2022
Annual Report
Key Financial Figures at a Glance
Consolidated Income Statement
2022 2021
Change
in %
Change
in % (fx adj.)
Sales EUR m 19,429.3 14,382.5 35.1 27.7
Operating gross profit EUR m 4,319.0 3,379.0 27.8 20.3
Operating EBITDA EUR m 1,808.6 1,344.6 34.5 26.7
Operating EBITDA/operating gross profit % 41.9 39.8
Operating EBITA EUR m 1,511.7 1,081.9 39.7 31.5
Operating EBITA/operating gross profit % 35.0 32.0
Profit after tax EUR m 902.5 461.4 95.6
Basic earnings per share EUR 5.74 2.90
Diluted earnings per share EUR 5.74 2.89
Consolidated Balance Sheet
Dec. 31, 2022 Dec. 31, 2021
Total assets EUR m 11,373.0 10,195.5
Equity EUR m 4,802.7 3,995.3
Working capital EUR m 2,588.6 2,109.8
Net financial liabilities EUR m 2,049.7 2,070.3
Consolidated Cash Flow
2022 2021
Net cash provided by operating activities EUR m 956.7 388.6
Payments to acquire intangible assets
and property, plant and equipment EUR m –267.2 –199.3
Free cash flow EUR m 1,005.1 439.5
Key Data on the Brenntag Shares
2022 2021
Share price EUR 59.72 79.58
No. of shares (unweighted) 154,500,000 154,500,000
Market capitalization EUR m 9,227 12,295
Free float % 100.00 100.00
2Annual Report 2022 Brenntag SE
Brenntag is the global market leader in chemicals
and ingredients distribution. The company holds a
central role in connecting customers and suppliers
of the chemical industry. With its two global divi-
sions Brenntag Essentials and Brenntag Specialties
the company provides a full-line portfolio of indus-
trial and specialty chemicals and ingredients as
well as tailor-made application, marketing and
supply chain solutions, technical and formulation
support, comprehensive regulatory know-how and
digital solutions for a wide range of industries.
Brenntag operates a global network of about
600locations in 72 countries. With its global work-
force of more than 17,500employees Brenntag
generated sales of EUR 19,4 billion in 2022.
Company
Profile
3Brenntag SEAnnual Report 2022
Letter
from the CEO
4Annual Report 2022 Brenntag SE
CEO LETTER
“Brenntag delivered another outstanding
performance in 2022, achieving record
results. Global presence, a comprehensive
portfolio of products and services, and
strong supplier relationships are the
pillars of our resilience and capabilities.”
Your Brenntag delivered another outstanding performance in 2022,
achieving record results. The basis for this is our business model,
which remains highly resilient even and especially in an extremely
difficult macroeconomic environment with a war ongoing in Europe.
A war which, until a little more than a year ago, we considered un-
thinkable and which throws into question many of the supposed
certainties and assumptions on which we base our business activ-
ities. We, the Board of Management, strongly condemn Russia’s in-
vasion of Ukraine and the continuing war. We were quick to take the
necessary steps after the war started and wound down our business
in and with Russia and Belarus. For another year, particularly heavy
demands were placed on society, industry and Brenntag, too. The
effects were diverse and clearly felt. The sharp rise in energy costs
as a result of the war led to substantial changes in supply and de-
mand, especially in Europe. Numerous manufacturers had to cut
back production or – at least temporarily – stop it completely.
Chemical base materials were in short supply, while others were
only available at increased prices. On top of this, there were further
lockdowns in China as a result of the COVID-19 pandemic, which
once again resulted in bottlenecks at ports and a shortage of con-
tainers. We repeatedly faced disrupted supply chains and the flow
of supplies had to be rethought.
Thanks to our robust business model and our global presence, how-
ever, we were able to supply our customers to the usual standard of
reliability. Reliability that is due especially to the untiring efforts and
outstanding performance of our employees around the globe. Their
expertise and commitment enabled Brenntag to act quickly, find
creative solutions and overcome the challenges. I would like to most
sincerely thank all our employees for that.
Our comprehensive transformation program “Project Brenntag”
also made a significant contribution to our success in financial year
2022. We worked consistently to implement our numerous initiatives
and can say with some degree of pride that we achieved and even
exceeded our ambitious goals a year earlier than planned. By the
end of 2022, the program had generated EUR 249 million in addi-
tional annual operating EBITDA, exceeding the original target of
EUR 220 million for financial year 2023.
Dear ladies and gentlemen,
dear shareholders,
5Annual Report 2022 Brenntag SE
CEO LETTER
Global presence, a comprehensive portfolio of products and services,
and strong supplier relationships are the pillars of our resilience and
capabilities. They are also reflected in our 2022 financial figures.
Last year, Brenntag lifted sales by 27.7% to just over EUR19.43 bil-
lion and generated operating gross profit of around EUR 4.32 billion,
an increase of 20.3%. Our operating EBITDA rose by 26.7% to just
over EUR 1.81 billion.
Our two divisions, Brenntag Specialties and Brenntag Essentials,
both contributed to this remarkable success by delivering an excel-
lent performance and mostly organic growth. As forecasted,
Brenntag Specialties grew at a stronger rate. Operating gross
profit rose by 24.8% to around EUR 1.68 billion. Operating EBITDA
was up by 32.1% to just under EUR 780 million. Brenntag Essentials
also showed a strong performance across all regions. Operating
gross profit grew by 17.7% year on year to around EUR 2.61 billion.
The division generated operating EBITDA of around EUR 1.15 billion,
an increase of 27.6%.
Brenntag has its sights set firmly on further growth and last Novem-
ber presented the “Strategy to Win” with that aim in mind. Our new
growth strategy, including ambitious medium-term targets for 2026,
is the next phase of our company’s transformation and builds con-
sistently on the foundations laid by “Project Brenntag” and the
achievements to date. The strategy involves individual growth plans
for Brenntag Specialties and Brenntag Essentials. Applying these
divisional strategies and leveraging our company’s global footprint
and fundamental strengths, we will further develop the differenti-
ated profiles of our two divisions and propel their growth above the
market growth rate.
Our “Strategy to Win” also sets out a clear program for the compa-
ny’s digital, data-driven transformation. We see Digital.Data.Excel-
lence (DiDEX) as a key growth driver for our Group. We will drive ef-
ficiency at all levels of our organization and develop Brenntag into
a data- and technology-driven business that uses its wealth of data
to develop new business opportunities and smart, innovative solu-
tions and thus generate further growth. We are evolving into an ag-
ile, flexible and, ultimately, the preferred business partner in the
chemical and ingredients distribution ecosystem.
6Annual Report 2022 Brenntag SE
CEO LETTER
Brenntag has the ambition and the skills to shape the future of our
industry. This vision is what drives us. It is also expressed in our new
global branding, which we presented together with the “Strategy to
Win” in November 2022. Strategy, vision and brand – together, they
are a clear signal to our business partners, shareholders and em-
ployees that we forge ahead as global market leader, assuming
responsibility, setting standards and further distancing ourselves
from our competitors.
We are pleased that our strategic growth plan and the new brand
have also received very good feedback from you, our shareholders.
Your reassurance that we are on the right track boosts and moti-
vates us and all our employees.
Industry leadership is also our aspiration when it comes to sustain-
ability: ESG is a top priority in our activities and an essential part of
our growth strategy. As global market leader, we have undertaken
to promote a sustainable future. In publishing our “Future Sustain-
able Brenntag” strategy and vision in April 2022, we set ourselves
an ambitious ESG agenda. This includes achieving net-zero emis-
sions by 2045, increasing the extent to which we use sustainability
criteria to steer our product portfolio and driving sustainability in
our supply chains.
Workplace safety and the health of our global workforce of over
17,500 employees are of paramount importance to us. Our aim by
2030 is to achieve an accident rate (Total Recordable Injury Rate
(TRIR)) of less than 2.0 and prevent serious accidents completely. In
order to achieve this, we stepped up our efforts last year through a
series of new internal campaigns to promote safety and raise aware-
ness. I am very pleased that the measures are paying off: The TRIR,
which still stood at 3.1 in 2021, dropped to 2.7 in the reporting period.
In order to achieve our ambitious growth targets, Brenntag has
always focused on growth through acquisitions, too. The global
chemical distribution market remains highly fragmented and offers
us numerous opportunities for consolidation. Last year, we invested
EUR 184 million in acquisitions in important focus industries and
growth markets. Our strong financial profile, which we continued to
work on in 2022, puts the company in a comfortable position in
terms of financing and gives us sufficient scope for further acquisi-
tions that create value. As part of the “Strategy to Win”, we have
therefore also increased the range for strategic M&A investments
to between EUR 400 and 500 million a year. We remain committed
to our principles: We are a very disciplined acquirer, have set our-
selves strict hurdles and concentrate on maximizing value creation.
7Annual Report 2022 Brenntag SE
CEO LETTER
We are equally reliable in our dividend policy. Since its stock market
listing in 2010, Brenntag has always increased the dividend it pays,
and will build on that again for the twelfth year in succession. At the
General Shareholders’ Meeting, we will propose that a dividend of
EUR 2.00 per share be paid for financial year 2022. This dividend will
afford you, Brenntag’s shareholders, an appropriate and attractive
share in our company’s tremendous success.
Reliability, stability and innovation are the values that guide our
actions. Last year, we demonstrated once again that we have the
ability to adapt to volatile market conditions. Brenntag is resilient
and able to grow even in this environment. Maintaining this resil
-
ience remains an ongoing task – for 2023 as well. We anticipate that
we will be working in a difficult operating environment again. Gen-
eral geopolitical, macroeconomic and operating conditions will
remain challenging. Nevertheless, we expect the situation to grad-
ually return to normal in the course of the year. Against this back-
ground, we expect the Brenntag Group’s operating EBITA
1)
for 2023
as a whole to be between EUR 1,300 million and EUR 1,500 million,
equivalent to operating EBITDA of between EUR 1,600 million and
EUR 1,800 million.
Dear shareholders, we would like to thank you for your loyalty and
your trust. These will continue to be what motivates us to make
Brenntag an even more valuable company.
Essen, March 7, 2023
Dr. Christian Kohlpaintner
Chief Executive Officer
1)
As of 2023, operating EBITA will be the Brenntag Group’s key performance indicator.
8Annual Report 2022 Brenntag SE
CEO LETTER
Brenntag on the Stock Market
The deteriorating, recessionary conditions also impacted on
Germany’s leading index, the DAX, and resulted – unsurpris-
ingly – in a negative annual performance. The DAX closed cal-
endar year 2022 at 13,924 points, a loss of 12.4%. In the course
of the year, the index failed to regain the annual high of 16,272
points attained on January 5, 2022 and on September 29,
2022 reached its annual low at 11,976 points.
Very early on, Brenntag has put in place a global crisis man-
agement system to protect the health and safety of its work-
force and business partners, and in the course of the pan-
demic continually modified this system in line with local
developments in the various regions of the world. As part of
our responsibility as an employer, we implemented strict and
forward-looking safety and hygiene measures at all sites. In
accordance with the statutory options, the General Share-
holders’ Meeting in 2022 was held as a purely virtual event.
Geopolitical uncertainties, the difficult macroeconomic envi-
ronment and the ongoing problems with the COVID-19 pan-
demic, especially in China, had a significant impact on global
capital markets in 2022. The rise in commodity and energy
prices exacerbated by the war in Ukraine, together with sub-
stantial cost increases on the procurement side and in per-
sonnel expenses, acted as an additional drag on the business
sector and, in Europe especially, led to a sharp decline in
business activity.
Moreover, the increasingly restrictive monetary policy of
national and supranational central banks caused the general
economic development to weaken, followed by deep turmoil
on the global capital markets. Overall, equity markets
responded to this large number of headwinds by marking
down prices significantly and ended calendar year 2022 on
sharp losses in the double-digit percentage range.
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Brenntag share price performance
Global developments also impacted on Brenntag SE shares.
In a difficult macroeconomic environment and amid a high
level of economic uncertainty, Brenntag shares fell by 25%
(23.4% including the dividend payment) over the course of
the year.
The Brenntag Group's operating profit performance in calen-
dar year 2022 was more than offset by general market devel-
opments and expectations. In both the Brenntag Essentials
division and the Brenntag Specialties division, the company
was able to increase its operating EBITDA by a clear margin.
In the context of the “Project Brenntag” transformation pro-
gram, Brenntag SE achieved some major successes and
secured the expected contributions to earnings a year earlier
than originally planned. The new corporate strategy, which
was presented at the Capital Markets Day 2022 in London,
was well received by capital markets participants. The “Strat-
egy to Win” envisages a doubling of the annual M&A spend to
around EUR 400 to 500 million, differentiated strategies for
both Brenntag Essentials and Brenntag Specialties divisions,
and the integration of Digital.Data.Excellence (DiDEX) as a
growth driver.
Brenntag shares marked their annual high at EUR 81.08 on
January 4, 2022 and failed to regain this level during the
course of the year in an environment of falling equity markets.
Brenntag SE shares found their annual low on October 12 at
EUR 55.70, at almost the same time as our benchmark indices
reached their lows.
In particular, the strong rises in commodity and energy prices
in the context of the Ukraine war led to increased price pres-
sure and higher stock volatility. Many chemical manufacturers
saw their business performance decline and this was reflected
in partly sharp price declines on the capital markets.
Brenntag SE shares were also affected by these trends in the
general industry environment and likewise dropped over the
course of the year, despite the good operating performance.
An additional cause of buyer reluctance among investors was
Brenntag SE’s announcement in November 2022 that it was
in preliminary takeover talks of a larger distribution compet-
itor. At the end of 2022, the shares closed at EUR 59.72. In Jan-
uary 2023, Brenntag SE ended the early talks regarding a
potential takeover. Brenntag shares have since made a
noticeable recovery.
65
70
75
80
85
90
95
100
105
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
■
Brenntag ■ DAX ■ STOXX Europe 600 Chemicals
1.01 Brenntag share price performance (Indexed)
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Reference data on the Brenntag shares
As at December 31, 2022, the subscribed capital of Brenntag SE
totaled EUR 154.5 million. The share capital is divided into
154,500,000 no-par value registered shares, each with a
notional value of EUR 1.00.
Since going public in 2010, Brenntag shares have been listed
in Deutsche Börse AG’s Prime Standard segment. Since June
2010, Brenntag shares had been part of the MDAX, the sec-
ond-largest German share index. Since September 2021,
Brenntag SE has been listed on the DAX.
With a market capitalization of EUR 9,137 million at the end of
2022, Brenntag shares ranked 32nd among all listed compa-
nies in Germany, according to the Deutsche Börse AG criteria.
Brenntag shares are included in major international indices
such as selected MSCI indices and the STOXX Europe 600,
which tracks the performance of the 600 largest companies
from 17 European countries, as well as in various sector indi-
ces such as the STOXX Europe 600 Chemicals. In addition,
Brenntag shares are included in various sustainability indices
such as the DAX 50 ESG and the DAX ESG Target Index.
Dec. 31, 2022 Dec. 31, 2021
Number of shares 154,500,000 154,500,000
WKN A1DAHH A1DAHH
ISIN DE000A1DAHH0 DE000A1DAHH0
Trading symbol BNR BNR
Market segments Regulated Market/
Prime Standard
Regulated Market/
Prime Standard
Trading venues Xetra and all
German regional
exchanges
Xetra and all
German regional
exchanges
Selected indices
DAX, MSCI, Stoxx Europe 600,
STOXX Europe 600 Chemicals,
DAX 50 ESG, DAX ESG Target
1.02 Key data on the shares
Brenntag in dialogue with the capital market
Our Investor Relations activities aim to deliver a fair and
transparent communication policy that provides equal treat-
ment to all stakeholders. Through openness and transpar-
ency, we aspire to increase awareness of our company as an
attractive investment and further develop Brenntag’s stand-
ing on the capital market. We communicate our company’s
business performance and strategy continuously, promptly
and reliably. This further strengthens investors’ confidence in
Brenntag and helps to ensure that our shares are adequately
valued on the capital market.
In 2022, we again attached significant importance to per-
sonal contact with capital market participants. The Board of
Management and the Investor Relations team were in con-
stant dialog with investors and analysts worldwide. Capital
market activities were further expanded. We discussed the
company’s business performance in detail in numerous meet-
ings at international roadshows or investor conferences and
at the General Shareholders’ Meeting.
The Investor Relations team made use of a variety of formats
to communicate with investors, both virtually and in person.
The corporate governance roadshow in February 2022 is wor-
thy of note. In the course of this multi-day roadshow, Doreen
Nowotne, Chair of the Supervisory Board of Brenntag SE,
answered questions about the composition of the Board of
Management and the Supervisory Board, the independence
of the Supervisory Board members, the Board of Management
remuneration system and the role of ESG within Brenntag SE
together with the Head of Corporate Investor Relations.
In February 2023, the company conducted a further road-
show on corporate governance. Here, the Chair of the Super-
visory Board of Brenntag SE, Doreen Nowotne, and Richard
Ridinger, Member of the Supervisory Board, presented
changes to the Board of Management remuneration system
in the context of the new corporate strategy as well as human
resources and succession planning on the Supervisory Board,
among other things.
In November 2022, the management of Brenntag SE pre-
sented the new Group strategy, “Strategy to Win”, at the Cap-
ital Markets Day 2022 in London. You can find a video recording
of the event on our website in the section Investor Relations.
In addition to the above-mentioned activities, the Board of
Management and the Investor Relations team regularly pro-
vided institutional investors, analysts and retail investors with
information on Brenntag SE in numerous discussions.
This year, we will continue to present the company at numer-
ous roadshows and capital market events. You will find the
latest list of dates in our financial calendar in the Investor
Relations Section of the Brenntag website at www.brenntag.
com/financial_calendar.
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BRENNTAG ON THE STOCK MARKET
Shareholder structure
As at February 28, 2023, notification had been received from
the following shareholders under Section 33 of the German
Securities Trading Act (WpHG) that their share of the voting
rights exceeded the 3% or 5% threshold:
Shareholder
Interest
in %
Date of
notification
BlackRock, Inc. >5 Feb. 06. 2023
The Capital Group Companies, Inc. >5 Jun. 15, 2022
Ameriprise Financial, Inc. >3 Feb. 21. 2023
Flossbach von Storch AG >3 Dec. 22, 2022
Wellington Management Group >3 Dec. 19, 2022
GIC Private Limited >3 Dec. 15, 2022
EuroPacific Growth Fund >3 Nov. 29, 2022
Kühne Holding AG
1)
>3 May 18, 2022
Burgundy Asset Management
2)
>3 Oct. 16 ,2018
1.03 Shareholder structure
1)
Details of person subject to the notification obligation: Klaus-Michael Kühne
2)
Details of person subject to the notification obligation: Hugh Anthony Arrell
All voting rights notifications are published on the company’s
website at www.brenntag.com/voting_rights_announcements.
At the time of reporting, 100% of Brenntag shares were held
in free float as defined by Deutsche Börse. Based on the data
collected most recently (December 31, 2022), more than 93%
of the identified shares are held by institutional investors and
organizations.
Directors’ dealings
In financial year 2022, 14 transactions were reported in
directors’ dealings notifications (managers’ transactions).
These can be viewed at any time on the Brenntag website at
www.brenntag.com/managerstransactions.
Analysts’ opinions
Brenntag is continuously monitored and rated by a large
number of international financial analysts. Currently (as at:
February 28, 2023), 22 banks regularly publish research
reports on our company’s latest performance and issue rec-
ommendations. Eighteen analysts have a buy recommenda-
tion and three have a hold recommendation on the Brenntag
shares. There is no sell recommendation at the present time.
One analyst firm is currently reorganizing their coverage and
does not issue a recommendation or price target for the
Brenntag shares. Many analysts value Brenntag highly as a
growth stock with strong cash flow generation. Furthermore,
following the successful implementation of “Project
Brenntag”, they see additional potential in the implementa-
tion of the next phase of the company’s transformation,
Brenntag’s “Strategy to Win”. As at February 20, 2023, the
average share price target was EUR 87.14.
1.04 Shareholdings of institutional investors by region
1)
1)
Data collected as at December 31, 2022; Source: Nasdaq
1.05 Analysts’ opinions
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BRENNTAG ON THE STOCK MARKET
20.1%
UK & Ireland
18.0%
Continental
Europe
12.0%
Germany
7.6%
Rest of World
42.4%
North America
3
Neutral
18
Buy
Analysts covering Brenntag SE
■
Baader Helvea
■
Bank of America
■
Bankhaus Metzler
■
Barclays
■
Berenberg Bank
■
Citigroup
■
Credit Suisse
■
Deutsche Bank
■
DZ Bank
■
Exane BNP Paribas
■
Goldman Sachs
■
HSBC
■
J. P. Morgan Cazenove
■
Jefferies
■
Kepler Cheuvreux
■
LBBW
■
Morgan Stanley
■
Oddo BHF
■
Societe Generale
■
Stifel
■
UBS
■
Warburg Research
Up-to-date information on this can be found on our website
at www.brenntag.com/analysts_opinions.
Creditor Relations
Brenntag has an extremely strong, long-term financial profile.
We have a capital structure that enables the Group to cover
its potential financing requirements at all times, including in
a difficult capital market environment. This gives us a high
degree of security, independence and financial flexibility. The
most important component in the financing structure of
Brenntag SE is the Group-wide syndicated loan agreement.
In addition, two bonds and a promissory note transaction are
currently outstanding with very favorable terms, underscoring
Brenntag SE’s high credit standing.
This strong credit profile maintained by Brenntag is reflected
in investment grade ratings from the two international rating
agencies Standard & Poor’s and Moody’s. Standard & Poor’s
assigns a “BBB” rating (outlook: positive). Standard & Poor’s
last raised the outlook from “stable” to “positive” in September
2021. Moody’s last raised Brenntag SE’s rating to "Baa2" (out-
look: stable) in March 2021. Previously, Moody’s had assigned
Brenntag a "Baa3" rating (outlook: positive).
In August 2022, Brenntag issued promissory notes totaling
around EUR 640 million. The promissory notes comprise a
total of seven tranches with tenors of three, five and seven
years and carrying both fixed and floating interest rates.
Alongside euro-denominated tranches totaling EUR 390 mil-
lion, the company also issued US dollar-denominated
tranches totaling USD 250 million. The transaction marks the
company’s first promissory note issue. The cash inflow from
the transaction will be used to generally fund the Brenntag
Group’s business development. Brenntag’s promissory note
placement in financial year 2022 confirmed its outstanding
market access in a challenging capital market environment,
optimized the currency mix and maturity profile of its liabili-
ties, and thus bolstered its solid financing.
Bond 2025 Bond 2029
Issuer Brenntag Finance B.V. Brenntag Finance B.V.
Listing Luxembourg
stock exchange
Luxembourg
stock exchange
ISIN XS1689523840 XS2394063437
Aggregate principal amount EUR m 600 500
Denomination EUR 1,000 100,000
Minimum transferrable amount EUR 100,000 100,000
Coupon % 1.125 0.500
Interest payment annual 27 Sep. 6 Oct.
Maturity Sep. 27, 2025 Oct. 6, 2029
1.06 Key data on the bonds of the Brenntag Group
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General shareholders’ meeting
The virtual, ordinary General Shareholders’ Meeting of
Brenntag SE was held in Essen on June 9, 2022. With atten-
dance at around 80%, the shareholders were very well repre-
sented. The General Shareholders’ Meeting confirmed all res-
olutions proposed by the Board of Management and the
Supervisory Board with a large majority in each case. At the
General Shareholders’ Meeting, shareholders reelected Mr.
Wijnand P. Donkers and Mr. Ulrich M. Harnacke as members
of the Supervisory Board. Shareholders also passed resolu-
tions on various capital transactions, such as creating the
authorization for a share buyback program and an authori-
zation to issue a bond with warrants. The proposal to pay a
dividend of EUR 1.45 per share was approved, representing a
7.0% increase compared with the previous year.
Attractive dividend proposal for 2022
Since going public in 2010, the company has paid its share-
holders a higher dividend each year. Since the stock market
flotation in 2010, the average annual dividend increase of the
Brenntag share, including the current dividend proposal, has
been 12.8% per annum, meaning that the absolute dividend
has increased by 325.5% overall.
Brenntag intends to increase the dividend for its shareholders
for financial year 2022, too. The Board of Management and
the Supervisory Board will recommend to shareholders at the
General Shareholders’ Meeting in June 2023 a dividend pay-
ment of EUR 2.00 per share. Subject to its approval at the
General Shareholders’ Meeting, this will be the twelfth con-
secutive dividend increase since the stock market flotation in
2010. The payout ratio on the basis of the consolidated profit
after tax attributable to shareholders of Brenntag SE would
therefore be 35%. With this payout ratio, which is in line with
capital market communications, we are allowing sharehold-
ers to participate in the company’s extraordinarily positive
earnings and cash flow development.
1.07 Dividend performance
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0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2022202120202019201820172016201520142013201220112010
0.47
0.67
0.80
0.87
0.90
1.00
1.05
1.10
1.20
1.25
1.35
1.45
2.00
(Proposal)
in % 1 year 3 years 5 years 10 years
Brenntag shares
1)
–23.4 9.6 4.9 8.4
DAX –12.3 1.7 1.5 6.2
STOXX Europe 600 Chemicals –14.3 6.1 6.5 8.4
1.09 Average annual performance of Brenntag shares and relevant benchmark indices in percent
1)
Received dividends reinvested. Due to rounding, the absolute totals may differ.
0
100
200
300
400
500
600
2022202120202019201820172016201520142013201220112010
■ Brenntag ■ DAX ■ STOXX Europe 600 Chemicals
Historical performance
1.08 Historical performance
1)
of Brenntag shares compared with the DAX (Mar. 29, 2010 to Dec. 31, 2022)
1)
Share price performance including dividends
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BRENNTAG ON THE STOCK MARKET
Dec. 31, 2022 Dec. 31, 2021
No. of shares 154,500,000 154,500,000
Dividend (in EUR) 2.00
6)
1.45
Dividend yield (in %)
1)
3.30 1.80
Payout ratio (in %) 35.00 50.00
Earnings per share (in EUR)
2)
5.74 2.90
Book value per share (in EUR)
3)
30.80 25.30
XETRA closing price (in EUR) 59.72 79.58
XETRA high (in EUR) 81.08 86.80
XETRA low (in EUR) 55.70 64.26
XETRA average price (in EUR) 68.21 76.83
Average daily trading volumes
XETRA and Frankfurt
Shares 444,560 314,019
EUR k 30,267,458 24,087,647
Market capitalization
(in EUR m)
4)
9,227 12,295
Price-earnings ratio
5)
10.40 27.40
1.10 Key data on the Brenntag shares
1)
Dividend/closing price x 100.
2)
Profit attributable to shareholders of Brenntag SE/number of shares.
3)
Equity attributable to shareholders of Brenntag SE/number of shares.
4)
Market capitalization at year-end.
5)
Closing price/earnings per share.
6)
As per the proposal for the appropriation of profit presented by the Board of
Management and the Supervisory Board, subject to approval at the General
Shareholders’ Meeting on June 15, 2023.
Service for shareholders
You can find comprehensive information on Brenntag SE and
the Brenntag shares on the Investor Relations website. In
addition to financial reports and presentations, it also con-
tains all the key dates on the financial calendar. The confer-
ence calls on the quarterly and annual financial statements
are recorded and offered in audio format. Shareholders and
interested parties can register by e-mail to be placed on the
investor mailing list. The Investor Relations team would also
be happy to help you in person.
Telephone: +49 (0) 201 6496 2100
Fax: +49 (0) 201 6496 2003
E-mail: IR@brenntag.de
Web: www.brenntag.com/investor_relations
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BRENNTAG ON THE STOCK MARKET
In the 2022 reporting period, Brenntag made clear progress in imple-
menting the transformation initiated in 2020, while at the same time
successfully overcoming the operational challenges arising from
macroeconomic conditions.
At the end of 2022 – that is, a year earlier than planned – Brenntag
was able to announce that the goals of “Project Brenntag”, the first
chapter in our transformation, had already been achieved and even
exceeded. The two global divisions Brenntag Specialties and
Brenntag Essentials were thus fully established, providing the basis
for the next phase of the company’s transformation, which it initiated
in November by adopting the “Strategy to Win”. The focus is now pri-
marily on strengthening the two divisions’ market position and devel-
oping the business model into a data- and technology-driven one.
The war in Ukraine has not only brought endless suffering to millions
of people; it has also led to severe geopolitical, energy policy and
economic turmoil. The resulting scarcity of transport capacity,
product shortages and high inflation have impacted significantly on
business operations. In these times, our business partners value
Brenntag’s reliability and delivery capability, which we demonstrated
once again thanks to our unrivaled global position and the dedicated
efforts of the entire organization. On behalf of the entire Supervisory
Board, I would like to say a big thank-you to all Brenntag employees
for their outstanding performance during the past financial year.
Cooperation between the Board of Management and
Supervisory Board
Due to the large number of projects and challenges, the Board of
Management and the Supervisory Board worked together very
closely in the reporting period. The Supervisory Board of Brenntag SE
performed the duties assigned to it by law, by the company’s Arti-
cles of Association and by its rules of procedure with the utmost
diligence. The members of the Supervisory Board regularly advised
the Board of Management in its management of the company and
monitored its activities. The Board of Management provided the
Supervisory Board with timely and comprehensive information on
all issues of relevance to the company.
Dear ladies and gentlemen,
dear shareholders,
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The points of focus here included the review and monitoring of the
development and implementation status of the transformation, i.e.
in particular the progress in implementing “Project Brenntag” and
the development of the “Strategy to Win”, the further development
of the corporate culture and the sustainability strategy, including
their embedding in operating activities, the capital allocation strat-
egy and specific acquisition projects. Other recurring topics on the
agenda at the Supervisory Board meetings in the financial year
2022 included the exceptional macroeconomic challenges due to
the war in Ukraine, the strains on global supply chains and the asso-
ciated substantial price increases. Moreover, the Supervisory Board
regularly turned its attention to global site and process safety and
advised the Board of Management on the further development of
safety standards, particularly with regard to accident prevention.
The Supervisory Board was also kept up to date on the risk position,
including risk management, deviations from plan and compliance
matters.
The Supervisory Board had ample opportunity to address in depth,
examine, discuss and consult on the reports from and resolutions
proposed by the Board of Management. In doing so, the Supervisory
Board always satisfied itself that at any time the company was
managed in an effective, proper and lawful manner. In addition, the
Supervisory Board was directly involved in all decisions of funda-
mental importance to the company at an early stage and discussed
those decisions with the Board of Management in detail.
The Supervisory Board held five ordinary meetings in the 2022
reporting period, one of which took place virtually. In addition, three
extraordinary meetings were held, two of them in the form of video
conferences and one in person. Despite the large number of Super-
visory Board meetings, we achieved the highest possible atten-
dance rate of 100% at the ordinary and extraordinary Supervisory
Board meetings. Mr. Ridinger was excused for being absent from
one meeting of the Audit Committee, so the overall attendance rate
at the committee meetings was 99%.
On five matters, the Supervisory Board took decisions by circular
resolution. Those decisions concerned personnel matters, the 2021
remuneration report, the convening of the General Shareholders’
Meeting on June 9, 2022, the continued development of the business
responsibility plan and the engagement of PricewaterhouseCoopers
GmbH Wirtschaftsprüfungsgesellschaft (PwC), Düsseldorf, as audi-
tor for the combined separate non-financial report for 2022.
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The following table contains a detailed overview of the Supervisory
Board members’ attendance at Supervisory Board and committee
meetings:
Name
Ordinary
Supervisory Board
meetings
Extraordinary
Supervisory Board
meetings
Meetings of the
Audit Committee
Meetings of the
Presiding and
Nomination
Committee
Meetings of the
Transformation and
Sustainability
Committee
Doreen Nowotne 5/5 3/3 – 12/12 9/9
Dr. Andreas Rittstieg 5/5 3/3 – 12/12 –
Stefanie Berlinger 5/5 3/3 8/8 – –
Wijnand P. Donkers 5/5 3/3 – 12/12 9/9
Ulrich M. Harnacke 5/5 3/3 8/8 – –
Richard Ridinger 5/5 3/3 7/8 – 9/9
1.11 Meeting attendance in 2022
The members of the Board of Management participated in the
Supervisory Board meetings. However, the Supervisory Board also
met regularly without the Board of Management. In the reporting
period, the Supervisory Board also consulted a total of seven times,
usually in connection with a Supervisory Board meeting, without the
Board of Management in attendance.
The members of the Supervisory Board were also available to
advise the Board of Management between the meetings and placed
particular emphasis on intense dialog. Thus, in 2022, two recluse
meetings were held in physical form, where the Board of Manage-
ment and the Supervisory Board spent two days consulting on and
discussing matters relating to the company’s strategic develop-
ment in greater depth. In addition, there was regular interaction on
current topics between the Chair of the Supervisory Board and the
Chair of the Board of Management. With regard to strategy devel-
opment, other members of the Supervisory Board also coordinated
individually with the Board of Management on specific issues.
Due to the intensive cooperation, the Supervisory Board was able
to consult with the Board of Management on the company’s future
strategic direction and to decide on business transactions and
measures presented by the Board of Management and requiring the
Supervisory Board’s approval.
In order to perform its duties efficiently, the Supervisory Board has
established various committees that prepare for discussions
and resolutions on the Supervisory Board or can adopt resolutions
themselves. Further information on the duties of the Supervisory
Board can be found in the section “Working Practices of the Board
of Management and Supervisory Board as well as the Composition
and Working Practices of their Committees” in the Corporate
Governance Statement. For information on the topics and resolu-
tions, please refer to the following section, “Topics Addressed in the
Supervisory Board Meetings”.
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Topics addressed in the Supervisory Board meetings
On March 8, 2022, the Supervisory Board held its first ordinary meet-
ing. The focus of this meeting was on the 2021 consolidated finan-
cial statements of Brenntag SE, on which both the Board of Man-
agement and the appointed auditors, PwC, reported in detail. The
Audit Committee informed the Supervisory Board about its review
and discussion of the consolidated and annual financial state-
ments. After reviewing the documents and determining that there
were no objections to be raised, the Supervisory Board approved the
consolidated financial statements of Brenntag SE for the financial
year 2021 and the annual financial statements of Brenntag SE,
which were thus adopted. This was followed by a detailed report on
general market conditions, strategy development and selected
compliance matters. The Supervisory Board also dealt with the fur-
ther development of global site and process safety and the devel-
opment of the Digital.Data.Excellence initiative. With regard to sus-
tainability, the Board of Management presented the ESG targets
achieved in 2021. It also put forward the specific ESG targets for
2022 and the newly developed medium- and long-term sustainabil-
ity strategy, including further medium- and long-term ESG targets.
Finally, there was also in-depth discussion of the implications of the
war in Ukraine. In this context, the Supervisory Board and the Board
of Management discussed Brenntag’s business in Russia and pos-
sible consequences. In addition, a crisis team was set up to monitor
the situation. The Supervisory Board supported the Board of Man-
agement’s decision to suspend all imports and exports to and from
Russia and Belarus in an orderly manner and to discontinue and
wind up business operations in Russia until further notice.
At its second ordinary meeting, held in the form of a video confer-
ence on April 22, 2022, the Supervisory Board turned its attention to
the combined separate non-financial report. The Audit Committee
and the appointed auditors, PwC, Düsseldorf, presented and
explained the results of their limited assurance engagement on the
combined separate non-financial report. The Supervisory Board fol-
lowed the Audit Committee’s recommendation and approved the
combined separate non-financial report.
The Supervisory Board held its third ordinary meeting on June 9, 2022
after the ordinary General Shareholders’ Meeting. The Board of
Management provided information on the current status of business
and reported in particular on the effects of the war in Ukraine on
Brenntag’s business performance. In addition, the Board of Manage-
ment presented the results of a global safety and process analysis
across all sites and discussed the next steps with the Supervisory
Board. The meeting also focused on discussion and approval of a
project to support the Digital.Data.Excellence strategy, which entails
investments in Brenntag’s IT systems and programs aimed at
improving digital capacities and capabilities. Furthermore, the Board
of Management informed the Supervisory Board about the progress
on IT security in a comprehensive report. The Supervisory Board also
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discussed projects related to mergers & acquisitions and the devel-
opment status of the growth strategies for the Brenntag Specialties
and Brenntag Essentials divisions. The Board of Management
reported on the status of the sustainability strategy’s development
and discussed the planned internal carbon management program
with the Supervisory Board. Finally, the Board of Management pro-
vided information on risk management and compliance matters.
At its fourth ordinary meeting on September 7, 2022, the Supervisory
Board dealt once again with the development of the “Strategy to
Win”. One focus of discussion was the corporate culture that had
been developed and the associated requirements for the profile of
skills and expertise for Brenntag managers. Furthermore, the Super-
visory Board advised the Board of Management on the further differ-
entiation of the divisional strategies. The Supervisory Board learned
about current business performance and approved a multi-year
partnership with Salesforce to enable Brenntag to offer its customers
and suppliers an effortless, data-driven and personalized user expe-
rience and thus fundamentally improve collaboration with custom-
ers and suppliers. Finally, on the topic of mergers & acquisitions, the
Supervisory Board addressed strategic questions related to a possi-
ble acquisition in respect of synergy- and evaluation-related issues.
At a total of three extraordinary meetings on October 18, 2022,
October 27, 2022 and November 14, 2022, one of which was held in
person, the Board of Management presented various potential
acquisition projects to the Supervisory Board. In particular, discus-
sions at these three extraordinary meetings covered matters relat-
ing to strategic direction, integration and effects of the possible
downturn in the macroeconomic environment on the evaluation
and financing of the potential acquisition projects. In addition at the
extraordinary meetings on October 18, 2022 and October 27, 2022,
the developed “Strategy to Win” was presented by the Board of
Management and discussed in depth with the Supervisory Board.
At the meeting on October 27, 2022, the Supervisory Board approved
the acquisition of all shares in Globe Chemical LLC based in Odessa,
Texas, USA, from Gravity Oilfield Services LLC. At the same meeting,
the Supervisory Board also approved the takeover of the Life
Science and Coatings business of Australian specialty distributor
Ravenswood.
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At the fifth and final ordinary meeting of the reporting period on
December 13, 2022, the Board of Management informed the Super-
visory Board about the next steps to implement the adopted “Strat-
egy to Win”. Besides the Board of Management’s presentation on
the third-quarter results of the Brenntag Specialties and Brenntag
Essentials divisions, another focal point of the meeting was the 2023
budget planning, which the Supervisory Board approved after con-
sulting with the Board of Management in depth and discussing the
trend in economic conditions. The Board of Management also pre-
sented the non-financial objectives for 2023, which were likewise
approved by the Supervisory Board. This was followed by status
reports on accident statistics and accident prevention. In addition,
Global Human Resources presented information on succession
planning and talent development. The Supervisory Board discussed
the steps in the selection procedure, the outcome of the procedure
and the Audit Committee’s recommendation of a statutory auditor
and group auditor, and decided to propose at the 2023 General
Shareholders’ Meeting that Deloitte GmbH Wirtschaftsprüfungs-
gesellschaft, Düsseldorf, be elected as statutory auditor and group
auditor for the financial year 2023. The Supervisory Board also
decided on the updated versions of the rules of procedure for the
Supervisory Board, the Board of Management and the Audit
Committee, and also amended the rules of procedure for the Trans-
formation and Sustainability Committee so as to reflect the latest
changes to the recommendations of the German Corporate Gover-
nance Code and the progress in developing the corporate strategy.
In this context, the Transformation Committee was renamed Trans-
formation and Sustainability Committee so as to reflect the shift in
the focus of its activities. Finally, the Supervisory Board decided on
the annual declaration of conformity with the German Corporate
Governance Code.
Supervisory Board Committee activities
In the financial year 2022, the Supervisory Board had a total of three
committees: the Audit Committee, the Presiding and Nomination
Committee, and the Transformation and Sustainability Committee.
Their respective chairs reported on the current work of the commit-
tees in the Supervisory Board meetings.
The Audit Committee, composed of Mr. Ulrich M. Harnacke (Chair),
Ms. Stefanie Berlinger and Mr. Richard Ridinger in the reporting
period, held a total of eight meetings. Four meetings were held in
person and four meetings virtually. The composition of the Audit
Committee meets the latest requirements and recommendations
regarding the financial expertise of the committee members under
the German Stock Corporation Act and the German Corporate Gov-
ernance Code, as Mr. Ulrich M. Harnacke has expertise in financial
statement auditing and special knowledge and experience in the
application of accounting principles and internal control and risk
management systems. Ms. Stefanie Berlinger likewise has appro-
priate expertise in financial statement auditing.
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Key topics addressed by the Audit Committee included the prepa-
rations for the audit of the annual financial statements, the consol-
idated financial statements, the management report and the Group
management report as well as the proposal for the appropriation
of profit and the review of the quarterly financial statements, the
half-year report and the quarterly statement. The statutory auditor
reported to the Audit Committee without undue delay on all findings
and issues arising in the course of the statutory audit that were of
importance to the duties of the Supervisory Board. In addition, the
statutory auditor provided notification or noted in the audit report
that it had not identified any facts while performing the statutory
audit that would result in a (further) deviation from the declaration
of conformity with the German Corporate Governance Code sub-
mitted by the Board of Management and the Supervisory Board.
Bearing in mind the recommendations of the German Corporate
Governance Code, the Supervisory Board has set out these princi-
ples in the Audit Committee rules of procedure and in particular
stipulated that the Audit Committee conduct a regular assessment
of the statutory audit. At its meetings, the Audit Committee dealt
extensively with the switch from regional to divisional reporting in
connection with the transformation project “Project Brenntag”.
The Audit Committee also gave detailed attention to the work and
findings of Internal Audit, the effectiveness of the internal control
system and the risk management system, and the further develop-
ment of the compliance management system. Further topics cov-
ered at the meetings included the review of the combined separate
non-financial report for the financial year 2021. In addition, the Audit
Committee consulted with the Board of Management and the rele-
vant department on the future structure of the combined separate
non-financial report. Following the election of PwC as statutory
auditor at the General Shareholders’ Meeting in the reporting period
and its statement to the Audit Committee that there are no circum-
stances that would call into question its impartiality, the Audit
Committee assured itself of the auditors’ required independence
and issued the audit engagement. There was also regular interaction
between the Audit Committee – in particular the Chair – and the
auditors outside of the meetings.
In the reporting period, the Audit Committee put the audit of the
annual financial statements of Brenntag SE, the consolidated finan-
cial statements and the combined management report for the
financial year 2023 out to public tender in accordance with the EU
provisions reforming statutory audit, doing so a year earlier than
required by law. On the initiative of the Chair of the Audit Committee,
a working group was established to select the statutory auditor. The
working group ensured that the tender procedure was carried out in
a fair, transparent and non-discriminatory manner in accordance
with Article 16 of the EU Regulation. Following a careful review of the
proposals submitted and presentations from the teams from the
audit firms submitting proposals, including in Brenntag SE’s princi-
pal finance departments abroad, the Audit Committee decided to
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recommend to the Supervisory Board that it propose at the 2023
General Shareholders’ Meeting that Deloitte GmbH Wirtschafts-
prüfungsgesellschaft, Düsseldorf, be elected as statutory auditor
and group auditor for the financial year 2023.
The Presiding and Nomination Committee was composed of the
Chair of the Supervisory Board, Ms. Doreen Nowotne, as well as
Dr.Andreas Rittstieg and Mr. Wijnand P. Donkers. In the reporting
period, the Committee met a total of twelve times. Three meetings
were held in person and nine meetings virtually. In particular, the
Presiding and Nomination Committee dealt with personnel matters,
short-term and long-term succession planning on the Board of
Management, the preparations for Supervisory Board resolutions on
the definition of the variable remuneration for the Board of Manage-
ment and the review of the remuneration system for the Board of
Management.
Another main focus was the succession planning of the Supervisory
Board, the review of the Supervisory Board’s profile of skills and
expertise, and the preparations for the Supervisory Board’s propos-
als for the election of Supervisory Board members for the General
Shareholders’ Meeting in 2022 and 2023. In this context, the Com-
mittee was supported by an external adviser. In selecting possible
candidates, the Presiding and Nomination Committee gave partic-
ular consideration to the targets adopted by the Supervisory Board
for its composition, including the profile of skills and expertise and
the diversity policy for the Supervisory Board.
The Transformation and Sustainability Committee, composed of
Ms.Doreen Nowotne (Chair), Mr. Wijnand P. Donkers and Mr. Richard
Ridinger in the reporting period, held a total of nine meetings. Six
meetings were held in person and three meetings virtually. In addi-
tion to the meetings, four informal video conferences took place
with the Board of Management in connection with potential acqui-
sition projects. At the meetings in the reporting period, the Commit-
tee dealt in detail with the implementation of “Project Brenntag”, for
which the company was able to announce at the end of the report-
ing period that the goals had been successfully achieved ahead of
schedule. In the second half of the reporting period especially, the
Committee’s focus shifted to the development and preparation of
the subsequent strategy project. In this context, the committee
dealt with the continued development of the two divisions’ strategic
direction, digitalization and the development of an ambitious sus-
tainability strategy by establishing new and ambitious medium-
and long-term targets, and prepared the relevant topics and reso-
lutions for the Supervisory Board meetings. In December 2022, the
Committee was renamed the “Transformation and Sustainability
Committee”. In future, it will allocate more time and attention to
discussing and monitoring the implementation of the company’s
sustainability strategy.
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German Corporate Governance Code
In connection with the further transformation and implementation
of Brenntag’s new corporate culture, the Supervisory Board of
Brenntag SE regularly discussed the requirements and principles of
reliable and sustainable corporate governance and their imple-
mentation within the company. On December 13, 2022, the Super-
visory Board decided on new rules of procedure for the Board of
Management, the Supervisory Board and its committees so as to
reflect the changes resulting from the new version of the German
Corporate Governance Code. On December 13, 2022, the Supervi-
sory Board and the Board of Management jointly submitted a new
declaration of conformity, which appears both on Brenntag’s
website under Corporate Governance Code and in the corporate
governance statement.
Good corporate governance also includes regularly assessing how
effectively the Supervisory Board as a whole and its committees
perform their duties. The Supervisory Board continuously assesses
the effectiveness with which the duties of the Supervisory Board
and its committees are performed. The assessment usually com-
prises multiple steps and starts, for example, by establishing the
points of focus, such as the frequency, organization and structuring
of meetings and committees, the scope and nature of the informa-
tion provided, communication within the Supervisory Board and
with the committees, and cooperation between the Board of Man-
agement and the Supervisory Board. The efficiency review usually
finishes by specifying objectives and setting out a schedule and
multiple follow-up meetings for a regular joint review of the objec-
tives and individual feedback. An external adviser monitors and
assists with the assessment from time to time. Building on the last
detailed efficiency review in 2021, the Supervisory Board scrutinized
the continued effectiveness of its activities in the second half of
2022. Particular emphasis was placed on examining the long-term
implementation and maintenance of the objectives set, also bear-
ing in mind the current and changing requirements on the Super-
visory Board and the committees. The Supervisory Board thus ful-
filled its intention from 2021 to conduct a more regular review on an
annual basis so as to continually assess and improve the effective-
ness of its work. The next self-assessment is scheduled for 2023.
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Brenntag SE aims to be as transparent as possible in communicat-
ing with the capital market. As Chair of the Supervisory Board, I am
authorized under section 5.4 (1) of the Supervisory Board’s rules of
procedure to discuss Supervisory Board-specific issues with inves-
tors, provided this is in the company’s interests and in compliance
with the applicable laws. Regular dialog with shareholders and
potential investors is of great importance to us. As Chair of the Super-
visory Board, I fulfilled this responsibility in particular at a multi-day
corporate governance roadshow in February 2022. The discussions
covered topics such as the composition of the Board of Management
and the status and further development of ESG within Brenntag SE.
I notified the Supervisory Board of all the main topics covered in
those discussions and kept the Chief Executive Officer fully informed.
In accordance with the German Corporate Governance Code, the
Supervisory Board informs the General Shareholders’ Meeting of any
conflicts of interest that have arisen among Supervisory Board
members. The members of the Board of Management and the
Supervisory Board are required to report any conflicts of interest to
me as Chair of the Supervisory Board without undue delay. No such
conflicts of interest were disclosed in the entire reporting period and
we can once again confirm our belief that all members of the Super-
visory Board can be regarded as independent of the company.
In the reporting period, the members of the Supervisory Board
undertook training and professional development measures appro-
priate to their duties on the Board to enable them to best carry out
their activities on the Supervisory Board. Training and development
measures included participation in specific events for Supervisory
Board members by the leading audit firms as well as other confer-
ences and professional events, for example on relevant regulatory
changes. The points of focus spanned corporate governance, sus-
tainability, financial and non-financial reporting, compliance and
risk management. As well as attending training events, the mem-
bers of the Supervisory Board were actively involved in associations
and networks such as the German Audit Committee Network, Finan-
cial Experts Association e.V., Deutsche Schutzvereinigung für Wert-
papierbesitz, the Applied Governance Circle and the Audit Commit-
tee Institute. In accordance with the law and the recommendation
of the German Corporate Governance Code, Brenntag SE bore the
cost of all Supervisory Board training measures to the extent that
these provided Brenntag-specific knowledge. Brenntag also
assisted the members of the Supervisory Board in organizing suit-
able trainings, such as a workshop on current regulatory changes
around ESG in August 2022. In addition, new members of the Super-
visory Board receive selectively compiled information materials
before taking up their position to enable them to prepare for their
activities. Further information on corporate governance at Brenntag
can be found in the Corporate Governance Statement.
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Review and adoption of the annual financial statements,
approval of the consolidated financial statements,
proposal for the appropriation of profit
The annual financial statements of Brenntag SE for the year ended
December 31, 2022 and the combined Group management report
and management report of Brenntag SE were prepared by the
Board of Management in accordance with the provisions of the
German Commercial Code (HGB) and the German Stock Corpora-
tion Act (AktG), and the consolidated financial statements in accor-
dance with the principles of the International Financial Reporting
Standards (IFRSs) as adopted in the EU and the supplementary pro-
visions of the German Commercial Code applicable pursuant to
Section 315e HGB. PricewaterhouseCoopers GmbH Wirtschafts-
prüfungsgesellschaft (PwC), Düsseldorf, the auditors elected by the
General Shareholders’ Meeting and appointed by the Supervisory
Board, audited and issued an unqualified auditors’ report on the
annual financial statements of Brenntag SE, the combined Group
management report and management report of Brenntag SE, and
the consolidated financial statements.
The annual financial statements of Brenntag SE, the consolidated
financial statements and the combined Group management report
and management report of Brenntag SE as well as the auditors’
audit reports were available to all members of the relevant body in
good time ahead of the Audit Committee meeting on February 28,
2023 and the Supervisory Board meeting on March 7, 2023. The
financial statement documents were discussed in detail on the
Audit Committee and on the Supervisory Board, in both cases in the
presence of the auditors, who gave a report. Following the prelimi-
nary review by the Audit Committee and the final result of the Super-
visory Board’s own review during its meeting on March 7, 2023, there
were no objections to be raised. The Supervisory Board endorses the
findings of the audit and approved the above-mentioned financial
statements prepared by the Board of Management. The annual
financial statements were thus adopted on March 7, 2023. The
Supervisory Board endorsed the Board of Management’s proposal
to use the distributable profit to pay a dividend of EUR 2.00 per
dividend-bearing no-par value share.
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REPORT OF THE SUPERVISORY BOARD
Brenntag SE is required to prepare a combined separate non-finan-
cial report for the financial year 2022. By way of a circular resolution
passed on December 21, 2022, the Supervisory Board instructed
PwC to perform a limited assurance engagement on the non-
financial reporting. All Supervisory Board members received the
combined separate non-financial Group report (“NfR”) and PwC’s
practitioner’s report on the limited assurance engagement on the
non-financial reporting (“Practitioner’s Report”) at an early stage.
The NfR and PwC’s Practitioner’s Report were discussed in detail by
the Audit Committee. The auditors from PwC took part in these
discussions and presented and explained the results of their review.
On the basis of its own review of the NfR, the Supervisory Board
passed a resolution on March 7, 2023 not to raise any objections to
the NfR or the Practitioner’s Report and to approve the findings of
PwC’s review.
Composition of the Board of Management
and Supervisory Board
There were no changes in the composition of the Supervisory Board
of Brenntag SE in the 2022 reporting period. We are delighted that
Mr. Wijnand P. Donkers and Mr. Ulrich M. Harnacke were reelected.
Ihave been Chair of the Supervisory Board since June 10, 2020 and
intend to retain this position until the end of my current mandate.
Mr. Richard Ridinger then intends to stand for the position of Chair
of the Supervisory Board.
There was one change in the composition of the Board of Manage-
ment in the reporting period. With effect from April 1, 2022, the
Supervisory Board appointed Dr. Kristin Neumann to the Board of
Management of Brenntag SE. She took up the position of Group
Chief Financial Officer. Dr. Kristin Neumann has many years’ expe-
rience at global companies. In her role, she is responsible for
Accounting, Controlling, Investor Relations, Legal, Shared Services,
Tax, Treasury and Insurance. Dr. Kristin Neumann succeeds Mr.Georg
Müller, who, with effect from February 2, 2022, stepped down
as Chief Financial Officer by mutual agreement. Dr. Christian
Kohlpaintner is still Chief Executive Officer on the five-member
Board. Besides Mr. Ewout van Jarwaarde, who holds the position of
Chief Transformation Officer on the Board of Management, the
Board members also include Mr. Steven Terwindt, who leads the
Brenntag Essentials division. Mr. Henri Nejade, who was responsible
for the Brenntag Specialties division in the reporting period, has
decided not to extend his service agreement with Brenntag when it
ends on June 30, 2023. The Supervisory Board would like to sincerely
thank Mr. Henri Nejade for his notable contribution to Brenntag’s
success and wish him all the best for his personal and professional
future. As of April 1, 2023, Mr. Michael Friede will take over the
position of Brenntag Specialties Chief Operating Officer. We are
pleased to have attracted to Brenntag an executive with interna-
tional experience and profound market knowledge.
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Thanks to the outstanding efforts and considerable dedication of
our employees, we were able to master the economic challenges in
the reporting period, while at the same time taking a significant
step forward on our transformation journey. On behalf of the entire
Supervisory Board, I would like to sincerely thank all Brenntag
employees, the Global Leadership Team and the entire Board of
Management for this exceptional achievement.
On behalf of the Supervisory Board
Doreen Nowotne
Chair
Essen, March 2023
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Corporate Governance Statement
Brenntag has always attached great importance to good
corporate governance. As a globally operating DAX40-listed
company, we are particularly aware of our responsibility and
our obligations in this area. The Board of Management and
Supervisory Board jointly issue the corporate governance
statement pursuant to Sections 289f and 315d of the German
Commercial Code (HGB) and report on the principles of
responsible corporate governance at Brenntag, each being
responsible for the parts of the report that relate to them. In
accordance with Principle 23 of the German Corporate Gov-
ernance Code in its current version of April 27, 2022, the cor-
porate governance statement is the central instrument of
corporate governance reporting.
Corporate Governance
Commitment to responsible corporate
governance
As in previous years, in this reporting year the Board of Man-
agement and the Supervisory Board thoroughly examined
corporate governance and the requirements of the German
Corporate Governance Code (“GCGC”). On the basis of these
deliberations, they issued, on December 13, 2022, the follow-
ing declaration of conformity with the recommendations of
the GCGC of December 16, 2019 and of April 27, 2022:
“Declaration by the Board of Management and the Supervi-
sory Board of Brenntag SE in accordance with Article 9 para.
1 lit. c) ii) SE-VO in conjunction with section 161 of the German
Stock Corporation Act (Aktiengesetz)
The Board of Management and the Supervisory Board of
Brenntag SE are obliged to resolve a Declaration of Confor-
mity in accordance with Article 9 para. 1 lit. c) ii) SE-VO in con-
junction with Section 161 of the German Stock Corporate Act
(Aktiengesetz). The last Declaration of Conformity has been
resolved on December 14, 2021. As of this time, the German
Corporate Governance Code in the version dated March 20,
2020 (“GCGC 2020”) was still in place. On June 27, 2022, a new
version of the German Corporate Governance dated April 28,
2022, has entered into force (“GCGC 2022”).
The Board of Management and the Supervisory Board hereby
declare that since their last Declaration of Conformity as of
December 14, 2021, Brenntag has complied with the recom-
mendations of GCGC 2020 with the exception of the recom-
mendation in number C.4 GCGC 2020. The exception is
declared for the following reasons:
With regard to the Supervisory Board’s Chair Doreen Nowotne,
there is a deviation from the recommendation in C.4 GCGC
2020. Ms. Nowotne holds positions at two non-group compa-
nies, one of which is listed, and one is non-listed. She is also
Chair of the Supervisory Board at a further non-group com-
pany. With her position as Chair of the Supervisory Board of
Brenntag SE, her total number of seats in accordance with
the GCGC’s counting method amounts to six. Therefore, a
deviation from C.4 GCGC 2020 is hereby declared. In any case,
the Supervisory Board has ascertained that Ms. Nowotne has
sufficient time available to discharge her duties.
Furthermore, the Board of Management and the Supervisory
Board hereby declare that Brenntag complies and plans to
continue to comply with the recommendations of GCGC 2022,
with the exception of the recommendation in number C.4
GCGC 2022 as described above.”
Explanations of the deviations from
the recommendations of the German
Corporate Governance Code
As in the previous year, Brenntag declares a deviation from
the recommendation C.4 GCGC 2020 and C.4 GCGC 2022
respectively with regard to the number of Supervisory Board
positions of Doreen Nowotne. According to C.4 GCGC 2020, a
Supervisory Board member should not hold more than five
supervisory board mandates in non-Group, listed companies
or comparable functions, with an appointment as chair being
counted twice. In addition to her office at Brenntag, the Chair
of the Supervisory Board, Doreen Nowotne, is currently a
member of the supervisory board of one other non-Group
listed company, one other non-Group, non-listed company
and the supervisory board chair of a non-Group, non-listed
company. Together with her position as Supervisory Board
Chair, she therefore has a total of six mandates according to
the GCGC 2020 counting method. The Supervisory Board is
convinced that, despite her other mandates, Ms. Nowotne has
sufficient time available to discharge her duties at Brenntag
and, thanks to her many years of experience, both at Brenntag
and as a business consultant, is extraordinarily well-suited to
the position of Supervisory Board Chair.
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Declaration on the suggestions made
in the GCGC
Brenntag complies with all suggestions made in the GCGC
2022.
Brenntag publishes an overview of implementation of the
GCGC’s suggestions on its corporate website at Corporate
Governance Code | Brenntag.
Disclosures on corporate governance practice
Responsible, prudent and sustainability-focused corporate
governance has always been a high priority at Brenntag. Our
paramount goal is to observe legal requirements and volun-
tary internal codes of conduct (compliance) so we always act
honestly, fairly and in good faith. To ensure this, the manage-
ment makes use of various internal control and risk manage-
ment systems and has established a compliance organiza-
tion in the company. Every Brenntag employee is personally
responsible for complying with all applicable laws, directives,
policies and regulations. The information on corporate gov-
ernance practice is also published on the website at Compli-
ance at Brenntag | Brenntag.
Compliance management and organization: The compliance
organization of Brenntag SE is headed by the Board of Man-
agement and, within the Board, by the Chairman. The Senior
Vice President (SVP) Compliance Brenntag Group of
Brenntag SE regularly provides the Board of Management
and the Supervisory Board with information on compliance
matters. Reports on compliance and whistleblowing cases
and the development of the Group-wide compliance man-
agement system are also given in the regular Audit Commit-
tee meetings of the Supervisory Board. The regional compli-
ance managers, who are appointed in the global regions,
ensure coordination of the compliance management system
at regional level. Regional compliance managers, who are
supported in their work by local compliance contacts, exam-
ine and report all compliance cases and/or compliance
questions which are brought to their attention and they reg-
ularly exchange information and experience with the SVP
Compliance Brenntag Group SE. In this way, we ensure close
networking of compliance management with our business
activities at regional and local levels.
Code of conduct and company guidelines: As a global com-
pany, Brenntag is subject to a large number of laws, directives,
regulations and ordinances. In addition to compliance with
rules and regulations, honesty and integrity are our top prior-
ities. A comprehensive Code of Business Conduct and Ethics
summarizes all fundamental company values, ethical princi-
ples, compliance with laws, rules and regulations as well as
the relevant guidelines and procedures which are of key sig-
nificance for Brenntag and its reputation. The Code of Busi-
ness Conduct and Ethics contains in particular the standards
and rules Brenntag applies in the areas of health, safety and
the environment, human rights and working conditions, deal-
ings with business partners and public institutions, combating
bribery and corruption, competition and antitrust law, avoid-
ance of conflicts of interest as well as data privacy and infor-
mation security. The Code of Business Conduct and Ethics has
been published both on the external website of the Brenntag
Group and on the Intranet and is available in various lan-
guages. It applies to all employees at all levels of the com-
pany. Its aim is to give guidance in the legal and ethical chal-
lenges of their daily work and to encourage correct and
compliant conduct. Every infringement of this code of con-
duct may lead to disciplinary action and have further conse-
quences under employment law and even criminal law for
employees committing an infringement. In addition to the
Code of Business Conduct and Ethics, there are further Group
guidelines detailing compliance requirements, including an
Anti-corruption Guideline, an Insider Compliance Guideline
and the Corporate Guideline on Foreign Trade Compliance. In
addition to the Code of Business Conduct and Ethics, which
was revised in January 2021, all Group-wide guidelines can
be accessed by all employees on the Group-wide Intranet.
Monitoring: The compliance processes and their implemen
-
tation are regularly monitored both centrally and decentrally,
in particular by the compliance organization. Appropriate
measures are developed to counteract any weaknesses that
are identified. Internal Audit Brenntag Group regularly reviews
the internal control and compliance management system of
the Brenntag Group companies. If weaknesses regarding
compliance are identified during the regular audits, the Com-
pliance department is informed accordingly and measures to
eliminate the weaknesses are developed and implemented.
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Training: Adherence to our Code of Conduct and antitrust
requirements as well as the prevention of corruption are par-
ticular focal points of our compliance program. Our employ-
ees receive regular training on these topics – either at in-per-
son events or through e-learning systems worldwide. The aim
is to keep all employees’ knowledge up to date, avoid any ille-
gal actions as well as to protect the environment and employ-
ees from harm. Regular participation in training on the Code
of Business Conduct and Ethics is mandatory for all employ-
ees. In addition, there are in-depth compliance training
courses at global, regional and local levels, particularly on the
topics of bribery and corruption, anti-trust law, data privacy
and fraud prevention.
Whistleblowing: Brenntag has set up procedures for receiving
and handling internal and external complaints and reports of
compliance issues throughout the Group. Our employees can
either make such reports to their direct supervisor or the
regional compliance manager, or alternatively submit them via
central or regional whistleblowing channels and whistleblow-
ing systems. It is also possible to make an anonymous report
using the whistleblowing system in particular. Persons outside
the company can submit complaints and report infringements
by using the whistleblowing channel on the website of
Brenntag SE. The information received is always treated in
strict confidence. Any reports received are reviewed internally
and at the meetings of the Audit Committee. Appropriate
action is taken if a compliance infringement has occurred.
Working practices of the Board of Management
and Supervisory Board as well as the composi-
tion and working practices of their committees
Brenntag SE has a two-tier management system consisting
of the Board of Management and the Supervisory Board in
accordance with the legal requirements of Article 9, para. 1,
number (c) (ii) of Regulation (EC) No. 2157/2001 on the Statute
for a European company (SE) ("SE Regulation") and the Ger-
man Stock Corporation Act. The management of business by
the Board of Management and supervision by the Supervisory
Board are therefore clearly separated. The Board of Manage-
ment and the Supervisory Board are guided by the applicable
legislation, the principles of the GCGC 2022, the company's
Articles of Association as well as their respective rules of pro-
cedure. The working practices of both bodies are geared to
responsible corporate governance, which is characterized by
open discussions and transparency.
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Board of
Management
Ewout Van Jarwaarde
Chief Transformation Officer
Dr. Kristin Neumann
Chief Financial Officer
(since April 1, 2022)
Dr. Christian Kohlpaintner
Chief Executive Officer
Henri Nejade
Chief Operating Officer
Brenntag Specialties
Steven Terwindt
Chief Operating Officer
Brenntag Essentials
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BOARD OF MANAGEMENT
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Board of Management
The Board of Management of Brenntag SE consists of five
members. By mutual agreement, Georg Müller stood down
from his post as Chief Financial Officer with effect from Feb-
ruary 2, 2022. Dr. Kristin Neumann took over the position with
effect from April 1, 2022. In line with the GCGC 2020, she was
initially appointed for a period of three years. Apart from the
aforementioned, the composition of the Board of Manage-
ment did not change in the reporting period. Dr. Christian
Kohlpaintner remains Chairman of the Board of Manage-
ment. In January 2023, Brenntag appointed Michael Friede to
the Board of Management with effect from April 1, 2023. He
will follow the current Brenntag Specialties Chief Operating
Officer Henri Nejade, who has decided not to extend his con-
tract with Brenntag when it ends on June 30, 2023.
Further information on the members of the Board of Manage-
ment can be found on the website at Board of Management|
Brenntag. Information on the remuneration of the Board of
Management can be found in the remuneration report.
Members of the Board of Management
The members of the Board of Management hold the following
offices on statutory supervisory boards and comparable
supervisory bodies of business enterprises.
Membership of statutory supervisory boards and comparable
German and foreign supervisory bodies of business enterprises
(as at Dec.31, 2022)
Name/Responsibilities First appointed External positions Group company positions
Dr. Christian Kohlpaintner
(CEO)
January 1, 2020
Corporate Board Office
Global Human Resources
Corporate Planning & Strategy
M & A Brenntag Group
Global Communications
Global Marketing
Corporate Compliance
Corporate Internal Audit
QSHE Brenntag Group
Sustainability Brenntag Group
Corporate Relations & Government Affairs
Georg Müller (until February 2, 2022)
(CFO)
April 1, 2012 BRENNTAG GmbH (Chair)
Corporate Controlling
Corporate Accounting
Legal Brenntag Group
Tax Brenntag Group
Treasury Brenntag Group
Corporate Investor Relations
Corporate Insurance Management
Shared Services Brenntag Group
Brenntag International Chemicals
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Membership of statutory supervisory boards and comparable
German and foreign supervisory bodies of business enterprises
(as at Dec.31, 2022)
Name/Responsibilities First appointed External positions Group company positions
Dr. Kristin Neumann
(CFO)
April 1, 2022 Zeppelin GmbH BRENNTAG GmbH (Chair)
Corporate Controlling
Accounting Brenntag Group
Legal Brenntag Group
Tax Brenntag Group
Treasury Brenntag Group
Corporate Investor Relations
Corporate Insurance Management
Shared Services Brenntag Group
Finance EMEA
Finance Americas
Finance APAC
Finance China & Hong Kong
Henri Nejade
(COO Brenntag Specialties)
July 1, 2015
Brenntag Specialties EMEA Brenntag (Shanghai) Enterprise
Management Co., Ltd.
Brenntag Specialties Americas Brenntag Cangzhou Chemical Co., Ltd.
Brenntag Specialties APAC Brenntag (Zhangjiagang) Chemical Co., Ltd.
Controlling Brenntag Specialties Brenntag Taiwan Co., Ltd.
Global Industry Development
Steven Terwindt
(COO Brenntag Essentials)
August 1, 2020
Brenntag Essentials EMEA
Brenntag Essentials North America
Brenntag Essentials LatAm
Brenntag Essentials APAC
Brenntag Essentials China & Hong Kong
Brenntag International Chemicals
Controlling Brenntag Essentials
Global Key Accounts
Global Sourcing & Supply Brenntag Essentials
Ewout van Jarwaarde
(CTO)
January 1, 2021
Digital Transformation
Data & Analytics
Core IT Platforms
Digital Business Architecture
Information Security
Brenntag Excellence
Transformation Office (incl. Project Brenntag)
Indirect Procurement & Procurement Excellence
E2E Deployment
Controlling CTO Domain
Working practices of the Board of Management
The Board of Management is responsible for managing the
company with the aim of creating sustainable value. It devel-
ops the company's strategy, taking due account of the envi-
ronmental and social impacts of the company’s activities.
The members of the Board of Management bear joint respon-
sibility for the entire management of the company’s business.
They work together in a spirit of collective responsibility and
keep one another informed about all significant business
transactions and other important transactions and measures
adopted in their respective areas of responsibility. Notwith-
standing the joint responsibility of all Board of Management
members for the conduct of Brenntag SE’s business, each
Board member is individually responsible for the areas
assigned to him under the business responsibility plan or
through other resolutions of the Board of Management.
The Board of Management manages the business of
Brenntag SE independently. In doing so, it must act in the
company’s best interest, and therefore in the interest of the
shareholders, employees and other stakeholders. The Board
of Management operates in accordance with the applicable
laws and the provisions of the individual service agreements
of its members as well as the company's Articles of Associa-
tion, its rules of procedure and the business responsibility
plan. The Board of Management has set up a sustainable risk
management and risk monitoring system that also covers
sustainability goals and includes processes and systems for
collecting and processing sustainability-related data. Fur-
thermore, the Board of Management develops the strategy of
the Brenntag Group in cooperation with the Supervisory
Board and discusses the current status of its implementation
with the Supervisory Board at regular intervals.
Board of Management meetings are to take place every two
weeks but at least once a month. The Board of Management
has a quorum if all its members have received invitations to
the meeting and at least half of its members participate in
adopting resolutions. Resolutions may be adopted outside
meetings either by circulating the documents or in another
form, for example by video conference. The Board of Manage-
ment must do everything in its power to ensure that its reso-
lutions are adopted unanimously. Insofar as other majorities
are not prescribed by law or by the Articles of Association of
Brenntag SE, the Board of Management is to adopt resolu-
tions with a simple majority of the members of the Board par-
ticipating in the vote. In the event of a tie, the Chairman of the
Board of Management has a second vote.
The Board of Management has currently not set up any com-
mittees. The transactions for which a resolution adopted by
the Board of Management is required by law, the Articles of
Association or the rules of procedure for the Board of Man-
agement of Brenntag SE include but are not limited to the
following measures:
■
Board of Management’s reports to the Supervisory Board,
■
fundamental organizational measures, such as the
conclusion of company agreements, transformation
measures within the meaning of the German Transfor-
mation of Companies Act or acquisitions, carve-outs or
the sale of material parts of the company as well as
strategy and business planning issues,
■
measures related to the implementation and controlling
of a monitoring system,
■
issuance of the declaration of conformity,
■
preparation of the annual financial statements and the
management report,
■
convening of the General Shareholders’ Meeting as well
as the Board of Management’s requests and proposals
for resolutions to be dealt with and voted on at the
General Shareholders’ Meeting,
■
matters with respect to which the Chair of the Board of
Management or any two members have requested a
resolution by the Board of Management.
Furthermore, internal guidelines applicable throughout the
Group have been implemented which also require a resolu-
tion passed by the entire Board of Management or by individ-
ual members of the Board of Management for certain mat-
ters. The Board of Management must regularly inform the
Supervisory Board, in due time and comprehensively, of all
issues of Brenntag SE and its subsidiaries with regard to strat
-
egy, corporate governance, the business policy it plans and
other fundamental questions of corporate planning, the com-
pany's profitability, business performance and current posi-
tion, risk management and compliance. The Board of Man-
agement addresses in particular any departures of business
performance from the plans made or targets agreed, stating
the reasons for such departures. In addition, the Board of
Management requires the prior consent of the Supervisory
Board for certain major matters which are described in detail
in the chapter “Supervisory Board”.
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Supervisory Board
As in the previous year, the Supervisory Board of Brenntag SE
consists of six members. The composition of the Supervisory
Board has not changed since the reporting year 2021. There
are no employee representatives on the Supervisory Board of
Brenntag SE as the German One-Third Employee Participa-
tion Act (Drittelbeteiligungsgesetz) and the German Codeter-
mination Act (Mitbestimmungsgesetz) are not applicable. The
members of the Supervisory mentioned by name below are
therefore all shareholders’ representatives.
Members of the Supervisory Board
The members of the Supervisory Board hold the following
offices on statutory supervisory boards and comparable
supervisory bodies of business enterprises.
Name Position held Member from
Membership of statutory supervisory boards
and comparable German and foreign supervisory
bodies of business enterprises
(as at December 31, 2022)
Doreen Nowotne
(Chair)
Presiding and Nomination
Committee
Transformation and
Sustainabillity Committee
Independent Management Consultant March 3, 2010 JENOPTIK AG (listed)
Lufthansa Technik AG
Franz Haniel & Cie. GmbH (Chair)
Dr. Andreas Rittstieg
(Deputy Chair)
Presiding and Nomination
Committee
Lawyer March 19, 2010 New Work SE (listed) (until June 1, 2022)
Hapag Lloyd AG (listed) (since May 25, 2022)
Hubert Burda Media Holding Geschäftsführung SE
Huesker Holding GmbH
Kühne Holding AG
Stefanie Berlinger
Audit Committee
Managing Director Lilja & Co. GmbH June 9, 2015 Lilja Capital Advisory Partners AG, Zurich,
Switzerland
Wijnand P. Donkers
Presiding and Nomination
Committee
Transformation and
Sustainability Committee
Independent Management Consultant June 8, 2017 EV Technology Group Inc.
Ulrich M. Harnacke
Audit Committee
Chartered Accountant, Tax Consultant,
Independent Business Consultant
June 8, 2017 Vossloh AG (listed)
Contigas Deutsche Energie-AG & Thüga AG
Deutsche Energie-AG & Thüga Holding
GmbH & Co. KGaA
Zentis GmbH & Co. KG
Richard Ridinger
Audit Committee
Transformation and
Sustainability Committee
Independent Management Consultant June 10, 2020 Firmenich International SA
Evolva Holding SA (listed) (until May 5, 2022)
SHL Medical AG
Working practices of the Supervisory Board
As the second governing body of a stock corporation (Aktieng-
esellschaft), the Supervisory Board has the task of monitoring
the management of the company by the Board of Manage-
ment as well as advising the Board of Management on the
management of the company. The Supervisory Board also
appoints and dismisses the members of the Board of Man-
agement. The Supervisory Board bases the composition of
the Board of Management on the company's strategy, the
requirements of the recommendations of the Government
Commission “German Corporate Governance Code" and on
the internal diversity policy. The Supervisory Board regularly
discusses the company’s strategy with the Board of Manage-
ment and the progress made in its implementation. Further-
more, the Board of Management regularly informs the Super-
visory Board of all issues with regard to planning, business
development, the risk situation and risk management of the
company in compliance with Section 90 of the German Stock
Corporation Act (AktG).
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Furthermore, the prior consent of the Supervisory Board is
required for some major Board of Management decisions,
including the business responsibility plan of the Manage-
ments, major changes in the business strategy of the
Brenntag Group, the acquisition or sale of major plots of land,
companies or business operations, the conclusion of agree-
ments in connection with the granting or raising of loans or
the assumption of guarantees, the amount of which exceeds
certain thresholds.
The Supervisory Board has adopted rules of procedure and,
according to these rules, holds at least two meetings in the
first two quarters and at least two meetings in the last two
quarters of each calendar year. If necessary and on a case-
by-case basis, additional meetings are held or circular reso-
lutions are passed outside Supervisory Board meetings. The
Supervisory Board has a quorum when at least three mem-
bers participate in the voting. Insofar as other majorities are
not prescribed by law, resolutions are passed by a simple
majority. In the event of a tie, the Chair has the casting vote.
He/she is also authorized to make any declarations on behalf
of the Supervisory Board which are necessary to implement
its resolutions.
The Supervisory Board members are in principle elected for a
period up to the close of the General Shareholders’ Meeting
which resolves on the formal discharge of the Supervisory
Board for the fourth financial year after commencement of
the respective term of office. The financial year in which the
term of office starts is not counted for this purpose. The Gen-
eral Shareholders’ Meeting can determine a shorter term of
office for the Supervisory Board members. Members of the
Supervisory Board may be re-elected. All members of the
Supervisory Board are bound by the company’s best interests
and must immediately inform the Supervisory Board of any
conflicts of interest. New members of the Supervisory Board
already receive targeted information material prior to taking
up office in order to prepare them for their work.
Information on the remuneration of the Supervisory Board
members can be found in the “remuneration report”; this
information can also be found on the website. The Supervisory
Board performs an assessment of its activities on a regular
basis, but at least every two years. The last efficiency review
took place in 2022. Further information on the efficiency
review is to be found in the Report of the Supervisory Board.
In the second half of the year, the Supervisory Board regularly
reviewed the planned progress and the achievement of
objectives. The next self-assessment is scheduled for 2023.
Since January 2021, the Supervisory Board has had three com-
mittees set up from among its members, namely the Presiding
and Nomination Committee, the Audit Committee, and the
Transformation and Sustainability Committee. The members
of the committees are appointed for the entire period of office
as members of the Supervisory Board. Each chair reports reg-
ularly to the Supervisory Board on the committee’s activities.
Presiding and Nomination Committee
As was the case in the previous year, the Presiding and Nom-
ination Committee set up by the Supervisory Board of
Brenntag SE consists of the Supervisory Board Chair, Doreen
Nowotne, as well as Dr. Andreas Rittstieg and Wijnand P.
Donkers. The Chair of the Supervisory Board always also holds
the Chair of the Presiding and Nomination Committee.
The Committee coordinates the activities of the Supervisory
Board as a whole and monitors compliance by the Board of
Management with the rules of procedure. Furthermore, the
Committee makes proposals regarding the appointment and
removal of members of the Board of Management, the terms
of the Board of Management service agreements within the
framework of the remuneration system structure adopted by
the Supervisory Board as well as any application to reduce
the remuneration of a Board of Management member, and
regularly provides the Supervisory Board with information for
reviewing the remuneration system as a whole. It ensures
long-term succession planning and sets the necessary qual-
ifications of the Board of Management members. In this con-
nection, the Presiding and Nomination Committee works
closely with the Board of Management. Furthermore, it pre-
pares a diversity concept for the Board of Management and
Supervisory Board. In addition, the Committee represents
Brenntag SE vis-à-vis former members of the Board of Man-
agement in accordance with Section 112 of the German
Stock Corporation Act, consents to sideline activities of Board
of Management members in accordance with Section 88 of
the German Stock Corporation Act and grants loans to the
persons named in Sections 89 and 115 of the German Stock
Corporation Act. In addition, the Committee approves con-
tracts with Supervisory Board members in accordance with
Section 114 of the German Stock Corporation Act and pro-
poses suitable candidates as Supervisory Board members to
the General Shareholders’ Meeting in case of the election of
Supervisory Board members, taking into account the con-
crete objectives for the composition of the Supervisory Board
and the profile of skills and expertise for the Supervisory
Board as a whole.
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Audit Committee
The Supervisory Board of Brenntag SE has set up an Audit
Committee, which meets at least four times in each calendar
year and in particular monitors the accounting process and
the quality of the audit of the annual financial statements.
The Audit Committee has three members who were appointed
by the Supervisory Board. As in the previous year, they are
Ulrich M. Harnacke as its Chair, Stefanie Berlinger and Rich-
ard Ridinger. Thanks to the many years he has spent working
as a chartered accountant and tax consultant, the Chair of
the Audit Committee, Ulrich M. Harnacke, has expertise in
financial statement auditing and special knowledge and
experience of applying accounting principles and internal
control procedures. Furthermore, he is not a former member
of the company’s Board of Management. Stefanie Berlinger
has special expertise in the field of financial statement audit
-
ing, which she has acquired through her many years of expe-
rience as a finance expert and managing director as well as
her years of service on the Audit Committee.
The Chair reports regularly to the Supervisory Board about
the activities of the Committee. The Audit Committee pre-
pares the resolutions of the Supervisory Board on the auditing
and adoption of the annual financial statements as well as
the approval of the consolidated financial statements, the
proposal for the appropriation of profit and the combined
separate non-financial report. Furthermore, the Audit Com
-
mittee prepares the Supervisory Board’s proposal to the Gen-
eral Shareholders’ Meeting on the election of the auditors for
the consolidated financial statements and the auditors for
the half-year and quarterly financial reports, insofar as the
latter are audited or reviewed by auditors. For this purpose,
the Audit Committee pre-reviews the documentation relating
to the consolidated and annual financial statements, the
combined Group management report and the management
report, the non-financial Group report within sustainability
reporting as well as the proposal for the appropriation of
profit. The Audit Committee discusses the audit reports with
the auditor. The Committee deals with accounting issues on
behalf of the Supervisory Board, in particular the treatment
of subjects of fundamental importance, such as the applica-
tion of new accounting standards and the monitoring of the
accounting process. It deals with half-year and quarterly
financial reports or quarterly statements as well as their audit
or review. Furthermore, it reviews the adequacy and effective-
ness of the company’s internal control system, risk manage-
ment system and internal audit system.
The Audit Committee also reviews observance of and com-
pliance with the statutory provisions and internal company
policies as well as compliance with the relevant rules of the
German Corporate Governance Code. On behalf of the Super
-
visory Board, the Committee also monitors in particular the
quality of the audit and the auditors’ independence, including
compliance with statutory requirements regarding the ten-
dering process, proper awarding of non-audit services, com-
pliance with the upper limit for permissible non-audit services
and observance of requirements to rotate the statutory audi-
tor. In addition, the Committee engages the auditors to con-
duct the audit of the annual financial statements and, if nec-
essary, a review of the half-year and quarterly financial
reports. Furthermore, it discusses the scope and main points
of the audit as well as cooperation between the statutory
auditor and Internal Audit Brenntag Group and other depart-
ments involved in risk management. On behalf of the Super-
visory Board, the Committee authorizes the auditors’ fee. In
addition, the Audit Committee discusses the financial, invest-
ment and liquidity plans with the Board of Management,
including the plans with respect to the observance of finan-
cial covenants and the adequacy of interest hedging for the
Group as well as deviations of the actual development from
targets previously reported. The Audit Committee is respon-
sible for the receipt and handling of complaints by employees
and third parties about the accounting, the internal company
control system, risk management, the audit of the financial
statements and other accounting-related issues (whis-
tleblowing). The Audit Committee may assume other tasks
which the Supervisory Board assigns to it. It obtains regular
reports about the work of the Corporate Internal Audit depart-
ment, in particular about that department’s audit focuses
and audit findings. The same applies to risk management
and the monitoring of compliance.
Transformation and Sustainability Committee
The Supervisory Board set up a Transformation Committee in
January 2021. Since then, this committee has dealt in partic-
ular with the planning and implementation of "Project
Brenntag" in the company, a review and refinement of the cor-
porate strategy and the corporate structure as well as the
relevant organizational processes. Furthermore, it is involved
in other aspects relating to the transformation of the com-
pany and other future topics, for example those relating to the
corporate culture and sustainability. The Transformation
Committee prepares the Supervisory Board meetings and
resolutions on corresponding resolution items. The members
of the Transformation Committee are Doreen Nowotne, who
is also its Chair, Wijnand P. Donkers and Richard Ridinger.
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The Transformation Committee was renamed the Transforma-
tion and Sustainability Committee in December 2022 follow-
ing the conclusion of “Project Brenntag”. In future, it will focus
on advising on and monitoring the implementation of the
strategy, also with regard to sustainability and digitalization,
and support further projects in connection with Brenntag’s
transformation in an advisory and monitoring capacity.
Shares held by the Board of Management
and Supervisory Board members
On December 31, 2022, no member of the Board of Manage-
ment or the Supervisory Board held share packages of
Brenntag SE or financial instruments relating to such shares,
which in each case exceed 1% of the shares issued by
Brenntag SE either directly or indirectly. At that date, the total
number of shares held by all members of the Board of Man-
agement and Supervisory Board together also did not exceed
1% of the shares issued by the company.
Avoidance of conflicts of interest on the Board
of Management and the Supervisory Board
In the reporting year, there were no conflicts of interest of
Board of Management or Supervisory Board members which
are to be reported immediately to the Supervisory Board
owing to the duty of loyalty to the company. Furthermore, as
was also the case in the previous years, in the reporting year
there were no advisory or other service agreements and con-
tracts for work between a member of the Supervisory Board
and the company or the other consolidated subsidiaries. No
member of the Board of Management has accepted more
than a total of three offices in non-Group listed companies or
on supervisory bodies of non-Group entities that make similar
requirements. A detailed list of the offices held by the mem-
bers of the Supervisory Board on supervisory boards to be
established by law or on comparable domestic and foreign
supervisory bodies of business enterprises is given in the
chapter “Members of the Supervisory Board”.
Reportable securities transactions of Board of
Management and Supervisory Board members
Pursuant to Section 26, para. 2 of the German Securities Trad-
ing Act (WpHG) in conjunction with Article 19 of the Regulation
(EU) No. 596/2014, termed the Market Abuse Regulation, any
persons working in a management capacity for an issuer of
securities and any persons closely associated with said per-
sons are obliged to report transactions involving shares of
Brenntag SE or related financial instruments if the value of
the transactions which they have made in one calendar year
reaches or exceeds EUR 20,000. Transactions reported in
financial year 2021 were duly published and are available on
Brenntag's website at Managers' Transactions | Brenntag.
Transactions in previous reporting periods were also duly pub-
lished and can also be accessed at any time on the website.
D&O insurance deductible
For details on the D&O insurance (Directors & Officers insur-
ance, liability insurance against financial losses), we refer you
to the information given in the chapter “remuneration report”.
Appropriate control and risk management
An effective risk management and control system is a pre-req-
uisite for the Board of Management and Supervisory Board of
Brenntag SE to ensure that opportunities and risks arising
from the business activities of Brenntag SE and its subsidiar-
ies are handled appropriately. One particular focus remains
the financial risks, in particular the liquidity and credit default
risks. Systematic risk management enables potential uncer-
tainties to be identified and assessed at an early stage and
risk positions optimized. The Board of Management reports
regularly to the Supervisory Board on any existing risks and
their development. The Audit Committee of the Supervisory
Board is responsible for monitoring the accounting process,
effectiveness and efficiency of the company’s internal con-
trols, risk management and the internal audit system. The
Audit Committee’s work is described in detail in the chapter
“Audit Committee”. Brenntag SE’s controlling, risk manage-
ment and audit systems are continually refined and regularly
adapted to changing conditions. Details on the internal con-
trol and risk management system including the adequacy and
effectiveness of the systems can be found in the chapter “Main
elements of the internal control/risk management system” in
the combined management report.
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Transparency and equal treatment through
comprehensive information
Brenntag SE aims to ensure that communications with the
capital market are as transparent as possible and that all
market participants are treated equally. Hereby, it is ensured
that all market participants receive information continuously,
promptly and comprehensively. For Brenntag SE, constant
dialogue with its shareholders and potential investors is a
matter of course. Communications with the capital market
are handled by the Board of Management and the Investor
Relations team. The company maintained its dialogue with
capital market participants at a high level in 2022. An over-
view of the various activities in this area can be found in the
chapter "Brenntag on the Stock Market". In addition, the Chair
of the Supervisory Board is, if required, available to discuss
specific topics that fall within the scope of the Supervisory
Board. Brenntag SE regards corporate governance as an inte-
gral part of communications with the capital market and its
investor relations activities. In February 2022, in-depth discus-
sions were held between the Chair of the Supervisory Board
and selected investors as part of a multi-day corporate gov-
ernance roadshow. Subjects discussed included the compo-
sition of the Board of Management and Supervisory Board,
the Board of Management remuneration system and the role
of ESG within Brenntag SE.
In line with its transparent communications policy, Brenntag SE
makes all material new information available to shareholders
on its corporate website without delay, including, in particular,
financial reports, investor presentations, financial news, ad-hoc
news, the Articles of Association as well as details on the Gen-
eral Shareholders’ Meeting and the financial calendar. The
financial calendar contains important event and publication
dates and can also be found at the end of this annual report.
Shareholders and general shareholders’ meeting
The shareholders exercise their membership rights at the
General Shareholders' Meeting and, as shareholders, express
the collective will of the company. As provided for by law and
in the Articles of Association, the shareholders of Brenntag SE
exercise their rights before or during the General Sharehold-
ers’ Meeting and, in this respect, may also exercise their voting
rights. Each share of Brenntag SE carries one vote in the Gen-
eral Shareholders’ Meeting. The General Shareholders’ Meet-
ing resolves, among other things, on the appropriation of
profit, the discharge of the Board of Management and of the
Supervisory Board and on the election of the auditors. As a
rule, the Chair of the Supervisory Board presides over the Gen-
eral Shareholders’ Meeting. The ordinary General Sharehold-
ers’ Meeting takes place once a year. Shareholders who are
registered with the share register of the company and whose
application for attendance is received by the company in
good time before the General Shareholders’ Meeting are enti-
tled to participate in the General Shareholders’ Meeting and
exercise their voting rights. Shareholders may exercise their
right to vote in the General Shareholders’ Meeting either per-
sonally or through a representative of their choice, or by a
company-appointed proxy acting on their instructions.
