Brenntag Se

Cool.

And Myra, when you get a chance, if we can get some audio on the stream as well from the moderator guys, just making sure everything's coming through correctly there. Okay, perfect.

Okay, guys, I'm going to start the recording in the speaker room just so we don't forget. And then we should be all set.

Great. Michael, did you just want to give the script a quick read through, please? You can just speed through it.

Sure. Yeah, give me a sec. Ladies and gentlemen, thank you for standing by. Welcome to the Brentag SEFY 2025 results call and live webcast. Please note that this 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, we ask that you please use the raise hand function at the bottom of your Zoom screen. Instructions will also follow at the time of Q&A. I'd now like to turn the call over to Andre Simon, Senior Vice President, Corporate Investor Relations. Please go ahead. Okay.

Great. Thank you.

Yes, so as well, Jo, with this one, I've just popped in the notes as well that the speakers want to be able to drop the slides when they get to Q&A, just as I think that the guy who's controlling the slides is also looking at the queue and doing ordering. So if we can just make sure the Q&A slide is held on the webinar as well, that would be great. Yeah, I've seen a bit about letting him know and podium. Oh, sorry. Yeah, sweet. Yeah, thanks, Jenny. Nice.

Christy, I would actually I would suggest that you drop audio on the webinar and keep your audio in the speaker link just so you don't get confused and start speaking when I go live.

Yeah, that's fine. I'm gonna I'm gonna switch over now that I've spoken to them and checked all's okay over here. So yeah. Thank you. Okay.

Just emailed to check whether all was okay.

So, yeah, brilliant.

I see you already missed us. Okay. Getting back at that momentarily.

Yeah, perfect. Okay.

Hi, everyone. We are here.

Hi. Yep, we can hear you loud and clear.

Perfect, perfect. That's good. We have the correct technicals in place to host our meeting. We have a couple of times to go, but I think it's all good so far.

Yeah, perfect. I know that we did it last time, and I believe you're in the same room, but did you just want to do a sound check from each of the places that the speakers will be sat?

Yes, I would like to have, I would like to dial in as an external participant, and then I try to check the sound quality.

Yeah, so Nina, would you go ahead? We'll be checking in with her phone and we'll move on.

Yeah, so we're not live at the moment, so she won't be able to hear anything because we're not live to the audience. I can send you for the webcast, I can send you like a preview link if you'd like.

Yeah, perfect. Yeah. Perfect.

I'm just going to send that across to you now.

let's do it

Okay, I've just sent that across now. And so the audio that you'll be able to hear on that link that I've just sent you, it's the same as what the listen-only audience receives. And it's also, it's probably about, it could be anywhere from 30 seconds to a minute behind what we're saying in the room here. Just there is a little bit of latency in between the two. So that will be why it seems slightly out of sync.

Okay, got it. I will put that in. Yeah, that's good. Well, I think we are all set. So technically-wise, we are all set. Yeah. Michael will be the operator today, right? His name is Michael.

Yeah, that's correct.

Other than that, the backup,

backup slides also have been received right yeah so um if you is it you that's going to be showing the slides this time as well yeah i will it's the same setup as as the last um as when we have been doing it the last time yeah perfect so if you could do me a favor and share the slides now um and then if we could just flick through to some just so that the live streamers can make sure their cropping is all good

Of course. Give me a second. We'll facilitate. Yeah.

Yeah. No rush at all. We've got plenty of time.

Yeah, that's good to hear. Feeling much more safe than the last time.

So there's no... You've got the first time out the way, so you're fine now.

Yeah, I mean, it's also, you know, the pressure is always high, new team, new management, new bosses, and you do not necessarily want to fail your first round, you know. So I'm trying to get myself into the open exchange platform, the screen's still loading. While that, I'm going into sharing the the version of our analyst presentation with you guys. Also making sure Again, it makes more sense to share the application, not the screen. Okay.

Exactly. Yeah. Because if you share your screen, it's your whole, everything that could go on, any emails that might pop up.

Got it, got it. No, but I turned everything off. So it just will be sharing or just will be on the screen. And I simply switch by clicking here and forth and maneuvering myself. You see, you should be able to see me.

Yeah, we can see those slides.

Okay, perfect. And of course, we prepared our concluding slide with the names of the two presenters. Once we reach that, we will exchange via chat in order to freeze it, to freeze the channel that I can use the screen for any other purposes.

Yeah, exactly. So we've also got one of my colleagues, Jenny, who she's, how I mentioned there'd be a backup moderator. Well, she's going to help you with, you know, ordering the queue and things like that on Podium. So she's the one who will let you know when you are safe to drop your slides.

Okay, perfect. Hi, Jenny. Cool to have you around. Looking forward to be with you.

Thank you very much. Lovely to meet you too.

Cool. So I see. Okay. I successfully made it into the open exchange platform. I see backup moderator ought to be you, Jenny. Christy, of course, is with us. The OE moderator, Open Exchange Remote 74. Interesting nickname. And Zouyoud is also with us.

Yeah. So that's some of our live streamers that are in there as well. Um, just everyone's connected and ready to go. Yeah.

Um, Nina just feedbacked. Um, she's, um, can I say something? I'm hearing you. She's feedbacking us.

Yeah, perfect.

So she should be hearing, um, she's hearing, she's hearing, she's hearing us, but she cannot, but she cannot possibly speak, right?

No. So she's just there as listen only at the moment. um so yeah we haven't got the webinar open at the moment um and once we do open the webinar um we just need to wait until we go live yeah yeah okay okay cool yeah awesome

Can I also join with two notebooks?

