Brenntag faces challenging Q2 2025 amid weak demand, currency pressures

GERMANY – Brenntag, a chemicals and ingredients distribution company with operations in animal nutrition, reported a tough second quarter of 2025 as macroeconomic uncertainty, weak customer sentiment, and unfavourable EUR/USD exchange rates weighed on performance.

The operating gross profits of the group, which has been in operation for more than 150 years, declined 1.9% to EUR 974.3 million (US$1,138 million), while operating EBITA fell 13.9% to EUR 246.4 million (US$288 million). 

Both Brenntag Specialties and Brenntag Essentials were affected by slowing demand and pricing pressures across key end markets.

Brenntag Specialties, which includes high-value ingredients for Life Science and Material Science applications, posted an operating gross profit of EUR 278.2 million (US$325 million), down 3.3% year on year. 

Within Life Sciences, the Pharma business showed resilience, but Nutrition and Beauty & Care weakened, particularly in the Americas. Material Science also remained constrained by high interest rates that dampened construction and infrastructure activity. 

Operating EBITA for Specialties dropped 11.2% to EUR 98.8 million (US$116 million), despite improved gross profit per unit from margin management.

The Essentials division, which supplies large-volume industrial and basic ingredients, achieved a slightly better gross profit margin relative to sales. 

However, its operating gross profit declined 1.3% to EUR 696.1 million (US$813 million) as pricing pressure offset modest volume gains in EMEA, Latin America, and APAC. EBITA for the division fell 13.1% to EUR 177.1 million (US$207 million).

Brenntag continued to pursue cost-containment measures, generating EUR 30 million (US$35 million) in quarterly savings and remaining on track to reach EUR 300 million (US$351 million) in annual reductions by 2027. 

Management also advanced its M&A strategy, acquiring mcePharma to expand in the EMEA biopharma market and adding GSZ Kaiserslautern to strengthen hazardous substance storage capabilities within its Essentials network.

Resilience, sustainability, and leadership transition

Despite the challenging backdrop, Brenntag maintained strong cash generation, with Q2 free cash flow at EUR 152.9 million (US$179 million). The company also reinforced its sustainability profile, earning an EcoVadis Gold rating and a CDP Climate “Leadership” score.

Geopolitical tensions, tariff uncertainties, and unfavourable EUR/USD trends are expected to persist. 

Nevertheless, CEO Christian Kohlpaintner emphasised Brenntag’s resilience and its focus on “Strategy to Win” initiatives to create business opportunities and drive structural improvements.

He noted that the company’s diversified portfolio, global reach, and innovation-focused ingredient offerings position it well for long-term growth.

In the first quarter of 2025, Brenntag had reported a 2.1% year-on-year increase in operating gross profit, reaching EUR 1,019.5 million (US$1.15 billion). Essentials rose 3.0% to EUR 724.5 million (US$821.4 million), while Specialties posted a 0.1% gain to EUR 295.0 million (US$334.5 million), maintaining stability. 

Both divisions benefited from strategic, commercial, and operational initiatives. Based on these results, Brenntag maintained its 2025 full-year operating EBITA guidance in the range of EUR 1.1 billion (US$1.25 billion) to EUR 1.3 billion (US$1.5 billion).

In other news, earlier this year, in May, Brenntag announced the appointment of Jens Birgersson as its next Chief Executive Officer and Member of the Management Board, effective September 1, 2025. 

Birgersson will succeed Kohlpaintner, who had announced in late 2024 that he would not renew his contract. Kohlpaintner will step down on August 31, 2025. The Supervisory Board’s Chairman, Richard Ridinger, praised the incoming CEO’s extensive leadership experience.

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