As was also the case in the previous year, shareholders were
offered the option of exercising their right to vote at the 2022
General Shareholders’ Meeting in writing by postal vote, with-
out appointing a person to represent them. It is also planned
to offer the option of postal voting for the 2023 ordinary Gen-
eral Shareholders’ Meeting. To provide information for the
shareholders, Brenntag SE posts the annual report on the
past financial year on its website promptly after the Supervi-
sory Board meeting at which the annual financial statements
are adopted. As was also the case in the previous year, notice
of the 2023 ordinary General Shareholders’ Meeting will be
given at least 36 days before the date on which it is to be held.
The invitation to attend will include a list of items on the
agenda as well as an explanation of conditions for atten-
dance and the rights of the shareholders. All documents and
information on the forthcoming ordinary General Sharehold-
ers’ Meeting are also available in good time for downloading
from the website of Brenntag SE. After the General Sharehold-
ers’ Meeting, Brenntag SE also publishes attendance and the
results of votes on the Internet.
Due to the continued restrictions imposed by the COVID-19
pandemic in financial year 2022, shareholders were again
only able to attend the General Shareholder's Meeting virtu-
ally. However, in accordance with the provisions of the Ger-
man COVID-19 Emergency Act, shareholders had the oppor-
tunity to submit questions in advance to the Board of
Management and Supervisory Board until one day before the
meeting. All questions were answered at the General Share-
holders' Meeting.
Accounting and financial statement auditing
The consolidated financial statements of Brenntag SE are
prepared in accordance with the International Financial
Reporting Standards (IFRSs), as adopted by the European
Union. The financial statements of Brenntag SE, on which the
dividend payment is based, are drawn up in accordance with
the German Commercial Code and the German Stock Cor-
poration Act. All single-entity and consolidated financial
statements of Brenntag SE since the IPO in 2010 have been
audited by PricewaterhouseCoopers GmbH Wirtschaftsprü-
fungsgesellschaft (PwC). The audit is managed centrally by
the PwC branch at Moskauer Str. 19, 40227 Düsseldorf. The
undersigned statutory auditors are Christiane Lawrenz (2020
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for the first time, both for the single-entity and consolidated
financial statements) and Daniel Deing (2021 for the first
time, both for the single-entity and consolidated financial
statements). The statutory requirements and requirements to
rotate pursuant to Sections 319 and 319a of the German
Commercial Code (HGB) are met. For financial year 2022, it
was again agreed with the statutory auditors that the Chair
of the Audit Committee would be informed immediately of
any possible grounds for exclusion or bias arising during the
audit insofar as they are not immediately eliminated, and that
the auditors would report immediately on any findings or
occurrences during the audit which have a significant bear-
ing on the duties of the Supervisory Board. It was also agreed
that the auditors would inform the Supervisory Board or make
a note in the audit report of any facts ascertained during their
examination that conflict with the declaration of conformity
with the recommendations of the Government Commission
“German Corporate Governance Code”; this declaration was
issued by the Board of Management and Supervisory Board
pursuant to Section 161 of the German Stock Corporation Act.
Information on targets for the percentage
of women and diversity
In accordance with Section 111, para. 5 of the German Stock
Corporation Act, Brenntag SE is required to set targets for the
share of women on the Supervisory Board, Board of Manage-
ment and, in accordance with Section 76, para. 4 of the Ger-
man Stock Corporation Act, on the first two management lev-
els below the Board of Management. The Supervisory Board
last set new targets for the share of women in 2021. In each
case, the deadline for implementing the target is January 31,
2026. It set the target for the share of women on the Supervi-
sory Board at 33.3% and the target for the share of women on
the Board of Management at 20%. For the Supervisory Board,
this corresponds to two women; for the Board of Manage-
ment one woman.
In 2017, the Board of Management had set targets for the
share of women on the only management level in the com-
pany below the Board of Management at 30%. The target set
was achieved by the end of the deadline for implementation
on June 30, 2022. Although the deadline for implementation
had not yet expired, the Board of Management resolved new
targets in February 2022. As a result of the new matrix struc-
ture as part of the transformation process, there is now a sec-
ond management level below the Board of Management for
which a target also has to be set. The Board of Management
aims to achieve a target of at least 30% for both levels by
January 31, 2026. Taking into account the current structure
and staffing of these management levels, a target of six
women has been set for the first management level. A target
of eight women has been set for the second management
level. Naturally, the aforementioned targets do not rule out
the possibility that the share of women will increase more
than that. Before the above-mentioned deadline for imple-
mentation expires, the Supervisory Board and Board of Man-
agement will pass a resolution setting new targets.
In Doreen Nowotne and Stefanie Berlinger, the Supervisory
Board has two female members so the share of women on
the Supervisory Board was 33.3% in the reporting period and
remains so. With the appointment of Dr. Kristin Neumann as
Chief Financial Officer effective April 1, 2022, we achieved the
20% target for the percentage of women on the Board of Man-
agement in 2022.
As at December 31, 2022 the percentage of women on the
first management level below the Board of Management
was roughly 31.8%, which corresponds to seven women. The
share of women on the second management level below the
Board of Management was 33.3%, which corresponds to
eleven women.
The advancement of young women is a major priority at
Brenntag. The positive change in the percentage of women
on the management levels below the Board of Management
is a sign that the internal measures implemented are a suc-
cess. The percentage of women in management roles is also
to be further improved by their participation in external pro-
grams. We are confident that this will enable us to set the
targets higher in the long term and keep them higher.
Apart from Brenntag SE, Brenntag GmbH is the only Group
company pursuant to Section 36 and Section 52 of the Ger-
man Limited Liability Companies Act (GmbHG) required to set
targets for the percentage of women on the Supervisory
Board, in the managing director team and on the two man-
agement levels below the managing directors. Brenntag
GmbH is not required to disclose a management report
because it has applied the exemption provisions pursuant to
Section 264, para. 3 HGB. In accordance with Section 289a,
para. 4, sentence 2 in conjunction with para. 1, sentence 2
HGB, Brenntag GmbH publishes its declaration with the spec
-
ifications and disclosures in accordance with Section 289a,
para. 2, No. 4 HGB on its website at www.brenntag.com/en-de/
compliance/proportion-of-women-in-management-positions.
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Information on the diversity policy
With respect to the composition of the Board of Management
and Supervisory Board, Brenntag has a diversity policy in
place that is designed to ensure diversity with regard to age,
gender, training, educational and professional background
as well as experience gained abroad. Brenntag promotes an
informal and open-minded work culture with the greatest
possible diversity (“Explore variety”). The diversity policy for
the Board of Management and the Supervisory Board ensures
that this approach is also reflected in these bodies. Brenntag
is convinced that a holistic approach to diversity will
strengthen the company in the long term by taking into
account different perspectives, experiences and back-
grounds, and it will create added value for Brenntag’s cus-
tomers and suppliers as well as its employees.
Diversity policy for the Board of Management
The diversity policy for the Board of Management is based on
a holistic approach to ensure successful, long-term succes-
sion planning:
■
The age limit for membership of the Board of
Management is 65.
■
The aim is to achieve the target and timeframe set for
the percentage of women on the Board of Management.
The target set for the share of women on the Board of
Management is 20% by January 31, 2026.
■
The Board of Management members shall collectively
have particularly extensive experience gained abroad.
■
The Board of Management members must collectively
have multiple years of management experience.
■
The Board of Management members must collectively
be familiar with the field of chemical distribution. At least
one Board of Management member shall have special
knowledge or professional experience in the chemical
industry or the distribution sector.
■
At least one Board of Management member shall have
demonstrated knowledge of financial reporting and
accounting.
The Supervisory Board takes these requirements into consid-
eration when appointing new Board of Management mem-
bers. Together with the Board of Management, the Supervi-
sory Board ensures long-term succession planning that is
geared to the company's interests. The Presiding and Nomi-
nation Committee took account of the above-mentioned cri-
teria in appointing the new member of the Board of Manage-
ment effective April 1, 2022. Dr. Kirstin Neumann was selected
as a new member in suitably well-structured processes. In its
current composition, the Board of Management of
Brenntag SE fulfils the requirements of the diversity policy.
Diversity policy for the Supervisory Board/Targets
for its composition/Profile of skills and expertise
The composition of the Supervisory Board shall ensure that it
can effectively monitor and advise the Board of Management
and can perform its duties prescribed by law and by the Arti-
cles of Association in the best-possible way. The Supervisory
Board’s diversity policy follows the following requirements
with regard to its composition:
■
No member of the Supervisory Board shall continue to
hold office beyond the close of the General Shareholders’
Meeting following his/her 70th birthday.
■
At least 33.3% of the seats on the Supervisory Board shall
be filled by women by January 31, 2026.
■
At least 50% of the members of the Supervisory Board
shall have particularly extensive experience gained
abroad. This requirement for extensive expertise gained
abroad is met if the respective member had regular
employment abroad for at least 18 months or worked
in an international working environment for more than
five years.
■
The Supervisory Board shall take account of the different
educational and/or professional backgrounds of its
members, giving due consideration to their knowledge,
skills and experience when describing the goals for the
composition of the Supervisory Board.
The current composition of the Supervisory Board satisfies all
aspects of the diversity policy.
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In addition to the diversity policy, the Supervisory Board has
defined specific goals for its composition as a whole and
taken qualitative criteria on company-specific requirements
into account:
■
The Supervisory Board shall collectively have suitable
knowledge, skills and experience in the following areas:
- corporate governance, compliance and risk
management
- the chemical industry, distribution, supply chain
management and B2B services
- strategy, portfolio management and M&A
- change management and HR
- the fields of accounting and financial reporting
(in accordance with Section 100, para. 5 of the
German Stock Corporation Act (AktG))
- capital markets
- digital transformation and IT
- ESG, sustainability, CSR and security.
■
The Supervisory Board shall collectively have experience
abroad.
■
The Supervisory Board shall – in its own estimation –
have an adequate number of independent members,
more than half of the members being independent.
When assessing independence, the Supervisory Board
shall take all aspects mentioned in C.6 and C.7 of the
German Corporate Governance Code into account.
■
The Supervisory Board shall ensure that all Supervisory
Board members have sufficient time to perform their
duties.
■
The Supervisory Board takes all aspects of the diversity
policy into account as goals for the composition of the
Supervisory Board.
The profile of skills and expertise for the entire Board specifies
the skills and expertise considered important by the Supervi-
sory Board and sets the specific requirements, in particular
with regard to educational and professional background:
■
The members of the Supervisory Board in the aggregate
shall have several years of executive leadership and CEO.
■
The members of the Supervisory Board in the aggregate
shall be familiar with chemical distribution sector. At
least one member of Supervisory Board shall have
educational or professional expertise in the chemical
industry or the distribution.
■
At least one member of the Supervisory Board shall have
expertise in the field of accounting and at least one other
member of Supervisory Board member shall have exper-
tise in the field of auditing.
■
At least one member of the Supervisory Board shall be
familiar with digital transformation
■
At least one member of the Supervisory Board shall be
familiar with sustainability, in particular ESG.
The Supervisory Board aims to continually improve its com-
position so as to meet the needs of the company and new
business developments and ensure a composition suitable
for the effective supervision and monitoring of the company,
taking into account management experience and specific
expertise in various fields such as accounting, auditing, digi-
talization and sustainability.
The Supervisory Board pursues these objectives and the
implementation of the diversity policy as a whole in its pro-
posals to the Annual General Shareholders’ Meeting for the
election of Supervisory Board members, last for the re-elec-
tion of the Supervisory Board members Wijnand P. Donkers
and Ulrich M. Harnacke at the ordinary General Shareholders’
Meeting in 2022.
The current composition of the Supervisory Board is in line
with its self-imposed objectives and the profile of skills and
expertise. The members of the Supervisory Board of
Brenntag SE have been chosen for their professional qualifi-
cations, their knowledge and their particular experience. The
members of the Supervisory Board as a whole are familiar
with the business sector in which Brenntag operates and have
the required experience.
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Qualification matrix of the Supervisory Board
An overview of the current qualifications and expertise of the
Supervisory Board members meeting the profile of skills and
expertise is published on our website at Supervisory Board|
Brenntag.
Expert Qualification
Profession
Business
economist
Business
economist
Business
economist
Business
economist
Lawyer Chemical
Engineer
International expertise Yes Yes Yes Yes Yes Yes
Member since March 2010 June 2015 June 2017 June 2017 March 2010 June 2020
Gender
Chemical industry
Female Female Male Male Male Male
Year of birth
Changemanagement/HR
Capital Markets
Digital transformation/IT
Corporate Governance/
compliance
Distribution/Supply Chain
Management B2B
Services industry
Financial Expert: (in accor-
dance with section 100 (5)
AktG)*
1972 1973 1962 1957 1956 1958
Nationality German German Dutch German German German
Yes Yes Yes Yes Yes Yes
Independence
(in accordance with GCGC)
Management/
C-level-experience
Strategy, Portfolio
Management, M&A
Safety/Corporate Social
Responsibility/ESG expertise
relevant to Brenntag
Yes Yes Yes Yes Yes
No overboarding
(in accordance with GCGC)
Doreen
Nowotne
Stefanie
Berlinger
Wijnand
Donkers
Ulrich
Harnacke
Richard
Ridinger
Dr. Andreas
Rittstieg
Doreen
Nowotne
Stefanie
Berlinger
Wijnand
Donkers
Ulrich
Harnacke
Richard
Ridinger
Dr. Andreas
Rittstieg
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CORPORATE GOVERNANCE STATEMENT
Independence
In the Supervisory Board’s opinion, a suitable number of inde-
pendent members is at least three. The Supervisory Board
believes that all current members are to be regarded as inde-
pendent as defined by the GCGC. When arriving at this
assessment, the Supervisory Board took into consideration
that, as of March 2022, the Supervisory Board Chair, Doreen
Nowotne, and Dr. Andreas Rittstieg have been members of the
Supervisory Board for more than twelve years. However, fur-
ther indicators for a lack of independence as set out in the
GCGC do not apply to either of them. The length of tenure indi-
cator does not conflict with the overall independence of both.
Doreen Nowotne and Dr. Rittstieg consider themselves to be
independent. In their consulting and monitoring duties, they
demonstrate the necessary distance to the Board of Manage-
ment along with the capacity for objective judgement, espe-
cially since the composition of the Board of Management has
changed during the term of office of both of them. The Super
-
visory Board feels that it is important to have at least one
long-serving member in order to maintain a minimum level of
consistency in advice provided to the Board of Management
given the daunting challenges the chemical industry is facing,
in particular digitalization and climate protection.
The manner in which they have performed their duties to date
gives the company no indication of possible conflicts of inter-
est that could influence the judgment of either of them. On
the basis of their professional experience and expertise in
their Supervisory Board and committee work, both also
demonstrate sufficient critical distance to the company and
the Board of Management.
A further aspect considered in the assessment of indepen-
dence was that both members do not represent any share-
holder on the Supervisory Board. Both were re-elected by a
large majority (over 94% of the votes cast) at the General
Shareholders’ Meeting 2020 after disclosing their previous
committee memberships. The Supervisory Board sees this as
confirmation that, in addition to their own assessment, the
shareholders also have sufficient confidence that Doreen
Nowotne and Dr. Rittstieg maintain their independence when
performing their duties.
Finally, it should be noted that Ms. Nowotne and Dr. Rittstieg
also have other duties and hold other offices and no business
relations exist between the company and them.
Further information on the members of the Supervisory Board
can be found on the website at Supervisory Board | Brenntag.
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50 Introduction
50 Remuneration of the Board of Management
50 Business performance and target achievement
in financial year 2022
50 Composition of the Board of Management
50 Consideration of the resolution of the General
Shareholders' Meeting 2022
51 Outlook for Board of Management remuneration
in financial year 2023
51 Board of Management remuneration systems
60 Further remuneration and contractual provisions
61 Contract termination provisions
62 Performance criteria in the financial year
77 Information on remuneration awarded and due
to Board of Management members serving
in financial year 2022 and former members
in accordance with Section 162 of the
German Stock Corporation Act (AktG)
79 Information on remuneration granted and earned
in accordance with number 4.2.5, para. 3 of the
German Corporate Governance Code as
amended on February 7, 2017 (GCGC 2017)
83 Information on shares granted in the financial year
84 Compliance with maximum remuneration
85 Remuneration of the Supervisory Board
86 Changes in earnings and remuneration over time
87 Auditor’s report
49
Annual Report 2022 Brenntag SE
2 Remuneration Report
49
88
Introduction
The remuneration report was audited by Pricewaterhouse-
Coopers GmbH Wirtschaftsprüfungsgesellschaft. This audit
went beyond the requirements of Section 162, para. 3 of the
German Stock Corporation Act (AktG). The audit opinion is
attached to the remuneration report.
The remuneration report of Brenntag SE was prepared jointly
by the company’s Board of Management and the Supervisory
Board and reports on the remuneration awarded and due to
the current and former members of the Board of Manage-
ment and the Supervisory Board in financial year 2022.
The remuneration report complies with the regulatory require-
ments of Section 162 of the German Stock Corporation Act
(AktG) and the recommendations and suggestions of the Ger-
man Corporate Governance Code (GCGC) as amended on
April 28, 2022.
Business performance and target
achievement in financial year 2022
The two global divisions, Brenntag Specialties and Brenntag
Essentials, each recorded strong growth and thus together
contributed to a very positive financial year 2022. The
Brenntag Group’s profit after tax increased by 95.6% year-on-
year from EUR 461.4 million to EUR 902.5 million.
In line with the Pay for Performance philosophy of the Remu-
neration System 2020, Brenntag Group's highly positive busi-
ness performance was also reflected in the final payout
amount of the Annual Bonus for financial year 2022 of 200%
of the target amount. Details are presented in the section
“Information on the performance criteria for the variable
remuneration earned in financial year 2022”.
Composition of the Board of Management
Georg Müller stood down from the Board of Management by
mutual agreement for personal reasons on February 2, 2022,
and his service agreement ended on March 31, 2022.
Dr. Kristin Neumann succeeded him as the new Chief Finan-
cial Officer of Brenntag SE effective April 1, 2022. Her service
agreement commenced on March 1, 2022.
On March 30, 2022, the Supervisory Board resolved to reap-
point Dr. Christian Kohlpaintner as Chair of the Board of Man-
agement of Brenntag SE. His contract was therefore extended
for a period of three years from January 1, 2023 to Decem-
ber31, 2025.
Consideration of the resolution of the
General Shareholders' Meeting 2022
The remuneration report of Brenntag SE for financial year
2021 was approved by the General Shareholders’ Meeting on
June 9, 2022 with a 85.32% share of the votes cast.
The investor and proxy advisor feedback received in connec-
tion with the approval of the remuneration report 2021 was
also taken into account when preparing the remuneration
report 2022. Introductory sections have been added in order
to further increase the comprehensibility and transparency
of the remuneration report. Furthermore, in the reporting on
the determination of the individual multiplier for the Annual
Bonus, importance has been attached to giving greater detail
on individual performance criteria and ESG aspects.
Remuneration of the Board of Management
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REMUNERATION
REPORT
INTRODUCTION
REMUNERATION OF THE BOARD OF MANAGEMENT
Outlook for Board of Management
remuneration in financial year 2023
With a view to aligning the Board of Management remunera-
tion system with the “Strategy to Win” announced in Novem-
ber 2022, the Supervisory Board is revising and updating the
current remuneration system in consultation with the Presid-
ing and Nomination Committee.
In doing so, the Supervisory Board will also take into account
the feedback from investors and proxy advisors as well as the
expertise of an independent remuneration consultant.
The revised and updated remuneration system is to be sub-
mitted to the General Shareholders’ Meeting in June 2023 for
approval with effect from January 1, 2023. Detailed informa-
tion on the main changes to the remuneration system will be
presented and explained in the run-up to the General Share-
holders' Meeting 2023.
Board of Management remuneration
systems
The Supervisory Board is responsible for setting the remuner-
ation of the Board of Management members. The Presiding
and Nomination Committee of the Supervisory Board dis-
cusses and reviews the remuneration system for the Board of
Management at regular intervals and prepares resolutions on
any changes thereto. In its decisions on the setting of the remu-
neration system, the Supervisory Board takes into account the
remuneration and employment conditions of the employees
of Brenntag SE, in particular the senior managers. In addition,
until inclusion of the Brenntag share in the DAX, the Supervisory
Board had compared the MDAX companies to assess the
appropriateness of Board of Management remuneration.
The Board of Management remuneration systems, in partic-
ular the Board of Management remuneration system that
was introduced in 2020 in line with the German Corporate
Governance Code 2020 and the requirements of the amended
German Stock Corporation Act, are designed to be clear and
comprehensible and support the Group's long-term perfor-
mance by creating effective incentives for growth and
increasing profitability. The aim of the remuneration systems
is to create an incentive for successful and sustainable cor-
porate development. The systems are therefore geared to
transparent, performance-based remuneration that is strongly
focused on the company's success and that depends in par-
ticular on long-term, but also operational targets, the perfor-
mance of the Brenntag share price as well as sustainability
aspects.
Two different remuneration systems were used in 2021 and
2022. The first remuneration system used dated from 2015
and applied to Board of Management members who were
already in office before January 1, 2020 (Board of Manage-
ment Remuneration System 2015). The second system used
is a new remuneration system for Board of Management
members who have been appointed to the Board since Jan-
uary 1, 2020 (Board of Management Remuneration System
2020). With regard to short-term variable and long-term vari-
able remuneration as well as the Share Ownership Guideline,
Henri Nejade switched from the Board of Management Remu-
neration System 2015 to the Board of Management Remuner
-
ation System 2020 as of January 1, 2021.
The Board of Management Remuneration System 2020 was
adopted by the Supervisory Board on December 23, 2020 and
approved by the General Shareholders' Meeting on June 10,
2021 with a 91.62% share of the vote. The Annual Base Salary
and the variable remuneration components are shown sepa-
rately in the following. There then follows a description of ben-
efits in kind and other contractual provisions that are struc-
tured in a comparable manner in both remuneration systems.
Board of Management Remuneration
System 2020
The Board of Management Remuneration System 2020 has
applied to Dr. Christian Kohlpaintner and Steven Terwindt
since 2020, to Henri Nejade and Ewout van Jarwaarde since
2021 and in 2022 it also applies to Dr. Kristin Neumann. The
following describes the remuneration system as it is actually
applied to the aforementioned members of the Board of Man-
agement. It is applied exactly within the framework of the
Board of Management remuneration system adopted by the
Supervisory Board and approved by the General Sharehold-
ers’ Meeting 2021.
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REMUNERATION
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REMUNERATION OF THE BOARD OF MANAGEMENT
The remuneration comprises fixed remuneration and variable
remuneration. The fixed remuneration consists of a base sal-
ary, pension benefits and benefits in kind. The variable remu-
neration is made up of short-term and long-term variable
remuneration components. Of the target total remuneration
of the Board of Management members, fixed remuneration
accounts for between 39% and 54%, short-term variable
remuneration components for between 21% and 28% and
long-term variable remuneration components for between
25% and 35%.
2.01 Remuneration components – Remuneration System 2020
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REMUNERATION OF THE BOARD OF MANAGEMENT
Fixed remuneration Base salary, benefits in kind, pension benefits
Short-term variable
remuneration
■
Plan type: Target bonus model
■
Financial performance criteria:
- 60% organic EBITDA
- 20% working capital turnover
- 20% earnings per share
- Individual performance multiplier (0.7–1.3) considers ESG
and individual performance measures
■
Cap: max. 200% of the target amount
Long-term variable
remuneration
■
Plan type: Virtual Performance Share Plan
■
Performance period: Four years
■
Financial performance criteria:
- Outperformance of the total shareholder return (TSR)
of the Brenntag share
- 50% vs. national index (DAX or MDAX)
- 50% vs. peer group of global competitors
■
Cap: max. 200% of the target amount
Other remuneration
components
and contractual
provisions
■
Malus & Clawback: The Supervisory Board is contractually entitled
- to retain variable remuneration (malus)
- to reclaim variable remuneration (clawback)
■
Share Ownership Guideline in the amount of the annual base salary:
- Chief executive officer (CEO): 200%
- Other members of the Board of Management: 100%
■
Maximum remuneration pursuant to the German Stock Corporation Act
- Chief executive officer (CEO): EUR 6,000,000
- Other members of the Board of Management: EUR 4,000,000
In addition to the above-mentioned remuneration compo-
nents, the Board of Management members receive benefits
in kind under their service agreements such as a mobility
allowance or company car, also for private use, or a car allow-
ance, and benefits for health care and long-term care insur-
ance. Steven Terwindt and Ewout van Jarwaarde were also
provided with a budget for a transitional period, which can be
used for accommodation at the Essen location.
The Annual Base Salary is paid in twelve equal monthly instal-
ments at the end of each month. If the service agreement
begins or ends during a financial year, the Annual Base Salary
for that financial year is payable on a pro rata temporis basis.
The variable remuneration consists of two components:
short-term variable remuneration in the form of an annual
bonus payment (Annual Bonus) and long-term variable remu-
neration in the form of virtual shares (Performance Share
Plan) of Brenntag SE. The Annual Bonus provides an incentive
to achieve the operational business objectives of the financial
year, which in turn are derived from the business strategy and
the annual budget plans. The Performance Share Plan is
designed to provide an incentive to ensure the long-term per
-
formance of the company.
Annual Bonus under the Remuneration System 2020
The Annual Bonus depends on the business success of
Brenntag in the past financial year. It is calculated on the
basis of achievement of the targets set for that financial year
■
organic EBITDA growth,
■
an improvement in working capital turnover and
■
earnings per share growth.
For Dr. Christian Kohlpaintner, Henri Nejade, Steven Terwindt,
and Ewout van Jarwaarde, 100% of all three target criteria
related to the Group level in 2021 and in 2022. This was also
the case for Dr. Kristin Neumann in 2022. An individual perfor-
mance multiplier is also used to assess the performance of
the Board of Management members. The Supervisory Board
has set the three key performance indicators, organic EBITDA
growth, improvement in working capital turnover and earn-
ings per share growth, as the financial targets of the Board of
Management members. Organic EBITDA reflects the compa-
ny's profitability from business operations excluding acquisi-
tions; this KPI is weighted at 60% in the bonus calculation.
Working capital turnover is a key performance indicator for
Brenntag to ensure efficient deployment of capital; the
weighting is 20%. Earnings per share as an important param-
eter – particularly for our shareholders – is also weighted at
20%. The targets for the three KPIs are derived from the annual
budget plans and are set annually by the Supervisory Board.
2.02 Remuneration structure – Remuneration System 2020
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REMUNERATION
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REMUNERATION OF THE BOARD OF MANAGEMENT
Total target remuneration
Henri Nejade
Long-term variable
remuneration
25%
Short-term variable
remuneration 21%
Benefits in kind
2%
Pension benefits
13%
Base salary
39%
Fixed remuneration 54%
Total target remuneration
Dr. Christian Kohlpaintner
Long-term variable
remuneration
35%
Short-term variable
remuneration 26%
Benefits in kind
1%
Pension benefits
9%
Base salary
29%
Fixed remuneration 39%
Total target remuneration
Dr. Kristin Neumann
Long-term variable
remuneration
33%
Short-term variable
remuneration 28%
Benefits in kind
2%
Pension benefits
8%
Base salary
29%
Fixed remuneration 39%
Total target remuneration
Steven Terwindt
Long-term variable
remuneration
33%
Short-term variable
remuneration 28%
Benefits in kind
2%
Pension benefits
8%
Base salary
29%
Fixed remuneration 39%
Total target remuneration
Ewout van Jarwaarde
Long-term variable
remuneration
34%
Short-term variable
remuneration 27%
Benefits in kind
2%
Pension benefits
8%
Base salary
29%
Fixed remuneration 39%
The achievement of each KPI target is calculated by compar-
ing the figure actually achieved in the past financial year with
the target set before the beginning of the past financial year.
This ratio is expressed as a percentage. Overall target
achievement is calculated by multiplying the target achieve-
ment figures of the three KPIs by their respective weightings
and then adding together these three weighted target
achievement figures. If overall target achievement is 100%,
the preliminary payout amount is 100% of the target amount.
If overall target achievement is 50% or less, the Board of Man-
agement members receive no Annual Bonus. For an overall
target achievement of 150% or more, the preliminary payout
amount is 200% of the target amount. The preliminary payout
amount increases linearly for overall target achievement per-
centages between 50% and 150%.
In order to determine the final payout amount, the preliminary
payout amount is multiplied by the individual performance
multiplier. The individual performance multiplier is set by the
Supervisory Board after each financial year in a range
between 0.7 and 1.3. In doing so, the Supervisory Board takes
into account the individual financial and non-financial per-
formance that cannot be reasonably measured by applying
KPIs. This refers to topics of environmental and social respon-
sibility (e.g. succession planning, development of executive
employees of the company, environmental responsibility,
compliance) and sustainable corporate development (e.g.
integration of acquisitions). The final payout amount is
capped at max. 200% of the individual and contractually
agreed target amount (Cap). If the service agreement begins
or ends during a financial year, the target amount for that
financial year is granted on a pro rata temporis basis.
The Annual Bonus is paid out within three months from
approval of the consolidated financial statements by the
Supervisory Board, but at the latest twelve months after the
end of the financial year for which the Annual Bonus has been
determined.
The Supervisory Board is entitled to unilaterally adjust or
change the Annual Bonus plan conditions or terminate the
respective plan at any time.
Long-term variable remuneration under
the Remuneration System 2020
The long-term variable remuneration is in the form of virtual
shares (Performance Share Units). The value of the payout
depends on the relative performance of the Brenntag share
compared with two peer groups and the absolute change in
the Brenntag share price over a four-year performance
period. The virtual shares are contingently granted in annual
tranches. Payout is made following completion of the perfor-
mance period.
50%
0%
100% 150%
Overall target
achievement
Preliminary
payout amount
100%
200%
2.03 Structure of the Annual Bonus – Remuneration System 2020
2.04 Annual Bonus payout curve – Remuneration System 2020
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REMUNERATION
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REMUNERATION OF THE BOARD OF MANAGEMENT
Target
amount in
EUR
Individual
performance
multiplier
(0.7–1.3)
Payout
amount in
EUR
(max. 200%
of target
amount)
Preliminary payout amount (0–200% of target amount)
Organic EBITDA
(growth)
Working capital
turnover
(improvement)
Earnings per
share
(growth)
Weighting 60% Weighting 20% Weighting 20%
The number of virtual shares that a Board of Management
member is finally granted at the end of the four-year perfor-
mance period depends on two performance criteria that are
set by the Supervisory Board and each weighted at 50%: the
outperformance of the total shareholder return (TSR) of the
Brenntag share compared with
■
the TSR performance of the DAX or MDAX and
■
the average TSR of a peer group of global competitors.
Due to the inclusion of Brenntag in the DAX, the national
benchmark index was changed from the MDAX to the DAX in
2022. Furthermore, Azelis Group NV was added to the peer
group of global competitors in 2022.
Therefore, the benchmark parameters for the performance
criteria of the individual tranches are as follows:
Tranche National benchmark index Peer group of global competitors
2020
MDAX Companies in Table 2.07 below excluding Azelis Group NV2021
2022
DAX Companies in Table 2.07 below including Azelis Group NV2023
2.06 Overview of the benchmark parameters for each tranche
The annual virtual shares are contingently granted on Janu-
ary 1 of each financial year. The number of shares initially
granted is calculated by dividing the individual and contrac-
tually agreed grant amount by the arithmetic mean of the
Brenntag share closing prices in the Xetra trading system
during the last three months before the start of the perfor-
mance period. If the service agreement begins or ends during
a financial year, the amount for that financial year is granted
on a pro rata temporis basis.
Number
of virtual
shares
initially
granted
Average
share price
at the
beginning
Average
share price
at the end
plus
dividends
Number
of virtual
shares
finally
granted
Grant
amount
in EUR
Payout
amount in
EUR
(max. 200%
of grant
amount)
Change in share price
Target Achievement (0–150%)
Performance of Brenntag share
vs. DAX or MDAX
Weighting 50%
Performance of Brenntag share
vs. global peer group
Weighting 50%
Year 1 Year 2 Year 3 Year 4
2.05 Structure of the Performance Share Plan – Remuneration System 2020
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REMUNERATION OF THE BOARD OF MANAGEMENT
The peer group of global competitors consists of the following
companies:
Aalberts N.V. Air Liquide S.A. Ashland Global Holdings Inc. Azelis Group NV
Bunzl plc DKSH Holding Ltd. RS Group plc
1)
Evonik Industries AG
Ferguson plc IMCD N.V. Linde plc McKesson Corporation
Rexel S.A. Travis Perkins plc Univar Solutions Inc. W.W. Grainger, Inc.
2.07 Peer group of global competitors
1)
Note: RS Group plc formerly operated under the name Electrocomponents plc.
The TSR is a key performance indicator for our shareholders.
The TSR reflects the change in the value, i.e. the return, of the
Brenntag share. Both share price changes and dividends, but
also other capital measures, are taken into account. A com-
parison of the TSR of the Brenntag share with the shareholder
return of other companies measures the advantages of an
investment in the Brenntag share compared with alternative
investments in shares of other companies. It is of central
importance for the long-term stability of the company that
shareholders receive an attractive return on their investment
in Brenntag shares.
Target achievement of each performance criterion is calcu-
lated by subtracting the performance of the DAX or MDAX or
the average TSR of the global peer group from the TSR of the
Brenntag share. If the performance of the DAX or MDAX or the
average TSR of the global peer group equals the TSR of the
Brenntag share, target achievement is 100%. If the TSR of the
Brenntag share outperforms the DAX or MDAX or the average
TSR of the global peer group by 25% or more percentage
points, target achievement is 150%. If the TSR of the Brenntag
share underperforms the DAX or MDAX or the average TSR of
the global peer group by 25% or more percentage points, tar-
get achievement is 0%. Values inbetween are determined by
linear interpolation. Overall target achievement is calculated
by multiplying the target achievement figures of the two per-
formance criteria by their respective weightings and then add-
ing together these two weighted target achievement figures.
2.08 Target achievement curve of the Performance
Share Plan – Remuneration System 2020
The number of virtual shares that a Board of Management
member is finally granted at the end of the four-year perfor-
mance period is calculated by multiplying the number of vir-
tual shares initially granted by the overall target achievement.
The payout amount is determined by multiplying the number
of virtual shares finally granted by the arithmetic mean of the
Brenntag share closing prices in the Xetra trading system
during the last three months prior to the end of the perfor-
mance period plus dividend payments during the perfor-
mance period. The payout amount is capped at max. 200%
of the individual and contractually set grant amount (Cap).
The payout amount is paid within three months from approval
of the consolidated financial statements by the Supervisory
Board, but at the latest twelve months after the end of the
financial year in which the performance period ends.
Early payout of the tranches of the Performance Share Plan
is not possible under the Remuneration System 2020.
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–25%
0%
0% +25%
Outperformance
Target achievement
100%
150%
The Supervisory Board is entitled at any time to unilaterally
adjust or change the Performance Share Plan conditions or
terminate the respective plan.
Malus and clawback
All variable remuneration components of a Board of Manage-
ment member are only paid out after the end of the regular
plan period. The Supervisory Board is contractually entitled
to retain the variable remuneration (malus) in whole or in part
if a Board of Management member violates their obligations
under Section 93 of the German Stock Corporation Act. In
addition, the Supervisory Board is contractually entitled to
reclaim parts of the variable remuneration (clawback) if a
Board of Management member violates their obligations
under Section 93 of the German Stock Corporation Act, pay-
out of the variable remuneration was made on the basis of
incorrect data or the company's EBITDA decreases by at least
25% within two years and during the Board of Management
member's service compared with the EBITDA for which the
variable remuneration was paid. A reclaim of variable remu-
neration is possible up to an amount of 25% of the total remu-
neration for the respective financial year.
In financial year 2022 no variable remuneration was retained
or reclaimed.
Caps and maximum remuneration
Under the Remuneration System 2020, total remuneration is
limited, on the one hand, by caps for each variable remuner-
ation component and, on the other, by the maximum remu-
neration.
The maximum payout amount from the Annual Bonus is
based on a target achievement of 150% or more. The maxi-
mum payout amount is 200% of the target amount. Even the
application of the individual performance multiplier cannot
increase the payout amount over this cap of 200% (maximum
remuneration).
Under the Performance Share Plan the number of virtual
shares finally granted is limited to 150% of the number of vir-
tual shares initially granted. This maximum number of shares
is reached when the Brenntag share outperforms the DAX or
MDAX and the global peer group (each weighted at 50%) by
25 percentage points or more. In addition, the payout amount
depends on the performance of the Brenntag share price and
on dividend payments. The total payout under the Perfor-
mance Share Plan is limited to 200% of the initial grant
amount (maximum remuneration).
The maximum total remuneration, comprising the sum of
Annual Base Salary, maximum Annual Bonus remuneration,
maximum Performance Share Plan remuneration, the
amount made available to build up pension entitlements,
and benefits in kind has been set at EUR 5,650,000 for
Dr.Christian Kohlpaintner, at EUR 3,000,000 for Dr.Kristin
Neumann and Steven Terwindt, at EUR 3,400,000 for Henri
Nejade and at EUR 2,700,000 for Ewout van Jarwaarde. If the
service agreement begins or ends during a financial year, the
remuneration cap for that financial year is adjusted on a pro
rata temporis basis.
Share Ownership Guideline
In order to bring the interests of the Board of Management
and shareholders more closely into line and to strengthen
Board of Management members' participation in the com-
pany, an obligation for Board of Management members to
purchase and hold Brenntag shares (Share Ownership Guide-
line) was introduced for the first time in 2020. The CEO is
obliged to purchase and continue to hold shares to the value
of 200% of his Annual Base Salary and Dr. Kristin Neumann,
Henri Nejade, Steven Terwindt and Ewout van Jarwaarde
shares to the value of 100% of their Annual Base Salary, in
each case for two years after the end of their service. Dr. Chris-
tian Kohlpaintner, Dr. Kristin Neuman, Steven Terwindt and
Ewout van Jarwaarde must purchase the shares within four
years, and Henri Nejade within two years. In each of these four
or two years, shares equivalent to 25% or 50% of the holding
obligation must be purchased. Compliance with the obliga-
tion to hold shares is checked once a year as at December 31.
The last check as at December 31, 2021 showed that all
Board of Management members subject to the obligation had
met their obligation to hold shares in full. The next check as at
December 31, 2022 is expected to take place in March 2023.
Board of Management Remuneration
System 2015
The Board of Management Remuneration System 2015 only
applied to Georg Müller in 2021 and 2022.
The total remuneration of Georg Müller consisted of three
components: a fixed Annual Base Salary, short-term, capped
variable cash remuneration (Annual Bonus) and long-term,
capped variable remuneration (Long-term Incentive Bonus).
In addition to the above-mentioned remuneration compo-
nents, Georg Müller received a pension component through
payments into the Deferred Compensation Contingency Plan,
contractually agreed benefits in kind and other benefits such
as a company car, also for private use, and allowances for
health care and long-term care insurance.
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Fixed remuneration accounted for 45% of Georg Müller's tar-
get total remuneration, short-term variable remuneration
components for 22% and long-term variable remuneration
components for 33%.
Annual Bonus under the Remuneration System 2015
Georg Müller’s Preliminary Annual Bonus agreed as short-
term variable remuneration was based on a contractually
specified amount (Annual Bonus) and depended on the
achievement of certain targets based on specific key perfor-
mance indicators (KPIs). The KPIs specified were operating
EBITDA (70%), working capital turnover (WCT; 15%) and con-
version ratio (operating EBITDA/operating gross profit; 15%).
The sole deciding factor in the calculation of the Annual
Bonus was the achievement of the KPI targets in the financial
year for which the bonus was paid. The targets and the figures
actually achieved were translated using the same exchange
rates. If the target set for a KPI was not achieved, this part of
the bonus was reduced by 4% for each 1% shortfall of the tar-
get set. If the target was exceeded, the relevant part of the
bonus was increased by 4% for each 1% exceedance of the
target set. The KPI targets for the coming financial year were
mutually agreed by the Supervisory Board and Board of Man-
agement, or, if they were not separately set, were derived from
the annual budget for the relevant financial year as approved
by the Supervisory Board. In addition, individual performance
was taken into account in that, at the end of the financial
year, the Supervisory Board decided on a multiplier for the
Preliminary Annual Bonus (amount after allowance for target
shortfalls or exceedances) of between 0.7 and 1.3. The result-
ing Final Annual Bonus was capped at 200% of the Annual
Bonus. If the service agreement did not subsist for a full
twelve months in a financial year, the Final Annual Bonus was
paid pro rata temporis.
2.09 Remuneration structure – Remuneration System 2015
The Annual Base Salary was payable in twelve equal monthly
instalments.
Target
amount in
EUR
Individual
performance
multiplier
(0.7–1.3)
Payout
amount in
EUR
(max. 200%
of target
amount)
Preliminary payout amount (0–200% of target amount)
Operating
EBITDA
Working capital
turnover
Conversion
ratio
Weighting 70% Weighting 15% Weighting 15%
Total target remuneration
Georg Müller
Long-term variable remuneration 33%
Short-term variable remuneration 22%
Benefits in kind 1%
Pension benefits 17%
Base salary 27%
Fixed remuneration 45%
2.10 Structure of the Annual Bonus – Remuneration System 2015
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Long-term variable remuneration under
the Remuneration System 2015
On the basis of a contractually set annual target amount, the
long-term variable remuneration component is subject to a
vesting period of three years in each case. 50% of the target
amount is contingent on the perfomance of the Brenntag SE
share during these three years (External LTI Portion) and 50%
is contingent on the long-term change in specific Group-wide
KPIs (Internal LTI Portion).
50% of the External LTI Portion is measured by the absolute
change in the total shareholder return for the Brenntag SE
share during the vesting period (Absolute External LTI Portion),
while the other 50% of the External LTI Portion for the 2019–2021
and 2020–2022 tranches is linked to the relative change in the
total shareholder return for the Brenntag SE share compared
with the performance of the MDAX during the vesting period,
for the 2021–2023 tranche to the relative change in the total
shareholder return for the Brenntag SE share compared with
the performance of the DAX during the vesting period (Relative
External LTI Portion). For every percentage point by which the
volume-weighted average share price on the last trade day of
the vesting period plus dividend payments during the vesting
period exceeds or falls short of the average share price on the
last trade day before the vesting period, the Absolute External
LTI Portion is increased or decreased by 2%. For every percent-
age point by which, for the 2019–2021 and 2020–2022
tranches, the MDAX is over- or underperformed in the vesting
period, and for the 2021–2023 tranche the DAX is over- or
underperformed in the vesting period, the Relative External LTI
Portion is increased or decreased by 3%. The overall External
LTI Portion at the end of the relevant vesting period equals the
sum of the Absolute External LTI Portion and the Relative Exter
-
nal LTI Portion. The Absolute and Relative External LTI Portions
may not be less than EUR 0. The External LTI Portion is capped
overall at 200% of the contractually set target amount for the
External LTI Portion.
2.11 Structure of the Long-term Incentive Bonus – Remuneration System 2015
The Internal LTI Portion is measured by the following KPI tar-
gets, which are agreed at the end of each financial year for
the following three-year vesting period in an LTI Bonus Plan:
EBITDA (50%), ROCE (EBITA/(the average carrying amount of
equity plus the average carrying amount of financial liabili-
ties less the average carrying amount of cash and cash
equivalents)) (25%) and earnings per share (25%). At the end
of each financial year during a vesting period, the achieve-
ment of the KPI targets in the particular financial year is
calculated for a share of 1/3 of the Internal LTI Portion (Annual
Internal LTI Portion). For every percentage point by which the
targets of a given KPI are over- or underperformed in the par-
ticular financial year, the Annual Internal LTI Portion is
increased or decreased by 3%. This may also lead to a nega-
tive Annual Internal LTI Portion. The overall Internal LTI Portion
at the end of the relevant vesting period equals the sum of the
Annual Internal LTI Portions. The Internal LTI Portion is also
capped at 200% of the contractually set target amount for
Change in total
shareholder
return for
Brenntag share
(Absolute
External LTI
Portion)
EBITDA
Performance of
Brenntag share vs.
MDAX resp. DAX
(Relative External
LTI Portion)
ROCE
Earnings
per share
Year 1 Year 2 Year 3
Target
amount in
EUR
Weighting
25%
Weighting
25%
Weighting
25%
Weighting
12.5%
Weighting
12.5%
Payout
amount in
EUR
Change in share price
Payout amount (0–200% of target amount)
External LTI Portion Internal LTI Portion
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the Internal LTI Portion. The overall Internal LTI Portion for a
vesting period may not be less than EUR 0.
The Long-term Incentive Bonus for each financial year equals
the sum of the External and Internal LTI Portions and is
capped at 200% of the target amount (LTI Cap). Any entitle-
ments to a Long-term Incentive Bonus are forfeited in the
event that the company terminates a Board of Management
member's service agreement prior to the expiry of its term by
virtue of a termination for cause or in the event of voluntary
resignation by a Board of Management member without the
company having set an important cause for such resignation.
In all other cases, the contractually set target amount for the
relevant ongoing financial year is paid out on a pro rata tem-
poris basis, all External and Internal LTI Portions granted for
prior years but not yet paid out are paid out prematurely. The
relevant parameters at the end of the service period are used
for measurement.
Further remuneration and
contractual provisions
The following describes further remuneration and contrac-
tual provisions that are largely applicable under both the
Board of Management Remuneration System 2015 and the
Board of Management Remuneration System 2020.
For the purpose of building up pension entitlements, Dr. Chris-
tian Kohlpaintner receives from the company an annual
amount of EUR 300,000 and may decide at his own discretion
how to use this money. The annual amount made available is
paid in twelve equal monthly instalments, in each case at the
end of the month. If the service agreement begins or ends
during a financial year, the annual amount will be granted on
a pro rata temporis basis for that financial year.
For the purpose of building up pension entitlements, the other
members of the Board of Management receive an annual
amount of 13.5% (rounded to the next full EUR 1,000) of their
Annual Base Salary and the short-term variable remuneration
(on 100% target achievement, i.e. irrespective of the actual
targets achieved).
Dr.Kristin Neumann, Steven Terwindt and Ewout van Jarwaarde
are paid out the relevant amount for building up pension enti-
tlements every year and may decide at their own discretion
how to use this money.
Henri Nejade has the option either to use this amount in whole
or in part for contributions to his French social insurance or to
also pay it annually into the Deferred Compensation Contin-
gency Plan of Brenntag SE. For 2022, Henri Nejade had
decided to pay the amount into the Deferred Compensation
Contingency Plan.
In the case of Georg Müller, the relevant amount was paid
annually as deferred compensation into the Deferred Com-
pensation Contingency Plan of Brenntag SE.
The Brenntag pension plan is a defined benefit pension com-
mitment with pension payments commencing when the
Board of Management member reaches the age of 63, pro-
vided that he or she is no longer in the service of the company.
The contributions are converted into pension modules in the
year in which the contributions are paid. The pension entitle-
ments are calculated solely on the basis of the sum of the
pension modules accumulated up to the age limit. This pen-
sion plan also contains an arrangement for a widows and
orphans pension which would amount to 60% and 20%
respectively of the full pension entitlements. In accordance
with the statutory provisions pursuant to Section 16 of the
German Occupational Pensions Act (BetrAVG), the interest on
the annual installments and the annual increase in pension
payments is 1%. The pension liability insurance policies taken
out with the Board of Management member as beneficiary
are pledged to that member.
The amounts expensed or accrued in 2022 and the present
values of the pension commitments for the members of the
Board of Management serving in financial year 2022 are as
follows:
in EUR k
Dr. Christian
Kohlpaintner
Dr. Kristin
Neumann
Georg
Müller
Henri
Nejade
Steven
Terwindt
Ewout
van Jarwaarde
Cost of pension
commitments – – 102 293 – –
Present value of
pension commitments – – 4,166 1,523 – –
2.12 Pension commitments in accordance with IFRSs
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Apart from the amounts explained above, which are made
available to build up pension entitlements, no other arrange-
ments for retirement and early retirement have been agreed.
In addition to the above-mentioned remuneration compo-
nents, the Board of Management members receive benefits
in kind and other benefits, such as a company car, also for
private use, or a car allowance, and benefits for health care
and long-term care insurance.
The benefits for health care and long-term care insurance are
limited to max. 50% of the premium they pay into their health
care and long-term care insurance. Steven Terwindt is pro-
vided with supplementary health insurance based on the
national health insurance system in Canada. Furthermore, a
group accident insurance has been taken out. In addition, the
company has taken out Directors & Officers Insurance (dam-
age liability insurance) for the Board of Management mem-
bers. This provides for a deductible of 10% of the damages
claimed in each case, but in each year limited to 150% of the
Annual Base Salary. For his services as director for Brenntag
companies in Asia Pacific of Brenntag Asia Pacific Pte. Ltd.,
Singapore, Henri Nejade also receives fixed remuneration
from this subsidiary in the amount of SGD600,000 per annum,
depending on the exchange rate but no more than
EUR400,000. Steven Terwindt and Ewout van Jarwaarde were
also provided with a budget for a transitional period, which
can be used for accommodation at the Essen location. For
Steven Terwindt, this budget is EUR16,200 per year and is only
available until July 31, 2023. For Ewout van Jarwaarde, this
budget was EUR1,000 per month and was only available until
June 30, 2021.
In the event of temporary disability due to illness, accident, or
any other cause not due to the fault of a Board of Manage-
ment member, said member is entitled to continued payment
of the full Annual Base Salary for a period of no more than
nine months. For the first three months of such incapacity, full
entitlement to the Annual Bonus and the target or grant
amount of the long-term variable remuneration is also
retained. In the event of the death of a Board of Management
member, the base salary is paid to their surviving dependents
for the month of their death and the six months following their
death or until the date on which the service agreement would
have been terminated without their death, whichever event
occurs first.
Contract termination provisions
The service agreements of the Board of Management mem-
bers end automatically on specified dates without any notice
of termination being required. The employment of Board of
Management members may only be terminated prematurely
for good cause or by mutual agreement. If employment is ter-
minated prematurely, the service agreement limits any sev-
erance pay to the value of twice the total annual remunera-
tion, but no more than the amount of remuneration that would
be paid until the end of the term of the service agreement.
A post-contractual non-compete clause has been agreed
with Dr. Christian Kohlpaintner, Dr. Kristin Neumann, Steven
Terwindt and Ewout van Jarwaarde. The post-contractual
non-compete obligation applies for a period of 24 months
after the termination of the service agreement. During this
period Dr. Christian Kohlpaintner, Dr. Kristin Neumann, Steven
Terwindt and Ewout van Jarwaarde receive a continuous pay-
ment amounting to 75% of their Annual Base Salary. Any earn-
ings pursuant to Section 74c of the German Commercial
Code (HGB) are deducted from this payment. There is no sep-
arate post-contractual non-compete clause for Georg Müller
and Henri Nejade.
There are no separate change-of-control arrangements.
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Performance criteria in the financial year
Information on the performance criteria for
the variable remuneration earned in financial
year 2022
The performance criteria for the Annual Bonus of the Board
of Management members were set for the financial year 2022
at the end of 2021. As previously described, Dr. Christian Kohl-
paintner, Dr. Kristin Neumann, Henri Nejade, Steven Terwindt
and Ewout van Jarwaarde were incentivized under the Board
of Management Remuneration System 2020, Georg Müller
under the Board of Management Remuneration System 2015.
The following table shows the respective targets and the
results actually achieved for Dr. Christian Kohlpaintner, Dr.
Kristin Neumann, Henri Nejade, Steven Terwindt and Ewout
van Jarwaarde. The respective target achievement is calcu-
lated from the two figures.
Dr. Christian Kohlpaintner, Dr. Kristin Neumann, Henri Nejade,
Steven Terwindt, Ewout van Jarwaarde
2022 Target Result
Target
achievement
Organic EBITDA growth
Brenntag Group 6.4% 22.8% 356.9%
Improvement in working capital turnover
Brenntag Group 0.10x –0.82x –
Earnings per share growth
Brenntag Group 18.4% 46.9% 254.9%
2.13 Performance criteria for the Annual Bonus earned in 2022 – Remuneration System 2020
The performance criteria in 2022 for Georg Müller are as follows:
Georg Müller
2022 Target Result
Target
achievement
Operating EBITDA (on constant currencies)
Brenntag Group EUR 1,420.3 m EUR 1,695.7 m 119.4%
Working capital turnover
Brenntag Group 8.3x 7.5x 90.2%
Conversion ratio
Brenntag Group 40.5% 41.9% 103.4%
2.14 Performance criteria for the Annual Bonus earned in 2022 – Remuneration System 2015
The Supervisory Board has agreed with the members of the
Board of Management that 50% of the individual perfor-
mance multiplier will be based on ESG measures of the
company and 50% on individual performance aspects. Spe-
cifically, the Supervisory Board agreed with the Board of
Management members at the end of 2021 that progress on
the following ESG measures is to be taken into account
holistically when setting the individual performance multi-
plier in 2022:
■
Reduction of Scope 1 and 2 emissions
■
Implementation of a carbon management program
■
Avoidance of spills or leaks
■
Implementation of a global policy on living wages
■
Set-up of a global organizational diversity, equity and
inclusion structure
■
Prevention of accidents
■
Enlargement of the governance structure to further
improve sustainability performance
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■
Introduction of a roadmap for a sustainable product
portfolio
■
Introduction of a risk management program for suppliers.
The ESG aspects taken into account are in line with the com-
pany’s sustainability reporting.
Individual performance factors were established based on
the three dimensions, growth, people and risk, so that these
could also be given full consideration in determining the
individual performance multiplier in 2022. These individual
performance factors include:
■
Announcing a comprehensive strategic growth plan for
2023 to 2026 (Horizon 2 Strategy)
■
Achieving the Project Brenntag target of over EUR 200
million by the end of the year
■
Start of the Horizon 2 Digital.Data.Excellence program
■
Revising the performance dialog including performance
steering and reporting
■
Developing a competency and leadership model on the
basis of the Horizon 2 requirements
■
Developing systematic succession planning for
managers and promoting diversity and inclusion
■
Ensuring that prioritized compliance measures are
implemented
■
Achieving progress with the Brenntag safety culture
■
Further developing the organizational concept for the
internal control and risk management system and
developing an action plan.
Taking a holistic view and using reasonable discretion, the
Supervisory Board considers the expectations placed in the
Board of Management members with regard to progress on
both the ESG and the individual performance aspects to have
been met or, in some cases, exceeded.
The individual performance multiplier that is applied to the
annual bonus in both remuneration systems was therefore set
by the Supervisory Board at 1.1 for Dr. Christian Kohlpaintner,
Dr. Kristin Neumann, Henri Nejade, Steven Terwindt and Ewout
van Jarwaarde and at 1.0 for Georg Müller.
The annual bonuses for 2022 are calculated on the basis of
the performance criteria previously described and the indi-
vidual performance multipliers as follows:
2022
Dr. Christian
Kohlpaintner
Dr. Kristin
Neumann
Henri
Nejade
Steven
Terwindt
Ewout
van Jarwaarde
Target amount EUR 900k EUR 417k EUR 500k EUR 500k EUR 450k
Organic EBITDA growth
(weighting 60%)
Brenntag Group
Target achievement 356.90% 356.90% 356.90% 356.90% 356.90%
Improvement in working capital
turnover (weighting 20%)
Brenntag Group
Target achievement – – – – –
Earnings per share growth
(weighting 20%)
Brenntag Group
Target achievement 254.90% 254.90% 254.90% 254.90% 254.90%
Overall target achievement 265.12% 265.12% 265.12% 265.12% 265.12%
Payout factor 200.00% 200.00% 200.00% 200.00% 200.00%
Preliminary payout amount EUR 1,800k EUR 833k EUR 1,000k EUR 1,000k EUR 900k
Individual performance
multiplier 1.10 1.10 1.10 1.10 1.10
Final payout amount (Cap) EUR 1,800k EUR 833k EUR 1,000k EUR 1,000k EUR 900k
2.15 Calculation of the Annual Bonus earned in 2022 – Remuneration System 2020
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2022 Georg Müller
Target amount EUR 138k
Operating EBITDA
(weighting 70%)
Brenntag Group
Pro rata target amount EUR 96k
Target achievement 119.4%
Payout factor 177.6%
Pro rata preliminary bonus amount EUR 171k
Working capital turnover
(weighting 15%)
Brenntag Group
Pro rata target amount EUR 21k
Target achievement 90.2%
Payout factor 60.7%
Pro rata preliminary bonus amount EUR 13k
Conversion ratio
(weighting 15%)
Brenntag Group
Pro rata target amount EUR 21k
Target achievement 103.4%
Payout factor 113.4%
Pro rata preliminary bonus amount EUR 23k
Preliminary payout amount EUR 207k
Individual performance multiplier 1.00
Final payout amount EUR 207k
2.16 Calculation of the Annual Bonus earned in 2022
for Georg Müller – Remuneration System 2015
The performance criteria for the 2020–2022 tranche of the
Long-term Incentive Bonus under the Board of Management
Remuneration System 2015 were set at the end of 2019.
Georg Müller and Henri Nejade were incentivized under the
Board of Management Remuneration System 2015 in 2020.
The following table shows the performance criteria for the
External LTI Portion of the 2020–2022 tranche:
2020–2022
tranche
Share price at the beginning of the performance
period (Jan. 1, 2020) EUR 46.82
Share price at the end of the performance
period (Dec. 31, 2022) EUR 61.18
Dividend payments during the vesting period EUR 4.05
Absolute shareholder return for
the Brenntag share 39.3%
MDAX at the beginning of the performance
period (Jan. 1, 2020) 26,873 points
MDAX at the end of the performance period
(Dec. 31, 2022) 24,561 points
MDAX performance during the performance
period –8.6%
Relative shareholder return for the Brenntag
share versus the MDAX 47.9%
2.17 Performance criteria for the earned External LTI Portion
of the 2020–2022 tranche – Remuneration System 2015
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By way of exception, a shortened performance period for the
External LTI Portion applies to Georg Müller as a result of the
early termination of his service agreement.
The performance criteria are, therefore, as follows:
2020–2022
tranche
Share price at the beginning of the performance
period (Jan. 1, 2020) EUR 46.82
Share price at the end of the performance
period (Feb. 2, 2022) EUR 77.85
Dividend payments during the vesting period EUR 4.05
Absolute shareholder return for
the Brenntag share 74.9%
MDAX at the beginning of the performance
period (Jan. 1, 2020) 26,873 points
MDAX at the end of the performance period
(Feb. 2, 2022) 34,700 points
MDAX performance during the performance
period 29.1%
Relative shareholder return for the Brenntag
share versus the MDAX 45.8%
2.18 Performance criteria for the earned External LTI Portion of the
2020–2022 tranche for Georg Müller – Remuneration System 2015
The following tables show the respective targets and the
results actually achieved for the Internal LTI Portion for the
individual years of the 2020–2022 tranche. The respective tar-
get achievement is calculated from the two figures:
2020–2022 tranche
Target Result
Target
achievement
EBITDA
2020 EUR 1,041.9 m EUR 1,057.7 m 101.5%
2021 EUR 1,095.1 m EUR 1,344.6 m 122.8%
2022 EUR 1,150.0 m EUR 1,808.6 m 157.3%
ROCE
2020 14.7% 15.0% 102.0%
2021 15.4% 19.6% 127.3%
2022 16.3% 22.3% 136.8%
Earnings
per share
2020 EUR 3.12 EUR 3.02 96.8%
2021 EUR 3.37 EUR 2.90 86.1%
2022 EUR 3.66 EUR 5.74 156.8%
2.19 Performance criteria for the earned Internal LTI Portion
of the 2020–2022 tranche – Remuneration System 2015
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The payout amounts for the 2020–2022 tranche of the Long-
term Incentive Bonus are calculated on the basis of the per-
formance criteria outlined above as follows:
Georg Müller Henri Nejade
Target amount EUR 800k EUR 600k
Internal Portion (weighting 50%)
2020 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 67k EUR 50k
Target achievement 101.5% 101.5%
Payout factor 104.5% 104.5%
Pro rata bonus amount EUR 70k EUR 52k
ROCE (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 102.0% 102.0%
Payout factor 106.1% 106.1%
Pro rata bonus amount EUR 35k EUR 27k
Earnings per share (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 96.8% 96.8%
Payout factor 90.4% 90.4%
Pro rata bonus amount EUR 30k EUR 23k
2021 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 67k EUR 50k
Target achievement 122.8% 122.8%
Payout factor 168.3% 168.3%
Pro rata bonus amount EUR 112k EUR 84k
ROCE (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 127.3% 127.3%
Payout factor 181.8% 181.8%
Pro rata bonus amount EUR 61k EUR 45k
Earnings per share (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 86.1% 86.1%
Payout factor 58.2% 58.2%
Pro rata bonus amount EUR 19k EUR 15k
Georg Müller Henri Nejade
2022 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 67k EUR 50k
Target achievement 157.3% 157.3%
Payout factor 271.8% 271.8%
Pro rata bonus amount EUR 181k EUR 136k
ROCE (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 136.8% 136.8%
Payout factor 210.4% 210.4%
Pro rata bonus amount EUR 70k EUR 53k
Earnings per share (weighting 25%)
Pro rata target amount EUR 33k EUR 25k
Target achievement 156.8% 156.8%
Payout factor 270.5% 270.5%
Pro rata bonus amount EUR 90k EUR 68k
External Portion (weighting 50%)
Absolute shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 200k EUR 150k
Absolute shareholder return
achieved 74.9% 39.3%
Payout factor 249.9% 178.6%
Pro rata bonus amount EUR 500k EUR 268k
Relative shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 200k EUR 150k
Relative shareholder return
achieved 45.8% 47.9%
Payout factor 237.4% 243.8%
Pro rata bonus amount EUR 475k EUR 366k
Preliminary External Portion EUR 975k EUR 634k
Maximum remuneration
External Portion EUR 800k EUR 600k
Final payout amount EUR 1,469k EUR 1,102k
2.20 Calculation of the earned 2020–2022 tranche
of the LTI Bonus – Remuneration System 2015
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Furthermore, as a result of the early termination of his service
agreement, Georg Müller will be prematurely paid out the
2021–2023 tranche of the Long-term Incentive Bonus granted
under the Remuneration System 2015. The performance cri-
teria for the 2021–2023 tranche of the Long-term Incentive
Bonus under the Board of Management Remuneration Sys-
tem 2015 were set at the end of 2020. The following table
shows the performance criteria for the External LTI Portion of
the 2021–2023 tranche as applied to Georg Müller:
2021–2023
tranche
Share price at the beginning of the performance
period (Jan. 1, 2021) EUR 59.99
Share price at the end of the performance
period (Feb. 2, 2022) EUR 77.85
Dividend payments during the vesting period EUR 2.80
Absolute shareholder return for
the Brenntag share 34.4%
DAX at the beginning of the performance period
(Jan. 1, 2021) 12,984 points
DAX at the end of the performance period
(Feb. 2, 2022) 15,758 points
DAX performance during the performance
period 21.4%
Relative shareholder return for the Brenntag
share versus the DAX 13.1%
2.21 Performance criteria for the earned External LTI Portion of the
2021–2023 tranche for Georg Müller – Remuneration System 2015
The following tables show the respective targets and the
results actually achieved for the Internal LTI Portion for the
individual years of the 2021–2023 tranche as applied to
Georg Müller. The respective target achievement is calculated
from the two figures. It should be noted that the performance
period is reduced from three to two years in the event of early
termination of the service agreement.
2021–2023 tranche for Georg Müller
Target Result
Target
achievement
EBITDA
2021 EUR 1,107.8 m EUR 1,344.6 m 121.4%
2022 EUR 1,233.2 m EUR 1,808.6 m 146.7%
ROCE
2021 16.3% 19.6% 120.2%
2022 18.4% 22.3% 121.2%
Earnings
per share
2021 EUR 3.08 EUR 2.90 94.2%
2022 EUR 3.85 EUR 5.74 149.1%
2.22 Performance criteria for the earned Internal LTI Portion of the
2021–2023 tranche for Georg Müller – Remuneration System 2015
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The amounts for the early payout of the 2021–2023 tranche
of the Long-term Incentive Bonus for Georg Müller are calcu-
lated on the basis of the performance criteria outlined above
as follows:
Georg Müller
Target amount EUR 800k
Internal Portion (weighting 50%)
2021 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 67k
Target achievement 121.4%
Payout factor 164.1%
Pro rata bonus amount EUR 109k
ROCE (weighting 25%)
Pro rata target amount EUR 33k
Target achievement 120.2%
Payout factor 160.7%
Pro rata bonus amount EUR 54k
Earnings per share (weighting 25%)
Pro rata target amount EUR 33k
Target achievement 94.2%
Payout factor 82.5%
Pro rata bonus amount EUR 27k
2022 (weighting 2/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 133k
Target achievement 146.7%
Payout factor 240.0%
Pro rata bonus amount EUR 320k
ROCE (weighting 25%)
Pro rata target amount EUR 67k
Target achievement 121.2%
Payout factor 163.6%
Pro rata bonus amount EUR 109k
Earnings per share (weighting 25%)
Pro rata target amount EUR 67k
Target achievement 149.1%
Payout factor 247.3%
Pro rata bonus amount EUR 165k
Georg Müller
External Portion (weighting 50%)
Absolute shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 200k
Absolute shareholder return achieved 34.4%
Payout factor 168.9%
Pro rata bonus amount EUR 338k
Relative shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 200k
Relative shareholder return achieved 13.1%
Payout factor 139.2%
Pro rata bonus amount EUR 278k
Final payout amount EUR 1,400k
2.23 Calculation of the earned LTI Bonus of the 2021–2023 tranche
for Georg Müller – Remuneration System 2015
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Performance criteria for the variable
remuneration awarded and due in financial
year 2022 (earned in 2021)
The performance criteria for the Annual Bonus of the mem-
bers of the Board of Management were set for financial year
2021 at the end of 2020. As previously described, Dr. Christian
Kohlpaintner, Steven Terwindt, Henri Nejade and Ewout van
Jarwaarde were incentivized under the Board of Manage-
ment Remuneration System 2020, Georg Müller under the
Board of Management Remuneration System 2015.
The following tables show the relevant targets for Dr. Christian
Kohlpaintner, Steven Terwindt, Henri Nejade and Ewout van
Jarwaarde and the results they actually achieved. The respec-
tive target achievement is calculated from the two figures.
Dr. Christian Kohlpaintner, Henri Nejade,
Steven Terwindt, Ewout van Jarwaarde
2021 Target Result
Target
achievement
Organic EBITDA growth
Brenntag Group 12.0% 26.2% 218.3%
Improvement in working capital turnover
Brenntag Group 0.80x 0.98x 122.5%
Earnings per share growth
Brenntag Group 12.0% –4.0% –
2.24 Performance criteria for the Annual Bonus 2021 awarded and due – Remuneration System 2020
Georg MüllerGeorg Müller
2021 Target Result
Target
achievement
Operating EBITDA (on constant currencies)
Brenntag Group EUR 1,107.8 m EUR 1,332.6 m 120.3%
Working capital turnover
Brenntag Group 8.0x 8.3x 103.7%
Conversion ratio
Brenntag Group 39.7% 39.8% 100.3%
2.25 Performance criteria for the Annual Bonus 2021 awarded and due – Remuneration System 2015
The performance criteria for financial year 2021 for Georg
Müller were as follows:
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The individual performance multiplier, which is applied to the
annual bonus in both remuneration systems, was set by the
Supervisory Board at 1.0 for all Board of Management mem-
bers. The individual performance multiplier takes into account
the individual financial and non-financial performance that
cannot be reasonably measured by applying KPIs. The Board
of Management initiated various ESG measures (Environmen-
tal, Social, Governance) for 2021. The Supervisory Board took
progress on these measures into account holistically when
2021
Dr. Christian
Kohlpaintner
Henri
Nejade
Steven
Terwindt
Ewout
van Jarwaarde
Target amount
EUR 900k EUR 500k EUR 500k EUR 450k
Organic EBITDA growth (weighting 60%)
Brenntag Group
Target achievement 218.33% 218.33% 218.33% 218.33%
Improvement in working capital turnover
(weighting 20%)
Brenntag Group
Target achievement 122.50% 122.50% 122.50% 122.50%
Earnings per share growth (weighting 20%)
Brenntag Group
Target achievement – – – –
Overall target achievement 155.50% 155.50% 155.50% 155.50%
Payout factor 200.00% 200.00% 200.00% 200.00%
Preliminary payout amount EUR 1,800k EUR 1,000k EUR 1,000k EUR 900k
Individual performance multiplier 1.00 1.00 1.00 1.00
Final payout amount EUR 1,800k EUR 1,000k EUR 1,000k EUR 900k
2.26 Calculation of the Annual Bonus 2021 awarded and due – Remuneration System 2020
determining the individual performance multiplier. Among
other things, progress on the implementation of “Project
Brenntag” was assessed when determining the individual per-
formance multiplier.
The annual bonuses for 2021 are calculated on the basis of
the performance criteria described above and the individual
performance multipliers as follows:
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2021 Georg Müller
Target amount EUR 550k
Operating EBITDA
(weighting 70%)
Brenntag Group
Pro rata target amount EUR 385k
Target achievement 120.3%
Payout factor 181.2%
Pro rata preliminary bonus amount EUR 698k
Working capital turnover (weighting 15%)
Brenntag Group
Pro rata target amount EUR 83k
Target achievement 103.7%
Payout factor 114.6%
Pro rata preliminary bonus amount EUR 95k
Conversion ratio (weighting 15%)
Brenntag Group
Pro rata target amount EUR 83k
Target achievement 100.3%
Payout factor 101.4%
Pro rata preliminary bonus amount EUR 84k
Preliminary payout amount EUR 876k
Individual performance multiplier 1.00
Final payout amount EUR 876k
2.27 Calculation of the Annual Bonus 2021 awarded
and due – Remuneration System 2015
The performance criteria for the 2019–2021 tranche of the
Long-term Incentive Bonus under the Board of Management
Remuneration System 2015 were set at the end of 2018.
Georg Müller, Henri Nejade and Markus Klähn were incentiv-
ized under the Board of Management Remuneration System
2015 in 2019.
The following table shows the performance criteria for the
External LTI Portion of the 2019–2021 tranche:
2019–2021
tranche
Share price at the beginning of the performance
period (Jan. 1, 2019) EUR 43.21
Share price at the end of the performance
period (Dec. 31, 2021) EUR 79.27
Dividend payments during the vesting period EUR 3.80
Absolute shareholder return for
the Brenntag share 92.3%
MDAX at the beginning of the performance
period (Jan. 1, 2019) 23,556 points
MDAX at the end of the performance period
(Dec. 31, 2021) 34,758 points
MDAX performance during the performance
period 47.6%
Relative shareholder return for
the Brenntagshare versus the MDAX
44.7%
2.28 Performance criteria for the External LTI Portion of the
2019–2021 tranche awarded and due – Remuneration System 2015
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By way of exception, a shortened performance period for the
External LTI Portion applies to Markus Klähn as a result of the
early termination of his service agreement. The performance
criteria are as follows:
2019–2021
tranche
Share price at the beginning of the performance
period (Jan. 1, 2019) EUR 43.21
Share price at the end of the performance
period (Jun. 30, 2021) EUR 76.08
Dividend payments during the vesting period EUR 3.80
Absolute shareholder return
for the Brenntag share 84.9%
MDAX at the beginning of the performance
period (Jan. 1, 2019) 23,556 points
MDAX at the end of the performance period
(Jun. 30, 2021) 33,087 points
MDAX performance during the
performance period 40.5%
Relative shareholder return for the Brenntag
share versus the MDAX 44.4%
2.29 Performance criteria for the External LTI Portion
of the 2019–2021 tranche awarded and due
for Markus Klähn – Remuneration System 2015
The following tables show the respective targets and the
results actually achieved for the Internal LTI Portion for the
individual years of the 2019–2021 tranche. The respective tar-
get achievement is calculated from the two figures.
2019–2021 tranche
Target Result
Target
achievement
EBITDA
2019
1)
EUR 927.3 m EUR 885.5 m 95.5%
2020 EUR 984.6 m EUR 1,057.7 m 107.4%
2021 EUR 1,043.6 m EUR 1,344.6 m 128.8%
ROCE
2019
1)
16.2% 14.5% 89.5%
2020 17.2% 15.0% 87.2%
2021 18.0% 19.6% 108.9%
Earnings
per share
2019
1)
EUR 3.20 EUR 3.02 94.4%
2020 EUR 3.50 EUR 3.02 86.3%
2021 EUR 3.79 EUR 2.90 76.5%
2.30 Performance criteria for the Internal LTI Portion of the
2019–2021 tranche awarded and due – Remuneration System 2015
1)
In financial year 2019 the figures do not contain any effects of IFRS 16.
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The payout amounts for the 2019–2021 tranche of the Long-
term Incentive Bonus are calculated on the basis of the per-
formance criteria outlined above as follows:
Markus Klähn Georg Müller Henri Nejade
Target amount EUR 600k EUR 800k EUR 600k
Internal Portion (weighting 50%)
2019 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 50k EUR 67k EUR 50k
Target achievement 95.5% 95.5% 95.5%
Payout factor 86.5% 86.5% 86.5%
Pro rata bonus amount EUR 43k EUR 58k EUR 43k
ROCE (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 89.5% 89.5% 89.5%
Payout factor 68.5% 68.5% 68.5%
Pro rata bonus amount EUR 17k EUR 23k EUR 17k
Earnings per share (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 94.4% 94.4% 94.4%
Payout factor 83.1% 83.1% 83.1%
Pro rata bonus amount EUR 21k EUR 28k EUR 21k
2020 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 50k EUR 67k EUR 50k
Target achievement 107.4% 107.4% 107.4%
Payout factor 122.3% 122.3% 122.3%
Pro rata bonus amount EUR 61k EUR 82k EUR 61k
ROCE (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 87.2% 87.2% 87.2%
Payout factor 61.6% 61.6% 61.6%
Pro rata bonus amount EUR 15k EUR 21k EUR 15k
Earnings per share (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 86.3% 86.3% 86.3%
Payout factor 58.9% 58.9% 58.9%
Pro rata bonus amount EUR 15k EUR 20k EUR 15k
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Markus Klähn Georg Müller Henri Nejade
2021 (weighting 1/3)
EBITDA (weighting 50%)
Pro rata target amount EUR 50k EUR 67k EUR 50k
Target achievement 128.8% 128.8% 128.8%
Payout factor 186.5% 186.5% 186.5%
Pro rata bonus amount EUR 93k EUR 124k EUR 93k
ROCE (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 108.9% 108.9% 108.9%
Payout factor 126.7% 126.7% 126.7%
Pro rata bonus amount EUR 32k EUR 42k EUR 32k
Earnings per share (weighting 25%)
Pro rata target amount EUR 25k EUR 33k EUR 25k
Target achievement 76.5% 76.5% 76.5%
Payout factor 29.6% 29.6% 29.6%
Pro rata bonus amount EUR 7k EUR 10k EUR 7k
External Portion (weighting 50%)
Absolute shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 150k EUR 200k EUR 150k
Absolute shareholder return achieved 84.9% 92.3% 92.3%
Payout factor 269.8% 284.5% 284.5%
Pro rata bonus amount EUR 405k EUR 569k EUR 427k
Relative shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 150k EUR 200k EUR 150k
Relative shareholder return achieved 44.4% 44.7% 44.7%
Payout factor 233.2% 234.1% 234.1%
Pro rata bonus amount EUR 350k EUR 468k EUR 351k
Preliminary External Portion EUR 755k EUR 1,037k EUR 778k
Maximum remuneration External Portion EUR 600k EUR 800k EUR 600k
Final payout amount EUR 904k EUR 1,209k EUR 904k
2.31 Calculation of the 2019–2021 tranche of the LTI Bonus awarded and due – Remuneration System 2015
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Furthermore, Markus Klähn was prematurely paid out the
2020–2022 tranche of the Long-term Incentive Bonus in 2022
as a result of the early termination of his service agreement.
The performance criteria for the 2020–2022 tranche of the
Long-term Incentive Bonus under the Board of Management
Remuneration System 2015 were set at the end of 2019. The
following table shows the performance criteria for the Exter-
nal LTI Portion of the 2020–2022 tranche as applied to Markus
Klähn:
2020–2022
tranche
Share price at the beginning of the performance
period (Jan. 1, 2020) EUR 46.82
Share price at the end of the performance
period (Jun. 30, 2021) EUR 76.08
Dividend payments during the vesting period EUR 2.60
Absolute shareholder return for
the Brenntag share 68.0%
MDAX at the beginning of the performance
period (Jan. 1, 2020) 26,873 points
MDAX at the end of the performance period
(Jun. 30, 2021) 33,087 points
MDAX performance during the performance
period 23.1%
Relative shareholder return for the Brenntag
share versus the MDAX 44.9%
2.32 Performance criteria for the External LTI Portion
of the 2020–2022 tranche awarded and due
to Markus Klähn – Remuneration System 2015
The following tables show the respective targets and the
results actually achieved for the Internal LTI Portion for the
individual years of the 2020–2022 tranche as applied to
Markus Klähn. The respective target achievement is calcu-
lated from the two figures. It should be noted that the perfor-
mance period was reduced from three to two years due to the
early termination of the service agreement.
2020–2022 tranche for Markus Klähn
Target Result
Target
achievement
EBITDA
2020 EUR 1,041.9 m EUR 1,057.7 m 101.5%
2021 EUR 1,095.1 m EUR 1,344.6 m 122.8%
ROCE
2020 14.7% 15.0% 102.0%
2021 15.4% 19.6% 127.3%
Earnings
per share
2020 EUR 3.12 EUR 3.02 96.8%
2021 EUR 3.37 EUR 2.90 86.1%
2.33 Performance criteria for the Internal LTI Portion
of the 2020–2022 tranche awarded and due
to Markus Klähn – Remuneration System 2015
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The amounts for the early payout of the 2020–2022 tranche
of the Long-term Incentive Bonus for Markus Klähn were cal-
culated on the basis of the performance criteria outlined
above as follows:
Markus Klähn
Target amount EUR 600k
Internal Portion (weighting 50%)
2020 (weighting 50%)
EBITDA (weighting 50%)
Pro rata target amount EUR 75k
Target achievement 101.5%
Payout factor 104.5%
Pro rata bonus amount EUR 78k
ROCE (weighting 25%)
Pro rata target amount EUR 38k
Target achievement 102.0%
Payout factor 106.1%
Pro rata bonus amount EUR 40k
Earnings per share (weighting 25%)
Pro rata target amount EUR 38k
Target achievement 96.8%
Payout factor 90.4%
Pro rata bonus amount EUR 34k
2021 (weighting 50%)
EBITDA (weighting 50%)
Pro rata target amount EUR 75k
Target achievement 122.8%
Payout factor 168.3%
Pro rata bonus amount EUR 126k
ROCE (weighting 25%)
Pro rata target amount EUR 38k
Target achievement 127.3%
Payout factor 181.8%
Pro rata bonus amount EUR 68k
Earnings per share (weighting 25%)
Pro rata target amount EUR 38k
Target achievement 86.1%
Payout factor 58.2%
Pro rata bonus amount EUR 22k
Markus Klähn
External Portion (weighting 50%)
Absolute shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 150k
Absolute shareholder return achieved 68.0%
Payout factor 236.1%
Pro rata bonus amount EUR 354k
Relative shareholder return for the
Brenntag share (weighting 50%)
Pro rata target amount EUR 150k
Relative shareholder return achieved 44.9%
Payout factor 234.8%
Pro rata bonus amount EUR 352k
Preliminary External Portion EUR 706k
Maximum remuneration External Portion EUR 600k
Final payout amount EUR 968k
2.34 Calculation of the 2020–2022 tranche of
the Long-term Incentive Bonus awarded and due
to Markus Klähn – Remuneration System 2015
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76Annual Report 2022 Brenntag SE
REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Information on remuneration awarded and
due to Board of Management members
serving in financial year 2022 and former
members in accordance with Section 162
of the German Stock Corporation Act (AktG)
Information on remuneration awarded and due
to Board of Management members serving in
financial year 2022 in accordance with Section
162 AktG
At the close of February 2, 2022, Georg Müller’s appointment
as a member of the Board of Management was terminated
by mutual agreement, his service agreement remaining in
effect until March 31, 2022. Georg Müller was available to the
company until March 31, in particular to answer any queries
regarding the annual financial statements and to provide the
best possible support for the on-boarding of Dr. Kristin Neu-
mann. In line with the terms of his service agreement, Georg
Müller received both his Annual Base Salary in the amount of
EUR 162,500 and a pension component paid as deferred
compensation into the Deferred Compensation Contingency
Plan on a pro rata temporis basis. The Annual Bonus for 2022
will also be calculated on a pro rata temporis basis and,
under the Remuneration System 2015, paid out in 2023. The
entitlements under the Long-term Incentive Plan will be cal-
culated according to the terms of his service agreement and
paid out. Details on the 2019–2021, 2020–2022 and
2021–2023 tranches are presented in the sections “Informa-
tion on the performance criteria for the variable remuneration
earned in financial year 2022” and “Performance criteria for
the variable remuneration awarded and due in financial year
2022 (earned in 2021)”.
For financial year 2022, the pro rata temporis target amount
of the long-term variable remuneration of EUR 200,000 will be
paid out in 2023 in accordance with the terms of his service
agreement after adoption of the audited consolidated finan-
cial statements of Brenntag SE. In line with the terms of his
service agreement, Georg Müller received benefits in kind
such as the use of a company car and private health care and
long-term care insurance allowances until March 31, 2022.
Dr. Kristin Neumann succeeded Georg Müller as the new CFO
of Brenntag SE with effect from April 1, 2022. Her service
agreement commenced on March 1, 2022.
Total remuneration for the Board of Management members
serving in financial year 2022 is as follows:
Dr. Christian Kohlpaintner Dr. Kristin Neumann Georg Müller
Term of service agreement as
a Board of Management member (until Dec. 31, 2025) (until Mar. 31, 2025) (until Feb. 2, 2022)
in EUR k in % in EUR k in % in EUR k in %
Annual Base Salary 2022 1,000 31.9 438 75.0 163 7.2
2021 1,000 32.0 – – 650 29.4
Pension allowance 2022 300 9.5 116 19.9 – –
2021 300 9.6 – – – –
Benefits in kind/other benefits 2022 38 1.2 30 5.1 4 0.2
2021 37 1.2 – – 19 0.8
Total non-performance-based
remuneration 2022 1,338 42.6 583 100.0 167 7.4
2021 1,337 42.8 – – 669 30.2
Short-term variable remuneration 2022 1,800 57.4 – – 876 39.0
2021 1,790 57.2 – – 592 26.8
Long-term variable remuneration 2022 – – – – 1,206 53.6
2021 – – – – 952 43.0
Total performance-based remuneration 2022 1,800 57.4 – – 2,082 92.6
2021 1,790 57.2 – – 1,544 69.8
Total remuneration 2022 3,138 100.0 583 100.0 2,249 100.0
2021 3,127 100.0 – – 2,213 100.0
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Henri Nejade Steven Terwindt Ewout van Jarwaarde
Term of service agreement as
a Board of Management member (until Jun. 30, 2023) (until Jul. 31, 2023) (until Dec. 31, 2023)
in EUR k in % in EUR k in % in EUR k in %
Annual Base Salary 2022 525 18.2 525 30.7 475 30.9
2021 525 22.9 525 75.8 475 74.6
Pension allowance 2022 – – 139 8.2 125 8.1
2021 – – 139 20.1 125 19.6
Benefits in kind/other benefits 2022 454 15.8 44 2.6 36 2.4
2021 428 18.7 29 4.1 37 5.8
Total non-performance-based
remuneration 2022 979 34.0 708 41.5 636 41.4
2021 953 41.6 693 100.0 637 100.0
Short-term variable remuneration 2022 1,000 34.7 1,000 58.5 900 58.6
2021 683 29.8 – – – –
Long-term variable remuneration 2022 905 31.3 – – – –
2021 654 28.6 – – – –
Total performance-based remuneration 2022 1,905 66.0 1,000 58.5 900 58.6
2021 1,337 58.4 – – – –
Total remuneration 2022 2,884 100.0 1,708 100.0 1,536 100.0
2021 2,290 100.0 693 100.0 637 100.0
2.35 Remuneration awarded and due to the Board of Management members serving in financial year 2022
in accordance with Section 162 of the German Stock Corporation Act (AktG)
Information on the remuneration awarded and
due to former Board of Management members
in accordance with Section 162 AktG
Markus Klähn stepped down from the Board of Management
at the end of July 31, 2020. His service agreement was termi-
nated by mutual agreement on the same day. A severance
package was negotiated with him, which was paid in three
parts. The first part in the amount of EUR626,851 was already
paid in 2020 and compensated him for lost remuneration
from his future base salary, company car allowance, amounts
to build up pension entitlements and for health care. The sec-
ond part of the severance package in the amount of
EUR201,836 was paid in 2021. This second part compensated
him for the lost remuneration from future annual bonuses. The
third part of the severance package in the amount of
EUR431,181 was paid in 2022 when the performance indica-
tors that make up the Long-term Incentive Bonus had been
determined. This third part compensated him for the lost
remuneration from future Long-term Incentive Bonuses. The
vested benefits from the Long-term Incentive Bonuses
2019–2021 in the amount of EUR904,725 and 2020–2022 in
the amount of EUR968,357 were also paid in 2022.
Karsten Beckmann stepped down from the Board of Manage-
ment at the end of August 31, 2020. His service agreement
was terminated by mutual agreement on the same day. It
was agreed with him that 50% of any remuneration from
other professional activities during a period of two years after
termination of his service agreement would be deducted from
the amount of severance pay.
As a result of this agreement, Karsten Beckmann repaid an
amount of EUR 13,500 to the company in 2021. In 2022,
Karsten Beckmann repaid a further EUR36,103 to the com-
pany. In addition, a supplement to the termination agreement
was negotiated with Karsten Beckmann providing for remu-
neration entitlements from the Long-term Incentive Bonus
2020 to be reduced by EUR 300,000. In addition, the company
also settled Karsten Beckmann’s deferred compensation
entitlements under the Deferred Compensation Contingency
Plan of Brenntag in full in 2022 in the form of a one-time pay-
ment of EUR 958,770.
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
The following table contains the remuneration awarded and
due to former Board of Management members in 2022.
Karsten Beckmann Jürgen Buchsteiner Markus Klähn
in EUR k in % in EUR k in % in EUR k in %
Annual Base Salary 2022 – – – – – –
2021 – – – – – –
Pension allowance 2022 – – – – – –
2021 – – – – – –
Benefits in kind/other benefits 2022 – – – – – –
2021 – – – – – –
Total non-performance-based
remuneration 2022 – – – – – –
2021 – – – – – –
Short-term variable remuneration 2022 – – – – – –
2021 432 24.9 – – 383 31.4
Long-term variable remuneration 2022 – – – – 1,873 81.3
2021 1,319 75.9 – – 634 52.0
Total performance-based remuneration 2022 – – – – 1,873 81.3
2021 1,751 100.8 – – 1,017 83.4
Termination benefits 2022 –36 –3.9 – – 431 18.7
2021 –14 –0.8 – – 202 16.6
Pension payments received 2022 959 103.9 305 100.0 – –
2021 – – 302 100.0 – –
Total remuneration 2022 923 100.0 305 100.0 2,304 100.0
2021 1,737 100.0 302 100.0 1,219 100.0
2.36 Remuneration awarded and due to former Board of Management members in accordance
with Section 162 of the German Stock Corporation Act (AktG)
Information on remuneration granted
and earned in accordance with number
4.2.5, para. 3 of the German Corporate
Governance Code as amended on
February 7, 2017 (GCGC 2017)
The following two tables provide the financial information
required by number 4.2.5, para. 3 of the German Corporate
Governance Code as amended on February 7, 2017 regarding
the remuneration granted (in the GCGC 2017 "benefits
granted") and the remuneration earned (in the GCGC 2017
"amounts allocated”). Brenntag is continuing these tables for
the time being for the sake of transparency and comparabil-
ity with prior-year data. The fixed remuneration and fringe
benefits indicated here correspond to the total non-perfor
-
mance-related remuneration of the Board of Management.
The one-year variable remuneration corresponds to the
aforementioned short-term variable remuneration and the
multi-year variable remuneration corresponds to the afore-
mentioned long-term variable remuneration.
Amounts are generally recognized as granted in the financial
year in which the underlying activity for this remuneration was
performed. This is subject to the proviso that a commitment
to pay remuneration must have been given at the time the
remuneration report was prepared. In addition, it must be
possible to establish a reliable estimate of the amount of this
remuneration. The year in which fixed remuneration and
fringe benefits are granted is generally also the year in which
they are recognized as an expense. For the one-year variable
remuneration, the relevant target amount in the case of 100%
target achievement is recognized as the fair value at the date
of grant. The multi-year variable remuneration resulting from
the long-term incentive plan is in each case subject to a vest-
ing period of three years and that resulting from the Perfor-
mance Share Plan to a vesting period of four years. However,
as a new plan is granted every year, in each case with a vest-
ing period of three years or four years, the total target amount
allocated per year in the event of 100% target achievement
or the fair value at the date of grant is recognized as having
been granted and not the portion (1/3 or 1/4) calculated as
attributable to the reporting year.