Yes, of course. Okay. Yeah, so the good thing about the change that we've made, so there's just one link that we need to use rather than unique links like we've had previously. So this link that I have in your calendar invite, it's just for like a normal Zoom room. as opposed to being a panelist in a webinar. So just to Nina's point as well about saying something or whatnot, where Jenny and Michael both are, they're actually in a different room to where we are right now. So we've connected a webinar and a Zoom room. So what you can hear on the stream, say from Jenny or from Michael, is what the audience says. Um, when they come on, that's, you know, if they ask a question, that's what it'll sound like as well.

Okay. All right. Um,

so just making sure we have the um the correct volume here or that we are good to hear yep So I think all is good. Other than that, I would say I briefly switch. We make a switch between the backup function and the standard or the line function here. I just want to make sure that we have everything set up and can switch swiftly in case we need to.

Yeah, of course. Did you want to run that through now? Maybe just give that a quick go.

Yeah, give me a second. Just setting everything up that goes around here. All right, switching to the phone now.

Test, test, test. Are we here? Test, test, test. Are we here?

Yeah, we can hear you. Obviously, we're getting that.

You hear us? Hearing us?

Yep, we can hear you.

I'm having an echo here.

Yeah, so you've got both of your audio sources working, so that's why you've got that echo.

Okay.

So both work, which is good.

So... So I believe one function doesn't work. We are out of this.

Yeah, exactly.

OK. OK. OK. OK. OK.

yeah so it might just be worth i'm i'm guessing you have now muted the backup line yeah now now back now back to normal mode perfect good okay now i just just just wanted to make sure um we have we have all everything working um because in case we don't have any connectivity we simply switch to the um to to the mobile network which hopefully deliver some connection. And then we should also not necessarily hear any echo.

Yes, exactly. Because the other one won't be connected.

Yeah. Which makes perfect sense because this is the whole function of a backup version.

Yeah, exactly. And also I've got slides ready to go just in case anything wants to happen. I can reshare them for you. I'll be following along very closely.

And you know, once the management arrives, we'll make, let's say a formal sound check from the positions where they are standing and where they are seating and you would adjust accordingly. in case we need.

Yeah, exactly. And we know that the audio quality in the room is quite good. So if anything does seem a bit off, it might be just positioning or something like that. Or maybe somebody has decided to put some paper over a microphone or something like that. So we can adjust that all once they arrive.

OK, perfect. That sounds really good. So no, really no hard feelings from my end here.

Good.

How about you? By the way, how many earnings calls did you host today?

Today is the second one.

Which company was the first one? Are you inclined to say?

Yeah, so it was with London Stock Exchange. We have a partnership with them. So we were on site with them doing Vesuvius, who are a steel and like metals and something along those lines.

What's the company called?

Vesuvius.

Vesuvius?

Yeah, like the mountains.

Ah, it's a... What country is it?

I don't know. I know the CEO is French. That's all I know.

Because I never heard of the company, so I just was confused.

Yes, a lot of them I hadn't ever really heard of before either, and then, yeah. A few earnings calls later, and yeah.

Obviously, I'm not invested by myself, so. But always good to know. We get to know new companies.

Yeah, exactly. Do you already have the address on your Teams? On the Office?

Okay.

What address is that?

What do you mean, which address?

You're doing a Teams meeting with Thomas and André, right?

Oh, no, they're writing to the boardroom.

I mean, what's the name of the boardroom?

Boardextern.

Boardextern. You have to tell the other one.

I'll write to you. I'll make a group with the two experts. Could be a lot of time and only with André.

This echo was just creepy. And then you went out afterwards and then it went 5, 6, 7 parts apart.

Yes, so we have the echo because we had both sound functions on.

Don't you want to turn the loudspeakers then?

Do we have to do one here and one here?

Should we do it now?

Yes, we can do it now. So we can put it in the center.

They're sitting next to each other.

You can also do it like this. Just take it over like that. So you don't have to stand next to me now.

But if the Becker function works, we'll get it. Okay. If the sound is a little too loud, it doesn't tickle that much when you move. You know, then it's more of a smoothie in the room, I think. That's true. That's true. Is that the right one now? Yes. Okay.

Yes, that's the right presentation.

With the freezing, you do that via the chat.

Are you in the board now?

Yes, please. Is that in the board? Yes. Really? Then you can give it away to Thomas here.

Is the board there where you are?

That would be left over from the meeting. No, it's already taken. You're a guy.

First of all, please.

Wait a minute, there's still a spoon missing here.

Then let's put it back here.

But who's pushing the thing here? It's all for the future.

Let's put it back here.

That's how it is. The two of us have to do it, right?

Yes, but I think it's just like that now.

There's still one sitting here, or two.

Yes, Thomas and...

Nothing happened.

Okay.

Lovely. But we can also put this tea box somewhere else. That's probably his teapot. He's drinking tea.

The cold water is already there. Oh, now I've got it.

But it wasn't there last time.

No. That's why I thought, the whole thing is still wrinkled. Last time there was nothing there. Oh, it's falling apart.

That's probably counted.

The cookies too. Awesome.

Okay, that didn't taste good, by the way. Nina, can you print out a speaking note for me, like V10, in case I have to go through that a little bit?

Yes, wait a minute, just a moment.

Just like that. So, that works. Well, I really hope so.

I think this setup with Thomas will still go on until after the break, but after a short break you have to do it alone without and Thomas and Jan. It doesn't work that way either.

