Brenntag SE — Earnings Release 2018

Aug 8, 2018

Q2 2018 Results

▌ 8 August 2018

Conference call on the Q2 2018 results Corporate Finance & Investor Relations

Q2 2018 results presentation AGENDA

▌Review Q2 2018

▌Financials Q2 2018

▌Outlook

▌Appendix

Highlights Q2 2018 REVIEW Q2 2018

Operating Gross Profit +8.4% (fx adj.) EUR 677.0m	Operating EBITDA +10.7% (fx adj.) EUR 231.3m	Q2 confirms growth trends from Q1
Broad based contribution to growth 3 regions growing across main industries	Successful completion of acquisitions Contribution from acquired businesses meeting	EPS +10.1% EUR 0.76

Operating EBITDA bridge1): Q2 2017 to Q2 2018 REVIEW Q2 2018

1) Calculations are partly based on assumptions made by management; effects based on rounded figures

Segments – EMEA REVIEW Q2 2018

in EUR m	Q2 2018	Q2 2017	∆ in %	in % (fx adj.)
Operating gross profit	293.5	280.0	4.8	6.4
Operating EBITDA	103.0	94.8	8.6	10.6

• Growth of both operating gross profit and operating EBITDA
• Double-digit operating EBITDA growth is primarily driven organically
• Initiatives to increase efficiency contributed to earnings results

Segments – North America REVIEW Q2 2018

in EUR m	Q2 2018	Q2 2017	∆ in %	in % (fx adj.)
Operating gross profit	281.4	280.2	0.4	8.5
Operating EBITDA	108.0	106.6	1.3	9.8

• Ongoing positive trend in the region
• Operating EBITDA growth entirely organic
• Growth is broad based across all industries

Segments – Latin America REVIEW Q2 2018

in EUR m	Q2 2018	Q2 2017	∆ in %	in % (fx adj.)
Operating gross profit	40.7	44.1	-7.7	2.0
Operating EBITDA	8.7	9.7	-10.3	0.0

• Flat results in continued volatile overall conditions are a positive
• Economies of Latin American countries show mixed picture
• Brenntag is well positioned across the sub-continent

Segments – Asia Pacific REVIEW Q2 2018

in EUR m	Q2 2018	Q2 2017	∆ in %	in % (fx adj.)
Operating gross profit	57.2	48.9	17.0	23.5
Operating EBITDA	19.8	16.8	17.9	24.1

• Another quarter with double digit growth
• Results supported by positive performance of acquisitions
• Track record underlines future growth potential of the region

Recent acquisitions REVIEW Q2 2018

Canada Colors and Chemicals

• Signing in Q2 2018
• Sales of around 140m EUR in 2017
• Gross profit of around 25m EUR in 2017
• Strengthening of industry focus and specialties capabilities in Canada
• Strategic step in the country with operations in various important locations

Raj Petro Specialties Private Limited

• Closing in Q2 2018
• Acquisition of 65% of the shares of the company in May 2018.
• The second tranche of 35% will be purchased after a period of five years or seven years at the latest.

Quimitecnica Group

• Closing in Q2 2018
• Expansion of distribution activities in Portugal and the north of Spain.

Q2 2018 results presentation AGENDA

▌Review Q2 2018

▌Financials Q2 2018

• ▌Outlook
• ▌Appendix

Income statement FINANCIALS Q2 2018

in EUR m	Q2 2018	Q2 2017	∆	∆ FX adjusted	2017
Sales	3,215.0	3,001.4	7.1%	12.2%	11,743.3
Cost of materials	-2,538.0	-2,344.9	7.6%		-9,189.2
Operating gross profit	677.0	656.5	3.1%	8.4%	2,554.1
Operating expenses	-445.7	-435.8	2.3%		-1,718.1
Operating EBITDA	231.3	220.7	4.8%	10.7%	836.0
Op. EBITDA / Op. gross profit	34.2%	33.6%			32.7%

Income statement (continued) FINANCIALS Q2 2018

in EUR m	Q2 2018	Q2 2017	∆	2017
Operating EBITDA	231.3	220.7	4.8%	836.0
Net expenses from holding charges and special items	-1.3	-0.9	-	-53.8
Depreciation	-29.8	-29.2	2.1%	-118.9
EBITA	200.2	190.6	5.0%	663.3
1) Amortization	-12.1	-11.7	3.4%	-44.2
EBIT	188.1	178.9	5.1%	619.1
Financial result	-23.8	-23.1	3.0%	-94.5
EBT	164.3	155.8	5.5%	524.6
Profit after tax	118.3	106.8	10.8%	362.0
EPS	0.76	0.69	10.1%	2.34

1) Includes scheduled amortization of customer relationships amounting to EUR 9.9m in Q2 2018 (EUR 9.4m in Q2 2017 and EUR 34.7 m in 2017).