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Fixed remuneration and fringe benefits are recognized as
remuneration earned in the financial year in which the under
-
lying activity has been performed, if the value of the final
payment has already been determined. For fixed remunera-
tion and fringe benefits, the date of recognition as remuner-
ation earned is generally the date on which it is recognized
as an expense. In the case of one-year variable remuneration
and multi-year variable remuneration, the remuneration
earned is recognized in the financial year of the actual pay-
out, which is, as a rule, the financial year following the respec-
tive vesting period.
Remuneration granted
Dr. Christian Kohlpaintner
Chief Executive Officer
Dr. Kristin Neumann
Chief Financial Officer
in EUR k 2021 2022
2022
(Min)
2022
(Max) 2021 2022
2022
(Min)
2022
(Max)
Fixed remuneration 1,000 1,000 1,000 1,000 – 438 438 438
Fringe benefits 337 338 338 338 – 146 146 146
Tot a l 1,337 1,338 1,338 1,338 – 583 583 583
One-year variable remuneration
Annual Bonus 2022 – 900 – 1,800 – 417 – 833
Annual Bonus 2021 900 – – – – – – –
Multi-year variable remuneration
Performance Share Plan 2022–2025 – 1,200 – 2,400 – 500 – 1,000
Performance Share Plan 2021–2024 1,200 – – – – – – –
LTI Bonus 2022–2024 – – – – – – – –
LTI Bonus 2021–2023 – – – – – – – –
Tot a l 2,100 2,100 – 4,200 – 917 – 1,833
Severance payments – – – – – – – –
Service cost – – – – – – – –
Total remuneration 3,437 3,438 1,338 5,538 – 1,500 583 2,417
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Remuneration granted
Georg Müller
Chief Financial Officer
Henri Nejade
Member of the Board of Management
in EUR k 2021 2022
2022
(Min)
2022
(Max) 2021 2022
2022
(Min)
2022
(Max)
Fixed remuneration 650 163 163 163 525 525 525 525
Fringe benefits 19 4 4 4 428 454 454 454
Tot a l 669 167 167 167 953 979 979 979
One-year variable remuneration
Annual Bonus 2022 – 138 – 275 – 500 – 1,000
Annual Bonus 2021 550 – – – 500 – – –
Multi-year variable remuneration
Performance Share Plan 2022–2025 – – – – – 600 – 1,200
Performance Share Plan 2021–2024 – – – – 600 – – –
LTI Bonus 2022–2024 – 200 – 400 – – – –
LTI Bonus 2021–2023 800 – – – – – – –
Tot a l 1,350 338 – 675 1,100 1,100 – 2,200
Severance payments – – – – – – – –
Service cost 475 102 102 102 335 293 293 293
Total remuneration 2,494 606 269 944 2,388 2,372 1,272 3,472
Remuneration granted
Steven Terwindt
Member of the Board of Management
Ewout van Jarwaarde
Member of the Board of Management
in EUR k 2021 2022
2022
(Min)
2022
(Max) 2021 2022
2022
(Min)
2022
(Max)
Fixed remuneration 525 525 525 525 475 475 475 475
Fringe benefits 168 183 183 183 162 161 161 161
Tot a l 693 708 708 708 637 636 636 636
One-year variable remuneration
Annual Bonus 2022 – 500 – 1,000 – 450 – 900
Annual Bonus 2021 500 – – – 450 – – –
Multi-year variable remuneration –
Performance Share Plan 2022–2025 – 600 – 1,200 – 550 – 1,100
Performance Share Plan 2021–2024 600 – – – 550 – – –
LTI Bonus 2022–2024 – – – – – – – –
LTI Bonus 2021–2023 – – – – – – – –
Tot a l 1,100 1,100 – 2,200 1,000 1,000 – 2,000
Severance payments – – – – – – – –
Service cost – – – – – – – –
Total remuneration 1,793 1,808 708 2,908 1,637 1,636 636 2,636
2.37 Board of Management remuneration granted
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Remuneration earned
1)
Dr. Christian Kohlpaintner
Chief Executive Officer
Dr. Kristin Neumann
Chief Financial Officer
Georg Müller
Chief Financial Officer
in EUR k 2022 2021 2022 2021 2022 2021
Fixed remuneration 1,000 1,000 438 – 163 650
Fringe benefits 338 337 146 – 4 19
Tot a l 1,338 1,337 583 – 167 669
One-year variable remuneration 1,800 1,800 833 – 207 876
Multi-year variable remuneration
LTI Bonus 2019–2021 – – – – – 1,206
LTI Bonus 2020–2022 – – – – 1,469 –
LTI Bonus 2021–2023 – – – – 1,400 –
LTI Bonus 2022–2024 – – – – 200 –
Tot a l 1,800 1,800 833 – 3,276 2,082
Severance payments – – – – – –
Service cost – – – – 102 476
Total remuneration 3,138 3,137 1,417 – 3,545 3,227
Remuneration earned
1)
Henri Nejade
Member of the Board
of Management
Steven Terwindt
Member of the Board
of Management
Ewout van Jarwaarde
Member of the Board
of Management
in EUR k 2022 2021 2022 2021 2022 2021
Fixed remuneration 525 525 525 525 475 475
Fringe benefits 454 428 183 168 161 162
Tot a l 979 953 708 693 636 637
One-year variable remuneration 1,000 1,000 1,000 1,000 900 900
Multi-year variable remuneration
LTI Bonus 2019–2021 – 905 – – – –
LTI Bonus 2020–2022 1,102 – – – – –
LTI Bonus 2021–2023 – – – – – –
LTI Bonus 2022–2024 – – – – – –
Tot a l 2,102 1,905 1,000 1,000 900 900
Severance payments – – – – – –
Service cost 293 336 – – – –
Total remuneration 3,374 3,194 1,708 1,693 1,536 1,537
2.38 Board of Management remuneration earned
1)
The current financial year only contains amounts allocated to Board of Management members who were serving in that year.
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REMUNERATION
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REMUNERATION OF THE BOARD OF MANAGEMENT
Information on shares granted
in the financial year
In 2020, 2021 and 2022, Dr. Christian Kohlpaintner, Dr. Kristin
Neumann, Henri Nejade, Steven Terwindt, and Ewout van
Jarwaarde were contingently granted virtual Brenntag
shares, so-called Performance Share Units, for the long-term
variable remuneration under the Board of Management
Remuneration System 2020.
Dr. Christian
Kohlpaintner
Dr. Kristin
Neumann
Henri
Nejade
Steven
Terwindt
Ewout
van Jarwaarde
2020 tranche
1)
25,614 – – 4,891 –
2021 tranche
2)
20,057 – 10,028 10,028 9,193
2022 tranche
3)
15,072 6,280 7,536 7,536 6,908
2.39 Performance Share Units initially contingently granted – Remuneration System 2020
1)
Price of the Brenntag share applicable at the beginning of the performance period: EUR 46.85
2)
Price of the Brenntag share applicable at the beginning of the performance period: EUR 59.83
3)
Price of the Brenntag share applicable at the beginning of the performance period: EUR 79.62
The amount is paid out after completion of the respective
four-year performance period subject to the performance
conditions as previously described for the Board of Manage-
ment Remuneration System 2020.
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REMUNERATION
REPORT
REMUNERATION OF THE BOARD OF MANAGEMENT
Compliance with maximum remuneration
In order to comply with the maximum remuneration require-
ment, all remuneration components hitherto awarded and
due for a financial year are listed, allocated to the financial
years in which they were granted, added up and compared
with the maximum remuneration to be applied for that finan-
cial year.
The remuneration report 2021 reported the status of contin-
ued compliance with maximum remuneration for financial
years 2020 and 2021. The final report on compliance with
maximum remuneration for financial years 2020 and 2021
will be made when the amount of long-term variable remu-
neration awarded and due in 2023 and 2024 respectively can
be determined.
The following table shows how the maximum remuneration
individually set is complied with in 2022.
Georg Müller is not listed in the table below as his service
agreement started in 2017 and no maximum remuneration
was agreed.
in EUR k
Dr. Christian
Kohlpaintner
Dr. Kristin
Neumann
Henri
Nejade
Steven
Terwindt
Ewout
van Jarwaarde
Annual base salary 1,000 438 525 525 475
Pension allowance 300 116 – 139 125
Benefits in kind/other benefits 38 30 454 44 36
Total remuneration awarded
and due to date in accordance with
Sec. 162, para. 1 AktG 1,338 583 979 708 636
Short-term variable remuneration 1,800 833 1,000 1,000 900
Long-term variable remuneration
1)
Service cost – – 293 – –
Total remuneration realized to date
in accordance with Sec. 87a, para. 1,
sentence 2, no. 1 AktG 3,138 1,417 2,272 1,708 1,536
Agreed maximum remuneration 5,650 2,500
2)
3,400 3,000 2,700
2.40 Compliance with the maximum remuneration in 2022 – Remuneration System 2020
1)
Cannot be determined until after the end of financial year 2023; awarded and due in financial year 2024
2)
On a pro rata temporis basis for the period from March 1 to December 31, 2022; full-year equivalent: EUR 3,000,000
The maximum remuneration for financial years 2020, 2021
and 2022 has been complied with for every member of the
Board of Management. It should be noted that so far not all
remuneration components for financial years 2020, 2021 and
2022 have been awarded and are due. In particular, entitle-
ments under the long-term variable remuneration cannot be
determined until after the end of the performance periods.
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REMUNERATION
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REMUNERATION OF THE BOARD OF MANAGEMENT
Remuneration of the Supervisory Board
The remuneration of the members of the Supervisory Board
was approved by resolution of the General Shareholders’
Meeting of Brenntag SE on June 10, 2020; it is purely fixed
remuneration. The chair and membership of Supervisory
Board committees are remunerated separately in line with
the German Corporate Governance Code.
The members of the Supervisory Board each receive annual
fixed remuneration in the amount of EUR 120k in addition to
reimbursement of their expenses. The Chair of the Supervisory
Board receives fixed remuneration of EUR 210k and the
Deputy Chair EUR 150k. The Chair of the Audit Committee
receives an additional EUR 85k per year and every other
member of the Audit Committee an additional EUR 25k per
year. The chairs of all other committees receive an additional
EUR 37.5k and every other member of these other committees
an additional EUR 25k per year.
The following table shows the amounts due in 2022 to Super-
visory Board members serving in financial year 2022 and for-
mer members:
in EUR k Fixed remuneration
Remuneration for
committee work Total
Doreen Nowotne
Chair 2022 210 75 285
2021 210 75 285
Dr. Andreas Rittstieg
Deputy Chair 2022 150 25 175
2021 150 25 175
Stefanie Berlinger 2022 120 25 145
2021 120 25 145
Wijnand P. Donkers 2022 120 50 170
2021 120 50 170
Ulrich M. Harnacke 2022 120 85 205
2021 120 85 205
Richard Ridinger 2022 120 50 170
2021 120 50 170
Total remuneration 2022 840 310 1,150
2021 840 310 1,150
2.41 Total remuneration of the Supervisory Board
Furthermore, Directors & Officers insurance (damage liability
insurance) has been taken out for the members of the Super-
visory Board with a deductible of at least 10% of the dam-
ages, but limited to 150% of the relevant Supervisory Board
member's fixed remuneration. Beyond this, Supervisory Board
members received no further
remuneration or benefits for personal services rendered, in
particular advisory and mediatory services, in the reporting
year. No loans or advances were granted to members of the
Supervisory Board in the reporting year, nor were any guaran-
tees or other commitments entered into in their favor.
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REMUNERATION
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REMUNERATION OF THE SUPERVISORY BOARD
Changes in earnings and remuneration over time
The following table shows the change in the remuneration of
the Board of Management, Supervisory Board and employees
as well as the change in the company’s earnings:
Changes in remuneration and the company’s earnings were
shown for the first time from 2020 to 2021 and are now
updated every year in the remuneration report. In the case of
Board of Management members serving in financial year
2022 and former members, the total remuneration awarded
and due is taken into account as described in the section
“Information on remuneration awarded and due to Board of
Management members serving in financial year 2022 and for-
mer members in accordance with Section 162 of the German
Stock Corporation Act (AktG)”. In the case of current and for-
mer Supervisory Board members, the total remuneration
awarded and due is taken into account as described in the
section “Remuneration of the Supervisory Board”. Apart from
apprentices, interns and pre-retirement part-time workers, all
employees who had a valid employment contract with
Brenntag SE in the respective financial year are included in
the changes in average employee remuneration. The basis is
the remuneration awarded. Part-time employment and
employees joining or leaving the company during the year are
extrapolated to the full-year, full-time equivalent. Base salary
and short-term and long-term variable remuneration are
included in the calculation for employees. Fringe benefits and
company pension schemes for employees are excluded from
the calculation as these remuneration components are to a
large extent purely administrative and are not subject to the
classic, annual adjustment mechanism. In this analysis, we
focus only on the employees of Brenntag SE in order to avoid
a distorted picture in the future as a result of takeovers and
different remuneration dynamics in other countries.
Actual 2022 Actual 2021
Change in 2022
compared with
2021
Change in 2021
compared with
2020
Remuneration of current members of the Board of Management
Dr. Christian Kohlpaintner (since Jan. 1, 2020) EUR 3,138k EUR 3,127k +0.4% +134.9%
Dr. Kristin Neumann (since Mar. 1, 2022) EUR 583k – +100.0% –
Georg Müller EUR 2,249k EUR 2,213k +1.6% +37.7%
Henri Nejade EUR 2,884k EUR 2,290k +25.9% +26.7%
Steven Terwindt (since Aug. 1, 2020) EUR 1,708k EUR 693k +146.5% +138.1%
Ewout van Jarwaarde (since Jan. 1, 2021) EUR 1,536k EUR 637k +141.1% +100.0%
Remuneration of former members of the Board of Management
Karsten Beckmann EUR 923k EUR 1,737k –46.9% –52.9%
Jürgen Buchsteiner EUR 305k EUR 302k +1.0% +1.0%
Markus Klähn EUR 2,304k EUR 1,219k +89.0% –31.2%
Remuneration of current members of the Supervisory Board
Doreen Nowotne EUR 285k EUR 285k – +50.8%
Ulrich M. Harnacke EUR 205k EUR 205k – –
Stefanie Berlinger EUR 145k EUR 145k – –
Wijnand P. Donkers EUR 170k EUR 170k – +30.8%
Richard Ridinger (since Jun. 10, 2020) EUR 170k EUR 170k – +112.5%
Dr. Andreas Rittstieg EUR 175k EUR 175k – +9.4%
Remuneration of former members of the Supervisory Board
– – – –
Remuneration of employees
Ø employee Brenntag SE EUR 110k EUR 101k +8.9% +6.5%
Change in earnings
Profit after tax Brenntag Group EUR 902.5m EUR 461.4m +95.6% –2.6%
Profit after tax Brenntag SE EUR 250.7m EUR 241.5m +3.8% +8.8%
2.42 Changes in Board of Management, Supervisory Board and employee remuneration
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CHANGES IN EARNINGS AND REMUNERATION OVER TIME
Auditor’s report
To Brenntag SE, Essen
We have audited the remuneration report of Brenntag SE,
Essen, for the financial year from January 1 to December 31,
2022 including the related disclosures, which was prepared
to comply with § [Article] 162 AktG [Aktiengesetz: German
Stock Corporation Act].
Responsibilities of the Executive Directors
and the Supervisory Board
The executive directors and the supervisory board of
Brenntag SE are responsible for the preparation of the remu-
neration report, including the related disclosures, that com-
plies with the requirements of § 162 AktG. The executive direc-
tors and the supervisory board are also responsible for such
internal control as they determine is necessary to enable the
preparation of a remuneration report, including the related
disclosures, that is free from material misstatement, whether
due to fraud or error.
Auditor’s Responsibilities
Our responsibility is to express an opinion on this remunera-
tion report, including the related disclosures, based on our
audit. We conducted our audit in accordance with German
generally accepted standards for the audit of financial state-
ments promulgated by the Institut der Wirtschaftsprüfer
(Institute of Public Auditors in Germany) (IDW). Those stan-
dards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance
about whether the remuneration report, including the related
disclosures, is free from material misstatement.
An audit involves performing procedures to obtain audit evi-
dence about the amounts including the related disclosures
stated in the remuneration report. The procedures selected
depend on the auditor's judgment. This includes the assess-
ment of the risks of material misstatement of the remunera-
tion report including the related disclosures, whether due to
fraud or error.
In making those risk assessments, the auditor considers inter-
nal control relevant to the preparation of the remuneration
report including the related disclosures. The objective of this
is to plan and perform audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal con-
trol. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of account-
ing estimates made by the executive directors and the super-
visory board, as well as evaluating the overall presentation of
remuneration report including the related disclosures.
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our audit opinion.
Audit Opinion
In our opinion, based on the findings of our audit, the remuner-
ation report for the financial year from January 1 to Decem-
ber31, 2022, including the related disclosures, complies in all
material respects with the accounting provisions of § 162 AktG.
Reference to an Other Matter – Formal Audit
of the Remuneration Report according to
§ 162 AktG
The audit of the content of the remuneration report described
in this auditor's report includes the formal audit of the remu-
neration report required by § 162 Abs. [paragraph] 3 AktG,
including the issuance of a report on this audit. As we express
an unqualified audit opinion on the content of the remunera-
tion report, this audit opinion includes that the information
required by § 162 Abs. 1 and 2 AktG has been disclosed in all
material respects in the remuneration report.
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Restriction on use
We issue this auditor’s report on the basis of the engagement
agreed with Brenntag SE. The audit has been performed only
for purposes of the company and the auditor‘s report is solely
intended to inform the company as to the results of the audit.
Our responsibility for the audit and for our auditor’s report is
only towards the company in accordance with this engage-
ment. The auditor’s report is not intended for any third parties
to base any (financial) decisions thereon. We do not assume
any responsibility, duty of care or liability towards third par-
ties; no third parties are included in the scope of protection of
the underlying engagement. § 334 BGB [Bürgerliches Gesetz-
buch: German Civil Code], according to which objections aris-
ing from a contract may also be raised against third parties,
is not waived.
Düsseldorf, March 6, 2023
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Christiane Lawrenz ppa. Daniel Deing
Wirtschaftsprüferin Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
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89Annual Report 2022 Brenntag SE
3 Non-financial
Report
89
145
90 CEO Letter
92 About this report
95 The business model
95 Sustainability at Brenntag
95 Strategy
98 ESG management and organization
101 Governance
101 Management structures for business ethics
101 Values
101 Compliance and integrity
103 Portfolio and investment steering
103 Portfolio steering
104 Investment steering
106 Social
106 Fair and safe employer
106 Occupational health and safety
108 Working conditions and social security benefits
109 Diversity and inclusion
111 People development and training
112 Responsible partner
112 Supply chain and human rights
116 Environment
116 Climate protection and reduction of emissions
116 Climate protection strategy and CO
management
117 Energy and Scope 1 and 2 emissions
119 Scope 3 emissions
121 Resource efficiency and circular economy
121 Critical materials and palm oil
121 Waste
121 Circular economy and recycling
122 Water
122 EU Taxonomy
133 Appendix
133 Calculation of Scope 3 emissions
134 GRI Index
139 TCFD Index
141 SASB Index
144 Practitioner’s Report
Dear readers,
dear shareholders,
The both economically and politically difficult and volatile environment
posed major challenges for Brenntag in 2022. But in this environment
especially, ESG retains top priority on our agenda and that of our stake-
holders. The profound changes in recent years have made it clear to
us as a company how important it is to actively engage with both envi-
ronmental and social aspects. By incorporating these matters into
responsible governance, we are working together for a livable future.
ESG is a top priority in our activities and an essential element of our strat-
egy. Last year, we once again stressed that we wish to become the leader
in the responsible distribution of sustainable chemicals and ingredients,
and also expressed this in our reformulated purpose. We made good
progress on this path in 2022.
We published our new, long-term ESG strategy, in which we set out am-
bitious goals in all three dimensions, environment, social and gover-
nance, and took further successful steps toward achieving those goals.
Among other things, we adopted guidelines for living wages and on sus-
tainability certification for new sites, drove the decarbonization of prod-
ucts and supply chains through the use of renewable and biomaterials,
and further reduced our accident numbers. All this contributes toward
our long-term sustainability vision Future Sustainable Brenntag. We are
also proud of the fact that, on a variety of ESG benchmarks and ratings,
we outperformed the industry average by a clear margin. In 2022, we
once again increased our score in the renowned EcoVadis sustainability
rating and for the first time were awarded the platinum medal. Brenntag’s
sustainability performance therefore puts it among the top 1% of rated
companies across all industries. We also made substantial progress on
corporate governance. Brenntag achieved an excellent 88.66% on the
DVFA Scorecard and therefore ranks among the leading DAX companies
in terms of corporate governance.
We consider it important that our ESG strategy reflects and fulfills the
needs of our stakeholders. In autumn 2022, we therefore carried out a
materiality analysis, where customers, suppliers, investors, associations
and internal stakeholders informed us of their assessment of 15 pre-
defined core ESG areas. The results of this analysis confirmed our focal
points. For us, this is another important sign that the market has under-
stood and accepted our strategy.
Our central objectives include climate protection and reduction of emis-
sions, which we are working on through numerous important measures
with a view to achieving our net-zero target, covering greenhouse gas
emissions generated by our own activities, by 2045. We have presented
a clear roadmap for reducing our Scope 1 and 2 emissions. This includes
fully meeting our electricity requirements from green energy by 2025 and
reducing our CO emissions by 40% compared with 2020 levels by 2030.
In the latter case, we had already achieved a reduction of more than 9%
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CEO LETTER
by the end of 2022 – a motivating result that shows that we are well on
track with the measures taken.
In order to implement our ESG strategy successfully, it is important to
further strengthen awareness of sustainability within our company and
foster new ideas. In 2022, we therefore introduced an internal carbon
fund, for example, for which sites around the globe applied by setting out
their innovative carbon-saving measures. Internal carbon pricing creates
incentives to save energy while at the same time generating funds for
2023 which, through the carbon fund’s support, will be invested in inno-
vative and efficient measures to reduce greenhouse gases. Headed by
myself as CEO, our newly established Sustainability Council dedicates
its attention, among other things, to the projects submitted and the pro-
vision of support through the carbon fund.
There is also a variety of ambitious projects on our agenda for 2023. After
embarking on the first analysis of our product portfolio with regard to
more sustainable product alternatives in 2022, we are looking forward to
starting the implementation phase in the course of this year. As a matter
of particular priority, we will also address the issue of human rights
across our supply chain. Furthermore, we are focusing our efforts with
regard to developing and tapping new circular areas of business.
Implementing ESG measures is a shared task. Together with our employ-
ees worldwide, we are working to make our industry sustainable and thus
contribute toward a more liveable future. I would like to sincerely thank
all colleagues at Brenntag for these efforts.
Dear readers, we are ambitiously continuing our journey toward a Future
Sustainable Brenntag. We are very consciously tackling our intermediate
goals; every achievement along the way takes us a step closer to our
objectives. In 2023, we will continue to do all we can to extend our respon-
sible role in sustainability as global market leader. I would be delighted
if you would accompany and support us in this.
Yours sincerely,
Dr. Christian Kohlpaintner
Chief Executive Officer of Brenntag SE
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About this report
Reporting principles
This combined separate non-financial report (NfR) for finan-
cial year 2022 is the tenth report published by Brenntag on its
sustainability activities since 2013. This year, the NfR has for
the first time been integrated into the Annual Report and will
not therefore be published as a standalone sustainability
report. It is not part of the Group management report.
This NfR is based on international standards for sustainability
reporting and therefore takes into account the interests of
investors, customers, partners, suppliers, NGOs, employees
and interested members of the public:
■
The Global Reporting Initiative (GRI, index on page 134),
■
The principles of the United Nations Global Compact
(UNGC),
■
The standards issued by the Sustainability Accounting
Standards Board (SASB, SASB “Chemicals” standard and
SASB “Road transportation” standard, index on page 141),
■
The standard issued by the Task Force on Climate-
related Financial Disclosures (TCFD, index on page 139).
The TCFD looks at the financial risks that climate
change poses to companies’ business performance.
This NfR was prepared in accordance with Section 315c in
conjunction with Sections 289c to 289e of the German Com-
mercial Code (HGB) and meets the legal requirements of the
HGB. It also contains the mandatory disclosures in accordance
with Regulation (EU) 2020/852 of the European Parliament and
of the Council of 18 June 2020 on the establishment of a
framework to facilitate sustainable investment, and amend-
ing Regulation (EU) 2019/2088 (EU Taxonomy Regulation).
To provide a structured presentation of this content, Brenntag
has used the GRI standards as a framework. The description
of the requirements under the HGB is based on the structure
of the GRI management approaches. This structure is used in
the description of the materiality analysis as well as for man-
agement approaches relating to “environmental matters”,
“employee matters”, “respect for human rights”, “anti-corrup-
tion and bribery matters” and “responsibility in the supply
chain” (GRI 3: Material Topics 2021). In addition, a GRI Content
Index contrasts the GRI indicators with the corresponding
passages in the report. This GRI Content Index is published
from page 134. The following disclosures are additional
information and not part of this separate NfR and therefore
not subject to the audit: the GRI Content Index, references to
information not contained in the NfR or the combined Group
management report and management report of Brenntag SE,
and SASB and TCFD indices.
The NfR has been audited by PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft (PwC) pursuant to ISAE 3000
(Revised) to obtain limited assurance. The Practitioner’s
Report can be found on pages 144–145. The NfR was also
preliminarily analyzed and audited by the Supervisory Board’s
Audit Committee and subsequently by the entire Supervisory
Board.
Information on the business model can be found in the com-
bined Group management report and management report of
Brenntag SE on pages 147-148.
In this NfR, correlations have been identified with amounts
reported in the consolidated financial statements. Informa-
tion on environmental provisions amounting to EUR 108.9 mil-
lion for the clean-up of soil and groundwater at current and
former, owned or leased sites can be found under note 25 to
the consolidated financial statements for financial year 2022.
Identification of material content
The issues presented in the materiality matrix on page 99
form the basis for determining the NfR content. The matrix is
the result of a materiality analysis that was updated in 2022
in that the stakeholders included assessed the relevance and
the effects of the various topics. The materiality analysis was
thus updated for the second time since it was first conducted
in 2015. In order to determine the material topics for the NfR,
Brenntag adhered to the requirements of Section 289c, para.
2 in conjunction with para. 3 of the German Commercial Code
(HGB) and the Global Reporting Initiative standards. These
topics were assessed for the NfR using the following criteria:
■
Topics that are necessary to form an understanding
of the business performance, the financial results, the
company’s position and the effects of Brenntag’s
activities on non-financial aspects (environmental,
social and employee matters, respect for human rights,
anti-corruption and bribery matters, responsibility
in the supply chain, and sustainable governance)
■
Topics rated between “high and very high” in at least one
of the dimensions
■
Topics that form part of Brenntag’s Group strategy and/
or its ESG strategy and the objectives contained in it.
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ABOUT THIS REPORT
In the reporting period, Brenntag looked closely at the mate-
rial topics and updated the materiality analysis against the
background of the ESG strategy (please see page 99). Com-
pared with the previous year, there were both some linguistic
changes and a revision of the scope of the list of topics. The
materiality analysis was submitted to and discussed and
decided upon by the Board of Management. This materiality
process identified the following topics as being material to
Brenntag within the meaning of the law:
Material topics pursuant to Section 289c,
para. 2 in conjunction with para. 3 of the
German Commercial Code
Aspects Issue and page reference
Environmental matters
Safe handling of chemicals
(page 107)
Combating climate change
(page 116)
Waste and packaging
(page 121)
More sustainable products
(page 103)
Circular business models
(page 121)
Responsible use of water
(resources) (page 122)
Climate resilience (page 104)
Employee matters
Occupational health and safety
(page 106)
People development and training
(page 111)
Respectful and caring work
environment (page 108)
Respect for human rights
Compliance and corporate
governance (page 101,112)
Anti-corruption and bribery
matters
Compliance and corporate
governance (page 101)
Social matters
(Not material within the meaning
of Section 289c, para. 3,
sentence 1 HGB)
Responsibility
in the supply chain
Responsible supplier
management (page 112)
Sustainable governance
Integration of sustainability in
governance structures (page 103)
3.01 Material topics pursuant to Section 289c, para. 2
in conjunction with para. 3 of the German Commercial Code
activities and employees’ involvement outside the NfR so that
this important topic is addressed. In addition to the aspects
covered by the law, Brenntag has identified “Responsibility in
the supply chain” and “Sustainable governance”. As the mar-
ket leader in chemicals and ingredients distribution, Brenntag
believes it has a responsibility to reduce negative effects with
regard to non-financial aspects within the supply chain and
to strengthen positive effects. Among other things, Brenntag’s
understanding of the topic of sustainable governance is
that sustainability aspects are important decision criteria in
portfolio and investment decisions and on M&A projects.
Data basis and calculation
This NfR covers Brenntag SE, which is included in the con-
solidated financial statements, as well as the consolidated
subsidiaries, which are also included along with structured
entities. For information on the group of consolidated com-
panies and consolidation method, see page 197 and page
202, as well as the list of companies included in the consol-
idated financial statements, page 265. Any deviations from
these parameters are indicated in the relevant section of
this NfR.
The reporting period for this NfR covers the Brenntag Group’s
financial year 2022 (January 1, 2022 to December 31, 2022).
Any deviations in the reporting periods for individual data and
contents are noted separately.
The contents and data provided in this report have been
determined on the basis of internal processes. They derive
from Brenntag’s existing management and data-recording
systems and from company documents and have been
obtained from the operational units of Brenntag’s regions
as well as the responsible corporate departments. The con-
tent of this report has been reviewed by employees with
the relevant specialist expertise.
Boundaries of material topics pursuant to GRI
The diagram on page 94 shows the boundaries of the mate-
rial topics pursuant to the GRI. The relevant GRI standards cov-
ered by each topic are also indicated. For topics that are not
covered by the GRI standards, we have referred directly to
the corresponding management approaches in the NfR
and, if necessary, to our website as an additional source of
information.
Based on the materiality analysis performed in 2022, the
following overview shows an updated presentation of the
material topics and boundaries.
Social matters were identified as being immaterial to
Brenntag within the meaning of the law and were therefore
not included in the NfR. However, Brenntag will report on social
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Material topics
Material topic
Relevant within
the organization
Relevant outside
the organization
Related GRI standards or management approach
for additional topics
GOVERNANCE
Compliance and corporate
governance
X GRI 205: Anti-corruption 2016
GRI 406: Non-discrimination 2016
GRI 407: Freedom of Association and Collective Bargaining 2016
GRI 417: Marketing and Labeling 2016
GRI 418: Customer Privacy 2016
Corporate Governance Statement, page 32
Integration of sustainability
in governance structures;
climate resilience; more
sustainable products
X X GRI 417: Marketing and Labeling 2016
Group Overview, page 147
ENVIRONMENT
Safe handling of chemicals X X GRI 416: Customer Health and Safety 2016
GRI 303: Water and Effluents 2018
GRI 306: Waste 2020
Combating climate change X X GRI 302: Energy 2016
GRI 305: Emissions 2016
Waste and packaging;
responsible use of water
(resources); circular
business models
X GRI 303: Water and Effluents 2018
GRI 306: Waste 2020
SOCIAL
Occupational health and
safety
X GRI 403: Occupational Health and Safety 2018
Respectful and caring work
environment
X GRI 401: Employment 2016
GRI 402: Labor/Management Relations 2016
GRI 405: Diversity and Equal Opportunity 2016
GRI 406: Non-discrimination 2016
GRI 407: Freedom of Association and Collective Bargaining
2016
People development and
training
X GRI 404: Training and Education 2016
Responsible supplier
management
X X GRI 204: Procurement Practices 2016
GRI 308: Supplier Environmental Assessment 2016
GRI 408: Child Labor 2016
GRI 409: Forced or Compulsory Labor 2016
GRI 411: Rights of Indigenous Peoples 2016
GRI 414: Supplier Social Assessment 2016
3.02 Material topics
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The business model
Brenntag is the global market leader in chemicals and ingre-
dients distribution. The company plays a central role in con-
necting customers and suppliers of the chemical industry. In
the field of sustainability, Brenntag pursues specific goals
and is committed to sustainable solutions in its own sector
and the industries served. In doing so, we identify the sustain-
ability needs of our numerous customer industries and work
together with our suppliers to develop appropriate products
and services. You can read more about the business model
on page 147 of the Group management report.
Targets initiative (SBTi) in 2022, thereby committing to have
its climate goals validated within the next two years. These
are science-based, 1.5°C-aligned goals. In 2022, the company
developed its sustainability vision Future Sustainable
Brenntag and formulated an ESG strategy, from which clearly
defined and ambitious medium- and long-term goals will be
derived along the value chain. Brenntag is thus taking the
lead in shaping the sustainable future of global chemical dis-
tribution.
Focus areas
Through its new ESG strategy, Brenntag is paving the way to
achieve its long-term sustainability vision Future Sustainable
Brenntag. The strategy comprises the following six focus areas:
■
Management structures for business ethics
■
Portfolio and investment steering
■
Fair and safe employer
■
Responsible partner for suppliers and communities
■
Climate protection and reduction of emissions
■
Resource efficiency and circular economy
All actions are guided by the United Nations Sustainable
Development Goals (SDGs). Brenntag has identified eight
SDGs that are of most relevance to the company and to which
it can make the greatest contribution. These eight SDGs are:
good health and well-being; gender equality; affordable and
clean energy; decent work and economic growth; industry,
Sustainability at Brenntag
Strategy
As the global market leader in chemicals and ingredients
distribution, Brenntag aims to fulfill its responsibility and
play a significant role in shaping the future of the industry.
We support our partners in our networks and promote
collaboration, excellence and shared success.
Sustainability has been an integral part of Brenntag’s corpo-
rate strategy for many years now. Since as far back as 2014,
the company has been a member of the UN Global Compact
and committed to its principles for human rights, labor stan-
dards, environmental protection and fighting corruption.
Since October 2014, Brenntag has been involved in Together
for Sustainability (TfS), an initiative that works to enhance
sustainability in the chemical industry supply chain. In
October 2016, Brenntag became the first chemical distributor
to obtain full membership in TfS.
In 2020, the CEO signed the Global Compact Statement from
Business Leaders for Renewed Global Cooperation together
with over 1,000 CEOs of companies from more than 100 coun-
tries. In 2021, Brenntag joined the global RE100 initiative,
thereby pledging its commitment to the goal of sourcing
100% renewable power by 2025.
In order to demonstrate its leading role on the journey to an
eco-friendly and sustainable future and make an impactful
contribution, Brenntag signed up to the Science Based
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THE BUSINESS MODEL
SUSTAINABILITY AT BRENNTAG
Resource efficiency and circular economy
Responsible partner for suppliers
and communities
Fair and safe employer
Climate protection and reduction of emissions
Management structures for business ethics
Portfolio and investment steering
3.03 SDGs
innovation and infrastructure; reduced inequalities; respon-
sible consumption and production; climate action.
The following graphic shows in which focus areas Brenntag
addresses the SDGs.
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Targets
Brenntag has set clear medium- and long-term targets
for each focus area. In order to achieve these, it has also
defined short-term targets, the progress toward which must
be measured on a yearly basis.
Focus areas Description Targets 2023–2025 Targets 2030–2045 Target achievement 2022
Management
structures
for business
ethics
Transparent and
reliable governance
structures that make
management
accountable
Further adjustment of Board
remuneration based on
ESG goals (2024)
Set-up of Sustainability
Council
Portfolio and
investment
steering
Implement policies
throughout the
company
All new sites green building
certified (2023)
100% portfolio steering
toward sustainability (2025)
Develop strategies to
support technological
advancement in important
industry segments (e.g.
automotive) (2025)
Fair and safe
employer
Set a high bar across
working conditions
Strive for zero
accidents
Ensure a dynamic and
diverse organization
100% of employees earn
at least a living wage (2023)
Set-up of global
organizational diversity,
equity and inclusion
structure (2023)
Female representation
of at least 30% across
our entire manage-
ment below the Board
of Management (2030)
TRIR
1)
< 2.0 and zero se-
vere accidents (Actual
Hurt Level 4–5) (2030)
Conduct analysis and
implement global policy
on living wages
Set up global organiza-
tional DEI
2)
structure and
definition of regional/coun-
try-specific targets
for female leadership
TRIR < 2.7
Responsible
partner
for suppliers and
communities
Improvements across
the entire supply chain
to ensure sustainable
and fair standards
Being a responsible
and valued neighbor
All suppliers are covered
by risk management
Conduct initial risk
assessment for 100%
of relevant suppliers
Climate
protection and
reduction
of emissions
Reduce emissions 100% electricity consump-
tion from renewable sources
(2025)
Total spills
< 0.7 events/MMH
3)
(2025)
100% compensation of remai-
ning Scope 1 and 2 emissions
(2025)
40% absolute carbon
reduction vs. 2020
(2030)
4)
Net zero carbon
emissions (2045)
8% reduction of COe
emissions (Scope 1 and 2)
in comparison to base
year 2020
Implement Carbon
Management Program
and allocate 100%
of the carbon fund
Total spills < 0.85 events/
MMH
Resource
efficiency and
circular
economy
Recycling and reuse,
including formation of
partnerships
Increase share of
sustainable solutions
to support supplier
and customer needs
Assess portfolio for
sustainability (30% covered)
and set 2025 quantitative
target (2023)
Ten circular businesses, each
generating > EUR 1 million
(2025)
Analyze part of the product
portfolio for sustainability in
an initial assessment
3.04 Focus areas
1)
Total Recordable Injury Rate
2)
Diversity, equity, inclusion
3)
MMH = million man-hours
4)
Excl. sites that were not included in the 2020 base year; those will be recorded separately.
achieved partially achieved
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SUSTAINABILITY AT BRENNTAG
ESG management and organization
Sustainability only becomes effective once it is firmly embed-
ded in organizational and management systems. The Super-
visory Board of Brenntag SE has established a separate
Transformation and Sustainability Committee to enable the
implementation and tracking of the sustainability objectives
to be monitored at the highest level of the company. At Group
level, Brenntag has numerous guidelines that apply world-
wide. In addition, the individual companies and sites pursue
a large number of activities on their own, both regionally and
locally. Sustainability Brenntag Group works to advance sus-
tainability topics in a targeted manner throughout the com-
pany. It is headed by the Vice President (VP) Sustainability
Brenntag Group. He reports directly to the CEO and is part of
the global team of managers. This promotes the integration
of sustainability topics in other areas of the Group and in the
regions. In 2022, Brenntag established a Sustainability Coun-
cil made up of managers from the regions and functions and
headed by the CEO. The Sustainability Council met three
times in the reporting period to discuss the implementation
of the sustainability strategy and cross-function initiatives.
In 2022, a human rights officer was appointed for Brenntag,
as specified in the German Supply Chain Due Diligence Act.
This role is assumed by the VP Sustainability Brenntag
Group. He sets out and oversees the management of human
rights and environmental risks and also keeps an eye on
changes in the legal framework strictly adhered to by
the company. The human rights officer reports directly to
corporate management.
Dialog with stakeholders
Brenntag maintains regular, open and target group-specific
dialog with all stakeholders. These include customers, em-
ployees, suppliers and business partners along with investors
and analysts, the media and other representatives of society.
The aim is to keep stakeholders appropriately up to date on
company developments and objectives and to create trans-
parency. In return, this interaction enables the company to
identify stakeholder expectations and give them appropriate
consideration in its business decisions. As a member of rele-
vant technical and industry associations at a local, regional
and international level, Brenntag devotes time and attention
to industry-specific issues. It is also essential to the success
of the sustainability strategy that employees are kept fully
informed about sustainability issues and given opportunities
to actively participate. Regular interaction therefore takes
place via various internal communication channels, such as
the employee magazine “together”, the newsletter or video
conference calls. The Brenntag intranet is also a source of
information on news and developments.
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SUSTAINABILITY AT BRENNTAG
Materiality analysis
In 2022, Brenntag updated the materiality analysis with a
view to sharpening the strategy published in 2022 and the
long-term sustainability vision Future Sustainable Brenntag
on the basis of various stakeholder perspectives and require-
ments. This analyzes the materiality of topics for the NfR in
terms of three aspects: the significance for stakeholders,
for understanding the business performance, the financial
results or the position of the company, and the effects of
Brenntag’s activities on the environment, society and the
economy.
The analysis included stakeholders such as employees,
managers, customers, suppliers, association representa-
tives and investors. The findings of the stakeholder survey
confirm the strategy and long-term Future Sustainable
Brenntag vision: All material topics also remain unchanged
in the eyes of stakeholders and continue to feed into the
defined focus areas.
Materiality matrix
3.05 Materiality matrix
Environment Social Governance
Stakeholder relevance highly relevantless relevant
low impact very high impact
3.00
4.00
2.00
2.00 3.00 4.00
Waste
and packaging
Responsible use
of water(resources)
Promoting biodiversity
More sustainable
products
Integration of sustainability
in governance structures
Climate resilience
Occupational health
and safety
Respectful and caring work environment
People development and training
Social involvement
Compliance and corporate
governance
Responsible supplier management
Combating climate change
Circular business
models
Safe handling
of chemicals
Impact
very high
Relevance for long-term
business development
high
medium
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Governance
Management structures for
business ethics
Values
We at Brenntag are grateful for the trust that our business
partners and other stakeholders place in us on a daily basis.
They quite rightly expect the highest level of quality, reliability
and efficient, innovative solutions. In order to meet these
standards, Brenntag uses five central values to systemati-
cally guide its actions. All business activities and business
relationships are shaped by these values.
Care
We take responsibility for each other,
our partners and the world.
Trust
We build relationships through authenticity
and commitment.
Clarity
We work toward common goals with focus
and determination.
Excellence
We go beyond expectations through
excellence, innovation and collaboration.
Safety
We put safety first in everything we do.
3.06 Values of Brenntag SE
In 2022, Brenntag further developed its corporate culture.
Employees from all areas of the company were involved from
the outset with a view to working out the core values together
in workshops. Brenntag wishes to embed these values in day-
to-day business and ensure that employees live the values.
Arange of digital and analog resources will be on offer in 2023
and are intended to encourage employees to consciously
engage with the values, discuss them within the team and use
them to guide their own actions. This begins during the new
employee recruitment process, which is shaped by the
Brenntag values, continues during human resources develop-
ment and involves interaction both among employees and
with external partners.
Compliance and integrity
Brenntag has traditionally attached great importance to re-
sponsible, future-oriented and sustainable corporate gover-
nance. In 2022, it continuously further developed its compli-
ance processes in order to continue to ensure that the
company and its employees comply consistently with the
laws, rules and guidelines of relevance to Brenntag. This fur-
ther development took place, among other things through the
organizational expansion of the compliance department, the
extension of the internal compliance reporting system and
the complete redesign of the compliance intranet presence.
Internal audits are regularly conducted at all Group compa-
nies to assess compliance with internal guidelines. Internal
Audit Brenntag Group conducted a total of 28 audits in 2022.
The Senior Vice President (SVP) Compliance Brenntag Group
reports on a regular basis directly to the Board of Manage
-
ment, the Supervisory Board and the Audit Committee during
the reporting period. The regionally appointed Regional Com-
pliance Managers, who are assisted in their work by local
compliance contacts, regularly exchange information and
experience with the SVP Compliance Brenntag Group. In the
reporting period, Compliance was further expanded both
centrally and locally and the organizational structure was
further developed.
Brenntag attaches great importance to setting up safe and
confidential points of contact for whistleblowers. Seventeen
confirmed incidents were reported in the reporting period.
Two reports of possible corrupt actions were submitted and
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investigations launched. In one case, the suspicion was not
confirmed at the end of the investigation. The investigation
into the second report is still ongoing. Employees and third
parties can access the relevant whistleblowing channels
through the Brenntag website.
As a global company, Brenntag is subject to a large number
of local, national and international laws and regulations. It is
the responsibility of all employees to comply with these rules
without exception. Examples of such internal regulations
developed by Brenntag include the Code of Business Conduct
and Ethics, the Anti-corruption Guideline and other Group
guidelines based on the corporate values.
Among other resources, the new Brenntag Compliance intra-
net site is used to familiarize employees with relevant topics
and provide extensive materials, guidelines and manuals. In
addition, Brenntag offers regular training, for example,
through the Group-wide e-learning platform in order to keep
employees’ knowledge of compliance topics up to date. As an
example, the online training module on the Code of Business
Conduct and Ethics is mandatory for employees once a year.
This was completed by 94% of the relevant employees in the
reporting period. In addition, employees who were designated
on the basis of their activity completed antitrust law training
(completed by 92% of the relevant employees) and anti-
corruption training (completed by 91% of the relevant
employees).
Trade compliance challenges as a result
of the Russia-Ukraine war
The war in Ukraine and its geopolitical and eco-
nomic consequences pose particular challenges for
Brenntag. As a distributor of chemical products and
ingredients with a global network, Brenntag has to
be mindful of a large number of rapidly changing
laws, embargo regulations and sanctions and
ensure that they are implemented. To enable it to
respond to changing situations as efficiently as
possible, Brenntag has put in place an internal crisis
team for the Russia-Ukraine war, made up of mem-
bers of various departments. To comply with the
economic sanctions imposed on the Russian
Federation, for example, Brenntag regularly reviews
business partners with the help of a sanction
checking system.
Data protection
Group-wide data protection places particular requirements
on Brenntag. Different statutory provisions have to be observed
at each of the Group’s international sites. At the same time, it
is necessary to appropriately protect the interests of data
subjects everywhere and ensure that data protection regula-
tions are adhered to throughout the company. For this,
the provisions of the General Data Protection Regulation and
the requirements of numerous other data protection laws
(e.g. in Brazil, California [USA], China, South Africa, etc.) must
be implemented and best brought into line. This requires com-
prehensive and in particular local expertise, well-coordinated
communication and a data protection management system
that integrates all sites.
As head of the Global Data Protection department, the Group
Data Protection Officer reports independently and directly to
the Chief Executive Officer at regular meetings. As of this year,
Global Data Protection falls within the area of responsibility
of the SVP Compliance Brenntag Group. Data protection
coordinators in the various regions support the Global Data
Protection department and report to the central unit. Data
protection recommendations and developments are regu-
larly discussed with the departments.
Introduced in 2020, the global data privacy management sys-
tem (One Trust) supports and automates the documentation
of all processing procedures worldwide, including the service
providers involved and the corresponding risk analyses. Since
the system was introduced, data and processes have been
managed locally and controlled centrally. In 2022, the quality
of documentation in One Trust was further improved and the
data protection coordinators in the regions received training
in this regard. Further steps were taken in 2022 to drive the
digitalization of data protection processes. Another point of
focus was providing support to the DiDEX initiatives, including
the auditing of service providers. In addition, the project
teams involved received in-depth advice so that data protec-
tion requirements are also observed from the outset by the
teams being newly set up as Brenntag’s new data landscape
is developed.
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Tax policy
Adherence to applicable tax laws and regulations is an
essential element of compliance (tax compliance). In 2022,
the Brenntag Group paid EUR 344.9 million in income taxes.
Brenntag’s tax policy is based on the following principles:
■
All relevant tax laws, rules, regulations and reporting
obligations in countries where Brenntag operates must
be fully adhered to.
■
All tax matters are dealt with in accordance with
Brenntag’s business strategy and the fundamental
values specified in the Code of Business Conduct and
Ethics.
■
All tax matters are handled with professional diligence.
■
Brenntag maintains constructive and transparent rela-
tionships with tax authorities that are based on integrity,
cooperation and mutual trust.
■
Brenntag attaches importance to sustainable tax plan-
ning in accordance with legal regulations. The Group
does not engage in tax planning that is not related to
business transactions.
The Brenntag Group’s tax policy is specified by the Board of
Management of Brenntag SE and implemented with the
central involvement of the Group Tax department.
To comply with tax laws and regulations, Brenntag has begun
to build a tax compliance management system (Tax CMS)
within the meaning of IDW AuS 980, starting with the German
subsidiaries. This system is to be rolled out across the Group
at a later date. The Tax CMS is continuously enhanced and
always adapted to the latest legislation or court rulings.
Portfolio and investment steering
Portfolio steering
Brenntag fulfills its responsibility as market leader and aims
to be a chemical industry leader in sustainability. This includes
focusing our product portfolio more on innovative and sus-
tainable products that result in greater efficiency, lower con-
sumption and fewer impacts on people and the environment
across the entire value chain. Close working relationships with
customers and suppliers play an important role here.
Brenntag aims to use sustainability criteria to steer 100% of
the relevant product portfolio by 2025 and to market more
products that make a particular contribution to sustainability
while reducing products that are negative contributors to sus-
tainability. On its journey to a more sustainable product port-
folio, Brenntag aims to analyze at least 30% of its product
portfolio from a sustainability perspective by 2023. Estab-
lished methods such as the Portfolio Sustainability Assess-
ment of the World Business Council for Sustainable Develop-
ment (WBCSD) serve as a guide here. The aim is to extend the
product portfolio with regard to sustainability criteria in light
of regional market requirements and trends in the customer
industries.
By offering sustainable products and solutions, the company
provides its customers with ever better support in meeting
their own sustainability targets. This also opens up further
business opportunities for Brenntag. In order to achieve this,
we analyzed a large proportion of our product portfolio from
a sustainability perspective in an initial assessment in 2022.
In the reporting period, 19 workshops were held on the
segmentation of the portfolio. For each market segment, the
participants from the individual business segments identified
initial sustainability trends and sustainability criteria for the
products marketed by Brenntag. In doing so, they factor in
sustainability criteria of relevance to the respective industry
and region and also take into consideration how the products
are used in different markets and customer industries.
Sustainability criteria can include RSPO certifications
1)
for the
HI&I (Household, Industrial & Institutional Care) segment or
biobased solvents, for example. The departments responsible
develop new, innovative formulations in close collaboration
with customers.
1)
RSPO certification is obtained by companies that have themselves audited by
an independent certifier against the criteria of the Roundtable on Sustainable
Palm Oil (RSPO).
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Brenntag benefits from the fact that its global presence and
comprehensive application and product expertise mean that
the company has knowledge of heavily regulated markets
and an appropriate supplier network. Brenntag can also
leverage this knowledge in less regulated markets to pro-
actively offer appropriate products to customers wishing to
comply with higher safety standards than regional regula-
tions require.
Initial steps toward a sustainable product portfolio were
taken through Brenntag’s own Step4Change initiative in
EMEA. Since 2020, Step4Change has been helping customers
to reach their sustainability targets by identifying more sus-
tainable product solutions from our partners that meet their
needs and making them available quickly and flexibly.
The business initiative by Brenntag Essentials EMEA made
considerable progress in 2022. Among other things, the initia-
tive entered into important collaborative arrangements with
suppliers of sustainable solutions.
Investment steering
Sustainability also plays a central role for Brenntag when it
comes to assessing investments. Since 2022, ESG factors
have been an integral part of due diligence on mergers and
acquisitions. We prepare a sustainability appraisal on each
acquisition candidate by determining whether the company
in question is a good fit with our ESG strategy. Among other
things, the appraisals assess energy consumption, energy
sources and the products offered by the acquisition candi-
date that are classified as sustainable. Brenntag has devel-
oped a guide specifically for this purpose. In the reporting
period, five assessments were prepared for mergers and
acquisitions.
Brenntag pursues a consistent sustainability strategy for its
own buildings, too. In 2022, we therefore introduced the
Corporate Sustainable Building Guideline. This requires each
new Brenntag-owned building to be certified to defined sus-
tainable building standards as of 2023. Recognized stan-
dards include LEED, BREEAM and Green Star. Existing build-
ings also have to be certified to one of the aforementioned
standards if there are any relatively large-scale moderniza-
tion or renovation projects scheduled.
In 2022, the company launched a pilot project together with
an external firm with a view to identifying future physical
climate risks, such as rising sea levels or exceptional heat
waves, for the Brenntag sites worldwide. The initial focus of
this project was on a qualitative assessment of each site’s
exposure to such risks in different global warming scenarios.
The project will help Brenntag to increase its sites’ resilience
to changes in climatic conditions.
Moreover, since 2022 the Sustainability department has been
involved as a reviewer in investments directly related to sus-
tainability and thus plays an important role in the deci-
sion-making process. The Sustainability department reviews,
for example, investments in buildings or means of transport
such as heavy goods vehicles, forklift trucks, etc. Whenever a
decision on investments affects Brenntag’s carbon footprint,
and where steering from a sustainability perspective is there-
fore appropriate, information is requested on aspects such
as the CO emissions concerned.
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105Annual Report 2022 Brenntag SE
105 Social
106 Fair and safe employer
106 Occupational health and safety
108 Working conditions and social security benefits
109 Diversity and inclusion
111 People development and training
112 Responsible partner
112 Supply chain and human rights
Non-financial Report
Social
105
114
Social
Fair and safe employer
Occupational health and safety
Occupational health and safety is of paramount importance
at Brenntag. As a global business with a highly diversified
supplier and customer structure, the company faces partic-
ular challenges, as it is confronted with different regional
laws and requirements, industry standards and work cultures.
Added to this is the combination of chemical process safety
and typical occupational safety issues arising from trans-
portation, storage, packaging and distribution at Brenntag.
Responsibility for occupational safety also includes external
transport companies, customers and contractors if they are
working at Brenntag sites or if they are supplied by Brenntag.
In order to fulfill this responsibility even better, Brenntag has
adapted its global QSHE (quality, safety, health, environment)
strategy. This is now based on four pillars: Culture, Team,
Management System and Monitoring & Controlling.
Culture
Throughout the Group, we operate in accordance with the
“Safety First” principle, relying strongly on personal commit-
ment and responsibility. In order to raise employee awareness
of occupational health and safety, Brenntag continuously ad-
dresses the topic through various different channels. Docu-
mented QSHE training tailored to the requirements of each
activity provides the basis. This is supplemented by commu-
nication formats such as five-minute talks, lessons learned
and best practices, which enable insights gained from inci-
dents or examples of good working practices to be shared
within the organization in a structured manner. Brenntag has
also established the Safety First Moments, where at the
beginning of meetings employees talk about all kinds of
safety issues arising in everyday professional or private life.
Running for a limited period, there are also global or regional
safety campaigns on a variety of topics. Individual accident
categories of marked frequency and/or high severity are
addressed in dedicated global campaigns so as to raise
employee awareness of these issues.
At the end of 2021, for example, Brenntag launched the world-
wide “Zero Tolerance to Chemical Exposures” campaign,
which ran for several months with the aim of sharpening em-
ployee awareness of chemical accidents. Detailed informa-
tion materials and an animated video in several languages
explained the five golden rules for avoiding exposure to
hazardous chemicals. A decrease in the number of such
accidents has already been noted.
The global Brenntag Enhanced Safety Thinking (BEST) pro-
gram also helps to raise awareness of safety. It consists of the
Brenntag Safety Behavior Standard developed in 2015 and
an employee survey to enable safety behavior and safety
awareness within the company to be evaluated and then
honed if necessary. In 2022, the company surveyed its global
workforce through BEST for the third time. According to the
online survey, Brenntag employees in all regions see a clear
improvement in the safety culture compared with the last
edition in 2018.
Once a year, Brenntag presents the Global Safety Awards in
two categories: the Safety Excellence Award for the best
safety record and the Safety Phoenix Award for the strongest
improvement in terms of safety. In 2022, the Traun site in
Austria (Safety Excellence Award) and the Manali site in India
(Safety Phoenix Award) were honored for their outstanding
achievements.
Team
In order to centralize its QSHE structure, Brenntag has estab-
lished a multinational team made up of QSHE experts work-
ing centrally and the QSHE directors of the global regions.
They work closely together with the regional and local QSHE
teams.
Management system
Brenntag operates an integrated QSHE management system
focused on people, sites and their equipment and processes.
The aim here is to harmonize the different regional and local
approaches, requirements and features within one global
QSHE system.
In 2022, the company internally issued a global QSHE manual
that combines its guidelines setting out company-wide
minimum standards. The content has since been gradually
revised in detail or newly prepared.
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One important element of the QSHE management system at
Brenntag is its participation in the international Responsible
Care/Responsible Distribution (RC/RD) initiative of the Inter-
national Chemical Trade Association (ICTA). Regardless of
legal requirements, the initiative wishes to ensure that mem-
ber companies continuously improve their environmental,
health, safety and security performance and report openly on
their progress on a regular basis. Brenntag companies with
operating sites or with direct sales contact to customers are
to participate if national associations offer a corresponding
program
1)
. Of a total of 87 relevant companies, 85 companies
participated in an RC/RD program. Brenntag thus achieved
a participation rate of 98% in 2022.
Safe facilities and processes are essential to safe operations.
Brenntag has therefore established process safety manage-
ment (PSM) programs at all sites worldwide that work with
chemicals as bulk goods, i.e. unpackaged. In an initial step in
2021, the sites conducted a self-assessment using a ques-
tionnaire based on internationally recognized standards.
From this, some sites identified necessary improvements,
which they implemented in 2022. Within the QSHE organiza-
tion, Brenntag has also built up an international team of PSM
experts that supports the sites and carries out PSM assess-
ments. Using a risk-based approach, it has developed a struc-
tured system under which all sites concerned undergo a PSM
assessment at least once every three years. Forty-six assess-
ments have already been carried out since the launch in 2021.
To ensure quality, Brenntag aims for all operating sites to be
certified to ISO 9001. Where useful and necessary, the com-
pany has supplemented or replaced this with further product-
or industry-related quality management systems
2)
. At the end
of 2022, 356 of Brenntag’s 364 relevant sites worldwide were
certified accordingly. This corresponds to a rate of 98%.
Monitoring & Controlling
Brenntag has established an extensive monitoring and con-
trolling system in order to continuously improve its safety
measures. In the reporting period, the company put into
operation a new central reporting platform that collates
information from the regional systems. This will replace the
previous system as of January 2023. The Brenntag compa-
nies report on accidents and incidents in accordance with
the Brenntag Global Standard Reporting Criteria. Brenntag
also relies strongly on monitoring and controlling as a pre-
ventive tool, such as in the case of near misses and in the
form of safety inspections and certifications.
In light of the increased expectations that Brenntag places
on the organizations in terms of QSHE and in particular PSM,
steps were taken to investigate whether the necessary re-
sources are available in all regions and countries. In some
regions, this is leading to appropriate changes.
Brenntag made clear progress on occupational safety in the
reporting period. The TRIR
3)
(Total Recordable Injury Rate)
decreased from 3.1 in the previous year to 2.7 in the reporting
period. Despite the improvement in the accident rate, there
were unfortunately two fatal traffic accidents involving
Brenntag drivers in the USA and one fatal accident involving
a driver of a contracted transport company at a site in Mexico.
As a result of accidents, two Brenntag employees also suf-
fered injuries from which they may not fully recover.
All spillages in excess of 200 liters of products that have been
assigned a hazard category in accordance with the interna-
tional GHS classification system are included in Brenntag’s
spillage rate. In 2022, this stood at 0.83 spillages per million
man-hours. We therefore met our target of no more than 0.85.
The majority of the incidents involved spillages of less than
1,000 liters. With the exception of a partial quantity of around
50 liters of hydrochloric acid, all spillages were collected by
the internal retention systems in place.
1)
RC/RD self-assessments can be used if an RC/RD program does not exist in
the country.
2)
Management systems that Brenntag recognizes as substitutes for ISO 9001
include: ISO 13485; ISO 22000; AS 9100; ISO/TS 16949; ISO 45001; GFSI
Systems; GMP/GDP/GMP+; FEMAS/FAMIQS; NACD Responsible Distribution.
3)
Number of injured people who receive medical treatment beyond first aid per
one million work hours.
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Working conditions and social security benefits
Remuneration and social security benefits
Through their expertise and dedication, Brenntag’s employ-
ees make a decisive contribution to the company’s success.
For this reason, the company wishes to attract the best staff
and offer them an attractive, safe and inspiring environment.
The primary objective of Brenntag’s human resources strat-
egy is for it to be regarded worldwide as the preferred
employer in chemical distribution. By offering flexible work
structures and career opportunities, the company aims to be
attractive to young talent and highly qualified staff and also
to enable the Group to retain high-performing team members
in particular over the long term. Brenntag therefore encour-
ages its employees to take responsibility and actively bring
their expertise and experience to the business.
For the management level, Brenntag has introduced a per-
formance-related remuneration system. This consists of three
components: a fixed annual base salary, a short-term vari-
able annual bonus and long-term variable remuneration. The
variable remuneration is closely linked to personal perfor-
mance, the achievement of targets for predefined perfor-
mance indicators and the company’s results. In addition to
the above-mentioned remuneration components, managers
receive contractually agreed benefits in kind and other ben-
efits. Depending on the country, benefits in kind may include
payment of relocation costs, a company car or insurance,
such as health insurance in the USA. Other benefits include
rent allowances or travel allowances, for example.
Pension provision is an important part of Brenntag’s remuner-
ation structure. The pension benefits differ according to the
legal, tax and economic environment in the country in ques-
tion and depend on the number of years of service and the
pay grade of the respective employee.
In addition, Brenntag’s aim by the end of 2023 is to implement
an adopted living wage policy that specifies that the salaries
of all Brenntag employees meet living wage standards. In
some countries in which the company operates, the statutory
minimum wages are less than an adequate income. As an
initial step, a gap analysis was launched together with exter-
nal service providers in the reporting period with a view to
determining where at Brenntag there are employees whose
salaries do not meet living wage standards. In 2023, Brenntag
plans to make appropriate salary adjustments to close the
gaps brought to light by the analysis.
Accidental spillages of products, energy and such like from
process facilities are termed process safety events (PSE). In
2022, there were 11 PSE1
1)
(higher-category events with con-
sequences such as injuries that lead to absence, exceeded
threshold quantities or evacuation in the surrounding area).
Brenntag was therefore well within its target of 15 for the year
as a whole.
Brenntag works continuously to increase occupational safety
and protect the health of its workforce as well as the work-
force of contractors, customers and transport companies.
The Brenntag Global QSHE Policy
The Brenntag Global QSHE Policy outlines the
company’s goals and standards in relation to QSHE.
Under this policy, it upholds the highest standards
with regard to quality, health, safety and environ-
mental management in all its activities. At all times,
Brenntag strives for process safety, occupational
health and safety, customer satisfaction, respect
for the environment and continuous improvement.
The company undertakes to provide the resources
required for this. Employees share the company’s
ethics and values, maintain exemplary behavior
and take part in relevant safety training. The
Brenntag Global QSHE Policy applies to all business
activities at all levels of the company hierarchy.
1)
PSE classification is made based on the definitions of the CCPS (Center for
Chemical Process Safety).
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Global framework ‘New Work’
Throughout the Group, Brenntag is placing greater emphasis
on agile and flexible working. The company actively seeks
opportunities to make working at Brenntag more flexible
around the globe. During the COVID-19 pandemic, it gained
experience of different mobile working models, on which the
company can now build.
In close cooperation with the regional and local human
resources departments at the international sites, Global HR
began to develop a framework for new work under the title
‘New Work – Towards Greater Flex’. This includes the guiding
principles for creating a more flexible work environment in all
Brenntag regions, business units and functions, bearing in
mind local differences. In the reporting period, Global HR
completed the global framework in coordination with the
regional and local human resources departments.
Various countries have already entered into works agree-
ments on flexible working. In Germany, for example, the
provisions stipulate that Brenntag employees are entitled to
three days’ mobile working a week, provided this is compati-
ble with their job profile.
Through all the measures to make working conditions at
Brenntag as safe and fair as possible, the company also
wishes to keep employee turnover at a low level. This key
indicator is determined centrally for each Brenntag company
on a quarterly basis and reported to Global HR. Due to regional
and country-specific differences, the figures are analyzed at
local level. In the event of atypical deviations, the causes are
identified, and suitable measures are considered as needed.
In the reporting period, voluntary employee turnover across
the Brenntag Group was 9.4%.
Voluntary turnover rate
1)
according to region
2022 2021 2020
abs. in % abs. in % abs. in %
EMEA
678 8.1 591 7.2 353 4.2
North America
624 9.8 628 10.3 418 7.1
Latin America
196 9.2 205 9.6 124 5.6
Asia Pacific
401 12.8 385 12.2 296 9.8
Other segments
25 6.1 45 10.7 21 7.4
Brenntag Group
1,924 9.4 1,854 9.3 1,212 6.1
3.09 Voluntary turnover rate according to region
1)
Voluntary employee resignations on the basis of the Schlüter formula.
Diversity and inclusion
As a company with operations worldwide, Brenntag employs
people from over 100 nations. Diversity is something that
Brenntag practices on a day-to-day basis and encompasses
several aspects, such as employees’ different cultural back-
grounds, qualifications and needs. Through the exchange of
knowledge, ideas and experience, diversity makes a decisive
contribution to Brenntag’s success. The company wishes to
foster this exchange and further increase the diversity of the
workforce so as to create a cosmopolitan work culture and a
dynamic work environment where all employees can learn
from one another. In EMEA, Brenntag has also established
Employee Resource Groups (ERGs). Led by employees, these
groups aim to promote a diverse and integrative workplace.
One of these groups is an ERG of women in France that was
set up in the reporting period.
Brenntag promotes diversity at all levels of the company. The
aim by 2030 is to increase the percentage of women at all
levels of management below the Group Board of Manage-
ment to at least 30%. In addition, work is currently under way
on a new diversity management structure, including increases
in capacity in global DEI
2)
, with a view to better promoting
diversity and inclusion across the workforce going forward.
On its Career pages too, the company makes it clear that
Brenntag sees diversity as a strength: Employees work to-
gether in multinational, interdisciplinary teams where people
with different cultural backgrounds, qualifications, experi-
ence and talents contribute to Brenntag’s success. In every
job advertisement, the company points out that Brenntag
offers a fair, respectful and supportive work culture where all
employees are able to develop and grow in line with their
individual needs and skills.
2)
DEI stands for diversity, equity and inclusion.
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Employees in leadership positions according
to management level
1)
and gender
2022 2021 2020
abs. in % abs. in % abs. in %
Level L-1
44 1.4 35 1.2
Women
10 22.7 7 20.0
Men
34 77.3 28 80.0
Level L-2
207 6.9 180 6.3
Women
63 30.4 46 25.6
Men
144 69.6 134 74.4
Level L-3
503 16.7 466 16.4
Women
181 36.0 178 38.2
Men
322 64.0 288 61.8
Level L-4
942 31.2 883 31.0
Women
351 37.3 318 36.0
Men
591 62.7 565 64.0
Level L-5+
1,320 43.8 1,284 45.1
Women
329 24.9 334 26.0
Men
991 75.1 950 74.0
Brenntag Group
3,016 100.0 2,848 100.0 362 100.0
Women
934 31.0 883 31.0 76 21.0
Men
2,082 69.0 1,965 69.0 286 79.0
3.10 Employees in leadership positions
according to management level and gender
1)
Due to the increased target female quota of 30% across all management
levels by 2030, employees in leadership positions are shown according to
management level as of 2021. Management level L-1 refers to the first level
below the Brenntag SE Board of Management, L-2 refers to the second level,
etc. L-5+ refers to the fifth and all other levels.
Through the diversity policy for the Board of Management, the
company wishes to continuously increase diversity on the
Board of Management of Brenntag SE so as to ensure tar-
geted management development in the area of diversity and
successful long-term succession planning bearing in mind
age, gender, education, professional background and inter-
national experience. Under the policy, the age limit for Board
of Management members is 65 years of age. By January 31,
2026, female representation should be at least 20% – an aim
which Brenntag already fulfills. Members should bring as
diverse a range of career paths and experience as possible
(please also see the Corporate Governance Statement).
Brenntag also wishes to strengthen diversity on the Supervi-
sory Board. The diversity policy for Brenntag’s Supervisory
Board likewise stipulates a line-up that is as diverse as pos-
sible in terms of the age, gender, education, career path and
international experience of the members. Among other things,
the policy stipulates that at least a third of the seats should
be filled by women by January 31, 2026 – a stipulation which
Brenntag already fulfills. Moreover, the Supervisory Board has
a female chair in Doreen Nowotne. No member should remain
in post beyond the close of the general shareholders’ meeting
following the member’s 70th birthday.
Advancement of women at Brenntag
Brenntag has undertaken to ensure gender diversity
worldwide throughout the company. It has initiated
various mentoring and coaching programs with a
view to providing women at Brenntag with targeted
support to promote their professional development.
‘Women at Brenntag’ is a six-month coaching
program with external coaches that is open to all
women at Brenntag who have been working for the
company for at least two years. In group and
individual coaching sessions, they learn strategies
that help them in their professional development.
The program takes place once a year. Women
at all career levels can apply, provided their line
managers approve their application to the
program. In 2022, there were 174 participants.
‘Inspire and Grow’ is an internal mentoring program
with mentors from the Global Leadership Team or
senior management level at Brenntag. The aim
of the program is to actively nurture outstanding
female talent. Managers can suggest suitable
employees for the program.
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In order to better meet the changing conditions and require-
ments in day-to-day professional and private life and support
people with different family backgrounds, Brenntag is pro-
moting a new, flexible way of working (see ‘New Work’ in the
section on working conditions and social security benefits).
When it comes to inclusion, the company attaches particular
importance to offering all employees and applicants equal
opportunities. Brenntag nurtures the strengths and potential
of disabled people and optimally integrates their skills so as
to create an atmosphere that puts people with and without
disabilities on a level playing field. Since 2020, Brenntag has
been a member of the Valuable 500 initiative. This brings
together the leaders of 500 international companies who
have undertaken to put disability inclusion on their manage-
ment agenda.
People development and training
Brenntag wishes to develop its employees according to their
talents and qualifications. Across all levels of the company
and at all sites, it establishes a culture of learning and gives
employees numerous opportunities to develop professionally
and personally. This enables Brenntag to achieve excellence
in all areas of the business. The individual and continuous
support given to our employees accords with Brenntag’s
corporate values (see Values, page 101). In this context, the
company places emphasis on dynamic development mea-
sures and a feedback culture at all levels that is also part
of the training programs. Brenntag offers several learning
programs aimed at different target groups.
Connecting Potential
This six-month program is aimed at employees at the start of
their career who could take on leadership roles at Brenntag
in the future. In 2022, 44 employees took part in the program.
Leading with Impact
This program is tailored to employees with some initial
leadership experience who are rising through the Group ranks.
In 2022, 21 employees took part in the program.
New Leader Transition
In 2022, 50 employees worldwide took part in this six-month
coaching program for prospective managers.
Women at Brenntag
This six-month coaching program for women recorded 174
participants in the reporting period.
Inspire and Grow
Forty-eight employees took part in this mentoring program
specifically for women in the reporting period.
Other options such as language courses, online learning,
coaching based on individual needs and mandatory training
such as compliance training are aimed at employees at all
levels of the hierarchy. Brenntag has also established a reg-
ular Global Learning Time newsletter to flag up specific con-
tent on the company’s own learning platform and foster the
culture of learning within the company. Through all these
training and development options, Brenntag wishes to train
and upskill its employees in a targeted manner so that they
can successfully master current challenges and future roles.
The reporting period was another year shaped by the
COVID-19 pandemic, which had a severe adverse effect on
the planning and delivery of education and employee devel-
opment programs. Brenntag was flexible in its response:
Within a short time, the company was also offering most of
its events as a virtual format. In doing so, Brenntag was able
to build on its already-extensive online learning range and
thus further enhance it.
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Responsible partner
Supply chain and human rights
As the global market leader in chemical and ingredients dis-
tribution, Brenntag takes its responsibility to uphold human
rights very seriously. The company undertakes to respect and
defend human rights worldwide within its supply chains.
These are among Brenntag’s top principles. Brenntag is a
member of the UN Global Compact and committed to its ten
principles for human rights, labor standards, fair remunera-
tion, environmental protection and fighting corruption. World-
wide, the company works to ensure fair working relationships
and, as described in the ESG strategy, acts as a responsible
partner to suppliers.
In order to meet this aspiration, Brenntag has implemented
numerous measures developed centrally by various depart-
ments such as Sustainability and Compliance Brenntag
Group. Employees can report human rights violations via the
whistleblowing system. External third parties can also use this
system. In the reporting period, Brenntag did not receive any
reports of human rights violations within the company.
Brenntag minimizes the risk of human rights violations in its
complex supply chains by communicating its expectations to
suppliers from the outset. In its Supplier Code of Conduct,
Brenntag requests that they actively work to protect human
rights within their organization.
Since 2016, Brenntag has been a member of the industry’s
Together for Sustainability (TfS) initiative. One core element
of the joint work within TfS involves audits or online assess-
ments of companies in the chemical industry, for example.
The task here is always to create and leverage synergies.
The central idea behind the audits and assessments is that a
supplier assessment can be used by all member companies,
thereby reducing the cost and effort for suppliers. Here,
Brenntag works together with EcoVadis, a leading provider of
sustainability assessments that is well established in the
chemical industry. EcoVadis evaluates companies in terms of
four categories: environment, labor and human rights, ethics
and sustainable procurement. In doing so, it scores the com-
panies’ sustainability performance on a scale from 0 to 100.
In addition, each company receives a detailed overview of
strengths and weaknesses as well as specific suggestions for
improvement.
Measured by its total chemical spend (in EUR), Brenntag
covered around 75% (2021: 75%) through such sustainability
assessments or audits in the reporting period. On a particu-
larly encouraging note, the company continues to see its
suppliers making considerable advances in improving their
sustainability performance. By the end of 2022, for example,
it appeared that 69% of suppliers who underwent re-assess-
ment had improved their score compared with the previous
year. This figure is particularly high in the group of suppliers
that had a relatively low score of under 45 in the previous year.
As many as 73% of suppliers that underwent re-assessment
in 2022 managed to improve their score by at least one point
compared with the previous assessment.
Share of total chemical spend
in EUR (in %)
3.8%
previous year: 4.8
25.3%
previous year: 24.7
70.9%
previous year: 70.6
no score
score 1–44 score 45–100
Share of total chemical spend in EUR (in %)
3.11 Share of total chemical spend in EUR (in %)
Of course, Brenntag itself also undergoes an EcoVadis as-
sessment on a regular basis. In the most recent assessment
published in December 2022, the company improved on its
previous score and achieved 77 points, the highest result in
the company’s history. Brenntag was awarded the EcoVadis
platinum medal for this result and thus ranks among the top
1% of all companies rated by EcoVadis. On sustainable pro-
curement, the company scores a particularly high 90 out of a
possible total of 100 points and is rated as outstanding.
Brenntag obtains a more detailed picture of sustainability
performance by performing on-site supplier sustainability
audits. In this case, the audits are based on a catalog of
requirements developed by TfS and cover sustainability
management, the environment, health and safety, employee
and human rights, and corporate governance. The results of
all audits are shared within TfS. Like the other TfS members,
Brenntag also accepts sustainability audits conducted in
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accordance with SQAS (Safety and Quality Assessment
System), SMETA (Sedex Members Ethical Trade Audit) and
PSCI (Pharmaceutical Supply Chain Initiative) standards.
Brenntag reviews its suppliers’ audit results. If necessary, it
agrees on corrective measures with the supplier and the
auditor and follows up on their implementation.
In 2022, in preparation for the specific requirements of the
German Supply Chain Due Diligence Act, Brenntag started to
further develop its risk assessment regarding human rights
violations and environmental risks for all suppliers. In addition
to existing EcoVadis assessments or TfS audits, this will be
based on an innovative IT solution that works both with pub-
licly accessible information (via media, for example) and with
artificial intelligence. The company has also appointed a
human rights officer, who will monitor risk management,
review the effectiveness of preventive and corrective actions,
and regularly inform management about potential incidents
in future. In the reporting period, 100% of relevant Brenntag
suppliers
1)
underwent the initial risk assessment process. In
addition, the company will continue working to also train its
suppliers with a greater focus on sustainability issues, to
which end it will make greater use of the TfS Academy or
e-learning resources, for example.
Brenntag is continuously developing measures to further
reduce potential risks within global supply chains. Going for-
ward, the company will continue to constantly expand its
commitment to respecting human rights across worldwide
supply chains. Not least of all, Brenntag aims to have all
suppliers covered by risk management.
How Brenntag is implementing the Supply
Chain Due Diligence Act
The German Supply Chain Due Diligence Act requires
certain German companies to fulfill human rights
and environmental due diligence obligations within
their supply chain. Brenntag is required to apply this
act from 2024. Given that there are several thousand
suppliers and various Group companies, this pres-
ents an enormous challenge, which Brenntag is fully
committed to meeting. The act requires companies
to create maximum transparency in the supply chain
and their own area of business, carry out risk analyses
and implement actions to prevent potential breaches
of due diligence obligations. In 2022, Brenntag
set up an interdisciplinary team of experts from
the fields of QSHE, sustainability, compliance, legal
and procurement, which deals explicitly with
implementing the requirements.
1)
Brenntag defines this as suppliers with a chemical spend of more than
EUR 1 million in a 12-month period.
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Together for Sustainability (TfS)
Together for Sustainability is a chemical industry initia-
tive. It wishes to make the sector more sustainable by
gradually establishing a uniform global program for the
responsible procurement of goods and services in the
chemical industry. The aim of TfS is to increase trans-
parency over sustainability in the supply chain and im-
prove environmental and social standards worldwide.
TfS was established in 2011 and currently has 40 mem-
bers. In 2022, the member companies generated
combined revenues of over EUR 600 billion. The mem-
bers regularly evaluate and review their suppliers by
means of a standardized process using assessments
and audits. This information is shared confidentially
and used jointly within the network, which provides
efficiency benefits for every member and creates
more transparency.
TfS also develops standards and guidelines for the
industry, including the Product Carbon Footprint (PCF)
Guideline (see Environment, page 120). This assists
manufacturers and suppliers in determining the envi-
ronmental footprint of their products. Brenntag was
involved in developing the Guideline. In addition, tai-
lored learning and development courses are offered
through the TfS Academy in order to train TfS member
companies’ procurement teams and their suppliers in
sustainability matters.
Through its involvement at TfS, Brenntag actively helps
to make the chemical industry more sustainable. The
interaction at workshops, the sharing of members’ best
practices and the synergies from the EcoVadis assess-
ments and audits help the company to promote sustain-
ability across the board and worldwide.
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115Annual Report 2022 Brenntag SE
115 Environment
116 Climate protection and reduction of emissions
116 Climate protection strategy and
CO
2
management
117 Energy and Scope 1 and 2 emissions
119 Scope 3 emissions
120 Scope 3 emissions Brenntag Group
121 Resource efficiency and circular economy
121 Critical materials and palm oil
121 Waste
121 Circular economy and recycling
122 Water
122 EU Taxonomy
Non-financial Report
Environment
115
132
Environment
Climate protection and reduction
of emissions
Climate protection strategy and CO
management
Brenntag always acts in accordance with the “Safety First”
principle – including when it comes to protecting the environ-
ment and climate. Numerous environmental protection and
efficiency measures are implemented at the company’s sites
worldwide in the context of local and regional conditions
and legislative requirements. The focus here is on energy and
water consumption, the protection of soil, water and air,
waste reduction, and transport and fleet management.
Climate protection plays a particularly important role in
Brenntag’s ESG strategy. The CEO of the Brenntag Group is
responsible for sustainability and therefore for climate pro-
tection. Sustainability Brenntag Group reports directly to him.
This department has functional management responsibility
for all climate protection-related matters. As a result, the CEO
is responsible, among other things, for developing CO reduc-
tion targets, monitoring target achievement, driving forward
measures to achieve targets and promoting climate-related
issues in different areas of the company. The Vice President
Sustainability Brenntag Group is involved in all important in-
vestment decisions as well as decisions regarding mergers
and acquisitions so that he can also ensure alignment with
our climate protection strategy in these areas.
For Scope 1 and 2 greenhouse gas emissions, i.e. those gen-
erated by its own activities, the company has set several tar-
gets: We want to reduce our Scope 1 and Scope 2 emissions
by 40% in absolute terms between the 2020 base year and
2030
1)
, and over the long term to be net zero in accordance
with the Paris Agreement
2)
by 2045, so that we contribute to
the 1.5°C target. We also want to procure 100% of our elec-
tricity from renewable sources
3)
by 2025. In order to achieve
the net-zero target, Brenntag intends to gradually replace
company cars and forklifts with low-carbon alternatives, sub-
stitute heating systems with sustainable alternatives such
as heat pumps, and switch the entire truck fleet over to
carbon-free transport (such as electric trucks), for example.
By doing so, we also aim to offset 100% of unavoidable
emissions from 2025 onwards.
With regard to Scope 3 emissions, which include all other
indirect emissions generated in a company’s value chain,
Brenntag wants to work together with its suppliers and data
service providers to create a better data set. On this basis, we
want to reduce Scope 3 emissions through portfolio steering,
for example. A Scope 3 target has not yet been set.
In 2022, Brenntag committed to the Science Based Targets
initiative (SBTi) that it would set science-based targets within
two years. The SBTi is a joint climate protection initiative
between WRI, CDP, WWF and the UN Global Compact. It helps
companies to set science-based climate targets. Brenntag
had already expressed its commitment to climate protection
and contributed to raising awareness of this issue among all
employees by joining the RE100 initiative back in summer
2021. RE100 provides a global guideline where businesses
pledge to source 100% renewable electricity over the medium
term.
1)
Reduction with respect to the sites already included in the 2020 base year.
New sites will be tracked separately.
2)
The Paris Agreement is a legally binding international treaty on climate
change. It was adopted by 196 parties at COP 21 in Paris on December 12,
2015 and entered into force on November 4, 2016. Its goal is to limit global
warming to well below 2, preferably to 1.5 degrees Celsius, compared with
pre-industrial levels.
3)
Electricity from renewable sources which we procure through direct supply
contracts, by purchasing guarantees of origin and by generating it on site.
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ENVIRONMENT
Scope 1, 2 and 3: direct and indirect
emissions
The Greenhouse Gas Protocol, which establishes
global greenhouse gas accounting standards,
distinguishes between direct and indirect emissions:
Scope 1 emissions are all direct emissions from
sources that are owned or controlled by a company
itself, e.g. emissions from fuels and coolants at the
company’s own site or from the company’s own
vehicle fleet.
Scope 2 emissions are indirect emissions from the
generation of purchased energy, e.g. electricity or
district heating from an energy provider.
Scope 3 emissions include all other indirect emissions
produced in upstream and downstream supply
chains, e.g. through the purchase and sale of goods
and services, employee mobility, and the processing
and use of sold products.
Energy and Scope 1 and 2 emissions
Brenntag established Group-wide energy reporting back
in 2016. Information on the sites’ energy consumption is
collected on a quarterly basis. The Brenntag sustainability
team centrally consolidates the data, evaluates them and
calculates the associated direct and indirect greenhouse gas
emissions.
To increase transparency over Scope 2 emissions, Brenntag
has calculated these emissions using the market-based
method in addition to the location-based method since 2020.
Both values are shown in this report (see table COe emissions
Brenntag Group). Using the market-based method enables
the company-specific consumption of energy from renew-
able sources to be presented in a more transparent manner.
The following information only relates to the values calcu-
lated using the market-based method.
Brenntag’s target for 2022, derived from the linear reduction
path toward net zero in 2045, was to reduce our total Scope1
and 2 emissions by at least 8.4% compared with the 2020
base year
1)
. This target was achieved with -9.2%. Excluding
acquisitions recognized from 2021, the reduction is 14.2%.
1)
Reduction with respect to the sites already included in the 2020 base year.
New sites will be tracked separately.
SCOPE 2
(indirect emissions)
purchased
electricity,
steam,
heating and cooling
for own use
purchased goods
and services, fuel and
energy-related emissions,
transportation and
distribution – upstream
SCOPE 3
(other indirect emissions)
transportation
and distribution –
downstream
SCOPE 3
(other indirect emissions)
downstream activities
company facilities,
company vehicles
SCOPE 1
(direct emissions)
CO
2
e
CO
2
upstream activities
3.12 Scope
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ENVIRONMENT
Energy consumption Brenntag Group
2022 2021
Base year:
2020
Electricity (in MWh)
150,010 142,272 139,928
thereof electricity from
renewable sources,
which we procure
through direct supply
contracts and purchasing
guarantees of origin 122,101 39,328 21,216
thereof electricity from
renewable sources we
generate on site 1,455 337 285
District heating (in MWh)
10,007 5,295 4,317
Natural gas (in MWh)
328,280 272,076 282,180
Diesel (in 1,000 liters)
49,302 46,777 48,638
Diesel (in MWh)
525,464 498,549 518,384
Petrol (in 1,000 liters)
4,947 4,518 4,686
Petrol (in MWh)
47,918 43,761 45,389
Other
2)
(in 1,000 liters)
3,696 3,785 3,850
Other
2)
(in MWh)
31,119 32,180 32,706
3.13 Energy consumption Brenntag Group
Note about calculation of CO
2
e emissions:
The CO
2
e emissions for electricity were calculated for both the location-based
and the market-based method using the respective country-specific factors
according to IEA (2020) for the base year 2020, according to IEA (2021) for the
year 2021 and according to IEA (2022) for the year 2022. If the specific emission
factor of the purchased electricity (e.g. of the energy producer) was available, the
factor has been applied in the market-based method instead of the country-
specific factor. For district heating, the calculation was carried out in both years
using the factor according to UBA (2018) and for all other energy types with the
respective energy-specific factors according to UK Government GHG Conversion
Factors for Company Reporting (2020) for the base year 2020, according to UK
Government GHG Conversion Factors for Company Reporting (2021) for the year
2021 and according to UK Government GHG Conversion Factors for Company
Reporting (2022) for the year 2022. Since not all energy consumption could be
reported at the time of the audit, extrapolations were made. This leads to an
extrapolated share of COe emissions according to the location-based method
of 1.7% and according to the market-based method of 1.5%.
CO2e emissions Brenntag Group
1)
2022 2021
Base year:
2020
Scope 1
Natural gas (in tonnes)
59,924 49,833 51,884
Diesel (in tonnes)
132,811 125,924 130,016
Petrol (in tonnes)
11,575 10,571 10,847
Other
2)
(in tonnes)
7,371 7,661 7,780
Scope 2
Electricity (in tonnes)
Location-based
47,542 47,122 49,655
Market-based
6,057 32,247 40,795
District heating (in tonnes)
2,162 1,144 933
Scope 1 + 2 (in tonnes)
Location-based
261,385 242,255 251,116
Market-based
219,900 227,380 242,255
Location-based
4.1%
3)
–3.5% –
Market-based
−9.2%
3)
−6.1% –
3.14 CO
2
e emissions Brenntag Group
1)
The data for the reporting year do not include the following operating units:
Y.S. Ashkenazi Agencies Ltd. & Biochem Trading 2011 Ltd. (since Q3);
Brenntag Sourcing Uruguay S. A., Brenntag Packed Chemicals Ltd. (UK),
Prime Surfactants Limited (UK), Prime Example Limited (UK),
Alpha Chemical Limited (since Q3)
2)
Gas oil, heating oil, CNG, LPG.
3)
Compared with the base year
The main contributor to the reduction in Scope 1 and 2 emis-
sions was the company’s continued drive in the reporting
period to switch to electricity from renewable energy sources.
In the reporting year, the share was 82%. Brenntag procures
electricity from renewable sources through direct supply con-
tracts, by purchasing guarantees of origin and by generating
it on site. It is intended to install solar panels at all sites where
it makes sense to do so. In the reporting period, for example,
solar panels were installed and put into operation in Santa Fe
Springs in the USA and Kędzierzyn-Koźle in Poland. These sup-
plement the existing installations on Brenntag warehouses
and offices in places such as Padua (Italy), Singapore and
Gurugram (India).
To make the efforts to reduce greenhouse gases as efficient
as possible, Brenntag introduced an internal carbon man-
agement program in 2022 (see info box on the next page),
where an internal price is placed on all Scope 1 and 2 emis-
sions produced. In the reporting period, 16 sites worldwide
applied for internal funding from the resulting central budget
by submitting project ideas for cutting the greenhouse gas
emissions they produce. The projects put forward range from
purchasing electric company cars and trucks plus charging
stations to replacing gas heating systems with heat pumps
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and installing solar panels. One site is even aiming to com-
plete the switch to being a zero-emissions site in the next few
years. In the reporting period, Brenntag determines who is
awarded the support on the basis of factors such as the proj-
ects’ potential emissions savings and innovative spirit as well
as the opportunity to gain experience and foster cultural
change. Overall, the program has met with a very positive
response both within the company and from customers.
In addition, Brenntag has started to offset emissions and, in
an initial step, offset 26% of unavoidable or unreducible
Scope 1 and 2 emissions in 2022 through high-quality proj-
ects. This percentage is to be gradually increased each year
to offset 100% of the remaining Scope 1 and 2 emissions by
2025. For the reporting period, Brenntag selected three very
different projects covering a broad range of sustainability
targets: producing green energy in Indonesia, protecting bio-
diversity in Brazil and supplying the population with clean
drinking water in Uganda.
The Ulubelu geothermal power plant in South Sumatra is
expected to produce 867,000 MWh of renewable energy a
year while at the same time saving around 581,000 t of COe.
As part of the Evergreen REDD+ forest conservation project,
Brenntag is contributing to the preservation of the Brazilian
rain forest, one of the most species-rich biotopes on earth.