And then I'll tell André,

On the one hand, we can maybe do the review or something like that. We wanted to do fashion. I haven't told André yet. But on the one hand, I have so many appointments tomorrow and some nonsense. And then there's the town hall, then there's the Mbera. I still have an appointment. And maybe it's good if you still have a weekend, Christy, you are still with us, but feel free to take a break. We are also just Lee Arsening here.

okay sure um so do you want to i'll obviously stay you know connected to audio you want to just let us know when you're ready um we'll do we'll make myself noticeable perfect sounds great perfect um

I can also print it out up here, right? No matter where, right?

Exactly, just print out a version like that.

Speaking Notes V10.

Where is it? Just go to the superimposed folder. There you have Speaking Notes 3 and there is... No, 4, sorry. And there is a V10 in there and you can print it out. You know, if I just... I want to read the script to get the transitions. Sometimes it's also good if you have it in front of you, because Mr. Bergason will just flip through it, you know? And then I can see which slide he is on. Side-by-side or? Side-by-side is okay.

You don't need color, right?

Make a color, please. Because through color you can also recognize which dress it is. When there are these boxes and so on.

I thought the sensation was great too.

I'll get that for you.

That's great.

You have to get it somewhere too, right? Or do I have to lie down now?

No, the back is also pressed. Oh, I see. Run out the back. No, left, left. Left and then straight ahead, please.

That's awesome.

Thank you very much, thank you very much.

Stock return Zalando.

Zalando 18? No, but it will remain with us around the DAX.

I don't have anything from Zalando. I just can't. That's probably too much for me. Okay.

Yeah.

Nothing, nothing again.

That would have been a great move, just to unroll this tea box or something like that. And then here, oh, it's here, it's here, it's here, it's here, it's here, it's here, it's here, it's here, it's here, it's here.

But the apartment over here is pretty good.

I never wanted to live there. Well, because it's so close to the company.

Of course, that's right. But the ones in the middle here are more like a flat.

I would never go to Essen. Everywhere, except in this city. I think it's so ugly here. It's hardly a more ugly place. Frankfurt is beautiful, to be honest. And Frankfurt also has strange corners. Isn't it? So Essen is not possible. I don't know how to live here.

I have to go into the living room a little bit and that we ... Hold on, Thomas.

Something's going on here. What? Maybe we're gone. Where to?

André or me. Okay then.

Two, two, we're five.

Who else? Jan.

I thought we'd take it. No, you don't have to go next to each other.

We have to play both at the same time.

I'm very passionate about it. What should that be? I've always asked that. Is that a city? Is that supposed to be a city?

I don't think so. Yes, it is. Visit Essen is written down there. This song. What towers? Where do such towers come from? They have been there for a hundred years.

The coal mine is still there.

Is it still there? On the left. On the left, in the middle. You can see food already. Oh yes. Thank you very much.

I can see that he sent it to you before the press call. In the 83 impairment. Yes, yes. So that you can continue to read it without worries. Exactly. We don't have to get you out of it yet, more for safety reasons.

Do you have a fallback system there?

Okay.

How did you find out that you had 9 million in the bridge? Do you already have the presentations?

Yes, of course. We publish all the documents in the morning. Analyst presentation, investor presentation. But what question do you have now? I don't know either. Any. Because some of us have actively packed it in ourselves. We want to say that it might come. With the bridge, with the OPEX bridge somewhere.

Mm hmm. Yes. Hello. Hello.

Hello. Hello.

Hello.

That's not quite correct.

Much better.

We also prepared the right answer. I mean, that's true, there are 9 million on the line, but on the other hand, I was of course also mega conservative in what we calculated today.

Most of the time.

It's for sequential decrease in Q4. So, but more out of charge.

But all in all, the costs have gone down, the primary expenses.

So BBS is, so to speak,

Ladies and gentlemen, thank you for standing by. Welcome to the Brentag SE FY 2025 results call and live webcast. Please note that this 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, we ask that you please use the raise hand function at the bottom of your Zoom screen. Instructions will also follow at the time of Q&A. I'd now like to turn the call over to Andre Simon, Senior Vice President, Corporate Investor Relations. Please go ahead.