Cash flow statement FINANCIALS Q2 2018

in EUR m	Q2 2018	Q2 2017	2017
Profit after tax	118.3	106.8	362.0
Depreciation & amortization	41.9	40.9	163.1
Income taxes	46.0	49.0	162.6
Income tax payments	-50.9	-73.0	-184.5
Interest result	22.5	20.5	86.5
Interest payments (net)	-13.3	-13.8	-78.3
Changes in current assets and liabilities	-86.6	-92.2	-203.7
Change in provisions	3.2	-1.1	78.4
Other	-8.4	11.0	18.4
Cash provided by operating activities	72.7	48.1	404.5

Cash flow statement (continued) FINANCIALS Q2 2018

in EUR m	Q2 2018	Q2 2017	2017
Purchases of intangible assets and property, plant & equipment (PPE)	-38.0	-27.5	-151.4
Purchases of consolidated subsidiaries and other business units	-69.0	-7.6	-108.0
Other	1.2	10.1	14.5
Cash used for investing activities	-105.8	-25.0	-244.9
Capital increase	-	-	-
Payments in connection with the capital increase	-	-	-
Purchases of companies already consolidated	-	-	-
Profits distributed to non-controlling interests	-1.0	-1.0	-1.7
Dividends paid to Brenntag shareholders	-170.0	-162.2	-162.2
Repayment of (-)/proceeds from (+) borrowings (net)	44.4	24.8	-60.4
Cash used for financing activities	-126.6	-138.4	-224.3
Change in cash & cash equivalents	-159.7	-115.3	-64.7

Balance Sheet and leverage FINANCIALS Q2 2018

in EUR m	30 June 2018	31 Mar 2018	31 Dec 2017	30 Sept 2017	30 June 2017
Financial liabilities	2,249.3	2,087.0	2,089.9	2,637.6	2,099.8
./. Cash and cash equivalents	332.8	489.1	518.0	1,053.1	380.5
Net Debt	1,916.5	1,597.9	1,571.9	1,584.5	1,719.3
Net Debt/Operating EBITDA 1)	2.3x	1.9x	1.9x	1.9x	2.1x
Equity	3,047.8	3,058.4	2,985.7	2,945.5	2,900.8

Working capital FINANCIALS Q2 2018

in EUR m	30 June 2018	31 Mar 2018	31 Dec 2017	30 Sept 2017	30 June 2017
Inventories	1,183.3	1,076.3	1,043.6	997.1	1,007.3
+ Trade receivables	1,989.7	1,834.9	1,672.7	1,716.3	1,761.5
./. Trade payables	1,382.3	1,267.9	1,205.8	1,174.3	1,247.7
Working capital (end of period)	1,790.7	1,643.3	1,510.5	1,539.1	1,521.1
Working capital turnover (year to-date) 1)	7.5x	7.5x	7.9x	8.0x	8.2x
Working capital turnover (last months) 2) twelve	7.5x	7.6x	7.9x	7.9x	8.0x

1) Using sales on year-to-date basis and average working capital year-to-date.

2) Using sales on LTM basis and average LTM working capital.

Free cash flow FINANCIALS Q2 2018

in EUR m	Q2 2018	Q2 2017	∆	∆	2017
Operating EBITDA	231.3	220.7	10.6	4.8%	836.0
CAPEX	-38.0	-27.3	-10.7	39.2%	-148.1
∆ Working capital	-45.4	-70.0	24.6	-35.1%	-247.6
Free cash flow	147.9	123.4	24.5	19.9%	440.3

Q2 2018 results presentation AGENDA

▌Review Q2 2018

▌Financials Q2 2018

▌Outlook

▌Appendix

OUTLOOK

Brenntag Group has had a good start into the year 2018

North America	EMEA
 Positive trend in macroeconomy to continue  Results to be supported by almost all customer industries	 Efficiency measures will continue to pay off
Latin America	Asia Pacific

Group	 Guidance Range: operating EBITDA of EUR 870m – EUR 900m for the full year 2018  Performance to be supported by all regions

THANK YOU FOR YOUR ATTENTION

Steven Holland, CEO

• With Brenntag since 2006
• +30 years of dedicated experience
• Region Latin America, Corp. Communications, Development, HR, HSE, Internal Audit + Compliance, M&A, Sustainability

Georg Müller, CFO

• With Brenntag since 2003
• +10 years of experience in chemicals distribution
• Corp. Accounting, Controlling, Finance & IR, Legal, Tax, Risk Management, Brenntag International Chemicals

We are ready to answer your questions!

