Officer Chief Financial Officer Chief Executive Officer Brenntag Essentials Bren
Slide 11: Portfolio sharpening to increase business model coherence
? Portfolio sharpening to increase business model coherence Selected semi-specialty products Unleash true potential through superior Global leader for innovative specialty and last mile delivery supported by efficient ingredients distribution in Life Science regional operations and global sourcing a
Slide 12: Brenntag Essentials: Unleashing the true potential of the platform
3 Brenntag Essentials: Unleashing the true potential of the platform fa mr Resilient and structurally growing Last Mile Service Operations excellence nw! Unleashing Brenntag Essentials’ true potential Global Sourcing and Interregional Optimization Regional Sourcing and Supply Chain Services * region
Slide 13: Brenntag Specialties: Power to perform
4. Brenntag Specialties: Power to perform fi Ss wl) ry Optimizing Closing BSP’s Delivering BSP’s platform performance gap consistent growth Focused M&A to Expand margins Prioritize cost base Drive product Leverage value shift portfolio adjustment portfolio added services towards Life management Scie
Slide 14: Creating optionality aligned with industry trends
5 Creating optionality aligned with industry trends Industry trends Brenntag gro & leadership drivers Attractive distribution market with mid-term underlying sales growth of 3 to 5% p.a.l) Continued outsourcing and increase of value-added services Continued economic and geopolitical uncertainty impa
Slide 15: Bifurcation of supplier & customer needs requires distinct business models
5 Bifurcation of supplier & customer needs requires distinct business models, making full-line value propositions obsolete Industrial Specialties 15 Supplier needs = Broad global access to SME customers across industries = Capabilities & infrastructure to manage complexity ExonMobil LyondellBasel <a
Slide 16: Consolidation in chemical distribution has accelerated
5 Consolidation in chemical distribution has accelerated Global chemical distribution market sales Number of deals executed by Top 50 chemical distributors @ Top 50 players have gained 10%-points market share over last 5 years ~85 Trend supported by 70% more M&A activity 2017 2022 2017-2019 2021-202
Slide 17: New ownership models and platforms have emerged
5 New ownership models and platforms have emerged Market share of Global Chemical Distribution Players 2022) Market Market Industrial-focused CAGR ‘23 -'27 Specialty-focused”) CAGR ‘23 ~'27 Sales as % of distribution market size Sales as % of distribution market size @ Distributor Distributor p 10 P
Slide 18: Creating two autonomous and independent leaders
5 Creating two autonomous and independent leaders to pro-actively shape the industry Bifurcation of supplier & customer needs requires distinct business models Acceleration of consolidation & specialization supported by sponsor backed platforms Highly efficient corporate governance and business serv
Slide 19: Further increasing internal re-organization efforts
5 Further increasing internal re-organization efforts to foster agility and efficiency rx Q oy MUL EA by Commercial Organization & Legal IT & process Operations & setup operating models entities setup supply chain Dedicated to Separate legal Separate . ntity structures for . ration Brenntag Essentia
Slide 20: Our path towards Horizon 3
Our path towards Horizon 3 Leader across Creating all dimensions ¥ Full business optionality 2026+ oy Reale gap BE sone = = Focus and sharpening = Operational performance for ’ disentanglement * Aligning Brenntag both divisions Essentials and Brenntag Specialties propositions with market trends « Fl
Slide 21: Financial framework
Financial framework Resilience and growth
Slide 22: Brenntag operates a highly diversified global footprint
Brenntag operates a highly diversified global footprint MArke, evpPlier, groducg, cvstome,, fH), a) =) x = CQ Global Serving multiple Several > 10,000 ~ 180,000 coverage industries thousand Largest geography Largest end market (Op. Gross Profit FY22) (Op. Gross Profit F¥22) < 30% <20% <10% ~50% 14%
Slide 23: Track record of sustainable, resilient and accretive growth