Thank you, Michael. Good afternoon, ladies and gentlemen, and a warm welcome to our earnings call for the fiscal year 25 from my end as well. On the call with me today are our CEO, Jens Börsson, and our CFO, Thomas Reisten. They will walk you through today's presentation, followed by a Q&A session. All relevant documents have been published this morning on our website in the investor relations section, and there will be a replay available. Allow me also to point out to our safe harbor statement, which will be found at the end of our slide deck. With that, I will now hand over to our CEO. Jens, please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Thank you for spending time with us here today. There is a lot of activity in the market and around the world. Today we are mostly talking about 2025, but let's wrap that up and do it properly today. Reflecting on 2025, we had a very difficult year. in the chemical industry. I think in 20 years we haven't had this long period of suppressed market conditions. And we saw it worsen during the year. It was quite stable in Q1 and Q2. And then the volumes on the top line went further south and landed on Q4 that was That said, when you look at us and compare it to other industry players, not least the principles towards manufacturing, the year proved again that we sit in a very good place in the market, in the value chain, and we have a very resilient business model. I'll come back to that soon. I was only with the company four months. I did start to read up during the summer, but in those months, we took a couple of important decisions. One was to really go in for being a full line distributor and not do the hard split. In that discussion, we removed the two division management layers and lifted the business unit straight up. And we formed a new EC. I'll come back to that soon. But basically, the people run in the P&Ls with a couple of functions. We formed a new executive committee team, and I'm happy with the progress. We have recruited everyone, and there's only one to start. But let me walk you through the main numbers. If you start in the top, We came in on 50 million euro top line, 4% down versus last year. With a trend, maybe not a percentage, in Q4 we were down some organic 5%, but versus the beginning, Q1 and Q2, that was quite a lot lower. Gross profit margin improved with half a percentage point in both businesses and we managed to keep it relatively stable. I mean, minus 2% is quite pleasing considering the market conditions and that it was hard to pass on prices because the whole industry has been in a sequence of, there are segments this, maybe energy and pharma, but in all the other segments, we have like a three year decline of pricing on the principal side. So it's hard for us to reduce, to increase the prices. And yet we managed to maintain the gross profit level. Then what I'm not so happy with is not too bad, but if you then look at the decline on the bottom line, and you could take either one of those measures, you see that a multiplier of four times to even six times bigger decline on the bottom line. It's still quite a positive result. I mean, we didn't go into losses or anything like that, but I'm not happy with that the multiplier, the fixed cost loaded us down quite as much, and that's something we need to work on. Going to the lowest row here on the left, the cash flow, good collection. good inventory management and then so actually the free cash flow increased with five percent and that played a role in the dividend proposal we're putting forward that we have added back non-cash one-off Thomas will explain the details for that and the dividend is 10% lower, which reflects how we see the market, but yet we keep it on an acceptable level because with that cash flow we can afford it and want to be a stock that is not too drastic and one step from the dividend. The priorities that were set when I came in were these ones. Sales really stopped the splitting internal focus, go out and sell. And at the moment, of course, such has also turned in the light of what's happening in the Middle East. We are navigating the current turbulence and that means all hands are on deck. raising prices, multiple supplies, and adapting to the new situation. Then we have the clarity and simplification. I'll come back to that on the next page, but we really tried to make it simpler to be a leader in this group and get more focus on the business and less on bureaucracy. I'll come back to that also. Then on execution, we have started to move, reducing the number of initiatives and put more force behind them, increasing the follow-up, and generally live sound management practice, and rather than go focused with determination, the wide and shallow all over the organisation. Let me briefly walk you through that. For the next slide, I'll give some examples. On the sales side, we can see tangible results in terms of more days in the field, a reduced churn of customers, and also quite a lot of dormant, small and medium accounts that didn't buy that we have managed to reactivate. So that's really good to see. On the clarity and simplification, when I come to the EC chart, we have done the structural change. We have also changed the management board, it's under me and Thomas now, and both Thomas and I are seeing our main responsibility to be in the executive committee. One example would be to get an approval. If you had certain approvals in the old hierarchy, if you traced it straight through, some of those required 26 inputs and steps, and today we try to keep that to three. That doesn't mean we want to make sloppy decisions. We want to make better decisions, but we involve the people that really have a stake in the decision. and we make them more accountable for it. Of course, that increases our agility and we have a much bigger probability of taking the right decision at the right time than being on the back foot all the time and too slow. On the institutions, I see some savings. Yes, headcount is down. We have made some progress. working hard here in Germany. Germany is not a quick fix, but I'm happy with the progress we are making. I think the organisation have realised that we need to change something and become leaner, and we are making progress. But if I had the wish, I would have liked that we could put that behind us even faster, but at least we are making progress we are ahead of what I expected. The basic logic for smaller overhead and a leaner center of the business doesn't mean that we we want to let the whole business go into anarchy we want to have small powerful functions but we we don't want to subscribe to this argument that this business is complex this business is quite simple what is it we do what's the core value stream that is to buy product to sell it to deliver it through the network efficiently and collect the cash. And what you see in that top line to bottom line is that we have too much around that core function. The core value added flow of the business also needs to be optimized, but we simply have too much that have been added around it. And you see it in the numbers when the volumes on the top line go down. And you have also seen it previously when the Boston business is growing, that you don't have the full leverage of the bottom line. So we are working very hard on setting that right. And then when we move into this year, we're going to work more and more and more out in the businesses. It's not that we are not working out in the business we have. 25 streams where we are working on these issues, of course, across the company. It's not just a German initiative this, but we have started and we are further ahead at the same time. If you then look at the new executive committee, if you go to the bottom row there, we have the three regional pnls the essential business we merged north america south america and the one president and then we have the global verticals the businesses that requires domain competence they are below there it should also be said that our biggest vertical is the nutrition Our second biggest vertical is actually oil and gas, but it's a regional one, so it's not represented here, but it's a very substantial and big business that is in North America into the oil and gas markets. We're very proud and happy about that one at this stage, but it's not visible here because it's not a global vertical that we are running. And then on the functions, you know, hinting towards the strategy, what we want to do, a CEO to optimize the supply chain network, 600 plus warehouses to make that really, really efficient and flexible and reliable. So that's one theme. That's the main job of the CEO to drive productivity through that, demonstrate that we can deliver scale effects. Then you have the, central HR, and we have a lot of good people and we've been a little bit thin on that. We have a smaller organization now, but we have increasing the competence, how we manage the HR side of things. Then we have the chief commercial officer and that basically from the flow of product to the customer. Here, to build a commercial machine would be a big thing going forward. We are pretty good to react quickly, but there is a lot of improvements that can be done in how we go to the market and how the sales force works and how we link that up with customer service from the CEO. So that is the theme, pricing approach, et cetera, structures to all that. contract management, we need to do quite a bit of that. And then we have the CIO, very happy that we are onboarded, Michael Sonntimer. He has been in four or five industries, but very importantly, he has been the CIO for a company that moves millions and millions of tons of goods. And I think that's quite a big change from where we were. We did a lot of investment into digital and IT, but we didn't put the fact in front that we are moving tons. Now we have a CEO with experience from moving tons, logistics, and obviously if you link that up with the supply chain network, with the selling, in a business with a transaction every second, every second, second, Digitalization, automation, AI is super key to get productivity. So I'm happy with that. We are just now missing the CEO to join on 1st of April. He has already been in. I've been in some meetings, but I get to read on board. So this was an important milestone for me moving forward. Then the last slide from me before I hand over to Omar. I'll leave that cost reduction to him, but clear is that we need now to really find, go from as much gross savings to net savings, and we need to put a substantial number through the P&N this year. I'll leave the details to Thomas, but it's really important that we work with it because I'm not happy with the link of the whole fixed cost mass around the core of the business. Then on the right-hand side, immediate opportunities. With the dividend and our financing approach and cash flow, we have I'm sure you're going to ask questions about that later, but we have freedom to do M&A. And it's not like we entered this year without wanting to do M&A, but we hope we can pick up some good targets with lower multiples. So I don't think the cash is going to be the limit to what we do. It's more going to be an issue of finding good targets that fit into our strategy. The two acquisitions that we closed Airedale on the 28th of February, we closed Chemtech already in December, they are looking good so far. So we are happy with those, but we need more of that. And then finally on navigating in the volatile environment, I just want to emphasize that we are incredibly fortunate to not be a big principal with a heavy asset manufacturing plant. We are light and we have a lot of experience navigating these turbulences, so at the moment we have all hands on deck to to get the pricing right and make sure we don't get caught between a rock and a hard place. And then obviously a big role we have is with all these disturbances on transportation to work really, really hard to keep our customers home so that they get product from us. Okay, with that, I hand over to Thomas, and during the Q&A, I'll come back a little bit on the Iran impacts, if you ask. But for now, we hand over to Thomas.