The drinking water project in Uganda not only serves the
health of over a million people; it also improves their standard
of living, reduces greenhouse gases and protects forests by
dispensing with the need for firewood to boil drinking water.
All three offset projects take place in countries where
Brenntag itself has sites, and meet the highest standards
of quality (Verified Carbon Standard (VCS) and certified
emission reduction (CER)).
Carbon management program
The carbon management program is an innovative
incentive system for climate protection measures
with an internal COe price: Each Brenntag com-
pany is held accountable for the emissions it causes
through a set internal price for the emissions. In the
initial phase in 2022, the amount generated under
this system was paid virtually into an internal
climate protection fund, providing a budget. Each
company or site can apply for the budget thus pro-
vided by submitting greenhouse-gas-saving pro-
jects. Brenntag is relying on the inventiveness of its
employees to propose innovative projects that best
fit the local conditions. At the end of each year, the
emissions caused will be compared against the
Brenntag Group’s desired emissions reduction path
toward net zero. If the target is not attained, the
COe price will be increased for the following year.
This creates a stronger incentive to reduce emis-
sions while simultaneously increasing the budget to
fund projects. Responsibility for setting the internal
price and selecting the projects that are to receive
support lies with the Sustainability Council.
Scope 3 emissions
To create more transparency over environmental impacts
in our value chain, Brenntag has also included Scope 3
emissions in its reporting since 2020. Scope 3.1, i.e. emis-
sions from our purchased chemicals, was identified as the
main Scope 3 emission source and accounts for approxi-
mately 97% of total calculated emissions
1)
. The decrease
compared with the previous year is mainly due to a reduced
purchasing volume. Emissions resulting from outbound
transport carried out by external companies (categories 3.4
and 3.9) increased compared with the previous year due to
the updated emission factor.
In 2022, Brenntag worked intensively to further improve the
quality of the data. In particular, we look at transportation by
external companies and the products purchased by Brenntag.
It is currently being examined whether this transportation
can also be covered by the carbon management program
in future.
1)
Scope 1 and 2 emissions (market-based method) and emissions in the
following Scope 3 categories: 3.1, 3.3, 3.4, 3.9.
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With regard to products, Brenntag relies on the calculation of
the product carbon footprint (PCF) based on primary data. In
this case, all the data required from suppliers are not yet
available. In order to capture data on our Scope 3 emissions
that are as precise as possible, we work together with spe-
cialist providers such as Carbon Minds. This collaboration
also helps Brenntag to provide customers with information on
the carbon footprint of its products. Through this service, we
assist them in achieving their own climate goals.
Scope 3 emissions Brenntag Group
Scope 3 category according to
Greenhouse Gas Protocol
1)
2022 (tCO
2
e) 2021 (tCO
2
e) 2020 (tCO
2
e)
3.1 Purchased goods and
services 21,284,553 23,573,360 22,021,336
3.3 Fuel and energy-related
emissions
2)
65,553 55,015 49,750
3.4 Transportation and
distribution (upstream)
151,243 (outgoing transportation)
176,971 (incoming transportation
and direct business)
3)
140,146 (outgoing transportation)
202,821 (incoming transportation
and direct business)
3)
140,359 (outgoing transportation)
162,579 (incoming transportation
and direct business)
3)
3.9 Transportation and
distribution (downstream)
17,407 (outgoing transportation)
159,178 (incoming transportation
and direct business)
3)
13,981 (outgoing transportation)
167,742 (incoming transportation
and direct business)
3)
14,364 (outgoing transportation)
115,502 (incoming transportation
and direct business)
3)
3.15 Scope 3 emissions Brenntag Group
1)
Information on the calculation of Scope 3 emissions is included in the Appendix, page 133).
2)
Not included in Scope 1 or 2.
3)
The values given for incoming transport and direct business have not been audited by PwC.
CDP climate score
After Brenntag improved its CDP climate score by two levels
to level B (Management) in 2021, the company’s goal for 2022
was to at least maintain this score. We did this by achieving
a level B score. Every year, CDP compares more than ten thou-
sand companies worldwide in terms of their strategic
approach to the challenges of climate change and assesses
their climate management system based on a comprehen-
sive catalog of criteria.
Other emissions
Emissions such as NO
x
(nitrogen oxides) and SO
x
(sulfur
oxides) are not relevant to Brenntag as a chemicals distributor.
In order to counter the potential impact of VOC emissions
(volatile organic compounds
1)
from the outset and in accor-
dance with the respective applicable legal framework, rele-
vant VOCs are filtered out of the exhaust air with the help of
activated carbon filters. The use of incinerators and gas dis-
placement when filling containers also helps to prevent VOCs.
Transport and fleet management
To keep the fuel consumption and harmful emissions of the
vehicle fleet to a minimum, Brenntag uses structured trans-
port logistics to avoid unnecessary trips and plans all trips as
efficiently as possible. In regular training courses, Brenntag
drivers receive instruction on matters such as fuel-conscious
driving.
More and more Brenntag companies use telematics systems
in order to optimize the use of their vehicle fleets. They record
vehicle- and trip-related data and thus facilitate safe and
eco-efficient driving.
1)
Organic materials that vaporize into the gas phase at room temperature or
higher temperatures, i.e. are volatile.
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Resource efficiency and
circular economy
Brenntag works continuously to reduce resource consump-
tion and minimize the environmental impacts of its business
activities on the soil, water and air. The company implements
appropriate environmental protection measures at all sites.
Resource efficiency processes such as water and waste are
implemented and measures carried out mainly by the QSHE
department. Product- and service-specific matters such as
critical materials and recycling are handled by the opera-
tional business. The overarching sustainability reporting and
the consolidation of the topics are the responsibility of Sus
-
tainability Brenntag Group.
Critical materials and palm oil
As a chemicals and ingredients distributor with operations
worldwide, Brenntag naturally adheres to the laws and guide-
lines applicable to its products in local and regional markets.
The company also assumes additional responsibility and
does its bit to ensure that its activities and those of its busi-
ness partners do not endanger people or the environment.
Particular attention needs to be paid to products containing
critical materials, including conflict minerals such as tin,
gold or tungsten. Brenntag is also mindful of palm oil and its
cultivation. In its marketing materials, the company provides
information on products containing palm oil and critical
materials. The aim is to offer customers sustainable alterna-
tives to those products, such as RSPO-certified
1)
palm oil.
Waste
The Brenntag sites have established processes for the han-
dling of waste that are appropriate to the nature and scale
of their business. The company maintains constant dialog
with the national umbrella associations of chemical dealers
with a view to further improving its waste management. The
common goal is to reduce the volume of waste in the industry
and increase recycling rates.
Brenntag gives its employees regular training on the handling
of chemical products as well as storage and transportation
to avoid unnecessary waste from the outset and reduce the
volume of waste. The company also introduces various
measures to avoid and reduce waste in countries where legal
requirements for avoiding and separating waste are not yet
implemented to the same extent as they are in the EU. All sites
in the Latin America region, for example, are prompted to sys-
tematically separate waste. In Peru, Brenntag also teaches
its employees and customers about composting.
Circular economy and recycling
Packaging
Brenntag tries to keep packaging to a bare minimum and in
doing so follows the 4R principle: reduce, reuse, recycle, re-
think. The aim is to reduce the number of packages used by
reusing them several times and applying better recycling
methods. To this end, the relevant departments maintain con-
stant dialog with the manufacturers of packaging systems in
order to establish take-back and recycling systems for the
various types of packaging and containers. Leveraging the
expertise of the internal Indirect Procurement department,
Brenntag seeks solutions for reusable packaging. In the EMEA
region, for example, Indirect Procurement has launched the
“Reuse of technical equipment throughout the EMEA region”
initiative. The aim of this initiative is to put equipment dis-
carded at one site to reuse at another site; this includes tanks
and plastic mixers, for example.
The logistics and sales departments are constantly working
to offer more deliveries in large units of quantity to save on
packaging materials. Brenntag has optimized its packaging
cycles: At the sites in EMEA, for example, several hundred
thousand IBCs (intermediate bulk containers) circulate annu-
ally. They are in use for two years on average and are refilled
three times a year. The company also offers customers the
option to return drums so that these can be refilled.
Products
At Brenntag Schweizerhall AG (Switzerland), there is also a
project where distillation equipment is used to treat solvents
to make them reusable. In addition, in the UK, Brenntag is now
testing a system where sites purchase used solvents (mostly
ethanol) from the pharmaceuticals industry in order to put
them to cascade use as excipients in their own processes. The
substance is then processed into cleaning fluid for wind-
screen wipers. Brenntag in EMEA is also making future plans
for exclusive partnerships for circular products made from
organic waste, for example. In addition, the company will con-
tinue to work to increase its resource efficiency and establish
a circular economy. In doing so, Brenntag intends to work
more closely together with suppliers and customers in future.
Further projects worldwide are currently in pilot phases.
1)
RSPO stands for Roundtable on Sustainable Palm Oil. RSPO is a global,
not-for-profit organization that brings together stakeholders from across the
palm oil supply chain to develop and implement global standards for
sustainable palm oil.
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Training
Brenntag delivered a series of training sessions on the circular
economy in the reporting period. In rounds of discussions,
product management and sales in the EMEA region exchange
information and ideas on the subject and seek further solu-
tions together.
Water
Brenntag uses water in many areas of its business operations,
for example to produce solutions, to clean pipe systems and
to cool or heat chemicals and tank facilities. The total amount
of water consumed here depends largely on the nature and
scope of the products handled and services provided. Water
consumption is therefore subject to fluctuations and differs
from site to site.
Brenntag also consumes water in operating the buildings and
plants, for example in sanitary facilities or to clean surfaces,
road tankers and buildings. The used water is treated in
wastewater treatment facilities that purify it in line with
statutory regulations before being returned to the system.
Brenntag obtains water mainly from the public water supply
network. Some sites also use other types of water supply, such
as rainwater or their own wells. Water consumption is not
currently recorded and controlled on a Group-wide basis.
Brenntag aims to minimize water consumption and be
economical with water in all processes. The site in Zarate
(Argentina), for example, captures rainwater, treats it and uses
it for industrial purposes and to extinguish fires at the site.
In addition, Brenntag works together with non-governmental
organizations such as Water for People with a view to imple-
menting further water-saving measures.
In the reporting period, Brenntag prepared a risk analysis in
order to find out which sites could suffer water shortages as
climate change increases.
EU Taxonomy
Art. 8 EU Taxonomy Regulation
By adopting the Action Plan on Financing Sustainable Growth,
the European Union took a decisive step to extend its commit
-
ment to climate protection and sustainable business practice
on the financial markets. One tool in the action plan presented
in March 2018 is the EU Taxonomy Regulation (EU Taxonomy).
This uniform and legally binding classification system sets out
which economic activities are regarded as environmentally
sustainable and how they should be reported. The aim is to
steer financial flows toward green investments. Investors
should thus be able to decide whether they wish to contribute
to the EU’s goals through their investments. All companies that
are required to provide non-financial reporting according to
Section 315b et seq. of the German Commercial Code (HGB)
have been obliged to disclose information on the implemen-
tation of the EU Taxonomy since inancial year 2021.
Against this background, in the following section, Brenntag as
a non-financial parent company presents the proportion of
its consolidated turnover, capital expenditure (Capex) and op-
erating expenditure (Opex) for the 2022 reporting period that
is associated with Taxonomy-eligible and Taxonomy-aligned
economic activities in relation to the first two environmental
objectives (climate change mitigation and climate change
adaptation) pursuant to Art. 8 of the EU Taxonomy Regulation.
Organization of company activities
A project team consisting of Corporate Accounting and
Sustainability Brenntag Group assumed responsibility for
implementing the EU Taxonomy requirements at Brenntag.
The project team analyzed all Taxonomy-eligible economic
activities listed in the Climate Delegated Act with regard to
applicability to Brenntag. The review to determine whether
Taxonomy-eligible economic activities are also Taxonomy-
aligned is carried out and documented in the Group consoli-
dation system by the Accounting department of the respec-
tive Group company. To ensure a uniform approach in
reviewing alignment, the Reporting Guideline EU Taxonomy
2022 is applied at all Brenntag Group companies.
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Key performance indicators
The key performance indicators (KPIs) required to be reported
under the EU Taxonomy include the turnover KPI, the Capex
KPI and the Opex KPI. For the 2022 reporting period, the KPIs
have to be disclosed in relation to Taxonomy-eligible eco-
nomic activities and Taxonomy-aligned economic activities.
As a distributor, Brenntag generates external sales only in the
context of one activity: the sale of chemicals and ingredients.
The review revealed that this economic activity is not covered
by the Climate Delegated Act and is therefore not Taxonomy-
eligible since trade-related activities have not been identi-
fied by the EU as a major source of greenhouse gas emissions.
In providing the service of transporting chemicals and ingre-
dients to customers, Brenntag does not generate external
sales on a standalone basis. As a result, this is not included
in the turnover KPI or reported as a Taxonomy-eligible activity.
The company therefore cannot present any Taxonomy-
eligible economic activities in relation to turnover.
However, Brenntag reports capital and operating expenditure
related to the purchase of output from Taxonomy-eligible
economic activities and individual measures to improve
energy efficiency listed, which are listed in the Climate
Delegated Act, as Taxonomy-eligible. In addition, Taxonomy-
eligible capital and operating expenditure is required to be
presented as Taxonomy-aligned if the technical screening
criteria and minimum requirements regarding human rights,
anti-corruption, taxation and fair competition are met pursu-
ant to the EU Taxonomy Regulation and the Delegated Act.
Taxonomy-eligibility
Brenntag discloses Capex and Opex related to the purchase
of output from Taxonomy-eligible and Taxonomy-aligned
economic activities and individual measures to improve
energy efficiency listed in Annex I of the Climate Delegated
Act (see table 3.16). In detail, on the basis of the overview of
investment requests, the budget planning lists and the con-
solidated reporting on Capex and Opex at Group level,
Brenntag has identified the following purchased outputs and
individual measures that correspond to Taxonomy-eligible
economic activities pursuant to the EU Taxonomy and there-
fore result in Taxonomy-eligible Capex/Opex:
Description of the Brenntag
activity
Corresponding economic
activity in the EU Taxonomy
(Annex I to the Delegated Act)
Motor vehicles
Purchase and leasing of
heavy goods vehicles for
freight transport
6.6. Freight transport services
by road
Purchase, leasing, repair
and maintenance of
industrial trucks
3.6. Manufacture of other
low-carbon technologies
Purchase and leasing of
passenger cars as com-
pany vehicles
6.5. Transport by motorbikes,
passenger cars and light
commercial vehicles
Renewable energy technologies
Purchase, leasing and
maintenance of renewable
energy technologies for
electricity and heat
generation at Brenntag
sites, e.g. solar panels, heat
pumps and wind turbines
7.6 Installation, maintenance
and repair of renewable
energy technologies
Buildings
Construction of new
buildings
7.1. Construction of new
buildings
Acquisition and leasing of
existing buildings
7.7. Acquisition and ownership
of buildings
Installation, maintenance
and repair of energy
efficiency equipment
7.3. Installation, maintenance
and repair of energy
efficiency equipment
Installation and mainte-
nance of charging stations
for electric vehicles
7.4. Installation, maintenance
and repair of charging
stations for electric vehicles
in buildings (and parking
spaces attached
to buildings)
3.16 Taxonomy-eligibility
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Taxonomy-alignment
The review for Taxonomy-alignment consists of multiple steps
that must be followed individually, with the results docu-
mented by the Group companies. In addition to the economic
activity’s substantial contribution to one of the two climate-
related environmental objectives, the criteria on avoiding
significant harm to one or more of the six environmental
objectives, referred to as the ‘do no significant harm’ (DNSH)
criteria, and compliance with the minimum requirements
regarding human rights, anti-corruption, taxation and fair
competition must also be checked. Brenntag considers all of
its Taxonomy-eligible economic activities as purchase of out-
put. Evidence in this regard is required from the supplier to
demonstrate that they are the result of a Taxonomy-aligned
activity. With regard to compliance with the minimum require-
ments, the review must also be carried out for Brenntag SE
without reference to a specific economic activity.
Substantial contribution
In the case of many of the economic activities relevant to
Brenntag under the Climate Delegated Act, the performance
of that activity already represents the substantial contribu-
tion, obviating the need for any further reviews. The installa-
tion of solar panels or heat pumps can be given as an exam-
ple. In the case of other economic activities, including the
‘construction of new buildings’ or the ‘acquisition of existing
buildings’, a more detailed review has to be carried out in
accordance with the regulatory standard.
Avoiding significant harm and compliance with mini-
mum requirements
For each economic activity that makes a substantial contri-
bution to at least one of the environmental objectives, it is
necessary to assess criteria on avoiding significant harm to
one or more of the six environmental objectives as well as
compliance with the minimum requirements. According to the
Final Report on Minimum Safeguards issued by the Platform
on Sustainable Finance in October 2022, the latter relates to
human rights, anti-corruption, taxation and fair competition.
The assessment is carried out by the department responsible
at the respective Group company in cooperation with the sup-
plier of the products purchased or the services received.
Not all criteria for Taxonomy-alignment fulfilled
As regards the purchase of output, no supplier was able to
provide information on and proof of fulfillment of all crite-
ria for Taxonomy-alignment, i.e. substantial contribution,
avoidance of significant harm and compliance with the
minimum requirements. As a result, it was not possible to
substantiate any Taxonomy-aligned Capex and Opex.
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Turnover KPI
Substantial contribution criteria
Code(s) (2)
Absolute turnover (3)
Proportion of turnover (4)
Climate change
mitigation (5)
Climate change
adaption (6)
Water and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Economic activities (1) EUR in % in % in % in % in % in % in %
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
none
Turnover of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
(A.2)
Total (A.1 + A.2)
B. Taxonomy-non-eligible activities
Turnover of Taxonomy-non-eligible activities (b)
19,429,304,770 100.0
Total (A+B)
19,429,304,770
3.17 Turnover KPI
Brenntag therefore reports the following KPIs:
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DNSH criteria
(Does not significantly harm)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-aligned propor-
tion of turnover 2022 (18)
Taxonomy-aligned propor-
tion of turnover 2021 (19)
Category
(enabling activity) (20)
Category
(transitional activity) (21)
Economic activities (1)
Y
/
N
Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N in % in % E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities)
none
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
Total (A.1 + A.2)
B. Taxonomy-non-eligible activities
Turnover of Taxonomy-non-eligible activities (b)
Total (A+B)
Proportion of turnover from products or services associated with
Taxonomy-aligned economic activities – disclosure covering year 2022
3.17 Turnover KPI
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Capex KPI
Substantial contribution criteria
Code(s) (2)
Absolute Capex (3)
Proportion of Capex (4)
Climate change
mitigation (5)
Climate change
adaption (6)
Water and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Economic activities (1) EUR in % in % in % in % in % in % in %
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Capex of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Freight transport services by road
6.6. 3,302,018 0.74
Manufacture of other low-carbon technologies
3.6. 5,747,276 1.28
Transport by motorbikes, passenger cars and light
commercial vehicles 6.5. 7,196,251 1.61
Installation, maintenance and repair of renewable
energy technologies 7.6 1,384,915 0.31
Construction of new buildings
7.1. 3,671,820 0.82
Acquisition and ownership of buildings
7.7. 20,219,765 4.52
Installation, maintenance and repair of energy
efficiency equipment 7.3. 1,854,067 0.41
Capex of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2) 43,376,113 9.69
Total (A.1 + A.2)
43,376,113 9.69
B. Taxonomy-non-eligible activities
Capex of Taxonomy-non-eligible activities (b)
404,259,242 90.31
Total (A+B)
447,635,356
3.18 Capex KPI
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ENVIRONMENT
DNSH criteria
(Does not significantly harm)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-aligned propor-
tion of Capex 2022 (18)
Taxonomy-aligned propor-
tion of Capex 2021 (19)
Category
(enabling activity) (20)
Category
(transitional activity) (21)
Economic activities (1)
Y
/
N
Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N in % in % E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Capex of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities)
Freight transport services by road
Manufacture of other low-carbon technologies
Transport by motorbikes, passenger cars and
light commercial vehicles
Installation, maintenance and repair of
renewable energy technologies
Construction of new buildings
Acquisition and ownership of buildings
Installation, maintenance and repair of
energy efficiency equipment
Capex of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) / / / /
Total (A.1 + A.2)
/ / / /
B. Taxonomy-non-eligible activities
Capex of Taxonomy-non-eligible activities (b)
Total (A+B)
Proportion of Capex from products or services associated with
Taxonomy-aligned economic activities – disclosure covering year 2022
3.18 Capex KPI
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Opex KPI
Substantial contribution criteria
Code(s) (2)
Absolute Opex (3)
Proportion of Opex (4)
Climate change
mitigation (5)
Climate change
adaption (6)
Water and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Economic activities (1) EUR in % in % in % in % in % in % in %
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Opex of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Freight transport services by road
6.6. 2,871,403 1.35
Manufacture of other low-carbon technologies
3.6. 934,296 0.44
Transport by motorbikes, passenger cars and light
commercial vehicles 6.5. 581,784 0.27
Installation, maintenance and repair of energy
efficiency equipment 7.3. 68,176 0.03
Installation, maintenance and repair of charging
stations for electric vehicles in buildings (and parking
spaces attached to buildings) 7.4. 2,425 0.00
Opex of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 4,458,085 2.09
Total (A.1 + A.2)
4,458,085 2.09
B. Taxonomy-non-eligible activities
Opex of Taxonomy-non-eligible activities (b)
208,385,347 97.91
Total (A+B)
212,843,432
3.19 Opex KPI
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ENVIRONMENT
DNSH criteria
(Does not significantly harm)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-aligned propor-
tion of Opex 2022 (18)
Taxonomy-aligned propor-
tion of Opex 2021 (19)
Category
(enabling activity) (20)
Category
(transitional activity) (21)
Economic activities (1)
Y
/
N
Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N Y
/
N in % in % E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
none
Opex of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities)
Freight transport services by road
Manufacture of other low-carbon technologies
Transport by motorbikes, passenger cars and
light commercial vehicles
Installation, maintenance and repair of
energy efficiency equipment
Installation, maintenance and repair of
charging stations for electric vehicles in
buildings (and parking spaces attached
to buildings)
Opex of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) / / / /
Total (A.1 + A.2)
/ / / /
B. Taxonomy-non-eligible activities
Opex of Taxonomy-non-eligible activities (b)
Total (A+B)
Proportion of Opex from products or services associated with
Taxonomy-aligned economic activities – disclosure covering year 2022
3.19 Opex KPI
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ENVIRONMENT
Brenntag does not carry out any nuclear power and gas activities and therefore
does not disclose the specific tables relating to these activities
Accounting policies
Brenntag determines the Taxonomy KPIs in accordance with
the legal requirements, including Annex I to the Art. 8 Dele-
gated Act, and describes its accounting policies in this regard
as follows:
Turnover KPI
The proportion of Taxonomy-eligible economic activities in
the total turnover has been calculated as the part of net turn-
over derived from products and services associated with Tax-
onomy-eligible economic activities (numerator) divided by the
net turnover (denominator). The denominator of the turnover
KPI is based on the company’s consolidated net turnover in
accordance with International Accounting Standard (IAS)
1.82(a), which can be taken from the consolidated financial
statements; see the consolidated income statement on
page2. You can find further details on Brenntag’s accounting
policies for consolidated net turnover on page 204.
With regard to the numerator, Brenntag has not identified any
Taxonomy-eligible activities, as explained above.
Capex KPI
The Capex KPI is defined as Taxonomy-eligible Capex (numer-
ator) divided by total Capex (denominator) as specified in the
EU Taxonomy. Total Capex consists of additions to tangible
and intangible fixed assets during the financial year, before
depreciation, amortization and any remeasurements, includ-
ing those resulting from revaluations and impairments, and
excluding fair value changes.
It includes additions to property, plant and equipment (IAS
16), intangible assets (IAS 38) and right-of-use assets (Inter-
national Financial Reporting Standards, IFRS 16). Additions
resulting from business combinations are also included.
Goodwill is not included in Capex because it is not defined as
an intangible asset in accordance with IAS 38. You can find
further details on the accounting policies with regard to the
company’s Capex on pages 205 to 206.
Brenntag’s total Capex can be derived from the consolidated
financial statements from the statements of changes in prop-
erty, plant and equipment, intangible assets (excluding good-
will) and right-of-use assets (see table 5.49 Property, plant and
equipment, table 5.50 Intangible assets and table 5.53 Right-
of-use assets). It is the sum total of the following transaction
types:
■
Business combinations
■
Other additions
for property, plant and equipment, intangible assets (exclud-
ing goodwill) and right-of-use assets.
With regard to the numerator, the company refers to the
explanations below.
Opex KPI
The Opex KPI is defined as Taxonomy-eligible Opex (numera-
tor) divided by total Opex (denominator).
Total Opex consists of direct uncapitalized costs that relate
to research and development, building renovation measures,
short-term leases, maintenance and repair, remediation and
any other direct expenditures relating to the day-to-day ser-
vicing of assets of property, plant and equipment.
For the Brenntag Group, the following aspects must be taken
into account in this regard:
■
The Brenntag Group does not incur any research and
development expenses.
■
The volume of uncapitalized leases was determined in
accordance with IFRS 16 and includes expenses for
short-term leases, variable leases and low-value leases
(see table 5.54 Lease expenses). Even though variable
leases and low-value leases are not explicitly mentioned
in the Art. 8 Delegated Act, Brenntag has interpreted the
legislation as to include these leases.
■
Maintenance and repair and other direct expenditures
relating to the servicing of assets of property, plant and
equipment were recorded in separate accounts. The
related cost items can be found in the other operating
expenses item in the consolidated income statement
and are part of maintenance and energy costs (see table
5.28 Other operating expenses). This also includes build-
ing renovation measures. As a rule, these are costs for
services and material costs.
■
Expenses for the remediation of environmental damage,
mainly for soil and groundwater for current and former,
owned or leased sites. The related cost items are included
in the other operating expenses item in the consolidated
income statement and are part of miscellaneous operat-
ing expenses (see table 5.28 Other operating expenses).
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ENVIRONMENT
With regard to the numerator, the company refers to the
explanations below.
Explanations on the numerator of the Capex KPI
and the Opex KPI
Since the Brenntag Group has not identified any Taxonomy-
eligible economic activities, the company does not record
Capex/Opex related to assets or processes that are associ-
ated with Taxonomy-eligible economic activities (“category
a” acc. to Sect. 1.1.2.2 of Annex I to the Art. 8 Delegated
Act) in the numerator of the Capex KPI and the Opex KPI.
Furthermore, there are no Capex plans (“category b” acc. to
Sect. 1.1.2.2 of Annex I to the Art. 8 Delegated Act).
Only “category c” Capex and Opex can therefore qualify as
Taxonomy-eligible and potentially Taxonomy-aligned, i.e.
Capex/Opex related to the purchase of output from Taxonomy-
eligible and potentially Taxonomy-aligned economic activi-
ties and individual measures to improve energy efficiency
that are listed in the Climate Delegated Act (Sect. 1.1.2.2. (c)
of Annex I to the Art. 8 Delegated Act). For the allocation of
Capex and Opex, Brenntag identified the relevant purchases
and measures, and then identified the primary related eco-
nomic activity in the Climate Delegated Act. In this way, the
company ensures that no Capex or Opex is included more
than once.
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Appendix
Calculation of Scope 3 emissions
Scope 3.1 Purchased goods and services
The greenhouse gas emissions were calculated for Brenntag’s
main product categories, which account for 76% of its total
chemical spend in tonnes. They were calculated using a com-
bined approach of volume and consumption-based emission
factors from Life Cycle Assessment (LCA) databases, which
were considered to be representative of Brenntag’s respective
product categories. By multiplying them by the volume-
related purchasing data for the product categories taken
from our Global Business Warehouse (GBW) and extrapolat-
ing them to the total spend, it was possible to determine a
value that reflects the total emissions in category 3.1.
Scope 3.3 Fuel- and energy-related emissions
(not included in Scope 1 or 2):
These were calculated using upstream emission factors from
the Department for Business, Energy & Industrial Strategy
(DBEIS) for the relevant energy sources whose consumption
volumes were already recorded as part of the reporting for
Scope 1 and Scope 2 emissions.
Scope 3.4 Transportation and distribution
(upstream and downstream):
All emissions caused by incoming and outgoing transpor-
tation as well as direct business involving external trucks
were calculated. They were calculated using a combined
approach of volume and consumption-based emission fac-
tors from DBEIS, which were correlated with the number of
tonne-kilometers. In addition, the average distance per con-
signment was initially calculated with the material transport
volumes for individual EMEA countries. For the North America
region, it was possible to use the distances per consignment,
on the basis of a ZIP-based geodata distance calculation, for
a portion of the total goods transported. These distances
were multiplied by the respective tonnes of transported goods
and by the corresponding emission factor. The emissions
calculated served in turn as a basis for extrapolating the total
emissions in categories 3.4 and 3.9 using volume-related
transport data taken from our Hyperion Financial Manage-
ment (HFM) system and the GBW for the respective global
regions. Finally, the total emissions calculated were allocated
to categories 3.4 and 3.9 based on the International Com-
mercial Terms (Incoterms).
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APPENDIX
GRI Index
Statement of use Brenntag has reported the information cited in this GRI content index for the period Jan. 1 to Dec. 31, 2022 with
reference to the GRI Standards.
GRI 1 used GRI 1: Foundation 2021
GRI standard and description References Comments and online resources
Universal Standards
GRI 2: General Disclosures 2021
The organization and its reporting practices
2-1 Organizational details NfR, p. 95 Brenntag SE,
Messeallee 11,
45131 Essen
2-2 Entities included in the organization’s
sustainability reporting
Consolidated Financial
Statements, p. 197
2-3 Reporting period, frequency of reporting
and contact point
NfR, p. 93 2022, annual reporting,
Brenntag SE
Sustainability Brenntag Group
Nadine Kolter
Phone +49 (0) 201 6496 1569
sustainability@brenntag.de
2-4 Restatements of information NfR, p. 92–94
2-5 External assurance NfR, pp. 92, 143–144
Activities and workers
2-6 Activities, value chain and other relevant
business relationships
NfR, p. 95
Management Report, p. 147
www.brenntag.com
2-7 Employees NfR, p. 110
Management Report, p. 167
Employees | Brenntag
2-8 Workers who are not employees
Employees | Brenntag
Governance
2-9 Governance structure and composition Report of the Supervisory
Board, p. 18
Corporate Governance
Statement, p. 32
To our Shareholders, p. 9
2-10 Nomination and selection of the highest
governance body
Corporate Governance
Statement, p. 32
2-11 Chair of the highest governance body Corporate Governance
Statement, p. 32
2-12 Role of the highest governance body in overseeing
the management of impacts
NfR, p. 98
2-13 Delegation of responsibility for managing impacts NfR, pp. 91–92
2-14 Role of the highest governance body in
sustainability reporting
NfR, pp. 92–93 Both the Board of Management and then the
Supervisory Board deal with the reporting.
The Board of Management decides and the
Supervisory Board approves.
2-15 Conflicts of interest NfR, p. 102
2-16 Communication of critical concerns NfR, p. 101
2-17 Collective knowledge of the highest
governance body
NfR, pp. 98, 101, 119
2-18 Evaluation of the performance of the highest
governance body
Remuneration Report, p. 49 The Board of Management and Supervisory Board
regularly address the achievement of annual
targets through an internal scorecard. In the event
of possible deviations in target achievement,
appropriate measures are initiated.
2-19 Remuneration policies NfR, p. 108
Remuneration Report, p. 49
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GRI standard and description References Comments and online resources
2-20 Process to determine remuneration NfR, p. 108
Remuneration Report, p. 49
2-21 Annual total compensation ratio Remuneration Report, p. 49
Strategy, policies and practices
2-22 Statement on sustainable development
strategy
NfR, pp. 90–91, 95, 97
2-23 Policy commitments NfR, p. 102
2-24 Embedding policy commitments NfR, pp. 102–103
2-25 Processes to remediate negative impacts NfR, pp. 101–102
2-26 Mechanisms for seeking advice and raising
concerns
NfR, p. 101
2-27 Compliance with laws and regulations NfR, pp. 101–102
2-28 Membership associations NfR, pp. 95, 107, 111, 112, 116
Memberships | Brenntag
Stakeholder engagement
2-29 Approach to stakeholder engagement NfR, p. 98
2-30 Collective bargaining agreements Due to its large number of international locations
and the broad range of labor regulations applica-
ble to these locations, Brenntag does not record
this data in a consolidated Group-wide format.
Material Topics
GRI 3: Material Topics 2021
3-1 Process to determine material topics NfR, pp. 93, 99
3-2 List of material topics NfR, p. 94
201: Economic Performance 2016
3-3 Management of material topics Management Report, p. 152
201-1 Direct economic value generated and distributed Key financial figures at a
glance, p. 2, Consolidated
Financial Statements, p. 185,
Consolidated income
statement, p. 186,
Notes, p. 216
201-3 Defined benefit plan obligations and other
retirement plans
Consolidated Financial
Statements, p. 231
204: Procurement Practices 2016
3-3 Management of material topics NfR, pp. 112–114
204-1 Proportion of spending on local suppliers Local and regional purchasing plays a role in the
business model of a chemicals distributor, in
particular in the area of commodities.
205: Anti-corruption 2016
3-3 Management of material topics NfR, pp. 101–102
205-1 Operations assessed for risks related to corruption In internal audits, a total of 24 Brenntag compa-
nies were, among other things, reviewed in
relation to corruption risk in the reporting period.
205-2 Communication and training about
anti-corruption policies and procedures
NfR, pp. 101–102
205-3 Confirmed incidents of corruption and actions
taken
Brenntag has not received any reports on
incidents for the reporting period.
206: Anti-competitive Behavior 2016
3-3 Management of material topics Voluntary reporting as anti-competitive behavior
is not a material topic according to the 2022
materiality analysis.
206-1 Legal actions for anti-competitive behavior,
anti-trust, and monopoly practices
Management Report,
p. 169, 178
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GRI standard and description References Comments and online resources
207: Tax 2019
3-3 Management of material topics NfR, p. 103 Voluntary reporting as tax is not a material topic
according to the 2022 materiality analysis.
207-1 Approach to tax NfR, p. 103
207-2 Tax governance, control, and risk management NfR, p. 103
207-3 Stakeholder engagement and management of
concerns related to tax
NfR, p. 103
302: Energy 2016
3-3 Management of material topics NfR, pp. 116–120
302-1 Energy consumption within the organization NfR, p. 118
302-3 Energy intensity NfR, p. 118
302-4 Reduction of energy consumption NfR, pp. 116–120
302-5 Reductions in energy requirements of products
and services
NfR, pp. 116–120
303: Water and Effluents 2018
3-3 Management of material topics NfR, p. 122
303-1 Interactions with water as a shared resource NfR, p. 122
303-2 Management of water discharge-related impacts NfR, p. 122
303-3 Water withdrawal NfR, p. 122
305: Emissions 2016
3-3 Management of material topics NfR, p. 116
305-1 Direct (Scope 1) GHG emissions NfR, pp. 117–119
305-2 Energy indirect (Scope 2) GHG emissions NfR, pp. 117–119
305-3 Other indirect (Scope 3) GHG emissions NfR, pp. 119–120
305-4 GHG emissions intensity NfR, pp. 118, 120
305-5 Reduction of GHG emissions NfR, pp. 118, 120
306: Waste 2020
3-3 Management of material topics NfR, p. 121
306-1 Waste generation and significant waste-related
impacts
NfR, p. 121
306-2 Management of significant waste-related impacts NfR, p. 121
306-3 Waste generated Due to the decentralized structure of the
company and different legal requirements
(e.g. Circular Economy Act in Germany), waste
management is handled by each site itself.
308: Supplier Environmental Assessment 2016
3-3 Management of material topics NfR, pp. 112–114
308-1 New suppliers that were screened using environ-
mental criteria
NfR, pp. 112–114
401: Employment 2016
3-3 Management of material topics NfR, pp. 108–111
401-1 New employee hires and employee turnover NfR, p. 109
Employees | Brenntag
401-2 Benefits provided to full-time employees that
are not provided to temporary or part-time
employees
NfR, p. 108 Due to our company’s decentralized and
international structure, it is not possible to
provide a complete list of the benefits which
our employees receive.
402: Labor/Management Relations
3-3 Management of material topics Brenntag informs its employees of impending
operational changes at an early stage and
comprehensively, while complying with applicable
national and international notification periods.
402-1 Minimum notice periods regarding operational
changes
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403: Occupational Health and Safety 2018
3-3 Management of material topics NfR, p. 106
403-1 Occupational health and safety management
system
NfR, p. 107
403-2 Hazard identification, risk assessment, and
incident investigation
NfR, pp. 107–108
403-3 Occupational health services Brenntag pursues a decentralized approach.
Some large sites have local occupational health
services, otherwise each site has a direct
contact for occupational health concerns.
403-4 Worker participation, consultation, and
communication on occupational health and
safety
NfR, pp. 106–107 Temporary workers also participate in the
BEST employee surveys.
403-5 Worker training on occupational health and safety NfR, p. 106
403-6 Promotion of worker health NfR, pp. 106–108
403-7 Prevention and mitigation of occupational health
and safety impacts directly linked by business
relationships
NfR, pp. 106–107
403-8 Workers covered by an occupational health and
safety management system
NfR, p. 108 All employees are covered by the global
QSHE management system.
403-9 Work-related injuries NfR, pp. 107–108 Temporary workers are included in the accident
reporting.
404: Training and Education 2016
3-3 Management of material topics NfR, p. 111
404-2 Programs for upgrading employee skills and
transition assistance programs
NfR, p. 111 Brenntag offers its employees target group-
specific and individual measures and training at
a global, regional and local level and provides
them either in conventional events attended in
person or through online training events. The
global e-learning management system provides
employees with an opportunity to enhance their
knowledge and skills independently and effi-
ciently.
404-3 Percentage of employees receiving regular
performance and career development reviews
Annual feedback meetings take place for all
Brenntag employees in which the employees’
performance is considered and their goals and
personal expectations as well as individual
development measures are discussed.
405: Diversity and Equal Opportunity 2016
3-3 Management of material topics NfR, pp. 109–111
405-1 Diversity of governance bodies and employees NfR, pp. 109–111
Corporate Governance
Statement, p. 44
405-2 Ratio of basic salary and remuneration of
women to men
Employees are recruited, remunerated and
developed solely on the basis of their qualifica-
tions and skills for the respective roles.
406: Non-discrimination 2016
3-3 Management of material topics NfR, pp. 109–111
406-1 Incidents of discrimination and corrective
actions taken
Brenntag reports on the total number of con-
firmed incidents. For confidentiality reasons,
Brenntag does not disclose the exact number of
complaints by type. Accordingly, the company
does not explicitly report the number of
complaints relating to discrimination.
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GRI standard and description References Comments and online resources
407: Freedom of Association and Collective Bargaining 2016
3-3 Management of material topics NfR, pp. 101–102
407-1 Operations and suppliers in which the right to
freedom of association and collective bargaining
may be at risk
NfR, pp. 101–102 As part of our TfS membership, Brenntag
requests that its suppliers undergo sustainability
assessments, which also include a review of
protection of the right of association and the
right to collective bargaining. Brenntag’s Code
of Business Conduct and Ethics as well as our
Supplier Code of Conduct also require the
protection of human rights, equal treatment
and fair working conditions.
408: Child Labor 2016
3-3 Management of material topics NfR, pp. 101–102, 112–114
408-1 Operations and suppliers at significant risk for
incidents of child labor
NfR, pp. 112–114
409: Forced or Compulsory Labor 2016
3-3 Management of material topics NfR, pp. 101–102, 112–114
409-1 Operations and suppliers at significant risk for
incidents of forced or compulsory labor
NfR, pp. 112–114
410: Security Practices 2016
3-3 Management of material topics Brenntag deploys security personnel at various
locations and uses service providers to provide
security services. Respect for human rights is a
crucial factor in this regard, which is also reflected
in the codes of conduct of providers used.
Brenntag has started to manage security mea-
sures centrally, among other things to increase
the commitment to respect human rights and to
collect relevant data on the implementation of
the measures.
410-1 Security personnel trained in human rights policies
or procedures
411: Rights of Indigenous Peoples 2016
3-3 Management of material topics NfR, pp. 101–102, 112–114
411-1 Incidents of violations involving rights of
indigenous peoples
Brenntag has not received any reports on
incidents for the reporting period.
413: Local Communities 2016
3-3 Management of material topics Brenntag does not systematically assess the
impact of its community and social activities.
413-1 Operations with local community engagement,
impact assessments, and development programs
414: Supplier Social Assessment 2016
3-3 Management of material topics NfR, pp. 112–113
414-1 New suppliers that were screened using social
criteria
NfR, pp. 112–113 As part of its QSHE Group guidelines, the
Brenntag Group has also specified processes
and criteria for dealing with subcontractors that
carry out construction, repair and maintenance
work at Brenntag locations. Their purpose is to
prevent accidents and incidents, enable work
activities to be performed safely and protect the
health of subcontractors.
416: Customer Health and Safety 2016
3-3 Management of material topics NfR, pp. 106–107
416-1 Incidents of non-compliance concerning the
health and safety impacts of products and
services
There were no incidents during the
reporting period.
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APPENDIX
TCFD Index
The requirements of the Task Force on Climate-related
Financial Disclosures (TCFD) cover governance, strategy, risk
management, and metrics and targets. The aim of reporting
in accordance with TCFD is to appropriately disclose the risks
and opportunities presented by climate change and thus
strengthen financial market stability. As the CDP climate
change questionnaire has largely integrated the TCFD require-
ments, Brenntag already reports the following information:
Governance
TCFD core element Required information
Reference to CDP
Climate Change 2022
Questionnaire
Disclosure of governance
around climate-related risks
and opportunities
a) Board of Management’s oversight of climate-related
risks and opportunities
C1.1.A
C1.1b
C1.3
C1.3a
b) Role of the Board of Management and senior executives
in assessing and managing climate-related risks and
opportunities
C1.2
C1.2a
Corresponding sections NfR, p. 95
NfR, p. 116
GRI standard and description References Comments and online resources
417: Marketing and Labeling 2016
3-3 Management of material topics In all countries we operate in, the products
manufactured and/or transported by Brenntag
are subject to legal requirements for the labeling
and indication of ingredients, their ecological
effects as well as information on safe use and
disposal.
417-1 Requirements for product and service information
and labeling
NfR, pp. 103, 104, 107
417-2 Incidents of non-compliance concerning product
and service information and labeling
There were no incidents during the reporting
period.
417-3 Incidents of non-compliance concerning marketing
and communications
There were no incidents during the reporting
period.
418: Customer Privacy 2016
3-3 Management of material topics NfR, p. 102
418-1 Substantiated complaints concerning breaches of
customer privacy and losses of customer data
There were no substantiated complaints from
customers or regulatory bodies in the reporting
period. Neither did Brenntag identify any leaks,
thefts, or losses of customer data.
3.20 GRI Index
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APPENDIX
Strategy
TCFD core element Required information
Reference to CDP
Climate Change 2022
Questionnaire
Disclosure of the actual and potential
impacts of climate-related risks and
opportunities on the organization’s
businesses, strategy, and financial
planning
a) Short-, medium- and long-term climate-related risks
and opportunities for the organization
C2.1a
C2.2
C2.2a
C2.4a
b) Impact of climate-related risks and opportunities on
businesses, strategy, and financial planning
C2.3
C3.3
C3.4
C2.4a
c) Resilience of the organization’s strategy, taking into
consideration different climate-related scenarios
(including a 2°C or lower scenario)
C3.1
C3.2a
C3.2b
Corresponding sections NfR, p. 95
NfR, p. 116
Risk Management
TCFD core element Required information
Reference to CDP
Climate Change 2022
Questionnaire
Disclosure of processes for
identifying, assessing, and managing
climate-related risks
a) Processes for identifying and assessing climate-related
risks
C2.1
C2.2
b) Processes for managing climate-related risks C2.1
C2.2
c) Integration of processes for identifying, assessing,
and managing climate-related risks into overall
risk management
C2.1
C2.2
Corresponding sections NfR, p. 116
Management Report, p. 169
Metrics and Targets
TCFD core element Required information
Reference to CDP
Climate Change 2022
Questionnaire
Disclosure of metrics and targets
used to assess climate-related risks
and opportunities
a) Metrics used to assess climate-related risks and
opportunities in line with the strategy and risk
management process
C4.1
C4.2
C9.1
b) Scope 1, Scope 2 and Scope 3 greenhouse gas
emissions and the related risks
C6.1
C6.3
C6.5
c) Targets used to manage climate-related risks and
opportunities and performance against targets
C4.1
C4.1a
C4.2
Corresponding sections NfR, p. 116
NfR, p. 121
3.21 TCFD Index
Responses to and results of Brenntag’s CDP questionnaire at: CDP Brenntag
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APPENDIX
Topic Accounting metric Code References/comments
Greenhouse Gas
Emissions
Gross global Scope 1 emissions,
percentage covered under
emissions-limiting regulations
RT-CH-110a.1
TR-RO-110a.1
NfR, pp. 117–119
The calculation of Scope 1 emissions
includes all greenhouse gases that
result from the consumption of the
corresponding energy sources, i.e.
CO, CH, NO. The share of CH and
NO in the total emissions is
approximately 1%.
At Brenntag, none of the emissions are
covered under emissions-limiting
regulations.
Discussion of long-term and
short-term strategy or plan to
manage Scope 1 emissions, emissions
reduction targets, and an analysis
of performance against those targets
RT-CH-110a.2
TR-RO-110a.2
NfR, pp. 116–119
(1) Total fuel consumed
(2) Percentage natural gas
(3) Percentage renewable
TR-RO-110a.3 NfR, p. 118
Air Quality Air emissions of the following
pollutants:
(1) NO
X
(excluding N
2
O)
(2) SO
X
(3) Volatile organic compounds (VOCs)
(4) Hazardous air pollutants (HAPs)
(5) Particulate matter (PM10)
RT-CH-120a.1
TR-RO-120a.1
Not relevant for Brenntag as a
distributor.
Energy
Management
(1) Total energy consumed
(2) Percentage grid electricity
(3) Percentage renewable
(4) Total self-generated energy
RT-CH-130a.1 NfR, p. 118
Water
Management
(1) Total water withdrawn
(2) Total water consumed, percentage
of each in regions with high or
extremely high baseline water stress
RT-CH-140a.1 Water withdrawal is not currently
recorded and consolidated on a
Group-wide basis.
Number of incidents of non-compliance
associated with water quality permits,
standards, and regulations
RT-CH-140a.2 No central information available.
Description of water management risks
and discussion of strategies and
practices to mitigate those risks
RT-CH-140a.3 No central information available.
Hazardous Waste
Management
Amount of hazardous waste generated,
percentage recycled
RT-CH-150a.1 Due to the decentralized structure of
the company and different legal
requirements (e.g. Circular Economy
Act in Germany), waste management
is handled by each site itself.
Community
Relations
Discussion of engagement processes
to manage risks and opportunities
associated with community interests
RT-CH-210a.1 NfR, p. 98, pp. 106–108, pp. 112–114
SASB Index
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APPENDIX
Topic Accounting metric Code References/comments
Workforce Health
and Safety
(1) Total recordable incident rate (TRIR)
and
(2) fatality rate for
(a) direct employees and
(b) contract employees
RT-CH-320a.1 NfR, pp. 107–108
At Brenntag, TRIR is defined as the
total recordable injury rate, the
number of workplace accidents
involving injuries that require medical
treatment (beyond first aid), per one
million work hours.
Description of efforts to assess, monitor,
and reduce exposure of employees and
contract workers to long-term (chronic)
health risks
RT-CH-320a.2 NfR, pp. 106–108
Product Design
for Use-phase Efficiency
Revenue from products designed for
use-phase resource efficiency
RT-CH-410a.1 NfR, p. 104, pp. 121–122
Environmental
Stewardship of
Chemicals
(1) Percentage of products that contain
Globally Harmonized System of
Classification and Labeling of
Chemicals (GHS) Category 1 and 2
Health and Environmental
Hazardous Substances,
(2) Percentage of such products
that have undergone a hazard
assessment
RT-CH-410b.1 (1) EMEA
1
: 69% North America: 45%
(2) EMEA
1
: 94%
2
North America: 100%
Discussion of strategy to
(1) manage chemicals of concern and
(2) develop alternatives with reduced
human and/or environmental
impact
RT-CH-410b.2 NfR, pp. 103–104
Genetically
Modified Organisms
Percentage of products by revenue that
contain genetically modified organisms
(GMOs)
RT-CH-410c.1 Not relevant
Management
of the Legal & Regulatory
Environment
Discussion of corporate positions
related to government regulations and/
or policy proposals that address
environmental and social factors
affecting the industry
RT-CH-530a.1 Management Report, pp. 172-179
NfR, pp. 103–104
Operational Safety,
Emergency Preparedness
& Response
Process Safety Incidents Count (PSIC),
Process Safety Total Incident Rate
(PSTIR), and Process Safety Incident
Severity Rate (PSISR)
RT-CH-540a.1 NfR, pp. 106–108
Activity Metric Production by reportable segment RT-CH-000.A Not reported
1)
Poland, Lithuania, Estonia and Latvia as well as Italy are only partially represented. For Brenntag Benelux and Multisol, data from countries in Africa are included,
in which the two national companies operate.
2)
Percentage of such products (with at least one substance) that have undergone a hazard assessment.
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APPENDIX
Topic Accounting metric Code References/comments
Driver Working
Conditions
(1) Total recordable incident rate (TRIR)
and
(2) fatality rate for
(a) direct employees and
(b) contract employees
TR-RO-320a.1 NfR, pp. 107–108
At Brenntag, TRIR is defined as the
total recordable injury rate, the
number of workplace accidents
involving injuries that require medical
treatment (beyond first aid), per one
million work hours.
(1) Voluntary and
(2) involuntary turnover rate for all
employees
TR-RO-320a.2
NfR, p. 109
Employees | Brenntag
Description of approach to managing
short-term and long-term driver health
risks
TR-RO-320a.3 NfR, pp. 106–108
Health risks for specific functions are
only assessed locally.
Accident &
Safety Management
Number of road accidents and
incidents
TR-RO-540a.1 NfR, pp. 107–108
Three road accidents with
commercial vehicles.
Safety Measurement System BASIC
percentiles for:
(1) Unsafe driving
(2) Hours-of-service compliance
(3) Driver fitness
(4) Controlled substances/Alcohol
(5) Vehicle maintenance
(6) Hazardous materials mompliance
TR-RO-540a.2 Not reported
(1) Number and
(2) aggregate volume of spills and
releases to the environment
TR-RO-540a.3 NfR, pp. 107–108
3.22 SASB Index
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APPENDIX
Practitioner’s Report
Independent Practitioner’s Report on a Limited Assur-
ance Engagement on Non-financial Reporting
To Brenntag SE, Essen
We have performed a limited assurance engagement on
the combined separate non-financial report of Brenntag SE,
Essen, (hereinafter the “Company”) for the period from
1January to 31 December 2022 (hereinafter the “Combined
Separate Non-financial Report”).
Not subject to our assurance engagement are the external
sources of documentation or expert opinions mentioned in
the Combined Separate Non-financial Report.
Responsibility of the Executive Directors
The executive directors of the Company are responsible for
the preparation of the Combined Separate Non-financial
Report in accordance with §§ (Articles) 315c in conjunction
with 289c to 289e HGB (“Handelsgesetzbuch”: “German Com-
mercial Code”) and Article 8 of REGULATION (EU) 2020/852
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of
18. June 2020 on establishing a framework to facilitate
sustainable investment and amending Regulation (EU)
2019/2088 (hereinafter the “EU Taxonomy Regulation”) and
the Delegated Acts adopted thereunder, as well as for making
their own interpretation of the wording and terms contained
in the EU Taxonomy Regulation and the Delegated Acts
adopted thereunder, as set out in section “EU Taxonomy” of
the Combined Separate Non-financial Report.
This responsibility includes the selection and application of
appropriate non-financial reporting methods and making as-
sumptions and estimates about individual non-financial
disclosures of the Group that are reasonable in the circum-
stances. Furthermore, the executive directors are responsible
for such internal controls as the executive directors consider
necessary to enable the preparation of a Combined Separate
Non-financial Report that is free from material misstatement
whether due to fraud or error.
The EU Taxonomy Regulation and the Delegated Acts issued
thereunder contain wording and terms that are still subject
to considerable interpretation uncertainties and for which
clarifications have not yet been published in every case.
Therefore, the executive directors have disclosed their inter-
pretation of the EU Taxonomy Regulation and the Delegated
Acts adopted thereunder in section “EU Taxonomy” of the
Combined Separate Non-financial Report. They are respon
-
sible for the defensibility of this interpretation. Due to the
immanent risk that indeterminate legal terms may be inter-
preted differently, the legal conformity of the interpretation is
subject to uncertainties.
Independence and Quality Control of the Audit Firm
We have complied with the German professional provisions
regarding independence as well as other ethical require-
ments.
Our audit firm applies the national legal requirements and
professional standards – in particular the Professional Code
for German Public Auditors and German Chartered Auditors
(“Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
prüfer“: “BS WP/vBP”) as well as the Standard on Quality Con-
trol 1 published by the Institut der Wirtschaftsprüfer (Institute
of Public Auditors in Germany; IDW): Requirements to quality
control for audit firms (IDW Qualitätssicherungsstandard 1:
Anforderungen an die Qualitätssicherung in der Wirtschafts-
prüferpraxis - IDW QS 1) – and accordingly maintains a com-
prehensive system of quality control including documented
policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal
and regulatory requirements.
Responsibility of the Assurance Practitioner
Our responsibility is to express a conclusion with limited
assurance on the Combined Separate Non-financial Report
based on our assurance engagement.
We conducted our assurance engagement in accordance
with International Standard on Assurance Engagements
(ISAE) 3000 (Revised): Assurance Engagements other than
Audits or Reviews of Historical Financial Information, issued
by the IAASB. This Standard requires that we plan and per-
form the assurance engagement to obtain limited assurance
about whether any matters have come to our attention that
cause us to believe that the Company’s Combined Separate
Non-financial Report, other than the external sources of doc-
umentation or expert opinions mentioned in the Combined
Separate Non-financial Report, are not prepared, in all mate-
rial respects, in accordance with §§ 315c in conjunction with
289c to 289e HGB and the EU Taxonomy Regulation and the
Delegated Acts issued thereunder as well as the interpreta-
tion by the executive directors disclosed in section “EU Taxon-
omy” of the Combined Separate Non-financial Report.
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APPENDIX
In a limited assurance engagement the procedures per-
formed are less extensive than in a reasonable assurance
engagement, and accordingly a substantially lower level of
assurance is obtained. The selection of the assurance proce-
dures is subject to the professional judgement of the assur-
ance practitioner.
In the course of our assurance engagement, we have,
amongst other things, performed the following assurance
procedures and other activities:
■
Gain an understanding of the structure of the Group’s
sustainability organisation and stakeholder engagement
Inquiries of the executive directors and relevant employ-
ees involved in the preparation of the Combined Sepa-
rate Non-financial Report about the preparation process,
about the internal control system relating to this process
and about disclosures in the Combined Separate Non-
financial Report
■
Identification of likely risks of material misstatement in
the Combined Separate Non-financial Report
■
Analytical procedures on selected disclosures in the
Combined Separate Non-financial Report
■
Reconciliation of selected disclosures with the corre-
sponding data in the consolidated financial statements
and group management report
■
Evaluation of the presentation of the Combined Separate
Non-financial Report
■
Evaluation of the process to identify taxonomy-eligible
and taxonomy-aligned economic activities and the
corresponding disclosures in the Combined Separate
Non-financial Report
■
Evaluation of CO2 compensation certificates exclusively
with regard to their existence, but not with regard to their
impact
In determining the disclosures in accordance with Article 8 of
the EU Taxonomy Regulation, the executive directors are
required to interpret undefined legal terms. Due to the imma
-
nent risk that undefined legal terms may be interpreted
differently, the legal conformity of their interpretation and,
accordingly, our assurance engagement thereon are subject
to uncertainties.
Assurance Opinion
Based on the assurance procedures performed and evidence
obtained, nothing has come to our attention that causes us
to believe that the Combined Separate Non-financial Report
of the Company for the period from 1 January to 31 Decem-
ber 2022 is not prepared, in all material respects, in accor-
dance with §§ 315c in conjunction with 289c to 289e HGB and
the EU Taxonomy Regulation and the Delegated Acts issued
thereunder as well as the interpretation by the executive
directors disclosed in section “EU Taxonomy” of the Combined
Separate Non-financial Report.
We do not express an assurance opinion on the external
sources of documentation or expert opinions mentioned in
the Combined Separate Non-financial Report.
Restriction of Use
We draw attention to the fact that the assurance engage-
ment was conducted for the Company’s purposes and that
the report is intended solely to inform the Company about the
result of the assurance engagement. Consequently, it may
not be suitable for any other purpose than the aforemen-
tioned. Accordingly, the report is not intended to be used by
third parties for making (financial) decisions based on it. Our
responsibility is to the Company. We do not accept any re-
sponsibility to third parties. Our assurance opinion is not mod-
ified in this respect.
Frankfurt am Main, 6 March 2023
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Nicolette Behncke ppa. Benjamin Wolf
Wirtschaftsprüferin
[German public auditor]
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APPENDIX
147 Preamble
147 Group overview
147 Business activities and Group structure
148 Objectives and strategy
148 Transformation program
149 Financial management system
152 Report on economic position
152 Economic environment
152 Business performance
154 Results of operations
160 Financial position
164 Financial and assets position
165 Annual financial statements of Brenntag SE
165 Results of operations and financial position
of Brenntag SE
166 Appropriation of distributable profit
of Brenntag SE
167 Employees
168 Quality management, safety, health
and environmental protection
168 Sustainability management
169 Report on expected developments,
opportunities and risks
169 Report on expected developments
169 Main elements of the internal control/risk
management system
172 Report on opportunities and risks
179 Summary of the opportunities and risk situation
180 Explanatory report on information required
under Sections 289a and 315a of the German
Commercial Code (HGB)
180 Composition of the subscribed capital
180 Restrictions on voting rights or transfer of shares
180 Direct or indirect interests in the capital of the
company exceeding 10% of the voting rights
180 Shares with special rights conferring powers
of control
180 System of control of any employee participation
scheme where the control rights are not exercised
directly by the employees
180 Legislation and provisions of the Articles of
Association applicable to the appointment and
removal of the members of the Board of Manage-
ment and governing amendments to the Articles
of Association
181 Powers of the Board of Management to issue
or repurchase shares
183 Significant agreements which take effect, alter
or terminate upon a change of control of the
company following a takeover bid
183 Compensation agreements with members of the
Board of Management or employees in the event
of a takeover bid
184 Corporate governance statement
184 Non-financial statement
146
Annual Report 2022 Brenntag SE
Combined
4 Management Report
of the Brenntag Group and Brenntag SE
146
184
Preamble
The German Corporate Governance Code (“GCGC”) provides
for disclosures on the internal control and risk management
system that go beyond the legal requirements for the man-
agement report. The disclosures are excluded from the stat-
utory auditor’s audit of the management report content (“dis-
closures not typically part of the management report”).
In the following, these disclosures are allocated thematically
to the main elements of the internal control/risk manage-
ment system; they have also been set apart from the disclo-
sures required to be audited by placing them in separate
paragraphs and labeled accordingly.
Group overview
Business activities and Group structure
Brenntag’s growth opportunities along with its resilient busi-
ness model are based not only on complete geographic cov-
erage, a wide product portfolio and a comprehensive offering
of value-added services, but especially on high diversity across
our suppliers, customers and industries and our targeted use
of the potential offered by outsourcing on the part of suppliers.
Brenntag is the reliable partner to chemical manufacturers
(its suppliers) and its roughly 180,000 customers
1)
. The com-
pany connects products, knowledge and innovation, and cre-
ates added value in its networks in countless ways. Brenntag
promotes sustainable products and connects the needs of
industry with the needs of people and the environment. As
global market leader, Brenntag has the vision of shaping the
future of the industry.
Brenntag purchases large-scale quantities of industrial and
specialty chemicals and ingredients from a large number of
suppliers. This enables it to achieve economies of scale and
offer a full-line range of products and value-added services.
The products it purchases are stored in distribution facilities,
packed into quantities the customers require and delivered,
typically in less-than-truckloads. Overall, Brenntag offers a
broad product range comprising more than 10,000 chemi-
cals
2)
and ingredients as well as extensive value-added ser-
vices such as just-in-time delivery, product mixing, repackag-
ing, inventory management and drum return handling. In
addition, Brenntag offers tailor-made application, marketing
and supply chain solutions, technical and formulation sup-
port, comprehensive regulatory know-how and digital solu-
tions such as digital sales channels and product platforms.
This know-how enables the company to work together with
its customers and suppliers to develop sustainable products
and solutions.
To enable it to best respond to its customers’ and suppliers’
diverse and changing requirements, Brenntag manages its
business through two global divisions: Brenntag Specialties
and Brenntag Essentials. Brenntag Specialties focuses on
selling ingredients and value-added services to the selected
industries, Nutrition, Pharma, Personal Care/HI&I (Home,
Industrial & Institutional), Material Science (Coatings & Con-
struction, Polymers, Rubber), Water Treatment and Lubri-
cants. Brenntag Specialties comprises the EMEA, Americas
and APAC segments. Brenntag Essentials markets a broad
portfolio of process chemicals across a wide range of indus-
tries and applications. Brenntag Essentials is managed
through the geographical segments EMEA, North America,
Latin America and APAC.
The two divisions are supported by Brenntag Business Ser-
vices, which have been allocated to “All other Segments”. In
addition, “All other Segments” combine the central functions
for the entire Group and the activities with regard to the dig-
italization of Brenntag’s business. The international opera-
tions of BRENNTAG International Chemicals GmbH, which
buys and sells chemicals in bulk on an international scale
without regional boundaries, are also included here.
For details of the scope of consolidation, please refer to the
notes to the consolidated financial statements for the period
ended December 31, 2022.
1)
The number of customers includes the customers that bought from Brenntag
at least once in the reporting period. The decision criterion is “sold-to”; a
sold-to party is the legal entity that is responsible for the purchase order and
makes contact with the supplier’s branch.
2)
Chemical substances, including the quality grade and concentration level
(in the case of diluted products) or the product form (in the case of solid
substances), are recorded as chemicals.
147Brenntag SE
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MANAGEMENT
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PREAMBLE
GROUP OVERVIEW
■
Brenntag plans to assume a leading role in the responsi-
ble distribution of sustainable chemicals and ingredients
and shape the industry’s sustainability agenda. This
includes using 100% environmentally-friendly energy by
2025 and achieving net-zero emissions by 2045 (see also
the combined separate non-financial report in a separate
section of this Annual Report 2022).
■
To strengthen organic growth, Brenntag plans to drive
market consolidation through M&A activity that creates
value. While maintaining financial discipline, Brenntag’s
focus here is on expanding its position in emerging
markets in both divisions, improving strategic capabili-
ties and market positions, augmenting the existing
portfolio and improving technical capabilities.
Transformation program
Between its introduction and the end of 2022, the multi-year
transformation and further development program “Project
Brenntag” generated around EUR249 million in additional
annual operating EBITDA, already exceeding the target of
EUR220 million for financial year 2023. All program initiatives
are on track: 100 sites across all regions have been closed
and more than 1,300 jobs structurally reduced in a socially
responsible manner. The cumulative expenses incurred in
connection with “Project Brenntag” since its start amounted
to around EUR89 million. Brenntag expects further financial
contributions from the ongoing “Project Brenntag” initiatives
in 2023. The effects of these measures will feed into the next
chapter in Brenntag’s transformation. Brenntag monitors the
project’s progress and the determined effects of the transfor-
mation using a project management and control system tai-
lored to these matters.
In the course of this next step in its transformation, Brenntag
will make targeted investments in its Digital.Data.Excellence
(DiDEX) capabilities and concentrate on the following five pil-
lars with a view to increasing efficiency, growth and excel-
lence throughout the organization:
1)Becoming the chemical distribution partner with the
smoothest business relationships
At Brenntag, customers and supplier partners are at the
center of day-to-day activities. As an omnichannel partner,
Brenntag is further developing virtual platforms such as
Brenntag Connect and offering new, fully digital services such
as Track & Trace. The Brenntag Excellence initiative is aimed
at building a stable, efficient and streamlined organization in
combination with dynamic and fast processes. It will help
Objectives and strategy
Brenntag aims to strengthen and further expand its position
as global market leader in an agilely changing global market
environment and lead its industry as the preferred partner for
customers and suppliers.
The transformation program “Project Brenntag” focused on
implementing the new operating model comprising two
global divisions and clear customer segmentation, optimiz-
ing the site network and structurally addressing productivity
improvements. “Project Brenntag” laid the foundations for
the company to achieve improved, sustainable organic earn-
ings growth.
The “Strategy to Win” presented in November 2022 involves
differentiated growth strategies for the two divisions. In addi-
tion, efficiency, growth and excellence are to be increased
throughout the organization through Digital.Data.Excellence
(DiDEX). Brenntag’s aim in applying its comprehensive and
ambitious strategy is to outpace market growth. Brenntag
aspires to play a crucial role in the realm of sustainable global
chemical and ingredients distribution.
The new “Strategy to Win” comprises four central pillars:
■
Applying differentiated divisional strategies and lever-
aging the company’s global footprint and reach,
Brenntag will sharpen the profile of its two divisions and
propel their growth above the market average. Brenntag
Specialties is to become the go-to global service partner
for innovative and sustainable solutions. Brenntag
Specialties is to extend the range of value-added ser-
vices, offer the most comprehensive and sustainable
portfolio, expand its global presence, focus on high-
growth customers and industries, and press ahead with
acquisitions. Brenntag Essentials is to become the
uncontested market leader shaping the future of indus-
trial chemicals distribution. The geographical, industry
and product breadth contributes to the company’s
stability and growth.
■
Digital.Data.Excellence (DiDEX) is to be an engine of
growth contributing to Brenntag’s fundamental trans-
formation into a data- and technology-driven business
and industry leader. Brenntag aspires to become the
easiest business partner in the chemical distribution
ecosystem, generate value from its data, modernize its
digital business architecture and thus provide the most
efficient and agile supply chain.
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Brenntag to promote the exchange of best practice and stan-
dardization. Brenntag Excellence will combine all local initia-
tives around the globe aimed at continuous improvement and
make them more efficient. The initiative supports the imple-
mentation of the new business model and digitalization, and
thus enables further growth, greater customer- and supplier-
centricity, and more agility.
2)Leveraging the potential of data
With the help of special tools and business intelligence,
Brenntag will make more effective use of its unique global
market, customer and supply chain expertise as well as avail-
able data so as to better serve customers, better manage
processes and create added value.
3)Creating a scalable information technology platform
Brenntag is working together with leading technology com-
panies to build a comprehensive, scalable and modular
global platform. This global platform will offer an improved
digital environment and a better IT infrastructure for the
company’s various functions and business units across the
supply chain.
4)Digital, data- and process-related skills and talent
The transformation is also focused on bolstering digital com
-
petencies and training Brenntag employees so as to equip
them with the necessary and right skills for the transforma-
tion. In addition, the workforce is being expanded by bringing
on board new digital and data talent on the basis of an
enhanced employer branding, new career paths and the cor-
porate culture in digital aspects.
5)Value creation and change
The DiDEX transformation will implement agile working meth-
ods and best practices. The transformation experience from
“Project Brenntag” provides a sound basis for ensuring value
creation in this step in the company’s transformation, too.
Overall, the comprehensive DiDEX program is expected to
deliver a sustainable additional contribution to operating
EBITA, reaching the full annual potential of EUR200 million in
total by the end of 2026. The investments in connection with
the DiDEX transformation are expected to amount to around
EUR350 million.
Financial management system
The Brenntag Group’s financial management system enables
it to measure attainment of its strategic objectives. It is based
on the key performance indicators operating gross profit,
operating EBITDA, operating EBITA and free cash flow and
their growth. Brenntag also measures return on capital and
working capital turnover and sets strict requirements for the
performance of investment projects and acquisitions.
In the following, the key performance indicators used to mea-
sure the Group’s financial performance are explained. They
also include alternative performance indicators not defined
under IFRSs such as operating EBITA and free cash flow, as a
result of which these terms may be defined differently by
other companies. These alternative performance indicators
are calculated continuously using a uniform approach, which
ensures that metrics from different financial years can be
compared. Brenntag sometimes also adjusts for acquisition
effects, in which case it talks about organic growth.
Operating gross profit
For Brenntag as a chemical distributor, operating gross profit
is an important factor for increasing enterprise value over the
long term. Operating gross profit is defined as the difference
between external sales and cost of materials. The goal is for
the growth in operating gross profit to exceed macroeco-
nomic benchmarks. In order to ensure that measurement of
performance at Group or regional level is meaningful, the
growth in operating gross profit is adjusted for currency
translation effects.
Operating EBITDA
The key indicator and measure for the financial performance
of the Brenntag Group is operating EBITDA. This indicator is
used to manage the segments, as it reflects the performance
of the business operations well and is a key component of
cash flow.
Operating EBITDA is the operating profit as recorded in the
consolidated income statement plus amortization of intan-
gible assets and depreciation of property, plant and equip-
ment, right-of-use assets and investment property, adjusted
for certain items.
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Brenntag adjusts operating EBITDA for holding charges and
for income and expenses arising from special items so as to
improve comparability in presenting the performance of its
business operations over multiple reporting periods and
explain it more appropriately. Holding charges are certain
costs charged between holding companies and operating
companies. At Group level, these effects net to zero. Special
items are income and expenses outside ordinary activities that
have a special and material effect on the results of operations.
Operating EBITA
In the course of operationalizing its strategy, Brenntag
decided to replace operating EBITDA with operating EBITA as
its key performance indicator. In contrast to operating EBITDA,
operating EBITA also reflects depreciation of property, plant
and equipment and right-of-use assets. For Brenntag, this is
important primarily so that it can take into account the dif-
ferent depreciation profiles of Brenntag Specialties and
Brenntag Essentials. Certain items of property, plant and
equipment and right-of-use assets are not separable and
support both divisions jointly. They have been allocated to a
division (depending on the region) and are depreciated there.
They are charged to the other division on the basis of fixed
and variable monthly amounts. The use of operating EBITA
also improves comparability within the peer group. The aim
is to continually grow operating EBITA throughout the busi-
ness cycle.
Cash generation
Free cash flow is defined as follows:
Additional performance indicators
In addition to the aforementioned financial performance indi-
cators, Brenntag uses several other metrics to assess the eco-
nomic success of its business activities.
In the Brenntag Group, return on capital is measured using
the indicator return on capital employed (ROCE). ROCE is
defined as:
The average carrying amounts in the denominator are
defined for a particular year as the arithmetic average of the
amounts at each of the following five dates: the beginning of
the year, the end of each of the first, second and third quar-
ters, and the end of the year.
The conversion ratio is an indicator calculated in order to
measure the efficiency of a segment or the Group, more spe-
cifically by expressing operating EBITA for a given period as a
percentage of operating gross profit for the same period. The
indicator is used primarily to assess longer-term trends and
less so to analyze short-term fluctuations between quarters.
In its efforts to generate increasing cash flow, Brenntag ana-
lyzes working capital turnover. This is defined as:
Working capital is defined as trade receivables plus invento-
ries less trade payables. Free cash flow is an important per-
formance indicator for Brenntag, as it shows what level of
cash is generated from operating activities and will therefore
be available for growth through acquisitions as well as for
lenders, shareholders and tax payments.
Average working capital for a particular year is defined as the
arithmetic average of working capital at each of the following
five dates: the beginning of the year, the end of each of the
first, second and third quarters, and the end of the year.
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Operating EBITDA
– payments to acquire intangible assets
and property, plant and equipment
+/– changes in working capital
– principal and interest payments on lease liabilities
= free cash flow
ROCE =
Operating EBITA
(average carrying amount of equity
+ average carrying amount of financial
and lease liabilities
– average carrying amount of cash
and cash equivalents)
working capital
turnover
=
sales
average working capital
To determine whether a particular investment project is
expected to generate value for Brenntag, it takes the modified
internal rate of return (MIRR) and the payback period as mea-
sures of the risk involved in the project. An investment project
is generally only approved if the MIRR is above the hurdle rate
and the combination of return and payback seems attractive.
The hurdle rate for the MIRR varies according to the risk
involved in the project and depends, among other factors, on
the respective country risk.
In addition to these metrics, Brenntag has also set strategic
objectives as well as financial hurdle rates that generally
have to be considered when an acquisition is carried out. In
particular, potential acquisitions must be able to satisfy the
hurdle rate of return in the form of free cash flow on capital
employed. Again, the hurdle rate of return depends, among
other factors, on the country risk of the acquisition.
Brenntag also refers to net debt leverage in order to continu-
ously review the adequacy of the company’s capital struc-
ture. In this case, the difference between financial and lease
liabilities and cash and cash equivalents is expressed relative
to operating EBITDA.
Further performance indicators such as tax rate and earnings
per share (EPS) are only used at Group level. They are not used
to measure the performance of Brenntag’s segments since
factors such as interest or tax are less a reflection of the oper-
ating performance of the segments, but are above all based
on central decisions.
Adjustments for exchange rate effects
For the purposes of Group accounting, the results of all Group
companies are translated into the Group currency, the euro.
The results are always translated at the average rate for the
reporting period.
Therefore, the results and in particular the change between
reporting periods may not only be affected by changes in
operating performance, but also by effects of translation
from functional currencies into the Group currency, the euro
(translation effects). As Brenntag considers it important to
assess the operating performance of the Group companies
and in particular the change in operating performance
between reporting periods free of distortions from translation
effects, it also reports the changes adjusted for these effects.
Exchange rate-adjusted financial metrics are not to be seen
as substitutes or as more meaningful financial indicators, but
always as additional information on sales, operating expenses,
earnings or other metrics.
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Report on economic position
Business performance
Major events impacting on business in 2022
2022 was impacted significantly by the Ukraine war. The
resulting economic sanctions and the geopolitical uncer-
tainty are having direct and indirect effects on international
trade. Against this background, the Board of Management of
Brenntag SE took the decision at the beginning of March 2022
to suspend all imports to and exports from Russia and
Belarus. The Board of Management also decided to halt the
business operations of all Brenntag companies in Russia and
Belarus. The decisions are valid until further notice.
Brenntag continues to closely monitor the situation and
developments in the region, as well as international mea-
sures, so that it can take further measures if necessary.
In March 2022, Brenntag acquired Y.S. Ashkenazi Agencies Ltd.
based in Netzer Sereni, Israel, and its subsidiary Biochem
Trading 2011 Ltd. The acquirees generated sales of around
EUR 39million in financial year 2021. Brenntag is thus con-
tinuing to expand its offering of specialty products and ser-
vices for suppliers and customers in the high-growth Food &
Nutrition and Personal Care markets and breaking into the
Israeli market.
At the beginning of April 2022, the service agreement with
Dr. Christian Kohlpaintner was extended until the end of 2025.
The Supervisory Board thus provided early confirmation that
Dr. Christian Kohlpaintner will remain in post as Chief Executive
Officer of Brenntag SE for a further three years, paving the
way for continuity in the company’s ongoing transformation.
In August 2022, Brenntag acquired all shares in Prime Surfac-
tants Limited and its subsidiary Prime Example Ltd. based in
Leeds, UK. The acquiree generated sales of around GBP17mil-
lion in financial year 2021. Having established a leading posi-
tion in surfactants in the UK personal care market, Prime Sur-
factants Limited is a good addition to Brenntag Specialties’
Personal Care and HI&I business unit.
Economic environment
In financial year 2022, the pace of growth in global industrial
production was much slower than in previous years at just
2.3% year on year. Global economic performance was
impacted by the Ukraine war, rising food and energy prices,
and a still-difficult COVID-19 situation in China. High inflation
rates depressed private consumption and corporate invest-
ment opportunities. Alongside rises in commodity prices, the
disruption to supply chains also worsened. Based on the dif-
ficult environment, the Global Manufacturing Purchasing
Managers’ Index (PMI) dropped to 48.6, a reading below the
50 neutral mark.
In the euro zone, industrial production expanded at a mar-
ginal rate of around 1.1% year on year in 2022, although
growth rates across the member states differed significantly
in some cases. The continuing weakness was due in particu-
lar to supply bottlenecks and high energy prices, which wors-
ened again against the background of the war in Ukraine.
Inflation in the euro zone climbed to 8.0% in 2022. Much like
the euro zone, the US economy was also marked by high infla-
tion (8.0%), particularly in the second half of the year. US
industrial production declined by 0.4% overall in 2022. In Latin
America, economic performance remained mixed, but gen-
erally more stable than in the USA and the euro zone. Overall,
the Latin American economy expanded year on year in 2022,
with industrial production increasing by around 3.8%. The
emerging economies of Asia (excluding China and Japan)
also achieved growth in 2022, with production expanding by
3.2% compared with the prior-year figure. In China, COVID-19
infection numbers were on a steep upward trajectory again
in 2022 and the initial response was to impose extensive mea-
sures to contain spreading outbreaks, which held economic
momentum severely in check. In December 2022, the zero-
Covid strategy was eased. At year-end, infection numbers
were on course to reach new highs. Due to the massive restric-
tions in the first half of 2022 especially, industrial production
in China only grew by about 3.4% year on year in 2022.
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Also in August 2022, Brenntag closed its first promissory note
(Schuldschein) transaction for around EUR 640 million. The
promissory notes were issued by parent company Brenntag SE
and comprise a total of seven tranches with tenors of three,
five and seven years and carrying both floating and fixed
interest rates. Alongside euro-denominated tranches totaling
EUR 390 million, the company also issued US dollar-denomi-
nated tranches totaling around USD 250 million.
In November 2022, Brenntag acquired TechManagement
Energy Services, LLC headquartered in Odessa, Texas, USA.
The acquiree generated sales of USD 85 million in financial
year 2021. As well as its headquarters and its blending facility
in Odessa, TechManagement has ten additional operating
facilities in West Texas, New Mexico and Oklahoma. The
acquiree’s formulation and blending expertise and its state-
of-the-art laboratory facilities were a welcome addition to
Brenntag’s energy services business in North America.
In December 2022, Brenntag acquired Ravenswood’s Life Sci-
ence and Coatings business. The company is headquartered
in Bayswater, Australia, and operates additional sites in Aus-
tralia and New Zealand. The acquiree generated sales of
around AUD 50 million in financial year 2021. This acquisition
extends Brenntag’s presence in Australia and New Zealand
and supports both its strategy in the nutrition segment and
its aspirations to expand the service portfolio by offering
additional blending capabilities.
Statement by the Board of Management
on business performance
The Brenntag Group achieved operating EBITDA of EUR1,808.6
million in financial year 2022, an increase of 34.5% compared
with the previous year. On a constant currency basis, this rep-
resents earnings growth of 26.7%. Brenntag therefore achieved
excellent operating results in the past financial year. Operat-
ing EBITA came to EUR1,511.7 million, an increase of 39.7%
(on a constant currency basis: 31.5%).
2022 was another year shaped by exceptional influencing fac-
tors. In China especially, the COVID-19 pandemic continued to
result in considerable restrictions on professional and private
life, and many global supply chains are still suffering the
effects of the pandemic years. In addition, Russia’s attack on
Ukraine led to substantial bottlenecks in the global movement
of goods. The consequences included restricted availability of
many products and inflation on a scale not seen for many
decades. In this exceptional geopolitical and economic envi-
ronment, Brenntag was able to fully maintain its operating
activities, supply its customers with the required products and
offer its employees a safe working environment in financial
year 2022. As market leader, Brenntag plays an important role
in global distribution markets and enjoys a high level of trust,
including in times of major uncertainty. In particular, Brenntag’s
broad and globally diversified customer and product portfolio
and its close relationships with suppliers paid off again.
The Brenntag Specialties division was able to increase earn-
ings significantly year on year. All division segments posted
considerable earnings growth compared with the prior-year
period.
The Brenntag Essentials division likewise achieved a clear
increase in earnings compared with the previous year, with
the Brenntag Essentials EMEA and Brenntag Essentials North
America segments in particular making substantial contribu-
tions to the division’s growth.
The implementation of “Project Brenntag” was an extreme
success in financial year 2022. With the program contributing
around EUR 249 million to operating EBITDA, the goal of gen-
erating an additional EUR 220 million was achieved a year
earlier than planned. The cumulative expenses incurred in
connection with “Project Brenntag” since its start amounted
to around EUR89 million.
Due to substantial price escalations in procurement markets
and also on sales markets, the Group recorded an increase in
working capital in financial year 2022. In addition, annualized
working capital turnover fell compared with the previous year
due to strains within the supply chain.
The total cash outflow for investments came to EUR267.2
million in financial year 2022, a significant increase on the
prior-year figure (2021: EUR199.3 million). Investments were
made in the global site network in particular.
Brenntag generated a high free cash flow of EUR 1,005.1 mil-
lion in financial year 2022. This is a significant increase on the
prior-year figure and offers the Group financial flexibility.
Based on the very good operating results, Brenntag also
achieved significantly higher profit after tax of EUR902.5 mil-
lion in financial year 2022.
Due to its lasting relationships with suppliers and customers,
its broad range of products and services, and the adaptabil-
ity of its organization, Brenntag is very well positioned both at
present and for the future.
Brenntag was once again able to convincingly demonstrate
its capabilities in the past financial year. Brenntag is very sat-
isfied with the operating results achieved. Overall, it closed
financial year 2022 with an excellent result.
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Results of operations
Business performance of the Brenntag Group
Change
in EUR m 2022 2021 in % in % (fx adj.)
1)
Sales 19,429.3 14,382.5 35.1 27.7
Operating gross profit 4,319.0 3,379.0 27.8 20.3
Operating expenses –2,510.4 –2,034.4 23.4 16.1
Operating EBITDA 1,808.6 1,344.6 34.5 26.7
Depreciation of property, plant and equipment
and right-of-use assets –296.9 –262.7 13.0 6.6
Operating EBITA 1,511.7 1,081.9 39.7 31.5
Net expense from special items –19.8 –228.7 – –
EBITA 1,491.9 853.2 – –
Amortization of intangible assets –109.5 –110.8 – –
Net finance costs –147.5 –92.1 – –
Profit before tax 1,234.9 650.3 – –
Income tax expense –332.4 –188.9 – –
Profit after tax 902.5 461.4 – –
4.01 Business performance of the Brenntag Group
1)
Change in % (fx adj.) is the percentage change on a constant currency basis.
The Brenntag Group generated sales of EUR19,429.3 million
in financial year 2022, a rise of 35.1% compared with the pre-
vious year. On a constant currency basis, sales were up by
27.7% on the prior-year figure. The rise is due mainly to signifi-
cantly higher sales prices per unit.
The Brenntag Group generated operating gross profit of
EUR 4,319.0 million in financial year 2022, an increase of
27.8% compared with the previous year. On a constant cur-
rency basis, this represents a significant rise of 20.3%. Both
divisions contributed to this positive performance at operat-
ing gross profit level. The increase in operating gross profit is
due mostly to organic growth in the business, but was also
supported by the acquisitions closed.
The Brenntag Group’s operating expenses amounted to
EUR2,510.4 million in financial year 2022, a rise of 23.4% year
on year. On a constant currency basis, operating expenses
were up by 16.1% on the prior-year figure. The rise in costs is
due in part to strong increases in energy and transport costs
as well as higher personnel and advisory expenses.
The Brenntag Group achieved operating EBITDA of
EUR1,808.6 million overall in financial year 2022, an increase
of 34.5% on the prior-year figure. On a constant currency
basis, it therefore achieved extremely encouraging earnings
growth of 26.7%. Operating costs rose at a softer rate than
operating gross profit, enabling it to record stronger growth
in operating EBITDA. The Brenntag Group’s growth is predom-
inantly organic and due to strong increases in earnings in
both of the divisions. Global supply chains remained very
strained and the trend in energy prices, driven primarily by
Russia’s war of aggression in Ukraine, posed an additional
challenge for international trade. In a still-difficult market
environment, Brenntag’s close relationships with customers
and suppliers, broad product portfolio and global logistics
expertise paid off again.
Depreciation of property, plant and equipment and right-of-
use assets rose by EUR34.2 million year on year to EUR296.9
million in financial year 2022.
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In 2022, tax decision notices and enforceable demands for
payment of energy tax were received in relation to provisions
recognized in the previous year for excise duties, leading to a
lower-than-expected tax liability. The reversal of the relevant
provisions resulted in other operating income of EUR19.0 million.
For the provisions recognized in the previous year for possible
breaches of export control regulations, a partial decision was
issued by the authorities, resulting in a reversal of the provi-
sion in the amount of EUR10.8 million. In addition, provisions
of EUR12.9 million were recognized for legal risks arising from
the sale of certain minerals in North America.
Net finance costs came to EUR147.5 million in financial year
2022 (2021: EUR92.1 million), with the year-on-year change
attributable mainly to four effects. Firstly, net interest expense
widened year on year to EUR92.1 million (2021: EUR59.5 mil-
lion). This is due mainly to the change in general interest rate
levels as a result of the measures taken by central banks
worldwide to tackle inflation. In addition, expenses arising on
the translation of foreign currency receivables and liabilities
showed a clear increase on the prior-year period due primar-
ily to generally higher currency fluctuations. Thirdly, the initial
classification of Turkey as a hyperinflationary economy
increased net finance costs by EUR18.3 million, of which
EUR2.0 million was recognized in net interest expense. Fur-
thermore, the measurement of liabilities relating to the acqui-
sition of non-controlling interests had an opposite effect, as
the resulting expenses in financial year 2022 were much lower
than in the previous year (2022: expenses of EUR7.6 million;
2021: expenses of EUR28.3 million).
Income tax expense rose by EUR143.5 million year on year to
EUR332.4 million in financial year 2022 due to an increase in
profits and special items in 2022.
Profit after tax stood at EUR902.5 million in financial year
2022 (2021: EUR461.4 million).
The Brenntag Group’s operating EBITA came to EUR1,511.7
million in financial year 2022, an increase of 39.7%. On a con-
stant currency basis, this represents significant earnings
growth of 31.5% compared with the prior-year figure.
Amortization of intangible assets amounted to EUR109.5 mil-
lion. Compared with financial year 2021, Brenntag recorded
a decrease of EUR1.3 million. However, an impairment loss of
EUR 38.1 million was recognized for the goodwill of the
Brenntag Essentials Latin America segment. The write-down
is due in particular to the lower income expected from the
cash-generating unit in combination with the appreciable
year-on-year increase in country risk premiums. In the previ-
ous year, an impairment loss of EUR51.9 million was recog-
nized in connection with changes to the Group’s IT portfolio.
Net expense from special items breaks down as follows:
in EUR m 2022 2021
Expenses in connection with
“Project Brenntag” and other
strategic projects –36.7 –34.7
Reversal of/addition to provisions
for excise duties 19.0 –175.5
Addition to provision for legal risks –2.1 –24.0
Refund of social security charges
paid in previous years in Brazil – 5.5
Net expense from special items –19.8 –228.7
4.02 Net expense from special items
The expenses in connection with “Project Brenntag” and other
strategic projects comprise advisory and one-time expenses
necessary in order to achieve the desired target structure,
such as expenses in connection with site closures and sever-
ance payments.
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Change
in EUR m 2022 2021 abs. in %
Operating EBITA 1,511.7 1,081.9 429.8 39.7
Average carrying amount of equity 4,543.1 3,802.8 740.3 19.5
Average carrying amount of financial and lease liabilities 3,120.2 2,363.4 756.8 32.0
Average carrying amount of cash and cash equivalents –882.2 –645.7 –236.5 36.6
ROCE 22.3% 19.6% – –
ROCE after special items 22.0% 15.5% – –
4.03 Return on capital employed (ROCE)
The Brenntag Group posted ROCE of 22.3% in financial year
2022, a rise of 2.7 percentage points compared with the pre-
vious year. This change is due mainly to the significant
increase in operating EBITA. Unadjusted for special items,
ROCE rose to 22.0% in financial year 2022 (2021: 15.5%).
Business performance in the divisions
in EUR m
Brenntag
Specialties
Brenntag
Essentials
All other
Segments
Brenntag
Group
Operating gross profit
2022 1,678.3 2,608.6 32.1 4,319.0
Change versus 2021 in % 30.8 26.2 11.1 27.8
fx. adj. change versus 2021 in % 24.8 17.7 11.1 20.3
Operating EBITDA
2022 779.6 1,153.3 –124.3 1,808.6
Change versus 2021 in % 37.4 36.8 88.6 34.5
fx. adj. change versus 2021 in % 32.1 27.6 88.9 26.7
Operating EBITA
2022 738.0 910.8 –137.1 1,511.7
Change versus 2021 in % 38.0 47.0 88.8 39.7
fx. adj. change versus 2021 in % 32.9 36.7 89.1 31.5
4.04 Business performance in the divisions
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Brenntag Specialties
in EUR m EMEA Americas APAC
Brenntag
Specialties
Operating gross profit
2022 725.0 664.3 289.0 1,678.3
Change versus 2021 in % 22.0 44.7 25.9 30.8
fx. adj. change versus 2021 in % 23.8 29.4 17.8 24.8
Operating EBITDA
1)
2022 335.0 297.2 148.6 779.6
Change versus 2021 in % 21.2 64.8 32.9 37.4
fx. adj. change versus 2021 in % 24.1 47.7 23.8 32.1
Operating EBITA
1)
2022 323.9 281.3 134.0 738.0
Change versus 2021 in % 20.1 65.6 38.9 38.0
fx. adj. change versus 2021 in % 23.0 48.4 29.5 32.9
4.05 Business performance in the segments/Brenntag Specialties
1)
The difference between the sum total of the reportable segments (EMEA, Americas and APAC) and the Brenntag Specialties division is the result of central activities
which are part of Brenntag Specialties but not directly attributable to any one segment.
