Brenntag Se · XETR:BNR
Brenntag — Q3 2011 Earnings Presentation
38 slides from Brenntag's earnings presentation, Nov 10, 2011
Slide 1: Q3 2011 Management Presentation
Q3 2011 Management Presentation, 10th November 2011 0
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by y Brenntag g AG and other information currentlyy available to the company. p y Various known and unknown risks, uncertainties and other factors could lead to material differences be
Slide 3: Agenda
Agenda 1. Highlights g g Q3 2011 2. Financials Q3 2011 3. Outlook Appendix 2
Slide 4: Agenda
Agenda 1. Highlights g g Q3 2011 2. Financials Q3 2011 3. Outlook Appendix 3
Slide 5: Introductory remarks to Q3 2011 earnings
1. Highlights Q3 2011 Introductory remarks to Q3 2011 earnings Ongoing sound business development in an economic environment of slowed down dynamic Strong gross profit growth of 7.7% as well as operating EBITDA growth of 8.6% (both y-o-y y o y, both FX adjusted) in Q3 2011 Main driver was the organi
Slide 6: Operating highlights Q3 2011
1. Highlights Q3 2011 Operating highlights Q3 2011 EUR 445.5m 445 5m Gross profit FX adjusted increase of 7.7% y-o-y (as reported increase of 3.7% y-o-y) EUR 166.6m 166 6m Operating EBITDA FX adjusted increase of 8.6% y-o-y (as reported increase of 3.9% y-o-y). Operating EBITDA / 37.4% (against 37.3
Slide 7: Strategic market entry in China
1. Highlights Q3 2011 Strategic market entry in China • Acquisition of Zhong Yung (International) Chemical Ltd. • Closing of purchase of the first tranche of 51% end of August 2011 and consolidation since 1st September 2011 • Acquisition of the remaining stake is contracted for 2016 • Estimated ente
Slide 8: Expansion of product portfolio into base oils and lubricant additives
1. Highlights Q3 2011 Expansion of product portfolio into base oils and lubricant additives • Signing of acquisition of Multisol Group Limited, a specialty chemical distributor of high value specialty chemicals, in September 2011 • Closing is expected in the course of 2011, subject to common merger
Slide 9: Refinancing
1. Highlights Q3 2011 Refinancing • Refinancing g took advantage g of Brenntag’s g continued successful track record and the attractive market environment in the first half of 2011 • Resulting in extended maturities, high degree of financial flexibility and significant margin improvements • Credit r
Slide 10: Refinancing (continued)
1. Highlights Q3 2011 Refinancing (continued) • Brenntag issued its first bond in July 2011 • Further diversification of the financing mix • Substantial demand among investors, issuance was several times oversubscribed Main data of the Brenntag bond ISIN XS0645941419 Issuer Brenntag Finance B.V. Lis
Slide 11: Agenda
Agenda 1. Highlights g g Q3 2011 2. Financials Q3 2011 3. Outlook Appendix 10
Slide 12: Income statement Q3 2011
2. Financials Q3 2011 Income statement Q3 2011 ∆ FX i EUR m in Q3 2011 Q3 2010 ∆ adjusted 2010 Sales 2,218.0 2,022.6 9.7% 13.6% 7,649.1 Cost of goods sold -1,772.5 -1,592.9 11.3% -6,012.7 Gross profit 445.5 429.7 3.7% 7.7% 1,636.4 Expenses 280.9 269.8 4.1% -1,038.8 EBITDA 164.6 159.9 2.9% 7.6% 597.6
Slide 13: Income statement Q3 2011 (continued)
2. Financials Q3 2011 Income statement Q3 2011 (continued) in EUR m Q3 2011 Q3 2010 ∆ 2010 EBITDA 164.6 159.9 2.9% 597.6 Depreciation -23.1 -21.2 9.0% -84.0 EBITA 141.5 138.7 2.0% 513.6 Amortization1) -6.0 -33.9 -82.3% -104.6 EBIT 135.5 104.8 29.3% 409.0 Financial result -28.62)) -32.7 -12.5% -177.2
Slide 14: Cash flow statement Q3 2011
2. Financials Q3 2011 Cash flow statement Q3 2011 in EUR m Q3 2011 Q3 2010 2010 Profit after tax 66.7 43.3 146.6 Depreciation & amortization 29.1 55.1 188.6 Income taxes 40.2 28.8 85.2 Income tax payments -31.0 -30.5 -86.1 Interest result 22.4 30.7 168.3 I t Interest t payments t (net) ( t) -46.7 46