Thanks a lot, Jens. And from my side as well, good afternoon to all of you. So on this slide 8, I now dive a bit deeper into the financial performance of Brentag in 2025. So Jens had already outlined that our results reflect a persistently challenging market environment as ongoing economic volatility, weekend market demand and muted customer activity. Operating gross profit amounted to 3.8 billion euro in 2025. Our operating gross profit margin reached 25.3%, which is an improvement of 0.5 percentage points versus the prior year. And despite the market headwinds, we expanded our gross profit margin. That demonstrates the robustness of our business model and our strong commercial discipline in managing margins in a subdued economic setting. Operating EBITDA came in at €1,288,000,000, which is down 8.6% year-on-year on a constant currency basis. And operating EBITDA stood at €929 million, which is a decline of 12.6% versus the prior year as well on a constant currency basis. So declines in earnings do primarily reflect the ongoing challenges in the chemical sector, and that includes the weak volume development and the muted pricing environment throughout the year. Developments were partially offset by the impacts from our cost containment program, and I'll talk a bit more into the details later on that. Moving on to the building blocks of our bottom line results. So if I start below operating EBIT A, the net expenses from special items totaled €106 million, compared with €111 million in the prior year. 2025 saw a notable increase in non-cash expenses, further weighing on our bottom line. So one of that was the amortization of intangible assets, which rose to €205 million. That's an increase of €130 million versus 2024. Also, this reflects impairment losses on goodwill in Brentac Essentials Latin America of €83 million in Q2 2025, and in Brentac Essentials, a payback of €59 million Q4 2025. This is driven by reduced earnings expectations in these respective regions. Reflecting these one-time non-cash effects, profit after tax attributed to Brentax shareholders amounted to €265 million, a decline of 52.3% on a constant currency basis compared with the prior year. Notwithstanding these developments, we have delivered a strong free cash flow of €941 million in 2025. This was supported by substantial cash inflows from the release of working capital and lower capex. Our ability to generate strong free cash flow remains a core pillar of RENTAX business model and is a key contributor to the company's resilience, particularly in economically volatile times. So let me now turn to page nine. where I'm going to review our Q4 2025 sequential performance a bit more. As in prior years, the fourth quarter is affected by fewer working days and typical seasonality. Customer activity usually slowing down towards the holiday period. Beyond the seasonal pattern, Q4 was notably weaker. It was driven by a couple of factors compared with the third quarter of 2025. First and most importantly, GP impacted by muted demand, which was particularly in December, while ASP and gross profit per ton remained basically flat. OPEX reflects significant progress on cost out efforts. However, the savings were actually compensated by several one-time effects in Q4. Amongst those, the buildup of some provisions and especially environmental provisions, an impairment on receivables and higher insurance costs, and in the end as well, the portfolio effect from the acquired entities. On the next slide, I'm taking a closer look at our divisional performance. Operating gross profit for Brentac Essentials amounted to €2,733,000,000 in 2025, which is a decline of 1.2% year-on-year on a constant currency basis. With the exception of Latin America, which benefited from acquisition-related growth, all regions have recorded negative volume development compared to the previous year. Reflecting these volume trends, operating gross profit decreased across all regions except Latin America. The key drivers of this development were weekend market demand, muted consumer sentiment, and lastly, subdued industrial production in many of our core industries. In addition, competition from Chinese products, particularly EMEA and Latam, continued to weigh on pricing. Despite this fragile macro environment, we've expanded our operating gross profit margin from 25.9% in 2024 to 26.4% in 2025, which is underscoring the resilience of the Brentac Essentials business model. We now turn the focus to brand tax specialties. We've generated €1,098,000,000 in operating gross profit in 2025, which is a decrease of 3.6% year-on-year, as well on a constant currency basis. So here, the macroeconomic backdrop significantly affects our results. Lower volumes across both life science and material science. Despite these demand elements, our sales teams effectively managed pricing and margins, which was helping to maintain solid commercial performance. Now looking at the gross profit trends across the business units, nutrition delivered a positive development in EMEA, while the Americas remained under pressure due to the lower demand for base ingredients in North America. Beauty and care has recorded a decline in gross profit, which was mainly driven by intensified competition in the Americas and APEC. Pharma posed a slight gross profit decline, and material science saw gross profit decreases due to a lower market sentiment across all of the sub-industries. Amid these challenges, We have expanded our operating gross profit margin from 22.4% in 2024 to 22.9% in 2025. Again, this is a clear reflection of our commercial strength and pricing discipline. Now, looking at page 11, I'd like to elaborate on our cost-out program. So in 2025, we generated €165 million in gross savings compared to the 2023 baseline. Exceeded our savings target for the year and delivered quite a strong level of underlying savings, as indicated during our earning calls throughout the year. Please note that all savings are measured against the 2023 baseline. In