In the coming years, Brenntag aims to strengthen and further expand its position as the global market leader in chemical and ingredients distribution in a changing global market environment.
In financial year 2023, Brenntag worked systematically to drive the execution of its “Strategy to Win” presented in November 2022. Firstly, the core elements comprised differentiated strategies for the two divisions Brenntag Specialties and Brenntag Essentials, which will be further developed through the “Advanced Operating Model” from January 2024 onwards. Secondly, Brenntag is pursuing a sustainability agenda with the aim of assuming a leading role in the responsible distribution of sustainable chemicals and ingredients. This includes using 100% environmentally-friendly energy by 2025 and achieving net-zero emissions by 2045, for example. Thirdly, Brenntag aims to drive market consolidation through value-creating M&A activity. Its focus here is on expanding its position in emerging markets in both divisions, improving strategic capabilities and market positions, augmenting the existing portfolio and improving technical capabilities. Fourthly, it is transforming itself into a data- and technology-driven company.
Through the “Advanced Operating Model” announced in July 2023 and operationalized in January 2024, Brenntag is continuing to implement the two divisions’ differentiated steering. This includes the divisions’ new steering and governance structure via divisional CEOs and Executive Committees. In addition, specific functions and responsibilities will be transferred from corporate level to the divisions to enable them to manage their business independently, enhance their decision-making and improve their business performance. They will be supported in this by a leaner corporate center. From the beginning of 2024, the Group will also create dedicated legal entity structures for both divisions along the new organizational structure.
In December 2023, Brenntag then presented its strategic roadmap extending through to 2027. This is centered around the further separation of Brenntag Essentials and Brenntag Specialties into two independent and autonomous global divisions with honed profiles. Brenntag Essentials’ strategy rests on three pillars: 1) last-mile delivery services, 2) regional provision and supply chain services, and 3) global sourcing and interregional optimization. Through this triple business model, Brenntag Essentials plans to accelerate its growth in the highly attractive, globally expanding chemical distribution market. The division plans to continue to invest in continuously enhancing its performance and to further implement a disciplined and targeted M&A strategy. Brenntag Specialties is placing emphasis on five performance levers: 1) price and margin management, 2) cost and efficiency improvements, 3) portfolio management and strategic portfolio decisions, 4) value-added services and 5) strategic acquisitions. With its global industry-segment setup, Brenntag Specialties will implement dedicated industry strategies and by doing so plans to extend its focus on very attractive market segments and further increase Life Science’s share of the portfolio. As communicated at the Capital Markets Day, a EUR 300 million cost reduction program was put in place with a view to enhancing efficiency and offsetting inflation-driven increases in costs. This also includes the reduction in costs from the DiDEX program.