Letter from the CEO

Dear ladies and gentlemen,

dear shareholders,

The past financial year was a special one for your Brenntag: We celebrated 150 years of our company. One highlight of the fantastic anniversary year were the celebrations at various sites around the globe and our ceremony in Essen in October 2024, where we had the pleasure of welcoming not only our employees, but also customers, business partners, representatives from the political arena, investors and friends of the company. I was deeply impressed by how many of Brenntag’s companions congratulated us on this occasion and paid tribute to our employees’ performance and our working relationship of trust.

The entire Brenntag team aspires to continue this track record of success. We know that Brenntag’s key to success was and still is to remain agile as an organization and in its thinking, and to continue to evolve in line with a clear strategy while constantly returning to our strengths and values. Only in this way was the company able to ascend to the position of global market leader in chemical and ingredients distribution over one and a half centuries and is now able to actively shape the future of our industry.

“Focus in change” – the motto of our anniversary year – is also an apt description of financial year 2024. On the chemical markets, the challenging macroeconomic environment and the still-strained geopolitical situation caused an unusually long bottoming-out in the industry cycle – a development that we have not yet experienced on this scale in the chemical industry. In this environment, we attached considerable importance to prudent price and margin management, further portfolio optimization, the differentiated management of our divisions and consistent implementation of our extensive cost-reduction program. At the same time, we worked full steam ahead to drive the further development and execution of our strategy. Here, the considerable commitment and hard work of the colleagues at Brenntag deserve the utmost respect.

Nevertheless, our financial results for financial year 2024 remained well below our expectations. Although we saw both the effect of the aforementioned measures and initiatives and the slight sequential recovery in volumes that had been forecast over the course of the year, we once again faced an extremely challenging environment and difficult market conditions. Competition remained fierce and price pressures persisted, especially in the case of industrial chemicals, placing severe demands on our team. In this environment and bearing in mind the general conditions described, Brenntag achieved an acceptable set of results overall in financial year 2024. The Group’s sales stood at EUR 16.24 billion and its operating gross profit at EUR 4.03 billion. Our operating EBITA came to EUR 1.10 billion. Brenntag Specialties posted operating gross profit of EUR 1.17 billion. Operating EBITA came to EUR 447 million. Operating gross profit at Brenntag Essentials came to EUR 2.85 billion. Operating EBITA stood at EUR 781 million in financial year 2024. Our weak share price performance reflects the results below our expectations and does not show Brenntag’s actual potential.

However, in financial year 2024 we not only worked on our efficiency and drove forward our day-to-day operations, but also consistently executed our “Strategy to Win” presented in November 2022. In this context, we are continuing to develop Brenntag’s organizational structure and reinforcing our two divisions’ differentiated positioning so as to better adapt them to changing customer and supplier needs. In November 2024, following an extensive review, we decided that it is in our shareholders’ interests to concentrate fully on executing “Strategy to Win” and on our path to enhancing performance and improving results. In disentangling the divisions, we are focusing on those areas which offer Brenntag the greatest potential for value creation and differentiation in our markets, including the allocation of the sites and their logistics chains. At the same time, we are driving measures to further disentangle the divisions while avoiding substantial one-time costs. We are minimizing dis-synergies and over the next few years will leverage the strength of our existing structure as “one Brenntag” with two increasingly differentiated divisions.

Besides measures that facilitate our two divisions’ profitability and organic growth, value-enhancing acquisitions are an important pillar of our “Strategy to Win”. In 2024, we once again made targeted investments in focus industries and growth markets of strategic importance to us and reinforced our market position. A total spend of EUR 570 million on eight closed acquisitions puts us slightly above the target corridor we have set for M&A investments.

I am delighted to report that we successfully pursued the sustainability pathway embedded in our strategy in 2024. For example, we commissioned Brenntag’s largest solar farm to date in Latin America, thereby supporting our goal of sourcing 100% of our energy requirements from renewable sources by the end of 2025. In addition, we provided customers with “CO2Xplorer on-demand”, a service tool for calculating the carbon footprint of chemical products. Developed in-house and certified by testing service provider TÜV Rheinland, this tool sets us clearly apart in the market as a provider of sustainable solutions.

Last year, Brenntag’s progress on sustainability was once again recognized and qualified by way of well-known ratings and certifications. We are particularly proud of the fact that we were able to increase our score at EcoVadis and were once again the only global chemical distributor to be awarded platinum, the highest possible status, and to thus rank among the top one percent of companies rated across all sectors and regions. In September 2024, Brenntag was admitted to the DAX 30 ESG index. In financial year 2024, we fully reviewed and adapted our climate change mitigation targets. These now cover Scope 1, 2 and 3 emissions. Having made these changes, we meet the requirements of the Science Based Targets initiative (SBTi), which successfully validated all targets at the beginning of 2025 – another case where we are unique in our industry.

In addition, we continue to consequently implement our Digital, Data & Excellence initiative, DiDEX, through which we are transforming Brenntag into a more data- and technology-driven company and more closely linking our processes with those of our suppliers and customers. Customer service is another area where we are relying more on AI. For example, we are the first company in Germany to have implemented AI agents on a Salesforce platform to simplify service, sales, marketing and distribution tasks.

The aim of all our strategic and operational efforts was and still is to create value for you, our shareholders. Since going public in 2010, we have reliably paid an attractive dividend. We want to do so again for this challenging financial year 2024 and at the Annual General Meeting will propose an unchanged dividend of EUR 2.10 per share.

We have a stated aim and a clear roadmap for 2025: Our top priority is to enhance the company’s operating performance. To this end, we are consistently executing our growth strategy. At the same time, we will continue to drive forward our ambitious transformation program as an essential ingredient for Brenntag’s sustained success. For 2025 we expect continued moderate improvements in volumes throughout the year, also driven by our acquisitions, and a sequential slightly better pricing environment in the second half of 2025. At the same time, we expect the macroeconomic and geopolitical environment to continue to be marked by uncertainty. Against this background, we expect the Brenntag Group’s operating EBITA for 2025 as a whole to be between EUR 1.1 billion and EUR 1.3 billion.

Dear shareholders, as you know, I have decided not to extend my contract with Brenntag beyond 2025. Although these are not parting words and there is still a lot we have planned for this year, I would like to take this opportunity to express my sincere thanks for your trust over the past five years or so. It was and still is an honor to work to ensure our company’s sustained success together with the fantastic Brenntag team, with passion and energy. My special word of thanks at this point goes to Kristin Neumann, who has unfortunately decided to leave the company when her contract expires. At the same time, I extend a warm welcome to Thomas Reisten as the future CFO on our management team.

I am proud of what we have achieved together so far. Your trust was and still is my biggest motivation. Over the coming months, I am looking forward to improving the company’s performance and continuing to implement the measures decided upon for its transformation together with our employees, the entire Board of Management, our global leadership team and the Supervisory Board so as to best position Brenntag for future, sustainable growth.

Essen, March 12, 2025

Dr. Christian Kohlpaintner

Chief Executive Officer