Q4 2025, generated 54 million euro in savings and overall the trajectory of the program has been highly encouraging and we remain focused on identifying further levers to manage and optimize our cost base additional positive signals are emerging as well when we look at our personnel cost base it is trending below prior year levels in early 2026 already Altogether, these developments underlying a cost discipline remains a key priority for us, and it further reinforces Brentak's ability and potential to execute effective self-help measures in a challenging operating environment. So looking ahead now, we will conclude the current cost start programme, which is based on a 2023 baseline, and we will recalibrate the baseline for our next cost out phase and towards basically measuring our savings against the 2025 operating expenses. This new approach ensures much greater accountability and comparability throughout the year and follows the rationale of clarity and simplification that we have introduced already with the third quarter results in 2025. On that new baseline, we are now targeting cost savings of 200 to 250 million euro by 2027. Again, let me emphasize that's against the new baseline of 2025. So now turning to slide 12, I'd like to walk you through the development of our operating EBIT A in 2025. Compare that to 2024, operating EBIT A was shaped by the following effects. Firstly, the FX translation effects reduced our operating EBIT A by 38 million Euro. Acquisitions have contributed 23 million Euro and organically operating EBIT A declined by 158 million Euro year on year. These developments reflect the market dynamics that we have outlined earlier. It's weaker volumes across many of our end markets, pricing pressure, particularly in industrial chemicals, and it's a backdrop of muted consumer confidence and subdued industrial activity. So already underlined, our cost out measures helped to partly mitigate these impacts. On slide 12, I would like to elaborate on our dividend proposal for 2025. Dividend is a cornerstone of our capital allocation framework. Our ambition is to provide reliable dividends across the economic cycle. At the same time, we have to take into account the current economic environment, the market backdrop, and our earnings development. In 2025, Profit after tax was significantly impacted by several one-off effects that weighed on our bottom line. Most importantly, the impairments in Brentac Essentials, in APEC, and in Latin America. Furthermore, we had expenses relating to the impairment of deferred tax assets and other special items which were reducing our earnings. Altogether, these one-off effects amounted to 248 million euros. As a result of that, profit after tax for 2025 stands at €265 million. However, this figure does not reflect the underlying earnings capacity of the company and therefore it's not an adequate basis for our dividend proposal. For this reason, we are adjusting the basis for our dividend for the one-time impacts that I've just mentioned. If you exclude these one-off impacts, we arrive at earnings per share of €3.55. In developing our proposal, we also considered our strong dividend track record. So having consistently paid meaningful dividends, even in challenging environments, whilst balancing the current economic reality. Based on these considerations, we propose a dividend of €1.90 per share. Very important overall, this proposal reflects a balanced approach of safeguarding financial stability whilst maintaining a clear commitment to delivering attractive and sustainable returns to shareholders. So let me close with the outlook for 2026. We decided to replace operating EBIT A with operating EBIT DA. as our key performance indicator and guidance figure. This change is driven by the following considerations. The metric provides a more accurate view of the underlying operating performance and cash generation by eliminating non-cash charges. And certainly, we believe in our assets as a differentiating factor. But this shift aligns with industry practices and makes us more comparable as well. Last year was characterized by significant macroeconomic volatility, muted consumer confidence, and low industrial activity, weak end market demand, and as well as pricing pressures, particularly in industrial chemicals. If you look forward at this point, we see no reversal of these trends. The market environment therefore remains highly challenging and we are not expecting short-term improvements. Consequently, we have reflected these factors in our guidance for 2026. So for the full year 2026, we expect our operating EBITDA to be in the range of €1,150,000,000 to €1,350,000,000. So a few notes on What this guidance is actually based on, the forecast includes contributions from acquisitions already closed and it assumes stable exchange rates at the levels prevailing at the time of this publication. Please note also that any potential impacts from the currently evolving crisis in the Middle East are not reflected in our guidance. As we now look into early 2026, we are seeing a continuation of the trends that we have experienced toward the end of 2025. Notably, it's fragile consumer sentiments as well as ongoing demand and end market weakness across many regions and product categories. Financial effects of the geopolitical escalation of the Middle East remain quite difficult to predict at this stage. such prior year comparables in q1 2026 remain fairly high based on these trends against this backdrop we remain fully focused on the areas within our control so we will be advancing our cost out initiatives we will be continuing to streamline the organization maintain a disciplined focus on cash preservation and lastly we will certainly as well strengthening our proximity to customers across all markets and at the same time we are working on our strategic review which we intend to present in the second half of 2026. so with this i'd like to close the presentation now and look forward to your questions