Operating gross profit in the Brenntag Specialties division
came to EUR1,678.3 million in financial year 2022, an increase
of 30.8% on the prior-year figure. On a constant currency
basis, it showed a rise of 24.8%. Brenntag Specialties bene-
fited primarily from significantly higher operating gross profit
per unit. This broad-based, positive performance at operating
gross profit level was supported by almost all focus indus-
tries. The focus industries in Life Science performed especially
well.
Overall, the Brenntag Specialties division generated operat-
ing EBITDA of EUR779.6 million in financial year 2022, an
increase of 37.4% on the prior-year figure. On a constant cur-
rency basis, operating EBITDA was up by 32.1%. All segments
of the Brenntag Specialties division contributed to this very
encouraging result. It was driven mostly by substantial
organic growth and also supported by the acquisitions
closed. In the course of 2022, there were difficulties in global
supply chains in the individual Specialties segments and
these were reflected in container shortages and a lack of
available transport capacity, for example. Almost all seg-
ments saw rising energy and transport costs. In the Special-
ties Americas and APAC segments, operating EBITDA never-
theless increased at a faster pace than operating gross profit.
It was possible to pass on the inflation-driven increases in
costs. The Americas and EMEA segments are particularly
worthy of note here. In absolute terms, these were the stron-
gest drivers of the positive results compared with the previous
year. The APAC segment also achieved significant growth
rates in the course of the year.
Operating EBITA in the Brenntag Specialties division came to
EUR738.0 million in financial year 2022, an increase of 38.0%
on the prior-year figure. On a constant currency basis, this
represents growth of 32.9%.
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Brenntag Essentials
in EUR m EMEA
North
America
Latin
America APAC
Brenntag
Essentials
Operating gross profit
2022 969.6 1,342.5 176.9 119.6 2,608.6
Change versus 2021 in % 20.9 34.3 16.7 5.7 26.2
fx. adj. change versus 2021 in % 20.2 20.0 5.0 –2.0 17.7
Operating EBITDA
1)
2022 474.7 578.1 60.7 41.4 1,153.3
Change versus 2021 in % 43.5 39.4 14.1 –8.0 36.8
fx. adj. change versus 2021 in % 42.6 24.6 2.9 –14.5 27.6
Operating EBITA
1)
2022 367.5 468.5 42.8 33.6 910.8
Change versus 2021 in % 65.2 47.4 10.6 –18.6 47.0
fx. adj. change versus 2021 in % 63.9 31.7 – –24.5 36.7
4.06 Business performance in the segments/Brenntag Essentials
1)
The difference between the sum total of the reportable segments (EMEA, North America, Latin America and APAC) and the Brenntag Essentials division is the result
of central activities which are part of the Brenntag Essentials division but not directly attributable to any one segment.
Operating EBITA in the Brenntag Essentials division rose by
47.0% year on year to EUR910.8 million in financial year 2022.
On a constant currency basis, it showed a rise of 36.7%.
All other Segments
In “All other Segments” in financial year 2022, Brenntag
recorded a high rise in costs compared with the previous year.
The major drivers here included higher advisory expenses, pri-
marily in IT, Brenntag Excellence and other strategic projects,
as well as noticeably higher lease expenses, particularly in
relation to software and licenses.
BRENNTAG International Chemicals GmbH, the only operat-
ing company within “All other Segments”, significantly
exceeded prior-year operating EBITDA in financial year 2022.
Overall, the operating EBITDA of “All other Segments” was
down by EUR 58.4 million on the prior-year figure to EUR–124.3
million in financial year 2022. The operating EBITA of “All other
Segments” came to EUR–137.1 million in financial year 2022,
a decrease of EUR64.5 million on the prior-year figure.
Operating gross profit in the Brenntag Essentials division
grew by 26.2% year on year to EUR2,608.6 million in financial
year 2022. On a constant currency basis, operating gross
profit was up by 17.7% on the prior-year figure. This perfor-
mance is due to higher operating gross profit per unit in all
segments of the Brenntag Essentials division. The Essentials
EMEA and North America segments achieved substantial
rates of growth in operating gross profit in financial year 2022.
The North America segment also achieved higher volumes.
The difficulties in global supply chains impacted negatively
on business operations in this division, too.
The Brenntag Essentials division achieved operating EBITDA
of EUR1,153.3 million in financial year 2022, a rise of 36.8%
compared with the previous year. On a constant currency
basis, this represents growth of 27.6%. Brenntag Essentials
faced strong inflationary pressures on costs, particularly
transport and energy costs, but was more or less able to pass
these on. In the EMEA and North America segments, operating
EBITDA nevertheless increased at a faster rate than operating
gross profit. The positive operating EBITDA performance in
the EMEA, North America and Latin America segments is due
almost entirely to organic growth. Operating EBITDA in the
APAC segment was noticeably lower year on year due to falls
in demand in all APAC regions, particularly in China. Despite
existing shortages on the market, the division managed to
reliably supply customers with products at all times.
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Forecast/Actual comparison
In the following, performance compared with the forecast
published in last year’s financial report is only commented
upon where it differs from that forecast.
Given the global impact of the war in Ukraine and the COVID-
19 pandemic on the economy, Brenntag is extremely satisfied
with its operating EBITDA performance. This earnings fore-
cast is inclusive of the contribution from the acquisitions
closed and exclusive of foreign currency translation effects
arising after the date of the forecast’s preparation. So far in
the course of the pandemic, Brenntag has been able to
demonstrate the strength and robustness of its business
model. For 2022, Brenntag had initially forecast operating
EBITDA of between EUR1,450.0 million and EUR1,550.0 mil-
lion. On June 13, 2022, the Board of Management of
Brenntag SE decided to raise this forecast range to between
EUR1,750.0 million and EUR1,850.0 million. When publishing
the financial results for each of the second and third quarters,
Brenntag confirmed the upper half of that forecast range. The
revisions were in each case due to the strong results for the
quarters of 2022 already ended, the positive earnings trends
in the past quarter and the growth outlook for the rest of the
year. The forecast also reflected expectations for future mar-
ket conditions. The forecasts were based on the assumption
at the date of their publication that exchange rates would
remain stable. At year-end, the Brenntag Group achieved
operating EBITDA of EUR 1,808.6 million, putting it within the
forecast range.
At the beginning of financial year 2022, Brenntag expected a
slight improvement in working capital turnover compared
with the reported averages for the previous financial year. In
fact, working capital turnover fell significantly.
In the prior-year forecast, Brenntag expected capital expen-
diture of EUR290 million. At EUR267.2 million, capital expen-
diture in the past financial year was well below the original
forecast. This is primarily attributable to delays on the pro-
jects aimed at site optimization.
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Financial position
Capital structure
The primary objective of capital structure management is to
maintain the Group’s financial strength. Brenntag concen-
trates on a capital structure which enables the Group to cover
its potential financing requirements at all times. This gives
Brenntag a high degree of independence, security and flexi-
bility. Our liquidity, interest rate and currency risks are largely
managed on a Group-wide basis. Derivative financial instru-
ments are only used to hedge the above-mentioned risks from
underlying transactions and not for speculative purposes. A
Group-wide Finance Guideline ensures the implementation of
these policies and standard processes throughout the Group.
The most important component in the financing structure of
Brenntag SE is the Group-wide syndicated loan agreement.
As the existing loan would have matured in January 2024,
Brenntag agreed a new syndicated loan totaling the equiva-
lent of EUR1.5 billion with a consortium of international banks
in February 2023. The new loan has a term ending in 2028. It
is based on variable interest rates with margins depending on
the credit rating, and is divided into two revolving credit facil-
ities – one credit facility in the amount of EUR1 billion and a
USD credit facility in the amount of USD525.0 million (euro
equivalent as at Dec. 31, 2022: EUR492.2 million). For the first
time, the margin is also linked to the achievement of certain
Brenntag Group sustainability targets. As Brenntag repaid
outstanding liabilities under the old syndicated loan at the
beginning of 2023, total liabilities (excluding accrued interest
and before offsetting of transaction costs) under the new syn-
dicated loan amounted to around EUR180 million at the time
of the refinancing in February 2023 (by comparison: as at
December 31, 2022, total liabilities under the old loan
amounted to EUR547.6 million). Only slightly more than a
third of the USD credit facility was drawn down. The credit
facility of EUR1 billion, on the other hand, remained mostly
unused and is available for further drawdowns at any time.
While some of our subsidiaries are direct borrowers under the
loan, others obtain their financing from intra-Group loans. The
syndicated loan is guaranteed by Brenntag SE.
In September 2017, Brenntag Finance B.V. issued a EUR600
million bond (Bond 2025) maturing in 2025 and bearing a
coupon of 1.125% with interest paid annually.
In October 2021, Brenntag Finance B.V. issued a further bond
for EUR500.0 million (Bond 2029). The bond has a maturity of
eight years and carries an annual coupon of 0.50%. It is the
first bond issue to take place under a EUR3.0 billion debt issu-
ance program newly established in 2021. The Bond 2029 was
issued primarily for the purpose of refinancing the Bond (with
Warrants) 2022 early, ahead of its maturity in December 2022.
Most of the proceeds from the Bond 2029 were therefore
swapped for US dollars by way of a long-dated derivative
(cross-currency interest rate swap) in 2021.
In addition, in August 2022, Brenntag closed a promissory
note (Schuldschein) transaction for around EUR640.0 million.
The promissory notes were issued by Brenntag SE and com-
prise a total of seven tranches with tenors of three, five and
seven years and carrying floating or fixed interest rates.
Alongside euro-denominated tranches totaling EUR390.0
million, the company also issued US dollar-denominated
tranches totaling USD250.0 million.
In December 2022, Brenntag repaid the Bond (with Warrants)
2022 in the amount of USD500.0 million. As the Brenntag
share price was lower than the strike price at the end of the
exercise period in November 2022, the warrants did not have
a positive intrinsic value and were not exercised. Therefore, no
new shares were created.
In addition to the four above-mentioned financing instru-
ments, some of our companies make use of credit lines with
local banks in consultation with Group Treasury.
Due to the two fixed-rate bonds and the partly fixed-rate
promissory notes, just under 50% of the Brenntag Group’s
financial liabilities were hedged against the risk of interest
rate increases as at December 31, 2022.
According to our short- and mid-term financial planning, the
capital requirements for operating activities, planned invest-
ments and projects, and dividends and acquisitions on the
assumed scale are expected to be covered by the cash pro-
vided by operating activities. To cover short-term liquidity
requirements and for general corporate purposes, we likewise
have the aforementioned credit facilities under the syndi-
cated loan.
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Investments
In financial year 2022, investments in property, plant and
equipment and intangible assets (excluding additions from
acquisitions) led to a total cash outflow of EUR267.2 million
(2021: EUR199.3 million).
Brenntag regularly invests in the maintenance, replacement
and extension of the Group infrastructure necessary to per-
form its services, such as warehouses, offices, trucks, field
service vehicles and IT hardware for various systems. As the
market leader and a responsible chemical distributor,
Brenntag attaches importance to ensuring that its property,
plant and equipment meet comprehensive health, safety and
environmental requirements.
Among a vast number of investments, the following projects
are worthy of note:
In order to improve operational efficiency at a site in Santa
Fe, California, USA, funds totaling EUR14.9 million in financial
year 2022 were invested in increasing storage, processing and
packing capacity as well as capacity to unload entire wag-
ons. The project is expected to be completed in the first quar-
ter of 2023.
In addition, in the Gulf Coast region of Louisiana, USA, EUR5.0
million was invested in 2022 in order to facilitate the consoli-
dation of several outdated and unconnected facilities –
including offices, blending facilities, tank farms and ware-
houses – into a single facility in Maurice, Louisiana. Just as
importantly, this investment in the extended facility positions
Brenntag for growth in the Gulf Coast region over the coming
decades. The project is expected to be completed in the first
quarter of 2023.
A further EUR8.2 million was invested in financial year 2022
with a view to readying a plant in Toledo, Ohio, USA, to handle
inorganic and corrosive products by expanding an outdoor
tank farm for solvents and extending rail capacity. These
infrastructure improvements will not only improve this site’s
competitive position, but also enable the consolidation of two
existing sites in line with the objectives of the site network
optimization project. This project was completed in 2022.
In addition, in Lutterworth, UK, a commercial property and a
plot of land were acquired next to the existing plant. The
investment will enable site capacity to be substantially mod-
ernized and increased in future and the site to be strategically
positioned as a key hub. Investment in the property totaled
EUR11.2 million in 2022.
Maturity profile of our credit portfolio
1)
as at December 31, 2022 in EUR m:
4.07 Maturity profile of our credit portfolio
1)
Syndicated loan, promissory notes, Bond 2025 and Bond 2029 excluding accrued interest and transaction costs. N.B.: As the illustration refers
to December 31, 2022, it still includes the previous syndicated loan (due to mature in 2024), although this has since been replaced with a new loan
agreement maturing in 2028 (see also the explanatory notes above).
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0
100
200
300
400
500
600
700
800
2029202820272026202520242023
Investments in intangible assets amounted to EUR8.0 million
in financial year 2022 (2021:EUR20.0 million) and related
mainly to digitalization and the expansion of the IT infrastruc-
ture in EMEA and Asia Pacific.
Investments are typically funded from cash flow and/or
available cash from the respective Group companies. With
larger investment projects which cannot be covered by local
funds, financing is provided by the Group and external bor-
rowings are mostly not necessary.
Cash flow
in EUR m 2022 2021
Net cash provided
by operating activities 956.7 388.6
Net cash used in investing activities –401.4 –608.5
of which payments to acquire
consolidated subsidiaries,
other business units and other
financial assets –156.7 –420.5
of which payments to acquire
intangible assets and property,
plant and equipment –267.2 –199.3
of which proceeds from
divestments 22.5 11.3
Net cash used in/provided
by financing activities –225.8 174.1
of which dividends paid
to Brenntag shareholders –224.0 –208.6
of which proceeds from
promissory notes 640.0 –
of which repayments
of/proceeds from borrowings –540.2 401.3
of which other financing activities –101.6 –18.6
Change in cash and cash
equivalents 329.5 –45.8
4.08 Cash flow
Net cash provided by operating activities of EUR956.7 million
(2021: EUR388.6 million) was influenced by the rise in working
capital of EUR385.7 million (2021: EUR575.3 million).
Of the net cash of EUR401.4 million (2021: EUR608.5 million)
used in investing activities, EUR267.2 million (2021: EUR199.3
million) comprised payments to acquire intangible assets and
property, plant and equipment. Payments to acquire consol-
idated subsidiaries and other business units in financial year
2022 consisted mainly of payments to acquire the shares in
TechManagement Energy Services, LLC headquartered in
Odessa, Texas, USA, in November 2022 and Ravenswood’s Life
Science and Coatings business headquartered in Bayswater,
Australia, in December 2022. They also included cash inflows
from repayments in connection with prior-year acquisitions.
Besides bank loans taken out and repaid as well as lease lia-
bilities repaid, net cash used in financing activities of
EUR225.8 million (2021: net cash provided by financing activ-
ities of EUR174.1 million) mainly included the cash inflow of
around EUR640.0 million from promissory notes (Schuld-
schein) taken out in August 2022 and the cash outflow of
EUR445.8 million for repayment of the Bond (with Warrants)
2022 at maturity in December 2022. A further EUR224.0 mil-
lion was used for the dividend payment to Brenntag share-
holders and a further EUR96.4 million to settle the liability
relating to the acquisition of the remaining 49% of the shares
in TEE HAI CHEM PTE LTD, Singapore.
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The Brenntag Group’s free cash flow amounted to EUR1,005.1
million in financial year 2022, an increase of 128.7% on the
previous year.
This is due mainly to the significant rise in operating EBITDA
and also to the smaller increase in the change in working cap-
ital compared with the previous year. Capital expenditure to
expand the Group’s infrastructure was up significantly on the
prior-year figure.
Free cash flow
Change
in EUR m 2022 2021 abs. in %
Operating EBITDA 1,808.6 1,344.6 464.0 34.5
Payments to acquire intangible assets and property, plant
and equipment –267.2 –199.3 –67.9 34.1
Change in working capital –385.7 –575.3 189.6 –33.0
Principal and interest payments on lease liabilities –150.6 –130.5 –20.1 15.4
Free cash flow 1,005.1 439.5 565.6 128.7
4.09 Free cash flow
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The cash portion of the change in working capital amounted
to an outflow of EUR385.7 million. At 7.5, annualized working
capital turnover was well below the prior-year figure (8.3).
in EUR m Dec. 31, 2022 Dec. 31, 2021
Liabilities under syndicated loan 551.9 518.6
Other liabilities to banks 217.9 165.2
Promissory notes (Schuldschein) 627.1 –
Bond 2025 599.2 598.2
Bond 2029 497.5 497.1
Bond (with Warrants) 2022 – 437.0
Derivative financial instruments 56.9 21.5
Other financial liabilities 111.0 92.1
Tot a l 2,661.5 2,329.7
Lease liabilities 434.3 445.6
Cash and cash equivalents 1,046.1 705.0
Net financial liabilities 2,049.7 2,070.3
4.11 Net financial liabilities
Financial and assets position
Dec. 31, 2022 Dec. 31, 2021
in EUR m abs. in % abs. in %
Assets
Current assets 5,920.3 52.1 4,958.1 48.6
of which trade receivables 2,676.8 23.5 2,290.2 22.5
of which inventories 1,773.8 15.6 1,621.9 15.9
Non-current assets 5,452.7 47.9 5,237.4 51.4
Total assets 11,373.0 100.0 10,195.5 100.0
Liabilities and equity
Current liabilities 3,238.0 28.5 3,526.1 34.5
of which trade payables 1,862.0 16.4 1,802.3 17.7
of which financial and lease liabilities 429.7 3.8 789.4 7.7
Equity and non-current liabilities 8,135.0 71.5 6,669.4 65.5
of which financial and lease liabilities 2,666.1 23.4 1,985.9 19.5
of which equity 4,802.7 42.2 3,995.3 39.2
Total liabilities and equity 11,373.0 100.0 10,195.5 100.0
4.10 Financial and assets position
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Annual financial statements of Brenntag SE
Results of operations and financial
position of Brenntag SE
in EUR m 2022 2021
Sales 64.8 35.9
Other own work capitalized – 1.1
Other operating income 193.4 110.4
Cost of materials –32.1 –22.0
Personnel expenses –54.4 –53.9
Amortization and write-downs of
intangible assets and depreciation
and write-downs of property, plant
and equipment –3.3 –34.9
Other operating expenses –355.6 –137.7
Net finance income 446.2 328.5
Profit before tax 259.0 227.4
Taxes on income –8.3 14.1
Profit after tax/net income
for the financial year 250.7 241.5
Withdrawal from/appropriation
to retained earnings 58.3 –17.5
Distributable profit 309.0 224.0
4.12 Brenntag SE/Income statement in accordance
with the German Commercial Code (HGB)
Sales result exclusively from sales to affiliated companies. Of
the total, revenues from the provision of services to affiliated
companies, which result mainly from IT services, other man-
agement services and personnel services provided, account
for EUR 62.5 million (2021: EUR 33.8 million).
Other own work capitalized relates to own work performed
in connection with the introduction and commissioning of
software.
Other operating income rose by EUR83.0 million to EUR193.4
million. The rise is attributable mainly to an increase in income
from foreign currency hedges and foreign exchange gains.
Cost of materials consists solely of the cost of purchased
services. The EUR 10.1 million rise in cost of materials to
EUR32.1 million is mainly the result of the expansion of IT
security and higher implementation and license costs.
The EUR0.5 million rise in personnel expenses to EUR54.4
million is attributable to the increase in headcount.
Only depreciation and amortization charges were recognized
in financial year 2022. In the previous year, write-downs
amounted to a total of EUR31.5 million and were the result of
changes to the IT portfolio in the course of implementing
“Project Brenntag”.
Other operating expenses increased by EUR217.9 million to
EUR 355.6 million. The increase is due in part to higher advi-
sory expenses, primarily in IT, Brenntag Excellence and other
strategic projects, as well as expenses from foreign currency
hedges and foreign exchange losses.
As in the previous year, net finance income consists mainly of
income from profits transferred by Brenntag Holding GmbH,
Essen, in the amount of EUR431.9 million (2021: EUR323.5
million). Net interest income in the amount of EUR14.3 million
(2021: EUR 5.0 million) was driven mainly by intra-Group
financing activities.
As at December 31, 2022, temporary differences – both
Brenntag SE’s own and those at companies in the consoli-
dated tax group and German partnerships – give rise to a
future tax receivable, as deferred tax assets exceed deferred
tax liabilities. Applying the option under Section 274, para. 1,
sentence 2 of the German Commercial Code, a deferred tax
asset is not recognized for the excess of deferred tax assets
over deferred tax liabilities.
In line with its function as a holding company, Brenntag SE’s
future results mainly depend on the receipt of dividends from
companies in the Group and therefore also on the business
performance of subsidiaries and decisions on dividend distri-
butions. Brenntag expects Brenntag SE’s net income for 2023
to be similar to that for the past financial year. At Brenntag,
intra-Group profits are distributed taking local financing
requirements and further constraints into consideration. Even
if no intra-Group dividends are distributed to Brenntag SE in
a financial year, there are sufficient reserves to pay an appro-
priate dividend to the Brenntag shareholders.
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ANNUAL FINANCIAL STATEMENTS OF BRENNTAG SE
in EUR m Dec. 31, 2022 Dec. 31, 2021
Fixed assets 2,550.5 2,545.1
Current assets including
prepaid expenses 2,036.4 1,424.3
Total assets 4,586.9 3,969.4
Equity 2,792.7 2,766.0
Provisions 113.0 82.8
Liabilities 1,681.2 1,120.6
Total equity and liabilities 4,586.9 3,969.4
4.13 Brenntag SE/Balance sheet in accordance
with the German Commercial Code (HGB) – condensed version
The fixed assets of Brenntag SE in the amount of EUR 2,550.5
million (Dec. 31, 2021: EUR 2,545.1 million) almost exclusively
comprise shares in affiliated companies.
Current assets including prepaid expenses rose by EUR612.1
million to EUR 2,036.4 million. The rise relates primarily to
finance receivables due from affiliated companies, which
amounted to EUR 1,747.6 million (Dec. 31, 2021: EUR 1,250.2
million).
The equity of Brenntag SE increased by EUR 26.7 million to
EUR 2,792.7 million. This rise resulted from the net income for
financial year 2022 of EUR 250.7 million minus the dividend
paid for financial year 2021 in the amount of EUR 224.0 million.
Provisions amounted to EUR113.0 million in total (Dec. 31, 2021:
EUR82.8 million) and consisted mainly of provisions for pen-
sions and similar obligations, provisions for outstanding
invoices and provisions for other personnel expenses. Provi-
sions for pensions rose byEUR 5.8 million to EUR45.3 million
and provisions for outstanding invoices by EUR27.3 million to
EUR36.3 million.
Liabilities of EUR1,681.2 million (Dec. 31, 2021: EUR1,120.6
million) relate mainly to finance liabilities to affiliated com-
panies, which declined by EUR 84.0 million year on year to
EUR1,032.0 million.
The subscribed capital amounted to EUR 154.5 million in total
(Dec. 31, 2021: EUR154.5 million) and, as in the previous year,
is divided into 154,500,000 no-par value registered shares.
The full annual financial statements of Brenntag SE with the
unqualified auditors’ report of the auditors Pricewaterhouse-
Coopers GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf,
are published in the Federal Gazette and can be ordered as
an offprint from Brenntag SE.
Appropriation of distributable profit
of Brenntag SE
The net income of Brenntag SE as at December 31, 2022 was
EUR 250,694,014.54. After allowing for the withdrawal of
EUR58,305,985.46 from retained earnings, the distributable
profit is EUR309,000,000.00.
At the ordinary General Shareholders’ Meeting on June 15, 2023,
the Board of Management will propose that the balance
sheet profit of Brenntag SE amounting to EUR309,000,000.00
be used to pay a dividend of EUR2.00 per no par value share
entitled to a dividend and to appropriate to retained earnings
such amount of the distributable profit attributable to non-div-
idend bearing, no par value shares at the time of the adoption
of the resolution on the appropriation of balance sheet profit
for fiscal year 2022 by the General Shareholders’ Meeting.
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ANNUAL FINANCIAL STATEMENTS OF BRENNTAG SE
Employees
As at December 31, 2022, Brenntag had 17,540 employees
worldwide, including the 318 employees of the companies
newly acquired in 2022. 90% of the workforce work outside
Germany. The total number of employees is determined on
the basis of headcount, i.e. part-time employees are fully
Dec. 31, 2022 Dec. 31, 2021
Headcount abs. in % abs. in %
Brenntag Specialties 4,527 25.8 4,534 26.3
Brenntag Essentials 10,811 61.6 10,329 59.9
All other Segments 2,202 12.6 2,373 13.8
Brenntag Group 17,540 100.0 17,236 100.0
4.14 Employees per division
All logistics functions are part of the Brenntag Essentials divi-
sion in all regions except Asia Pacific (in the Asia Pacific
region, they are part of the Brenntag Specialties division). To
take account of this in the segment results, the other divisions
are charged at the amount of the logistics services they use.
The same applies to the services provided to Essentials or
Specialties by Business Services.
included. Excluding the new acquisitions, the total number of
people employed in the Brenntag Group declined by 14, or
0.1%, compared with the previous year. Voluntary employee
turnover was 9.4% on average across the Group (2021: 9.3%).
Further information can be found in the combined separate
non-financial report in the Annual Report 2022.
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EMPLOYEES
Quality management, safety, health
and environmental protection
Occupational health and safety, process safety, customer
satisfaction, respect for the environment and the long-term
conservation of natural resources are of key importance to
Brenntag as a matter of principle.
Brenntag’s global business operations and its highly diversi-
fied customer and supplier structure bring a diverse range of
operating conditions (legislation, cultures, industry standards
and other requirements). The combination of chemical pro-
cess safety and typical occupational safety issues arising
from transportation, storage, packaging and distribution add
to the complexity at Brenntag.
In order to meet the resulting requirements, Brenntag’s QSHE
strategy (QSHE: quality, safety, health and environment) is
based on the following four pillars:
■
Culture
■
Team
■
Management System
■
Monitoring & Controlling
Further information on quality, safety, health and environmen-
tal protection is published in the combined separate non-fi-
nancial report along with quantitative disclosures on relevant
performance indicators.
Sustainability management
Being global market leader means bearing responsibility
worldwide. Brenntag is aware of this responsibility and over
the past few years has continuously expanded its sustainabil-
ity organization and activities. It has established a global sus-
tainability program and comprehensive governance struc-
tures with a view to driving the integration of numerous ESG
matters into its business processes.
Responsible and sustainable chemical and ingredients distri-
bution is a fundamental element of Brenntag’s strategy; it
provides the basis for Brenntag’s future as a global leader.
Further information can be found in the combined separate
non-financial report.
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SUSTAINABILITY MANAGEMENT
Report on expected developments,
opportunities and risks
Following a fall in working capital turnover in the past finan-
cial year, Brenntag anticipates that it will achieve a moderate
improvement in working capital turnover compared with the
reported averages for the past financial year. In 2023,
Brenntag expects the planned business activity and the
improvement in working capital turnover to result in an over-
all decrease in working capital.
Brenntag is planning capital expenditure of around EUR350
million in financial year 2023. Among other things, it is con-
tinuing to optimize the global site network in order to close
gaps in the network, leverage economies of scale, install new
central hubs as growth drivers and make improvements at
existing sites. In doing so, it is also investing more in safety and
sustainability at the sites. Further investments relate to mea-
sures under Brenntag’s digitalization strategy.
Overall, and assuming that exchange rates remain stable,
Brenntag anticipates that free cash flow in 2023 will be
roughly in line with the prior-year figure due primarily to a
lower cash outflow as a result of the increase in working cap-
ital. Therefore, it once again expects a high free cash flow that
will enable it to continue to ensure its acquisition strategy and
dividend policy and, at the same time, maintain liquidity at an
adequate level.
Main elements of the internal control/risk
management system
The aim of risk management is to identify, monitor and miti-
gate emerging risks at an early stage or to prevent them com-
pletely. Therefore, the risk management system consists of
risk reporting (an early detection system), controlling and an
internal monitoring system as well as individual measures to
identify risks at an early stage and limit any known risks. The
planning, controlling and reporting processes of the Brenntag
Group are integral parts of the risk management systems of
all operational and legal units as well as the central functions.
Report on expected developments
In financial year 2023, the Brenntag Group expects the war in
Ukraine and geopolitical tensions to once again result in
strains in supply chains and strong inflationary pressures. Due
to lower demand, it is possible that prices in Brenntag’s sup-
ply chains will fall despite general price increases. This con-
tinues to result in a still greater-than-average degree of
uncertainty over growth expectations for the global economy
in 2023. Oxford Economics currently predicts that the global
economy, measured in terms of industrial production (IP), will
turn down in 2023. Weighted by the sales generated by
Brenntag in the individual countries, this results in a forecast
average real IP growth rate of –0.7% in 2023.
At the level of the Brenntag Group, operating EBITA will be the
key performance indicator in future. In light of the continuing
economic uncertainty, Brenntag expects the Group’s operat-
ing EBITA for financial year 2023 to be between EUR1,300 mil-
lion and EUR 1,500 million. This includes the effects in the
course of implementing our divisional strategies, the initial
achievements of our digitalization strategy and additional
measures under “Project Brenntag”. Our forecast takes into
account the contributions to earnings from acquisitions
already closed and assumes that exchange rates will remain
stable. Brenntag once again expects operating EBITDA to be
between EUR 1,600 million and EUR 1,800 million.
After the Brenntag Specialties and Brenntag Essentials divi-
sions were able to deliver exceptionally good results in 2022,
the Brenntag Group expects a decline in operating EBITA in
both divisions in 2023. The relative decline in operating EBITA
for the Brenntag Essentials division in 2023 is expected to be
lower than in the Brenntag Specialties division. These expec-
tations for the two divisions apply in the same form to oper-
ating EBITDA.
The forecast decrease in operating EBITA is slightly higher
than the expected decline in operating gross profit due to the
fact that Brenntag anticipates higher operating expenses in
providing its services and will incur initial expenditure in con-
nection with the strategy and digitalization initiatives.
Brenntag expects the decline in the Group's operating gross
profit to be driven by a decline in operating gross profit in both
divisions, with the decline at Brenntag Essentials forecast to
be relatively smaller than at Brenntag Specialties.
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Risk reporting (early detection system)
Brenntag continually identifies and analyzes risks at the
Group companies and constantly improves internal work-
flows and the IT systems used throughout the Group.
Responsibility for risks lies initially with the legal units in the
Brenntag Group. This includes identifying risks and estimating
their effects. It must also be ensured that there are suitable
measures in place to reduce risks.
The risk inventories performed and documented every six
months at the Group companies and at the highest Group
level are an important tool for global risk management. In
addition, all units have been instructed to immediately report
any significant risks suddenly occurring (ad hoc reporting) to
Group headquarters.
The risk inventories gather estimations on existing risks. Stan-
dardized risk catalogues giving examples of the typical risks
for the Brenntag Group are used as a system for gathering this
information. In doing so, thematically related risks are grouped
into risk categories. Any risks which are identified are assessed
with regard to the possible extent of damage and their prob-
ability of occurrence, in each case on a five-level scale.
First, the gross risk is assessed. The gross risk is the maximum
damage if no counteraction is taken. If a risk can be reliably
counteracted by effective action, these measures have to be
shown in risk profiles and assessed with regard to their effec-
tiveness. The residual risk (net risk) is then the gross risk less
the effect of measures taken to reduce the risk.
Brenntag classifies net risks as “high”, “medium” or “low”
according to the estimated probability of occurrence and the
possible extent of damage, i.e. the negative impact on the
results of operations, the financial position and cash flow,
which gives the following risk matrix:
The individual risks reported are consolidated at regional
level and for the Group and then presented to the Board of
Management. The overall risk position is determined by
aggregating all risks. To assess risk-bearing capacity, we
compared this against compliance with a leverage ceiling
(ratio of net debt to EBITDA). Risk reporting covers risks only,
not opportunities. The estimate of the risks per risk category
and the opportunities and risks are explained in detail in the
section “Report on opportunities and risks”.
The process for systematically identifying and assessing risks
for the Group companies is regularly audited by Internal Audit
Brenntag Group. In addition, the statutory auditor, as an inde-
pendent, external party, assesses the general suitability of the
risk early detection system in the course of its audit of the
annual financial statements.
Probability of occurrence
Possible extent of damage Highly improbable Improbable Possible Probable Highly probable
Qualitative in EUR m (< 6%) (6–15%) (16–30%) (31–70%) (> 70%)
Critical > 1,200 Medium Medium High High High
High > 600–1,200 Medium Medium Medium High High
Medium > 240–600 Low Medium Medium Medium High
Low > 120–240 Low Low Medium Medium Medium
Insignificant ≤ 120 Low Low Low Medium Medium
4.15 Risk assessment matrix
Controlling
The Corporate Controlling department immediately pro-
cesses the information gained from the monthly and quar-
terly reports and can thus identify and communicate risks
and opportunities. This also includes an analysis of the rea-
sons for any deviations from planned figures. On the basis of
any identified deviations from planned figures, the Corporate
Controlling department regularly examines the achievability
of targets in forecasts, indicating the associated opportuni-
ties and risks. The financial performance indicators examined
are mainly those described in the section “Financial manage-
ment system”, above all operating EBITDA, which is being
replaced by operating EBITA.
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The continuous evaluation of opportunity and risk potential
in all segments is also an elementary part of Brenntag’s strat-
egy, which is described in detail in the section “ Objectives and
strategy”. As part of regular strategy development, Brenntag
analyzes the market opportunity and risk situation in each
Brenntag segment and, on this basis, establishes goals and
value-enhancing measures designed to mitigate risks and
exploit opportunities. Finally, the situation analysis and busi-
ness operation plans are regularly reviewed in discussions on
business performance.
Internal monitoring system
Another important part of risk management in the Brenntag
Group is the internal monitoring system consisting of the
organizational security measures, internal controls and inter-
nal audit.
The internal control system comprises all central and
decentralized policies and regulations adopted by the Board
of Management and the regional and local management
teams with the aim of ensuring
■
the effectiveness and efficiency of the workflows and
processes,
■
the completeness, correctness and reliability of internal
and external financial reporting as well as
■
the Group-wide observance of applicable laws and
regulations (compliance).
Both the efficiency of the workflows and processes and the
effectiveness of the internal control systems set up in the
decentralized units as well as the reliability of the systems
used are regularly examined by Internal Audit Brenntag
Group. The results of these audits are reported immediately.
Thus, Brenntag ensures that the Board of Management is kept
continuously informed of any weaknesses and any resulting
risks, along with the appropriate recommendations to elimi-
nate the weaknesses.
Internal control system related to the (Group)
accounting process (report in accordance with
Section 289, para. 4 and Section 315, para. 4
of the German Commercial Code (HGB))
The Group accounting process is managed by the Corporate
Accounting department. A major element of the internal con-
trol system related to the (Group) accounting process is an
IFRS accounting manual applicable throughout the Group
which specifies accounting and measurement policies for all
companies included in the consolidated financial statements.
Preparation of the consolidated financial statements is sup-
ported by the use of uniform, standardized reporting and con-
solidation software (SAP SEM-BCS) containing comprehensive
testing and validation routines. The services of external
experts are used for special areas of accounting, e.g. the
annual goodwill impairment test as well as environmental and
pension actuarial reports to determine the relevant provisions.
In addition, there are other Group-wide guidelines which have
concrete effects on accounting, above all the “Internal Control
Guideline”, which contains requirements on the performance
of monitoring routines as well as the separation of functions,
the dual control principle and access authorizations, the
“Transfer Pricing Guideline” as well as the “Finance Guideline”.
Internal Audit Brenntag Group regularly checks compliance
with these Group guidelines at the subsidiaries.
Furthermore, the 2022 quarterly financial statements were
reviewed by the statutory auditors.
Summary assessment of the internal control and risk man-
agement system:
In continually addressing internal control and risk manage-
ment in financial year 2022, the Board of Management iden-
tified the potential for improvement in some areas. It
responded to any risks detected by initiating immediate mea-
sures and organizational changes. In summary, bearing in
mind these initiatives, the Board of Management has no indi-
cations that the internal control and risk management sys-
tem is not appropriate and effective.
1)
1)
The disclosures in this paragraph are disclosures not typically part of the
management report as defined in the preamble to this management report.
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Report on opportunities and risks
Brenntag’s strategy is geared to steadily improving the effi
-
ciency and underlying profitability of the business. The
Brenntag Group companies are exposed to a number of risks
arising from their business activities in the field of chemical
distribution and related areas. At the same time, these busi-
ness activities also give rise to numerous opportunities to safe
-
guard and nurture the company’s competitiveness and growth.
Projects, in particular the strategic initiatives (see the section
“Objectives and strategy”), are regularly implemented to
maintain and strengthen the Group’s profitability. These pro-
jects mainly focus on developing opportunities to increase
operating gross profit but also on cost optimization.
To limit or entirely eliminate possible financial consequences
of risks that may occur, Brenntag has, insofar as is possible,
taken out appropriate insurance for the size of its businesses
to cover damage and liability risks. The following sections
describe the risks and opportunities which could influence the
business performance, financial position and results of
operations of the Brenntag Group. Similar, organizationally or
functionally related risks have been systematically grouped
in risk categories. The estimates made per risk category
relate to the net risk. Unless stated otherwise or obvious from
the context, the following statements on risks and opportuni-
ties refer to all Brenntag segments.
As part of Group risk management, Brenntag also analyzes
environmental, social and governance-related (ESG) aspects,
such as environmental matters, employee matters, human
rights, anti-corruption and bribery matters and the risks
related to those matters. The risks are transferred into the
non-financial report in accordance with the German act
transposing the EU CSR Directive into German law (Act to
Strengthen Non-financial Disclosures by Companies in their
Management and Group Management Reports (CSR-Richt-
linie-Umsetzungsgesetz)) if risks have a severe, negative
impact on the environment and society and it is highly prob-
able that they will occur.
Overview of the assessment of corporate risks for financial
year 2022:
Risk category
Possible extent
of damage
Probability
of occurrence Overall risk
Economic environment and political stability Medium Probable Medium
Market risks High Possible Medium
Operational risks Medium Possible Medium
Financial risks Medium Possible Medium
Health, safety, environmental protection and quality management High Possible Medium
IT risks Medium Possible Medium
Personnel risks Medium Possible Medium
Acquisition risks Medium Possible Medium
Compliance risks High Possible Medium
Legal risks Medium Possible Medium
4.16 Overview of corporate risks
■
Economic environment and political stability:
Due to the international nature of its business, Brenntag is
exposed to a number of economic, political and other risks,
and the possibility that negative developments in individual
regions or countries might have an adverse effect on its busi-
ness or financial position cannot be entirely ruled out. For
example, natural disasters, pandemics or the instability of the
economic and political situation in regions or countries in
which Brenntag operates may have a negative impact on its
business and its operating result. Countries and regions with
an unstable economic and political situation are often
emerging markets, which offer great opportunities due to
above-average growth. Overall, the international nature of
the business balances out the risks. Moreover, a large per-
centage of business is conducted in stable economies.
Economic downturns may have a negative impact on
Brenntag’s sales and operating gross profit. In addition to
sales risks arising from high unemployment in certain coun-
tries and high levels of public debt, a pronounced economic
downturn in Europe or China in particular, an increase in pro-
tectionist tendencies and the possible escalation of geopo-
litical tensions may lead to falling demand. Financial year
2022 was impacted significantly by the Ukraine war. Brenntag
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strongly condemns Russia’s attack on Ukraine and the war.
The resulting economic sanctions and the geopolitical uncer-
tainty are having direct and indirect effects on international
trade. Against this background, the Board of Management of
Brenntag SE took the decision at the beginning of March 2022
to suspend all imports to and exports from Russia and
Belarus. The Board of Management also decided to halt the
business operations of all Brenntag companies in Russia and
Belarus. The decisions are valid until further notice and are
being implemented in a controlled manner. Brenntag contin-
ues to very carefully monitor the situation and developments
in the Ukraine war as well as international measures, and is
in close contact and communication with industry partners
and associations as well as with the authorities. The general
geopolitical, macroeconomic and operating environment is
expected to remain challenging. Global supply chains have
remained very strained and the trend in energy prices, driven
primarily by Russia’s war of aggression in Ukraine, posed an
additional challenge for international trade. The significant
factors influencing the outlook include further developments
and effects attributable to rising energy and supply costs in
Europe, the trend in inflation in the USA and Europe, and lock-
downs and the pandemic situation in China. Brenntag is cur-
rently working on countermeasures in order to keep the rise in
operating costs under control and is planning for various sce-
narios, depending on possible political and economic deci-
sions by government agencies.
The constant dialog with customers and suppliers in the
region also enables Brenntag to identify any impact on its
business and supply chains at an early stage and act accord-
ingly. In a recession, lower profitability on the part of custom-
ers could lead to higher bad debt losses. However, the high
level of diversification of Brenntag’s business by geography,
customer industries, suppliers, products and customers pro-
vides high resilience.
The past two years were impacted significantly by the COVID-
19 pandemic. In particular, the lockdown measures and zero-
Covid strategy in China led to severe friction in production
and to strains in global supply chains in 2022. During this
phase, particular challenges arose that required companies
to quickly adapt and be flexible, such as in sourcing goods. In
addition, difficult-to-predict processes of industrial change
accelerated. The situation in China changed in the last few
weeks of the financial year. The Chinese government
announced the end of its zero-Covid strategy and eased
restrictions. Given its mostly unvaccinated population and
ineffective vaccines, China faces sharp rises in infection num-
bers, which could again lead to the closure of ports and
important production facilities as well as new mutations of
the virus. Due to its broad geographical footprint and close
supplier relationships, Brenntag has so far coped with the
pandemic’s risks relatively well. In the past, Brenntag bene-
fited especially from being diversified in terms of its product
portfolio and its global supplier and customer relationships.
During difficult periods, they provided natural protection
against local infection hot spots. This network therefore
formed the basis for containing the pandemic’s risks to day-
to-day operations. Nevertheless, a strain on global supply
chains is likely and thus the risk of further increases in raw
materials prices as well as the risk that these additional costs
cannot be passed on to customers. In order to ensure a supply
of raw materials at the best possible price, Brenntag contin-
uously analyzes supply chains and occasionally stockpiles
inventories as a safety cushion. This, in turn, raises the risk
that, if the situation in the raw materials market were to ease,
the inventories would be too expensive and have to be sold at
less than their value. At the same time, customers could start
substituting the products with cheaper alternatives.
Brenntag continuously analyzes all risks relevant to its busi-
ness and promptly takes all the necessary and possible mea-
sures to counter them.
On the sales side, opportunities and risks may arise from
political measures, more specifically from tighter standards
and increasing regulation such as the EU chemicals regula-
tion REACH and the EU Chemicals Strategy for Sustainability
(CSS). Based on its global expertise and broad portfolio of
products and services, Brenntag is superbly positioned to be
able to serve its customers’ requirements at all times.
■
Market risks and opportunities:
Brenntag’s strategic development is geared to the current
global, regional and local market growth drivers.
Brenntag’s business is managed through two global divisions
focused on customer and supplier needs: Brenntag Essentials
and Brenntag Specialties. Based on this, there are major sales
opportunities of strategic significance for Brenntag in the
flexible and efficient marketing of process chemicals and in
the large, globally relevant focus industries on which Brenntag
Specialties concentrates, namely Nutrition, Pharma, Personal
Care/HI&I (Home, Industrial & Institutional), Material Science
(Coatings & Construction, Polymers, Rubber), Water Treat-
ment and Lubricants. In addition, its global network and com-
prehensive portfolio of products and services places Brenntag
in a unique position to meet customers’ increasing require-
ments for pan-regional and global end-to-end solutions. The
growing demand for customer-specific solutions, blending
and services and alternative sales channels also open up fur-
ther growth opportunities. The focus here is shifting to global
interaction and the opportunity to learn from one another as
part of the best practice approach, both of which are there-
fore important sources of potential for future success.
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As an international Group, Brenntag sees opportunities in all
regional markets to extend its market lead. The continuous
expansion of its geographic presence in emerging markets,
particularly in the Asia Pacific region, offers above-average
growth opportunities. Brenntag intends to continue to opti
-
mally exploit the opportunities presented by company acqui-
sitions and the active consolidation of the fragmented chem-
ical distribution market. There are opportunities in the
increasing level of digitalization and these are being
addressed and implemented in all lines of business through
a holistic approach.
In terms of product sourcing, Brenntag’s operating model
enables it to achieve economies of scale. The optimization of
the local product portfolios through sales partnership agree-
ments with chemical producers for new products or product
categories offers further potential. In addition, Brenntag
intends to continue to actively realize the potential that arises
as a result of chemical producers outsourcing supply chain
and sales activities. The global distribution network and the
experienced professional organization at all levels of the
Brenntag Group are key elements for tapping this potential.
The new “Strategy to Win” was formulated with a view to
making optimum use of the opportunities outlined (please
also see the section “Objectives and strategy”). For each of
the two divisions, Brenntag Specialties and Brenntag Essen-
tials, specific strategies were set out to address the particular
potential in their respective markets.
Brenntag plans to leverage customers’ increasing need for
sustainable solutions and products to strengthen its position
as market leader through the pioneering role it aims to play
in responsible and sustainable chemical distribution. Through
its fundamental transformation into a data- and technolo-
gy-driven company, it also intends to fully exploit the potential
of digital solutions in all Brenntag business models while at
the same time enabling more efficient and reliable supply
chains. Lastly, through continuing M&A activities, Brenntag
wishes to leverage growth opportunities, primarily in Asia
Pacific and in attractive market segments.
At local level, Brenntag creates the right conditions through
its operating activities to effectively and efficiently exploit the
opportunities which the markets offer.
In some local markets Brenntag serves, competition from
other chemical distributors is growing. This stronger compe-
tition, which is partly due to the increasing pan-regional activ-
ities and consolidation among competitors as well as the
development of new sales channels, some of them digital, is
a risk that might negatively impact sales and earnings.
Brenntag therefore works continually to improve its portfolio
of products and services. The local business might also be
impacted by customers relocating to low-cost countries.
However, Brenntag sees its extensive global presence as a key
factor in balancing out these local risks.
As far as possible, the sourcing risk related to the supply of
strategically important raw materials is offset through long-
term contracts and/or partnerships with different suppliers
and alternative supply sources. However, the purchase prices
can vary considerably depending on the market situation and
impact on cost structures. To safeguard its competitiveness,
Brenntag counteracts these risks by adjusting sales prices,
through international procurement and through strict cost
management.
The risk arising from future market developments is counter-
acted by constantly monitoring markets and competitors as
well as by holding regular strategy meetings.
■
Operational risks:
Brenntag’s business is exposed to operational risks. As a
chemical distributor, Brenntag is exposed to the risk of inter-
ruptions to business, quality problems or unexpected techni-
cal difficulties, for example as a result of the incorrect han-
dling of chemicals or machinery and equipment on site and
during transportation. Disruptions and outages at its ware-
house sites or during transportation may lead to delivery
delays and falling sales revenues. Brenntag counters this risk
through extensive safety measures at its sites and regionally
standardized quality and safety manuals, by specifically
training employees in how to handle chemicals correctly and
through safety campaigns across the sites. In addition,
Brenntag has taken out appropriate business interruption
insurance for sites where any disruption might pose the threat
of interruptions to business due to the local geographical site
structure and/or portfolio structure, as well as increased cost
of working cover for all sites.
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Risks may arise if the products purchased and delivered to
customers do not meet the specified and agreed quality or if,
in specific cases, their sale is subject to restrictions. The dis-
tribution of certain products (such as minerals) may result in
particular liability risks. However, the procedures that have
been established provide a good level of assurance that
products are procured from reliable sources, are of appropri-
ate quality and are sold on in accordance with the law.
■
Financial risks and opportunities:
Brenntag’s business is generally exposed to exchange rate,
interest rate, credit and price risks.
Due to the fact that Brenntag conducts business in different
currency areas, changes in exchange rates may have positive
or negative translation effects on the results of the Group. In
particular, any change in the euro/US dollar exchange rate
may have a substantial impact as a large proportion of busi-
ness is conducted in the US dollar area. Brenntag has decided
not to hedge exchange rate differences resulting from the
translation of financial statements of subsidiaries whose
functional currency is not the euro (translation risks). On the
other hand, transaction exposures resulting from the transla-
tion of foreign currency receivables and liabilities into the
functional currency of a subsidiary are hedged where it
makes economic sense to do so. This is based on a Group-
wide Finance Guideline that sets out basic requirements and
objectives, threshold values and hedging instruments to be
used. The Finance Guideline requires Group companies to off-
set the risks of open net foreign currency exposure using suit-
able instruments such as forward and swap contracts or to
keep them within certain limits. Any exceptions exceeding the
above limits must be agreed on a case-by-case basis with
the Treasury department.
Unfavorable political developments and financial policy deci
-
sions in specific countries may have a particularly negative
impact in this context.
Risks related to cash investments are limited by only doing
business with banks and business partners considered to be
of strong credit standing. Payments are also handled through
such banks. The credit facility under the syndicated loan is
made available by a large number of international banks,
meaning that availability is ensured through high diversity.
Uncollectibility risk is reduced by continually monitoring cus-
tomers’ credit ratings and payment behavior and setting
appropriate credit limits. The risk is limited by the large num-
ber of customers the company has in different countries; even
the largest key account customer only accounts for around
2% of Group sales. In some cases, credit insurance is also
taken out in order to limit risks.
The Brenntag Group is partly financed with debt capital.
Brenntag is confident that the loan agreements and credit
lines, the bonds issued and the liquid funds available are ade-
quate to cover the Group’s future liquidity needs, even if
requirements should increase unexpectedly. Like comparable
loan agreements, the syndicated loan contains a number of
customary affirmative and negative covenants. In particular,
in the agreement still in place on December 31, 2022,
Brenntag had undertaken to comply with a leverage ceiling
(the ratio of net debt to EBITDA). At the beginning of 2023,
this agreement was replaced with a new syndicated loan that
no longer contains this provision. In the event of a severe
breach of the provisions of the loan agreement, the facility
agent appointed by the lenders may call in the loans if he
deems this move necessary to safeguard the lenders’ inter-
ests. As the Group’s main financing instruments (syndicated
loan and two bonds) all contain so-called cross-default
clauses, any breach of contract or calling due of outstanding
amounts in respect to one financing instrument could also
have a negative impact on the others.
The terms and conditions of the financing instruments are
also influenced by the Group’s credit rating. A change in the
rating that the international rating agencies Standard &
Poor’s and Moody’s assign to Brenntag may impact on the
Group’s financing terms. The rating may have a positive or a
negative impact. Both rating agencies continue to assign an
investment grade rating, thereby confirming Brenntag’s high
credit standing. Moody’s currently rates Brenntag at “Baa2”
with a stable outlook, while Standard & Poor’s has given
Brenntag a rating of “BBB” with a positive outlook.
Some of Brenntag’s financing is based on variable interest
rates which are subject to fluctuations in market interest
rates. This means that Brenntag has both the opportunity to
participate in falling market interest rates but also the risk of
incurring higher interest cost as a result of rising market inter-
est rates. The split between variable and fixed interest rates
is determined as part of interest risk management. Derivative
instruments such as foreign exchange forwards, interest rate
and currency swaps or combined instruments may be used
to hedge risks from financing. Interest rate-related financial
risks are mainly managed by the Treasury department at
Group headquarters. If individual companies hedge financial
risks from operating activities themselves, this is done in con-
sultation with and under the supervision of Group headquar-
ters. This permits a balancing of risks throughout the Group.
Further information on financial risks can be found in the sec-
tion “Reporting of financial instruments” in the notes to the
consolidated financial statements.
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The Brenntag Group has obligations to current and former
employees as a result of pension commitments. Some of the
pension obligations are covered by plan assets. The plan
assets are subject to capital market risks, as a portion of
them is invested in funds and equities. Any changes in rele-
vant inputs, such as an increase in life expectancy or salaries,
may lead to higher cash outflows and higher present values
of the defined benefit obligation. To some extent regionally,
contributions are also paid into defined benefit pension plans
maintained by more than one employer (termed multi-em-
ployer plans). If other participating employers do not meet
their payment obligations, Brenntag may be liable for the
obligations of those employers. A detailed description of the
risks arising from pension obligations is provided in the notes
to the consolidated financial statements (Consolidated
income statement disclosures, 26. Provisions for pensions and
other post-employment benefits).
■
Quality management, safety, health
and environmental protection:
The risks to safety, health and the environment arising from
the distribution of chemicals are countered by maintaining
a high standard of safety precautions at the sites and oper-
ating in accordance with the “Safety First” principle through-
out the Group. This is part of Brenntag’s QSHE strategy
(QSHE: quality, safety, health and environment). Information
on the QSHE strategy is published in the combined separate
non-financial report. The monitoring of environmental, health
and safety risks is part of the ESG strategy. The Board of
Management sets the ESG targets at the beginning of the
year and is informed about the achievement of those targets
once a quarter.
As a chemical distributor, Brenntag generally operates in a
complex regulatory environment. Cross-country teams of
regulatory specialists are deployed to ensure that operating
and business processes are in compliance with the relevant
requirements. Here too, Brenntag sees itself in a good posi-
tion due to its scale, the central systems it has in place and
its expertise.
Environmental and climate protection has always played an
important role at Brenntag. Brenntag’s goal worldwide is to
conserve resources, make optimum use of them and minimize
the impact of its business activities on soil, water and air. Cli-
mate change may give rise to a range of different risks for
Brenntag, but also to opportunities for the company. Brenntag
has sites all over the world, and more and more acute risks
can be expected as a result of extreme weather events such
as hurricanes and flooding. In 2022, the company conducted
a pilot project with a view to better preparing the Brenntag
sites for such climatic changes. This analyzed the exposure
of all sites to physical risks in three different global warming
scenarios. For further information, please see the combined
separate non-financial report in the Annual Report 2022. Sites
at risk prepare for the relevant weather conditions by taking
advance action to remove mainly critical products and sen-
sitive equipment from storage areas that are particularly
under threat or to secure those products and equipment.
Plans are drawn up to ensure that customers will be supplied
from other sites in the Brenntag network should sites be tem-
porarily out of operation following such events. In addition, the
global fight against climate change will lead to structural,
regulatory and technological changes in the market on the
one hand, but also to increased costs as a result of preventive
technologies or government carbon taxes on the other.
Reducing CO emissions to net zero by 2045 is one of the ESG
targets through which Brenntag contributes to climate pro-
tection and wishes to fulfil its responsibility. In addition, the
sustainability component will be an important management
metric for Brenntag’s product portfolio in future so that
Brenntag is well positioned with regard to the aforementioned
market changes. Brenntag’s leading role in the value chain as
a distributor that connects numerous chemical and ingredi-
ents manufacturers with a large number of users allows it to
leverage the resulting opportunities particularly quickly.
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■
IT risks and opportunities:
IT risks arise, on the one hand, from the dependency of busi-
ness processes and the increasing integration of systems, and
on the other from external IT security risks, such as the increas-
ing threat posed by cybercrime (e.g. manipulation and theft of
data through hacker attacks). These risks could result in net-
work failure and system slowness or errors; data can be falsi-
fied, stolen or destroyed by errors in system operations, pro-
gram errors or external influences. Brenntag counters these
risks by training employees, through ongoing investments in
hardware and software, by continually updating systems (in
particular by installing patches), through the use of virus scan-
ners, firewall systems, data security measures, and privilege
and access controls. These IT security measures are moni-
tored using Group-wide IT security standards and IT policies.
On the other hand, the increasing use of IT systems and data
analytics opens up efficiency gains in operational processes
and in improved communication with customers and suppli-
ers. In addition, IT-managed systems generally improve the
quality and security of internal controls and data protection.
Brenntag continuously invests in the further development and
security of the software used, especially on ERP systems and
digital platforms. This opens up opportunities for improved
business process support. On the other hand, risks arise in the
course of implementation and development processes (e.g.
from requirements that may change over time), which
Brenntag counters by constantly monitoring and, if necessary,
adjusting the implementation plans and solutions.
■
Personnel risks and opportunities:
Personnel risks result mainly from the steadily increasing skills
shortage, particularly in sales, logistics and IT, as a result of
which Brenntag may lose high performers and staff in key
positions or be unable to find a sufficient number of qualified
staff to fill vacancies within the Group. Brenntag counters
these risks by positioning itself globally as the preferred
employer in chemical distribution and fostering long-term
employee retention. It also limits these risks through
Brenntag’s global employer brand and through globally uni-
form programs and measures that allow the Brenntag com-
panies to take into account country-specific legislation and
circumstances. Information on Brenntag’s HR strategies and
tools is provided in the “Social” section of the combined sep-
arate non-financial report for 2022. Combining these with
other early warning indicators, Brenntag is able to promptly
identify possible changes in employees’ attachment to the
company and initiate appropriate management measures
where necessary.
■
Acquisition risks and opportunities:
In the Brenntag Group, every decision to acquire is linked to
minimum requirements on the internal rate of return of the
particular investment. The company valuations incorporating
the findings of due diligence work performed are of central
importance in acquisitions. Therefore, all significant risks and
opportunities are systematically recorded and an appropri-
ate purchase price determined. Company acquisitions
always involve risks surrounding the integration of employees
and business operations. Significant integration risks mainly
include the loss of the acquiree’s key employees and the loss
of business relationships with suppliers and customers.
Achieving the planned growth in the acquired business and
realizing the planned synergies from the transaction are other
significant areas of risk. Brenntag strives to limit these risks
with adequate transaction structures, by conducting oppor-
tunity and risk analyses at an early stage in the approval pro-
cess, with the support of external consultants and with spe-
cific contract structures (e.g. incentive, warranty and retention
clauses). In the past, M&A activities focused on Europe, North
America and Asia. In the case of acquisitions in emerging
markets such as Asia, Latin America and Eastern Europe, rel-
atively high purchase prices coupled with higher risks (e.g.
compliance risks, higher working capital funding require-
ments, integration risks, foreign currency risks) are typical of
target companies in these countries. However, there are also
considerably greater opportunities in these countries owing
to the higher growth rates.
■
Compliance risks:
Compliance involves conducting business in accordance with
the relevant regulations. Any form of corruption or bribery is
forbidden at Brenntag. The binding rules requiring all employ-
ees to treat one another and business partners fairly are set
out in the Code of Business Conduct. In this respect, risks may
result from the failure to observe the relevant rules. Brenntag’s
Code of Business Conduct is binding on all employees
throughout the Group worldwide. Employees are required to
comply with the Code of Business Conduct, familiarize them-
selves with its content and take part in relevant training.
One focus of compliance activities at Brenntag is monitoring
antitrust compliance and preventing bribery and corruption.
Employees are made aware of and given extensive training
on these topics primarily by rolling out e-learning programs
globally.
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As the global market leader in chemical distribution, and as
a company with operations worldwide, Brenntag conducts
business in countries that are subject to export control regu-
lations, embargoes and other types of trade restriction
imposed by the USA, the EU or other countries or organiza-
tions. Brenntag must comply with all foreign trade and cus-
toms laws applicable in the countries, such as restrictions on
exports or imports of particular goods, services and technol-
ogies to or from countries subject to sanctions or embargoes.
The same goes for checking companies or persons against
applicable sanction lists. In addition, Brenntag employees
must comply with all applicable trade restrictions resulting
from international embargoes, which typically restrict or pro-
hibit payment and capital transactions with particular coun-
tries. Brenntag fulfils this obligation in part by using an auto-
mated, IT-based screening solution. With the help of a special
software application, customers and suppliers are regularly
checked against the sanction lists issued by the United
Nations, the European Union, the USA and various other coun-
tries in which Brenntag operates. The aim is to identify sanc-
tioned companies and persons, and comply with various
sanctions provisions.
Brenntag takes care to ensure human rights compliance
along its value chain. Human rights compliance is reviewed
in the course of supplier assessments and audits, which are
carried out systematically via an assessment portal of an
established provider of sustainability assessments.
As a company with operations worldwide, Brenntag is subject
to laws and regulations relating to data protection. Breaches
of data protection regulations may lead to substantial pen-
alties and fines. Furthermore, data protection breaches could
lead to substantial reputational damage and a loss of trust.
A global data protection guideline was introduced to mitigate
these risks. In addition, both the central data protection
department and local data protection coordinators continu-
ously monitor data protection compliance.
■
Legal risks:
Brenntag SE and individual subsidiaries have been named as
defendants in various legal actions and proceedings arising
in connection with their activities as a global group. Some-
times, Brenntag is also the subject of investigations by the
authorities. Brenntag cooperates with the relevant authorities
and, where appropriate, conducts internal investigations
regarding alleged wrongdoings with the assistance of
in-house and external counsel.
The decision issued by the French Competition Authority in
2013 in relation to the allocation of customers and coordina-
tion of prices was set aside by a court of appeal due to pro-
cedural errors at Brenntag’s request in February 2017. In
December 2020, the court imposed a fine of EUR 47 million.
Brenntag has lodged an appeal against the decision. Regard
-
ing the investigation also ongoing at the French Competition
Authority concerning whether BRENNTAG SA has illegally
made use of its market position, a decision by the Authority is
still pending. Based on current knowledge, Brenntag assumes
that claims for civil liability arising from the above-mentioned
proceedings are not sufficiently substantiated.
As a global company, Brenntag has to comply with the country-
specific tax laws and regulations in each jurisdiction. Tax
exposures could result in particular from current and future
tax audits of German and foreign subsidiaries. These expo-
sures are generally reflected in the balance sheet by recog-
nizing provisions.
The German Group companies BRENNTAG GmbH and BCD
Chemie GmbH were or are currently the subject of routine
reviews of the tax on alcohol and energy conducted or being
conducted by the German customs authorities for the years
2014 to 2018. As a result, in financial year 2021, tax decision
notices relating to alcohol tax were received for the years
2014 to 2016 in the amount of EUR 94.0 million and the appro-
priate taxes were paid. Legal redress was sought against the
decisions. In 2021, Brenntag took the precaution of recogniz-
ing an amount of EUR 81.5 million in the balance sheet for the
outstanding years under review. The findings of the review
relate only to formal errors. At no time were there doubts con-
cerning the tax-free use of alcoholic products by our custom-
ers. Brenntag believes that, in most cases, it will be successful
in seeking legal redress. The authorities have continued their
reviews of BCD Chemie GmbH for 2016 to 2017 and of
BRENNTAG GmbH for 2017 to 2018. Under a tax audit notice
issued in 2022, BRENNTAG GmbH is also the subject of a
review for 2021. There are as yet no significant findings.
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The energy tax review at BRENNTAG GmbH for the years
2016 and 2017 was completed in 2022 and tax decision
notices totaling EUR 2.5 million were issued. This led to the
reversal of the provisions of EUR 19.0 million recognized in
the previous year.
Also considering the above-mentioned appeal, it is not pos-
sible at present to conclusively predict whether further tax
assessments will be made. As at December 31, 2022, EUR 60.0
million had been recognized in the balance sheet as a pre-
caution for the outstanding years under review. With the sup-
port of external experts on excise duties, Brenntag examined
the extent to which comparable excise duty risks also exist in
other European countries. Ultimately, this analysis did not
bring to light any circumstances that require the company to
take the precaution of recognizing amounts in the balance
sheet for similar cases. Initial organizational improvements
have already been implemented.
Given the number of legal disputes and other proceedings
that Brenntag is involved in, it is possible that a ruling may be
made against Brenntag in some of these proceedings. The
company contests actions and proceedings where it consid-
ers it appropriate. Provisions are established for ongoing legal
disputes on the basis of the estimated risk and, if necessary,
with the help of external consultants. It is very difficult to pre-
dict the outcome of such matters, particularly in cases in
which claimants seek indeterminate compensation. Any
adverse decisions rendered in such cases may have material
effects on Brenntag’s net assets, financial position and results
of operations for a reporting period. However, Brenntag cur-
rently does not expect its net assets, financial position and
results of operations to be materially affected.
Summary of the opportunities
and risk situation
During the past financial year, we once again continuously
updated and assessed the risk situation for the Brenntag
Group. The Group’s risk position did not change significantly
during that period. In our opinion, the risks described in the
section “Report on opportunities and risks” do not jeopardize
the continued existence of the company, either individually or
collectively. Additional risks and opportunities that we are
currently unaware of or risks that we currently consider
immaterial may also have a negative impact on our business
operations. We are convinced that we can continue to suc-
cessfully master the challenges arising from the risks
described above.
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Explanatory report on information required under
Sections 289a and 315a of the German Commercial
Code (HGB)
Composition of the subscribed capital
As at December 31, 2022, the subscribed capital of Brenntag SE
totaled EUR 154,500,000. The share capital is divided into
154,500,000 no-par value registered shares, each with a
notional value of EUR 1.00.
According to article 7, para. 3 of the Articles of Association of
Brenntag SE, any right of shareholders to certification of their
shares is excluded to the extent permitted by law and that
certification is not required under the rules of any stock
exchange on which the share is admitted to trading. The com-
pany is entitled to issue share certificates embodying several
shares (consolidated certificates). Pursuant to Section 67,
para. 2 of the German Stock Corporation Act (AktG) in con-
junction with Article 9, para. 1 (c) (ii) of Council Regulation (EC)
No 2157/2001 on the Statute for a European company (“the
SE Regulation”), only those persons recorded in the compa-
ny’s share register will be recognized as shareholders of
Brenntag SE. For purposes of recording the shares in the com-
pany’s share register, shareholders are required to submit to
Brenntag SE the number of shares held by them, and, in the
case of individuals, their name, address and date of birth, or
in the case of legal entities, their company name, business
address and registered offices. All shares confer the same
rights and obligations. At the General Shareholders’ Meeting,
each share has one vote and accounts for the shareholders’
proportionate share in the net income of Brenntag SE.
Excepted from this rule are any treasury shares held by
Brenntag SE that do not entitle Brenntag SE to any member-
ship rights. Brenntag SE does not currently have any treasury
shares. The shareholders’ rights and obligations are governed
by the provisions of the German Stock Corporation Act (which
apply to an SE as a European stock corporation by way of the
reference to other relevant provisions contained in Article 9 of
the SE Regulation), in particular by Sections 12, 53a ff., 118 ff.
and 186 of the German Stock Corporation Act.
Restrictions on voting rights
or transfer of shares
The Board of Management of Brenntag SE is not aware of any
agreements relating to restrictions on voting rights or on the
transfer of shares.
Direct or indirect interests in the capital
of the company exceeding 10% of the
voting rights
As at December 31, 2022, the company was not aware of any
direct or indirect interests in the capital of the company that
exceeded 10% of the voting rights. Section 33 of the German
Securities Trading Act (WpHG) requires that any investor whose
percentage of voting rights in Brenntag SE reaches, exceeds
or falls below certain thresholds as a result of purchases, dis-
posals or otherwise must notify Brenntag SE and the German
Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht). All voting right notifications in
accordance with Section 33 of the German Securities Trading
Act received by Brenntag SE in the reporting period concern
shares of the voting rights in excess of the 3% and 5% thresh-
olds and can be viewed in the Investor Relations section of the
company’s website at www.brenntag.com.
Shares with special rights conferring
powers of control
There are no shares with special rights conferring powers of
control.
System of control of any employee
participation scheme where the control
rights are not exercised directly by the
employees
Brenntag SE does not have a general employee participation
scheme.
Legislation and provisions of the Articles of
Association applicable to the appointment
and removal of the members of the Board
of Management and governing amendments
to the Articles of Association
The appointment and removal of members of the Board of
Management are subject to the provisions of Sections 84 and
85 of the German Stock Corporation Act. The Supervisory
Board appoints the members of the Board of Management
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289A AND 315A OF THE GERMAN COMMERCIAL CODE HGB
for a maximum term of five years. Their appointment may be
resolved according to article 13, para. 4 of the Articles of
Association of Brenntag SE by simple majority of votes. In the
event of a tie, the Chair of the Supervisory Board has the cast-
ing vote. According to article 9, para. 1 of the Articles of Asso-
ciation of Brenntag SE, the Board of Management consists of
one or more persons. The specific number of members of the
Board of Management is determined by the Supervisory
Board. As at December 31, 2022, the Board of Management
of Brenntag SE consisted of five members.
Contrary to Sections 133, para. 1 and 179, para. 2, sentence
1 of the German Stock Corporation Act, article 20 of the Arti-
cles of Association of Brenntag SE stipulates that in cases
that require the majority of the share capital represented
when the resolution is passed, the simple majority of the cap-
ital represented is sufficient. However, this does not apply to
changes to the object of the company, as Section 179, para.
2, sentence 2 of the German Stock Corporation Act only per-
mits amendments to a company’s Articles of Association
regarding the object of the company to be adopted with
larger majorities than three-quarters of the capital repre-
sented when the resolution is passed. The authority to adopt
purely formal amendments to the Articles of Association is
transferred to the Supervisory Board under article 14, para. 2
of the Articles of Association of Brenntag SE. In addition, by
resolution of the General Shareholders’ Meeting on June 20,
2018, the Supervisory Board was authorized to amend the
Articles of Association of Brenntag SE in connection with the
creation of new authorized capital after implementation of
each capital increase and after expiry of the authorization
period without use of the authorized capital.
Powers of the Board of Management
to issue or repurchase shares
Authorization to create authorized capital
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized, with the
approval of the Supervisory Board, to increase the share cap-
ital of Brenntag SE on one or more occasions until June 8,
2027 by a total of up to EUR 35,000,000 by issuing up to
35,000,000 new registered ordinary shares in return for cash
contributions or contributions in kind. The shareholders shall
generally be granted a subscription right. However, in certain
cases the Board of Management is authorized, with the
approval of the Supervisory Board, to exclude the sharehold-
ers’ statutory subscription rights for one or more capital
increases under the authorized capital. This shall apply, for
example, if the capital increase is effected against cash con-
tributions and the issue price of the new shares is not
significantly lower than the stock market price of the shares
of the same class and carrying the same rights already
traded on the stock market at the time of final determination
of the issue price within the meaning of Section 203, para. 1
and para. 2 and Section 186, para. 3, sentence 4 of the Ger-
man Stock Corporation Act and the total pro rata amount of
registered share capital represented by the new shares issued
in accordance with this paragraph with exclusion of subscrip-
tion rights pursuant to Section 186, para. 3, sentence 4 of the
German Stock Corporation Act does not exceed 10% of the
registered share capital in the amount of EUR 154,500,000
(simplified exclusion of subscription rights). Details can be
found in the Articles of Association of Brenntag SE, which are
available in the Investor Relations section of the website at
www.brenntag.com.
The Board of Management shall decide on the further content
of the share rights and the conditions of the issuance of
shares with the approval of the Supervisory Board.
Authorization to acquire and use treasury shares in
accordance with Section 71, para. 1, no. 8 of the German
Stock Corporation Act
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized, with the
approval of the Supervisory Board, to acquire treasury shares
up to a total of 10% of the share capital. The shares acquired
on the basis of this authorization, together with other shares
in the company which Brenntag SE has already acquired and
still holds, may at no time account for more than 10% of the
respective registered share capital. The authorization may be
exercised in whole or in part, once or several times. It took
effect at the close of the General Shareholders’ Meeting on
June 9, 2022 and shall be valid until June 8, 2027. If the shares
are purchased on the stock exchange, the purchase price
(excluding incidental costs) may not be more than 10% higher
or lower than the arithmetic mean of the share prices (closing
auction prices of Brenntag SE shares in XETRA trading or a
comparable successor system) on the Frankfurt Stock
Exchange on the last five trading days prior to the purchase
or the entering into an obligation to purchase. In the case of
acquisition by means of a public purchase offer, Brenntag SE
may either publish a formal offer or issue a public invitation
to submit offers for sale. The purchase price offered (exclud-
ing incidental costs) or the limits of the purchase price range
per share determined by Brenntag SE (excluding incidental
costs) may not exceed or fall below the arithmetic mean of
the share prices on the Frankfurt Stock Exchange on the last
five trading days prior to the publication of the purchase offer
or the invitation to submit offers by more than 10%. The
authorization may be exercised for any purpose permitted by
law. The Board of Management was authorized, with the
181Brenntag SE
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289A AND 315A OF THE GERMAN COMMERCIAL CODE HGB
and to grant the holders of such Bonds option or conversion
rights to Brenntag SE shares and to make other declarations
and take other actions necessary for a successful issue. The
issues of Bonds may be divided into partial Bonds each having
equal rights. Bonds may only be issued against contribution
in kind, provided that the value of the contribution in kind cor-
responds to the issue price and that this price is not signifi-
cantly lower than the theoretical market value of the Bonds
determined in accordance with recognized methods of finan-
cial mathematics. The Board of Management is authorized,
under certain circumstances and with the approval of the
Supervisory Board, to exclude shareholders’ subscription
rights to the Bonds. However, with regard to the exclusion of
subscription rights against cash payment, this authorization
shall apply only provided that the shares issued to fulfil the
option or conversion rights and/or in the case of fulfilment of
the conversion obligation represent no more than 10% of the
registered share capital. Decisive for the threshold of 10% is
the registered share capital in the amount of EUR 154,500,000
(simplified exclusion of subscription rights). Details can be
found in the Articles of Association of Brenntag SE, which are
available in the Investor Relations section of the website at
www.brenntag.com.
When convertible bonds, profit participation rights or profit
participating bonds with conversion rights are issued, the
holders are granted the right to exchange their Bonds for new
Brenntag SE shares in accordance with the more detailed
Conditions.
When bonds with warrants, profit participation rights or profit
participating bonds with option rights are issued, one or more
warrants shall be attached to each partial bond or each
profit participation right or each participating bond, entitling
the holder to subscribe for Brenntag SE shares in accordance
with the more detailed Conditions.
New shares are issued at the option or conversion price to be
set in accordance with the aforementioned resolution grant-
ing authorization.
In November 2015, Brenntag Finance B.V., in its capacity as
issuer and with Brenntag SE as guarantor, issued a bond with
warrant units in the amount of USD 500.0 million maturing on
December 2, 2022 (“Bond (with Warrants) 2022”). It did so on
the basis of the authorization resolved upon at the General
Shareholders’ Meeting on June 17, 2014 (“Authorization 2014”)
to issue Bonds and grant the holders or creditors of the Bonds
option or conversion rights for up to 25,750,000 new
Brenntag SE shares representing a notional amount of up to
EUR 25,750,000 in the registered share capital (“Conditional
Capital 2014”).
approval of the Supervisory Board, to withdraw the treasury
shares acquired on the basis of the authorization pursuant to
Section 71, para. 1, no. 8 of the German Stock Corporation Act
without any further resolution by the General Shareholders’
Meeting. The withdrawal may be limited to a portion of the
shares acquired. The authorization to withdraw shares may
be exercised more than once. The withdrawal of shares gen-
erally leads to a reduction in registered share capital. In de ro-
gation of this, the Board of Management may determine that
the registered share capital shall remain unchanged and that
instead the withdrawal shall increase the proportion of the
registered share capital represented by the remaining shares
in accordance with Section 8, para. 3 of the German Stock
Corporation Act. In this case, the Board of Management is
authorized to adjust the indication of the corresponding num-
ber in the Articles of Association. Treasury shares may, under
certain circumstances, also be used subject to exclusion of
the shareholders’ subscription rights existing in principle and
in particular by way of simplified exclusion of subscription
rights as specified above.
Authorization to issue bonds and to create
conditional capital
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized (“Authoriza-
tion 2022”), with the approval of the Supervisory Board, to
issue holder or registered convertible bonds or bonds with
warrants as well as profit participation rights or profit partic-
ipating bonds with option or conversion rights on one or more
occasions up to June 8, 2027 for a total nominal amount of up
to EUR 2,000,000,000 with or without limited term (“Bonds”)
and to grant the holders or creditors of the Bonds option or
conversion rights to up to 15,450,000 new Brenntag SE shares
with a pro rata total amount of the registered share capital of
up to EUR 15,450,000 in accordance with the respective option
or convertible bond conditions or profit participation right or
participating bond conditions (“Conditions”) to be determined
by the Board of Management. In order to grant shares to the
holders or creditors of Bonds, the registered share capital was
conditionally increased at the General Shareholders’ Meeting
on June 9, 2022 by up to 15,450,000 no-par value registered
shares conferring profit-sharing rights from the beginning of
the financial year in which they were issued (“Conditional Cap-
ital 2022”); this equates to an increase in the registered share
capital of up to EUR 15,450,000. The Bonds may, in addition to
euros, also be issued in a foreign legal currency, subject to a
limit of the corresponding equivalent value in euros, and by
companies dependent on Brenntag SE or in which it holds a
majority interest; in this case, the Board of Management was
authorized, with the approval of the Supervisory Board, to
assume the guarantee for the Bonds on behalf of Brenntag SE
182Brenntag SE
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289A AND 315A OF THE GERMAN COMMERCIAL CODE HGB
Section 5 of the conditions of issue relating to the Bond 2025
in the amount of EUR 600.0 million issued by Brenntag Finance
B.V. in September 2017 also contains provisions governing a
change of control, under which bondholders may request that
the bond be repaid early if the rating is downgraded within a
certain period of a change of control (in each case as defined
in the conditions of issue).
Furthermore, section 5 of the conditions of issue relating to
the Bond 2029 in the amount of EUR 500.0 million placed by
Brenntag Finance B.V. in September 2021 and paid out in
October 2021 (first issue under the newly established debt
issuance program) also contains a provision governing a
change of control, under which bondholders may likewise
request that the bond be repaid early if the rating is down-
graded within a certain period of a change of control (in each
case as defined in the conditions of issue).
Section 5 of the loan agreement relating to the promissory
note transaction placed by Brenntag SE in August 2022 for
around EUR 640 million also contains provisions governing a
change of control. In this case too, the lenders may request
that the notes be repaid early if the rating is downgraded
within a certain period of a change of control (as defined in
the loan agreement).
Further information on the bonds and the conditions of issue
can be found in the Investor Relations section of the website
at www.brenntag.com.
Compensation agreements with members
of the Board of Management or employees
in the event of a takeover bid
There are no compensation agreements with members of the
Board of Management or employees in the event of a take-
over bid.
The warrants attached to the Bond (with Warrants) 2022 enti-
tled the holder to purchase Brenntag SE ordinary shares by
paying the strike price applicable at that time. The warrants
to purchase Brenntag SE shares had not been exercised at
the exercise date at the beginning of December 2022.
Significant agreements which take effect,
alter or terminate upon a change of control
of the company following a takeover bid
As at the reporting date, the most important component in
Brenntag’s financing structure is the Group-wide loan agree-
ment concluded with a consortium of international banks.
The total loan volume is described in the section “Capital
structure”. The main conditions are laid down in a syndicated
facilities agreement entered into in January 2017. Under this
agreement, individual lenders have the right to terminate the
agreement if any person or group of persons acting in concert
acquire directly or indirectly more than 50% of the shares
issued or the voting rights in Brenntag SE. The right to termi-
nate in the event of a change of control is preceded by a
30-day negotiating period on the continuation of the loan
agreements. If the parties involved cannot reach agreement
on the continuation of the loan agreements in this period,
each lender can within ten days terminate his involvement as
a lender in the agreement by giving notice of at least another
30 days and request payment of the outstanding loan amounts.
Section 5 of the bond terms and conditions and section 7 of
the warrant terms and conditions relating to the bond with
warrant units in the amount of USD 500.0 million issued by
Brenntag Finance B.V. in November 2015 and maturing on
December 2, 2022 (Bond (with Warrants) 2022) contained pro
-
visions governing a change of control. Bondholders were able
to request that the bond be repaid early following an agreed
period if one or more persons acting in concert within the
meaning of Section 34, para. 2 of the German Securities Trad-
ing Act (WpHG) held 50% or more of the voting rights in
Brenntag SE. The terms and conditions of the warrants issued
with the bonds stated that, in the event of a change of control,
the holders of the warrants could receive the right to pur-
chase shares at a lower strike price during a specified period
following the change of control. The size of the adjustment to
the strike price declined over the term of the warrants and
was set out in more detail in the terms and conditions of the
warrants. As under the bond terms and conditions, a change
of control occurred if one or more persons acting in concert
within the meaning of Section 34, para. 2 of the German Secu-
rities Trading Act held 50% or more of the voting rights in
Brenntag SE.
183Brenntag SE
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EXPLANATORY REPORT ON INFORMATION REQUIRED UNDER SECTIONS
289A AND 315A OF THE GERMAN COMMERCIAL CODE HGB
The corporate governance statement required under Sections
289f, 315d of the German Commercial Code (HGB), including
the corporate governance report, can be found in the Investor
Relations section of the website at www.brenntag.com and in
the section “To Our Shareholders”.
Non-financial statement
The non-financial statement required under Sections 289b
and 315b of the German Commercial Code (HGB) is available
in a separate section of the Annual Report 2022 in the form of
a combined separate non-financial report.
Corporate governance statement
184Brenntag SE
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CORPORATE GOVERNANCE STATEMENT
NONFINANCIAL STATEMENT
186 Consolidated income statement
187 Consolidated statement of comprehensive income
188 Consolidated balance sheet
190 Consolidated statementof changes in equity
191 Consolidated cash flow statement
192 Notes
192 Key financial figures by segment
194 Group key financial figures
195 General information
196 Consolidation policies and methods
204 Accounting and measurement policies
212 Consolidated incomestatement disclosures
217 Consolidated balance sheet disclosures
265 Annex
265 Annex: List of Shareholdings in Accordance with
Section 313, Para. 2 of the German Commercial
Code as at December 31, 2022
185
Annual Report 2022 Brenntag SE
Consolidated
5 Financial Statements
185
272
Consolidated income statement
in EUR m Note 2022 2021
Sales 1.) 19,429.3 14,382.5
Cost of materials 2.) –15,110.3 –11,003.5
Operating gross profit 4,319.0 3,379.0
Other operating income 3.) 92.4 49.0
Personnel expenses 4.) –1,380.1 –1,205.3
Depreciation, amortization and impairment losses 18.) / 19.) / 20.) –406.4 –373.5
Impairment losses on trade receivables and other receivables 13.) –15.0 –7.5
Other operating expenses 5.) –1,227.5 –1,099.3
Operating profit 1,382.4 742.4
Share of profit or loss of equity-accounted investments 21.) 1.6 1.0
Interest income 16.7 4.5
Interest expense 6.) –108.8 –64.0
Change in liabilities relating to acquisition of non-controlling interests
recognized in profit or loss 7.) –7.6 –28.3
Loss on the net monetary position 8.) –16.3 –
Other net finance costs 9.) –33.1 –5.3
Net finance costs –147.5 –92.1
Profit before tax 1,234.9 650.3
Income tax expense 10.) –332.4 –188.9
Profit after tax 902.5 461.4
Attributable to:
Shareholders of Brenntag SE 886.8 448.3
Non-controlling interests 15.7 13.1
Basic earnings per share in euro 11.) 5.74 2.90
Diluted earnings per share in euro 11.) 5.74 2.89
5.01 Consolidated income statement
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186Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
Consolidated statement of
comprehensive income
in EUR m Note 2022 2021
Profit after tax 902.5 461.4
Remeasurements of defined benefit pension plans 26.) 64.0 26.2
Deferred tax relating to remeasurements of defined benefit pension plans 26.) –19.9 –7.1
Items that will not be reclassified to profit or loss 44.1 19.1
Change in exchange rate differences on translation of
consolidated companies 28.) 94.2 179.4
Change in net investment hedge reserve 33.) –0.4 –9.6
Remeasurement of cross-currency interest rate swaps 33.) –46.3 –21.5
Reclassification to profit or loss of hedging losses 33.) 36.7 13.4
Costs of hedging 33.) 1.5 7.2
Reclassification to profit or loss of costs of hedging 33.) –0.8 –0.2
Deferred tax relating to those items 33.) –0.3 0.3
Items that may be reclassified subsequently to profit or loss 84.6 169.0
Other comprehensive income, net of tax 128.7 188.1
Total comprehensive income 1,031.2 649.5
Attributable to:
Shareholders of Brenntag SE 1,012.3 629.2
Non-controlling interests 28.) 18.9 20.3
5.02 Consolidated statement of comprehensive income
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CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Consolidated balance sheet
ASSETS
in EUR m Note Dec. 31, 2022 Dec. 31, 2021
Current assets
Cash and cash equivalents 12.) 1,046.1 705.0
Trade receivables 13.) 2,676.8 2,290.2
Other receivables 14.) 272.6 230.1
Other financial assets 15.) 20.2 22.8
Current tax assets 117.3 84.0
Inventories 16.) 1,773.8 1,621.9
5,906.8 4,954.0
Non-current assets held for sale 17.) 13.5 4.1
5,920.3 4,958.1
Non-current assets
Property, plant and equipment 18.) 1,358.1 1,236.4
Intangible assets 19.) 3,459.3 3,358.8
Right-of-use assets 20.) 426.3 436.5
Equity-accounted investments 21.) 5.4 4.1
Other receivables 14.) 40.7 44.5
Other financial assets 15.) 24.4 26.1
Deferred tax assets 10.) 138.5 131.0
5,452.7 5,237.4
Total assets 11,373.0 10,195.5
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188Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
LIABILITIES AND EQUITY
in EUR m Note Dec. 31, 2022 Dec. 31, 2021
Current liabilities
Trade payables 22.) 1,862.0 1,802.3
Financial liabilities 23.) 319.7 677.7
Lease liabilities 20.) 110.0 111.7
Other liabilities 24.) 664.9 573.1
Other provisions 25.) 154.8 187.3
Liabilities relating to acquisition of non-controlling interests 27.) 25.0 89.7
Current tax liabilities 97.6 84.3
3,234.0 3,526.1
Liabilities associated with assets held for sale 17.) 4.0 –
3,238.0 3,526.1
Non-current liabilities
Financial liabilities 23.) 2,341.8 1,652.0
Lease liabilities 20.) 324.3 333.9
Other liabilities 24.) 4.9 6.5
Other provisions 25.) 166.1 146.6
Provisions for pensions and other post-employment benefits 26.) 119.1 183.3
Liabilities relating to acquisition of non-controlling interests 27.) 104.3 126.5
Deferred tax liabilities 10.) 271.8 225.3
3,332.3 2,674.1
Equity 28.)
Subscribed capital 154.5 154.5
Additional paid-in capital 1,491.4 1,491.4
Retained earnings 3,035.0 2,283.3
Accumulated other comprehensive income 71.6 –15.0
Equity attributable to shareholders of Brenntag SE 4,752.5 3,914.2
Equity attributable to non-controlling interests 50.2 81.1
4,802.7 3,995.3
Total liabilities and equity 11,373.0 10,195.5
5.03 Consolidated balance sheet
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CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
Consolidated statement
of changes in equity
in EUR m
Subscribed
capital
Additional
paid-in capital
Retained
earnings
Exchange rate
differences
Net investment
hedge reserve
Dec. 31, 2020 154.5 1,491.4 2,080.6 –182.4 5.6
Dividends – – –208.6 – –
Business combinations – – – – –
Transactions with owners – – –56.1 – –
Profit after tax – – 448.3 – –
Other comprehensive income, net of tax – – 19.1 172.2 –9.6
Total comprehensive income for the
period – – 467.4 172.2 –9.6
Dec. 31, 2021 154.5 1,491.4 2,283.3 –10.2 –4.0
Dividends – – –224.0 – –
Transactions with owners
1)
– – 44.8 5.2 –
Profit after tax – – 886.8 – –
Other comprehensive income, net of tax – – 44.1 91.0 –0.4
Total comprehensive income for the
period – – 930.9 91.0 –0.4
Dec. 31, 2022 154.5 1,491.4 3,035.0 86.0 –4.4
in EUR m
Cash flow
hedge reserve
Deferred tax
relating to
cash flow
hedge reserve
Equity
attributable to
shareholders
of Brenntag SE
Equity
attributable to
non-controlling
interests Equity
Dec. 31, 2020 – – 3,549.7 61.9 3,611.6
Dividends – – –208.6 –0.4 –209.0
Business combinations – – – 7.5 7.5
Transactions with owners – – –56.1 –8.2 –64.3
Profit after tax – – 448.3 13.1 461.4
Other comprehensive income, net of tax –1.1 0.3 180.9 7.2 188.1
Total comprehensive income for the
period –1.1 0.3 629.2 20.3 649.5
Dec. 31, 2021 –1.1 0.3 3,914.2 81.1 3,995.3
Dividends – – –224.0 –1.4 –225.4
Transactions with owners
1)
– – 50.0 –48.4 1.6
Profit after tax – – 886.8 15.7 902.5
Other comprehensive income, net of tax –8.9 –0.3 125.5 3.2 128.7
Total comprehensive income for the
period –8.9 –0.3 1,012.3 18.9 1,031.2
Dec. 31, 2022 –10.0 – 4,752.5 50.2 4,802.7
5.04 Consolidated statement of changes in equity
1)
Includes the acquisition of the remaining shares (49%) in TEE HAI CHEM PTE LTD, Singapore in Q2 2022 (for further information, please refer to Note 28).