Track record of sustainable, resilient and accretive growth Op. EBITA and ROCEY Hl op. BIT in EURm — ROCE CAGR . . ~7%2) hag | = Consistent growth profile 18% 1,612 = Ability to protect profitability even in macro downturns 14% eee = ROCE continuously above WACC (~6-9%) = Countercyclical cash flow 3
Slide 24: M&A is a core part of the growth story
M&A is acore part of the growth story Compounding value creation over time” M&A since implementation of new operating model?) “CS EUR ~5.4bn of acquired reven 3 SS FURS Abn of acquired revenue a oma EMEA Lo. re WY EUR ~3.4bn spent on ~100 acquisitions | A om eS Benes ti ; ; North Jn sian ~8x average
Slide 25: Portfolio sharpening enhances value proposition
Portfolio sharpening enhances value proposition Re-allocation of selected businesses aligned with specific supplier and customer needs [J Transfer of businesses according to value drivers to improve value creation potential = Harmonized business models for both Brenntag Essentials and Brenntag Speci
Slide 26: New divisional setup reflected in updated reporting structure
New divisional setup will be reflected in updated reporting structure from Q1 2024 onwards Brenntag Specialties Revenue-generating Brenntag Essentials parts of ‘All other Regional segments?) Segments’ will be included in i vaTam APAC Finished lubricants Material Brenntag Essentials Science going for
Slide 27: Accelerating ongoing initiatives and resetting the cost base
Accelerating ongoing initiatives and resetting the cost base Some measures ‘overlapping G&A operating model & function redesign End-to-end in ct spend management Supply chain cost reduction Streamlining of overhead structure Cost synergies from portfolio shift: more efficient, go-to-market approach
Slide 28: Horizon 3 will be prepared during 2024 and 2025
Horizon 3 will be prepared during 2024 and 2025 2024 2025 2026 of existing Horizon 2 measures and all cost take-out Full business autonomy Legal separation of key countries Subsequent waves of countries Operational disentanglement Portfolio Portfolio sharpening Continued (product) portfolio strength
Slide 29: Our growth formula
Our growth formula Key components contributing to our Op. EBITA CAGR Chemicals Growth multiplier market growth from outsourcing Group cost and M&A ici Contribution initiatives C i; 2% 3% a Organic CAGR: 7-9% a Total CAGR: 10-12% 29
Slide 30: Brenntag Group 2027 organic growth and profitability targets
Brenntag Group 2027 organic growth and profitability targets Brenntag Brenntag Brenntag Group Essentials Specialties Operating Gross Profit CAGR 4-7% 4-6% 5-7% Operating EBITA CAGR 7-9% 5-7% 7-9% Operating EBITA Conversion Ratio 35-37% 32 - 34% 43 - 45% One-off costs: DiDEX and SAP implementation (i
Slide 31: Capital allocation framework remains unchanged
Capital allocation framework remains unchanged Capital allocation framework Shareholder returns Leverage Reinvestment in the business through annual Capex of EUR 300-400m Capex ; . nny Capex guidance also including DiDEX investments Continued investment in value-generative bolt-on M&A where strategi
Slide 32: Brenntag Essentials
Brenntag Essentials Unleashing the true potential of the platform = BRENNTAG
Slide 33: Unleashing Brenntag Essentials' true potential
‘ Unleashing Brenntag: Essentials’ true potential Globalindustry leading platform Grow platform leveraging with.strong cash generation network optionalities in unique through market cycles business.model and.continuous performance enhancement 33 Targeted M&A agenda delivering compounding growth
Slide 34: Brenntag Essentials operates in a highly attractive, globally growing market
ma~ © Brenntag Essentials operates in a highly attractive, globally growing market Increasing outsourcing Structurally growing market globally Fragmented market structure V1 and demand for Global industrial chemical distribution Global chemical distribution players market share?) . i .) CAGR reduced
Slide 35: Brenntag Essentials is a market leading, global and diversified platform
> a Brenntag Essentials is a market leading, global and diversified platform ee re Global Market Leader FY22 Op. Gross Profit Average Cash Conversion”) 70 >10 million >80% Global reach . . of global chemicals demand Countries Transactions per year covered with same day delivery End markets Regionall