Ladies and gentlemen, we will now begin our Q&A session. If you would like to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. Once your name has been announced, please unmute your line and ask your question. If you want to withdraw your question, please lower your hand using the raise hand function. Thank you and a moment for the first question, please. Our first question comes from Suasini Varanasi from Goldman Sachs. Please unmute your line and ask your question.

Hi, good afternoon. Thank you for taking my questions. Two from me, please. Appreciate that your guidance is based on the macroeconomic environment that you have laid out in your presentation, but clearly it excludes what's happening in the Middle East at this point. I just wanted to get a sense first how early trading has evolved in Jan-Feb and whether that has changed because of the situation in the Middle East. Are you seeing any disruptions? Are you seeing any upward movement on chemical pricing? Are you making any changes to your inventory working capital? I think that would be. good to have some color there thank you and i think the just a second one um if we think about the one-off costs um that have um sorry the cost-saving programs that have been announced uh including the new one how should we think about the one-off costs linked to both of these programs for 2026 and 2027 please thank you okay so so on the pricing um

We are 13 days into this. And the traditional way when you have the hydrocarbon side of things getting under pressure that we have here, such as solvents pricing move up in our work, that will impact the solvents. Those prices move up immediately. And then it moves on to transport cost there. It's starting to happen quickly. And here we have the combination of the people transporting due to fuel prices, but also the challenge of delays and longer routes, etc. So that starts to move. And then since all chemicals are made with energy, you will see a pressure up on the other cost. So what we see now is clearly pricing moving up. and we are active to pass on the cost increases and working very intensively on this. It's too early to give overriding numbers, but you can see some of the principals stepping in very quickly and raising their prices, and we do what we normally do in this situation, make sure that we don't get caught between a rock and a hard place.

So on your second question with regards to the cost-out program, obviously, I mean, the first thing that I want to mention here is we are looking at a broadening and an acceleration of the cost-out program. As you will have noticed, when we are now re-baselining this onto the 2025 baseline, we are speaking about 200 to 250 million additional costs out until 2027. In order to achieve that, we will continue to incur some runoff costs, which is the baseline of your question. And I would expect this to be in the range of previous special items that we have seen there as well. We will continue on a similar run rate. When you look at the run rate, please do exclude the other one-offs that you have seen in this current year where we have had impairments. That's not going to be repeated into the future. It's not part of this cost-out program, obviously.

Thank you very much. I think that was very helpful, Kala. And just a quick follow-up, please. Appreciate the commentary on pricing, but have you seen any changes to volume trends? I mean, are your customers stocking up, anticipating any disruptions? Thank you.

So now it's very early day, you know, the 13th day. But if you have a year end, you would expect a lot of people destocking and make sure they don't cross the end of December with too much stock. So that's normal. And then when you have a situation where most experienced players would know that pricing will go up because energy goes up, cost goes up, transport goes out, all the rest, you would expect pre-buying. What we have seen so far is, and it's very short, I mean, it's still early, so it's hard to say it's different. The type of feedback we've gotten so far has been, do you have stock? Can you supply us? We get it that the prices will go up. And that has been the first six, seven days of that. And then whether they are increased buying, I think we are stepping into that stage now. And here, I think the situation is a little bit different compared to a normal case. And that is that there are quite a few users, you know, people that buy from us often manufacture something with the chemicals. There is a worry in the market about the underlying demand. Will this energy crisis or whatever we call it result in a lower demand in Q2. That's what the mathematics that go through people's mind. So therefore, I'm also curious to see in one, two weeks, what's going to happen to the pre-buying and people are moderate or whether they go all in for it. And if I were to compare the regions, if we take the pure energy bill, you know, here in Europe, we're talking 5x at least for a manufacturer on the energy per kilowatt or megawatt hour price compared to China, a 4x versus the US. And you could expect that Europe is going to be impacted quite a lot by this energy increase. So you have this balance with the shutdown production. Will overall demand go down? Will there be uncertainty? just very difficult to know and I think so the volatility as such we have I see no problem with that we know how to do it we were quick out to start working on it and then I'm more curious to see what happens with overall demand because of this crisis and obviously there we have the whole duration of the crisis that will impact and I'm not I'm not the person to assess how how long this will go on we just do the best on the pricing now and then we we see what happens to demand as we move forward that's very clear thank you very much as a reminder if you would like to ask a question please use the raise hand feature at the bottom of your zoom screen our next question comes from nicole manion from ubs please go ahead and ask your question

Hi, good afternoon. Thanks for taking my question. I've got two, please. The first is just on the comments in the presentation around some new business wins. There's a few mentions in North America, a decent number of supplier agreements that have been formed over the last year as well. And I think the reference as well to improving lead conversion. Obviously, this is all in a market where volumes are under a fair bit of pressure. So do you think this is a reflection of just the internal sort of changes that you've made, or are you seeing kind of outsourcing kick up again in what is obviously a very difficult volume environment? That would be the first question. Sorry, I'll pause there. Thank you.

