Brenntag fails to meet the anticipated range in their predictions
In a shift from its usual optimistic outlook, chemicals distributor Brenntag is treading carefully with its 2025 profit goals. The company is aiming for the lower end of its March guidance range of €1.1 billion to €1.3 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITA). This means matching its best ever performance of last year, at best.
Navigating a Stormy Business Sea
Brenntag's journey through Q1 2025 emerged less than ideal, falling short of analysts' predictions. The DAX-listed firm reported a 1.8% year-on-year increase in EBITA, amounting to €264.3 million, and a revenue growth of 1.7% to €4.07 billion. However, net income attributable to shareholders decreased from €141.4 million in 2024 to €134.4 million.
In a statement, CEO Christian Kohlpaintner laid bare the challenges Brenntag faced: "This quarter, Brenntag had to contend with a dicey business environment. Persistent geopolitical uncertainties, escalating economic uncertainties worsened by global trade debates, and heightened volatility took a toll." The turbulent conditions led to pressure on prices and a dip in demand in certain sectors.
Currency Woes, Economic and Geopolitical Risks
Brenntag's financial woes aren’t limited to its immediate business environment. The company has grappled with negative currency effects, escalating economic uncertainty, and persistent geopolitical conflicts. These factors have raised operational risks and costs, compounding the challenges Brenntag faces.
[1] To combat these hurdles, Brenntag has decided to double its cost-saving measures in 2025 compared to the previous year.
[2] This strategy is driven by the company’s commitment to thrive in the face of adversity and continue delivering value to its stakeholders.
[1] In the midst of escalating economic uncertainties and persistent geopolitical conflicts affecting the industry, Brenntag has chosen to intensify its cost-saving measures in 2025, aiming to double the efforts from the previous year.
[2] By committing to this strategy, Brenntag intends to persevere through the challenges and maintain its reputation as a valuable player in the finance and business sectors.
