Brenntag abandons split, bets on €350M digital overhaul to revive growth

Chemical distributor Brenntag has ruled out splitting into two separate companies. Instead, the firm will push ahead with a sweeping efficiency programme to cut costs and boost digital operations. The decision comes after a challenging year in which profits fell but cash flow improved.

In fiscal 2025, Brenntag reported a 3.7% to 7% drop in revenue, landing at €15.2 billion. Operating earnings also declined by 8.6%, with EBITDA falling to €1.29 billion. Weak global demand and industrial slowdowns weighed on performance, though free cash flow rose to €941 million.

The company's new strategy focuses on keeping its Essentials and Specialties divisions together. CEO Jens Birgersson argued that maintaining synergies between the two gives Brenntag a stronger competitive position. A full separation, he said, would be too costly and risky.

A major part of the plan is a €350 million digital push called DiDEX, aimed at modernising supply chains by 2026. Brenntag expects this to add €200 million in annual earnings. Alongside this, an accelerated cost-cutting drive should deliver €300 million in yearly savings by 2027.

Investors have reacted positively to the changes. After hitting a 52-week low, Brenntag's share price rebounded by over 7% to around €51 on 23 March 2026. The company's market value now stands at approximately €7.96 billion. Analysts at Goldman Sachs also raised their price target to €66, calling it a Buy.

Looking ahead, Brenntag remains cautious. For 2026, it forecasts EBITDA between €1.15 billion and €1.35 billion, reflecting ongoing weak demand. External pressures—including low order volumes, currency fluctuations, and geopolitical tensions—continue to pose challenges.

Shareholders will have two key dates in May 2026: the first-quarter results on 1 May and the Annual General Meeting, where a dividend of €1.90 will be put to a vote.

Brenntag's shift away from a potential breakup marks a clear bet on internal restructuring. The company aims to strengthen its position through digital upgrades and deep cost reductions. With investor confidence rising and a cautious outlook for 2026, the focus now turns to delivering on efficiency targets.