Okay. So I'm pleased with the progress we've made. We obviously haven't reorganized sales in any massive way, but we removed the split. We made sure people have incentives where they're also rewarded for the joint success. And we have a good account coverage that we think of all the businesses, all the products we can sell into an account. And then sending the people back in the street. So that has led to, you could typically have 15 to 20% more time out in the field, intensified sales effort. Then working harder with the customer, we can see that customer churn has been reduced. And then we have done campaigns where we take dormant accounts, customers that haven't bought for a year and say, let's go out and work with them. And there was one week effort where we woke up 70 accounts just in one market by doing that. So I see a lot of positive signs of that, but obviously the market is not great, but doing that hard work, especially on medium and small accounts and get into agreements and start to get on track and grow with them again, or getting a business with them, that has been a little bit neglected because people were too focused on splitting businesses or business definitions. So we are making good progress on reactivating that. Then on the big accounts, here pricing and everything else is more difficult, tough to deal with, very commercially good. I would say with the big, big accounts we have, and I'm talking accounts where we are doing total back and forth, upstream and downstream business, half a billion and up. We have a lot of activity with them also because they are working strategically in these times with their asset, the players they're going to deal with. We have a lot of discussion about putting more over to us and maybe simplify the distribution structure. We also have some people that want to go the other way, but I would say The trend is with our big accounts that we are making growth plans with all of them.

Great, thank you. That's very helpful. I did have just a second quick question, please, on the cost savings. It looks like these are expected to be fairly broad-based in terms of the areas you're targeting. But I did want to ask specifically about the opportunity that might still exist within your other operating expenses. I think these did come down a little bit this year, but maybe not as much as you might have expected, particularly given that focus on sort of duplicate costs. I'm thinking about the expenses for advisory, auditing and so on, also quite elevated miscellaneous operating expenses too, certainly compared to a couple of years ago. Is there still quite a big part of that to be sort of targeted in this next kind of wave of of cost savings. I know you haven't broken it out specifically, but yeah, any kind of view on how you view that kind of other operating expenses line and the buckets within it would be really helpful. Thank you.

So I will hand that question to Thomas, but before we start, there is an operating expense of the whole network and the productivity, the footprint, the flows, the loading of the trucks and the sourcing of material indirect and direct expense. that's a big topic in this business and we have done some work on it in some region but we haven't hasn't been the primary focus we will get more into that and it will help that we have a ceo coming in that has the clear responsibility for the productivity of that whole whole piece so that's a very general comment but over to thomas to give some favor

Yeah, absolutely. So, I mean, when you look at the cost program that we have started some time ago, this obviously has helped us as well already to get a clear direction in terms of cost savings being incorporated and at least managing the inflationary trends in that context. So that was a very broad cost program to your question in terms of what are we covering in that context. And in that, we have already reduced quite a few of the other expenses compared to previous years. I mean, you've mentioned advisory costs as an example as well. That has been reduced significantly over the last quarters already. And consequently, if you look forward, it continues to be a broad cost program covering all individual lines. But in terms of the potential for these self-help initiatives that we certainly have quite a bit of potential still today and that we will be running and accelerating, it is on the one hand on all lines, but some of them more pronounced, as Jens has actually been talking about. So if you go through that, we have had quite a bit of impact already and we see quite a lot of green shoots on the overhead costs in terms of people-related costs for the central resources. We do see as well that in that line, continue to have then as well on the other expenses that are in these areas of the business further reductions and we will focus on all of that continuously to keep them at a lower level and further reduce but then we will get as well into transport and warehouse costs where we will see more impact going forward as these are definitely as well the larger cost blocks in order to continue to optimize it to the cost base so Making really good progress and, on the other hand, quite a bit of self-help opportunity still into the future.

That was very helpful. Thank you. Cheers.

Our next question comes from Anil Srinoy from Barclays. Please go ahead and ask your question.

Yeah. Hi. Good afternoon, everyone. And thank you so much for taking my questions. Just the one, please. I was trying to understand, how do you see the dynamic from China, I mean, the competition from China? in both your divisions, that is essentials and specialties. We have seen, we have heard your competitors in the specialty distribution saying that they're seeing quite, I mean, considerable Chinese competition, which has led to a decline in their gross profit and EBIT A, and especially in the semi-commodity kind of products. So by that logic, is essential seeing a little more competition than specialties? And this was before the war. So if you could give us some color on that, please.

So as I was saying, it hasn't changed. First of all, we have actually seen quite big price increases in China for product. So The Chinese principles, and we have a sourcing center in China, have been very quick to raise prices. But the competition from China in APAC or South Asia, et cetera, is still there. And you see it also in Latin America, especially Brazil and some other places, a bit spotty, some market not. some market very heavy, and then less in Mexico and China and US because we have the tariffs, and then we see it coming into Europe. And on the specialty side, sure, you have a lot of specialty chemicals coming up there, and some have been approved, some have been, you can use in the market, some not. So I would say nothing has really changed on that front. maybe be one aspect that I've seen some big price increases from China just in this week on product due to the energy situation and Iran or the Middle Eastern problems.

Shut the telephone. Thank you. Mr Kidd's the Q&A session. I'll now hand back to Andre for closing remarks.

Yeah, thank you, Michael. And this brings us to the end of the conference call. In case there are further questions, please do not hesitate to reach out to our IR team. Our results for the first quarter 26 will be published on the 13th May. And ladies and gentlemen, thank you very much for joining us today. We are looking forward to see you on a roadshow or a conference, which we will rejoin in the next couple of weeks. And with that, I give you a good day and goodbye.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.