Slide 36: Brenntag Essentials is resilient and structurally growing
® > a Brenntag Essentials is resilient and structurally growing Growth through the cycle... ... With Low volatility Last 10 years growth evolution 45% 2013-21 avg. C 37% } C sa ) Typical chemical 5 og rn producers sales >15% Number of years , 35% of growth 4 U \ Commodity 25% ! chemicals market sale
Slide 37: Last Mile, Regional Sourcing, Global Sourcing
| P ) /| ng o Global Sourcing and ain Services | nterregional Optimization Customer teach, proximity, cost Supply chain optimization, regional Leverage global scale, global efficient network and service product management, tollgate access optimization and product trade excellence and supplier relati
Slide 38: The 'triple' business model caters to the needs of our customers
ma~ © The ‘triple’ business model caters to the needs of our customers and supply partners and provides unique network optionalities Our business model Value chain Business partner needs Customers Supply partners . r Access to Market reach Global Sourcing Bue a rd products and and Interregional worl
Slide 39: Last Mile Service Operations
Sales & service center in local market; Bulkbreakings packaging & last mile delivery services Comprehensive catalogue of standard products\and local services Value added services: Blending & 9mixing operations | 1 Last Mile Service Operations (LMSO) density LMSO Europe e Newcastle @ UK Central e vta
Slide 40: Regional Sourcing and Supply Chain Services
Regional Sourcing and-SupptyChain Services _ Bundling of last mile sourcing needs for efficiency Manage tollgates” for cost- competitive delivery to LMSO Extensive in-house and 3rd party logistics to manage regional flows — Es ? Regional networks leverage delivery of products to Last Mile Operations
Slide 41: Building the global network to boost supply security
Mav © 3 Building the global network to boost supply security and competitiveness Rotterdam regional ter! © Californie Bejinge 9 fuser. we) « oe. Shanghai @4--~~~ > tL: otal a— Houston a a a 1 = ° rae 1 Interregional ( “~9l8ndapore . . . a Optimization / ¥_ Sourcing gateway to high-entry meee a @ ims
Slide 42: Unleashing the true potential of the platform
Unleashing the true potential of the platform Op. EBITA uplift 1 a | SY a Ye Ls FY23E Portfolio shift FY23E Volume growth Inflation Drive last mile Strengthen Leverage global FY27E Targeted (Prior to PS) (Post PS) and market operational regional sourcing and M&A normalization excellence sourcing and
Slide 43: Driving last-mile operational excellence
@ ® 1 Unleashing the true potential of the platform: Driving last-mile operational excellence * Establish common last mile service operations globally with full responsibility for last mile P&L Operations optimization = Common performance framework for customer service, supply chain, operational & f
Slide 44: Example: Reversing last mile service operations to the mean
a Ls) ® la Example: Reversing last mile service operations to the mean = Implement standard performance framework for key operating metrics = Create peer groups = Rank and reward to improve performance - reverse lower quartiles to the mean through operational excellence initiatives -, Conv Sis eo 6
Slide 45: Example: Site network optimization
7 Conve Customer / CHAS 45 1 b Example: Site network optimization through consolidation and investments to upgrade our network Key Next wave multi-year site network optimization to increase our efficiency and lower cost-to-serve Investment focused on safety and sustainability upgrades, expanding our
Slide 46: Example: Digital.Data.Excellence
tc Tools Capabilities Impact 46 ig] co 1] Example: Digital.Data.Excellence to become easiest to do business with and lower cost-to-serve L pl ‘I = Enhancing Brenntag's collaborative interactions across channels Y Covering >60% of Gross Profit <1 year after launch * Conversion Ratio 4 Customer NPS =
Slide 47: Strengthening regional sourcing and supply chain services
2 () ? Unleashing the true potential of the platform: Strengthening regional sourcing and supply chain services Key initiatives = Increase regionally sourced product catalogue and steer portfolio towards sustainable products Tollgates forecasting = Expand regional supply chain capabilities to captur