Q2 2018 results presentation AGENDA

▌Review Q2 2018

▌Financials Q2 2018

▌Outlook

▌Appendix

Balance Sheet as of June 30, 2018 FINANCIALS Q2 2018

968 2.812 52 1.183 368 1.990 333 Assets Cash and cash equivalents Trade receivables Other assets Inventories Assets held for sale Intangible assets Property, plant and equipment 7,706 in EUR m 3.048 ^{415 200 17 395} 1.382 2.249 Liabilities and Equity Financial liabilities Trade payables Other liabilities Other provisions Liabilities assoc. with assets held for sale Other Equity 7,706

Financial stability of Brenntag Group FINANCIALS Q2 2018

• Constant leverage levels over period with M&A activity
• Investment-grade ratings from Standard & Poor's ("BBB") and Moody's ("Baa3")

Bond 2018 was repaid in July 2018

1) Net debt defined as current financial liabilities plus non-current financial liabilities less 'cash and cash equivalents'

Segments Q2 2018 FINANCIALS Q2 2018

in EUR m		EMEA	North America	Latin America	Asia Pacific	All other segments	Group
Operating gross profit	Q2 2018	293.5	281.4	40.7	57.2	4.2	677.0
	Q2 2017	280.0	280.2	44.1	48.9	3.3	656.5
	∆	4.8%	0.4%	-7.7%	17.0%	27.3%	3.1%
	∆ FX adjusted	6.4%	8.5%	2.0%	23.5%	27.3%	8.4%
Operating EBITDA	Q2 2018	103.0	108.0	8.7	19.8	-8.2	231.3
	Q2 2017	94.8	106.6	9.7	16.8	-7.2	220.7
	∆	8.6%	1.3%	-10.3%	17.9%	13.9%	4.8%
	∆ FX adjusted	10.6%	9.8%	0.0%	24.1%	13.9%	10.7%

Income statement FINANCIALS H1 2018

in EUR m	H2 2018	H1 2017	∆	∆ FX adjusted
Sales	6.190,2	5,974.7	3.6%	10.1%
Cost of materials	-4,875.6	-4,670.5	4.4%
Operating gross profit	1,314.6	1,304.2	0.8%	7.5%
Operating expenses	-876.7	-881.7	-0.6%
Operating EBITDA	437.9	422.5	3.6%	10.9%
Operating EBITDA/Operating gross profit	33.3%	32.4%
Net expenses from holiding charges and special items	-1.5	-1.1
Depreciation	-58.0	-58.1	-0.2%	5.5%
EBITA	378.4	363.3	4.2%	10.9%
1) Amortization	-24.3	-23.3	-4.3%	12.5%
EBIT	354.1	340.0	4.1%
Financial result	-42.8	-45.9	-6.8%
EBT	311.3	294.1	5.8%
Profit after tax	224.3	201.5	11.3%

1) Includes scheduled amortization of customer relationships amounting to EUR 19.7m in H1 2018 (EUR 18.5m in H1 2017 and EUR 34.7 million in 2017).

Cash flow statement FINANCIALS H1 2017

in EUR m	H1 2018	H1 2017
Profit after tax	224.3	201.5
Depreciation & amortization	82.3	81.4
Income taxes	87.0	92.6
Income tax payments	-83.8	-102.7
Interest result	43.0	45.3
Interest payments (net)	-21.6	-29.4
Changes in current assets and liabilities	-235.8	-225.4
Changes in provisions	-27.9	-45.3
Other	-7.0	15.2
Cash provided by operating activities	60.5	123.8

Cash flow statement (continued) FINANCIALS H1 2017

in EUR m	H1 2018	H1 2017
Purchases of intangible assets and property, plant & equipment	-72.5	-53.1
Purchases of consolidated subsidiaries and other business units	-69.2	-34.9
Other	5.1	11.9
Cash used for investing activities	-136.6	-76.1
Capital increase	-	-
Payments in connection with the capital increase	-	-
Purchases of companies already consolidated	-	-
Profits distributed to non-controlling interests	-1.0	-1.0
Dividends paid to Brenntag shareholders	-170.0	-162.2
Repayment of (-)/proceeds from (+) borrowings (net)	62.0	-91.5
Cash used for financing activities	-109.0	-254.7
Change in cash & cash equivalents	-185.1	-207.0

Free cash flow FINANCIALS H1 2018

in EUR m	H1 2018	H1 2017	∆	∆	2017
EBITDA	437.9	422.5	15.4	3.6%	836.0
CAPEX	-65.1	-47.4	-17.7	37.3%	-148.1
∆ Working capital	-197.2	-225.8	28.6	-12.7%	-247.6
Free cash flow	175.6	149.3	26.3	17.6%	440.3

Segments FINANCIALS H1 2018

in EUR m		EMEA	North America	Latin America	Asia Pacific	All other segments	Group
Operating gross profit	H1 2018	583.0	539.0	78.6	106.1	7.9	1,314.6
	H1 2017	559.0	552.7	87.8	97.2	7.5	1,304.2
	∆	4.3%	-2.5%	-10.5%	9.2%	5.3%	0.8%
	∆ FX adjusted	5.8%	8.6%	1.3%	17.6%	5.3%	7.5%
Operating EBITDA	H1 2018	204.4	196.1	16.8	37.2	-16.6	437.9
	H1 2017	190.8	195.2	18.9	33.8	-16.2	422.5
	∆	7.1%	0.5%	-11.1%	10.1%	2.5%	3.6%
	∆ FX adjusted	8.8%	11.9%	0.6%	18.5%	2.5%	10.9%