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CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Consolidated cash flow statement
in EUR m Note 2022 2021
29.)
Profit after tax 902.5 461.4
Loss on the net monetary position 16.3 –
Depreciation and amortization 18.) / 19.) / 20.) 406.4 373.5
Income tax expense 10.) 332.4 188.9
Income taxes paid –344.9 –222.5
Net interest expense 6.) 92.1 59.5
Interest paid (netted against interest received) 29.) –110.6 –49.5
(of which interest paid for leases) 20.) (–11.2) (–10.9)
Dividends received 0.3 0.1
Inventories –94.1 –486.3
Trade receivables –306.8 –501.2
Trade liabilities 15.2 412.2
Changes in working capital –385.7 –575.3
Changes in other operating assets and liabilities 50.0 –13.2
Changes in provisions –19.9 149.1
Non-cash change in liabilities relating to acquisition of non-controlling interests 7.) 7.6 28.3
Other non-cash items and reclassifications 10.2 –11.7
Net cash provided by operating activities 956.7 388.6
Proceeds from the disposal of other financial assets 0.8 2.5
Proceeds from the disposal of intangible assets and property,
plant and equipment 21.7 8.8
Payments to acquire consolidated subsidiaries and other business units 29.) –156.7 –420.5
Payments to acquire intangible assets and property, plant and equipment –267.2 –199.3
Net cash used in investing activities –401.4 –608.5
Repayments of liabilities relating to acquisition of non-controlling interests 29.) –98.4 –16.5
Dividends paid to Brenntag shareholders –224.0 –208.6
Profits distributed to non-controlling interests –3.2 –2.1
Proceeds from borrowings 29.) 808.0 933.5
Repayments of lease liabilities –139.4 –119.6
Repayments of borrowings –568.8 –412.6
Net cash used in/provided by financing activities –225.8 174.1
Change in cash and cash equivalents 329.5 –45.8
Effect of exchange rate changes on cash and cash equivalents 13.0 24.5
Reclassification into non-current assets held for sale –1.4 –
Cash and cash equivalents at beginning of period 12.) 705.0 726.3
Cash and cash equivalents at end of period 12.) 1,046.1 705.0
5.05 Consolidated cash flow statement
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191Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
Notes
Key financial figures by segment
The Brenntag Group is managed through two global divisions,
Brenntag Specialties and Brenntag Essentials, which are
each managed through geographically structured segments.
Brenntag Specialties focuses on selling ingredients and val-
ue-added services to the selected industries, Nutrition,
Pharma, Personal Care/HI&I (Home, Industrial & Institutional),
Material Science (Coatings & Construction, Polymers, Rub-
ber), Water Treatment and Lubricants. Brenntag Essentials
markets a broad portfolio of process chemicals across a wide
range of industries and applications. The global Brenntag
Specialties division comprises the geographical segments
EMEA, Americas and APAC.
The global Brenntag Essentials division comprises the geo-
graphical segments EMEA, North America, Latin America and
APAC. The two divisions are supported by Brenntag Business
Services, which have been allocated to “All other Segments”.
In addition, “All other Segments” combine the central func-
tions for the entire Group and the activities with regard to the
digitalization of our business. The international operations of
BRENNTAG International Chemicals GmbH, which buys and
sells chemicals in bulk on an international scale without
regional boundaries, are also included here.
The following table shows the reconciliation of the reportable
segments to the Group:
Period from January 1 to December 31
in EUR m
Brenntag
Specialties
Brenntag
Essentials
All other
Segments Group
External sales
2022 7,947.4 10,720.9 761.0 19,429.3
2021 6,003.3 7,815.4 563.8 14,382.5
fx adj. change in % 26.2 28.3 35.0 27.7
Operating gross profit
2022 1,678.3 2,608.6 32.1 4,319.0
2021 1,283.2 2,066.9 28.9 3,379.0
fx adj. change in % 24.8 17.7 11.1 20.3
Operating EBITDA
2022 779.6 1,153.3 –124.3 1,808.6
2021 567.5 843.0 –65.9 1,344.6
fx adj. change in % 32.1 27.6 88.9 26.7
Operating EBITA (segment result)
2022 738.0 910.8 –137.1 1,511.7
2021 534.9 619.6 –72.6 1,081.9
fx adj. change in % 32.9 36.7 89.1 31.5
5.06 Reconciliation of the reportable segments to the Group 2022/2021
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
The following table shows the segment information for the
geographical segments of the global Brenntag Specialties
division:
Period from January 1 to December 31
in EUR m EMEA
1)
Americas
2)
APAC
Central
activities
3)
Brenntag
Specialties
External sales
2022 3,369.0 3,148.8 1,429.6 – 7,947.4
2021 2,753.0 2,170.0 1,080.3 – 6,003.3
fx adj. change in % 23.8 30.0 23.8 – 26.2
Operating gross profit
2022 725.0 664.3 289.0 – 1,678.3
2021 594.5 459.2 229.5 – 1,283.2
fx adj. change in % 23.8 29.4 17.8 – 24.8
Operating EBITDA
2022 335.0 297.2 148.6 –1.2 779.6
2021 276.5 180.3 111.8 –1.1 567.5
fx adj. change in % 24.1 47.7 23.8 20.0 32.1
Operating EBITA (segment result)
4) 5)
2022 323.9 281.3 134.0 –1.2 738.0
2021 269.6 169.9 96.5 –1.1 534.9
fx adj. change in % 23.0 48.4 29.5 20.0 32.9
5.07 Segment reporting on the global Specialties division 2022/2021
1)
Europe, Middle East & Africa.
2)
North and Latin America.
3)
Central activities which are part of Brenntag Specialties but not directly attributable to any one segment.
4)
In the course of operationalizing its strategy, Brenntag took the decision in the fourth quarter of 2022 to replace operating EBITDA with operating EBITA as its key
performance indicator. Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
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NOTES
Period from January 1 to December 31
in EUR m EMEA
1)
North
America
Latin
America APAC
2)
Central
activities
3)
Brenntag
Essentials
External sales
2022 4,292.6 4,779.7 861.4 787.2 – 10,720.9
2021 3,186.7 3,268.5 634.5 725.7 – 7,815.4
fx adj. change in % 33.7 30.7 22.5 0.6 – 28.3
Operating gross profit
2022 969.6 1,342.5 176.9 119.6 – 2,608.6
2021 802.2 999.9 151.6 113.2 – 2,066.9
fx adj. change in % 20.2 20.0 5.0 –2.0 – 17.7
Operating EBITDA
2022 474.7 578.1 60.7 41.4 –1.6 1,153.3
2021 330.8 414.7 53.2 45.0 –0.7 843.0
fx adj. change in % 42.6 24.6 2.9 –14.5 128.6 27.6
Operating EBITA (segment result)
4)
5)
2022 367.5 468.5 42.8 33.6 –1.6 910.8
2021 222.4 317.9 38.7 41.3 –0.7 619.6
fx adj. change in % 63.9 31.7 – –24.5 128.6 36.7
5.08 Segment reporting on the global Essentials division 2022/2021
1)
Europe, Middle East & Africa.
2)
Asia Pacific including the China and Hong Kong segment, which is presented separately internally.
3)
Central activities which are part of Brenntag Essentials but not directly attributable to any one segment.
4)
In the course of operationalizing its strategy, Brenntag took the decision in the fourth quarter of 2022 to replace operating EBITDA with operating EBITA as its key
performance indicator. Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
Group key financial figures
in EUR m 2022 2021
Operating EBITDA 1,808.6 1,344.6
Payments to acquire intangible assets and property, plant and equipment
1)
–267.2 –199.3
Change in working capital
2)3)
–385.7 –575.3
Principal and interest payments on lease liabilities –150.6 –130.5
Free cash flow 1,005.1 439.5
5.09 Free cash flow
6)
Prior year: additions to property, plant and equipment and intangible assets; prior-year figure adjusted for comparability.
7)
Definition of working capital: trade receivables plus inventories less trade payables.
8)
Adjusted for exchange rate effects and acquisitions.
The following table shows the segment information for the
geographical segments of the global Brenntag Essentials
division:
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NOTES
in EUR m 2022 2021
Operating EBITDA 1,808.6 1,344.6
Depreciation of property, plant and equipment and right-of-use assets arising from leases –296.2 –258.4
Impairment of property, plant and equipment –0.7 –4.3
Operating EBITA (segment result)
1)
1,511.7 1,081.9
Net expense from special items –19.8 –228.7
(of which expenses in connection with “Project Brenntag” and other strategic projects) (–36.7) (–34.7)
(of which reversal of / addition to provisions for excise duties) (19.0) (–175.5)
(of which addition to provision for legal risks) (–2.1) (–24.0)
(of which refund of social security charges paid in previous years in Brazil) (–) (5.5)
EBITA 1,491.9 853.2
Amortization of intangible assets
2)
–71.4 –58.9
Impairment of intangible assets –38.1 –51.9
EBIT 1,382.4 742.4
Net finance costs –147.5 –92.1
Profit before tax 1,234.9 650.3
5.10 Reconciliation of operating EBITDA to profit before tax
1)
In the course of operationalizing its strategy, Brenntag took the decision in the fourth quarter of 2022 to replace operating EBITDA with operating EBITA as its
key performance indicator. Operating EBITA of the reportable segments (EMEA, North America, Latin America and Asia Pacific) amounts to EUR 1,648.8 million
(2021: EUR 1,154.5 million) and operating EBITA of All other Segments to EUR –137.1 million (2021: EUR –72.6 million).
2)
For the period from January 1 to December 31, 2022, this figure includes amortization of customer relationships in the amount of EUR 48.2 million
(2021: EUR 37.2 million).
in EUR m 2022 2021
Operating EBITA (segment result) 1,511.7 1,081.9
Average carrying amount of equity 4,543.1 3,802.8
Average carrying amount of financial
liabilities and lease liabilities 3,120.2 2,363.4
Average carrying amount of cash and
cash equivalents –882.2 –645.7
ROCE
1)
22.3% 19.6%
ROCE
1)
after special items 22.0% 15.5%
5.11 Determination of ROCE
1)
ROCE stands for return on capital employed and is defined as EBITA / (the
average carrying amount of equity plus the average carrying amount of
financial liabilities less the average carrying amount of cash and cash
equivalents). The average carrying amounts in the denominator are defined
for a particular year as the arithmetic average of the amounts at each of the
following five dates: the beginning of the year, the end of each of the first,
second and third quarters, and the end of the year.
General information
As one of the world’s leading chemical distributors with
around 600 locations
1)
, Brenntag offers its customers and
suppliers an extensive range of services, global supply chain
management and a highly developed chemical distribution
network in EMEA, North and Latin America as well as in the
Asia Pacific region.
Brenntag SE has its registered office at Messeallee 11, 45131
Essen, Germany, and is entered in the commercial register at
the Essen Local Court under commercial register number
HRB 31943.
These consolidated financial statements of Brenntag SE were
prepared by the Board of Management of Brenntag SE
on March 6, 2023 authorized for publication and submitted
to the Supervisory Board for approval at its meeting on
March 7, 2023.
The consolidated financial statements of Brenntag SE are
denominated in euros (EUR). Unless stated otherwise, the
amounts are in millions of euros (EUR million). For arithmetic
reasons, rounding differences of ± one unit after the decimal
point (EUR, %, etc.) may occur.
1)
The number of locations is recorded in a central database and includes all
Brenntag operating sites, both its own and external. The number excludes
purely office buildings, laboratories and external sites handling less than
300 tonnes p.a.
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NOTES
Consolidation policies and methods
Standards applied
The consolidated financial statements have been prepared
in accordance with IFRSs (International Financial Reporting
Standards), as adopted in the EU.
The IFRSs comprise the standards (International Financial
Reporting Standards and International Accounting Stan-
dards) issued by the International Accounting Standards
Board (IASB) and the interpretations by the IFRS Interpreta-
tions Committee (IFRS IC) and the former Standing Interpre-
tations Committee (SIC).
The accounting policies applied comply with all the stan-
dards and interpretations existing and adopted by the EU as
at December 31, 2022 whose application is mandatory. In ad-
dition, the German commercial law provisions to be applied
in accordance with Section 315e, para. 1 of the German Com-
mercial Code (HGB) were taken into account.
Due to the war in Ukraine, the Board of Management of
Brenntag SE decided to halt the business operations of all
Brenntag companies in Russia and Belarus until further notice.
As at December 31, 2022, the Brenntag companies in Russia
reported cash and cash equivalents of EUR 15.5 million (of
which EUR 2.6 million in euros, EUR 1.4 million in rubles and
EUR 11.5 million in US dollars) which were only available to
Brenntag for cross-border transfers subject to the applicable
restrictions on foreign exchange transactions. As at Decem-
ber 31, 2021, the cash and cash equivalents of the Brenntag
companies in Russia amounted to EUR 4.1 million.
The following revised and new standards issued by the Inter-
national Accounting Standards Board (IASB) have been
applied by the Brenntag Group for the first time:
First-time adoption in 2022
■
Amendments to IFRS 3 (Business Combinations) regard-
ing a reference to the Conceptual Framework
■
Amendments to IAS 16 (Property, Plant and Equipment)
regarding the presentation of proceeds before the
intended use of an item of property, plant and equipment
■
Amendments to IAS 37 (Provisions) regarding the defini-
tion of unavoidable costs of meeting the obligations
under an onerous contract
■
Annual Improvements to IFRSs (2018-2020 Cycle)
The amendments to IFRS 3 update a reference to the revised
IFRS Conceptual Framework (2018) and add to IFRS 3 a re-
quirement that an acquirer apply the requirements of IAS 37
(Provisions) or IFRIC 21 (Levies) in identifying liabilities as-
sumed, with the exception of contingent liabilities acquired,
to which the requirements of IFRS 3.23 continue to apply,
under which they must be recognized even if it is not probable
that there will be an outflow of economic resources. For
acquired contingent assets, an explicit prohibition on recog-
nition has been added.
The amendments to IAS 16 prohibit an entity from deducting
from the cost of an item of property, plant and equipment any
proceeds from selling products produced using that item of
property, plant and equipment before its intended use. Pro-
ceeds must be shown in profit or loss, as must production
expenditures incurred before the intended use of an item of
property, plant and equipment, such as during testing for
example.
The amendments to IAS 37 regarding the definition of un-
avoidable costs of meeting the obligations under an onerous
contract specify that all costs directly attributable to a con-
tract must be taken into account in determining whether the
contract is onerous as defined by IAS 37. Costs that relate
directly to a contract may be either incremental costs of
fulfilling that contract (e.g. direct labor or materials) or other
costs that relate directly to fulfilling the contract (e.g. depre-
ciation charges for items of property, plant and equipment
used in fulfilling the contract).
The annual improvements to IFRSs contain a number of minor
amendments to various standards that are intended to clar-
ify the content of the standards and eliminate any existing
inconsistencies.
Neither the aforementioned revised standards nor the annual
improvements to IFRSs have a material impact on the presen-
tation of the Group’s net assets, financial position and results
of operations.
Probable first-time adoption in 2023
■
IFRS 17 Insurance Contracts
■
Amendments to IAS 1 and IFRS Practice Statement 2
(Disclosure of Accounting Policies)
■
Amendments to IAS 8: Definition of Accounting Estimates
■
Amendments to IAS 12 regarding the prohibition on the
recognition of deferred tax at initial recognition of an
asset or liability
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NOTES
IFRS 17 will become effective on January 1, 2023 and replace
IFRS 4, the interim standard in effect since 2005. The new
standard sets out principles for the identification, recognition,
measurement, presentation and disclosure of insurance
contracts by insurers.
The amendments to IAS 1 are part of the IASB’s Disclosure
Initiative, the fundamental objective of which is to improve the
quality of financial reporting. This also includes ridding the
notes to IFRS financial statements of information that is irrel-
evant to users of the financial statements. In future, disclo-
sures will be required only on material accounting policy in-
formation and not on significant accounting policy
information. Information is regarded as “material” if it is de-
cision useful to users of the financial statements.
The amendments to IAS 8 contain clarifications to help enti-
ties distinguish between accounting policies and accounting
estimates.
The initial recognition exemption (IRE) generally places a pro-
hibition on the recognition of deferred tax at initial recognition
of an asset or liability in a transaction which is not a business
combination and affects neither accounting profit nor tax-
able profit. The amendments to IAS 12 narrow the scope of
the IRE. This means that, especially in the case of leases (rec-
ognition of the right-of-use asset and a lease liability) and in
the case of decommissioning and restoration obligations
(recognition as part of the cost of the asset and recognition
of a liability), both deferred tax assets (to the extent that they
are recoverable) and deferred tax liabilities are required to be
recognized if the transaction gives rise to equal deductible
and taxable temporary differences. It is no longer permitted
to omit to recognize deferred tax.
Probable first-time adoption in 2024
■
Amendments to IAS 1 regarding the classification of
liabilities as current or non-current – not yet endorsed by
the European Union
■
Amendments to IFRS 16 regarding the lease liability in a
sale and leaseback – not yet endorsed by the European
Union
The narrow-scope amendment to IAS 1 clarifies that liabilities
are classified as current or non-current based on the entity’s
rights in existence at the end of the reporting period.
Under the amendment, liabilities are classified as non- current
if, at the end of the reporting period, the entity has a substan-
tive right to defer settlement of the liability for at least twelve
months after the reporting date. In assessing whether a (sub-
stantive) right exists, the entity does not consider whether it
will exercise its right. Classification is unaffected by manage-
ment’s intentions in this regard.
Under the amendments to IFRS 16, an entity is required to
subsequently measure the lease liability in such a way that it
does not recognize any gain or loss that relates to the right of
use it retains.
Brenntag is currently examining the effects of the amended
standards on the presentation of the Group’s net assets,
financial position and results of operations. From a present
perspective, they do not have a material impact on the pre-
sentation of the Group’s net assets, financial position and
results of operations.
Scope of consolidation
As at December 31, 2022, the consolidated financial state-
ments include Brenntag SE and in addition 27 (Dec. 31, 2021:
28) domestic and 193 (Dec. 31, 2021: 203) foreign consoli-
dated subsidiaries including structured entities.
The table below shows the changes in the number of consol-
idated companies including structured entities:
Dec. 31, 2021 Additions Disposals Dec. 31, 2022
Domestic consolidated companies 29 – 1 28
Foreign consolidated companies 203 7 17 193
Total consolidated companies 232 7 18 221
5.12 Changes in scope of consolidation
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NOTES
The additions relate to entities acquired in business combi-
nations under IFRS 3 and one entity established. The dispos-
als are the result of mergers of companies no longer operat-
ing and liquidations.
Four (Dec. 31, 2021: three) associates are accounted for using
the equity method.
A full list of shareholdings for the Brenntag Group in accor
-
dance with Section 313, para. 2 of the German Commercial
Code (HGB) can be found in the Annex to the Notes.
In the case of two (Dec. 31, 2021: two) subsidiaries where
Brenntag does not hold the majority of the voting rights, it
nevertheless exercises its power to direct the relevant activi-
ties. The structured entities individually listed in the list of
shareholdings in accordance with Section 313, para. 2 of the
German Commercial Code (HGB) are a leasing company and
a sales company.
Business combinations in accordance with
IFRS 3
In March 2022, Brenntag acquired all shares in Y.S. Ashkenazi
Agencies Ltd. based in Netzer Sereni, Israel, and its subsidiary
Biochem Trading 2011 Ltd. Brenntag is thus continuing to ex-
pand its offering of specialty products and services for sup-
pliers and customers in the high-growth Food & Nutrition and
Personal Care markets and breaking into the Israeli market.
In August 2022, Brenntag acquired all shares in Prime Surfac-
tants Limited and its subsidiary Prime Example Ltd based in
Leeds, UK. Having established a leading position in surfac-
tants in the UK personal care market, Prime Surfactants
Limited is a good addition to Brenntag Specialties’ Personal
Care and HI&I business unit.
In November 2022, Brenntag acquired TechManagement
Energy Services, LLC (TechManagement) headquartered in
Odessa, Texas, USA. As well as its headquarters and its blend-
ing facility in Odessa, TechManagement has ten additional
operating facilities in West Texas, New Mexico and Oklahoma.
The acquiree’s formulation and blending expertise and its
state-of-the-art laboratory facilities are a welcome addition
to Brenntag’s energy services business in North America.
In December 2022, Brenntag acquired Ravenswood’s Life Sci-
ence and Coatings business. The company is headquartered
in Bayswater, Australia, and operates additional sites in Aus-
tralia and New Zealand. This acquisition extends Brenntag’s
presence in Australia and New Zealand and supports both its
strategy in the nutrition segment and its aspirations to ex-
pand the service portfolio by offering additional blending ca-
pabilities.
The purchase price, net assets and goodwill relating to these
business combinations break down as follows:
in EUR m
Tech
Management Ravenswood Other entities To ta l
Purchase price 78.4 52.6 53.2 184.2
of which consideration contingent
on earnings targets – 4.8 10.0 14.8
Assets
Cash and cash equivalents – – 3.9 3.9
Trade receivables, other financial assets
and other receivables 25.8 10.8 23.5 60.1
Other current assets 17.5 6.8 9.8 34.1
Non-current assets 28.2 13.8 17.7 59.7
Liabilities
Current liabilities 9.0 2.5 24.7 36.2
Non-current liabilities 3.0 4.9 5.1 13.0
Net assets 59.5 24.0 25.1 108.6
of which Brenntag’s share 59.5 24.0 25.1 108.6
of which non-controlling interests – – – –
Goodwill 18.9 28.6 28.1 75.6
of which deductible for tax purposes 18.9 – – 18.9
5.13 Net assets acquired in 2022
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NOTES
Assets acquired and liabilities assumed in business combi-
nations are normally recognized at their fair value at the date
of acquisition. The multi-period excess earnings method
was used to measure customer relationships. In particular,
the estimate of the useful lives of customer relationships can
affect their fair value.
For reasons of time, measurement of the assets acquired and
liabilities assumed (among others customer relationships and
deferred taxes) of the entities acquired in financial year 2022
has not yet been completed. There are no material differ-
ences between the gross amount and the carrying amount of
the receivables. The main factors determining the goodwill
are the above-mentioned reasons for the acquisitions where
not included in other assets (e.g. customer relationships and
similar rights).
Acquisition-related costs in the amount of EUR 1.5 million
were recognized under other operating expenses.
Since their acquisition by Brenntag, the business units
acquired in financial year 2022 have generated the following
sales and the following profit after tax:
in EUR m
Tech
Management Ravenswood Other entities 2022
Sales 23.8 3.4 47.7 74.9
Profit after tax – 1.2 0.1 1.4 0.3
5.14 Sales and profit after tax of the businesses acquired since acquisition
If the above-mentioned business combinations had taken
place with effect from January 1, 2022, sales of about
EUR19,750 million would have been reported for the Brenntag
Group in the reporting period. Profit after tax would have been
about EUR 889 million.
The carrying amounts and annual amortization of the intan-
gible assets held by the business units acquired in 2022 and
contained in non-current assets, in each case at the ex-
change rate at the acquisition date, are as follows:
in EUR m
Tech
Management Ravenswood Other entities
Provisional
fair value
Customer relationships
and similar rights
Customer relationships 9.8 10.2 15.1 35.1
Annual amortization 2.5 2.6 3.1 8.2
Trademark 1.0 0.4 0.9 2.3
Annual amortization 1.0 0.1 0.3 1.4
5.15 Intangible assets acquired
Measurement of the assets and liabilities from the acquisition
in financial year 2021 of the first tranche (67%) of Zhongbai
Xingye Food Technology (Beijing) Co. Ltd., a specialty distrib-
utor of food ingredients based in Beijing, China, and a subsid-
iary has been completed.
There were no changes to the purchase price, net assets
acquired or goodwill.
Measurement of the assets and liabilities from the acquisition
in financial year 2021 of Storm Chaser Holding Corporation
based in Wilmington/Delaware, USA, and its subsidiaries
(“JM Swank”) has been completed.
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NOTES
in EUR m
Provisional
fair value Adjustments Final fair value
Purchase price 256.1 0.1 256.2
of which consideration contingent on earnings targets – – –
Assets
Cash and cash equivalents 0.6 – 0.6
Trade receivables, other financial assets and other receivables 40.0 – 40.0
Other current assets 34.8 – 34.8
Non-current assets 70.9 –0.2 70.7
Liabilities
Current liabilities 40.5 –0.2 40.3
Non-current liabilities 11.5 – 11.5
Net assets 94.3 –0.4 93.9
of which Brenntag’s share 94.3 – 94.3
of which non-controlling interests – – –
Goodwill 161.8 0.5 162.3
of which deductible for tax purposes – – –
5.16 Net assets acquired in 2021: JM SWANK
in EUR m
Provisional
fair value Adjustments Final fair value
Purchase price 45.6 – 45.6
of which consideration contingent on earnings targets – – –
Assets
Cash and cash equivalents – – –
Trade receivables, other financial assets and other receivables 35.1 – 35.1
Other current assets 36.4 – 36.4
Non-current assets 8.3 – 8.3
Liabilities
Current liabilities 39.1 0.1 39.2
Non-current liabilities 3.5 – 3.5
Net assets 37.2 0.1 37.3
of which Brenntag’s share 37.2 0.1 37.3
of which non-controlling interests – – –
Goodwill 8.4 – 8.4
of which deductible for tax purposes 8.4 – 8.4
5.17 Net assets acquired in 2021: Matrix Chemical
Measurement of the assets and liabilities from the acquisition
in financial year 2021 of Matrix Chemical, LLC has been com-
pleted. The company is a solvents distributor and the largest
distributor of acetone in North America.
The purchase price, net assets acquired and goodwill were
adjusted as follows in the measurement period:
The purchase price, net assets acquired and goodwill were
adjusted as follows in the measurement period:
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NOTES
Measurement of the assets and liabilities of the other entities
and businesses acquired in financial year 2021 (Miroven S.r.l.
based in Cernusco Sul Naviglio, Comelt S.p.A. based in Assago
and Aquadepur S.R.L. based in Cogliate (Comelt) (all in north-
ern Italy), ICL Packed Ltd. based in Grays, Essex, England, and
Alpha Chemical Ltd. based in Dartmouth, Nova Scotia,
Canada) has been completed.
The purchase price, net assets acquired and goodwill were
adjusted as follows in the measurement period:
in EUR m
Provisional
fair value Adjustments Final fair value
Purchase price 58.4 0.1 58.5
of which consideration contingent on earnings targets – – –
Assets
Cash and cash equivalents 1.3 – 1.3
Trade receivables, other financial assets and other receivables 14.7 – 14.7
Other current assets 4.0 – 4.0
Non-current assets 22.4 – 22.4
Liabilities
Current liabilities 13.1 – 13.1
Non-current liabilities 13.1 – 13.1
Net assets 16.2 – 16.2
Goodwill 42.2 0.1 42.3
of which deductible for tax purposes – – –
5.18 Net assets acquired in 2021: Other business combinations
Goodwill from the business combinations carried out in finan-
cial years 2021 and 2022 changed as follows:
in EUR m
Zhongbai
Xingye JM Swank
Matrix
Chemical
Tech
Manage-
ment Ravenswood Other Goodwill
Dec. 31, 2021 66.8 169.8 8.8 – – 43.0 288.4
Exchange rate differences –1.5 10.5 0.5 –1.3 –2.1 –2.0 4.1
Business combinations in 2022 – – – 18.9 28.6 27.9 75.4
Adjustments in the measurement
period – 0.5 – – – 0.1 0.6
Dec. 31, 2022 65.3 180.8 9.3 17.6 26.5 69.0 368.5
5.19 Change in goodwill
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NOTES
The net cash outflow in 2022 resulting from business combi-
nations has been determined as follows:
in EUR m
Purchase price 184.4
Less cash and cash equivalents acquired 3.9
Plus purchase price payments reclaimed –8.9
Less purchase prices payable 14.9
Payments to acquire consolidated subsidiaries
and other business units 156.7
5.20 Reconciliation of acquisition costs to payments to acquire
consolidated subsidiaries and other business units
Consolidation methods
The consolidated financial statements include the financial
statements – prepared according to uniform accounting pol-
icies – of Brenntag SE and all entities controlled by Brenntag.
This is the case when the following conditions are met:
■
Brenntag has decision-making power over the relevant
activities of the other entity.
■
Brenntag has exposure, or rights, to variable returns from
its involvement with the other entity.
■
Brenntag has the ability to use its decision-making power
over the relevant activities of the other entity to affect
the amount of the variable returns of the other entity.
Control may be based on voting rights or arise from other
contractual arrangements. Accordingly, the scope of consol-
idation includes, in addition to entities in which Brenntag SE
directly or indirectly controls the majority of voting rights,
structured entities which are controlled as a result of contrac-
tual arrangements.
Inclusion in the consolidated financial statements com-
mences at the date on which control is obtained and ends
when control is lost.
Acquisitions are accounted for using the acquisition method
in accordance with IFRS 3. The cost of an acquired business
unit is considered to be the fair value of the assets given.
Acquisition-related costs are recognized as an expense.
Contingent consideration is recognized as a liability at the
acquisition-date fair value when determining the cost. If
Brenntag gains control but does not acquire 100% of the
shares, the corresponding non-controlling interest is recog-
nized.
Identifiable assets, liabilities and contingent liabilities of an
acquiree that are eligible for recognition are generally mea-
sured at their fair value at the transaction date, irrespective
of the share of any non-controlling interests. Any remaining
differences between cost and the share of the net assets
acquired are recognized as goodwill.
In the event of an acquisition in stages which leads to control
of a company being obtained, or in the event of a share sale
involving a loss of control, the shares already held in the first
case or the remaining shares in the second case are mea-
sured at fair value through profit or loss. Acquisitions or dis
-
posals of shares which have no effect on existing control are
recognized in equity.
Receivables, liabilities, expenses, income and intercompany
profits or losses within the Brenntag Group are eliminated.
Associates and joint ventures of the Brenntag Group where
Brenntag has significant influence or joint control are ac-
counted for using the equity method. Significant influence is
generally considered to exist when Brenntag SE holds be-
tween 20% and 50% of the voting rights either directly or indi-
rectly. The same consolidation policies apply to companies
accounted for using the equity method as to consolidated
companies, whereby recognized goodwill is contained in the
carrying amount of investments accounted for using the
equity method. Brenntag’s share of the profit/loss after tax of
the companies accounted for using the equity method is rec-
ognized in the income statement. The accounting policies of
the companies accounted for using the equity method were,
as far as necessary, adjusted in line with the accounting
policies of Brenntag.
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NOTES
Currency translation
Foreign currency receivables and liabilities in the single-entity
financial statements are stated on initial recognition at the
spot exchange rate at the date of the transaction. At the
reporting or settlement date, foreign currency receivables
and liabilities are translated at the closing rate. The resulting
differences are recognized in profit or loss.
The items contained in the financial statements of a Group
company are measured on the basis of the currency of the
relevant primary economic environment in which the com-
pany operates (functional currency). The presentation cur-
rency of the Brenntag Group is the euro.
The single-entity financial statements of the companies
whose functional currency is not the euro are translated into
euros as follows:
Assets and liabilities are translated at the closing rate, in-
come and expense at the annual average rate. Any differ-
ences resulting from currency translation are recognized in
other comprehensive income. Goodwill and fair value adjust-
ments resulting from the acquisition of foreign companies are
assigned to the foreign company and also translated at the
closing rate.
For some companies in Latin America and in the Asia Pacific
region, the functional currency is the US dollar and not the
local currency. Non-monetary items, primarily property, plant
and equipment, goodwill and other intangible assets as well
as environmental provisions, are translated from the local
currency into US dollars using the exchange rate at the trans-
action date. Monetary items are translated at the closing rate.
All income and expenses are translated at the average ex-
change rate for the reporting period with the exception of de-
preciation and amortization, impairment losses and reversals
of impairment losses as well as income and expenses in-
curred in connection with environmental provisions. These are
translated at the same exchange rates as the underlying as-
sets and liabilities. The resulting foreign currency differences
are recognized in profit or loss. After translation of the items
in the single-entity financial statements into the functional
currency, the US dollar, the same method is used for transla-
tion from US dollars into the Group currency, the euro, as for
companies whose functional currency is the local currency.
The single-entity financial statements of foreign companies
accounted for using the equity method are translated using
the same principles.
The euro exchange rates of major currencies changed as
follows:
Closing rate Average rate
EUR 1 = currencies Dec. 31, 2022 Dec. 31, 2021 2022 2021
Brazilian real (BRL) 5.6386 6.3101 5.4399 6.3779
Canadian dollar (CAD) 1.4440 1.4393 1.3695 1.4826
Swiss franc (CHF) 0.9847 1.0331 1.0047 1.0812
Chinese yuan renminbi (CNY) 7.3582 7.1947 7.0788 7.6282
Danish krone (DKK) 7.4365 7.4364 7.4396 7.4370
Pound sterling (GBP) 0.8869 0.8403 0.8528 0.8596
Polish zloty (PLN) 4.6808 4.5969 4.6861 4.5652
Russian ruble (RUB) 76.8960 85.3004 72.1436 87.1527
Swedish krona (SEK) 11.1218 10.2503 10.6296 10.1465
Turkish lira (TRL) 19.9649 15.2335 17.4088 10.5124
US dollar (USD) 1.0666 1.1326 1.0531 1.1827
5.21 Exchange rates of major currencies
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NOTES
Accounting and measurement policies
Revenue recognition
Revenue from contracts with customers is recognized using
a five-step model in accordance with IFRS 15:
1. Identify the contract(s) with a customer
2. Identify the separate performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the separate
performance obligations
5. Recognize revenue when (or as) the entity satisfies
a performance obligation.
Revenue is recognized in the amount of consideration to
which Brenntag expects to be entitled in exchange for goods
or services. Variable consideration, such as cash discounts,
discounts and rebates, is estimated and taken into account
when determining the transaction price. Where relevant, the
transaction price is allocated to individual performance
obligations.
Revenue from the sale of goods or services is recognized
when control of the goods or services transfers to the cus-
tomer. Control transfers when the customer obtains control
of the agreed goods or services and can obtain benefits from
them. In a sale of goods, control usually transfers when the
goods are collected by the customer or dispatched by
Brenntag or a third party. In this case, revenue is recognized
at a point in time. In cases where goods are delivered to a
third party with the aim of resale to an end customer and the
third party does not obtain control of the goods, revenue is not
recognized until the goods are delivered to the end customer.
Revenue from services is recognized over time.
If a discount (e.g. volume discount) is granted, revenue is rec-
ognized taking into account probable price reductions. The
transaction price is determined taking into account past ex-
perience. Revenue is only recognized to the extent that it is
highly probable that a reversal in the amount of revenue will
not occur.
There are currently no significant financing components in
the Brenntag Group. Payment terms are negotiated locally
and reflect standard market practice. As there are no long-
term performance obligations, the amount and timing of
allocated transaction prices are not required to be disclosed
for performance obligations that are unsatisfied as of the
reporting date (practical expedient in IFRS 15.121).
Interest income is recognized as the interest accrues using
the effective interest method.
Dividend income is recognized when the right to receive pay-
ment is established.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, cheques
and deposits held with banks with an original term of three
months or less.
Trade receivables, other receivables and other
financial assets
Trade receivables that do not contain a significant financing
component are initially recognized at the transaction price in
accordance with IFRS 15. All other financial assets are mea-
sured on initial recognition at fair value (if applicable, includ-
ing transaction costs). Fair value is defined as the price that
would be received to sell an asset or paid to transfer a liabil-
ity in an orderly transaction between market participants at
the measurement date.
For the purpose of subsequent measurement, financial assets
are classified into one of three categories, depending on the
business model for managing the financial assets and the
contractual cash flow characteristics:
■
Measured at amortized cost: Assets held in order to
collect contractual cash flows, where those cash flows
are solely payments of principal and interest
■
Measured at fair value through other comprehensive
income: Assets held in order to collect contractual cash
flows and sell the assets, where those cash flows are
solely payments of principal and interest
■
Measured at fair value through profit or loss: Assets that
do not meet the criteria of the two aforementioned
categories.
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NOTES
Cash and cash equivalents, trade receivables, other receiv-
ables and receivables included in other financial assets are
measured at amortized cost. There are no financial instru-
ments measured at fair value through other comprehensive
income. Securities and shares in entities where Brenntag does
not have at least significant influence are measured at fair
value through profit or loss, as are derivative financial instru-
ments.
For fair value measurement, IFRS 13 provides a three-level
hierarchy that reflects the extent to which the inputs used to
determine fair value are market-based:
■
Level 1: Fair value determined using quoted or market
prices in an active market
■
Level 2: Fair value determined using quoted or market
prices in an active market for similar financial assets or
liabilities, or other measurement methods for which
significant inputs used are based on observable market
data
■
Level 3: Fair value determined using measurement
methods for which significant inputs used are not based
on observable market data.
Trade receivables are subsequently measured using provision
matrices. Country-specific valuation allowances are deter-
mined for receivables in the same credit risk class (e.g. cus-
tomer industries) based on historical credit losses and for-
ward-looking estimates. In this context, credit risk is assessed
primarily on the basis of the extent to which the receivables
are past due. If there is objective evidence that trade receiv-
ables or other financial assets measured at amortized cost
should be considered impaired, a specific valuation allow-
ance reflecting the credit risk in question is recognized in
profit or loss. The valuation allowances are always posted to
an allowance account in the balance sheet. If a receivable is
uncollectible, the gross amount and the valuation allowance
are both derecognized.
A regular way purchase or sale of non-derivative financial
assets is recognized at the settlement date. Derivative finan-
cial instruments are recognized in the balance sheet when
Brenntag becomes a party to the contractual provisions of
that instrument.
Financial assets are derecognized if the contractual rights to
the cash flows from the financial asset have expired or have
been transferred and Brenntag has transferred substantially
all the risks and rewards of ownership.
Inventories
Inventories mainly comprise merchandise. They are initially
recognized at cost. Production costs for the inventories pro-
duced through further processing are also capitalized.
Inventories are subsequently measured in accordance with
IAS 2 at the lower of cost (on the basis of the average cost
formula) and net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs
necessary to make the sale. Net realizable value also reflects
effects of obsolescence or reduced marketability. Earlier
valuation allowances on inventories are reversed if the net
realizable value of the inventories increases again.
Property, plant and equipment
Property, plant and equipment is carried at cost of acquisition
or construction and, except for land, depreciated over its
estimated useful life on a straight-line basis. If major compo-
nents of an item of property, plant and equipment have
different useful lives, these components are accounted for
separately and depreciated over their respective useful lives.
Acquisition costs include all expenditure directly attributable
to the acquisition.
In accordance with IAS 16, future costs for any restoration
obligation are recognized as an increase in the cost of acqui-
sition or construction of the respective asset and a corre-
sponding provision is established at the time of acquisition or
construction of the item of property, plant and equipment.
In accordance with IAS 20, government grants and assistance
for investments are deducted from the related asset.
The charges on property, plant and equipment include both
depreciation charges and impairment losses.
When items of property, plant and equipment are sold, the
difference between the net proceeds and the carrying
amount of the respective asset is recognized as a gain or loss
in other operating income or expenses.
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NOTES
Assets are depreciated over the following useful lives:
Useful life
Land rights 40 to 50 years
Buildings 15 to 50 years
Installations and building improvements 8 to 20 years
Technical equipment and machinery 3 to 20 years
Vehicles 5 to 8 years
Other equipment, operating
and office equipment 2 to 10 years
5.22 Useful lives of property, plant and equipment
Intangible assets
Intangible assets include customer relationships and similar
rights purchased, the “Brenntag” trademark, other trade-
marks, software, concessions and similar rights as well as
goodwill from the acquisition of consolidated subsidiaries
and other business units.
Intangible assets acquired through business combinations
are measured on initial recognition at their acquisition-date
fair value.
Separately acquired intangible assets are carried at cost.
Acquired software licenses are recognized at cost plus directly
attributable costs incurred to acquire and bring to use the
specific software.
In addition to goodwill, the “Brenntag” trademark has an in-
definite useful life as no assumption can be made about its
durability or the sustainability of its economic use. The other
intangible assets are amortized on a straight-line basis over
their estimated useful lives. The following useful lives are
assumed:
Useful life
Concessions, industrial and similar rights
as well as software and trademarks with
definite useful lives 3 to 10 years
Customer relationships and similar rights 3 to 15 years
5.23 Useful lives of intangible assets
The charges on intangible assets include both amortization
charges and impairment losses.
Leases
Under the rules in IFRS 16 (Leases), lessees are generally
required to recognize leases in the balance sheet in the form
of a right-of-use asset and a corresponding lease liability.
In doing so, all contractual lease payments to the lessor are
included in the measurement. Lease payments are not sepa-
rated into payments for lease components and payments for
non-lease components (e.g. payments for maintenance or
servicing costs). When recognizing extension and purchase
options, judgements need to be made. Lease payments from
extension periods and exercise prices of purchase options are
included in the measurement if the option is reasonably cer-
tain to be exercised.
In the income statement, leases are in these cases presented
as a financing transaction, i.e. the right-of-use asset usually
has to be depreciated on a straight-line basis and the lease
liability adjusted using the effective interest method. For
short-term leases with a term of twelve months or less and
leases for which the underlying asset is of low value, there is
an option to continue to recognize the lease as an expense in
EBITDA. Brenntag exercises this option accordingly.
The leases at Brenntag relate mainly to land and buildings
(warehouse and office space), vehicles and other plant and
equipment. Leases are entered into for fixed terms of more
than one year to 70 years in limited cases, but may also con-
tain extension options.
The incremental borrowing rates were determined on the
basis of a base rate plus a risk premium. The base rates in
major currencies and countries were derived from interest
rate swaps (if available) or government bond yields for a period
of up to twenty years. For countries or currencies for which
there were no reliable data available on which to base the
determination, the euro base rate was adjusted to reflect a
country risk premium.
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NOTES
Impairment testing of non-current non-financial
assets
In accordance with IAS 36, non-current non-financial assets
are tested for impairment whenever there is an objective
indication that the carrying amount may not be recoverable.
Assets that have an indefinite useful life and are, therefore,
not subject to amortization are also tested for impairment at
least annually.
Impairment exists when the carrying amount of an asset
exceeds the estimated recoverable amount. Recoverable
amount is the higher of fair value less costs of disposal and
value in use. Value in use is the present value of the future
cash flows expected to be derived from an asset. If the carry-
ing amount is higher than the recoverable amount, the asset
is written down to the recoverable amount.
If the recoverable amount of an individual asset cannot be
determined, the recoverable amount of the cash-generating
unit (CGU) to which this asset belongs is determined and
compared with the carrying amount of the CGU.
Impairments, except for impairments of goodwill, are re-
versed as soon as the reasons for the impairment no longer
exist.
Goodwill is tested for impairment regularly, at least annually,
after completion of the annual budget process by comparing
the carrying amount of the relevant cash-generating unit with
its recoverable amount.
If the carrying amount of a CGU exceeds the recoverable
amount, an impairment exists in the amount of the difference.
In this case, the goodwill of the relevant CGU would first be
written down. Any remaining impairment would be allocated
to the assets of the CGU in proportion to the net carrying
amounts of the assets at the reporting date. The carrying
amount of an individual asset must not be less than the
highest of fair value less costs of disposal, value in use (in
each case in as far as they can be determined) and zero.
Other provisions
In accordance with IAS 37, other provisions are recognized
when the Group has a present legal or constructive obligation
towards third parties as a result of past events, it is more likely
than not that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated.
Non-current provisions are recognized at the present value of
the expected outflow and their discounting is unwound over
the period until their expected utilization. For provisions for
long-service anniversary bonuses and pre-retirement part-
time working arrangements, this is carried out bearing in
mind actuarial principles or by obtaining external appraisals.
If the projected obligation declines as a result of a change in
an estimate, the provision is reversed by the corresponding
amount. Reversals of provisions for personnel expenses are
recognized in personnel expenses. Provisions recognized
as other operating expenses are reversed as other operating
income.
Provisions are recognized for cash-settled share-based pay-
ments in accordance with IFRS 2. The Long-Term Incentive
Program and the expiring long-term, virtual share-based
remuneration program for the members of the Board of Man-
agement and the Long-Term Incentive Plan for Executives and
Senior Managers are classified as cash-settled share-based
payments. Provisions are established for the resulting obliga-
tions. The obligations are measured at fair value. They are
recognized as personnel expenses over the vesting period
during which the beneficiaries acquire a vested right (uncon-
ditional right). The fair value is remeasured at each reporting
date and at the settlement date.
Provisions for pensions and other
post-employment benefits
The Group’s pension obligations comprise both defined con-
tribution and defined benefit pension plans.
The contributions to be paid into defined contribution pension
plans are recognized directly as expense. Provisions for
pension obligations are not established as, in these cases,
Brenntag has no additional obligation apart from the obli-
gation to pay the premiums.
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NOTES
In accordance with IAS 19, provisions are established for de-
fined benefit plans, unless the plans are multi-employer pen-
sion funds for which insufficient information is available. The
obligations arising from these defined benefit plans are de-
termined using the projected unit credit method, under which
the expected benefits to be paid after retirement are deter
-
mined taking dynamic measurement inputs into account and
spread over the entire length of service of the employees par-
ticipating in the plan. For this purpose, an actuarial valuation
is obtained every year. The actuarial assumptions for the dis-
count rate, salary increase rate, pension trend, life expec-
tancy and cost increases for medical care used to calculate
the defined benefit obligation are established on the basis of
the respective economic circumstances. The plan assets
measured at fair value are deducted from the present value
of the defined benefit obligation (gross pension obligation).
Plan assets are assets where the claim to said assets has, in
principle, been assigned to the beneficiaries. This results in
the net liability required to be recognized or the net asset re-
quired to be recognized.
The discount rate is determined by reference to market yields
at the end of the reporting period on fixed-rate senior corpo-
rate bonds. The currency and term of the corporate bonds
taken as a basis are consistent with the currency and esti-
mated term of the post-employment benefit obligations.
Life expectancy is determined using the latest mortality
tables.
Pension costs are made up of three components:
As a result of the inclusion of the remeasurement components
in other comprehensive income, net of tax, the balance sheet
shows the full extent of the net obligation avoiding volatility
in profit or loss that may result in particular from changes in
the measurement inputs.
Multi-employer defined benefit plans are treated as defined
contribution plans when insufficient information is available.
Trade payables, financial liabilities and other
liabilities
Trade payables, financial liabilities (excluding derivative
financial instruments and contingent purchase prices payable
in business combinations) and other liabilities are classified
as at amortized cost. They are initially recognized at their
fair value net of transaction costs incurred and subsequently
carried at amortized cost using the effective interest method.
Derivative financial instruments and contingent purchase
prices payable in business combinations are initially recog-
nized at fair value and subsequently measured at fair value
through profit or loss.
Component Constituents Recognized in
Service cost – Current service cost Personnel expenses
– Past service cost incl. gains and losses from plan curtailments
– Gains and losses from plan settlements
Net interest expense – Unwinding of discounting of defined pension obligation (DBO) Interest expense
– Interest income from plan assets
Remeasurements – Actuarial gains and losses on DBO from experience
adjustments and from changes in measurement inputs
Other comprehensive income,
net of tax
– Changes in value of plan assets not already contained in net
interest expense
5.24 Pension cost components
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NOTES
Liabilities relating to acquisition of non-con-
trolling interests
Liabilities relating to the acquisition of non-controlling inter-
ests include unconditional and contingent purchase price
obligations relating to the acquisition of non-controlling
interests as well as liabilities arising from limited partners’
rights to repayment of contributions.
On initial recognition, they are recognized as a liability at their
fair value (present value of the purchase price obligation) by
reducing retained earnings. They are subsequently measured
at amortized cost. Unwinding of discounting and changes in
estimates of unconditional purchase price obligations and
liabilities arising from limited partners’ rights to repayment of
contributions are recognized in profit or loss. Exchange rate
effects are recognized in profit or loss or, in the case of net
investment hedges, directly in equity.
Deferred taxes and current income taxes
Current income taxes for current and prior periods are recog-
nized at the amount expected to be paid to or recovered from
the taxation authorities.
Deferred taxes are determined in accordance with IAS 12
(Income Taxes). They arise from temporary differences be-
tween the carrying amounts of assets and liabilities in the
IFRS balance sheet and their tax base, from consolidation ad-
justments and from tax loss carryforwards that are expected
to be utilized.
Deferred tax assets are recognized to the extent that it is likely
that future taxable profit will be available against which the
temporary differences and unutilized loss carryforwards can
be utilized.
No deferred taxes are recognized for the difference between
the net assets and the tax base of subsidiaries (outside basis
differences) provided Brenntag is able to control the timing of
the reversal of the temporary difference and it is unlikely that
the temporary difference will reverse in the foreseeable
future.
Deferred taxes for domestic companies are calculated on the
basis of the combined income tax rate of the German consol-
idated tax group of Brenntag SE of 32% (2021: 32%) for cor-
porate income tax, solidarity surcharge and trade income tax,
and for foreign companies, at local tax rates. These are tax
rates which can be expected to apply on the basis of laws in
the different countries that have been enacted or substan-
tially enacted at the reporting date.
Deferred tax assets and liabilities are netted against each
other if they relate to the same taxation authority, the com-
pany has a legally enforceable right to set them off against
each other and they mature in the same period.
Bond with warrant units
The bond with warrant units consisting of the bond (Bond
(with Warrants) 2022) and the warrant components was re-
paid in December 2022. Upon issue, these components were
recognized separately at fair value, including transaction
costs. The bond with warrant units was subsequently mea-
sured at amortized cost using the effective interest method.
The warrants constituted equity as they entitled the holder to
acquire a fixed number of Brenntag shares at a specified
strike price. Upon issue in November 2015, they were therefore
taken directly to additional paid-in capital and recognized at
fair value (warrant premium), including transaction costs.
There was no subsequent measurement.
Subscribed capital
The subscribed capital is carried at its nominal value.
Assumptions and estimates
Preparation of the consolidated financial statements requires
the use of assumptions and estimates which may affect the
amount and presentation of assets and liabilities and income
and expenses. These assumptions and estimates mainly
relate to the following:
■
the calculation and discounting of cash flows when
impairment tests are performed;
■
the probability of occurrence, interest rates and other
measurement inputs used to measure provisions, partic-
ularly for environmental risks and defined benefit pension
obligations;
■
the amount of liabilities relating to the acquisition of
non-controlling interests as well as the determination of
interest rates (see the section “Standards applied”);
■
the assessment of whether purchase and extension
options will be exercised when accounting for right-of-
use assets in accordance with IFRS 16 (Leases).
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NOTES
Due to rising energy and supply costs in Europe, the trend in
inflation in the USA and Europe, and lockdowns and the pan-
demic situation in China, Brenntag’s business performance
and the assumptions about its future free cash flow perfor-
mance remain subject to uncertainties which may affect the
recognition and amount of assets and liabilities stated in the
balance sheet, particularly goodwill. Brenntag took account
of the particularly volatile macroeconomic conditions by wid-
ening the ranges used in the sensitivity analyses compared
with the previous year. However, except in the case of the
cash-generating unit Latin America (BES), for which an im-
pairment loss was recognized, the sensitivity analyses per-
formed during goodwill impairment testing showed sufficient
scope. As in the previous year, no goodwill impairment would
have arisen if the free cash flow taken as a basis for goodwill
impairment testing had been 15% lower (previous year: 10%
lower), with all other conditions remaining the same. As in
2021, a 30% lower (previous year: 20% lower) growth rate over
the entire planning period, with all other conditions remaining
the same, and an increase of 1.5 percentage points (previous
year: 1.0 percentage points) in the WACC (weighted average
cost of capital after taxes) taken as a basis for goodwill im-
pairment testing would likewise not have led to any impair-
ment. In the case of the cash-generating unit Latin America
(BES), the aforementioned sensitivity analyses would have
resulted in an impairment loss on the other assets.
If the discount rates used to determine the environmental pro-
visions had been one percentage point higher or lower and all
other conditions had remained the same, the provision would
have decreased by EUR 5.8 million (Dec. 31, 2021: EUR 5.3 mil-
lion) or increased by EUR 6.6 million (Dec. 31, 2021: EUR 5.4
million), respectively.
Sensitivity analyses of defined benefit pension obligations are
described in the section “Provisions for pensions and other
post-employment benefits”.
In the case of right-of-use assets under IFRS 16 (Leases),
purchase and extension options are recognized if they are
reasonably certain to be exercised. In this respect, the assess-
ment is subject to a high degree of judgement. If circum-
stances change, the assessment of whether an option is
reasonably certain to be exercised must be made anew.
Furthermore, assumptions are made as to the realization of
future tax benefits from loss carryforwards and to the useful
lives of intangible assets and property, plant and equipment.
The actual amounts may differ from the assumptions and
estimates in individual cases. Adjustments are recognized
when estimates are revised.
The global fight against climate change will lead not only to
structural, regulatory and technological changes, but also to
increased costs as a result of preventive technologies or gov-
ernment carbon taxes. This could potentially impact on ac-
counting estimates and assumptions. Brenntag has estab-
lished a global sustainability program and comprehensive
governance structures with a view to driving the integration
of numerous ESG matters into its business processes. There
were no effects on the financial reporting or the estimates
and assumptions made in financial year 2022.
Cash flow statement
The cash flow statement classifies cash flows by operating,
investing and financing activities. The cash provided by oper-
ating activities is determined using the indirect method on the
basis of the profit / loss after tax. Interest payments made
and received, tax payments and dividends received are pre-
sented as components of cash provided by operating activi-
ties. The effects of acquisitions of consolidated subsidiaries
and other business units as defined by IFRS 3 (Business Com-
binations) are eliminated from the individual items of the cash
flow statement and combined under cash flow from investing
activities. Under IFRS 16 (Leases), lease payments made are
included in cash used in financing activities as repayments
of borrowings and in cash provided by operating activities as
interest paid. Payments under short-term leases or leases of
low-value assets are a component of cash flow from operat-
ing activities. Cash and cash equivalents in the cash flow
statement correspond to the cash and cash equivalents in
the balance sheet. The effect of exchange rate changes on
cash and cash equivalents is shown separately.
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NOTES
Segment reporting
Segment reporting under IFRS 8 (Operating Segments) is
based on the management approach. Reporting is based on
the internal control and reporting information used by the top
management to assess segment performance and allocate
resources. In the course of operationalizing its strategy,
Brenntag took the decision in the fourth quarter of 2022
to replace operating EBITDA with operating EBITA as its key
performance indicator.
Hyperinflation
In the interim consolidated financial statements for the pe-
riod ended June 30, 2022, Turkey was for the first time required
to be classified as a hyperinflationary economy in accor-
dance with IAS 29 (Financial Reporting in Hyperinflationary
Economies). This standard requires non-monetary assets and
liabilities, the statement of comprehensive income and equity
to be restated at the end of each reporting period by applying
the price index applicable at the end of the reporting period.
The balance of those adjustments is presented in profit or loss
as a loss on the net monetary position. IAS 29 must be applied
as if Turkey had always been hyperinflationary. Brenntag used
the consumer price index published by the Turkish Statistical
Institute (Dec. 31, 2021: 687 index points; Dec. 31, 2022: 1,129
index points). Effects of EUR 6.5 million arising on retrospec-
tive application as at January 1, 2022 and the inflation effect
on equity of EUR 17.8 million were recognized as exchange
rate differences in other comprehensive income. Inflation led
to an increase in sales of EUR 53.3 million, an increase in cost
of materials of EUR 42.1 million and, in the balance of the
other income statement items, an increase in expenses of
EUR 6.5 million. Inflation resulted in a loss on the net monetary
position of EUR 16.3 million for 2022. Overall, the application
of IAS 29 depressed profit after tax by EUR 11.6 million. The
prior-year amounts in the balance sheet and the income
statement of the subsidiary in Turkey, and therefore in the
Group as well, were not restated.
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CONSOLIDATED
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NOTES
Consolidated income
statement disclosures
1.) Sales
Sales of EUR 19,429.3million (2021: EUR 14,382.5million) are
almost entirely attributable to contracts with customers as
defined by IFRS 15. Sales of EUR 1.4 million (2021: EUR1.5mil-
lion) were generated with related parties.
Sales of EUR 19,349.8million (2021: EUR 14,309.6million) re-
late mainly to the sale of goods and sales of EUR 79.5million
(2021: EUR 72.9million) to the provision of services. For the
majority of the sales, therefore, control transfers at a point in
time, which depends specifically on the terms of delivery
agreed with the customer. Control usually transfers when the
goods are collected by the customer or dispatched by
Brenntag or a third party.
Of the sales revenues from the sale of goods, EUR 19,224.6mil-
lion (2021: EUR 14,212.4million) are attributable to warehous-
ing or direct business. Of the other revenues from the sale of
goods in the amount of EUR 125.2million (2021: EUR 97.2mil-
lion), EUR 115.5million (2021: EUR 76.4million) relate to con-
signment business. Revenue from consignment agreements
is recognized when control of the goods transfers to either a
distributor or the end customer.
For a breakdown of sales by operating segment, please refer
to the “Key financial figures by segment” section of these
notes to the consolidated financial statements.
Trade receivables reported in the amount of EUR 2,676.8mil-
lion (Dec. 31, 2021: EUR 2,290.2million) are entirely attribut-
able to contracts with customers. No contract assets are
currently recognized in the Brenntag Group.
Liabilities from contracts with customers break down as
follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Contract liabilities under credit notes 14.6 16.3
Refund liabilities 29.1 19.9
Prepayments received 7.5 9.7
Tot a l 51.2 45.9
5.25 Current contract liabilities from contracts with customers
2.) Cost of materials
Cost of materials amounts to EUR 15,110.3 million (2021:
EUR11,003.5 million) and comprises the cost of purchased
goods and services. It includes expenses in the amount of
EUR30.5 million (2021: EUR 20.4 million) from valuation allow-
ances on inventories.
3.) Other operating income
in EUR m 2022 2021
Income from the disposal
of non-current assets 7.3 4.2
Income from the reversal of liabilities
and provisions no longer required 40.5 14.9
Miscellaneous operating income 44.6 29.9
Tot a l 92.4 49.0
5.26 Other operating income
Other operating income includes income of EUR 19.0 million
from the reversal of provisions for alcohol and energy tax.
4.) Personnel expenses
Personnel expenses amount to EUR 1,380.1million in total
(2021: EUR 1,205.3million). This line item includes wages and
salaries totaling EUR 1,101.5 million (2021: EUR 964.5 million)
as well as social insurance contributions of EUR 278.6 million
(2021: EUR 240.8 million), of which pension expenses (includ-
ing employer contributions to the statutory pension insurance
fund) account for EUR 137.7 million (2021: EUR 119.5 million).
Net interest expense from defined benefit plans is not included
in personnel expenses but presented within net finance costs
under interest expense. Personnel expenses for the share-
based remuneration programs on the basis of virtual shares
amount to EUR 15.3 million (2021: EUR 22.1 million).
The average number of employees breaks down as follows:
2022 2021
1)
Brenntag Specialties 4,426 4,714
Brenntag Essentials 10,699 10,104
All other Segments 2,193 2,379
Tot a l 17,318 17,197
5.27 Employees by division
1)
When the new operating model was introduced on January 1, 2021, not all
employees had yet been allocated to a division. In such cases, employee
allocation in 2021 was either simplified or decided based on expectations. As
a result, the division averages calculated for 2021 differ from the averages for
2022, which are based on the completed employee allocation.
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NOTES
As at December 31, 2022, the Brenntag Group had a work-
force of 17,540 (Dec. 31, 2021: 17,236). Of this figure, 1,685
(Dec. 31, 2021: 1,656) were employed in Germany.
5.) Other operating expenses
in EUR m 2022 2021
Carriage outwards –323.8 –271.6
Property-related and other taxes –42.4 –211.0
Maintenance and energy costs –256.8 –182.8
Audit and advisory fees –132.0 –60.4
Lease expenses –76.0 –52.4
Other services –58.9 –43.9
Insurance expenses –51.8 –50.9
Miscellaneous operating expenses –285.8 –226.3
Tot a l –1,227.5 –1,099.3
5.28 Other operating expenses
In the previous year, expenses for property-related and other
taxes included expenses of EUR 175.5 million for excise duties
arising from routine reviews of the tax on alcohol and energy
conducted by the German customs authorities.
6.) Interest expense
in EUR m 2022 2021
Interest expense on liabilities
to third parties –86.0 –48.9
Expense from the fair value measurement
of the cross-currency interest rate swap –7.7 –2.3
Net interest expense on
defined benefit pension plans –1.9 –1.3
Interest expense on other provisions –1.2 –0.5
Interest expense on leases –12.0 –11.0
Tot a l
–108.8 –64.0
5.29 Interest expense
7.) Change in liabilities relating to acquisition of
non-controlling interests recognized in profit
or loss
in EUR m 2022 2021
Change in call option and liabilities relating
to acquisition of non-controlling interests
recognized in profit or loss –5.4 –26.6
Change in liabilities recognized in profit or
loss arising from limited partners' rights to
repayment of contributions –2.2 –1.7
Tot a l –7.6 –28.3
5.30 Change in liabilities relating to acquisition of non-controlling
interests recognized in profit or loss
For further information, please refer to Note 27).
8.) Loss on the net monetary position
The inflation effect on non-monetary items, the statement of
comprehensive income and equity resulted in a loss on the
net monetary position of EUR 16.3 million for financial year
2022.
9.) Other net finance costs
in EUR m 2022 2021
Exchange rate loss on foreign
currency receivables and liabilities –76.2 –26.5
Exchange rate gain on foreign
currency derivatives 44.1 23.3
Miscellaneous other net finance
costs –1.0 –2.1
Tot a l –33.1 –5.3
5.31 Other net finance costs
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NOTES
10.) Income tax expense
in EUR m 2022 2021
Current income taxes –324.7 –221.7
Deferred taxes –7.7 32.8
(of which for temporary differences) (–1.2) (23.3)
(of which for tax loss carryforwards) (–6.5) (9.5)
Tot a l –332.4 –188.9
5.32 Income tax expense
The effective tax expense of EUR 332.4 million (2021:
EUR188.9million) differs by EUR – 62.7 million (2021: EUR–19.0
million) from the expected tax expense of EUR 395.2 million
(2021: EUR 207.9 million). The expected tax expense results
from applying the Group tax rate of 32% (Dec. 31, 2021: 32%)
to profit before tax.
The reasons for the difference between the expected and the
effective tax expense are as follows:
in EUR m 2022 2021
Profit before tax 1,234.9 650.3
Expected income tax expense
(32%, 2021: 32%) –395.2 –207.9
Difference due to tax base –1.2 –0.7
Effect of different tax rates arising
on the inclusion of foreign and domestic
subsidiaries 110.6 67.1
Changes in valuation allowances on
deferred tax assets / losses for which
deferred taxes are not recognized /
utilization of loss carryforwards –14.6 –10.0
Changes in the tax rate and tax laws –0.9 0.3
Expenses not deductible for tax purposes –19.0 –25.9
Goodwill impairment loss Latin America
(BES) –11.2 –
Tax-free income 6.2 1.2
Share of profit or loss of
equity-accounted investments 0.4 0.2
Prior-period tax expense 1.2 –6.9
Change in liabilities relating
to acquisition of non-controlling
interests recognized in profit or loss –2.1 –8.2
Other effects –6.6 1.9
Effective tax expense –332.4 –188.9
5.33 Tax expense reconciliation
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CONSOLIDATED
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NOTES
Deferred taxes result from the individual balance sheet items
and other items as follows:
Dec. 31, 2022 Dec. 31, 2021
in EUR m
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
Current assets
Cash and cash equivalents and financial assets 15.2 8.5 13.5 8.9
Inventories 28.6 2.1 22.8 0.3
Non-current assets
Property, plant and equipment and right-of-use
assets 5.4 167.5 5.2 155.7
Intangible assets 23.7 202.0 16.5 188.2
Financial assets 9.7 19.5 11.9 6.9
Current liabilities
Other provisions 13.9 0.4 12.3 0.4
Liabilities 75.7 4.4 70.0 5.6
Non-current liabilities
Provisions for pensions 16.0 8.1 34.9 8.7
Other provisions 16.8 1.7 16.9 1.8
Liabilities 70.1 2.6 62.9 2.2
Special tax-allowable reserves 4.2 – 3.9
Loss carryforwards 97.1 – 92.6 –
Valuation allowances on loss carryforwards –76.3 – –64.6 –
Consolidation items –0.7 7.5 – 6.6
Offsetting –156.7 –156.7 –163.9 –163.9
Deferred taxes 138.5 271.8 131.0 225.3
Deferred tax liabilities (net) – 133.3 – 94.3
5.34 Deferred tax assets and liabilities
Deferred tax assets and liabilities break down by maturity as
follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Deferred tax assets to be recovered
after more than 12 months 13.6 22.7
Deferred tax assets to be recovered
within 12 months 124.9 108.3
Deferred tax assets 138.5 131.0
Deferred tax liabilities to be
recovered after more than 12 months 268.4 224.4
Deferred tax liabilities to be
recovered within 12 months 3.4 0.9
Deferred tax liabilities 271.8 225.3
Deferred tax liabilities (net) 133.3 94.3
5.35 Deferred tax by maturity
Deferred tax liabilities (net) changed as follows:
in EUR m 2022 2021
Deferred tax liabilities (net)
at Jan. 1 94.3 115.8
Exchange rate differences 3.9 3.3
Income / expense in profit or loss 7.7 –32.8
Income taxes recognized in other
comprehensive income 19.8 6.7
Business combinations 7.6 1.3
Deferred tax liabilities (net)
at Dec. 31 133.3 94.3
5.36 Change in deferred tax liabilities (net)
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NOTES
The existing tax loss carryforwards can be utilized as follows:
Dec. 31, 2022 Dec. 31, 2021
in EUR m
Loss
carryforwards
of which loss
carryforwards for
which deferred
taxes are not
recognized
Loss
carryforwards
of which loss
carryforwards for
which deferred
taxes are not
recognized
Within one year 4.0 (3.9) 1.2 (1.2)
2 to 5 years 19.7 (18.3) 9.5 (9.5)
6 to 9 years 1.5 (1.2) 8.6 (8.5)
More than 9 years 316.8 (206.5) 297.6 (205.8)
Unlimited 374.7 (343.7) 326.1 (272.5)
Tot a l 716.7 573.6 643.0 497.5
5.37 Tax loss carryforwards
Deferred tax on loss carryforwards is measured based on the
expected taxable income derived from the current mid-term
planning, allowing for restrictions on loss carryforwards and
their utilization (minimum taxation).
Deferred taxes of EUR 20.8 million (Dec. 31, 2021: EUR 28.0
million) were recognized for loss carryforwards of EUR 143.1
million (Dec. 31, 2021: EUR 145.5 million) which are likely to be
utilized. They include deferred taxes of EUR 0.9 million (Dec.
31, 2021: EUR 0.2 million) from current-period tax losses. Loss
carryforwards which are likely to be utilized also include US
subsidiaries’ loss carryforwards for state taxes totaling
EUR52.6 million (tax rate between 7% and 8%) (Dec. 31, 2021:
EUR44.3 million) and for federal taxes totaling EUR 54.0 mil-
lion (Dec. 31, 2021: EUR 46.6 million).
No deferred taxes were recognized for loss carryforwards
of EUR573.6 million (Dec. 31, 2021: EUR 497.5 million) which
are not likely to be utilized. This figure includes domestic cor-
poration tax and trade tax loss carryforwards totaling
EUR341.1million (Dec. 31, 2021: EUR 269.3 million) as well as
US subsidiaries’ loss carryforwards for state taxes totaling
EUR204.8 million (tax rate between 7% and 8%) (Dec. 31,
2021: EUR205.8 million).
There are no longer any interest carryforwards which are not
likely to be utilized (Dec. 31, 2021: interest carryforwards not
likely to be utilized of EUR 1.6 million, for which no deferred
taxes were recognized).
Temporary differences in connection with investments in sub-
sidiaries for which no deferred tax liabilities were recognized
amount to EUR 779.5 million (Dec. 31, 2021: EUR 558.1 million).
11.) Earnings per share
Basic earnings per share in the amount of EUR 5.74(2021:
EUR 2.90) are determined by dividing the share of profit after
tax of EUR 886.8million (2021: EUR 448.3million) attributable
to the shareholders of Brenntag SE by the number of shares
outstanding (154.5 million).
The warrants from the bond (Bond (with Warrants) 2022) issued
in November 2015 had a dilutive effect in 2021, as the average
Brenntag share price was higher than the strike price of the
warrants of EUR 72.2474. In December 2022, Brenntag repaid
the Bond (with Warrants) 2022 in the amount of USD 500 mil-
lion. As the Brenntag share price was lower than the strike price
at the end of the exercise period in November 2022, the war-
rants did not have a positive intrinsic value and were not exer-
cised. Therefore, no new shares were created.
Diluted earnings per share are calculated as follows:
in EUR m 2022 2021
Share of profit after tax attributable
to Brenntag SE shareholders 886.8 448.3
Number of Brenntag SE shares 154.5 154.5
Basic earnings per share 5.74 2.90
Number of potential shares with
a dilutive effect
1)
– 0.4
Number of shares 154.5 154.9
Diluted earnings per share 5.74 2.89
5.38 Diluted earnings per share
1)
Maximum number of shares that would be issued if the warrants were
exercised less the number of shares that could be bought with the issue
proceeds at the average price for the period.
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NOTES
Consolidated balance sheet disclosures
12.) Cash and cash equivalents
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Bank deposits 1,029.3 689.8
Cheques and cash on hand 16.8 15.2
Tot a l 1,046.1 705.0
5.39 Cash and cash equivalents
13.) Trade receivables
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Trade receivables from third parties 2,676.7 2,290.2
Trade receivables from related
parties 0.1 –
Tot a l 2,676.8 2,290.2
5.40 Trade receivables
Trade receivables at the reporting date were past due and
impaired within the following time bands:
in EUR m
not past
due
1 to 30
days
31 to 60
days
61 to 90
days
91 to 180
days
more than
180 days
Dec. 31,
2022
Loss given default (%) 0.4 1.4 6.0 13.9 14.7 84.3
Gross amount of trade receivables 2,252.8 330.9 66.7 27.3 17.7 37.5 2,732.9
Valuation allowance 9.6 4.5 4.0 3.8 2.6 31.6 56.1
5.41 Loss given default on trade receivables / Dec. 31, 2022
in EUR m
not past
due
1 to 30
days
31 to 60
days
61 to 90
days
91 to 180
days
more than
180 days
Dec. 31,
2021
Loss given default (%) 0.4 1.8 6.0 13.4 11.9 74.3
Gross amount of trade receivables 2,019.8 214.7 38.4 13.4 10.9 36.2 2,333.4
Valuation allowance 7.1 3.8 2.3 1.8 1.3 26.9 43.2
5.42 Loss given default on trade receivables / Dec. 31, 2021
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NOTES
Of the trade receivables, EUR823.0million (Dec. 31, 2021:
EUR685.0million) are secured by trade credit insurance.
In EMEA and Latin America, most of the trade receivables are
secured by trade credit insurance. In Asia Pacific, there is
trade credit insurance for most of the receivables in certain
countries. In North America as well as in some countries in
EMEA, Latin America and Asia Pacific, either there is no trade
credit insurance or only a relatively small proportion of the
trade receivables are secured by trade credit insurance.
Impairment losses on trade receivables changed as follows:
Accumulated
impairment losses on
trade receivables
in EUR m 2022 2021
Jan. 1 43.2 37.6
Exchange rate differences / other 3.5 2.3
Added 17.8 10.6
Reversed –3.1 –3.0
Utilized –5.3 –4.3
Dec. 31 56.1 43.2
5.43 Change in impairment losses on trade receivables
14.) Other receivables
Dec. 31, 2022 Dec. 31, 2021
in EUR m of which current of which current
Other receivables in scope of IFRS 7:
Receivables from packaging 10.7 (10.7) 9.7 (9.7)
Reimbursement claims – environment 4.4 (–) 3.7 (–)
Suppliers with debit balances 13.0 (13.0) 14.5 (14.5)
Receivables from insurance claims 2.3 (2.3) 1.8 (1.8)
Deposits 7.9 (7.9) 6.5 (6.5)
Receivables from commissions and rebates 12.3 (12.3) 25.3 (25.3)
Receivables from employees 0.8 (0.8) 0.7 (0.7)
Miscellaneous other receivables 57.2 (45.0) 41.3 (28.7)
Other receivables in scope of IFRS 7 total 108.6 (92.0) 103.5 (87.2)
Other receivables out of scope of IFRS 7:
Prepayments 40.5 (40.4) 25.5 (25.5)
Value-added tax receivables 100.1 (94.8) 76.9 (72.3)
Receivables from other taxes 14.6 (6.3) 16.4 (7.1)
Non-current income tax receivables 3.6 (–) 2.7 (–)
Plan assets not netted with provisions for pensions 5.3 (–) 10.3 (–)
Prepaid expenses 40.6 (39.1) 39.3 (38.0)
Other receivables out of scope of IFRS 7 total 204.7 (180.6) 171.1 (142.9)
Total other receivables 313.3 (272.6) 274.6 (230.1)
5.44 Other receivables
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NOTES
15.) Other financial assets
Remaining term
in EUR m 1 year or less more than 1 year Dec. 31, 2022
Financial receivables from third parties 17.5 13.8 31.3
Derivative financial instruments at fair value through profit or loss 2.7 9.2 11.9
Debt instruments at fair value through profit or loss – 1.4 1.4
Tot a l 20.2 24.4 44.6
5.45 Other financial assets / Dec. 31, 2022
Remaining term
in EUR m 1 year or less more than 1 year Dec. 31, 2021
Financial receivables from third parties 13.2 20.5 33.7
Derivative financial instruments at fair value through profit or loss 9.6 3.9 13.5
Debt instruments at fair value through profit or loss – 1.7 1.7
Tot a l 22.8 26.1 48.9
5.46 Other financial assets / Dec. 31, 2021
16.) Inventories
Inventories break down as follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Merchandise 1,693.0 1,559.4
Finished goods 34.8 24.3
Work in progress 1.6 1.8
Raw materials and supplies 44.4 36.4
Tot a l 1,773.8 1,621.9
5.47 Inventories
17.) Assets held for sale and liabilities
associated with those assets
Assets held for sale include property, plant and equipment
held for sale totaling EUR 9.6 million (Dec. 31, 2021:
EUR4.1million). The property, plant and equipment and other
assets and liabilities of our South African subsidiary PROTANK
(Proprietary) Limited, Durban, are also reported here, as
Brenntag intends to sell the company within twelve months.
The assets and liabilities break down as follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Cash and cash equivalents 1.5 –
Trade receivables and other receiv-
ables 0.7 –
Deferred taxes 0.6 –
Property, plant and equipment and
intangible assets 10.7 4.1
Assets held for sale 13.5 4.1
Trade payables, other liabilities and
provisions 4.0 –
Liabilities associated with assets
held for sale 4.0 –
5.48 Assets held for sale and liabilities
associated with those assets
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NOTES
18.) Property, plant and equipment
in EUR m
Land, land
rights and
buildings
Technical
equipment and
machinery
Other equip-
ment, operat-
ing and office
equipment
Prepayments
and assets
under con-
struction Tot a l
Cost
Dec. 31, 2020 1,005.2 716.2 356.3 91.5 2,169.2
Exchange rate differences 43.7 38.1 13.3 7.3 102.4
Business combinations 7.4 2.0 2.1 0.1 11.6
Other additions 15.0 36.4 40.3 102.5 194.2
Reclassification into non-current assets
held for sale –5.8 – – – –5.8
Disposals –9.3 –9.2 –34.0 –0.1 –52.6
Transfers 40.8 42.9 9.4 –91.4 1.7
Dec. 31, 2021 1,097.0 826.4 387.4 109.9 2,420.7
Exchange rate differences 22.0 16.0 6.1 2.5 46.6
Business combinations 4.7 2.7 9.8 – 17.2
Other additions 31.5 53.4 50.8 120.6 256.3
Reclassification into non-current assets
held for sale –11.2 –7.4 –0.7 – –19.3
Disposals –15.5 –9.5 –33.7 –0.6 –59.3
Transfers 40.7 50.4 15.7 –103.4 3.4
Dec. 31, 2022 1,169.2 932.0 435.4 129.0 2,665.6
Accumulated depreciation and
impairment
Dec. 31, 2020 326.6 462.9 251.1 – 1,040.6
Exchange rate differences 13.1 24.6 9.8 – 47.5
Depreciation 34.4 58.8 47.2 – 140.4
Impairment 4.1 0.2 – – 4.3
Reclassification into non-current assets
held for sale –1.7 – – – –1.7
Disposals –7.5 –8.2 –31.4 – –47.1
Transfers 0.5 –0.3 0.1 – 0.3
Dec. 31, 2021 369.5 538.0 276.8 – 1,184.3
Exchange rate differences 7.1 12.2 5.0 – 24.3
Depreciation 36.4 70.1 51.8 – 158.3
Impairment 0.7 – – – 0.7
Reclassification into non-current assets
held for sale –3.0 –5.4 –0.6 – –9.0
Disposals –11.8 –8.1 –31.9 – –51.8
Transfers –1.6 –1.7 4.0 – 0.7
Dec. 31, 2022 397.3 605.1 305.1 – 1,307.5
Carrying amounts at Dec. 31, 2021 727.5 288.4 110.6 109.9 1,236.4
Carrying amounts at Dec. 31, 2022 771.9 326.9 130.3 129.0 1,358.1
5.49 Property, plant and equipment
The net carrying amounts of the property, plant and equip-
ment subject to impairment total EUR 2.2 million. Government
grants total EUR 1.5 million (Dec. 31, 2021: EUR 1.6 million).
Assets under construction total EUR 121.8 million (Dec. 31,
2021: EUR 107.2 million), of which EUR 114.0 million (Dec. 31,
2021: EUR 100.0 million) is attributable to investments made
during the financial year.
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NOTES
19.) Intangible assets
in EUR m Goodwill Trademarks
Customer
relationships
and similar
rights
Software,
licenses and
similar rights Tot a l
Cost
Dec. 31, 2020 2,564.7 217.6 130.5 190.3 3,103.1
Exchange rate differences 146.2 2.5 10.7 4.7 164.1
Business combinations 277.2 14.7 62.2 1.1 355.2
Other additions – – 0.2 19.8 20.0
Disposals – – –11.2 –2.6 –13.8
Transfers – – – 1.6 1.6
Dec. 31, 2021 2,988.1 234.8 192.4 214.9 3,630.2
Exchange rate differences 85.3 0.5 1.9 2.5 90.2
Business combinations 76.2 2.3 34.8 0.1 113.4
Other additions – – 0.1 7.9 8.0
Disposals – – –25.5 –4.4 –29.9
Transfers – – – 0.1 0.1
Dec. 31, 2022 3,149.6 237.6 203.7 221.1 3,812.0
Accumulated amortization and
impairment
Dec. 31, 2020 – 17.3 66.8 81.1 165.2
Exchange rate differences – 1.6 4.7 2.8 9.1
Amortization – 3.7 37.2 18.0 58.9
Impairment – – – 51.9 51.9
Disposals – – –11.2 –2.5 –13.7
Dec. 31, 2021 – 22.6 97.5 151.3 271.4
Exchange rate differences – – 0.2 1.5 1.7
Amortization – 6.7 48.2 16.5 71.4
Impairment 38.1 – – – 38.1
Disposals – – –25.5 –4.4 –29.9
Dec. 31, 2022 38.1 29.3 120.4 164.9 352.7
Carrying amounts at Dec. 31, 2021 2,988.1 212.2 94.9 63.6 3,358.8
Carrying amounts at Dec. 31, 2022 3,111.5 208.3 83.3 56.2 3,459.3
5.50 Intangible assets
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NOTES
The goodwill and the “Brenntag” trademark are assets with
an indefinite useful life. They are tested regularly, at least an-
nually, for impairment after completion of the annual budget
process. The carrying amount of the “Brenntag” trademark is
EUR 196.9 million as in the previous year.
The Brenntag Group is managed through two global divisions,
Brenntag Specialties (BSP) and Brenntag Essentials (BES),
which are each managed through geographically structured
segments. These are the cash-generating units for the good-
will impairment test. Goodwill breaks down by cash-generat-
ing unit as follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
EMEA (BSP) 591.4 564.3
Americas (BSP) 693.8 652.2
APAC (BSP) 303.7 274.2
EMEA (BES) 441.5 442.4
North America (BES) 960.4 901.4
Latin America (BES) 0.2 33.6
APAC excluding China and Hong
Kong (BES) 50.2 49.4
China and Hong Kong (BES) 44.5 44.8
All other Segments 25.8 25.8
Group 3,111.5 2,988.1
5.51 Regional allocation of goodwill
The carrying amounts of the cash-generating units include
right-of-use assets recognized under IFRS 16 (Leases). Fair
value less costs of disposal is taken as the recoverable
amount. This amount is determined on the basis of a recog-
nized company valuation model. The company valuation
model is based on cash flow plans, which are in turn based
on the five-year plan approved by the Board of Management
and applicable at the date of the performance of the impair-
ment test, taking into account IFRS 16 (Leases). The five-year
plan consists of a mid-term plan for the first three years pre-
pared by management in collaboration with the subsidiaries
and an extrapolation for the two following years performed
by management. The fair value thus determined is required
to be classified into Level 3 of the IFRS 13 measurement
hierarchy.
The cash flow forecasts for the impairment test of the finan-
cial year ended December 31, 2022 were derived from the
budget for 2023 and the plan years 2024 to 2027. The growth
rates are based on management’s past experience, expecta-
tions as to future trends in markets and costs as well as quan-
tities and prices on the basis of external macroeconomic
data, and the contribution to earnings expected from “Project
Brenntag”.
Fair value less costs of disposal for Latin America (BES) is
EUR297.4 million (Level 3 of the fair value hierarchy) and
therefore less than the carrying amount. Therefore, a goodwill
impairment loss of EUR 38.1 million was recognized. The im-
pairment loss is due in particular to the lower income ex-
pected from the cash-generating unit in combination with the
appreciable year-on-year increase in country risk premiums.
In the detailed planning period from 2023 to 2027, the aver-
age growth rates (CAGR) of the cash-generating units of
Brenntag Specialties and Brenntag Essentials are between
4.0% and 14.4% (Dec. 31, 2021: between 6.3% and 16.8%).
After the, in some cases, much higher growth rates in the
years 2023 to 2027 (detailed planning period), the planned
growth rates for the period from 2028 onwards are 0.5% in
EMEA BSP, 0.75% in Americas BSP, 1.0% in APAC BSP, 0.5% in
EMEA BES, 0.75% in North America BES, 1.0% in Latin America
BES, 1.0% in APAC excluding China and Hong Kong BES, and
1.0% in China and Hong Kong BES, (2021: 0.5% in EMEA BSP,
0.75% in Americas BSP, 1.0% in APAC BSP, 0.5% in EMEA BES,
0.75% in North America BES, 1.0% in Latin America BES, 1.0%
in APAC excluding China and Hong Kong BES, and 1.0% in
China and Hong Kong BES).
The region-specific WACC used to discount the cash flows
thus determined is based on a risk-free interest rate of 2.00%
(2021: 0.10%) and a market risk premium of 7.00% (2021:
7.75%). The estimates of daily yield curves published by the
German central bank, the Bundesbank, are taken as a basis
for determining the risk-free interest rate. The beta factor
used and the capital structure are derived from a peer group.
When unlevering, IFRS 16 (Leases) was reflected by making a
retrospective adjustment to the leverage of the peer group
companies. Furthermore, region-specific tax rates and coun-
try risk premiums (according to Damodaran) are used.
WACC in % 2022 2021
EMEA (BSP) 8.5 7.2
Americas (BSP) 8.2 7.0
APAC (BSP) 8.5 7.4
EMEA (BES) 8.2 7.0
North America (BES) 8.2 7.0
Latin America (BES) 11.0 8.8
APAC excluding China and Hong Kong (BES) 8.5 7.6
China and Hong Kong (BES) 8.2 7.0
All other Segments 8.2 7.0
Group 8.3 7.1
5.52 WACC by cash-generating unit
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NOTES
20.) Leases
Right-of-use assets arising from leases changed as follows:
in EUR m
Rights to use land
and buildings
Rights to
use vehicles
Other right-of-
use assets Tot a l
Cost
Dec. 31, 2020 356.0 198.7 41.9 596.6
Exchange rate differences 16.7 12.5 0.3 29.5
Business combinations 20.2 5.6 0.1 25.9
Other additions 37.4 48.9 17.8 104.1
Disposals –16.1 –22.8 –9.7 –48.6
Transfers –3.0 –1.0 – –4.0
Dec. 31, 2021 411.2 241.9 50.4 703.5
Exchange rate differences 10.5 8.4 –1.0 17.9
Business combinations 4.8 0.2 0.1 5.1
Other additions 53.9 48.6 21.2 123.7
Reclassification into non-current assets held for sale –1.2 – – –1.2
Disposals –33.7 –38.0 –7.4 –79.1
Transfers 0.1 –0.9 –0.4 –1.2
Dec. 31, 2022 445.6 260.2 62.9 768.7
Accumulated depreciation
Dec. 31, 2020 82.2 76.7 19.0 177.9
Exchange rate differences 5.2 5.0 0.3 10.5
Depreciation 56.3 51.1 10.6 118.0
Disposals –9.6 –20.8 –8.5 –38.9
Transfers –0.3 –0.2 – –0.5
Dec. 31, 2021 133.8 111.8 21.4 267.0
Exchange rate differences 3.5 3.4 –0.5 6.4
Depreciation 67.8 53.6 16.5 137.9
Reclassification into non-current assets held for sale –0.4 – – –0.4
Disposals –26.9 –36.4 –7.0 –70.3
Transfers 0.1 1.8 –0.1 1.8
Dec. 31, 2022 177.9 134.2 30.3 342.4
Carrying amounts at Dec. 31, 2021 277.4 130.1 29.0 436.5
Carrying amounts at Dec. 31, 2022 267.7 126.0 32.6 426.3
5.53 Right-of-use assets
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NOTES
Extension options in the amount of EUR 81.1 million (Dec. 31,
2021: EUR 77.7 million) and purchase options in the amount
of EUR 6.1 million (Dec. 31, 2021: EUR 6.9 million) were not
included in the measurement of the right-of-use assets and
lease liabilities, as it is not reasonably certain at the present
time that they will be exercised. The extension options relate
mainly to rights to use land and buildings, and the purchase
options mainly to rights to use vehicles.
The following lease expenses were recognized in profit or loss:
in EUR m 2022 2021
Lease expense relating
to short-term leases –35.5 –25.7
Lease expense relating
to variable lease payments –10.2 –7.4
Lease expense relating to leases
of low-value assets –0.9 –1.3
Tot a l –46.6 –34.4
5.54 Lease expenses
As at December 31, 2022, future lease commitments for
short-term leases amounted to EUR 16.6 million (Dec. 31,
2021: EUR 8.8 million), for variable lease payments to EUR9.9
million (Dec. 31, 2021: EUR 8.9 million) and for leases entered
into but not yet commenced to EUR22.6 million (Dec. 31,
2021: EUR 7.2 million).
Interest expense on lease liabilities amounts to EUR12.0mil-
lion (Dec. 31, 2021: EUR11.0million). Total payments for leases
amounted to EUR 199.2 million in 2022 (Dec. 31, 2021:
EUR165.1 million). Further information on lease liabilities is
provided in the sections “Financial liabilities” and “Reporting
of financial instruments”.
21.) Equity-accounted investments
Equity-accounted investments changed as follows:
in EUR m
Investments in
associates
Dec. 31, 2020 3.2
Net income from equity-accounted
investments 1.0
Total comprehensive income 1.0
Dividends received –0.1
Dec. 31, 2021 4.1
Net income from equity-accounted
investments 1.6
Total comprehensive income 1.6
Dividends received –0.3
Dec. 31, 2022 5.4
5.55 Change in equity-accounted investments
The financial year of the investments accounted for using the
equity method is the calendar year.
22.) Trade payables
Trade payables of EUR 1,862.0 million (Dec. 31, 2021:
EUR1,802.3million) include accruals of EUR293.0million
(Dec. 31, 2021: EUR326.5million) for outstanding invoices.
