11.10.22
Brenntag has announced its detailed strategic growth plan including new mid-term targets until 2026. The comprehensive “Strategy to Win” comprises dedicated growth strategies for both divisions, Brenntag Specialties and Brenntag Essentials, details and targets for the company’s digital, data, and excellence transformation as well as its sustainability and M&A strategy.
“Strategy to Win” represents the second phase in Brenntag’s transformation journey. The first phase, “Project Brenntag,” started more than two years ago and focused on implementing the new operating model with two global business divisions and clear customer segmentation, optimizing the site network, and on structurally addressing productivity improvements by 2023. Targets included an additional annualized operating EBITDA contribution of €220 million. As of the end of 2022, all Project Brenntag targets will be reached, one year ahead of plan, the company said, which has laid the foundation and enabled the company to achieve improved sustainable organic earnings growth.
“Brenntag is the undisputed and resilient leader in an attractively growing and highly fragmented, indispensable market. We have now defined how to strengthen and expand this position. We aim to foster growth in our global divisions with clear differentiated strategies,” said Christian Kohlpaintner, CEO Brenntag SE. “Moreover, we build a comprehensive digital and data framework and architecture to better serve our global customer base and achieve the next level of operational efficiency, growth, and excellence. With our comprehensive and ambitious ‘Strategy to Win’ we aim to outpace the underlying market growth. Brenntag will play a crucial role in the ecosystem of sustainable global chemicals and ingredients distribution.”
Brenntag says Brenntag Essentials will become the undisputed market leader shaping the future of Essentials distribution and achieving accelerated growth and become more efficient. Brenntag Essentials will leverage its unrivalled foundational strengths resulting in a clear competitive advantage. Its highly diversified geographic, industry and product spread make the business resilient and a reliable partner locally and globally. The division has defined three key strategic priorities: Brenntag Essentials will strengthen its local and regional distribution networks and optimize its last mile delivery capabilities, enhance its global expertise by re-enforcing global sourcing market intelligence capabilities and expanding global terminal capabilities at strategic ports, and will put a focus on capturing new market potential through mergers and acquisitions and by increasing its portfolio for sustainable products and supply chain solutions.
Brenntag sees strategic mergers and acquisitions as an enabler of future growth and thus will double the annual planned M&A spend to around €400 to 500 million. As a leading consolidator in the industry, Brenntag’s acquisition strategy will be focused on five key pillars, such as the accelerating growth in Life Sciences globally, enhancing strategic capabilities and market positions, expanding positions in emerging markets in both divisions, filling white spots to complement the existing portfolio, and improving tech capabilities that enable efficiency gains.
“Strategy to Win” represents the second phase in Brenntag’s transformation journey. The first phase, “Project Brenntag,” started more than two years ago and focused on implementing the new operating model with two global business divisions and clear customer segmentation, optimizing the site network, and on structurally addressing productivity improvements by 2023. Targets included an additional annualized operating EBITDA contribution of €220 million. As of the end of 2022, all Project Brenntag targets will be reached, one year ahead of plan, the company said, which has laid the foundation and enabled the company to achieve improved sustainable organic earnings growth.
“Brenntag is the undisputed and resilient leader in an attractively growing and highly fragmented, indispensable market. We have now defined how to strengthen and expand this position. We aim to foster growth in our global divisions with clear differentiated strategies,” said Christian Kohlpaintner, CEO Brenntag SE. “Moreover, we build a comprehensive digital and data framework and architecture to better serve our global customer base and achieve the next level of operational efficiency, growth, and excellence. With our comprehensive and ambitious ‘Strategy to Win’ we aim to outpace the underlying market growth. Brenntag will play a crucial role in the ecosystem of sustainable global chemicals and ingredients distribution.”
Divisional Strategies
According to the company, Brenntag Specialties will become the global go-to service partner for innovative and sustainable solutions. To achieve these ambitions, the division has defined five key strategic priorities: Brenntag Specialties will 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 division is building on its unique strengths and capabilities, including a network of 81 application development centers to drive innovations for the different industries, diverse market insights, and strategic partnerships with global suppliers.Brenntag says Brenntag Essentials will become the undisputed market leader shaping the future of Essentials distribution and achieving accelerated growth and become more efficient. Brenntag Essentials will leverage its unrivalled foundational strengths resulting in a clear competitive advantage. Its highly diversified geographic, industry and product spread make the business resilient and a reliable partner locally and globally. The division has defined three key strategic priorities: Brenntag Essentials will strengthen its local and regional distribution networks and optimize its last mile delivery capabilities, enhance its global expertise by re-enforcing global sourcing market intelligence capabilities and expanding global terminal capabilities at strategic ports, and will put a focus on capturing new market potential through mergers and acquisitions and by increasing its portfolio for sustainable products and supply chain solutions.
“Digital.Data.Exellence”
Additionally, with its Digital.Data.Excellence growth driver (DiDEX), Brenntag enhances efficiency, growth and excellence across the organization and transforms the company from the core to become a data and tech driven enterprise and industry leader. To this extent, Brenntag will strongly invest in its DiDEX capabilities and focuses on five pillars: becoming easiest to do business with in the chemical distribution ecosystem, unlocking the value from its data, modernizing the company’s digital business architecture as well as building capabilities to attract and retain talent, and driving value delivery and embed change in the organization with a mindset of continuous improvement. Thus, Brenntag says it will become the “most connected and agile supply chain partner in the industry to best address today’s challenges of flexibility, sustainability, and efficiency.”M&A Intent
According to Kristin Neumann, CFO, Brenntag SE, Brenntag “will focus on growth through organic re-investments as well as through value creating M&A activities. 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.”Brenntag sees strategic mergers and acquisitions as an enabler of future growth and thus will double the annual planned M&A spend to around €400 to 500 million. As a leading consolidator in the industry, Brenntag’s acquisition strategy will be focused on five key pillars, such as the accelerating growth in Life Sciences globally, enhancing strategic capabilities and market positions, expanding positions in emerging markets in both divisions, filling white spots to complement the existing portfolio, and improving tech capabilities that enable efficiency gains.