31 August 2012 17:14 [Source: ICIS news]
LONDON (ICIS)--Standard & Poor's (S&P's) expects the 2012 earnings before interest, tax, depreciation and amortisation (EBITDA) of German chemicals distributor Brenntag to be close to €700m ($875m), the ratings agency said on Friday.
The improvement on the company’s 2011 EBITDA of €658m should be achievable because Brenntag's “global presence... should mitigate the recessionary environment in Europe”, S&P said.
“We believe such an increase is likely achievable, notwithstanding the challenging European economic environment, but bearing in mind a weaker euro, economic growth in the Americas and Asia, as well as the impact of several modest-size acquisitions,” it added.
Brenntag is the world's largest full-line distributor of industrial and specialty chemicals
The guidance of Brenntag's management was that EBITDA of €705m-735m should be recorded this year.
Brenntag is well within the net debt-to-EBITDA threshold of 3.4x for 2012, S&P also noted. Net debt to EBITDA as defined in Brenntag's loan agreements stood at 2.1x as of 30 June, the ratings agency said.
The company had “strong” liquidity, said S&P, and was expected by the ratings agency to maintain its EBITDA margin at 7%-8% in 2012 and 2013.
($1 = €0.80)
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