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NOTES
23.) Financial liabilities
Remaining term
in EUR m 1 year or less more than 1 year Dec. 31, 2022
Liabilities under syndicated loan 5.1 546.8 551.9
Other liabilities to banks 217.8 0.1 217.9
Promissory notes (Schuldschein) 3.9 623.2 627.1
Bond 2025 1.8 597.4 599.2
Bond 2029 0.6 496.9 497.5
Derivative financial instruments 6.1 50.8 56.9
Other financial liabilities 84.4 26.6 111.0
Tot a l 319.7 2,341.8 2,661.5
Lease liabilities 110.0 324.3 434.3
Cash and cash equivalents 1,046.1
Net financial liabilities 2,049.7
5.56 Financial liabilities / Dec. 31, 2022
Remaining term
in EUR m 1 year or less more than 1 year Dec. 31, 2021
Liabilities under syndicated loan 1.1 517.5 518.6
Other liabilities to banks 164.8 0.4 165.2
Bond 2025 1.8 596.4 598.2
Bond 2029 0.6 496.5 497.1
Bond (with Warrants) 2022 437.0 – 437.0
Derivative financial instruments 6.3 15.2 21.5
Other financial liabilities 66.1 26.0 92.1
Tot a l 677.7 1,652.0 2,329.7
Lease liabilities 111.7 333.9 445.6
Cash and cash equivalents 705.0
Net financial liabilities 2,070.3
5.57 Financial liabilities / Dec. 31, 2021
The syndicated bullet loan is a loan agreement with a con-
sortium of international banks. The syndicated loan is divided
into different tranches with different currencies. As at Decem-
ber 31, 2022, it had a term ending in January 2024. While
some subsidiaries are direct borrowers under the loan, others
obtain their financing from intra-Group loans. The syndicated
loan is guaranteed by Brenntag SE.
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NOTES
in EUR m Remaining term
Interest rate
above
CDOR / LIBOR Dec. 31, 2022
Currency
CAD Jan. 31, 2024 1.05% 55.4
USD Jan. 31, 2024 1.05% 492.2
Tot a l 547.6
Accrued interest 5.1
Transaction costs –0.8
Liabilities under syndicated loan 551.9
5.58 Liabilities under syndicated loan / Dec. 31, 2022
in EUR m Remaining term
Interest rate
above
CDOR / LIBOR Dec. 31, 2021
Currency
CAD Jan. 31, 2024 1.15% 55.6
USD Jan. 31, 2024 1.15% 463.5
Tot a l 519.1
Accrued interest 1.1
Transaction costs –1.6
Liabilities under syndicated loan 518.6
5.59 Liabilities under syndicated loan / Dec. 31, 2021
In addition to the above-mentioned tranches, the syndicated
loan also includes two revolving credit facilities totaling
EUR940.0 million (Dec. 31, 2021: EUR 940.0 million), which
were mostly unused as at December 31, 2022.
At the end of August 2022, Brenntag SE placed promissory
notes with a nominal value of around EUR640.0 million. These
were issued at the nominal amount. Alongside five euro-
denominated tranches with a total nominal value of
EUR390.0 million, the company also issued two US dollar-
denominated tranches with a total nominal value of around
EUR250.0 million. The seven tranches have tenors of three,
five and seven years and are due for repayment on August 29
and 30 of the respective year.
The liabilities under the syndicated loan break down as
follows:
Five tranches carry floating interest rates, while two (euro)
tranches have a fixed interest rate over the respective term.
Interest payments are made quarterly for the floating-rate
USD tranches, semi-annually for the floating-rate euro-
denominated tranches, and annually for the fixed-rate euro-
denominated tranches.
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NOTES
The liabilities under the promissory notes break down as
follows:
in EUR m Remaining term
Interest rate p.a.
above EURIBOR /
SOFR or fixed
rate Dec. 31, 2022
Currency
EUR Aug. 29, 2025 +0.75 pc points 60.0
Aug. 30, 2027 +1.00 pc points 175.0
Aug. 30, 2027 2.648% 75.0
Aug. 30, 2029 +1.15 pc points 50.0
Aug. 30, 2029 2.889% 30.0
Tot a l 390.0
USD Aug. 29, 2025 +1.25 pc points 65.6
Aug. 30, 2027 +1.50 pc points 168.8
Tot a l 234.4
Accrued interest 3.9
Transaction costs –1.2
Liabilities under promissory notes 627.1
5.60 Liabilities under promissory notes / Dec. 31, 2022
The Bond 2025 issued in September 2017 in the amount of
EUR600.0 million matures in 2025 and bears a coupon of
1.125% with interest paid annually.
The Bond (with Warrants) 2022 issued in November 2015 was
issued at 92.7% of par and bore a coupon of 1.875% p.a. with
interest payable semi-annually. The discount (7.3% or
USD36.5 million) was the warrant premium on the warrants
to purchase Brenntag SE shares issued together with the
Bond (with Warrants) 2022. The warrant premium was recog-
nized in the additional paid-in capital of Brenntag SE. The
Bond (with Warrants) 2022 was fully repaid (including the dis-
count) at maturity at the beginning of December 2022. The
warrants to purchase Brenntag SE shares were not exercised.
In October 2021, Brenntag issued a further bond for EUR 500.0
million (Bond 2029). The bond has a maturity of eight years
and carries an annual coupon of 0.50%. It is the first bond
issue to take place under a EUR 3 billion debt issuance pro-
gram newly established in 2021.
The Bonds 2025 and 2029 and the Bond (with Warrants) 2022
were issued by our Group company, Brenntag Finance B.V.,
Amsterdam, Netherlands.
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NOTES
24.) Other liabilities
Dec. 31, 2022 Dec. 31, 2021
in EUR m of which current of which current
Other liabilities in scope of IFRS 7:
Liabilities from packaging 65.3 (65.3) 61.7 (61.7)
Customers with credit balances 31.6 (31.6) 32.5 (32.5)
Liabilities to insurance companies 24.6 (24.6) 20.5 (20.5)
Liabilities from sales deductions, rebates 29.1 (29.1) 19.9 (19.9)
Liabilities from the acquisition of assets 22.8 (22.8) 26.0 (26.0)
Miscellaneous other liabilities 127.8 (122.9) 72.7 (66.4)
Other liabilities in scope of IFRS 7 total 301.2 (296.3) 233.3 (227.0)
Other liabilities out of scope of IFRS 7:
Liabilities to employees 228.8 (228.8) 203.5 (203.5)
Liabilities from value-added tax 89.0 (89.0) 67.5 (67.3)
Liabilities from other taxes 31.6 (31.6) 30.2 (30.2)
Deferred income 1.4 (1.4) 2.4 (2.4)
Liabilities from social insurance contributions 14.4 (14.4) 18.2 (18.2)
Miscellaneous other liabilities 3.4 (3.4) 24.5 (24.5)
Other liabilities out of scope of IFRS 7 total 368.6 (368.6) 346.3 (346.1)
Total other liabilities 669.8 (664.9) 579.6 (573.1)
5.61 Other liabilities
Other liabilities include accruals of EUR81.1million (Dec. 31,
2021: EUR70.1million).
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NOTES
in EUR m
Environmental
provisions
Provisions
for personnel
expenses
Miscellaneous
provisions To t a l
Jan. 1, 2022 97.1 57.9 178.9 333.9
Exchange rate differences 3.0 0.5 2.1 5.6
Additions from business combinations – 0.2 – 0.2
Unwinding of discounting 0.9 – 0.3 1.2
Utilized –6.9 –21.4 –22.7 –51.0
Reversed –1.8 –5.1 –32.1 –39.0
Added 16.3 27.4 30.5 74.2
Transferred 0.3 – –4.5 –4.2
Dec. 31, 2022 108.9 59.5 152.5 320.9
5.62 Change in other provisions
Other provisions have the following maturities:
in EUR m
Environ-
mental
provisions
Provisions
for
personnel
expenses
Miscella-
neous
provisions
Dec. 31,
2022
Environ-
mental
provisions
Provisions
for
personnel
expenses
Miscella-
neous
provisions
Dec. 31,
2021
1 year or less 12.2 16.3 126.3 154.8 12.7 23.3 151.3 187.3
1 to 5 years 37.4 39.0 13.6 90.0 33.9 29.0 13.9 76.8
more than 5 years 59.3 4.2 12.6 76.1 50.5 5.6 13.7 69.8
Tot a l 108.9 59.5 152.5 320.9 97.1 57.9 178.9 333.9
5.63 Maturity of other provisions
Environmental provisions
The recognition and measurement of environmental provi-
sions are coordinated centrally by external independent ex-
perts. The provision amounts are determined on the basis of
individual cost estimates for each case. Allowance is made
not only for the nature and severity of pollution but also for
the conditions at the respective sites and the sovereign terri-
tories in which these sites are located.
Environmental provisions are stated at their present values.
They are discounted at maturity-dependent, risk-free interest
rates for the respective functional currencies. Increases in the
future expenditure due to inflation are allowed for. The dis-
count rates for environmental provisions range from 1.6% to
13.4%, depending on the currency (Dec. 31, 2021: from 0.0%
to 12.5%).
As at December 31, 2022, environmental provisions total
EUR108.9 million (Dec. 31, 2021: EUR 97.1 million). They mainly
relate to the rehabilitation of soil and ground water for current
and former, owned and leased sites but also cover costs for
further and accompanying measures such as necessary en-
vironmental inspections and observations. The provisions in-
clude EUR 20.7 million (Dec. 31, 2021: EUR20.6 million) for
contingencies for which a cash outflow is not likely but nev-
ertheless possible. In line with the requirements of IFRS 3,
these contingencies have entered the balance sheet largely
through the purchase price allocation in connection with the
acquisition of the Brenntag Group by funds advised by BC
Partners Limited, Bain Capital, Ltd. and subsidiaries of Gold-
man Sachs International at the end of the third quarter of
2006.
25.) Other provisions
Other provisions changed as follows in financial year 2022:
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Due to the nature and the large number of parameters which
have to be considered when determining environmental pro-
visions, there are uncertainties in their measurement. This ap-
plies both to the amount and the timing of future expenditure.
However, based on the information available at the time of
preparation of the financial statements, it can be assumed
that the environmental provisions are reasonable and any ad-
ditional amounts incurred would not have any material effect
on the net assets, financial position and results of operations
of the Group.
In some cases, special agreements have been reached which
ensure that the cost of any future environmental work neces-
sary will be borne by third parties. If receipt of payment from
the third party is virtually certain provided Brenntag meets its
obligations, these claims to reimbursement are recognized.
They are generally measured in the same way as the corre-
sponding provisions. The amount recognized does not exceed
the amount of the provision. The claims to reimbursement
recognized at December 31, 2022 amount to EUR 4.4 million
(Dec. 31, 2021: EUR 3.7 million).
Provisions for personnel expenses
Provisions for personnel expenses primarily contain obliga-
tions arising from future variable and individual one-time
payments, payments in connection with employee long-ser-
vice anniversary bonuses, early retirement regulations and
pre-retirement part-time work compensation. Provisions for
virtual share-based remuneration programs are also pre-
sented under this item. These programs are long-term bonus
systems for members of the Board of Management of
Brenntag SE, on the one hand, and for executives and senior
managers of the Brenntag Group, on the other.
Long-term virtual share-based remuneration program for
the members of the Board of Management and Long-Term
Incentive Plan for Executives and Senior Managers (LTI Plan)
Details of the long-term, variable remuneration for the mem-
bers of the Board of Management are provided in the section
“Related parties”.
For the period from 2013 to 2020, an LTI Plan was offered to
a group of managers which is to be redefined every year by
the Board of Management of Brenntag SE. The term of the
program is divided into a one-year performance period and
a general vesting period of three years. The total bonus pool
amount available for one annual tranche of the LTI Plan ba-
sically depends on the change in operating EBITDA in the per-
formance period; further amounts can be assigned to the
bonus pool at the discretion of the Board of Management.
Restrictions exist to the extent that the bonus pool may not
exceed 0.675% of the actual operating EBITDA. On the basis
of this bonus pool, the number of virtual shares is determined
for each plan participant pro rata based on the average price
of the Brenntag shares and the annual salary of the partici-
pant in relation to the total annual salaries of all participants.
After expiry of the vesting period, the plan participants receive
remuneration resulting from the virtual shares allocated mul-
tiplied by the average Brenntag share price, adjusted for div-
idends, capital transactions and stock splits. Payment per
virtual share must not exceed 250% of the average share
price, on the basis of which the number of virtual shares was
determined.
In 2021, a new LTI Plan was set up for selected members of
the Brenntag Group’s Global Leadership Team (GLT). This spe-
cial long-term incentive program is aimed at retaining GLT
members and motivating them to ensure and share in the
long-term success of “Project Brenntag” and therefore the
Brenntag Group. These selected GLT members are condition-
ally entitled to a bonus payment depending on their LTI target
bonus and the achievement of a defined EBITDA target for
financial year 2023. 50% of the bonus payment is in cash and
50% in the form of virtual shares of the company. Following a
holding period of a further year, the virtual shares are con-
verted into a cash payment.
Provisions for share-based remuneration total EUR 37.9 mil-
lion as at December 31, 2022 (Dec. 31, 2021: EUR 31.0 million)
and disaggregate into the following maturities:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
1 year or less 5.8 8.8
1 to 5 years 32.1 22.2
Tot a l 37.9 31.0
5.64 Provisions for share-based remuneration
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NOTES
Miscellaneous provisions
Miscellaneous provisions include provisions of EUR 60.0 mil-
lion (Dec. 31, 2021: EUR 81.5 million) in connection with routine
reviews of the tax on alcohol and energy being conducted by
the German customs authorities. In addition, other provisions
primarily include provisions for compensation payable, pro-
visions for restoration obligations and provisions for risks from
legal proceedings and disputes.
Provisions for current and likely litigation are established in
those cases where reasonable estimates are possible. These
provisions contain all estimated legal costs as well as the
possible settlement costs. The amounts are based on infor-
mation and cost estimates provided by lawyers (for details,
please see the section entitled Legal proceedings and dis-
putes).
26.) Provisions for pensions and
other post-employment benefits
There are both defined contribution and defined benefit pen-
sion plans for the employees of the Brenntag Group. The pen-
sion obligations vary depending on the legal, tax and eco-
nomic circumstances in the respective country and the
employee’s years of service with the company and pay grade.
Defined contribution plans
A large number of the employees of the Brenntag Group will
receive benefits from the statutory social insurance fund, into
which the contributions are paid as part of their salary. In ad-
dition, various other pension fund commitments exist at the
companies of the Brenntag Group. As the company has no
further obligations after payment of the retirement pension
contributions to the state social insurance fund and private
insurance companies, these plans are treated as defined
contribution plans. Current pension contribution payments
are recognized as expense for the relevant period. In financial
year 2022, pension expenses in the Brenntag Group for em-
ployer contributions to the statutory pension insurance fund
and for non-statutory defined contribution plans amounted
to a total of EUR 108.6 million (2021: EUR 91.7 million).
In the USA, subsidiaries of the Brenntag Group pay into de-
fined benefit plans maintained by more than one employer
(termed multi-employer plans). These multi-employer defined
benefit plans are accounted for in the consolidated financial
statements as defined contribution plans because the infor-
mation required to use defined benefit accounting is not
available in a timely manner and in sufficient detail. Further-
more, there is no consistent and reliable basis for allocating
the obligation, plan assets and cost to individual participat-
ing employers, which is necessary for accounting for defined
benefit plans in accordance with IAS 19.
If other participating employers do not meet their payment
obligations, Brenntag may be liable for the obligations of
those employers. Any potential withdrawal from the plans by
an entity may lead to that entity having to offset the potential
shortfall relating to its share of the plan. The funding level of
the individual plans ranged from about 15% to 102% as at
December 31, 2022 (about 18% to 94% as at December 31,
2021). Brenntag Group subsidiaries account for approxi-
mately 0.06% to 1.26% of the total contributions (2021:
approximately 0.06% to 1.54%), depending on the plan. With-
drawal from all plans at the present time would lead to an
estimated one-time expense of approximately EUR 61 million
or approximately USD 64 million (2021: approximately
EUR 56 million or approximately USD 66 million). It is not
intended to withdraw from any of these plans at this time.
In financial year 2022, contributions of EUR 2.9 million or
USD3.0 million (2021: EUR 2.4 million or USD 2.8 million) were
paid. The contributions are included in the above-mentioned
contributions for non-statutory defined contribution plans. In
2023, the contributions are expected to amount to approxi-
mately EUR 3.0 million.
Defined benefit plans
The defined benefit plans of the Brenntag Group are funded
by provisions and largely covered by assets. The principal ob-
ligations (over 90% of the total volume) are in Switzerland,
Germany, Canada and the Netherlands. The remaining obli-
gations are spread over another eleven countries in the EMEA,
Latin America and Asia Pacific segments.
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NOTES
Switzerland
In Switzerland, every employer is obliged by national law to
set up a company retirement pension scheme. When deter-
mining the pension benefits, the minimum requirements
of the Federal Law on Occupational Retirement, Surviving
Dependents’ and Disability Pensions (Bundesgesetz über die
beruflichen Alters-, Hinterlassenen- und Invalidenvorsorge
(BVG)) and the corresponding regulations are required to be
observed.
The Swiss group company maintains a funded pension plan
for its employees. The assets of this plan are held in two au-
tonomous foundations. The foundation board is made up of
equal numbers of employer and employee representatives. It
is responsible for setting the investment strategy, for changes
in the plan rules and in particular also for determining the
financing of the pension benefits.
The pension benefits are based on the retirement assets ac-
crued. The annual retirement credits and interest are credited
to these retirement assets. On retirement, the insured person
is obliged to take 30% of the accrued retirement assets in the
form of a lump-sum payment and may choose whether to
take the remaining 70% of the accrued retirement assets in
the form of a life-long pension or another lump-sum payment.
In addition to the retirement benefits, the pension benefits
also include disability and surviving dependents’ pensions.
The insured person may also dispose of parts of their accrued
retirement assets prematurely if this serves to improve their
pension situation (for owner-occupied residential property). If
there is a change of employer, the retirement assets are
transferred to the pension scheme of the new employer.
The employee and employer contributions are set by the
foundation board. According to the BVG, the employer pays
at least 50% of the necessary contributions. In the case of
Brenntag Schweizerhall AG, the employer pays some 70% of
the contributions in accordance with the rules of the plan.
As the contributions to the pension plan that the employees
in Switzerland pay are based on formal rules, the risk distri-
bution between employee and employer is taken into account
when measuring the obligation. In the case of Brenntag
Schweizerhall AG, this leads to an only minor reduction in the
present value of the benefit obligation.
Germany
The German group companies have retirement pension plans
which are based on contractual provisions or works
agreements:
The Employee Pension Plan 2000/2012 (Mitarbeiter Vorsorge-
plan 2000/2012) is a pension plan funded by the employer.
The employer awards an annual pension contribution of be-
tween EUR 250 and EUR 500 depending on length of service,
which is converted into pension modules. The amount of the
benefits depends on the pension modules accrued before
retirement.
The Pension Scheme 2000/2012 for Executives (Leistungsord-
nung 2000/2012 für Führungskräfte) of the German Brenntag
companies is a pension plan for executives funded by the em-
ployer in the form of individual commitments. The annual
pension contribution depends on the pensionable remunera-
tion (basis of assessment). The annual basis of assessment is
the sum total of the fixed remuneration, Christmas and vaca-
tion allowances and bonuses but no more than three times
the contribution assessment limit for the statutory pension
system. The pension contribution is a maximum of 4% of the
basis of assessment up to the contribution assessment limit
plus a maximum of 10% for parts exceeding the contribution
assessment limit. The annual pension contributions are con-
verted into pension modules. The amount of the benefits
depends on the pension modules accrued before retirement.
All employees have the option to convert pay components
into an entitlement to pension benefits within the meaning of
the German Company Pension Act (Betriebsrentengesetz
(BetrAVG)) by participating in the Pension Plan Through
Employee-funded Pension Commitments (Vorsorgeplan über
mitarbeiterfinanzierte Versorgungszusagen). The annual pen-
sion contribution for participating employees is between at
least EUR 250 and a maximum of 4% of the contribution as-
sessment limit for the statutory pension system (Section 1a
BetrAVG). The company also pays an additional pension
allowance of 15% to the converted amount provided that the
pension contribution comes from remuneration subject to
statutory pension insurance contributions. Furthermore,
through the Deferred Compensation Plan (DCP), employees
have the option to convert pay components into an entitle-
ment to pension benefits. The converted employee contribu-
tions are protected by pension liability insurance pledged to
the employee who is entitled to the pension. With both em-
ployee-funded plans, the employees must decide every year
on the pension contribution they wish to make.
In addition to the retirement benefits, the pension benefits
also include surviving dependents’ pensions and – except in
the case of the Deferred Compensation Plan (DCP) – disabil-
ity benefits.
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NOTES
The Pension Scheme 2000/2012 for Executives (Leistungsord-
nung 2000/2012 für Führungskräfte) is a pure retirement
pension plan with a monthly life-long pension. With the other
pension plans, the pension benefit is paid out as a lump sum
or as an annual capital instalment spread over a maximum
of five years or as a life-long pension.
Furthermore, in Germany, Brenntag still has isolated retire-
ment and disability pension commitments under pension
plans set up in the past. These commitments depend on the
years of service and the pay grades of the respective employ-
ees. They are mainly commitments involving monthly pension
payments.
Canada
In Canada, Brenntag maintains an employer-funded pension
plan with a life-long monthly pension for employees who
joined the company before December 31, 2011. The basis of
assessment for calculating the annual pension is 1% of the
average salary of the three highest annual salaries of the
beneficiary multiplied by the number of years of service. In
addition to the retirement benefits, the pension benefits
include disability and surviving dependents’ pensions.
The plan participants in the employer-funded pension plan
who are under 50 or who have less than 15 years of service or
less than 55 points (sum of age and years of service) must pay
into a defined contribution plan newly set up in 2014 in order
to continue to build up their retirement pension. Employer and
employee pay equal portions of the contributions. The enti-
tlements accrued up to the date of transition remain in place.
For employees in Canada who joined the company up to and
including May 31, 2013, there is an employer-funded supple-
mentary medical cost plan in retirement as well as a life in-
surance payout of CAD 5,000 on retirement. As this plan has
the characteristics of a pension, it is classified under pensions
and other post-employment benefits.
Netherlands
Company pension systems play a prominent role in the Neth-
erlands as the pay-as-you-go statutory pension scheme only
provides a basic pension.
The companies maintain a funded retirement plan for their
employees. When there is a change of employer, the credit
balance from the plan assets can be transferred to the pen-
sion scheme of the new employer or remains in the previous
company’s pension scheme. About 20% of the retirement
pension plan is funded by the employee and about 80% by the
employer. Depending on the employer’s commitment, the ba-
sis of assessment for calculating the annual pension is the
last salary before the employee reaches retirement age or the
average salary over the employee’s active career before
reaching retirement age. The amount calculated from the
basis of assessment is multiplied by the years of service. The
retirement pension plan is a pure pension plan with a life-long
monthly pension. In addition to the retirement benefits, the
pension benefits include disability and surviving dependents’
pensions.
Risks arising from defined benefit pension plans
Brenntag is exposed to risks arising from the plans. An in-
crease in life expectancy, an increase in salaries and the ad-
justment of pensions in line with inflation as required by law in
Germany, or an increase in medical costs in Canada, would
lead to higher cash outflows and, in combination with falling
discount rates, in each case to higher present values of the
defined benefit obligation. There is investment risk in Switzer-
land primarily with regard to the proportion of the plan assets
invested in shares. There is no investment risk in Germany or
the Netherlands as the plan assets consist solely of insurance
policies. In Canada, the plan assets consisting of external fund
shares are in principle exposed to investment risk. In order to
minimize this risk, the plan assets in Canada are subject by
law to an audit every three years to establish whether the
assets invested are sufficient to fund the pension obligations.
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NOTES
Actuarial parameters applied
The plan assets are measured at fair value. The calculation
of the present value of the benefit obligations is based on the
following main actuarial parameters. When several countries
are grouped together, the values are average values weighted
by the present value of the respective benefit obligation:
in % Switzerland Germany Canada Netherlands
Other
countries Weighted
Discount rate 2022 2.30 3.70 5.20 3.70 4.52 3.58
2021 0.30 1.00 3.20 1.00 2.14 1.24
Expected salary trend 2022 1.50 2.50 3.25 2.50 3.73 2.40
2021 1.00 2.50 3.25 2.00 3.65 2.22
Expected pension trend 2022 0.50 2.00 2.00 2.00 2.58 1.59
2021 0.00 1.75 2.00 1.75 2.24 1.37
Medical cost trend 2022 n.a. n.a. 5.40 n.a. n.a. 5.40
2021 n.a. n.a. 6.00 n.a. n.a. 6.00
5.65 Actuarial parameters applied
As inflation has actually been much higher since the last pen-
sion adjustment dates, for pensioners in Germany for whom
adjustments are made in line with the changes in the con-
sumer price index, an additional valuation premium of 8.09%
is included for the above-average pension adjustments for
the coming years that have accrued but not yet been made.
The effects of applying the premium to reflect the pension
adjustment status amounted to EUR 1.5 million as at Decem-
ber 31, 2022.
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NOTES
With respect to life expectancy, the Heubeck 2018 G mortal-
ity tables (generational tables) are taken as a basis in Ger-
many. The BVG 2020 generational mortality tables are used
in Switzerland. We use the “Prognose Tafel AG2020” table in
the Netherlands and the “CPM-2014Priv generational mortal-
ity table” in Canada.
Provisions for pensions and other post-employment
benefits by country
in EUR m Switzerland Germany Canada Netherlands
Other
countries
Dec. 31,
2022
Present value of the defined benefit
obligation 103.6 112.4 56.8 48.4 23.0 344.2
Fair value of plan assets –121.9 –25.4 –51.3 –43.9 –6.2 –248.7
Effect of the asset ceiling 18.3 – – – – 18.3
Provisions for pensions and other
post-employment benefits – net – 87.0 5.5 4.5 16.8 113.8
of which assets recognized – – 5.0 – 0.3 5.3
Provisions for pensions and
other post-employment benefits
recognized in the balance sheet – 87.0 10.5 4.5 17.1 119.1
5.66 Provisions for pensions and other post-employment benefits by country / Dec. 31, 2022
in EUR m Switzerland Germany Canada Netherlands
Other
countries
Dec. 31,
2021
Present value of the defined benefit
obligation 117.1 163.3 72.9 75.8 28.6 457.7
Fair value of plan assets –123.1 –24.8 –68.5 –68.0 –6.3 –290.7
Effect of asset ceiling 6.0 – – – – 6.0
Provisions for pensions and other
post-employment benefits – net – 138.5 4.4 7.8 22.3 173.0
of which assets recognized – – 10.3 – – 10.3
Provisions for pensions and
other post-employment benefits
recognized in the balance sheet – 138.5 14.7 7.8 22.3 183.3
5.67 Provisions for pensions and other post-employment benefits by country / Dec. 31, 2021
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NOTES
Pension obligations, plan assets and provisions for pensions
and other post-employment benefits recognized in the bal-
ance sheet changed as follows:
Change in the present value of the defined benefit
obligations
in EUR m 2022 2021
Present value of pension obligations at
the beginning of the period 457.7 476.0
Exchange rate differences 6.1 11.4
Business combinations – 0.5
Transferred –0.3 0.6
Utilized –17.9 –14.9
Service cost
Current service cost 14.7 15.3
Past service cost –0.2 –0.3
Employee contributions 1.6 1.3
Interest expense on the present
value of the obligation 5.7 3.8
Settlements – –0.1
Remeasurement components
Change in economic assumptions –125.9 –33.9
Change in demographic assumptions 0.9 –6.1
Experience adjustments 1.8 4.1
Present value of pension obligations
at the end of the period 344.2 457.7
5.68 Change in the present value of the
defined benefit obligations
The present value of pension obligations totaling
EUR344.2million (Dec. 31, 2021: EUR457.7million) includes
pension obligations for members of the Board of Manage-
ment amounting to EUR 5.7 million (Dec. 31, 2021: EUR8.7mil-
lion) and for former members of the Board of Management
amounting to EUR 8.2 million (Dec. 31, 2021: EUR 13.4 million).
The decrease in pension obligations attributable to the
change in economic assumptions of EUR– 125.9million is due
mainly to the discount rates being higher than at December
31, 2021 in all currency areas. The rates can be found in the
table “Actuarial parameters applied”.
Change in the fair value of plan assets
in EUR m 2022 2021
Fair value of plan assets
at the beginning of the period 290.7 281.5
Exchange rate differences 6.5 11.2
Transferred – 0.4
Utilized –13.0 –10.5
Employer contributions 6.9 8.8
Administrative costs for plan assets –0.5 –0.5
Employee contributions 1.6 1.3
Interest income on plan assets 3.8 2.5
Settlements – –0.1
Remeasurement components –47.3 –3.9
Fair value of plan assets
at the end of the period 248.7 290.7
5.69 Change in the fair value of plan assets
Change in the effect of the asset ceiling
in EUR m 2022 2021
Asset ceiling at the beginning of the period 6.0 –
Exchange rate differences 0.4 0.2
Remeasurement components 11.9 5.8
Asset ceiling at the end of the period 18.3 6.0
5.70 Change in the effect of the asset ceiling
The asset ceiling is the result of a surplus in the plans in
Switzerland, which does not give rise to any economic bene-
fits in the form of refunds or reductions in future contributions.
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NOTES
Change in provisions for pensions and other post-
employment benefits recognized in the balance sheet
in EUR m 2022 2021
Provisions for pensions and
other post-employment benefits
at the beginning of the period 173.0 194.5
Exchange rate differences – 0.4
Business combinations – 0.5
Transferred –0.3 0.2
Utilized –4.9 –4.4
Employer contributions –6.9 –8.8
Current service cost 14.7 15.3
Past service cost –0.2 –0.3
Administrative costs for plan assets 0.5 0.5
Net interest expense 1.9 1.3
Remeasurement components –64.0 –26.2
Provisions for pensions and other
post-employment benefits at the end of the
period – net 113.8 173.0
of which assets recognized 5.3 10.3
Provisions for pensions and other
post-employment benefits recognized in
the balance sheet at the end of the period 119.1 183.3
5.71 Change in provisions for pensions and other
post-employment benefits ecognized in the balance sheet
Recognized provisions for pensions include EUR10.6million
(Dec. 31, 2021: EUR14.8million) for the supplemental medical
cost plan in Canada. Pension costs recognized in the income
statement for obligations under defined benefit plans total
EUR 16.9 million (2021: EUR 16.8 million). Net interest expense
is presented within net finance costs. Current service cost and
administrative costs for plan assets are presented within per-
sonnel expenses, where the amounts of past service cost and
the amounts from settlements are also recognized.
The present values of the defined benefit obligations break
down as follows into active members, former employees with
vested rights and pensioners, split according to the payout
method, resulting in the following weighted average duration
of the defined benefit obligations:
in EUR m 2022 2021
Present value of the pension
obligations funded by plan assets,
of which: 246.9 322.2
Active members with lump-sum payment 12.6 17.2
Active members with monthly pension 94.4 127.2
Active members with option to choose 14.5 26.8
Former employees with vested rights
to lump-sum payment 8.8 12.5
Former employees with vested rights
to monthly pension 2.4 3.5
Former employees with vested rights
with option to choose 11.6 15.3
Pensioners with monthly pension 102.6 119.7
Present value of the pension
obligations not funded by plan
assets, of which: 86.7 120.7
Active members with lump-sum payment 23.4 30.8
Active members with monthly pension 19.4 33.0
Active members with option to choose – –
Former employees with vested rights
to lump-sum payment 6.9 8.2
Former employees with vested rights
to monthly pension 8.2 12.9
Former employees with vested rights
with option to choose – –
Pensioners with monthly pension 28.8 35.8
Medical cost plan 10.6 14.8
Present value of the pension
obligations at the end of the period 344.2 457.7
Weighted average duration of the
pension obligations in years 14 17
5.72 Breakdown of the present values of
defined benefit obligations by members
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NOTES
The pension payments to be made by the company directly
amount to EUR4.9million in 2022 (2021: EUR4.4million). From
a present perspective, the cash outflow resulting from pen-
sion payments made by the company directly will remain at
a level of EUR 4 to 6 million over the long term. The pension
payments expected to be made by the company directly in
2023 total EUR 5.7 million.
The fair value of the plan assets disaggregates into the
following asset classes:
in EUR m Switzerland Germany Canada Netherlands
Other
countries
Dec. 31,
2022
Shares 20.1 – 8.3 – 2.0 30.4
Fixed-interest securities 12.7 – 42.2 – 0.7 55.6
Insurance policies 89.1 25.4 – 43.9 3.5 161.9
Cash and cash equivalents – – 0.8 – – 0.8
Fair value of plan assets 121.9 25.4 51.3 43.9 6.2 248.7
5.73 Fair value of the plan assets by asset class / Dec. 31, 2022
in EUR m Switzerland Germany Canada Netherlands
Other
countries
Dec. 31,
2021
Shares 22.3 0.1 9.9 – 2.0 34.3
Fixed-interest securities 14.0 – 58.1 – 0.9 73.0
Insurance policies 86.8 24.7 – 68.0 3.4 182.9
Cash and cash equivalents – – 0.5 – – 0.5
Fair value of plan assets 123.1 24.8 68.5 68.0 6.3 290.7
5.74 Fair value of the plan assets by asset class / Dec. 31, 2021
The plan assets are solely for fulfilling the defined benefit ob-
ligations and constitute protection for pension entitlements,
which is a legal requirement in some countries and is volun-
tary in other countries.
The structure of the plan assets is reviewed at regular inter-
vals. All assets, which, in Brenntag’s case, mainly consist of
insurance policies, are tailored long-term to the amount and
maturity of the pension commitments, taking investment risks
and statutory regulations governing the investment of retire-
ment assets into account.
Owing to the composition of the plan assets, investment risk
at Brenntag is limited to securities traded in active markets
(shares and fixed-interest securities). This part (2022: 34.6%
of plan assets; 2021: 36.9% of plan assets) is subject to mar-
ket fluctuations. All other assets are not traded in an active
market.
The annual payments made into the plan assets, which,
according to the plan rules, consist almost exclusively of
obligatory payments, amount to EUR 6.9 million (2021:
EUR8.8million). From a present perspective, the cash outflow
resulting from contributions made by the company will
remain at a level of EUR 7 million to EUR 8 million over the long
term. Payments into plan assets for financial year 2023 are
expected to total EUR 7.2 million.
Sensitivity analysis of the present value of the defined
benefit obligation
The sensitivity analysis takes into account in each case the
change in an assumption and the resulting effects on the
defined benefit obligations, the other assumptions remaining
the same as in the original calculation.
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NOTES
in EUR m 2022 2021
Discount rate
Increase by 0.5 percentage points –24.3 –32.9
Decrease by 0.5 percentage points 26.8 37.9
Expected salary trend
Increase by 0.5 percentage points 2.1 3.3
Decrease by 0.5 percentage points –2.0 –2.6
Expected pension trend
Increase by 0.5 percentage points 6.1 8.3
Decrease by 0.5 percentage points –5.7 –7.7
Medical cost trend
Increase by 0.5 percentage points 0.7 1.2
Decrease by 0.5 percentage points –0.6 –1.1
5.75 Sensitivity analysis of the present value
of the defined benefit obligation
A 10% decrease in the mortality rates leads to an increase in
life expectancy, depending on the individual age of each ben-
eficiary. That means, for example, that the life expectancy of
a 63-year-old employee as at December 31, 2022 increases
by about one year. In order to determine the sensitivity of lon-
gevity, the mortality rates for the beneficiaries were reduced
by 10%. If the mortality rates decreased by 10%, the present
value of the defined benefit obligation would increase by
EUR8.2 million (2021: EUR 10.5 million).
27.) Liabilities relating to acquisition of
non- controlling interests
Liabilities relating to the acquisition of non-controlling inter-
ests break down as follows:
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Liabilities relating to acquisition
of non-controlling interests 127.1 214.4
Liabilities arising from limited
partners' rights to repayment
of contributions 2.2 1.9
Tot a l 129.3 216.3
5.76 Liabilities relating to acquisition
of non-controlling interests
Liabilities relating to the acquisition of non-controlling inter-
ests decreased due to the acquisition of the remaining
non-controlling interests in TEE HAI CHEM PTE LTD, Singapore.
They consist mainly of liabilities relating to the acquisition of
the remaining 33% of the shares in Zhongbai Xingye Food
Technology (Beijing) Co., Ltd (EUR 81.2 million) as well as the
remaining shares in RAJ PETRO SPECIALTIES PRIVATE LIMITED
(EUR 25.0 million or 35%).
EUR 106.3 million (Dec. 31, 2021: EUR 181.2 million) of liabili-
ties relating to the acquisition of non-controlling interests
have been included in net investment hedge accounting. Ex-
change rate-related changes in the liabilities included in net
investment hedge accounting are recognized within equity in
the net investment hedge reserve. Of the liabilities relating to
the acquisition of non-controlling interests, EUR25.0million
(Dec. 31, 2021: EUR89.7million) are current.
The effects of the change in liabilities relating to the acquisi-
tion of non-controlling interests recognized in profit or loss are
presented in Note 7.).
28.) Equity
Capital management
The aim of capital management at Brenntag is to optimally
deploy the resources used to ensure the company’s continued
existence and, at the same time, to generate a reasonable
return on capital – measured by ROCE – for the shareholders
in line with market conditions.
In 2022, the Group generated ROCE of 22.3% (2021: 19.6%).
in EUR m 2022 2021
Operating EBITA 1,511.7 1,081.9
Average carrying amount of equity 4,543.1 3,802.8
Average carrying amount of financial
liabilities and lease liabilities 3,120.2 2,363.4
Average carrying amount of cash and
cash equivalents –882.2 –645.7
ROCE
1)
22.3% 19.6%
ROCE
1)
after special items 22.0% 15.5%
5.77 Determination of ROCE
1)
For the definition of ROCE, see the “Group key financial figures” section.
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FINANCIAL STATEMENTS
NOTES
Brenntag monitors the appropriateness of borrowings inter
alia through the ratio of net financial liabilities to operating
EBITDA (leverage). Brenntag generally considers leverage of
approximately 2x to be appropriate. Due to an exceptionally
good business performance in 2022, the ratio was once again
well below that level at 1.1x as at December 31, 2022.
We will monitor changes in leverage going forward and
examine how we can create an optimum capital structure. In
addition to current business performance and the trend in
chemicals prices, our analysis also takes into account rela-
tively large cash payments, such as those for acquisitions.
in EUR m 2022 2021
Non-current financial liabilities
and lease liabilities 2,666.1 1,985.9
Current financial liabilities
and lease liabilities 429.7 789.4
Cash and cash equivalents –1,046.1 –705.0
Net financial liabilities 2,049.7 2,070.3
Operating EBITDA 1,808.6 1,344.6
Net financial liabilities /
operating EBITDA 1.1x 1.5x
5.78 Net financial liabilities / Operating EBITDA
Subscribed capital
As at December 31, 2022, the subscribed capital of
Brenntag SE totaled EUR 154,500,000 (Dec. 31, 2021:
EUR154,500,000). The share capital is divided into 154,500,000
no-par value registered shares (Dec. 31, 2021: 154,500,000
no-par value shares), each with a notional value of EUR1.00
(Dec. 31, 2021: EUR 1.00).
According to article 7, para. 3 of the Articles of Association of
Brenntag SE, any right of shareholders to certification of their
shares is excluded to the extent permitted by law and that
certification is not required under the rules of any stock
exchange on which the share is admitted to trading. The com-
pany is entitled to issue share certificates embodying several
shares (consolidated certificates). Pursuant to Section 67,
para. 2 of the German Stock Corporation Act (AktG) in con-
junction with Article 9, para. 1 (c) (ii) of Council Regulation (EC)
No 2157/2001 on the Statute for a European company (“the
SE Regulation”), only those persons recorded in the compa-
ny’s share register will be recognized as shareholders of
Brenntag SE. For purposes of recording the shares in the com-
pany’s share register, shareholders are required to submit to
Brenntag SE the number of shares held by them, and, in the
case of individuals, their name, address and date of birth, or
in the case of legal entities, their company name, business
address and registered offices. All shares confer the same
rights and obligations. At the General Shareholders’ Meeting,
each share has one vote and accounts for the shareholders’
proportionate share in the net income of Brenntag SE.
Excepted from this rule are any treasury shares held by
Brenntag SE that do not entitle Brenntag SE to any member-
ship rights. Brenntag SE does not currently have any treasury
shares. The shareholders’ rights and obligations are governed
by the provisions of the German Stock Corporation Act (which
apply to an SE as a European stock corporation by way of the
reference to other relevant provisions contained in Article 9 of
the SE Regulation), in particular by Sections 12, 53a ff., 118 ff.
and 186 of the German Stock Corporation Act.
Additional paid-in capital
The additional paid-in capital amounts to EUR 1,491.4 million
(Dec. 31, 2021: EUR 1,491.4 million).
Retained earnings
Retained earnings include cumulative profit after tax and the
remeasurement component of the defined benefit pension
plans including deferred taxes. Transactions with owners are
also recognized here. The latter are effects of share pur-
chases and sales which have no influence on existing control
and are recognized in retained earnings.
As proposed by the Board of Management and the Supervi-
sory Board, the ordinary General Shareholders’ Meeting of
Brenntag SE on June 9, 2022 passed a resolution to pay a div-
idend of EUR 224,025,000.00 (2021: EUR 208,575,000.00).
Based on 154.5 million shares, that is a dividend of EUR 1.45
(2021: EUR 1.35) per no-par value share entitled to a dividend.
At the General Shareholders’ Meeting on June 15, 2023, the
Board of Management and the Supervisory Board will pro-
pose that the balance sheet profit of Brenntag SE amounting
to EUR 309,000,000.00 be used for the distribution of a divi-
dend of EUR 2.00 on each share of no-par value share entitled
to the dividend for the fiscal year 2022 and to appropriate to
retained earnings such amount of the balance sheet profit, if
any, allotted to shares of no-par value with no dividend enti-
tlement for the fiscal year 2022 at the time of the adoption of
the resolution on the appropriation of the balance sheet profit
for the fiscal year 2022 by the General Shareholders’ Meeting.
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NOTES
Other components of equity / Non-controlling interests
Exchange rate differences include effects of EUR 6.5 million
arising on retrospective application of IAS 29 (hyperinflation)
in Turkey and the inflation effect on equity of EUR 17.8 million
in financial year 2022.
Other components of equity comprise the cumulative gain/
loss from exchange rate differences, the net investment
hedge reserve and the cash flow hedge reserve.
The cumulative gain/loss from exchange rate differences
contains the differences from the translation of the financial
statements of foreign companies into the Group currency
(euro), which are recognized in other comprehensive income.
The foreign exchange gains of EUR 91.0 million recognized
here in financial year 2022 (2021: foreign exchange gains of
EUR 172.2 million) resulted primarily from the appreciation of
the US dollar against the euro.
Exchange rate differences from liabilities included in net
investment hedge accounting are recognized within equity in
the net investment hedge reserve.
The cash flow hedge reserve contains the effective portion of
the cumulative fair value changes in derivative financial
instruments included in cash flow hedge accounting.
Non-controlling interests comprise the shares of non-Group
shareholders in the equity of consolidated entities. Non-con-
trolling interests changed as follows:
in EUR m
Subscribed
capital, retained
earnings and
additional
paid-in capital
Exchange rate
differences
Non-controlling
interests
Dec. 31, 2020 67.7 –5.8 61.9
Dividends –0.4 – –0.4
Business combinations 7.5 – 7.5
Transactions with owners –8.2 – –8.2
Profit after tax 13.1 – 13.1
Other comprehensive income, net of tax – 7.2 7.2
Total comprehensive income for the period 13.1 7.2 20.3
Dec. 31, 2021 79.7 1.4 81.1
Dividends –1.4 – –1.4
Transactions with owners –43.2 –5.2 –48.4
Profit after tax 15.7 – 15.7
Other comprehensive income, net of tax – 3.2 3.2
Total comprehensive income for the period 15.7 3.2 18.9
Dec. 31, 2022 50.8 –0.6 50.2
5.79 Change in non-controlling interests
Non-controlling interests decreased by EUR 50.0 million due
to the acquisition of the remaining non-controlling interests
in TEE HAI CHEM PTE LTD, Singapore. The EUR 1.6 million in-
crease in non-controlling interests at Brenntag Saudi Arabia
Limited had an opposite effect.
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
The assets, liabilities, sales and profit after tax (in each case
100%) of Zhongbai Xingye (33% non-controlling interest)
and RAJ PETRO SPECIALTIES PRIVATE LIMITED (RAJ) (35%
non-controlling interest) are shown below:
in EUR m
Zhongbai
Xingye RAJ
Assets
Current assets 146.7 142.8
Non-current assets 11.2 15.1
Liabilities
Current liabilities 113.9 83.8
Non-current liabilities 2.7 24.3
Net assets 41.3 49.8
Income statement
Sales 216.9 286.8
Profit after tax 14.3 6.4
5.80 Subsidiaries with non-controlling interests / 2022
in EUR m
Zhongbai
Xingye RAJ Tee Hai
Assets
Current assets 96.2 127.1 51.6
Non-current assets 22.6 17.7 73.9
Liabilities
Current liabilities 84.5 73.3 19.9
Non-current liabilities 6.0 25.6 16.0
Net assets 28.3 45.9 89.6
Income statement
Sales 81.5 217.1 98.6
Profit after tax 3.6 11.5 4.9
5.81 Subsidiaries with non-controlling interests / 2021
Powers of the Board of Management
to issue or repurchase shares
Authorization to create authorized capital
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized, with the ap-
proval of the Supervisory Board, to increase the share capital
of Brenntag SE on one or more occasions until June 8, 2027
by a total of up to EUR 35,000,000 by issuing up to 35,000,000
new registered ordinary shares in return for cash contribu-
tions or contributions in kind. The shareholders shall generally
be granted a subscription right. However, in certain cases the
Board of Management is authorized, with the approval of the
Supervisory Board, to exclude the shareholders’ statutory
subscription rights for one or more capital increases under
the authorized capital. This shall apply, for example, if the
capital increase is effected against cash contributions and
the issue price of the new shares is not significantly lower than
the stock market price of the shares of the same class and
carrying the same rights already traded on the stock market
at the time of final determination of the issue price within the
meaning of Section 203, para. 1 and para. 2 and Section 186,
para. 3, sentence 4 of the German Stock Corporation Act and
the total pro rata amount of registered share capital repre-
sented by the new shares issued in accordance with this
paragraph with exclusion of subscription rights pursuant to
Section 186, para. 3, sentence 4 of the German Stock Corpo-
ration Act does not exceed 10% of the registered share capi-
tal in the amount of EUR 154,500,000 (simplified exclusion of
subscription rights). Details can be found in the Articles of
Association of Brenntag SE, which are available in the Investor
Relations section of the website at www.brenntag.com.
The Board of Management shall decide on the further content
of the share rights and the conditions of the issuance of
shares with the approval of the Supervisory Board.
Authorization to acquire and use treasury shares in accor-
dance with Section 71, para. 1, no. 8 of the German Stock
Corporation Act
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized, with the ap-
proval of the Supervisory Board, to acquire treasury shares up
to a total of 10% of the share capital. The shares acquired on
the basis of this authorization, together with other shares in
the company which Brenntag SE has already acquired and
still holds, may at no time account for more than 10% of the
respective registered share capital. The authorization may be
exercised in whole or in part, once or several times. It took ef-
fect at the close of the General Shareholders’ Meeting on June
9, 2022 and shall be valid until June 8, 2027. If the shares are
purchased on the stock exchange, the purchase price (exclud-
ing incidental costs) may not be more than 10% higher or
lower than the arithmetic mean of the share prices (closing
auction prices of Brenntag SE shares in XETRA trading or a
comparable successor system) on the Frankfurt Stock
Exchange on the last five trading days prior to the purchase
or the entering into an obligation to purchase. In the case of
acquisition by means of a public purchase offer, Brenntag SE
may either publish a formal offer or issue a public invitation
to submit offers for sale. The purchase price offered (exclud-
ing incidental costs) or the limits of the purchase price range
per share determined by Brenntag SE (excluding incidental
costs) may not exceed or fall below the arithmetic mean of
the share prices on the Frankfurt Stock Exchange on the last
five trading days prior to the publication of the purchase offer
or the invitation to submit offers by more than 10%. The au-
thorization may be exercised for any purpose permitted by
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NOTES
law. The Board of Management was authorized, with the ap-
proval of the Supervisory Board, to withdraw the treasury
shares acquired on the basis of the authorization pursuant to
Section 71, para. 1, no. 8 of the German Stock Corporation Act
without any further resolution by the General Shareholders’
Meeting. The withdrawal may be limited to a portion of the
shares acquired. The authorization to withdraw shares may
be exercised more than once. The withdrawal of shares gen-
erally leads to a reduction in registered share capital. In der-
ogation of this, the Board of Management may determine
that the registered share capital shall remain unchanged and
that instead the withdrawal shall increase the proportion of
the registered share capital represented by the remaining
shares in accordance with Section 8, para. 3 of the German
Stock Corporation Act. In this case, the Board of Management
is authorized to adjust the indication of the corresponding
number in the Articles of Association. Treasury shares may,
under certain circumstances, also be used subject to exclu-
sion of the shareholders’ subscription rights existing in princi-
ple and in particular by way of simplified exclusion of sub-
scription rights as specified above.
Authorization to issue bonds and to create conditional
capital
By resolution of the General Shareholders’ Meeting on June 9,
2022, the Board of Management was authorized (“Authoriza-
tion 2022”), with the approval of the Supervisory Board, to is-
sue holder or registered convertible bonds or bonds with war-
rants as well as profit participation rights or profit
participating bonds with option or conversion rights on one or
more occasions up to June 8, 2027 for a total nominal amount
of up to EUR 2,000,000,000 with or without limited term
(“Bonds”) and to grant the holders or creditors of the Bonds
option or conversion rights to up to 15,450,000 new
Brenntag SE shares with a pro rata total amount of the reg-
istered share capital of up to EUR 15,450,000 in accordance
with the respective option or convertible bond conditions or
profit participation right or participating bond conditions
(“Conditions”) to be determined by the Board of Management.
In order to grant shares to the holders or creditors of Bonds,
the registered share capital was conditionally increased at
the General Shareholders’ Meeting on June 9, 2022 by up to
15,450,000 no-par value registered shares conferring prof-
it-sharing rights from the beginning of the financial year in
which they were issued (“Conditional Capital 2022”); this
equates to an increase in the registered share capital of up
to EUR 15,450,000. The Bonds may, in addition to euros, also
be issued in a foreign legal currency, subject to a limit of the
corresponding equivalent value in euros, and by companies
dependent on Brenntag SE or in which it holds a majority
interest; in this case, the Board of Management was autho-
rized, with the approval of the Supervisory Board, to assume
the guarantee for the Bonds on behalf of Brenntag SE and to
grant the holders of such Bonds option or conversion rights to
Brenntag SE shares and to make other declarations and take
other actions necessary for a successful issue. The issues of
Bonds may be divided into partial Bonds each having equal
rights. Bonds may only be issued against contribution in kind,
provided that the value of the contribution in kind corre-
sponds to the issue price and that this price is not significantly
lower than the theoretical market value of the Bonds deter-
mined in accordance with recognized methods of financial
mathematics. The Board of Management is authorized, under
certain circumstances and with the approval of the Supervi-
sory Board, to exclude shareholders’ subscription rights to the
Bonds. However, with regard to the exclusion of subscription
rights against cash payment, this authorization shall apply
only provided that the shares issued to fulfil the option or con-
version rights and/or in the case of fulfilment of the conver
-
sion obligation represent no more than 10% of the registered
share capital. Decisive for the threshold of 10% is the
registered share capital in the amount of EUR 154,500,000
(simplified exclusion of subscription rights). Details can be
found in the Articles of Association of Brenntag SE, which are
available in the Investor Relations section of the website at
www.brenntag.com.
When convertible bonds, profit participation rights or profit
participating bonds with conversion rights are issued, the
holders are granted the right to exchange their Bonds for new
Brenntag SE shares in accordance with the more detailed
Conditions.
When bonds with warrants, profit participation rights or profit
participating bonds with option rights are issued, one or more
warrants shall be attached to each partial bond or each
profit participation right or each participating bond, entitling
the holder to subscribe for Brenntag SE shares in accordance
with the more detailed Conditions.
New shares are issued at the option or conversion price to be
set in accordance with the aforementioned resolution grant-
ing authorization.
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
In November 2015, Brenntag Finance B.V., in its capacity as
issuer and with Brenntag SE as guarantor, issued a bond with
warrant units in the amount of USD 500.0 million maturing on
December 2, 2022 (“Bond (with Warrants) 2022”). It did so on
the basis of the authorization resolved upon at the General
Shareholders’ Meeting on June 17, 2014 (“Authorization 2014”)
to issue Bonds and grant the holders or creditors of the Bonds
option or conversion rights for up to 25,750,000 new
Brenntag SE shares representing a notional amount of up to
EUR 25,750,000 in the registered share capital (“Conditional
Capital 2014”).
The bond was offered only to institutional investors outside
the USA. Shareholders’ subscription rights were excluded. The
warrants attached to the Bond (with Warrants) 2022 entitled
the holder to purchase Brenntag SE ordinary shares by paying
the strike price applicable at that time. The Terms and Con-
ditions of the Bond (with Warrants) 2022 allowed Brenntag SE
to settle exercised options both from the Conditional Capital
2014 and from the authorized capital described above or
from the treasury shares it holds or to buy back the warrants.
The investor was able to detach the warrants from the bonds.
The bond with warrant units, bonds detached from warrants
and detached warrants were admitted to trading on the Open
Market (Freiverkehr) segment of the Frankfurt Stock Ex-
change. The warrants to purchase Brenntag SE shares had
not been exercised at the exercise date at the beginning of
December 2022.
29.) Consolidated cash flow
statement disclosures
Net cash provided by operating activities of EUR 956.7million
(2021: EUR 388.6 million) was influenced by the rise in working
capital of EUR 385.7million (2021: EUR575.3million).
Of the net cash of EUR401.4million (2021: EUR 608.5 million)
used in investing activities, EUR267.2million comprised pay
-
ments to acquire intangible assets and property, plant and
equipment. Payments to acquire consolidated subsidiaries
and other business units consisted mainly of payments to ac-
quire the shares in TechManagement Energy Services, LLC
headquartered in Odessa, Texas, USA, in November 2022 and
Ravenswood’s Life Science and Coatings business headquar-
tered in Bayswater, Australia, in December 2022. They also
included cash inflows from repayments in connection with
prior-year acquisitions.
Besides bank loans taken out and repaid as well as lease
liabilities repaid, net cash used in financing activities of
EUR225.8million (2021: net cash provided by financing ac-
tivities of EUR 174.1 million) mainly included the cash inflow
of around EUR640.0million from promissory notes (Schuld-
schein) taken out in August 2022 and the cash outflow of
EUR445.8 million for repayment of the Bond (with Warrants)
2022 at maturity in December 2022. A further EUR224.0 mil-
lion was used for the dividend payment to Brenntag share-
holders and a further EUR96.4million to settle the liability
relating to the acquisition of the remaining 49% of the shares
in TEE HAI CHEM PTE LTD, Singapore.
At 7.5 in the reporting period, annualized working capital turn-
over
1)
was lower than at the end of 2021 (8.3).
The loss on the net monetary position resulting from the ap-
plication of IAS 29 (Financial Reporting in Hyperinflationary
Economies) in Turkey depressed profit after tax by
EUR16.3million. This non-cash effect is presented as an ad-
justment to net cash provided by operating activities as a
separate line item. Other non-cash effects were adjusted in
the respective line items in the cash flow statement insofar
as they can be allocated. All other non-cash effects resulting
from the application of IAS 29 were adjusted in other non-
cash items and reclassifications and reduced net cash pro-
vided by operating activities by EUR 9.4 million. The notional
loss of purchasing power of cash and cash equivalents result-
ing from the application of IAS 29 amounted to EUR8.0mil-
lion in the reporting period of which a partial amount of
EUR3.3 million is attributable to the opening balance of cash
and cash equivalents.
Of the interest payments, EUR 15.9million (2021: EUR4.0mil-
lion) relate to interest received and EUR126.5million (2021:
EUR 53.5million) to interest paid.
1)
Ratio of annual sales to average working capital: average working capital is
defined for a particular year as the average of working capital at the
beginning of the year, the end of each of the first, second and third quarters,
and the end of the year.
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
Financial liabilities changed as follows:
in EUR m
Dec. 31,
2021
Net cash
used in
financing
activities
Non-cash
changes
in lease
liabilities
Business
combina-
tions in
accor-
dance
with IFRS 3
Exchange
rate
differ-
ences Other
Dec. 31,
2022
Liabilities under syndicated loan 518.6 – – – 28.5 4.8 551.9
Other liabilities to banks 165.2 47.7 – 10.1 –5.1 – 217.9
Liabilities under promissory notes – 639.8 – – –15.4 2.7 627.1
Bond 2025 598.2 – – – – 1.0 599.2
Bond 2029 497.1 – – – – 0.4 497.5
Bond (with Warrants) 2022 437.0 –445.8 – – 36.6 –27.8 –
Derivative financial instruments 21.5 – – – –0.3 35.7 56.9
Other financial liabilities 92.1 –2.5 – 3.7 –0.9 18.6 111.0
Financial liabilities 2,329.7 239.2 – 13.8 43.4 35.4 2,661.5
Lease liabilities 445.6 –139.4 114.3 5.0 8.0 0.8 434.3
Tot a l 2,775.3 99.8 114.3 18.8 51.4 36.2 3,095.8
Dividends paid to Brenntag shareholders –224.0
Profits distributed to non-controlling
interests –3.2
Settlement of liabilities relating to
acquisition of non-controlling interests –98.4
Net cash used in financing activities –225.8
5.82 Change in financial liabilities in 2022
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
in EUR m
Dec. 31,
2020
Net cash
provided
by
financing
activities
Non-cash
changes
in lease
liabilities
Business
combina-
tions in
accor-
dance
with IFRS 3
Exchange
rate
differ-
ences Other
Dec. 31,
2021
Liabilities under syndicated loan 477.8 –2.5 – – 42.6 0.7 518.6
Other liabilities to banks 124.4 29.4 – 3.6 7.6 0.2 165.2
Bond 2025 597.3 – – – – 0.9 598.2
Bond 2029 – 498.6 – – – –1.5 497.1
Bond (with Warrants) 2022 398.3 – – – 31.5 7.2 437.0
Derivative financial instruments 11.4 – – – –0.6 10.7 21.5
Other financial liabilities 30.2 –4.6 – 39.3 3.0 24.2 92.1
Financial liabilities 1,639.4 520.9 – 42.9 84.1 42.4 2,329.7
Lease liabilities 426.7 –119.6 94.4 26.2 18.1 –0.2 445.6
Tot a l 2,066.1 401.3 94.4 69.1 102.2 42.2 2,775.3
Dividends paid to Brenntag shareholders –208.6
Profits distributed to non-controlling
interests –2.1
Settlement of liabilities relating to
acquisition of non-controlling interests –16.5
Net cash provided by financing activities 174.1
5.83 Change in financial liabilities in 2021
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CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
30.) Segment reporting
The Brenntag Group is managed through two global divisions,
Brenntag Specialties and Brenntag Essentials, which are
each managed through geographically structured segments.
Brenntag Specialties focuses on selling ingredients and val-
ue-added services to the selected industries, Nutrition,
Pharma, Personal Care/HI&I (Home, Industrial & Institutional),
Material Science (Coatings & Construction, Polymers, Rub-
ber), Water Treatment and Lubricants. Brenntag Essentials
markets a broad portfolio of process chemicals across a wide
range of industries and applications. The global Brenntag
Specialties division comprises the geographical segments
EMEA, Americas and APAC. The global Brenntag Essentials
division comprises the geographical segments EMEA, North
America, Latin America and APAC. The two divisions are sup-
ported by Brenntag Business Services, which have been allo-
cated to “All other Segments”. In addition, “All other Segments”
combine the central functions for the entire Group and the
activities with regard to the digitalization of our business.
The international operations of BRENNTAG International
Chemicals GmbH, which buys and sells chemicals in bulk on
an international scale without regional boundaries, are also
included here.
In the course of operationalizing its strategy, Brenntag took
the decision in the fourth quarter of 2022 to replace operating
EBITDA with operating EBITA as its key performance indicator.
In contrast to operating EBITDA, operating EBITA also reflects
depreciation of property, plant and equipment and right-of-
use assets. For Brenntag, this is important primarily so that it
can take into account the different depreciation profiles of
Brenntag Specialties and Brenntag Essentials. Certain items
of property, plant and equipment and right-of-use assets are
not separable and support both divisions jointly. They have
been allocated to a division (depending on the region) and are
depreciated there. They are charged to the other division on
the basis of fixed and variable monthly amounts. Brenntag
uses operating EBITA to manage the segments, as it reflects
the performance of the business operations well and is a key
component of cash flow.
The aim is to continually grow operating EBITA throughout the
business cycle. It is the operating profit as recorded in the
consolidated income statement plus amortization of intan-
gible assets, adjusted for certain items.
Brenntag adjusts operating EBITA for holding charges and for
income and expenses arising from special items so as to im-
prove comparability in presenting the performance of its
business operations over multiple reporting periods and ex
-
plain it more appropriately. Holding charges are certain costs
charged between holding companies and operating compa-
nies. At Group level, these effects net to zero. Special items
are income and expenses outside ordinary activities that
have a special and material effect on the results of opera-
tions.
There are no significant non-cash items in the reporting
period.
Impairment losses on property, plant and equipment in
the amount of EUR 0.7 million (2021: EUR 4.3 million mainly
EMEA (BES)) relate mainly to the EMEA (BES) segment. The
goodwill impairment loss of EUR 38.1 million relates to the
Latin America (BES) segment. There are no impairment losses
on other intangible assets (2021: EUR 51.9 million “All other
Segments”).
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NOTES
Non-current assets comprise property, plant and equipment,
right-of-use assets and intangible assets. Non-current assets
are allocated to the different countries as follows:
Property, plant and equipment Right-of-use assets Intangible assets
1)
in EUR m Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
Germany 87.5 82.2 61.3 54.4 16.5 17.2
USA 435.7 351.8 167.5 175.2 56.0 63.0
Singapore 65.1 64.7 17.7 21.2 0.2 2.4
Canada 85.2 86.3 14.4 17.1 2.6 6.1
United Kingdom 62.9 48.5 39.2 37.8 14.4 14.8
France 92.4 90.0 8.7 10.7 0.5 0.5
Switzerland 38.6 39.0 2.1 1.6 0.2 0.3
Italy 55.2 54.1 22.6 26.3 1.2 3.0
Spain 46.5 47.5 9.8 10.2 0.1 0.2
China 90.9 103.1 1.3 2.4 12.8 20.9
Others 296.0 269.1 83.7 79.6 34.9 30.1
Tot a l 1,356.0 1,236.3 428.3 436.5 139.4 158.5
5.84 Non-current assets by country
1)
Intangible assets excluding goodwill and “Brenntag” trademark.
The allocation of external sales to the different countries is
shown in the following table:
External sales
in EUR m 2022 2021
Germany 1,945.4 1,538.2
USA 6,783.8 4,580.7
Canada 733.6 558.8
France 605.4 476.4
Italy 739.7 599.8
United Kingdom 793.6 596.1
Poland 647.5 514.9
China 705.7 573.2
Others 6,474.6 4,944.4
Tot a l 19,429.3 14,382.5
5.85 External sales by country
31.) Other financial obligations
and contingent liabilities
As at December 31, 2022, purchase commitments in respect
of property, plant and equipment amounted to EUR 5.1 million
(Dec. 31, 2021: EUR 6.6 million) and, as in the previous year,
had a remaining term of one year or less. Information on lease
obligations as at December 31, 2021 can be found in the
sections “Leases” and “Reporting of financial instruments”.
In connection with the elimination of environmental damage,
as at December 31, 2022, there were contingent liabilities with
a fair value of EUR 5.4 million (Dec. 31, 2021: EUR 5.0 million).
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NOTES
32.) Legal proceedings and disputes
Brenntag SE and individual subsidiaries have been named as
defendants in various legal actions and proceedings arising
in connection with their activities as a global group. Some-
times, Brenntag is also the subject of investigations by the
authorities. Brenntag cooperates with the relevant authorities
and, where appropriate, conducts internal investigations re-
garding alleged wrongdoings with the assistance of in-house
and external counsel.
The decision issued by the French Competition Authority
in 2013 in relation to the allocation of customers and coordi-
nation of prices was set aside by a court of appeal due to
procedural errors at Brenntag’s request in February 2017. In
December 2020, the court imposed a fine of EUR 47 million.
Brenntag has lodged an appeal against the decision. Regard
-
ing the investigation also ongoing at the French Competition
Authority concerning whether BRENNTAG SA has illegally
made use of its market position, a decision by the Authority is
still pending. Based on current knowledge, Brenntag assumes
that claims for civil liability arising from the above-mentioned
proceedings are not sufficiently substantiated.
As a global company, Brenntag has to comply with the country-
specific tax laws and regulations in each jurisdiction. Tax
exposures could result in particular from current and future
tax audits of our German and foreign subsidiaries. These
exposures are generally reflected in the balance sheet by
recognizing provisions.
The German Group companies Brenntag GmbH and BCD
Chemie GmbH were or are currently the subject of routine
reviews of the tax on alcohol and energy conducted or being
conducted by the German customs authorities for the years
2014 to 2018. As a result, in financial year 2021, tax decision
notices relating to alcohol tax were received for the years
2014 to 2016 in the amount of EUR 94.0 million and the ap
-
propriate taxes were paid. Legal redress was sought against
the decisions. In 2021, Brenntag took the precaution of recog-
nizing an amount of EUR 81.5 million in the balance sheet for
the outstanding years under review. The findings of the review
relate only to formal errors. At no time were there doubts con-
cerning the tax-free use of alcoholic products by our custom-
ers. Brenntag believes that, in most cases, it will be successful
in seeking legal redress. The authorities have continued their
reviews of BCD Chemie GmbH for 2016 to 2017 and of
Brenntag GmbH for 2017 to 2018. Under a tax audit notice
issued in 2022, Brenntag GmbH is also the subject of a review
for 2021. There are as yet no significant findings.
The energy tax review at BRENNTAG GmbH for the years 2016
and 2017 was completed in 2022 and tax decision notices
totaling EUR 2.5 million were issued. This led to the reversal of
the provision of EUR 19.0 million recognized in the previous
year.
Also considering the above-mentioned appeal, it is not
possible at present to conclusively predict whether further
tax assessments will be made. As at December 31, 2022,
EUR60.0 million had been recognized in the balance sheet as
a precaution for the outstanding years under review. With the
support of external experts on excise duties, Brenntag exam-
ines the extent to which comparable excise duty risks also
exist in other European countries. Ultimately, this analysis did
not bring to light any circumstances that require the com-
pany to take precaution of recognizing amounts in the bal-
ance sheet for similar cases. Initial organizational improve-
ments have already been implemented.
Given the number of legal disputes and other proceedings
that Brenntag is involved in, it is possible that a ruling may be
made against Brenntag in some of these proceedings. The
company contests actions and proceedings where it consid-
ers it appropriate. Provisions are established for ongoing legal
disputes on the basis of the estimated risk and, if necessary,
with the help of external consultants. It is very difficult to pre-
dict the outcome of such matters, particularly in cases in
which claimants seek indeterminate compensation. Any ad-
verse decisions rendered in such cases may have material
effects on Brenntag’s net assets, financial position and results
of operations for a reporting period. However, Brenntag cur-
rently does not expect its net assets, financial position and
results of operations to be materially affected.
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NOTES
33.) Reporting of financial instruments
Carrying amounts and fair values by measurement
category
The financial assets recognized in the balance sheet were
allocated to the IFRS 9 measurement categories as follows:
in EUR m Dec. 31, 2022
Classification of financial assets:
At
amortized cost FVTPL
1)
Tot a l
carrying amount Fair value
Cash and cash equivalents 1,046.1 – 1,046.1 1,046.1
Trade receivables 2,676.8 – 2,676.8 2,676.8
Other receivables 108.6 – 108.6 108.6
Other financial assets 31.3 13.3 44.6 44.6
Tot a l 3,862.8 13.3 3,876.1 3,876.1
5.86 Classification of financial assets by measurement category / Dec. 31, 2022
1)
Financial assets at fair value through profit or loss.
in EUR m Dec. 31, 2021
Classification of financial assets:
At
amortized cost FVTPL
1)
Total
carrying amount Fair value
Cash and cash equivalents 705.0 – 705.0 705.0
Trade receivables 2,290.2 – 2,290.2 2,290.2
Other receivables 103.5 – 103.5 103.5
Other financial assets 33.6 15.2 48.8 48.8
Tot a l 3,132.3 15.2 3,147.5 3,147.5
5.87 Classification of financial assets by measurement category / Dec. 31, 2021
1)
Financial assets at fair value through profit or loss.
The majority of the financial assets measured at amortized
cost have remaining terms of less than one year. Their carrying
amounts at the reporting date approximate their fair values.
Of the other receivables recognized in the balance sheet,
EUR204.7 million (Dec. 31, 2021: EUR 171.1 million) are not
financial assets as defined by IFRS 7. They are mainly receiv-
ables from value-added tax and other taxes, prepaid ex-
penses and prepayments.
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NOTES
The classification and measurement of the financial liabilities
recognized in the balance sheet are shown in the table below:
in EUR m Dec. 31, 2022
Classification of financial liabilities:
At
amortized cost FVTPL
1)
Tot a l
carrying amount Fair value
Trade payables 1,862.0 – 1,862.0 1,862.0
Other liabilities 301.2 – 301.2 301.2
Liabilities relating to acquisition of non-controlling interests 129.3 – 129.3 129.2
Financial liabilities 2,575.7 85.8 2,661.5 2,495.5
Tot a l 4,868.2 85.8 4,954.0 4,787.9
5.88 Classification of financial liabilities by measurement category / Dec. 31, 2022
1)
Financial liabilities at fair value through profit or loss.
in EUR m Dec. 31, 2021
Classification of financial liabilities:
At
amortized cost FVTPL
1)
Total
carrying amount Fair value
Trade payables 1,802.3 – 1,802.3 1,802.3
Other liabilities 233.3 – 233.3 233.3
Liabilities relating to acquisition of non-controlling interests 216.2 – 216.2 217.0
Financial liabilities 2,288.6 41.1 2,329.7 2,356.6
Tot a l 4,540.4 41.1 4,581.5 4,609.2
5.89 Classification of financial liabilities by measurement category / Dec. 31, 2021
1)
Financial liabilities at fair value through profit or loss.
The majority of the trade payables and other liabilities mea-
sured at amortized cost have remaining terms of less than
one year. Their carrying amounts at the reporting date there-
fore approximate their fair values. The fair values of the bonds
measured at amortized cost under financial liabilities were
determined using quoted or market prices in an active market
(Level 1 of the fair value hierarchy). The fair values of the other
financial liabilities measured at amortized cost were deter
-
mined using the discounted cash flow method on the basis
of inputs observable on the market (Level 2 of the fair value
hierarchy). The liabilities relating to the acquisition of non-con-
trolling interests were determined on the basis of recognized
company valuation models. The company valuation models
are based on cash flow plans (Level 3 of the fair value hierar-
chy). The fair values of foreign exchange forwards and foreign
exchange swaps are determined by comparing forward rates
and discounted to present value (Level 2 of the fair value
hierarchy).
The fair value of the cross-currency interest rate swaps is de-
termined in two steps. First, the expected future cash flows
are discounted using maturity-matched market interest rates
according to the currency. In the second step, the cash flows
discounted in foreign currency (US dollar) are then translated
into the reporting currency (EUR) at market exchange rates
(Level 2 of the fair value hierarchy). The value of a call option
to acquire non-controlling interests is calculated from the in-
trinsic value and the time value of the option. The intrinsic
value of the call option is calculated as the difference be-
tween the enterprise value and the strike price. The time value
reflects the optionality of movements in the future strike price
and the future enterprise value of the non-controlling inter-
ests. This is illustrated by way of a Monte Carlo simulation and
the fair value of the option then determined (Level 3 of the fair
value hierarchy).
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NOTES
The allocation of the financial assets and liabilities recog-
nized in the balance sheet at fair value to the levels of the IFRS
13 fair value hierarchy is shown in the table below:
in EUR m
Hierarchy level Level 1 Level 2 Level 3 Dec. 31, 2022
Financial assets at fair value through profit or loss 1.4 2.7 9.2 13.3
Financial liabilities at fair value through profit or loss – 56.9 28.9 85.8
5.90 Financial instruments according to fair value hierarchy / Dec. 31, 2022
in EUR m
Hierarchy level Level 1 Level 2 Level 3 Dec. 31, 2021
Financial assets at fair value through profit or loss 1.7 9.6 3.9 15.2
Financial liabilities at fair value through profit or loss – 21.5 19.6 41.1
5.91 Financial instruments according to fair value hierarchy / Dec. 31, 2021
Of the other liabilities recognized in the balance sheet,
EUR368.6 million (Dec. 31, 2021: EUR 346.3 million) are not
financial liabilities as defined by IFRS 7. They are mainly lia-
bilities to employees, liabilities from value-added tax and
other taxes, as well as deferred income.
Liabilities resulting from contingent consideration arrange-
ments of EUR29.3million (Dec. 31, 2021: EUR19.6million)
relate to liabilities for contingent purchase prices payable in
business combinations. The amount of the contingent pur-
chase price component required to be recognized at fair
value is contingent on the earnings achieved by the acquired
business and is limited in both the lower (EUR 0.0 million) and
the upper (EUR 29.3 million) range.
Liabilities resulting from contingent consideration arrange-
ments changed as follows:
in EUR m 2022 2021
Jan. 1 19.6 1.5
Exchange rate differences –0.3 0.8
Added 1.7 –
Reversed –0.7 –
Business combinations 10.0 17.3
Purchase price payments –1.0 –
Dec. 31 29.3 19.6
5.92 Change in liabilities resulting from
contingent consideration arrangements
The call option to acquire non-controlling interests was
recognized in the amount of EUR 9.2 million (Dec. 31, 2021:
EUR3.9 million) on the basis of the mean of the Monte Carlo
simulations. The minimum is EUR 0.0 million (Dec. 31, 2021:
EUR0.0 million) and the maximum EUR 31.0 million (Dec. 31,
2021: EUR 15.6 million).
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NOTES
The net gains/losses from financial assets and liabilities
broken down into measurement categories are as follows:
in EUR m 2022
Interest At fair value Currency translation
Measurement
category: Income Expense
Change in liabilities
relating to acquisition of
non-controlling interests
and call option recog-
nized in profit or loss Gains Losses Gains Losses
Impair-
ments,
net
Net
gain/
loss
Financial assets
measured
at amortized cost 16.7 – – – – 153.4 –202.4 –15.0 –47.3
Financial liabilities
measured at
amortized cost – –84.8 –12.9 – – 81.6 –108.8 – –124.9
FVTPL
1)
– –7.7 5.3 121.4 –77.3 – – – 41.7
Tot a l 16.7 –92.5 –7.6 121.4 –77.3 235.0 –311.2 –15.0 –130.5
5.93 Net gains/losses from financial assets and liabilities / 2022
1)
Financial assets and liabilities at fair value through profit or loss.
in EUR m 2021
Interest At fair value Currency translation
Measurement
category: Income Expense
Change in liabilities
relating to acquisition of
non-controlling interests
recognized in profit or
loss Gains Losses Gains Losses
Impair-
ments,
net
Net
gain/
loss
Financial assets
measured
at amortized cost 4.5 – – – – 52.6 –75.3 –7.5 –25.7
Financial liabilities
measured at
amortized cost – –47.7 –32.2 – – 50.1 –53.9 – –83.7
FVTPL
1)
– –2.3 3.9 65.3 –42.0 – – – 24.9
Tot a l 4.5 –50.0 –28.3 65.3 –42.0 102.7 –129.2 –7.5 –84.5
5.94 Net gains/losses from financial assets and liabilities / 2021
2)
Financial assets and liabilities at fair value through profit or loss.
Of the interest expense on liabilities to third parties contained
in interest expense, EUR 1.2 million (2021: EUR 1.3 million) is
interest expense which is not part of the effective interest on
financial liabilities measured at amortized cost.
With the exception of valuation allowances on trade receiv-
ables and other receivables, net gains and losses on subse-
quent measurement are presented within net finance costs.
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NOTES
in EUR m
Gross amounts
of financial
assets and
liabilities Offsetting
Carrying
amounts in the
balance sheet
Enforceable
master netting
arrangements
and similar
arrangements
Dec. 31, 2022
Net amount
Trade receivables 2,699.0 –22.2 2,676.8 –4.6 2,672.2
Other financial assets 44.6 – 44.6 –1.1 43.5
Trade payables 1,869.6 –7.6 1,862.0 –4.6 1,857.4
Other liabilities 684.4 –14.6 669.8 –1.1 668.7
Financial liabilities 2,661.5 – 2,661.5 – 2,661.5
5.95 Offsetting of financial assets and liabilities / Dec. 31, 2022
in EUR m
Gross amounts
of financial
assets and
liabilities Offsetting
Carrying
amounts in the
balance sheet
Enforceable
master netting
arrangements
and similar
arrangements
Dec. 31, 2021
Net amount
Trade receivables 2,310.9 –20.7 2,290.2 –5.2 2,285.0
Other financial assets 48.8 – 48.8 –1.6 47.2
Trade payables 1,810.9 –8.6 1,802.3 –5.2 1,797.1
Other liabilities 591.5 –12.1 579.4 –1.6 577.8
Financial liabilities 2,329.7 – 2,329.7 – 2,329.7
5.96 Offsetting of financial assets and liabilities / Dec.31, 2021
Nature and extent of risks arising from financial
instruments
According to IFRS 7, risks arising from financial instruments
can typically be divided into currency risk, interest rate risk,
credit risk and liquidity risk.
Currency risk
Currency risks arise particularly when monetary items or con-
tracted future transactions are in a currency other than the
functional currency of a company. Overall, this results in a
surplus of (partly intra-Group) monetary assets over liabilities
of EUR 296.4 million as at December 31, 2022 (Dec. 31, 2021:
EUR 71.5 million). Foreign exchange forwards, foreign ex-
change swaps and cross-currency interest rate swaps are
used as hedging instruments. The notional amount of the
hedges used was EUR –231.4 million as at December 31, 2022
(Dec. 31, 2021: EUR –41.4 million). The foreign exchange for-
wards and foreign exchange swaps used have maturities of
less than one year and are not included in hedge accounting.
If the euro had been worth 10% more or less against all
Offsetting of financial assets and liabilities
The gross amounts of financial assets and liabilities are
offset on the basis of netting arrangements in the balance
sheet as follows or they are subject to enforceable master
netting arrangements or similar agreements that do not meet
the requirements for offsetting in the balance sheet:
currencies as at December 31, 2022, translation of monetary
items in foreign currency into the Group currency, the euro,
allowing for the foreign exchange forward transactions and
foreign exchange swaps still open on December 31, 2022,
would have resulted in the following changes in net finance
costs:
2022 2021
in EUR m +10% –10 % +10% –10 %
USD –5.5 6.7 –3.7 4.5
GBP –2.6 3.2 0.6 –0.7
PLN 2.0 –2.4 0.4 –0.4
Other currencies 2.2 –2.7 0.8 –1.1
Tot a l –3.9 4.8 –1.9 2.3
5.97 Sensitivity analysis currency risk
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NOTES
Liabilities relating to the acquisition of non-controlling inter-
ests in Raj Petro and Zhongbai Xingye are in each case
included in a net investment hedge in accordance with IFRS
9.5.2 (c). The hedged items are the share of the net assets of
Raj Petro and Zhongbai Xingye attributable to Brenntag.
Exchange rate-related changes in the liabilities are recog-
nized within equity in the net investment hedge reserve. An
economic relationship exists in each case, as the hedging
instrument and the hedged item have values that move in the
opposite direction because of a change in the hedged cur-
rency risk. Any increase (decrease) in the Indian rupee (INR) or
Chinese yuan renminbi (CNY) against the euro leads to an
increase (decrease) in the net assets and an increase
(decrease) in the INR- or CNY-denominated liabilities. The
effectiveness of the hedging relationships was determined at
inception of the hedging relationships and is regularly deter-
mined on a retrospective basis to ensure that there is an eco-
nomic relationship between the hedged item and the hedging
instrument. There was no hedge ineffectiveness as at Decem-
ber 31, 2022. If the euro had been worth 10% more or less
against the Indian rupee (INR) as at December 31, 2022, the
net investment hedge reserve would have increased by
EUR2.5 million (Dec. 31, 2021: EUR4.2 million) or decreased
by EUR2.5 million (Dec. 31, 2021: EUR4.2 million). If the euro
had been worth 10% more or less against the Chinese yuan
renminbi (CNY) as at December 31, 2022, the net investment
hedge reserve would have increased by EUR 8.1 million
(Dec.31, 2021: EUR7.3 million) or decreased by EUR8.1 million
(Dec. 31, 2021: EUR7.3 million).
Net investment hedges at
Dec. 31, 2022 Raj Petro
Zhongbai
Xingye
Carrying amount of the portion of the
liability relating to the acquisition of
non-controlling interests included in the net
investment hedge in EUR m 25.0 81.2
Carrying amount of the portion of the
liability relating to the acquisition of
non-controlling interests included in the
net investment hedge in local currency
(INR or CNY m) 2,205.7 597.8
Hedge ratio 1:1 1:1
Hedge rate EUR/INR or EUR/CNY 84.2292 7.195
Change in carrying amount (in net invest-
ment hedge reserve) 2.1 1.7
Change in value of hedged item used to
determine hedge effectiveness –2.1 –1.7
5.98 Net investment hedges Dec. 31, 2022
Net investment hedges at
Dec. 31, 2021 TEE HAI Raj Petro
Zhongbai
Xingye
Carrying amount of the portion
of the liability relating to the
acquisition of non-controlling
interests included in the net
investment hedge in EUR m 66.8 41.5 72.9
Carrying amount of the portion
of the liability relating to the
acquisition of non-controlling
interests included in the net
investment hedge in local
currency (SGD, INR or CNY m) 97.5 3,034.0 496.9
Hedge ratio 1:1 1:1 1:1
Hedge rate EUR/SGD, EUR/INR
or EUR/CNY 1.6218 89.661 7.6244
Change in carrying amount (in
net investment hedge reserve) –3.7 –2.1 –3.9
Change in value of hedged item
used to determine hedge
effectiveness 3.7 2.1 3.9
5.99 Net investment hedges Dec. 31, 2021
In October 2021, Brenntag Finance B.V., Amsterdam, Nether-
lands, issued a EUR 500 million bond (Bond 2029). Brenntag
Finance B.V. swapped most of the proceeds from the Bond
2029 for US dollars by way of cross-currency interest rate
swaps and passed them on to Brenntag North America, Inc.,
Reading, USA, as an intra-Group loan. The intra-Group loan
and the cross-currency interest rate swaps were included in
cash flow hedge accounting so as to limit currency and inter-
est rate risk in the consolidated financial statements.
Critical terms matching is used to assess the effectiveness of
the hedging relationship. The economic relationship between
hedged items and hedging instruments results from closely
aligned terms. The cross-currency basis is not part of the
hedging relationship and is recognized in a separate compo-
nent of equity as a reserve for costs of hedging. The ineffec-
tive portions of the hedging relationship are determined using
the hypothetical derivative method. They result mainly from
counterparty risk and, if necessary, are recognized in profit or
loss within net interest expense. In financial year 2022, this
resulted in interest income of EUR0.7 million (2021: interest
expense of EUR0.7 million).
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NOTES
in EUR m
Cash flow
hedge
reserve
Reserve for costs
of hedging Total Deferred tax
Cash flow hedge
reserve incl.
deferred tax
Dec. 31, 2020 – – – – –
Changes in the fair value of hedging
instruments and hedging costs –21.5 7.2 –14.3 – –14.3
Reclassification to profit or loss 13.4 –0.2 13.2 – 13.2
Deferred tax relating to those items – – – 0.3 0.3
Dec. 31, 2021 –8.1 7.0 –1.1 0.3 –0.8
Changes in the fair value of hedging
instruments and hedging costs –46.3 1.5 –44.8 – –44.8
Reclassification to profit or loss 36.7 –0.8 35.9 – 35.9
Deferred tax relating to those items – – – –0.3 –0.3
Dec. 31, 2022 –17.7 7.7 –10.0 – –10.0
5.100 Change in cash flow hedge reserve
One significant component in the fair value measurement of
the cross-currency interest rate swaps is the exchange rate
of the underlying currencies (EUR/USD). As the exchange rate
component – moving in the opposite direction to the hedged
item – is designated as part of the hedging relationship,
ceteris paribus, an assumed change in the exchange rate
leads only to a change in the cash flow hedge reserve. If the
euro had been worth 10% more or less against the USdollar
as at December 31, 2022, the cash flow hedge reserve would
have decreased by EUR 4.5 million or increased by EUR5.5mil-
lion (December 31, 2021: increased by EUR1.7 million or de-
creased by EUR2.1 million).
Interest rate risk
Interest rate risks can occur due to changes in market interest
rates. The risks result from changes in the fair values of fixed-
rate financial instruments or from changes in the cash flows
of variable-rate financial instruments.
Due to the two fixed-rate bonds and the partly fixed-rate
promissory notes, just under 50% of the Brenntag Group’s
financial liabilities were hedged against the risk of interest
rate increases as at December 31, 2022.
If the market interest rate at December 31, 2022 had been 300
basis points (2021: 25 basis points) higher or lower (relative to
the total amount of variable-rate financial liabilities as at
December 31, 2022), the negative impact on net finance costs
would have been EUR 38.5 million or the positive impact
EUR32.8 million (2021: negative impact of EUR1.7 million or
positive impact of EUR1.7 million).
Interest rate-related fair value changes in the cross-currency
interest rate swaps have no impact on net income for the
financial year due to the agreed swap rates and hedge
accounting. Conversely, the current difference between the
euro market interest rate and the US dollar market interest
rate has a significant impact on the amount of the cash flow
hedge reserve; as at December 31, 2022, the USD market
interest rate was above the euro market interest rate. If the
euro market interest rate at December 31, 2022 had been 25
basis points higher or lower with the US dollar market interest
rate remaining unchanged, the cash flow hedge reserve
would have decreased by EUR 5.9 million to EUR –15.9 million
or increased by EUR 6.1 million to EUR –3.9 million (December
31, 2021: decreased by EUR 8.6 million or increased by EUR8.8
million).
Credit risk
Non-derivative financial instruments entail credit risk when
contractually agreed payments are not made by the contract
-
ing parties. The maximum credit risk on non-derivative finan-
cial instruments corresponds to their carrying amounts. The
expected credit risk from individual receivables is allowed for
by recognizing write-downs of the assets (see also Note 13.).
With the derivative financial instruments used, the maximum
credit risk is the total of all positive fair values of these instru-
ments as, in the event of non-performance by the contracting
parties, losses on assets would be restricted to this amount.
The following table shows the changes in equity resulting
from the hedging relationship:
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NOTES
Liquidity risk
Liquidity risk is the risk that the Brenntag Group may in future
not be able to meet its contractual payment obligations. Due
to the fact that the Brenntag Group’s business is not subject
to any pronounced seasonal fluctuations, there is relatively
little fluctuation in liquidity during the financial year.
To ensure that the Brenntag Group can pay at all times, it not
only has appropriate liquidity reserves in the form of cash and
cash equivalents but also credit lines under the syndicated
loan which can be utilized as needed. In order to identify the
liquidity risks, the Group has a multi-annual liquidity plan
which is regularly reviewed and adjusted if necessary.
In certain countries (e.g. China EUR 39.7 million (2021:
EUR24.3 million), South Africa EUR10.5 million (2021: EUR27.3
million), Russia EUR 15.5 million (2021: EUR4.1 million) and
India EUR9.6 million (2021: EUR9.6 million)), Brenntag has
local cash and cash equivalents at its disposal for cross-bor-
der transfers only subject to the applicable restrictions on for-
eign exchange transactions.
The undiscounted cash flows resulting from financial liabili-
ties are shown in the following table:
Cash flows 2023–2028 ff.
in EUR m
Carrying
amount
Dec. 31,
2022 2023 2024 2025 2026 2027 2028 ff.
Trade payables 1,862.0 1,862.0 – – – – –
Other liabilities 669.8 664.9 0.4 – – – 4.5
Liabilities relating to acquisition of non-controlling
interests 129.3 25.7 85.5 22.6 – – –
Liabilities under syndicated loan 551.9 5.1 546.8 – – – –
Other liabilities to banks 217.9 217.8 0.1 – – – –
Promissory notes (Schuldschein) 627.1 5.7 5.7 131.3 5.2 423.9 82.8
Bond 2025 599.2 6.8 6.8 606.8 – – –
Bond 2029 497.5 2.5 2.5 2.5 2.5 2.5 502.5
Bond (with Warrants) 2022 – – – – – – –
Lease liabilities 434.3 122.5 93.4 68.8 44.9 31.9 134.7
Derivative financial instruments 56.9 50.8
of which cash inflows – 453.8 – – – – –
of which cash outflows – 483.7 – – – – –
Other financial liabilities 111.0 84.4 14.1 7.8 3.5 1.2 –
Tot a l 5,756.9 3,027.3 755.3 839.8 56.1 459.5 775.3
5.101 Future cash flows from financial liabilities / Dec. 31, 2022
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NOTES
Cash flows 2022–2027 ff.
in EUR m
Carrying
amount
Dec. 31,
2021 2022 2023 2024 2025 2026 2027 ff.
