Brenntag ETR: BNR reported a 15% increase in third-quarter operating EBITDA and reaffirmed its full-year earnings outlook, as stable customer demand and cost savings helped offset higher energy, transportation and sourcing costs.
Operating EBITDA rose to €385 million, while revenue increased 13% year over year to €4.3 billion on stable volumes. Operating gross profit grew 10% to €1.064 billion. The chemical distributor expects full-year 2026 operating EBITDA toward the upper end of its €1.35 billion to €1.45 billion guidance range.
Group CEO Jens Birgersson said the result came in line with expectations despite volatile market conditions and less favorable pricing than in the second quarter. “The underlying improvements in our business are holding,” he said.
Group CFO Thomas Reisten said elevated chemical prices supported gross profit, although higher sourcing costs increasingly flowed through the income statement. The operating gross margin was 24.9%, which Reisten described as reflecting a temporary timing effect.
Both Divisions Increase Earnings
Brenntag Essentials increased third-quarter revenue 17% to €3 billion and operating EBITDA 12% to €276 million. Operating gross profit rose 12%, with all regions contributing to that growth.
North American operating EBITDA rose 18% to €169 million, supported by an encouraging volume trend and positive gross profit momentum. In Europe, the Middle East and Africa, EBITDA increased 6% to €86 million as volumes remained broadly stable. Asia-Pacific EBITDA rose 9% to €6 million, with double-digit growth in China.
Latin American EBITDA fell 5% to €30 million despite higher gross profit. Birgersson said volumes declined and an earthquake in Colombia hurt demand. The company also faced rapid input price increases in its Mexican lubricants business that it could not pass on in the market.
Brenntag Specialties revenue rose 5% to €1.3 billion, and operating EBITDA increased 3% to €110 million. Life Science EBITDA edged up 1% to €70 million, while Material Science EBITDA rose 13% to €36 million. Birgersson said pricing momentum remained positive in both segments, although volumes were mixed in Life Science and weaker in Material Science.
Reisten said Pharma and Material Science delivered strong sequential growth in gross profit per unit, partly supported by pricing effects related to the Middle East conflict.
Cost Savings and Cash Flow
Brenntag generated €47 million in gross cost savings during the third quarter, up from €41 million in the second quarter and €27 million in the first. Savings for the first nine months totaled close to €115 million, and the company remains on track for approximately €150 million in 2026, management said.
Reisten said the program includes reductions in central costs, organizational simplification and productivity improvements. Brenntag has organically reduced its workforce by approximately 800 full-time equivalents since September 2025. The company continues to target cumulative savings of €200 million to €250 million by 2027 against its 2025 cost base.
Free cash flow was €183 million in the quarter. Reisten said elevated chemical prices increased working capital requirements by raising the value of inventories and receivables, although the related cash outflows eased from the previous quarter.
Outlook and Strategy Update
Brenntag’s outlook assumes no broad-based decline in customer demand across its end markets and takes into account usual seasonal patterns. Reisten noted that fourth-quarter activity typically slows because of fewer working days, holidays and weather.
Birgersson said the company expects subdued demand, geopolitical uncertainty and further volatility in energy and freight markets for the rest of the year. He said customer buying patterns are expected to remain stable, while commercial initiatives, simplification and cost reductions should continue to provide support.
Brenntag plans to provide updated medium-term guidance and further details on its growth and margin strategy at its Capital Markets Day following the earnings presentation. Birgersson said the update would build on the existing business rather than introduce “a completely new Brenntag.”
The CEO also said the integrations of Chem Tech and Airedale were progressing well. Brenntag closed its acquisition of South Korea-based Woojin Trading in the Beauty & Care business at the end of October.
About Brenntag (ETR:BNR)
Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries.
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