Slide 15: Cash flow statement Q3 2011 (continued)
2. Financials Q3 2011 Cash flow statement Q3 2011 (continued) in EUR m Q3 2011 Q3 2010 2010 Purchases of intangible assets and property, property -18.9 -19.1 -81.2 plant & equipment (PPE) Purchases of consolidated subsidiaries and 3.6 -134.7 -143.1 other business units Oth Other 19 1.9 12 1.2 58 5.8
Slide 16: Balance sheet as of 30 September 2011
2. Financials Q3 2011 Balance sheet as of 30 September 2011 in EUR m 5,367 5,367 Cash and cash equivalents 482 1,855 1,279 Trade receivables Financial liabilities Other assets 254 Inventories Trade payables 653 975 Other liabilities 372 200 Other provisions 1,875 Intangible assets1) 317 Other 1,648
Slide 17: Specific effects relating to the consolidation of Zhong Yung
2. Financials Q3 2011 Specific effects relating to the consolidation of Zhong Yung • 51% of Zhong Yung is currently owned by Brenntag; the outstanding 49% will be purchased h d in i 2016 • Zhong Yung is fully consolidated by the Brenntag Group since September 2011 • Earnings attributable to our co-o
Slide 18: Balance sheet and leverage Q3 2011
2. Financials Q3 2011 Balance sheet and leverage Q3 2011 30 June 31 March 31 Dec 31 Dec in EUR m 30 September 2011 2011 2011 2010 2009 Financial liabilities1) 1,855.2 1,729.8 1,726.7 1,783.8 2,436.3 ./. Cash and cash equivalents 481.6 259.2 349.8 362.9 602.6 Net Debt 1,373.6 1,470.6 1,376.9 1,420.9
Slide 19: Leverage: Net debt / Operating EBITDA Q3 2011
2. Financials Q3 2011 Leverage: Net debt / Operating EBITDA1) Q3 2011 6.0x 6,0x 2) 5.6x 4.8x 4,0x 3.6x 4.0x 2.7x 2.7x 2 6x 2.6x 24 2.4x 2.2x 2.3x 2.1x 2,0x 2.0x 0,0x 0.0x 0 0x 2007 2008 2009 2) 31 M Mar 30 JJun 30 SSep 31 DDec 31 M Mar 30 J June 30 S Sep 2) 2) 2) 2) 2010 2010 2010 2010 2011 2011 2)
Slide 20: Maturities profile as of 30 September 2011
2. Financials Q3 2011 Maturities profile as of 30 September 20111) 1.400 Main maturity under Syndicated Facility 1.200 1.000 800 600 Bond o d 400 €174m borrowings under A/R Securitization – 200 0 2011 2012 2013 2014 2015 2016 2017 2018 1) Syndicated loan, bond and liabilities under the international
Slide 21: Working capital Q3 2011
2. Financials Q3 2011 Working capital Q3 2011 30 September 30 June 31 Mar 31 Dec 31 Dec i EUR m in 2011 2011 2011 2010 2009 Inventories 653.4 645.7 606.0 606.1 422.3 + Trade receivables 1,279.2 1,264.8 1,216.2 1,059.7 831.4 ./. Trade payables 975.3 923.5 917.7 834.1 655.6 Working capital (end of per
Slide 22: Free cash flow Q3 2011
2. Financials Q3 2011 Free cash flow Q3 2011 in EUR m Q3 2011 Q3 2010 ∆ ∆ 2010 EBITDA 164.6 159.9 4.7 2.9% 597.6 Capex -19.0 -21.4 -2.4 -11.2% -85.1 ∆ Working capital 76.0 -47.7 123.7 n/m -136.4 F Free cash h flow fl 221 6 221.6 90 8 90.8 130 8 130.8 >100% 100% 376 1 376.1 21
Slide 23: Segments Q3 2011
2. Financials Q3 2011 Segments Q3 2011 North Latin Asia All other in EUR m Europe Group America America Pacific segments External sales Q3 2011 1 066 1,066.5 715.9 1 9 210 2 210.2 104 3 104.3 121 1 121.1 2 218 0 2,218.0 Q3 2010 1,011.3 653.1 190.6 83.3 84.3 2,022.6 ∆ 5.5% 9.6% 10.3% 25.2% 43.7% 9.7%
Slide 24: Agenda
Agenda 1. Highlights g g Q3 2011 2. Financials Q3 2011 3. Outlook Appendix 23
Slide 25: Outlook
3. Outlook Outlook 2010 Trend 2011 9M 2011 Comments and 2012 • Only slight macroeconomic growth assumed EUR 7,649m • Outsourcing trends by producers, the preferential role of Sales EUR 6,519m scale distributors and Brenntag’s strong competitive position are expected to provide further g growth poten
Slide 26: Outlook
3. Outlook Outlook 2010 Trend 2011 9M 2011 Comments and 2012 • T To a large l extent a function f i off sales l growthh • Business growth will lead to an increase of Working EUR 832m Capital compared to end 2010, no additional liquidity Working capital for working capital build-up in Q4 2011 expecte
Slide 27: Thank you for your attention!
