Brenntag Se

Ladies and gentlemen, thank you for standing by. Welcome to the Brentag SE Q1 results call and live webcast. Please note that the call will be recorded. During today's call, webcast participants will be in a listen-only mode while we conduct the question and answer session. If you wish to ask a question, please ask that you use the raise hand function at the bottom of your Zoom screen. Instructions will also follow at the time of the Q&A. I would now like to turn the call over to Thomas Altmann, Senior Vice President, Corporate Investment Relations. Please go ahead.

Good afternoon, ladies and gentlemen, and welcome to the earnings call for the first quarter of 2025. On the call with me today are our CEO, Dr. Christian Kohlbein, and our CFO, Thomas Reisten. They will walk you through today's presentation, which is followed by a Q&A session. Our relevant documents have been published this morning on our website and can be found at brentak.com in the investor relations section. In that same area, you will also find a replay of today's call. Before we begin, allow me also to point you to our safe harbor statement, which you will find at the end of the slide deck. With that, I will hand over to our CEO. Christian, over to you.

Yes, thank you, Thomas, and good afternoon, ladies and gentlemen. I will start with the highlights of the first quarter 2025, and Thomas Reisten will then walk you through the details of our financial performance. Our first quarter results were characterized by a persistently challenging business environment, a volatile geopolitical climate, and a high degree of economic uncertainty, which were amplified by global tariff negotiations. These negotiations and the anticipation of significant tariff changes already dampened business sentiment in the second half of March. Although our results are in line with the prior year period, The sequential performance in comparison to the fourth quarter 2024 did not meet fully our initial expectations. Sales for the first quarter amounted to 4.1 billion euros, which is stable compared to the prior year period. Operating gross profit increased by 2% and stood at 1.0 billion euros. Gross profit as percentage of sales also increased slightly compared to last year, which indicates that we managed gross profit to our advantage despite ongoing pressure from industrial chemical selling prices. Operating EBITDA stood at €355 million, an increase of 2.5% year-over-year, which demonstrates positive operating leverage as we translated our gross profit growth into higher operating EBITDA growth. Our operating EBITDA amounted to €264 million and remained stable. We generated a free cash flow of 163 million euros and earnings per share stood at 93 cents compared to 97 cents last year. I'm happy to confirm that our cost containment measures supported our underlying cost development in the first quarter and that we are well on track to deliver the targeted savings in 2025. Let me say a few words on the outlook for 2025. We maintain our operating EBITDA guidance for the full year 2025 in the range of 1.1 billion euros to 1.3 billion euros. Although potential secondary and tertiary tariff effects are hard to predict, we need to reflect the dampened business sentiment, which already impacted our performance towards the end of the first quarter. Considering the substantial unfavorable changes in the Euro-US dollar FX rate, the increased level of economic uncertainty, the unresolved tariff discussions, as well as the continuation of geopolitical conflicts, we currently expect earnings for 2025 to be in the lower range of our guidance. As already mentioned, The macroeconomic environment remains highly challenging, and we felt an increased level of economic uncertainty in the first quarter of 2025. The anticipation of significant global tariff changes already led to a dampened business sentiment in the second half of March, particularly in the US market. Since March is usually a defining month for the first quarter, this development is visible in our results and was not anticipated at the time of our full year results. Let me reiterate that the direct impact of tariffs on our business is rather limited since the vast majority of our products are sourced and sold within the same region. In the United States, less than 10% of the imports are coming from countries directly affected by tariffs. However, we must acknowledge that we are not immune to secondary or tertiary effects. These effects are significantly larger. Secondary sectorial effects on our customers in specific industries and value chains, like automotive, are difficult to assess at the moment. On top, tertiary effects reflected in inflation, interest rates, economic growth and general consumer sentiment are difficult to predict but will have significant impact on the demand pattern. The tariff environment remains highly dynamic and the overall risk for global demand and a potential economic slowdown has substantially increased. In this context, the US economy contracted 0.3% in the first quarter of 2025, which is the first negative development since 2022 and a situation that we need to monitor very closely. At the same time, our chemical distribution business model has proven its resilience many times. and our high degree of diversification across end markets, products, customers and suppliers helps mitigate negative impacts. With our broad geographical footprint and our unique distribution network, we are well positioned to manage through this highly challenging condition successfully and continue to be a reliable business partner for our stakeholders globally. Before we have a more detailed look at our financial results, I would like to talk about our strategic achievements in the first quarter. We have been working intensively on the execution of our divisional strategies, including the targeted disentanglement of our two divisions, which we have presented to you in detail during our full year 2024 results call in March. At the same time, we are prudently managing our cost base and are executing our cost containment measures while focusing on running our business. Brentac Specialties continues to focus on improving its performance through a combination of short-term and long-term levers. We achieved further gross profit per unit improvements in the first quarter due to ongoing price and margin management initiatives. Our cost containment measures are well on track including headcount reductions, counterbalancing, inflation. In terms of longer-term measures, we also continue to improve our global supplier portfolio with further so-called top-of-the-pyramid wins in Q1. In Brandtag Essentials, we are executing our triple strategy, focusing particularly on our last-mile service operations. Here, we successfully implemented a standard reporting on main KPIs, including targets. We also continue to optimize our global site network and for the full year 2025, we intend to close additionally more than 10 locations globally. And of course, also in Brandtag Essentials, we are diligently executing our cost containment program. Overall, our cost containment program contributed significantly to our group's cost development in the first quarter and is well on track to deliver the targeted cost out for the full year 2025. We currently develop further measures to accelerate our cost-out delivery against the background of the challenging business environment. Let me now hand over to Thomas, who will explain our financial results in more detail.