Trade payables 1,802.3 1,802.3 – – – – –
Other liabilities 579.4 573.1 2.1 – – – 4.3
Liabilities relating to acquisition of non-controlling
interests 216.2 90.6 46.4 78.7 11.6 – –
Liabilities under syndicated loan 518.6 6.8 6.8 519.1 – – –
Other liabilities to banks 165.2 164.8 0.4 – – – –
Promissory notes (Schuldschein) –
– – – –
–
–
Bond 2025 598.2 6.8 6.8 6.8 606.8 – –
Bond 2029 497.1 2.5 2.5 2.5 2.5 2.5 502.5
Bond (with Warrants) 2022 437.0 449.8 – – – – –
Lease liabilities 445.6 121.8 90.3 69.3 53.0 32.3 132.7
Derivative financial instruments 21.5 15.2
of which cash inflows – 492.7 – – – – –
of which cash outflows – 501.9 – – – – –
Other financial liabilities 92.1 66.1 11.8 7.4 3.9 2.9 –
Tot a l 5,373.2 3,293.8 167.1 683.8 677.8 37.7 654.7
5.102 Future cash flows from financial liabilities / Dec. 31, 2021
Derivative financial instruments
The notional amount and fair values of derivative financial
instruments are shown in the table below:
Dec. 31, 2022 Dec. 31, 2021
in EUR m
Notional
amount
Positive
fair value
Negative
fair value
Notional
amount
Positive
fair value
Negative
fair value
Foreign exchange forward transactions and
foreign exchange swaps not included in hedge
accounting 896.3 2.8 6.3 792.6 8.4 6.3
Cross-currency interest rate swaps included in
hedge accounting 429.7 – 50.8 429.7 – 15.2
Call option 26.2 9.2 – 13.6 3.9 –
5.103 Derivative financial instruments
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NOTES
34.) Related parties
In the course of its normal business activities, Brenntag SE
also obtains services from and provides services for related
entities. These related entities are the subsidiaries included in
the consolidated financial statements as well as associates
accounted for using the equity method and their subsidiaries.
The following transactions with related parties were per-
formed on terms equivalent to those that prevail in arm’s
length transactions:
in EUR m 2022 2021
Sales from transactions with
associates 1.4 1.5
Goods delivered and services
rendered by associates 0.4 0.5
5.104 Transactions with related parties
in EUR m
Dec. 31,
2022
Dec. 31,
2021
Trade receivables from associates 0.1 0.3
Trade payables to associates – –
5.105 Receivables from and payables to related parties
The transactions of Brenntag SE with subsidiaries included
in the consolidated financial statements as well as between
included subsidiaries have been eliminated.
Related persons are the members of the Board of Manage-
ment and the Supervisory Board of Brenntag SE and mem-
bers of their families.
Remuneration of the Board of Management
The total remuneration of the Board of Management consists
of three components: a fixed Annual Base Salary, short-term,
capped variable cash remuneration (Annual Bonus) and long-
term, capped variable remuneration (Long-Term Incentive
Bonus). In addition to the above-mentioned remuneration
components, the members of the Board of Management
receive pension benefits, contractually agreed benefits in
kind and other benefits.
The Annual Base Salary is payable in twelve equal monthly
instalments. If the service agreement begins or ends during a
financial year, the Annual Base Salary for that financial year
is payable on a pro rata temporis basis.
The Annual Bonus depends on Brenntag’s business success
in the past financial year. It is calculated based on achieve-
ment of the targets set for specific key performance indica-
tors for the financial year. Under the Remuneration System
2020, the key performance indicators are organic EBITDA
growth (60%), the improvement in working capital turnover
(20%) and earnings per share growth (20%). In the case of the
Remuneration System 2015, the key performance indicators
are operating EBITDA (70%), working capital turnover (WCT;
15%) and conversion ratio (operating EBITDA/operating gross
profit; 15%). An individual performance multiplier is also used
to assess the performance of the Board of Management
members. The individual performance multiplier is set by the
Supervisory Board after each financial year in a range be-
tween 0.7 and 1.3. In doing so, the Supervisory Board takes
into account the individual financial and non-financial per-
formance that cannot be reasonably measured by applying
KPIs. This refers to topics of environmental and social respon-
sibility (e.g. succession planning, development of executive
employees of the company, environmental responsibility,
compliance) and sustainable corporate development
(e.g. integration of acquisitions). The final payout amount is
capped at max. 200% of the individual and contractually
agreed target amount (Cap).
The remuneration system for Dr. Christian Kohlpaintner (CEO),
Dr. Kristin Neumann, Henri Nejade, Steven Terwindt and Ewout
van Jarwaarde includes, among other components, long-
term variable remuneration in the form of virtual shares (Per-
formance Share Units). The value of the payout depends on
the relative performance of the Brenntag share compared
with two peer groups and the absolute change in the Brenntag
share price over a four-year performance period. The virtual
shares are granted in annual tranches. Payout is made follow-
ing completion of the performance period.
The annual virtual shares are awarded on January 1 of each
financial year. The number of shares to be granted initially is
calculated by dividing the individual and contractually
agreed grant amount by the arithmetic mean of the Brenntag
share closing prices in the Xetra trading system during the
last three months before the start of the performance period.
If the service agreement begins or ends during a financial
year, the grant amount for that financial year shall be calcu-
lated on a pro rata temporis basis.
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NOTES
The number of virtual shares finally granted at the end of the
four-year performance period depends on two performance
criteria that are each weighted at 50%: the outperformance
of the Total Shareholder Return (TSR) of the Brenntag share
compared with the performance of the MDAX, or since the 2022
tranche compared with the performance of the DAX, and the
average TSR of a selectively compiled peer group of global
competitors.
Target achievement of each performance criterion is calcu-
lated by subtracting the performance of the MDAX/DAX or the
average TSR of the selected peer group from the TSR of the
Brenntag share. If the performance of the MDAX/DAX or the
average TSR of the selected peer group equals the TSR of the
Brenntag share, target achievement is 100%. If the TSR of the
Brenntag share outperforms the MDAX/DAX or the average
TSR of the selected peer group by 25% or more percentage
points, target achievement is 150%. If the TSR of the Brenntag
share underperforms the MDAX/DAX or the average TSR of
the selected peer group by 25% or more percentage points,
target achievement is 0%. Values in-between are determined
by linear interpolation. Overall target achievement is calcu-
lated by multiplying the target achievement figures of the two
performance criteria by their respective weightings and then
adding together these two weighted target achievement
figures.
The number of virtual shares finally granted at the end of the
four-year performance period is calculated by multiplying the
number of virtual shares initially granted by the overall target
achievement.
The payout amount is determined by multiplying the number
of virtual shares finally granted by the arithmetic mean of the
Brenntag share closing prices in the Xetra trading system
during the last three months prior to the end of the perfor-
mance period plus dividend payments during the perfor-
mance period. The payout amount is capped at max. 200%
of the individual and contractually set target grant amount
(Cap).
The remuneration system used for Dr. Christian Kohlpaintner
(CEO), Dr. Kristin Neumann, Henri Nejade, Steven Terwindt and
Ewout van Jarwaarde in 2022 differs from the remuneration
system for Georg Müller and for Karsten Beckmann and
Markus Klähn, neither of whom was a serving Board of Man-
agement member in 2022.
For the former members of the Board of Management of
Brenntag SE who were appointed to the Board prior to 2020,
there is a different remuneration system, which likewise
includes a long-term share-based remuneration program
(Long-Term Incentive Plan). In this case, the long-term variable
remuneration is awarded every year and is partly based on
the performance of the Brenntag share. On the basis of a con-
tractually set Annual Target Amount, this remuneration com-
ponent is subject to a vesting period of in each case three
years. 50% of the Target Amount is contingent on the change
in the value of the company’s shares during these three years
(External LTI Portion) and 50% is contingent on the long-term
development of specific Group-wide KPIs (Internal LTI Portion).
50% of the External LTI Portion is measured by the absolute
change in the total shareholder return for the company’s
shares during the vesting period (Absolute External LTI Por-
tion), while the other 50% of the External LTI Portion is mea-
sured by the relative change in the total shareholder return
for the company’s shares in comparison to the performance
of the MDAX or, since the 2021 tranche, the DAX during the
vesting period (Relative External LTI Portion). For every per-
centage point by which the average share price on the last
trade day of the vesting period exceeds or falls short of the
average share price on the last trade day before the vesting
period, the Absolute External LTI Portion is increased or de-
creased by 2%. For every percentage point by which the MDAX
is over- or underperformed in the vesting period, the Relative
External LTI Portion is increased or decreased by 3%. The over-
all External LTI Portion at the end of the relevant vesting
period equals the sum of the Absolute External LTI Portion and
Relative External LTI Portion. The Absolute External LTI Portion
and Relative External LTI Portion may not be less than EUR 0.
The External LTI Portion is capped overall at 200% of the
contractually set Target Amount for the External LTI Portion.
The Internal LTI Portion is measured by the following KPI
targets, which are agreed at the end of each financial year
for the following vesting period in an LTI Bonus Plan: EBITDA,
ROCE and earnings per share. At the end of each financial
year during a vesting period, the achievement of the KPI tar-
gets in the particular financial year is calculated for a share
of 1/3 of the Internal LTI Portion. For every percentage point
by which the targets of a given KPI are over- or underper-
formed in the particular financial year, the Annual Internal LTI
Portion is increased or decreased by 3%. This may also lead
to a negative Annual Internal LTI Portion. The overall Internal
LTI Portion at the end of the relevant vesting period equals the
sum of the Annual Internal LTI Portions. The Internal LTI Portion
is also capped at 200% of the contractually set Target
Amount for the Internal LTI Portion. The overall Internal LTI
Portion for a vesting period may not be less than EUR 0. The
Long-Term Incentive Bonus for each financial year equals the
sum of the External and Internal LTI Portions.
The Long-Term Incentive Bonus for each financial year is also
capped at 200% of the Target Amount (LTI Cap).
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NOTES
Individual arrangements have been agreed with the mem-
bers of the Board of Management with regard to building up
pension entitlements. One member of the Board of Manage-
ment receives an annual amount of EUR 300,000 and may
decide at his own discretion how to use this money. The an-
nual amount made available is paid in twelve equal monthly
instalments, in each case at the end of the month. If the ser-
vice agreement begins or ends during a financial year, the
annual amount for that financial year will be granted on a pro
rata temporis basis. For the purpose of building up pension
entitlements, the other members of the Board of Manage-
ment receive an annual amount of 13.5% of their Annual Base
Salary and the short-term variable remuneration (on 100%
target achievement, i.e. irrespective of the actual targets
achieved). In the case of one member of the Board of Man-
agement, the relevant amount is transferred annually into the
Deferred Compensation Contingency Plan of Brenntag SE.
This plan also contains an arrangement for a widows and
orphans pension which would amount to 60% and 20% re-
spectively of the full pension entitlements. The pension liabil-
ity insurance policy taken out with the Board of Management
member as beneficiary are pledged to him. Another member
of the Board of Management has the option either to use this
amount in whole or in part for contributions to his French
social insurance or to also pay it annually into the Deferred
Compensation Contingency Plan of Brenntag SE. Further
members of the Board of Management are paid out the rele-
vant amount for building up pension entitlements every year
and may decide at their own discretion how to use this money.
The members of the Board of Management also receive ben-
efits in kind and other benefits, such as a company car, also
for private use, or a car allowance and benefits for health
care and long-term care insurance.
The following table shows the recognition of the Board of
Management remuneration for the Board of Management
members serving in each financial year:
in EUR m 2022 2021
Short-term benefits 5.8 5.6
Post-employment benefits 1.4 4.8
Share-based remuneration 7.2 8.5
Tot a l 14.4 18.9
5.106 Liabilities recognized for Board of Management remunera-
tion in accordance with IFRSs
For the Board of Management members serving in financial
year 2022, the present value of defined benefit obligations is
EUR 5.7 million (Dec. 31, 2021: EUR 8.7 million) and the fair
value of plan assets EUR 4.3 million (Dec. 31, 2021: EUR3.9
million). In this context, the capitalized surrender value of pen-
sion liability insurance is EUR 4.3 million (Dec. 31, 2021:
EUR3.9 million).
in EUR m 2022 2021
Short-term benefits 10.2 9.9
Post-employment benefits (excluding
interest expense) 0.4 0.8
Share-based remuneration 0.8 5.6
Tot a l 11.4 16.3
5.107 Board of Management remuneration expense
in accordance with IFRSs
The service agreements of the Board of Management mem-
bers end automatically on specified dates without any notice
of termination being required. The employment of Board of
Management members may only be terminated prematurely
for good cause or by mutual agreement. If employment is ter-
minated prematurely, the service agreement limits any sev-
erance pay to the value of twice the total annual remunera-
tion, but no more than the amount of remuneration that
would be paid until the end of the term of the service agree-
ment. As at December 31, 2022, the maximum amount of
severance payable would have been EUR 29.0 million (Dec. 31,
2021: EUR 21.2 million). A post-contractual non-compete
clause has been agreed with several Board of Management
members who are incentivized under the Remuneration Sys-
tem 2020. The post-contractual non-compete clause applies
for a period of 24months after the termination of the service
agreement. During this period, these Board of Management
members receive a continuous payment amounting to 75%
of their Annual Base Salary. Any earnings pursuant to Section
74c of the German Commercial Code (HGB) are deducted
from this payment. There are no separate change-of-control
arrangements.
For former members of the Board of Management, the pres-
ent value of defined benefit obligations is EUR 7.9 million
(Dec. 31, 2021: EUR 12.9 million) and the fair value of plan
assets EUR 6.3 million (Dec. 31, 2021: EUR 7.2 million). In this
context, the capitalized surrender value of pension liability
insurance is EUR 6.3 million (Dec. 31, 2021: EUR 7.2 million).
In accordance with the German Commercial Code (HGB), the
total remuneration of the Board of Management members
serving in financial year 2022 amounts to EUR 11.5 million
(2021: EUR 15.3 million).
Of the total remuneration, an amount of EUR 1.3 million (2021:
EUR 5.4 million, in each case the fair value at the grant date)
is attributable to share-based remuneration programs.
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NOTES
Detailed information on the Board of Management remuner-
ation systems and the remuneration of each member of the
Board of Management is provided in the remuneration report.
In financial year 2022, the cost of pension commitments
(defined benefit plans) under the German Commercial Code
(HGB) to former members of the Board of Management
amounted to EUR 0.2 million (2021: EUR 0.9 million). In addi-
tion, income of EUR 0.0 million (2021: EUR 0.3 million) was
recognized. The income in financial year 2021 is mainly attrib-
utable to a reduction in remuneration entitlements from the
Long-Term Incentive Bonus 2020 that was negotiated in the
context of a supplement to the termination agreement.
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board comprises purely
fixed remuneration.
The members of the Supervisory Board each receive annual
fixed remuneration in the amount of EUR 120.0k in addition to
reimbursement of their expenses. The Chair of the Supervisory
Board receives base remuneration of EUR 210.0k and the
Deputy Chair EUR 150.0k. The Chair of the Audit Committee
receives an additional EUR 85.0k per year and every other
member of the Audit Committee an additional EUR25.0k per
year. The Chairs of the Presiding and Nomination Committee
and the Transformation Committee receive an additional
EUR37.5k and every other member of the Presiding and Nom-
ination Committee and Transformation Committee an addi-
tional EUR 25.0k per year.
The total remuneration of the members of the Supervisory
Board due in the short term amounts to EUR 1.2 million for
financial year 2022 (2021: EUR 1.2 million).
The Supervisory Board remuneration system and the remu-
neration of each member of the Supervisory Board are
detailed in the remuneration report.
Apart from the aforementioned, there were no significant
transactions with related persons.
35.) Fees for the auditors of the
consolidated financial statements
The following fees for the services of the auditors of the con-
solidated financial statements, PricewaterhouseCoopers
GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, were
recognized as expenses:
in EUR m 2022 2021
Financial statement audit services 1.6 1.8
Other assurance services 0.2 0.1
Tax advisory services 0.0 0.0
Other services rendered 0.0 0.0
Tot a l 1.8 1.9
5.108 Fees for the auditors of the
consolidated financial statements
Fees for financial statement audit services for financial year
2022 consist mainly of payments for the statutory audit of the
consolidated financial statements, the review of the quarterly
reporting and the statutory audit of the annual financial
statements of Brenntag SE and its domestic subsidiaries.
Fees for other assurance services in financial year 2022 relate
to the engagement to provide assurance on the Brenntag
Group’s separate combined non-financial report and assur-
ance services related to Brenntag SE’s Board of Management
remuneration.
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NOTES
36.) Exemptions pursuant to Section 264,
para. 3 / Section 264b of the
German Commercial Code
For financial year 2022, the following subsidiaries of
Brenntag SE are making use of the exemptions pursuant to
Section 264, para. 3 and Section 264b of the German Com-
mercial Code:
■
Brenntag Holding GmbH, Essen
■
Brenntag Germany Holding GmbH, Essen
■
Brenntag Foreign Holding GmbH, Essen
■
Brenntag Beteiligungs GmbH, Essen
■
BRENNTAG GmbH, Duisburg
■
BRENNTAG International Chemicals GmbH, Essen
■
Brenntag Real Estate GmbH, Essen
■
BCD Chemie GmbH, Hamburg
■
CLG Lagerhaus GmbH & Co. KG, Essen
■
Brenntag European Services GmbH & Co. KG, Zossen
■
CM Komplementär 03-018 GmbH & Co. KG, Essen
■
CM Komplementär 03-019 GmbH & Co. KG, Essen
■
CM Komplementär 03-020 GmbH & Co. KG, Essen
■
ACU PHARMA und CHEMIE GmbH, Apolda
37.) Declaration of conformity
with the German Corporate
Governance Code
On December 13, 2022, the Board of Management and Super-
visory Board issued the declaration of conformity with the
recommendations of the Government Commission “German
Corporate Governance Code” for financial year 2022 as re-
quired by Section 161 of the German Stock Corporation Act.
The declaration of conformity can be found in the section “To
Our Shareholders” in Brenntag SE’s 2022 annual report and
can also be viewed at any time on the Brenntag SE website
(https://corporate.brenntag.com/en/about/corporate-gover-
nance/corporate-governance-code/).
38.) Events after the reporting period
The most important component in the financing structure of
Brenntag SE is the Group-wide syndicated loan agreement.
As the existing loan would have matured in January 2024,
Brenntag agreed a new syndicated loan totaling the equiva-
lent of EUR1.5 billion with a consortium of international banks
in February 2023. The new loan has a term ending in 2028.
It is based on variable interest rates with margins depending
on the credit rating, and is divided into two revolving credit
facilities – one credit facility in the amount of EUR 1 billion and
a USD credit facility in the amount of USD525.0 million (euro
equivalent as at Dec. 31, 2022: EUR492.2 million). For the first
time, the margin is also linked to the achievement of certain
Brenntag Group sustainability targets.
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NOTES
Essen, March 6, 2023
Brenntag SE
BOARD OF MANAGEMENT
Dr. Christian Kohlpaintner Henri Nejade Dr. Kristin Neumann
Steven Terwindt Ewout van Jarwaarde
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264Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
Annex
Annex: List of shareholdings in accordance with Section 313,
para. 2 of the German Commercial Code as at December 31, 2022
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
1 Brenntag SE Essen
Consolidated subsidiaries
Algeria
2 Alliance Chimie Algerie SPA Algiers 0.00 100.00 99.94 70
Argentina
3 Brenntag Argentina S.A. Buenos Aires 0.00 90.00
10.00
100.00 116
125
Australia
4 Brenntag Australia Pty. Ltd. Mulgrave 0.00 100.00 100.00 152
5 RAVENSWOOD INGREDIENTS PTY. LTD. Mulgrave 0.00 100.00 100.00
2)
4
Bangladesh
6 BRENNTAG BANGLADESH FORMULATION LTD. Dhaka 0.00 100.00 100.00 116
7 BRENNTAG BANGLADESH LTD. Dhaka 0.00 100.00 100.00 116
8 BRENNTAG BANGLADESH SERVICES LTD. Dhaka 0.00 100.00 100.00 7
Belgium
9 BRENNTAG NV Deerlijk 0.00 99.99
0.01
100.00 69
44
10 European Polymers and Chemicals Distribution BVBA Deerlijk 0.00 100.00 100.00 132
Bolivia
11 Brenntag Bolivia S.R.L. Santa Cruz 0.00 90.00
10.00
100.00 116
124
Brazil
12 Brenntag Quimica Brasil Ltda. Guarulhos, Estado
de Sao Paulo
0.00 100.00
0.00
100.00 116
124
13 Quimilog Transportes e Logística Ltda. Brusque 0.00 100.00 100.00 12
Bulgaria
14 BRENNTAG BULGARIA EOOD Sofia 0.00 100.00 100.00 116
Chile
15 Brenntag Chile Comercial e Industrial Limitada Santiago 0.00 95.00
5.00
100.00 116
124
China
16 Brenntag (Shanghai) Enterprise Management Co.,
Ltd.
Shanghai 0.00 100.00 100.00 116
17 Brenntag (Zhangjiagang) Chemical Co., Ltd Zhangjiagang 0.00 100.00 100.00 84
18 Brenntag Cangzhou Chemical Co., Ltd Cangzhou 0.00 79.40
20.60
100.00 26
84
19 Guangzhou Fan Ya Jia Rong Trading Co., Ltd. Guangzhou 0.00 60.00
40.00
100.00 22
25
20 Guangzhou Wellstar Trading Co., Ltd. Guangzhou 0.00 100.00 100.00 83
21 Shanghai Anyijie Chemical Logistic Co., Ltd. Shanghai 0.00 100.00 100.00 26
22 Shanghai Jia Rong Trading Co., Ltd. Shanghai 0.00 100.00 100.00 26
23 Shanghai Wellstar Trading Co., Ltd. Shanghai 0.00 100.00 100.00 83
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265Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
24 Shenzhen Wellstar Trading Co., Ltd. Shenzhen 0.00 100.00 100.00 83
25 Tianjin Tai Rong Chemical Trading Co., Ltd. Tianjin 0.00 100.00 100.00 22
26 Tianjin Zhong Yung Chemical Warehousing Co., Ltd. Tianjin 0.00 100.00 100.00 84
27 ZhongYung (GuangDong) Chemical Distribution
Service Co., Ltd
Dongguan 0.00 100.00 100.00 82
28 Zhongbai Food Technology (Shanghai) Co., Ltd Shanghai 0.00 100.00 67.00 29
29 Zhongbai Xingye Food Technology (Beijing) Co., Ltd Beijing 0.00 67.00 67.00 116
Costa Rica
30 Brenntag Business Services Sociedad de
Responsabilidad Limit
Heredia, Barreal 0.00 100.00 100.00 116
31 Quimicos Holanda Costa Rica S.A. San Jose 0.00 100.00 100.00 116
Curaçao
32 H.C.I. (Curaçao) N.V. i. L. Curaçao 0.00 100.00 100.00 116
33 HCI Shipping N.V. Curaçao 0.00 100.00 100.00 32
Denmark
34 Aktieselskabet af 1. Januar 1987 Ballerup 0.00 100.00 100.00 35
35 Brenntag Nordic A/S Ballerup 0.00 100.00 100.00 116
Germany
36 ACU PHARMA und CHEMIE GmbH Apolda 0.00 100.00 100.00 47
37 BBG - Berlin-Brandenburger Lager- und Distributions-
gesellschaft Biesterfeld Brenntag mbH
Hoppegarten 0.00 50.00
50.00
100.00 38
47
38 BCD Chemie GmbH Hamburg 0.00 100.00 100.00 47
39 BRENNTAG GmbH Duisburg 0.00 100.00 100.00 47
40 BRENNTAG International Chemicals GmbH Essen 0.00 100.00 100.00 47
41 Blitz 03-1161 GmbH Mülheim an der
Ruhr
0.00 100.00 100.00 46
42 Blitz 03-1162 GmbH Mülheim an der
Ruhr
0.00 100.00 100.00 54
43 Blitz 03-1163 GmbH Mülheim an der
Ruhr
0.00 100.00 100.00 55
44 Brenntag Beteiligungs GmbH Essen 0.00 100.00 100.00 49
45 Brenntag European Services GmbH & Co. KG Zossen 0.00 100.00
0.00
100.00 44
51
46 Brenntag Foreign Holding GmbH Essen 0.00 100.00 100.00 44
47 Brenntag Germany Holding GmbH Essen 0.00 100.00 100.00 44
48 Brenntag Global Services GmbH Zossen 0.00 100.00 100.00 45
49 Brenntag Holding GmbH Essen 100.00 0.00 100.00 1
50 Brenntag Real Estate GmbH Essen 0.00 100.00 100.00 44
51 Brenntag Vermögensmanagement GmbH Zossen 0.00 100.00 100.00 44
52 CLG Lagerhaus GmbH Duisburg 0.00 100.00 100.00 47
53 CLG Lagerhaus GmbH & Co. KG Essen 0.00 100.00
0.00
100.00 47
52
54 CM Komplementär 03-018 GmbH & Co. KG Essen 0.00 100.00
0.00
100.00 41
46
55 CM Komplementär 03-019 GmbH & Co. KG Essen 0.00 100.00
0.00
100.00 42
54
56 CM Komplementär 03-020 GmbH & Co. KG Essen 0.00 100.00
0.00
100.00 43
55
57 CVB Albert Carl GmbH & Co. KG Berlin Berlin 0.00 100.00
0.00
51.00 58
61
58 CVH Chemie-Vertrieb GmbH & Co. Hannover KG Hanover 0.00 51.00
0.00
51.00 47
59
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266Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
59 CVH Chemie-Vertrieb Verwaltungsgesellschaft mbH Hanover 0.00 51.00 51.00 47
60 CVM Chemie-Vertrieb Magdeburg GmbH & Co. KG Magdeburg 0.00 100.00
0.00
51.00 58
61
61 CVP Chemie-Vertrieb Berlin GmbH Berlin 0.00 100.00 51.00 58
62 ROSEA Grundstücks-Vermietungsgesellschaft mbH &
Co. Objekt Hüttenheim KG
Düsseldorf 0.00 94.00 94.00
3)
47
Dominican Republic
63 BRENNTAG CARIBE S.R.L. Santo Domingo 0.00 100.00
0.00
100.00 116
125
Ecuador
64 BRENNTAG ECUADOR S.A. Guayaquil 0.00 100.00
0.00
100.00 116
125
El Salvador
65 BRENNTAG EL SALVADOR, S.A. DE C.V. Soyapango 0.00 100.00
0.00
100.00 116
124
Finland
66 Brenntag Nordic OY Vantaa 0.00 100.00 100.00 116
France
67 BRACHEM FRANCE HOLDING SAS Chassieu 0.00 100.00 100.00 49
68 BRENNTAG EXPORT SARL Vitrolles 0.00 100.00 99.94 71
69 BRENNTAG FRANCE HOLDING SAS Chassieu 0.00 100.00 100.00 67
70 BRENNTAG MAGHREB SAS Vitrolles 0.00 100.00 99.94 68
71 BRENNTAG SA Chassieu 0.00 99.94 99.94 69
72 METAUSEL SAS Chassieu 0.00 100.00 99.94 71
73 Multisol France SAS Villebon sur Yvette 0.00 100.00 100.00 69
74 Multisol International Services SAS Sotteville Les
Rouen
0.00 80.00
20.00
100.00 69
73
75 SOCIETE COMMERCIALE TARDY ET CIE. SARL i. L. Vitrolles 0.00 51.00 50.97 68
Ghana
76 Brenntag Ghana Limited Accra 0.00 100.00 100.00 116
Greece
77 Brenntag Hellas Chimika Monoprosopi EPE Penteli 0.00 100.00 100.00 130
Guatemala
78 BRENNTAG GUATEMALA S.A. Guatemala City 0.00 99.97
0.03
100.00 116
125
Guyana
79 ALPHA CHEMICAL GUYANA INC. Georgetown 0.00 100.00 100.00 116
Honduras
80 BRENNTAG HONDURAS, S.A. San Pedro Sula 0.00 98.51
1.49
100.00 116
125
Hong Kong
81 Brenntag Chemicals (HK) Pte Limited Hong Kong 0.00 100.00 100.00 152
82 Hong Kong Dongguan Zhongrong Investment Co
Limited
Hong Kong 0.00 100.00 100.00 84
83 WELLSTAR ENTERPRISES (HONG KONG) COMPANY
LIMITED
Hong Kong 0.00 100.00 100.00 116
84 Zhong Yung (International) Chemical Co., Limited Hong Kong 0.00 100.00 100.00 116
India
85 Brenntag Ingredients (India) Private Limited Mumbai 0.00 100.00 100.00 152
86 RAJ PETRO SPECIALITIES PRIVATE LIMITED Mumbai 0.00 65.00 65.00 116
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267Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
Indonesia
87 PT. Brenntag Jakarta Selatan 0.00 100.00 100.00 152
88 PT. Dharmala HCI i. L. Jakarta 0.00 91.14 91.14 116
Ireland
89 Brenntag Chemicals Distribution (Ireland) Limited Dublin 0.00 100.00 100.00 211
Israel
90 Biochem Trading 2011 Ltd. Be'er Ya'akov 0.00 100.00 100.00
2)
91
91 Y.S. Ashkenazi Agencies Ltd. Be'er Ya'akov 0.00 100.00 100.00
2)
116
Italy
92 AQUADEPUR SRL Cogliate 0.00 100.00 100.00 93
93 BRENNTAG S.P.A. Assago 0.00 100.00 100.00 116
Canada
94 BRENNTAG CANADA INC. Toronto 0.00 100.00 100.00 127
Kenya
95 Brenntag Kenya Limited Nairobi 0.00 100.00 100.00 116
Colombia
96 BRENNTAG COLOMBIA S.A. Bogotá D.C. 0.00 94.87
4.15
0.41
0.38
0.19
100.00 116
124
127
125
121
97 BRENNTAG COLOMBIA ZONA FRANCA S.A.S. Barranquilla 0.00 100.00 100.00 96
98 CONQUIMICA SAS Itagui 0.00 100.00 100.00 96
Croatia
99 BRENNTAG HRVATSKA d.o.o. Zagreb 0.00 100.00 100.00 130
Latvia
100 SIA BRENNTAG LATVIA Riga 0.00 100.00 100.00 139
101 SIA DIPOL BALTIJA Riga 0.00 100.00 100.00 198
Lithuania
102 UAB BRENNTAG LIETUVA Kaunas 0.00 100.00 100.00 139
Malaysia
103 BRENNTAG BUSINESS SERVICES SDN. BHD. Kuala Lumpur 0.00 100.00 100.00 116
104 BRENNTAG MALAYSIA SDN. BHD. Kuala Lumpur 0.00 100.00 100.00 116
105 BRENNTAG SDN. BHD. Kuala Lumpur 0.00 100.00 100.00 152
106 Brenntag Chemicals Malaysia Sdn. Bhd. Kuala Lumpur 0.00 30.00 30.00 116
Morocco
107 ALCOCHIM MAROC S.A.R.L. Casablanca 0.00 100.00 99.94 70
108 BRENNTAG MAROC S.A.R.L associé unique Casablanca 0.00 100.00 99.94 70
Mauritius
109 Brenntag Chemicals Mauritius Limited Port Louis 0.00 100.00 100.00 116
110 Multisol Mauritius Limited Port Louis 0.00 100.00 100.00 215
Mexico
111 AMCO INTERNACIONAL S.A. DE C.V. Mexico City 0.00 100.00
0.00
100.00 112
113
112 BRENNTAG MÉXICO, S.A. DE C.V. Cuautitlan Izcalli 0.00 100.00
0.00
100.00 116
124
113 BRENNTAG PACIFIC, S. DE R.L. DE C.V. Tijuana 0.00 99.00
1.00
100.00 194
192
New Zealand
114 BRENNTAG NEW ZEALAND LIMITED Wellington 0.00 100.00 100.00 152
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268Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
Nicaragua
115 BRENNTAG NICARAGUA, S.A. Managua 0.00 100.00
0.00
100.00 116
125
Netherlands
116 BRENNTAG (Holding) B.V. Amsterdam 0.00 74.00
26.00
100.00 120
46
117 BRENNTAG Coöperatief U.A. Amsterdam 0.00 99.00
1.00
100.00 192
191
118 BRENNTAG Dutch C.V. Amsterdam 0.00 99.90
0.10
100.00 116
124
119 Brenntag Finance B.V. Amsterdam 0.00 100.00 100.00 116
120 Brenntag HoldCo B.V. Amsterdam 0.00 100.00 100.00 49
121 Brenntag Nederland B.V. Dordrecht 0.00 100.00 100.00 116
122 Brenntag Vastgoed B.V. Dordrecht 0.00 100.00 100.00 121
123 DigiB B.V. Amsterdam 0.00 100.00 100.00 116
124 H.C.I. Chemicals Nederland B.V. Amsterdam 0.00 100.00 100.00 116
125 HCI Central Europe Holding B.V. Amsterdam 0.00 100.00 100.00 116
126 HCI U.S.A. Holdings B.V. Amsterdam 0.00 100.00 100.00 117
127 Holland Chemical International B.V. Dordrecht 0.00 100.00 100.00 116
Nigeria
128 Brenntag Chemicals Nigeria Limited Matori-Lagos 0.00 90.00
10.00
100.00 116
125
Norway
129 BRENNTAG NORDIC AS Borgenhaugen 0.00 100.00 100.00 149
Austria
130 Brenntag Austria GmbH Vienna 0.00 99.90
0.10
100.00 131
44
131 Brenntag Austria Holding GmbH Vienna 0.00 100.00 100.00 9
132 JLC-Chemie Handels GmbH Wiener Neustadt 0.00 100.00 100.00 130
133 Provida GmbH Vienna 0.00 100.00 100.00 130
Panama
134 BRENNTAG PANAMA S.A. Panama City 0.00 100.00 100.00 116
Peru
135 BRENNTAG PERU S.A.C. Lima 0.00 100.00
0.00
100.00 116
125
Philippines
136 BRENNTAG INGREDIENTS INC. Muntinlupa City 0.00 100.00 100.00 116
Poland
137 BCD POLYMERS Sp. z o.o. Suchy Las 0.00 100.00 100.00 10
138 BCD Polska Sp. z o.o Warsaw 0.00 100.00 100.00 10
139 BRENNTAG Polska sp. z o.o. Kedzierzyn-Kozle 0.00 61.00
39.00
100.00 9
130
140 Eurochem Service Polska sp. z o.o. Warsaw 0.00 100.00 100.00 139
141 Fred Holmberg & Co Polska Sp.z o.o. Warsaw 0.00 100.00 100.00 139
Portugal
142 Brenntag Portugal - Produtos Quimicos, Lda. Lordelo 0.00 73.95
26.05
100.00 46
116
Puerto Rico
143 Brenntag Puerto Rico, Inc. Caguas 0.00 100.00 100.00 116
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269Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
Republic of Serbia
144 Brenntag d.o.o. Beograd-Savski Venac Belgrade 0.00 100.00 100.00 116
Romania
145 BRENNTAG S.R.L. Chiajna 0.00 100.00 100.00 125
Russia
146 OOO BRENNTAG Moscow 0.00 100.00 100.00 130
147 OOO MULTISOL Moscow 0.00 100.00 100.00 214
Saudi Arabia
148 Brenntag Saudi Arabia Limited Riad 0.00 75.00 38.25 206
Sweden
149 Brenntag Nordic AB Malmö 0.00 100.00 100.00 116
Switzerland
150 Brenntag Schweizerhall AG Basel 0.00 100.00 100.00 69
Singapore
151 BRENNTAG ASIA PACIFIC PTE. LTD. Singapore 0.00 100.00 100.00 116
152 BRENNTAG PTE. LTD. Singapore 0.00 100.00 100.00 151
153 DigiB Asia Pacific Pte. Ltd. Singapore 0.00 100.00 100.00 123
154 TEE HAI CHEM PTE LTD Singapore 0.00 100.00 100.00 116
Slovakia
155 BRENNTAG SLOVAKIA s.r.o. Pezinok 0.00 100.00 100.00 130
Slovenia
156 BRENNTAG LJUBLJANA d.o.o. Ljubljana 0.00 100.00 100.00 130
Spain
157 BRENNTAG QUIMICA, S.A.U. Dos Hermanas 0.00 100.00 100.00 69
158 Devon Chemicals S.A. Barcelona 0.00 100.00 100.00 116
Sri Lanka
159 BRENNTAG LANKA (PRIVATE) LIMITED Athurugiriya 0.00 100.00 100.00 116
South Africa
160 BRENNTAG SOUTH AFRICA (PTY) LTD Midrand 0.00 100.00 100.00 116
161 FORMERBSA (PTY) LTD Cape Town 0.00 100.00 100.00 116
162 LIONHEART CHEMICAL ENTERPRISES (PROPRIETARY)
LIMITED
Cape Town 0.00 100.00 100.00 116
163 Multisol South Africa (Proprietary) Limited Cape Town 0.00 100.00 100.00 215
164 PROTANK (Proprietary) Limited Durban 0.00 71.10 71.10 160
South Korea
165 Brenntag Korea Co., Ltd. Gwacheon-si 0.00 100.00 100.00 46
Taiwan
166 Brenntag Taiwan Co., Ltd. Taipei 0.00 100.00 100.00 116
167 NEUTO CHEMICAL CORP. Taipei 0.00 100.00 100.00 116
Tanzania
168 Brenntag Tanzania Limited Dar es Salam 0.00 99.99
0.01
100.00 116
125
Thailand
169 Brenntag Enterprises (Thailand) Co., Ltd. Bangkok 0.00 51.00
49.00
100.00 172
116
170 Brenntag Ingredients (Thailand) Public Company
Limited
Bangkok 0.00 51.00
49.00
100.00 169
116
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270Annual Report 2022 Brenntag SE
CONSOLIDATED
FINANCIAL STATEMENTS
ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
171 Brenntag Lubricants (Thailand) Co., Ltd. Bangkok 0.00 98.00
1.00
1.00
100.00 116
151
152
172 Brenntag Service (Thailand) Co., Ltd. Bangkok 0.00 51.01
48.99
100.00 169
116
173 Thai-Dan Corporation Limited Bangkok 0.00 99.90
0.05
0.05
100.00 170
169
172
Czech Republic
174 Brenntag CR s.r.o. Prague 0.00 100.00 100.00 130
Turkey
175 BRENNTAG KIMYA TICARET LIMITED SIRKETI Istanbul 0.00 100.00 100.00 130
Tunisia
176 Brenntag Tunisie SARL Fouchana 0.00 100.00 99.94 70
Uganda
177 Brenntag Uganda Limited Kampala 0.00 99.00
1.00
100.00 116
125
Ukraine
178 TOB BRENNTAG UKRAINE Kyiv 0.00 100.00 100.00 198
179 TOB TRIDE Kyiv 0.00 100.00 100.00 130
Hungary
180 BCB Union Kft. Budapest 0.00 96.67
3.33
100.00 116
124
181 BRENNTAG Hungaria Kft. Budapest 0.00 97.93
2.07
100.00 130
125
Uruguay
182 BRENNTAG SOURCING URUGUAY S.A. Colonia del
Sacramento
0.00 100.00 100.00 116
USA
183 Alphamin Inc. Dallas/Texas 0.00 100.00 100.00 9
184 Altivia Louisiana, L.L.C. St. Gabriel/
Louisiana
0.00 100.00 100.00 195
185 BWEV, LLC Wilmington/
Delaware
0.00 100.00 100.00 189
186 Brenntag Global Marketing, LLC Wilmington/
Delaware
0.00 100.00 100.00 192
187 Brenntag Great Lakes, LLC Chicago/Illinois 0.00 100.00 100.00 126
188 Brenntag Latin America, Inc. Wilmington/
Delaware
0.00 100.00 100.00 192
189 Brenntag Lubricants, LLC Wilmington/
Delaware
0.00 100.00 100.00 192
190 Brenntag Mid-South, Inc. Henderson/
Kentucky
0.00 100.00 100.00 192
191 Brenntag North America Foreign Holding, LLC Wilmington/
Delaware
0.00 100.00 100.00 192
192 Brenntag North America, Inc. Wilmington/
Delaware
0.00 100.00 100.00 116
193 Brenntag Northeast, LLC Wilmington/
Delaware
0.00 100.00 100.00 192
194 Brenntag Pacific, Inc. Wilmington/
Delaware
0.00 100.00 100.00 192
195 Brenntag Southwest, Inc. Longview/Texas 0.00 100.00 100.00 192
196 Brenntag Specialties, LLC Wilmington/
Delaware
0.00 100.00 100.00 192
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271Annual Report 2022 Brenntag SE
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ANNEX
No. Company Domicile
Held
directly
%
1)
Held
indirectly
%
1)
Effective
net holding
%
1)
Via no.
197 Coastal Chemical Co., L.L.C. Abbeville/Louisi-
ana
0.00 100.00 100.00 126
198 Dipol Chemical International, Inc. New York/New York 0.00 100.00 100.00 130
199 JM Swank, LLC Wilmington/
Delaware
0.00 100.00 100.00 203
200 New Jersey Lube Oil, LLC East Hartford/
Connecticut
0.00 100.00 100.00 189
201 Storm Chaser Holding Corporation Wilmington/
Delaware
0.00 100.00 100.00 196
202 Storm Chaser Intermediate Holding Corporation Wilmington/
Delaware
0.00 100.00 100.00 201
203 Storm Chaser Intermediate Holding II Corporation Wilmington/
Delaware
0.00 100.00 100.00 202
204 TechManagement Energy Services, LLC Dallas/Texas 0.00 100.00 100.00
2)
197
United Arab Emirates
205 Raj Petro Specialties DMCC Dubai 0.00 100.00 65.00 86
206 Trychem FZCO Jebel Ali, Dubai 0.00 51.00 51.00 116
207 Trychem Trading L.L.C. Port Saeed, Dubai 0.00 100.00 51.00 206
United Kingdom
208 A1 Cake Mixes Limited i. L. Dundee 0.00 50.00
50.00
100.00 213
211
209 Brenntag Colours Limited Leeds 0.00 100.00 100.00 211
210 Brenntag Inorganic Chemicals Limited Leeds 0.00 100.00 100.00 211
211 Brenntag UK Holding Limited Leeds 0.00 100.00 100.00 69
212 Brenntag UK Limited Leeds 0.00 100.00 100.00 211
213 Kluman and Balter Limited Leeds 0.00 100.00 100.00 211
214 Multisol Europe Limited Leeds 0.00 100.00 100.00 215
215 Multisol Group Limited Leeds 0.00 100.00 100.00 216
216 Multisol Limited Leeds 0.00 100.00 100.00 211
217 Murgatroyd's Salt & Chemical Company Limited Leeds 0.00 100.00 100.00 210
218 PRIME EXAMPLE LTD Leeds 0.00 100.00 100.00
2)
219
219 PRIME SURFACTANTS LIMITED Leeds 0.00 100.00 100.00
2)
211
Vietnam
220 BRENNTAG VIETNAM COMPANY LIMITED Ho Chi Minh City 0.00 100.00 100.00 152
221 NAM GIANG COMMERCIAL SERVICE CO.,LTD Ho Chi Minh City 0.00 0.00 0.00
3)
1
Investments accounted for using the equity method
Denmark
222 Borup Kemi I/S Borup 0.00 33.33 33.33 34
Germany
223 SOFT CHEM GmbH Laatzen 0.00 33.40 17.03 59
Thailand
224 Berli Asiatic Soda Co., Ltd. Bangkok 0.00 50.00 50.00 170
United Kingdom
225 PURE SODIUM HYPOCHLORITE BIOCIDAL
PRODUCTS GROUP LTD.
London 0.00 20.00 20.00 212
1)
Share in the capital of the company
2)
Business combination in accordance with IFRS 3
3)
Structured entity
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ANNEX
274Brenntag SE
TO OUR
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REMUNERATION
REPORT
NON-FINANCIAL
REPORT
MANAGEMENT
REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
RESPONSIBILITY
STATEMENT 2022
Responsibility statement 2022
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial state-
ments give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the Group man-
agement report includes a fair review of the development and performance of the business and the position of the Group,
together with a description of the material opportunities and risks associated with the expected development of the Group.
Essen, March 6, 2023
Brenntag SE
Board of Management
Dr. Christian Kohlpaintner Henri Nejade Dr. Kristin Neumann
Steven Terwindt Ewout van Jarwaarde
275Brenntag SE
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REMUNERATION
REPORT
NON-FINANCIAL
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CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To Brenntag SE, Essen
Report on the audit of the consolidated financial
statements and of the Group management report
Audit Opinions
We have audited the consolidated financial statements of
Brenntag SE, Essen, and its subsidiaries (the Group), which
comprise the consolidated statement of financial position as
at December 31, 2022, and the consolidated statement of
comprehensive income, consolidated statement of profit or
loss, consolidated statement of changes in equity and con-
solidated statement of cash flows for the financial year from
January 1 to December 31, 2022, and notes to the consoli-
dated financial statements, including a summary of signifi-
cant accounting policies. In addition, we have audited the
Group management report of Brenntag SE, which is com-
bined with the Company’s management report, for the finan-
cial year from January 1 to December 31, 2022. In accordance
with the German legal requirements, we have not audited the
content of the disclosures marked as unaudited in section
“Main elements of the internal control/risk management sys-
tem” of the Group management report.
In our opinion, on the basis of the knowledge obtained in
the audit,
■
the accompanying consolidated financial statements
comply, in all material respects, with the IFRSs as ad-
opted by the EU, and the additional requirements of
German commercial law pursuant to § [Article] 315e
Abs. [paragraph] 1 HGB [Handelsgesetzbuch: German
Commercial Code]] and, in compliance with these
requirements, give a true and fair view of the assets,
liabilities, and financial position of the Group as at
December 31, 2022, and of its financial performance for
the financial year from January 1, to December 31, 2022,
■
the accompanying Group management report as a
whole provides an appropriate view of the Group’s
position. In all material respects, this Group manage-
ment report is consistent with the consolidated financial
statements, complies with German legal requirements
and appropriately presents the opportunities and risks
of future development. Our audit opinion on the Group
management report does not cover the content of the
disclosures in section “Main elements of the internal
control/risk management system” of the Group man-
agement report referred to above.
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
that our audit has not led to any reservations relating to the
legal compliance of the consolidated financial statements
and of the Group management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial state-
ments and of the Group management report in accordance
with § 317 HGB and the EU Audit Regulation (No. 537/2014,
referred to subsequently as “EU Audit Regulation”) in compli-
ance with German Generally Accepted Standards for Finan-
cial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany]
(IDW). We performed the audit of the consolidated financial
statements in supplementary compliance with the Interna-
tional Standards on Auditing (ISAs). Our responsibilities under
those requirements, principles and standards are further de-
scribed in the “Auditor’s Responsibilities for the Audit of the
consolidated financial statements and of the Group manage-
ment report” section of our auditor’s report. We are indepen-
dent of the group entities in accordance with the require-
ments of European law and German commercial and
professional law, and we have fulfilled our other German pro-
fessional responsibilities in accordance with these require-
ments. In addition, in accordance with Article 10 (2) point (f)
of the EU Audit Regulation, we declare that we have not pro-
vided non-audit services prohibited under Article 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our audit opinions on the consolidated financial state-
ments and on the Group management report.
Key Audit Matters in the Audit of
the Consolidated Financial Statements
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the con-
solidated financial statements for the financial year from Jan-
uary 1 to December 31, 2022. These matters were addressed
in the context of our audit of the consolidated financial state-
ments as a whole, and in forming our audit opinion thereon;
we do not provide a separate audit opinion on these matters.
276Brenntag SE
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MANAGEMENT
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FURTHER
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INDEPENDENT AUDITOR’S REPORT
In our view, the matter of most significance in our audit were
as follows:
1)Recoverability of goodwill
2)Accounting treatment of business combinations
3)Measurement of environmental provisions
4)Valuation of risks posed by excise taxes
Our presentation of these key audit matters has been struc-
tured in each case as follows:
1)Matter and issue
2)Audit approach and findings
3)Reference to further information
Hereinafter we present the key audit matters:
1)Recoverability of goodwill
1)Goodwill amounting to EUR 3.1 billion (27% of consolida-
ted total assets) is reported under the “Intangible assets”
item in the consolidated balance sheet of Brenntag SE. The
Company allocates goodwill to the respective groups of
cash-generating units. Goodwill is tested for impairment
by the Company once a year as of the end of the reporting
period, or when there are indications of impairment. The
Company engaged an external expert to carry out the
impairment testing. The basis for the measurement is
generally the present value of the future cash flows of the
respective group of cash-generating units, which is calcu-
lated as fair value less costs of disposal and compared
against the carrying amount of the respective group of
cash-generating units, including goodwill. Present values
are calculated using discounted cash flow models. The
business valuation model is based on cash flow projecti-
ons, which in turn are based on the five-year plan approved
by the executive directors and applicable at the time the
impairment test is carried out. The planning is based on
the executive directors’ fundamental growth assumptions,
which are specified in detail by the budget managers in
the context of bottom-up planning for the first three years
and consolidated into a medium-term business plan at
segment level. The Board of Management extrapolates
them for a further two years taking into account informa-
tion from the planning process. The discount rate used is
the weighted cost of capital for the relevant group of cash-
generating units. The result of this measurement depends
to a large extent on the executive directors’ assessment of
future cash inflows and the discount rate used, and is the-
refore subject to uncertainty. For this reason, and in con-
nection with the EUR 38.1 million impairment loss recog-
nized in relation to the Latin America (BES) cash-generating
unit, assessing the recoverability of goodwill was of parti-
cular significance in the context of our audit.
2)As part of our audit, among other things we reviewed the
method used to perform impairment tests and calculate
the impairment loss, and assessed the calculation of the
weighted average cost of capital. We assessed the appro-
priateness of the future cash inflows used in the calcula-
tion, among other procedures by comparing this informa-
tion against the five-year plan adopted by the executive
directors, as well as by reconciling the underlying assump-
tions with general and sector-specific market expectati-
ons. In this context, we also assessed whether the costs of
Group functions were properly included in the impairment
tests on the respective cash-generating units. In the know-
ledge that even relatively small changes in the discount
rate applied can have a material impact on the value of
the entity calculated in this way, we also focused our tes-
ting on the parameters used to determine the discount
rate applied, and assessed the calculation model. We
furthermore assessed the usability of the external opinion
and the appropriateness of the raw data underlying the
expert opinion, the assumptions made, the methods used
and how consistent these were in comparison to prior peri-
ods. Overall, the valuation parameters and assumptions
used by the executive directors are in line with our expec-
tations and are also within the ranges considered by us to
be reasonable.
3)
The Company’s disclosures on goodwill are contained in
section “19.) Intangible assets” of the notes to the consoli-
dated financial statements.
277Brenntag SE
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FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
2)Accounting treatment of business combinations
1)In fiscal year 2022, the Brenntag Group acquired Y.S. Ash-
kenazi Agencies Ltd. and its subsidiary Biochem Trading
2011 Ltd., each with registered office in Be’er Ya’akov
(Israel), PRIME SURFACTANTS LIMITED and its subsidiary
PRIME EXAMPLES LTD., with registered office in Leeds (Uni-
ted Kingdom), and TechManagement Energy Services, LLC,
Dallas/Texas (United States). In addition, the Group acqui-
red the Life Science and Coatings division of Ravenswood,
Bayswater (Australia), as part of an asset deal. Taking into
account net assets acquired of EUR 108.7 million attribu-
table to Brenntag (in relation to 100%), the transactions
generated EUR 75.4 million in goodwill acquired. In addi
-
tion, the Group brought its valuation of the assets and lia-
bilities resulting from prior-year acquisitions to a timely
close in the reporting period with valuation adjustments
relating to net assets acquired (EUR –0.4 million) and
goodwill (EUR +0.5 million). Given the material overall
effect of the amounts involved in the acquisitions on the
net assets, financial position, and results of operations of
the Brenntag Group and given the complexity of valuing
the acquisitions, these were of particular significance in
the context of our audit.
2)In reviewing the accounting treatment of the acquisitions,
we began by inspecting and assessing the respective con-
tractual agreements underlying the acquisitions and
reconciled the purchase prices paid as consideration for
the acquired business operations with the supporting pay-
ment documentation provided to us. We assessed the ope-
ning balance sheet figures underlying the above-mentio-
ned acquisitions. We assessed fair values that were
measured centrally (e.g., of customer relationships) by
reconciling the numerical data with the original financial
accounts and the parameters used. We also used che-
cklists to establish whether the requirements set out in IFRS
3 for disclosures in the notes to the financial statements
had been complied with in full. We also assessed the valua-
tion adjustments made to the assets and liabilities resul-
ting from the prior-year acquisitions. Based on these and
other audit procedures performed and the information
available, we were able to satisfy ourselves that the acqui-
sition of the respective shares was properly presented.
3)The Company’s disclosures on acquisitions are contained
in the section entitled “Business combinations in accor-
dance with IFRS 3” of the notes to the consolidated finan-
cial statements.
3)Measurement of environmental provisions
1)
As of December 31, 2022, the environmental provisions
recognized in the consolidated financial statements of
Brenntag SE (primarily for the decontamination of soil and
groundwater at current and former Company-owned or
leased sites) amounted to EUR 108.9 million. The provisions
also include contingent liabilities of EUR 20.7 million for
which cash outflows are not likely but nonetheless possi-
ble. Due to purchase price allocations, these were reported
in the consolidated balance sheet under acquisitions in
accordance with IFRS 3. The recognition of environmental
provisions at the subsidiaries was coordinated centrally by
an external expert. In addition, another auditing firm assis-
ted the Company in measuring the provisions and summa-
rized the results in an expert report. The environmental
provisions were recognized at the present value of the
expected expenditures, taking into account future infla-
tion-related increases. The provisions were discounted
using interest rates for risk-free assets with matching
terms for each functional currency. Due to the nature and
large number of influencing factors that need to be taken
into account when calculating environmental provisions,
their measurement is subject to considerable uncertain-
ties and as such was of particular significance overall in
the context of our audit.
2)As part of our audit, among other things we assessed the
appropriateness of the measurement models used and
the assumptions. Accordingly, we evaluated and assessed
the underlying future cash outflows calculated by the
Group companies. We also reviewed measurement para
-
meters (in particular inflation rates, discount rates and
currency translation from the functional to the reporting
currency) used by the Company. Furthermore, we revie-
wed and assessed the mathematical accuracy of the
calculations and the appropriateness of the calculations
performed by the other auditing firm in its sensitivity ana-
lyses. In our view, taking into consideration the information
available, the valuation parameters and underlying
assumptions used by the executive directors are appro-
priate overall for the purpose of properly measuring envi-
ronmental provisions.
3)The Company’s disclosures on the measurement of envi-
ronmental provisions are contained in the sections entitled
“Environmental provisions” and “Assumptions and estima-
tes” of the notes to the consolidated financial statements.
278Brenntag SE
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REMUNERATION
REPORT
NON-FINANCIAL
REPORT
MANAGEMENT
REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
4)Valuation of risks posed by excise taxes
1)As of December 31, 2021, the Group had recognized pro-
visions totaling EUR 81.5 million for risks relating to alcohol
and energy taxes at BRENNTAG GmbH and BCD Chemie
GmbH. During the fiscal year, the German customs autho-
rities completed their inspection relating to energy taxes
at BRENNTAG GmbH for 2016 and 2017 and issued tax
assessment notices in the total amount of EUR 2.5 million.
The provisions recognized for this purpose in the previous
year exceeded this amount by EUR 19.0 million, and as
such Brenntag reversed the difference through profit or
loss. The remaining provisions recognized in the financial
statements amounted to EUR 60.0 million as of December
31, 2022. Due to the nature and large number of influen-
cing factors that need to be taken into account when cal-
culating provisions for excise taxes, their measurement is
subject to considerable uncertainties and as such was of
particular significance overall in the context of our audit.
2)As part of our audit, with the involvement of customs and
excise tax experts we began by assessing the substance
of the excise tax risks in respect of their existence and
amount. We were given access to audit reports, tax
assessment notices and other correspondence between
the Brenntag companies and the customs authorities. In
addition, we examined the external letters of confirmation
from the tax advisors engaged by Brenntag. We evaluated
and critically assessed the valuation assumptions and
probabilities of occurrence underlying Brenntag’s calcu-
lations of the provisions. We additionally assessed the
accurate presentation of the utilisation and reversal of
provisions established for the tax assessment periods 2016
and 2017. We believe that the valuation parameters and
underlying valuation assumptions used by the executive
directors are appropriate overall for the purpose of accu-
rately measuring the provisions for excise tax risks.
3)
The Company’s disclosures relating to the provisions
described and the circumstances are contained in secti-
ons “25.) Other provisions” and “32.) Legal proceedings and
disputes” of the notes to the consolidated financial
statements.
Other Information
The executive directors are responsible for the other informa-
tion. The other information comprises the disclosures marked
as unaudited in section “Main elements of the internal con-
trol/risk management system” of the Group management
report as an unaudited part of the Group management report.
The other information additionally comprises
■
the statement on corporate governance pursuant
to § 289f HGB and § 315d HGB
■
the separate non-financial statement on the fulfillment
of § 289b to 289e and of Sections 315b until 315c HGB
■
the remuneration report pursuant to § 162 AktG [Aktien-
gesetz: German Stock Corporation Act], for which the
Supervisory Board is also responsible
■
all remaining parts of the annual report – excluding
cross-references to external information – with the
exception of the audited consolidated financial state-
ments, the audited Group management report and our
auditor’s report.
Our audit opinions on the consolidated financial statements
and on the Group management report do not cover the other
information, and consequently we do not express an audit
opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the
other information mentioned above and, in so doing, to con-
sider whether the other information
■
is materially inconsistent with the consolidated financial
statements, with the Group management report disclo-
sures audited in terms of content or with our knowledge
obtained in the audit, or
■
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
279Brenntag SE
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REMUNERATION
REPORT
NON-FINANCIAL
REPORT
MANAGEMENT
REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
Responsibilities of the Executive Directors and the
Supervisory Board for the Consolidated Financial
Statements and the Group management report
The executive directors are responsible for the preparation of
the consolidated financial statements that comply, in all ma-
terial respects, with IFRSs as adopted by the EU and the ad-
ditional requirements of German commercial law pursuant
to § 315e Abs. 1 HGB and that the consolidated financial
statements, in compliance with these requirements, give a
true and fair view of the assets, liabilities, financial position,
and financial performance of the Group. In addition the exec-
utive directors are responsible for such internal control as
they have determined necessary to enable the preparation of
consolidated financial statements that are free from mate-
rial misstatement, whether due to fraud (i.e., fraudulent finan-
cial reporting and misappropriation of assets) or error.
In preparing the consolidated financial statements, the exec-
utive directors are responsible for assessing the Group’s abil-
ity to continue as a going concern. They also have the respon-
sibility for disclosing, as applicable, matters related to going
concern. In addition, they are responsible for financial report-
ing based on the going concern basis of accounting unless
there is an intention to liquidate the Group or to cease oper-
ations, or there is no realistic alternative but to do so.
Furthermore, the executive directors are responsible for the
preparation of the Group management report that, as a
whole, provides an appropriate view of the Group’s position
and is, in all material respects, consistent with the consoli-
dated financial statements, complies with German legal re-
quirements, and appropriately presents the opportunities and
risks of future development. In addition, the executive direc-
tors are responsible for such arrangements and measures
(systems) as they have considered necessary to enable the
preparation of a Group management report that is in accor-
dance with the applicable German legal requirements, and
to be able to provide sufficient appropriate evidence for the
assertions in the Group management report.
The supervisory board is responsible for overseeing the
Group’s financial reporting process for the preparation of the
consolidated financial statements and of the Group manage-
ment report.
Auditor’s Responsibilities for the Audit of the Consoli-
dated Financial Statements and of the Group manage-
ment report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or
error, and whether the Group management report as a whole
provides an appropriate view of the Group’s position and, in
all material respects, is consistent with the consolidated fi-
nancial statements and the knowledge obtained in the audit,
complies with the German legal requirements and appropri-
ately presents the opportunities and risks of future develop-
ment, as well as to issue an auditor’s report that includes our
audit opinions on the consolidated financial statements and
on the Group management report.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
§317 HGB and the EU Audit Regulation and in compliance
with German Generally Accepted Standards for Financial
Statement Audits promulgated by the Institut der Wirtschafts-
prüfer (IDW) and supplementary compliance with the ISAs will
always detect a material misstatement. Misstatements can
arise from fraud or error and are considered material if, indi-
vidually or in the aggregate, they could reasonably be ex-
pected to influence the economic decisions of users taken on
the basis of these consolidated financial statements and this
Group management report.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
■
Identify and assess the risks of material misstatement of
the consolidated financial statements and of the Group
management report, whether due to fraud or error, design
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appro-
priate to provide a basis for our audit opinions. The risk of
not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
■
Obtain an understanding of internal control relevant to
the audit of the consolidated financial statements and
of arrangements and measures (systems) relevant to the
audit of the Group management report in order to design
audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an audit
opinion on the effectiveness of these systems.
280Brenntag SE
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REMUNERATION
REPORT
NON-FINANCIAL
REPORT
MANAGEMENT
REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
■
Evaluate the appropriateness of accounting policies
used by the executive directors and the reasonableness
of estimates made by the executive directors and related
disclosures.
■
Conclude on the appropriateness of the executive direc-
tors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a mate-
rial uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in the auditor’s report to the related disclosures
in the consolidated financial statements and in the
Group management report or, if such disclosures are
inadequate, to modify our respective audit opinions. Our
conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events
or conditions may cause the Group to cease to be able
to continue as a going concern.
■
Evaluate the overall presentation, structure and content
of the consolidated financial statements, including the
disclosures, and whether the consolidated financial
statements present the underlying transactions and
events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabili-
ties, financial position and financial performance of the
Group in compliance with IFRSs as adopted by the EU
and the additional requirements of German commercial
law pursuant to § 315e Abs. 1 HGB.
■
Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the Group to express audit opinions on
the consolidated financial statements and on the Group
management report. We are responsible for the direction,
supervision and performance of the group audit. We
remain solely responsible for our audit opinions.
■
Evaluate the consistency of the Group management
report with the consolidated financial statements, its
conformity with German law, and the view of the Group’s
position it provides.
■
Perform audit procedures on the prospective information
presented by the executive directors in the Group man-
agement report. On the basis of sufficient appropriate
audit evidence we evaluate, in particular, the significant
assumptions used by the executive directors as a basis
for the prospective information, and evaluate the proper
derivation of the prospective information from these
assumptions. We do not express a separate audit opinion
on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk
that future events will differ materially from the prospec-
tive information.
We communicate with those charged with governance re-
garding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any sig-
nificant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a state-
ment that we have complied with the relevant independence
requirements, and communicate with them all relationships
and other matters that may reasonably be thought to bear
on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial state-
ments of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about
the matter.
281Brenntag SE
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REMUNERATION
REPORT
NON-FINANCIAL
REPORT
MANAGEMENT
REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
Annual Report 2022
FURTHER
INFORMATION
INDEPENDENT AUDITOR’S REPORT
Other legal and regulatory requirements
Report on the Assurance on the Electronic Rendering of
the Consolidated Financial Statements and the Group
management report Prepared for Publication Purposes
in Accordance with § 317 Abs. 3a HGB
Assurance Opinion
We have performed assurance work in accordance with §317
Abs. 3a HGB to obtain reasonable assurance as to whether
the rendering of the consolidated financial statements and
the Group management report (hereinafter the “ESEF docu-
ments”) contained in the electronic file Brenntag_SE_KA+ZLB_
ESEF-2022-12-31.zip and prepared for publication purposes
complies in all material respects with the requirements of §
328 Abs. 1 HGB for the electronic reporting format (“ESEF for-
mat”). In accordance with German legal requirements, this
assurance work extends only to the conversion of the infor-
mation contained in the consolidated financial statements
and the Group management report into the ESEF format and
therefore relates neither to the information contained within
these renderings nor to any other information contained in the
electronic file identified above.
In our opinion, the rendering of the consolidated financial
statements and the Group management report contained in
the electronic file identified above and prepared for publica-
tion purposes complies in all material respects with the re-
quirements of § 328 Abs. 1 HGB for the electronic reporting
format. Beyond this assurance opinion and our audit opinion
on the accompanying consolidated financial statements and
the accompanying Group management report for the financial
year from January 1 through December 31, 2022 contained
in the “Report on the Audit of the consolidated financial state-
ments and on the Group management report” above, we do
not express any assurance opinion on the information con-
tained within these renderings or on the other information
contained in the electronic file identified above.
Basis for the Assurance Opinion
We conducted our assurance work on the rendering of the
consolidated financial statements and the Group manage
-
ment report contained in the electronic file identified above
in accordance with § 317 Abs. 3a HGB and the IDW Assurance
Standard: Assurance Work on the Electronic Rendering, of Fi-
nancial Statements and Management Reports, Prepared for
Publication Purposes in Accordance with § 317 Abs. 3a HGB
(IDW AsS 410 (06.2022)) and the International Standard on
Assurance Engagements 3000 (Revised). Our responsibility in
accordance therewith is further described in the “Group Au-
ditor’s Responsibilities for the Assurance Work on the ESEF
Documents” section. Our audit firm applies the IDW Standard
on Quality Management 1: Requirements for Quality Manage-
ment in the Audit Firm (IDW QS 1).
Responsibilities of the Executive Directors and
the Supervisory Board for the ESEF Documents
The executive directors of the Company are responsible for
the preparation of the ESEF documents including the elec-
tronic renderings of the consolidated financial statements
and the Group management report in accordance with §328
Abs. 1 Satz 4 Nr. [number] 1 HGB and for the tagging of the
consolidated financial statements in accordance with §328
Abs. 1 Satz 4 Nr. 2 HGB.
In addition, the executive directors of the Company are re-
sponsible for such internal control as they have considered
necessary to enable the preparation of ESEF documents that
are free from material non-compliance with the requirements
of § 328 Abs. 1 HGB for the electronic reporting format,
whether due to fraud or error.
The supervisory board is responsible for overseeing the pro-
cess for preparing the ESEF documents as part of the finan-
cial reporting process.
Group Auditor’s Responsibilities for the
Assurance Work on the ESEF Documents
Our objective is to obtain reasonable assurance about
whether the ESEF documents are free from material non-com-
pliance with the requirements of § 328 Abs. 1 HGB, whether
due to fraud or error. We exercise professional judgment and
maintain professional skepticism throughout the audit. We
also:
■
Identify and assess the risks of material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due
to fraud or error, design and perform assurance proce-
dures responsive to those risks, and obtain assurance
evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.
■
Obtain an understanding of internal control relevant to
the assurance work on the ESEF documents in order to
design assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
assurance opinion on the effectiveness of these controls.
■
Evaluate the technical validity of the ESEF documents,
i.e., whether the electronic file containing the ESEF
documents meets the requirements of the Delegated
Regulation (EU) 2019/815 in the version in force at the
date of the consolidated financial statements on the
technical specification for this electronic file.
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INDEPENDENT AUDITOR’S REPORT
■
Evaluate whether the ESEF documents provide an
XHTML rendering with content equivalent to the audited
consolidated financial statements and to the audited
Group management report.
■
Evaluate whether the tagging of the ESEF documents
with Inline XBRL technology (iXBRL) in accordance with
the requirements of Articles 4 and 6 of the Delegated
Regulation (EU) 2019/815, in the version in force at the
date of the consolidated financial statements, enables
an appropriate and complete machine-readable XBRL
copy of the XHTML rendering.
Further Information pursuant to
Article 10 of the EU Audit Regulation
We were elected as group auditor by the annual general
meeting on June 9, 2022. We were engaged by the Supervi-
sory Board on December 12, 2022. We have been the group
auditor of Brenntag SE, Essen without interruption since the
Company first met the requirements of a public-interest en-
tity within the meaning of § 319a Abs. 1 Satz 1 HGB in finan-
cial year 2010.
We declare that the audit opinions expressed in this auditor’s
report are consistent with the additional report to the audit
committee pursuant to Article 11 of the EU Audit Regulation
(long-form audit report).
Reference to an other matter –
use of the auditor’s report
Our auditor’s report must always be read together with the
audited consolidated financial statements and the audited
Group management report as well as the assured ESEF doc-
uments. The consolidated financial statements and the Group
management report converted to the ESEF format – including
the versions to be filed in the company register – are merely
electronic renderings of the audited consolidated financial
statements and the audited Group management report and
do not take their place. In particular, the “Report on the Assur-
ance on the Electronic Rendering of the consolidated finan-
cial statements and the Group management report Prepared
for Publication Purposes in Accordance with § 317 Abs. 3a
HGB” and our assurance opinion contained therein are to be
used solely together with the assured ESEF documents made
available in electronic form.
German public auditor responsible
for the engagement
The German Public Auditor responsible for the engagement
is Christiane Lawrenz.
Düsseldorf, March 6, 2023
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
sgd. Christiane Lawrenz sgd. ppa. Daniel Deing
Wirtschaftsprüferin Wirtschaftsprüfer
(German public auditor) (German public auditor)
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SEGMENT REPORTING
Segment reporting
Business performance of the Brenntag Group
Change
in EUR m 2022 2021 abs. in % in % (fx adj.)
Sales 19,429.3 14,382.5 5,046.8 35.1 27.7
Operating gross profit 4,319.0 3,379.0 940.0 27.8 20.3
Operating expenses –2,510.4 –2,034.4 –476.0 23.4 16.1
Operating EBITDA 1,808.6 1,344.6 464.0 34.5 26.7
Depreciation of property,
plant and equipment –296.9 –262.7 –34.2 13.0 6.6
Operating EBITA (Segmentergebnis) 1,511.7 1,081.9 429.8 39.7 31.5
Net income/expense from special items –19.8 –228.7 – – –
EBITA 1,491.9 853.2 – – –
Amortization of intangible assets –109.5 –110.8 – – –
Net finance costs –147.5 –92.1 – – –
Profit before tax 1,234.9 650.3 – – –
Income tax expense –332.4 –188.9 – – –
Profit after tax 902.5 461.4 – – –
6.01 Business performance of the Brenntag Group 12 M 2022/2021
Change
in EUR m Q4 2022 Q4 2021 abs. in % in % (fx adj.)
Sales 4,734.5 4,041.7 692.8 17.1 11.3
Operating gross profit 1,030.2 913.5 116.7 12.8 7.0
Operating expenses 678.1 567.2 110.9 19.6 13.0
Operating EBITDA 352.1 346.3 5.8 1.7 –2.9
Depreciation of property,
plant and equipment –80.6 –70.8 9.8 13.8 8.3
Operating EBITA (Segmentergebnis) 271.5 275.5 –4.0 –1.5 –5.8
Net income/expense from special items –23.9 –124.6 – – –
EBITA 247.6 150.9 – – –
Amortization of intangible assets –56.3 –19.1 – – –
Net finance costs –45.3 –42.9 – – –
Profit before tax 146.0 88.9 – – –
Income tax expense –40.4 –25.9 – – –
Profit after tax 105.6 63.0 – – –
6.02 Business performance of the Brenntag Group Q4 2022/2021
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SEGMENT REPORTING
Period from January 1 to December 31
in EUR m
Brenntag
Specialties
Brenntag
Essentials
All other
Segments Group
External sales
2022 7,947.4 10,720.9 761.0 19,429.3
2021 6,003.3 7,815.4 563.8 14,382.5
fx adj. change in % 26.2 28.3 35.0 27.7
Operating gross profit
2022 1,678.3 2,608.6 32.1 4,319.0
2021 1,283.2 2,066.9 28.9 3,379.0
fx adj. change in % 24.8 17.7 11.1 20.3
Operating EBITDA
2022 779.6 1,153.3 –124.3 1,808.6
2021 567.5 843.0 –65.9 1,344.6
fx adj. change in % 32.1 27.6 88.9 26.7
Operating EBITA (segment result)
2022 738.0 910.8 –137.1 1,511.7
2021 534.9 619.6 –72.6 1,081.9
fx adj. change in % 32.9 36.7 89.1 31.5
6.03 Reconciliation of the Reportable Segments to the Group 12M 2022/2021
Period from October 1 to December 31
in EUR m
Brenntag
Specialties
Brenntag
Essentials
All other
Segments Group
External sales
2022 1,897.5 2,686.4 150.6 4,734.5
2021 1,683.5 2,216.2 142.0 4,041.7
fx adj. change in % 7.9 14.2 6.1 11.3
Operating gross profit
2022 370.7 653.8 5.7 1,030.2
2021 355.7 551.1 6.7 913.5
fx adj. change in % 0.2 11.5 –14.9 7.0
Operating EBITDA
2022 136.7 257.4 –42.0 352.1
2021 150.3 208.5 –12.5 346.3
fx adj. change in % –11.5 16.9 236.0 –2.9
Operating EBITA (segment result)
2022 125.0 191.1 –44.6 271.5
2021 141.4 148.5 –14.4 275.5
fx adj. change in % –13.9 21.7 209.7 –5.8
6.04 Reconciliation of the Reportable Segments to the Group Q4 2022/2021
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Period from January 1 to December 31
in EUR m EMEA
1)
North
America
Latin
America APAC
2)
Central
activities
3)
Brenntag
Essentials
External sales
2022 4,292.6 4,779.7 861.4 787.2 – 10,720.9
2021 3,186.7 3,268.5 634.5 725.7 – 7,815.4
fx adj. change in % 33.7 30.7 22.5 0.6 – 28.3
Operating gross profit
2022 969.6 1,342.5 176.9 119.6 – 2,608.6
2021 802.2 999.9 151.6 113.2 – 2,066.9
fx adj. change in % 20.2 20.0 5.0 –2.0 – 17.7
Operating EBITDA
2022 474.7 578.1 60.7 41.4 –1.6 1,153.3
2021 330.8 414.7 53.2 45.0 –0.7 843.0
fx adj. change in % 42.6 24.6 2.9 –14.5 128.6 27.6
Operating EBITA (segment result)
4)
5)
2022 367.5 468.5 42.8 33.6 –1.6 910.8
2021 222.4 317.9 38.7 41.3 –0.7 619.6
fx adj. change in % 63.9 31.7 – –24.5 128.6 36.7
6.05 Segment Reporting on the global Essentials division 12M 2022/2021
1)
Europe, Middle East & Africa.
2)
Asia Pacific including the China and Hong Kong segment, which is presented separately internally.
3)
Central activities which are part of Brenntag Essentials but not directly attributable to any one segment.
4)
Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
Period from October 1 to December 31
in EUR m EMEA
1)
North
America
Latin
America APAC
2)
Central
activities
3)
Brenntag
Essentials
External sales
2022 1,087.1 1,214.3 205.9 179.1 – 2,686.4
2021 881.7 945.6 180.3 208.6 – 2,216.2
fx adj. change in % 23.1 14.9 4.9 –16.5 – 14.2
Operating gross profit
2022 251.1 338.7 39.1 24.9 – 653.8
2021 210.1 268.7 41.6 30.7 – 551.1
fx adj. change in % 19.7 13.2 –13.9 –21.4 – 11.5
Operating EBITDA
2022 121.6 120.6 10.1 5.8 –0.7 257.4
2021 85.3 98.5 13.7 9.7 1.3 208.5
fx adj. change in % 42.8 10.0 –30.4 –40.6 –146.2 16.9
Operating EBITA (segment result)
4) 5)
2022 92.3 90.2 5.4 3.9 –0.7 191.1
2021 57.0 71.9 10.0 8.3 1.3 148.5
fx adj. change in % 62.4 12.8 –48.1 –55.2 –146.2 21.7
6.06 Segment Reporting on the global Essentials division Q4 2022/2021
1)
Europe, Middle East & Africa.
2)
Asia Pacific including the China and Hong Kong segment, which is presented separately internally.
3)
Central activities which are part of Brenntag Essentials but not directly attributable to any one segment.
4)
Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
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SEGMENT REPORTING
Period from January 1 to December 31
in EUR m EMEA
1)
Americas
2)
APAC
Central
activities
3)
Brenntag
Specialties
External sales
2022 3,369.0 3,148.8 1,429.6 – 7,947.4
2021 2,753.0 2,170.0 1,080.3 – 6,003.3
fx adj. change in % 23.8 30.0 23.8 – 26.2
Operating gross profit
2022 725.0 664.3 289.0 – 1,678.3
2021 594.5 459.2 229.5 – 1,283.2
fx adj. change in % 23.8 29.4 17.8 – 24.8
Operating EBITDA
2022 335.0 297.2 148.6 –1.2 779.6
2021 276.5 180.3 111.8 –1.1 567.5
fx adj. change in % 24.1 47.7 23.8 20.0 32.1
Operating EBITA (segment result)
4) 5)
2022 323.9 281.3 134.0 –1.2 738.0
2021 269.6 169.9 96.5 –1.1 534.9
fx adj. change in % 23.0 48.4 29.5 20.0 32.9
6.07 Segment reporting on the global Specialities division 12M 2022/2021
1)
Europe, Middle East & Africa.
2)
North and Latin America.
3)
Central activities which are part of Brenntag Specialties but not directly attributable to any one segment.
4)
Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
Period from October 1 to December 31
in EUR m EMEA
1)
Americas APAC
2)
Central
activities
3)
Brenntag
Specialties
External sales
2022 790.5 745.8 361.2 – 1,897.5
2021 706.5 656.4 320.6 – 1,683.5
fx adj. change in % 14.3 1.6 8.0 – 7.9
Operating gross profit
2022 158.0 148.5 64.2 – 370.7
2021 153.8 136.6 65.3 – 355.7
fx adj. change in % 6.2 –3.0 –5.7 – 0.2
Operating EBITDA
2022 51.6 60.0 26.8 –1.7 136.7
2021 70.7 51.8 28.1 –0.3 150.3
fx adj. change in % –22.9 3.2 –8.1 500.0 –11.5
Operating EBITA (segment result)
4) 5)
2022 48.6 55.5 22.6 –1.7 125.0
2021 69.0 48.5 24.2 –0.3 141.4
fx adj. change in % –25.6 1.7 –9.8 500.0 –13.9
6.08 Segment reporting on the global Specialities division Q4 2022/2021
1)
Europe, Middle East & Africa.
2)
North and Latin America.
3)
Central activities which are part of Brenntag Specialties but not directly attributable to any one segment.
4)
Segment operating EBITA is calculated as segment EBITA adjusted for holding charges and special items.
5)
Certain items of property, plant and equipment and right-of-use assets are not separable and support both divisions jointly. They have been allocated to a division
(depending on the region) and are depreciated there. They are charged to the other division on the basis of fixed and variable monthly amounts.
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GLOSSARY
Glossary
A
APAC | Asia Pacific, China and Hong Kong
B
BEST | BEST (Brenntag Enhanced Safety Thinking) is a global
Brenntag initiative to improve the safety behaviour/the
safety culture in the whole company.
Brenntag Business Services | Brenntag Business Services
were introduced to support the two divisions, Brenntag Essen-
tials and Brenntag Specialties, harmonize internal processes
and intensify global collaboration. They have been allocated
to “All other Segments”.
Brenntag Essentials | The global division "Brenntag Essentials"
markets a broad portfolio of process chemicals across a wide
range of industries and applications at a local level.
Brenntag Specialties | The global division "Brenntag Special-
ties" is geared to expanding our market position as the lead-
ing supplier of specialty chemicals in six selected focus indus-
tries worldwide: Nutrition, Pharma, Personal Care/HI&I
(Home, Industrial & Institutional), Material Science (Coatings
& Construction, Polymers, Rubber), Water Treatment and Lu-
bricants.
C
Conversion ratio | The conversion ratio at Brenntag is calcu-
lated as the quotient of operating EBITDA and operating
gross profit. It represents one of the most important efficiency
ratios.
D
Diversification | Diversification at Brenntag means a broad
range as regards geography, end markets, customers, prod-
ucts and suppliers. This high degree of diversification makes
Brenntag largely independent of individual market segments
or regions.
Division | Since the beginning of 2021, we have been manag-
ing Brenntag through two global divisions: “Brenntag Essen-
tials” and “Brenntag Specialties”.
E
EMEA | Europe, Middle East & Africa
G
Global key accounts | At Brenntag, we take care of our key
accounts at local, national, pan-regional and global level and
develop and implement tailor-made concepts for their opti-
mum supply with industrial and specialty chemicals. For our
customers, this means they can concentrate on their core
business, secure in the knowledge that they have a partner
they can rely on.
H
Hub-and-spoke-system | Brenntag sites are generally oper-
ated using an efficient ‘hub-and-spoke’ model. Large bulk
quantities are received at Brenntag’s ‘hub’ locations which
have large tank farms, warehouses and mixing and blending
facilities, plus sometimes white room facilities. From our hubs
we supply our ‘spoke’ facilities which accommodate smaller
tank farms and warehouses and are located in close proxim-
ity to our customers to ensure prompt and smooth delivery.
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GLOSSARY
I
IBC | IBC stands for intermediate bulk container. IBCs are used
mostly for storing and transporting liquids. A capacity of 1,000
litres is typical.
ICTA | The ICTA (International Chemical Trade Association)
was established in 2016 and replaced the ICCTA as the in-
ter-national council for chemical trade associations. It rep-
resents the interests of over 1,300 chemical distributors
worldwide. ICTA provides a worldwide network, coordinating
work on issues and programmes of international interest
across chemical trade associations.
Industrial chemicals | Industrial chemicals is the term used at
Brenntag to distinguish standard chemical products that
have specific properties and effects from → speciality chem-
icals. The manufacturer of the product is generally irrelevant
for the user.
J
Just-in-time delivery | With just-in-time deliveries, the cus-
tomer does not store supplies but orders the products as re-
quired (“just in time”) from the supplier.
L
Leverage | This term has various meanings in the world of fi-
nance. In this document, it refers to the ratio of net debt to
operating EBITDA.
M
Mixing & blending | The term “mixing & blending” describes the
mixing and formulation of solid and liquid chemicals in the
correct mixing ratio with consistent quality as well as the fill-
ing of products in the desired packaging unit. Brenntag offers
its customers not just distribution services but the complete
mixing & blending of end products as a value-added service.
O
One-stop shop | One-stop shop means that our customers
can obtain a comprehensive range of specialty and industrial
chemicals and services from a single source.
Outsourcing | Outsourcing at Brenntag is understood to mean
that chemical manufacturers pass on their small and medi-
um-sized customers to Brenntag who then obtain their chem-
icals from Brenntag.
P
Packaging | Packaging refers to packing or packing material.
Packing drum | A packing drum is a packing unit in which a
product is sold and delivered. Typical packing drum sizes are
e.g. cans, barrels or → IBCs.
Project Brenntag | "Project Brenntag" comprises a holistic
analysis of the company and, building on this, a broad-based
transformation program.The core elements are the new op-
erating model comprising two global segments with a strong
focus on customer and supplier requirements, a distinct go-
to-market approach derived from that, (infra-)structural top-
ics as well as supporting people and change management
measures.
R
REACH | REACH (Registration, Evaluation, Authorization and
Restriction of Chemicals) is a regulation of the European
Union adopted to improve the protection of human health
and the environment from the risks that can be posed by
chemicals.
Responsible Care/Responsible Distribution | Responsible
Care/Responsible Distribution (RC/RD) is a global initiative of
the chemicals industry and chemicals traders. It is a voluntary
commitment to act responsibly and do more than is required
by law: to promote sustainability, demonstrate product stew-
ardship, make plants and the surrounding areas safer as well
as improve occupational health and safety and environmen-
tal protection.
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GLOSSARY
S
Segment | Component of an entity which is reported sepa-
rately. In general, the definition is based on the internal report-
ing (management approach).
Sourcing activities | Brenntag has extensive experience and
know-how in managing efficient sourcing relationships with
national and international suppliers of chemical products.
Specialty chemicals | Specialty chemicals, which are often
developed for customized applications, are distinguished
from → industrial chemicals by their individual formulations.
Which manufacturer produces the specialty chemical is of
prime importance for the user.
Supply chain management | Brenntag provides large chemical
producers and the processing industry with efficient logistics
networks. We provide transport, warehousing and distribution
and assist production and marketing processes. We warrant
highest efficiency and best safety standards. We optimize
supply chains, synchronize distribution, take on monitoring
tasks, assume responsibility for VMI (Vendor Managed Inven-
tory) and control and schedule follow-up orders for goods.
T
Together for Sustainability (TFS) | TfS (Together for Sustain-
ability) is the name of an industry initiative founded by major
companies of the chemicals sectors. The purpose is to de-
velop and implement a global audit programme to assess
and improve sustainability practices within the supply chains
of the chemical industry.
Trademark | A trademark generally refers to a brand name
and at Brenntag includes both the name and the logo.
TRIR | TRIR (Total Recordable Injury Rate) is an international
industry widely used performance indicator, indicating how
often employees sustain injuries in work-related accidents. It
shows the number of persons with work-related injuries re-
quiring medical attention above first-aid per one million
hours worked.
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FIVEYEAR OVERVIEW
Five-year overview
2022 2021 2020 2019 2018
Sales EUR m 19,429.3 14,382.5 11,794.8 12,821.8 12,550.0
Operating gross profit EUR m 4,319.0 3,379.0 2,869.4 2,821.7 2,660.9
Operating EBITDA EUR m 1,808.6 1,344.6 1,057.7 1,001.5 875.5
Operating EBITDA/operating gross profit % 41.9 39.8 36.9 35.5 32.9
Operating EBITA EUR m 1,511.7 1,081.9 805.3 757.9 753.5
Operating EBITA/operating gross profit % 35.0 32.0 28.1 26.9 28.3
Profit after tax EUR m 902.5 461.4 473.8 469.2 462.3
Earnings per share EUR 5.74 2.90 3.02 3.02 2.98
6.09 Consolidated income statement
Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018
Total assets EUR m 11,373.0 10,195.5 8,143.5 8,564.2 7,694.5
Equity EUR m 4,802.7 3,995.3 3,611.6 3,579.0 3,301.2
Working capital EUR m 2,588.6 2,109.8 1,346.6 1,767.7 1,807.0
Net financial liabilities EUR m 2,049.7 2,070.3 1,339.9 2,060.5 1,761.9
6.10 Consolidated balance sheet
2022 2021 2020 2019 2018
Net cash provided by operating activities EUR m 956.7 388.6 1,219.0 879.3 375.3
Investments in non-current assets (capex) EUR m –267.2 –199.3 –201.9 –205.9 –172.2
Free cash flow
1)
EUR m 1,005.1 439.5 1,054.6 837.3 542.6
6.11 Consolidated cash flow
Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018
Share price EUR 59.72 79.58 63.35 48.48 37.70
No. of shares (unweighted) 154,500,000 154,500,000 154,500,000 154,500,000 154,500,000
Market capitalization EUR m 9,227 12,295 9,786 7,490 5,825
Free float % 100.00 100.00 100.00 100.00 100.00
6.12 Key data on Brenntag shares
1)
Calculation based on operating EBITDA.
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FINANCIAL CALENDAR 2023
Financial Calendar 2023
The financial calendar is updated
regularly. The latest dates can be
found on our website at
www.brenntag.com/financial_
calendar
May 10
2023
Quarterly Statement
Q1 2023
August 09
2023
Interim Report
Q2 2023
June 15
2023
General Shareholders‘
Meeting 2023
November 09
2023
Quarterly Statement
Q3 2023
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IMPRINT AND CONTACT
Issuer
BrenntagSE
Corporate Investor Relations
Messeallee 11
45131 Essen, Germany
Phone: +49 201 6496 2100
Fax: +49 201 6496 2003
E-Mail: IR@brenntag.de
Internet: www.brenntag.com
Contact
BrenntagSE
Corporate Investor Relations
Phone: +49 201 6496 2100
Fax: +49 201 6496 2003
E-Mail: IR@brenntag.de
Design
MPM Corporate Communication Solutions
Part of RYZE Digital
Mombacher Straße 4
55122 Mainz, Germany
Phone: +49 61 31 95 69 0
E-Mail: inf[email protected]
Internet: www.mpm.de
Information on the Annual Report
This translation is only a convenience translation. In the event of any differences, only the German version is
binding. We would like to point out that the photographic material from this Annual Report may not be reproduced
or reused. Full information on the photos used can be found on our website.
Information on rounding
Due to commercial rounding, minor differences may occur when using rounded amounts or rounded
percentages.
Disclaimer
This report may contain forward-looking statements based on current assumptions and forecasts made by
Brenntag SE and other information currently available to the company. Various known and unknown risks,
uncertainties and other factors could lead to material differences between the actual future results, financial
situation, development or performance of the company and the estimates given here. Brenntag SE does not
intend, and does not assume any liability whatsoever, to update these forward-looking statements or to
adapt them in line with future events or developments.
