Brenntag SE, the global market leader in chemicals and ingredients distribution, has softened its full-year earnings guidance to reflect the current tough market conditions, including the potential impact from tariffs, as per Chemweek.
Brenntag has not lowered its 2025 operating EBITA guidance of €1.1 billion-€1.3 billion, but said it now expects earnings to be “in the lower end” of the guidance.
“The macroeconomic environment remains highly challenging with an increased level of economic uncertainty,” the company said in a statement May 14. “Due to the high volatility of the developments, it is currently difficult to predict with certainty the impact on Brenntag, its industry and the markets it serves. Although potential secondary and tertiary tariff effects are hard to predict, Brenntag needs to reflect the dampened business sentiment which already impacted the company’s performance towards the end of the first quarter.”
The softer earnings outlook also reflects “severe” currency headwinds, the general increased level of economic uncertainty, and the continuation of geopolitical conflicts, as well as unresolved tariff discussions, it said.
Brenntag, meanwhile, reported a decline in first-quarter net profit to €134.4 million from €141.4 million in the year-earlier period, on sales up 1.7% to €4.1 billion. Gross profit increased 3.6% year over year to €1.0 billion.
Sales were below analysts’ consensus estimate of €4.2 billion provided by S&P Capital IQ.
“Brenntag experienced another quarter characterized by a challenging business environment with ongoing geopolitical and even increased economic uncertainties and volatility, amplified by global tariff negotiations,” said Brenntag CEO Christian Kohlpaintner. “The anticipation of significant tariff changes already dampened business sentiment in the second half of March. Although our results in the first quarter 2025 are in line with the prior-year period and we report operating gross profit growth, the sequential performance in comparison to the fourth quarter 2024 did not fully meet our initial expectations.”
In the Brenntag Specialties division, despite a decline in volumes, gross profit increased 1.0% year over year to €295 million. The business achieved “a meaningful improvement” in operating gross profit per unit, through portfolio optimization, and price and margin management, the company said. In the life science segment, the nutrition business unit showed a stable gross profit performance year over year, whereas performance in pharma was slightly lower than in the prior-year quarter. The beauty and care business unit reported the strongest performance within life science, showing “clear growth,” Brenntag said. The performance of the material science segment was slightly above the prior-year period, mainly due to acquisitions, the company said.
The Brenntag Essentials division reported first-quarter operating gross profit of €724.5 million, up 4.7% year over year despite a “challenging and competitive market environment,” the company said. All regions except North America contributed to the development. A positive volume development was recorded in EMEA, Latin America and Asia-Pacific, whereas North America was “challenging,” the company said. The Asia-Pacific and Latin America regions achieved double-digit volume growth year over year, it said.
Meanwhile, Brenntag is planning to accelerate its cost-reduction program, which was launched at the start of 2024. In 2025, Brenntag aims roughly to double the savings it achieved in 2024, the company said.
“We continued to put high focus on the implementation of our cost-containment program and realized cost savings of €30 million in the first quarter of 2025,” said Brenntag CFO Thomas Reisten. “Considering the challenging business environment and following a deeper analysis of potential measures, we will be accelerating our cost-out initiative – both in scope and speed.”
Brenntag is on track to achieve its goal of €300 million in annualized cost cuts by 2027, compared with 2023, Reisten said.
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