[ID] => 9963
[post_author] => 288
[post_date] => 2018-08-14 09:13:51
[post_date_gmt] => 2018-08-14 08:13:51
[post_content] => Germany's Brenntag, the world's largest chemical distributor in terms of sales, has announced a second-quarter post-tax profit of €118.3m ($135m), an increase of 10.8 per cent on the €106.8m achieved this time last year. At the same time, the company's sales rose 7.1 per cent year-on-year to €3.2bn from €3bn, while operating EBITDA grew by 4.8 per cent to reach €231.3m.
"We are pleased with the strong performance which is underpinned by broad-based organic growth and positive contributions from acquisitions leading to a double-digit increase in operating EBITDA," says CEO Steven Holland. "Together with the first quarter, this made for a solid first half of 2018 for us – with organic growth strongly outperforming the prior year."
In terms of geography, the company reports that operations in its home territory of Europe, the Middle East and Africa (EMEA) "continued to perform well", with sales climbing 6 per cent year-on-year to €1.4bn; operating gross profit 4.8 per cent to €293.5m; and operating EBITDA 8.6 per cent to €103m. "With another strong performance in almost all customer industries", Brenntag North America, meanwhile, saw its sales rise 4.6 per cent over the period to €1.2bn concurrent with a 0.4 per cent increase in operating gross profit and a 1.3 per cent increase in operating EBITDA, which, respectively, came in at €281.4m and €108m.
Further south and "in an economic environment that remained challenging", Brenntag Latin America "achieved results on a par with the prior-year period thanks to its broad regional footprint". Nevertheless, regional sales dropped 4.4 per cent year-on-year to €195.4m while operating gross profit fell 7.7 per cent to €40.7m and operating EBITDA 10.3 per cent to €8.7m. That said, Asia Pacific pulled in some "excellent quarterly results", confirming "that the segment is a promising growth region where Brenntag continues to deliver above average rates of increase". Consequently, compared to 12 months ago, sales jumped 23.7 per cent to €351.7m, resulting in a 17 per cent increase in operating gross profit, which closed at €57.2m, and a 17.9 per cent increase in operating EBITDA, which hit €19.8m.
Also announcing second-quarter results, Univar, the world's number two, posted a net income of $56.1m from total net sales worth almost $2.4bn. This compares favourably to respective prior-year figures of $31.3m and $2.2bn. "Our strategy is working, our global execution is improving," says president and CEO David Jukes. "The investment in our sales force effectiveness is showing improved results across all of our regions during the second quarter and we continue to receive more product authorisations from our supplier partners, both of which position us well for future growth. We delivered strong growth in both the EMEA and Latin America regions and the pace of our US transformation continues to accelerate. Our entire company is energised to maintain our momentum as we enter the second half of the year."
Indeed, in its native US net sales grew 10.0 per cent year-on-year to $1.3bn; gross profit 5.5 per cent to $290.8m; and adjusted EBITDA 5.9 per cent to $97.2m. In Canada, however, dampened demand from the agricultural sector offset otherwise healthy industrial chemicals growth. Thus, while gross profit rose by 2.1 per cent to $68.9m, net sales dropped 8.4 per cent over the period and adjusted EBITDA 5.2 per cent to $34.6m.
A rosier picture, though, emerged in the EMEA, where net sales increased 10.4 per cent year-on-year to $511.9m, leading to a 12.9 per cent increase in gross profit, which came to $118.2m. Simultaneously, adjusted EBITDA jumped 17.3 per cent over the period to $40.1m due, the company says, "to double-digit growth in Focused Industries, favourable mix and improved sales force execution". Univar's Rest of World segment, on the other hand, was aided by a "strong performance in both Brazil and Mexico along with increasing profitability in Asia Pacific". As such, it was able to finish the quarter with regional net sales of $100m, a gross profit of $22.6m and an adjusted EBITDA of $9.1m, representing respective year-on-year increases of 0.2 per cent, 22.2 per cent and 85.7 per cent.
IMPROVED MARKET ENVIRONMENT
Closing its third-quarter books, Nexeo Solutions clocked up a gross profit of $120.2m from sales and operating revenues worth just over $1bn. This marked gains of 17 per cent and 11 per cent on its respective prior-year figures of $102.7m and $942.7m. "The investments we have made in market-leading capability, combined with disciplined commercial execution and an improved market environment are yielding record results," says president and CEO David Bradley. "Over the last 12 months we have delivered 17 per cent adjusted EBITDA growth, which is a direct reflection of the quality of our people and the strength of our proprietary operating system."
Breaking this down, Nexeo notes that its Chemicals business upped its sales and operating revenues over the previous year's quarter from $443.9m to $494.9m, primarily due to "a 12.9 per cent increase in average selling prices largely as a result of an inflationary pricing environment and increased specialty mix". At the same time, gross profit went from $54.3m 12 months ago to $64.9m as a result of "a favourable shift in product mix and strong commercial execution" combined with "the addition of new specialty suppliers".
STRONG GROWTH IN ASIA
Meanwhile, Switzerland-headquartered DKSH, which describes itself as "the leading market expansion services provider with a focus on Asia", reports that it completed the first six months of the year with a post-tax profit of SFr 97.5m ($98m), an increase of 4.5 per cent on the SFr 93.3m announced 12 months ago. Hand-in-hand with this, net sales rose 7.4 per cent year-on-year to reach SFr 5.7bn from SFr 5.3bn, although EBIT remained essentially stable at SFr 139.5m. In terms of chemical distribution, its Business Unit Performance Materials (BUPM) recorded "particularly strong growth in Thailand, the Philippines and India". Resultantly, the BUPM was able to up its net sales by 5.8 per cent over the period to SFr 475.7m, while EBIT "stood 6.1 per cent above last year's level" at SFr 39.7m.
"The three Business Units Healthcare, Performance Materials and Technology reported good results and increased profitability," says CEO Stefan P Butz. "DKSH, on a group level, developed its acquisition pipeline and strengthened its presence in New Zealand with the purchase of Davies Foods. We also further increased our strategic focus with [a] transaction in China."
Back in the States, Hawkins kicked off its fiscal 2019 with a first-quarter net income of $9.1m, up from $5.8m 12 months ago, from sales totalling $149.8m, themselves up from $133.7m. "We are pleased that the momentum in our businesses that we saw building in the fourth quarter of fiscal 2018 continued into the first quarter of fiscal 2019," says president and CEO Patrick Hawkins. "We see positive signs in each of our segments, with new business opportunities, price increases due to rising material costs taking hold and previously-made investments paying off. As stated at the end of fiscal 2018, we believe we are well-positioned for fiscal 2019 earnings improvements."
[post_title] => Distribution: Things are looking up
[post_status] => publish
[comment_status] => open
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[post_name] => distribution-things-are-looking-up
[post_modified] => 2018-08-14 09:21:05
[post_modified_gmt] => 2018-08-14 08:21:05
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=9963
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