Slide 48: Interregional optimization to tap into network optionalities
3 Unleashing the true potential of the platform: Interregional optimization to tap into network optionalities Key initiatives * Market intelligenceteam monitors producer actions, trade flows and pricing, using insight and digital for supply decisions = Global interregional optimization uses price /
Slide 49: Disciplined and targeted M&A strategy will drive further growth
a Ls) ® 4. Disciplined and targeted M&A strategy will drive further growth and margin upside Highlighted examples Disciplined M&A strategy = Targeted M&A strategy criteria: Uv Create leading market positions in attractive markets Ss Invest into access to infrastructure @ Acquire digital and data ser
Slide 50: Brenntag Essentials 2027 growth and profitability targets
Brenntag Essentials 2027 growth and profitability targets Organic Op. Gross Profit Organic Op. EBITA CAGR CAGR 7\ all | [4 4% - 6% 5% -7% Further upside from M&A strategy Note: Base year FY28E post portfolio shift and including DiDEX-related uplift and cost take-out in CAGR figures and conversion ra
Slide 51: Unleashing Brenntag Essentials' true potential
‘ Unleashing Brenntag: Essentials’ true potential Globalindustry leading platform Grow platform leveraging with.strong cash generation network optionalities in unique through market cycles business.model and.continuous performance enhancement 51 Targeted M&A agenda delivering compounding growth
Slide 52: Brenntag Specialties
Brenntag Specialties Power to perform P, BRENNTAG
Slide 53: Brenntag Specialties: Power to perform
Ty £6. Optimizing OF BSP’s platform New operating model, streamlined portfolio and dedicated industry strategies 53 performance gap Significant improvement in conversion ratio and profitability Glo at Delivering ™ consistent growth Confirming attractive growth and operational leverage
Slide 54: Portfolio shift to better address supplier and customer needs
Portfolio shift to better address our supplier and customer needs 54 Water Treatment Combines entire Water Treatment ecosystem under BES roof Finished Lubricants Ability to leverage business critical capability of BES’ efficient last mile delivery Semi-specialties Better fit with BES go-to- market m
Slide 55: Strengthening BSP's operating model and increasing divisional autonomy
Strengthening BSP’s operating model and increasing divisional autonomy Geographical operating model New operating model Nutrition ry EMEA Shift from Life Science Beauty & Care fa] geographical to Primary . 1 steering Americas > > JA global industry business unit Pharma A APAC i | Supply Chain Steeri
Slide 56: Strong progress on executing our strategy in 2023
© aa Strong progress on executing our strategy in 2023 / ‘ = ‘ Z Opened two new I&ACs in India and Thailand for CASE & Construction oe Four acquisitions to further close white spots and add scale Opened two new Innovation & Application Centers (I&ACs) @ New sustainability / circularity partnerships
Slide 57: Accelerating BSP's performance to deliver higher organic growth
Accelerating BSP’s performance to deliver higher organic growth and profitability, with further upside from M&A Op. EBITA Conversion Margin (%) 3 43-45% — 38-40% — — — FY23E Portfolio shift FY23E Price and ? Cost-out /? Portfolio? Value-added FY27E (Prior to PS) (Post PS) margin efficiency managemen
Slide 58: Actively managing pricing and margins to improve profitability
58 ca ~ Ea 1 Actively managing pricing and margins to improve profitability Optimizing pricing strategies Utilizing DiDEX to support dynamic pricing strategy Identifying individual pricing requirements Ensuring sustainability of products Simulate pricing scenarios Identify the ideal pricing 2 Exclud
Slide 59: Cost-out program to underpin structural margin improvement
| | Cost-out program to underpin structural margin improvement SY Joint cost-out projects and ability to structure SLAs at arm’s length Upgrading salesforce efficiency Digital support from new BSP with dedicated supply Optimize usage of Group Enhancing go-to-market Transportation Management chain ca
Slide 60: Driving further growth through enhanced product mix
