ESSEN (dpa-AFX) - Following a decline in sales and earnings in 2023, chemicals trader Brenntag is taking a cautious view of the current year. The company expects the sequential recovery in sales to continue in 2024. The war in Ukraine, the conflict in the Middle East, geopolitical tensions and the slow decline in inflation continue to cause uncertainty regarding the global economy, the DAX-listed company announced in Essen on Thursday. For the current year, Brenntag therefore expects a slight decline in operating profit in the worst-case scenario. The share price fell by around three percent in the morning.

The company is reportedly targeting adjusted earnings before interest, taxes and goodwill amortization (operating Ebita) of between 1.23 billion and 1.43 billion euros.

In 2023, the chemicals trader felt the effects of weaker demand. Turnover shrank by 13.5 percent year-on-year to 16.8 billion euros. A stronger euro also had a negative impact - adjusted for currency effects, the decline amounted to eleven percent. Adjusted for special effects, earnings before interest, taxes and goodwill amortization fell by 16.3 percent to 1.27 billion euros.

A profit of just under 715 million euros was attributable to shareholders after almost 887 million euros in the previous year. The company's figures fell short of analysts' expectations. Brenntag's management wants to increase the dividend from 2.00 to 2.10 euros per share in the previous year.

In order to reduce costs, the Management Board led by CEO Christian Kohlpaintner introduced further measures in the summer of 2023 and announced plans to close 25 locations and reduce the number of employees by 300. More than 1,300 jobs had already been cut and 100 locations closed by the end of 2022. Brenntag plans to save a total of 300 million euros over the year to 2027. The company had put the one-off costs at 250 million euros.

Meanwhile, the Group is pressing ahead with the separation of its two divisions. The businesses with process chemicals (Essentials) and specialties for certain industries (Specialties) are to be set up independently by 2026.

This should lead to faster decisions and better results. The restructuring should lead to improved development, particularly in the specialty business, which, according to Group CEO Kohlpaintner, is currently lagging behind its competitors. This gap is to be closed. The management will then examine various strategic options. It remains to be seen whether the company will be split up.

Brenntag expects the independence of the two divisions to result in significant efficiency gains and savings in general administrative costs, expenses and the supply chain.

The chemicals trader was targeted by activist investors. In particular, the British financial investor Primestone attracted attention. Both Primestone and the US hedge fund Engine Capital are interested in splitting Brenntag into the two divisions for specialty and basic chemicals. The investors hope that this will lead to a rapid increase in value.

Brenntag trades internationally in industrial and specialty chemicals as well as ingredients. The company buys the substances from chemical groups in large quantities and sells them in smaller quantities. In recent years, Brenntag has grown with the help of smaller acquisitions. The company is generally less affected by economic downturns than chemical groups because customers then need fewer chemicals and increasingly buy them from distributors rather than producers. Most recently, Brenntag employed more than 17,700 people in 72 countries./mne/men/mis