Thank you for your attention! Brenntag board of management Steven Holland Jürgen Buchsteiner William Fidler CEO CFO Board Member We are ready to answer your questions. questions 26
Slide 28: Agenda
Agenda 1. Highlights g g Q3 2011 2. Financials Q3 2011 3. Outlook Appendix 27
Slide 29: Appendix Contents
Appendix Contents • Operating highlights 9M 2011 ................................................................. p. 29 • Income statement 9M 2011 ..................................................................... p. 30 • Cash flow statement 9M 2011 ..............................................
Slide 30: Operating highlights 9M 2011
Appendix Operating highlights 9M 2011 EUR 1,323.7m 1 323 7m Gross profit FX adjusted increase of 10.5% y-o-y (as reported increase of 8.0% y-o-y) EUR 492.4m 492 4m Operating EBITDA FX adjusted increase of 13.2% y-o-y (as reported increase of 10.0% y-o-y). Operating EBITDA / 37.2% (against 36.5% in 9
Slide 31: Income statement 9M 2011
Appendix Income statement 9M 2011 ∆ FX i EUR m in 9M 2011 9M 2010 ∆ adjusted 2010 Sales 6,518.5 5,710.2 14.2% 16.5% 7,649.1 Cost of goods sold -5,194.8 -4,484.3 15.8% -6,012.7 Gross profit 1,323.7 1,225.9 8.0% 10.5% 1,636.4 Expenses -834.1 -784.7 6.3% -1,038.8 EBITDA 489.6 441.2 11.0% 14.2% 597.6 Ad
Slide 32: Income statement 9M 2011 (continued)
Appendix Income statement 9M 2011 (continued) in EUR m 9M 2011 9M 2010 ∆ 2010 EBITDA 489.6 441.2 11.0% 597.6 Depreciation -65.9 -62.3 5.8% -84.0 EBITA 423.7 378.9 11.8% 513.6 Amortization1) -17.4 -97.7 -82.2% -104.6 EBIT 406.3 281.2 44.5% 409.0 Financial result -93.7 -141.4 -33.7% -177.2 EBT 312.6 1
Slide 33: Cash flow statement 9M 2011
Appendix Cash flow statement 9M 2011 in EUR m 9M 2011 9M 2010 2010 Profit after tax 201.2 84.2 146.6 Depreciation & amortization 83.3 160.0 188.6 Income taxes 111.4 55.6 85.2 Income tax payments -89.0 -55.7 -86.1 Interest result 84.7 139.5 168.3 I t Interest t payments t (net) ( t) -103.6 103 6 -168
Slide 34: Cash flow statement 9M 2011 (continued)
Appendix Cash flow statement 9M 2011 (continued) in EUR m 9M 2011 9M 2010 2010 Purchases of intangible assets and property, property -51.2 -49.4 -81.2 plant & equipment (PPE) Purchases of consolidated subsidiaries and -25.2 -137.6 -143.1 other business units Oth Other 72 7.2 32 3.2 58 5.8 Cash used
Slide 35: Free cash flow 9M 2011
Appendix Free cash flow 9M 2011 in EUR m 9M 2011 9M 2010 ∆ ∆ 2010 EBITDA 489.6 441.2 48.4 11.0% 597.6 Capex -48.0 -47.2 -0.8 -1.7% -85.1 ∆ Working capital -104.8 -170.9 66.1 -38.7% -136.4 F Free cash h flow fl 336 8 336.8 223 1 223.1 113 7 113.7 51 0% 51.0% 376 1 376.1 34
Slide 36: Segments 9M 2011
Appendix Segments 9M 2011 North Latin Asia All other in EUR m Europe Group America America Pacific segments External sales 9 2011 9M 3 28 3,287.5 2 033 0 2,033.0 597.5 9 2 33 273.3 32 2 327.2 6 18 6,518.5 9M 2010 2,948.2 1,843.8 543.0 121.9 253.3 5,710.2 ∆ 11.5% 10.3% 10.0% >100% 29.2% 14.2% ∆ FX 11
Slide 37: IPO-related effects on income statement 2010
Appendix IPO-related IPO related effects on income statement 2010 Q1 Q2 Q3 Q4 in EUR m H1 2010 2010 2010 2010 2010 2010 Effects above EBITDA IPO costs charged to Brachem +2.5 0.0 +2.5 0.0 -0.4 +2.1 Acquisition S.C.A. IPO costs -8.2 0.0 -8.2 0.0 +1.6 -6.6 Total effect above EBITDA -5.7 0.0 -5.7 0.0 1
Slide 38: Income statement 2010 adjusted for IPO effects
Appendix Income statement 2010 adjusted for IPO effects in EUR m Q1 2010 Q2 2010 H1 2010 Q3 2010 Q4 2010 2010 EBITDA 128.5 152.8 281.3 159.9 156.4 597.6 Adjustment for IPO- 5.7 0.0 5.7 0.0 -1.2 4.5 related effects EBITDA adjusted 134.2 152.8 287.0 159.9 155.2 602.1 Financial result -73.6 73 6 -35.1