3 Driving further growth and profitability through enhanced product mix Fill white spots through Focus on Develop own strategic supplier partnerships specialty products branded products and leverage global sourcing Improve product portfolio Fewer non-branded Leverage ‘accelerators’ in line with mark
Slide 61: Further scale value-added services with customers and suppliers
Further scale value-added services with customers and suppliers Application and innovation support Regulatory services Re-packing Mixing and blending Upgraded and specialized Scaled-up global network of Advanced capabilities Increase own-brand offering I&AC footprint by investing in industry-focused
Slide 62: Strengthening BSP's footprint and capabilities through M&A
aad 5 Strengthening BSP’s footprint and capabilities through M&A 2023 2027 M&A objectives EMEA NA LATAM APAC_ China EMEA NA LATAM APAC_ China Add scalable capabilities in high growth areas Accelerate market entry in APAC across all segments a Increase presence BSP Presence HB Market leader in all su
Slide 63: Strong M&A track record with significant pipeline
5 Strong M&A track record with significant pipeline Selected acquisitions from 2018 - 2023 EUR 1.2bn¢+ in acquired sales 20 si ©: Conony Gus r= Tiirkiye c-} ae = Business 2023 Blending solutions ~EUR 40m 2023 Nutrition ~EUR15m Big it RAVENSWROD @ || BHtz 2023 Blending solutions ~EUR 45m. 2023 Specia
Slide 64: Unique end market strategies to capture growth markets
a mw Unique end market strategies to capture potential of structurally attractive growth markets ma” fh YY | oo a o> oo Globally leading innovationand Strong technical expertise and Growth track record in volatile Technical expertise, strong global BSP strengths development expertisethrough broad pr
Slide 65: Global network of Innovation & Application Centers
a mw Connecting the most comprehensive global network of Innovation & Application Centers to drive growth @ # of BACs I&AC by end market Material Science Life Science North America @ fear gaitic Strategy to optimize network ay Enhance global connectivity 78 |&ACs g Scale innovation capabilities = gl
Slide 66: Delivering business success through global sharing of innovation
a [7 Delivering business success through global sharing of innovation Background Brenntag approach BSP APAC team identified a specialized sunscreen that is colorless and has a lower viscosity BSP had the ambition to globally commercialize this innovation for our suppliers and customers APAC team sha
Slide 67: Harnessing the power of our digital capabilities
Harnessing the power of our digital capabilities to differentiate experience and support seamless execution Customer Growth Engine —— Financial Reduce churn and impact improve volumes al Data-driven insights Pricing Engine Product Life Cycle Management ba al ba al Accelerate and systematize developm
Slide 68: Strengthening leadership positions in Life Science and Material Science
ea | Strengthening leadership positions in Life Science and Material Science Operational Mix Further improvement of Before portfolio shift After portfolio shift product portfolio and M&A Life Science Material Science Other (Water Treatment, Finished Lubes, Semi-specialties) 68 Indicative Op. Gross P
Slide 69: Brenntag Specialties 2027 growth and profitability targets
aS ~ By Brenntag Specialties 2027 growth and profitability targets Organic Op. Gross Profit Organic Op. EBITA Op. EBITA CAGR CAGR Conversion Ratio”) 4 © all | [4 g 5%-7% 7% -9% 43% - 45% Further upside from M&A strategy Note: Base year FY23E post portfolio shift and including DiDEX-related uplift an
Slide 70: Brenntag Specialties: Power to perform
Ty £6. Optimizing OF BSP’s platform New operating model, streamlined portfolio and dedicated industry strategies 70 performance gap Significant improvement in conversion ratio and profitability Glo a Delivering ™ consistent growth Confirming attractive growth and operational leverage
Slide 71: Key takeaways
Key takeaways (> BRENNTAG
Slide 72: Our path to Horizon 3: Becoming the leader across all dimensions
Our path to Horizon 3: Becoming the leader across all dimensions Two distinct and autonomous businesses Portfolio sharpening to increase business with one lean center model coherence Unleashing the true potential of Crystalize Brenntag Specialties’ power to Brenntag Essentials’ platform perform Upda