Brenntag : statement on Glass Lewis’ voting recommendation dated 31 May 2023

Brenntag SE strongly recommends its shareholders to vote FOR its Supervisory Board candidates

Dear Shareholders,

We have reviewed the Proxy Paper from Glass Lewis published on 31 May 2023. Brenntag believes that its track record, the objective of its current strategy and the strengths and competencies of the proposed Supervisory Board candidates have been significantly mis-stated, which we aim to clarify herein. Consequently, with regards to the "AGAINST" recommendation for proposals 9.1 and 9.2 of the agenda for the Annual General Meeting, the election of Richard Ridinger and Sujatha (Suja) Chandrasekaran to the Supervisory Board,Brenntag respectfully but strongly disagrees with this assessment by Glass Lewis and recommends its shareholders to vote FOR Brenntag's candidates.

Strategy and Performance

The Supervisory Board of Brenntag is fully focused on organic growth, performance improvement and sustainable shareholder value creation. In January 2020, after several years of stagnating organic EBITDA growth and share price performance, the Supervisory Board appointed Christian Kohlpaintner as CEO with a clear mandate to change. Since then, the entire Management Board has been renewed, with the latest addition, Michael Friede for the BSP segment, having joined only two months ago to accelerate the development and growth of the company.

Christian Kohlpaintner initiated a significant transformation, with the launch of "Project Brenntag" announced in the second half of that year. With the start of 2021, this strategy introduced a new divisional set-up with the two divisions Brenntag Essentials (BES) and Brenntag Specialties (BSP), replacing the previous geographic and legal entity focused operating model and creating meaningful efficiencies within the entire company.

The ambitious "Project Brenntag" targets were achieved by the end of 2022, one year ahead of schedule and despite significantly adverse macro environments and business conditions. The successful execution contributed to operating EBITA growing from about €0.8bn in FY 2019 to more than €1.5bn in FY 2022. Over the same period, EPS increased by 90% from 3.02 €/share to 5.74 €/share.

This strong operating performance allowed Brenntag to grow its dividends consistently. Since the IPO, annual dividend per share has grown at a CAGR of 13% and the Management Board and Supervisory Board propose a dividend of €2 per share for the fiscal year 2022, a significant increase from €1.45 in the prior year. This comes on top of a €750m share buyback announced in March 2023.

The progress made by Brenntag since Christian Kohlpaintner took over as CEO in January 2020 is also evidenced by a solid TSR (annualised, as of 25 May 2023) of 15% per annum compared to the DAX 40 (+5%), Univar (+9%), Azelis (-12%), since partial IPO in September 2021) and over the same period, while falling short of IMCD (+23%).

The next phase of the transformation started with the launch of Brenntag's "Strategy to Win" in November 2022, introducing dedicated strategies for the newly established divisions BES and BSP with the aim to reshape their respective business model set-up and to unfold the full potential in their respective markets. Building on the operating model introduced with "Project Brenntag", the strategy takes decisive steps to further advance the organisation from the full line distributor framework Brenntag has been operating in for decades before the start of the transformation in 2021. We are building more independent, high-quality and market-leading businesses, with differentiated strategies, steering and dedicated operations. At the same time, redesigned business processes and the required skills and capabilities are being built up.

Seven months since announcing the "Strategy to Win", Brenntag has already made significant progress, as communicated with our Q1 results. We strengthened the business mix of BSP towards higher value and more profitable products and services. For example, to increase value added services, broaden the portfolio, and expand globally, Brenntag acquired Ravenswood, strengthening blending capabilities in Nutrition, opened two innovation and application centres, one of which is a pharma formulation lab, and entered into new supplier partnerships (Inofea, DSM, Tereo, Cargill). In BES, Brenntag significantly expanded its footprint in South-East Asia with the acquisition of Aik Moh Group. Additionally, as part of our digitalization program DiDEX, we rolled out sales force applications for several pilot regions and recently announced partnerships with leading technology companies like Salesforce, Amazon Web Services, Workday and Project 44 to foster our digital transformation.

Beyond the required and ongoing work to improve the portfolio quality of BSP and in parallel to further grow BES profitably, our objective is to set up both divisions as two distinct businesses with separate management approaches and performance KPIs. To be clear, BSP is not yet in a position to be run as a stand-alone organization - it does not yet have a material own infrastructure such as its own supply chain organization and (except for sales functions and application centres) most of the cost base is dependent on BES and the corporate holding. Changing this is a key pillar of our "Strategy to Win", but will require time and resources until being fully implemented.

Our "Strategy to Win" will pave the way for a significantly improved operational and financial performance as defined in our concrete medium term financial targets for both divisions shared in our last Capital Markets Day. Today, the execution requires our full focus and attention across the entire organization. Only once we have established two operationally more independent businesses, we will have the optionality to pursue further steps.

We believe a premature decision to break up Brenntag (as argued for by PrimeStone and Engine Capital), without having put in place the required systems and structures, would seriously jeopardise the group's ambitious transformation journey. Such ill-prepared separation would not "revive Brenntag" but poses the risk of creating two dysfunctional entities, to the detriment of all our shareholders and stakeholders.

The Management Board will provide an update on the concrete decisions for the operating model of both divisions already pre-summer, while our strategic conclusions on the further path forward will be communicated at the Capital Markets Day in Autumn 2023.

The main guiding principle of both the Supervisory Board and Management Board has been, and will be, sustainable value creation.

Supervisory Board Candidates

We respectfully but strongly disagree with Glass Lewis' assessment that the election of candidates proposed by the Supervisory Board would reinforce the status quo. Richard Ridinger has been a strong supporter of Brenntag's transformation journey and his election and proposed succession as a Chairman is a testament to this process. The election of Suja Chandrasekaran would bring in a fresh perspective and necessary competencies to oversee and challenge the Management Board on Brenntag's transformation journey, including implementation of the structural changes as required, to deliver the highest value creation to the shareholders.

A) Richard Ridinger

• Richard Ridinger is a highly successful and well-recognized industrialist, with a track record of decisive leadership, strategic transformation, performance management and shareholder value creation.
• During Richard's tenure as CEO of Lonza Group from 2012 to 2019, the share price of the company increased more than sevenfold from below CHF 40 to about CHF 280. He successfully led the transformation of Lonza into a leader of the global Pharma-CDMO-Industry, thereby growing the company's market capitalization from about CHF 2 bn to over CHF 20 bn, fuelled by an operational and financial turnaround. In addition, he prepared the ground for the subsequent carve-out of Lonza's specialty ingredients business (LSI).
• Richard brings a deep understanding of the chemicals and life science industries as well as sustainability requirements in the chemicals sector. As former senior executive of Cognis, a worldwide supplier of specialty chemicals, personal care ingredients and nutritional ingredients as well as member of the Board of Directors at Firmenich (DSM-Firmenich), Richard additionally has a profound experience in the ingredients industry. Further, he has detailed knowledge of Brenntag and the distribution business model as well as the required governance expertise from various board memberships.
• In contrast, Geoff Wild brings very focused experience limited to Specialty Chemicals in the electronic industry end-markets only, which accounts for only a very small portion of Brenntag's business. He has no experience in the broader chemical industry and life sciences end-markets. Compared to Richard, who is Brenntag's candidate to succeed Doreen Nowotne as Supervisory Board Chair, Geoff also brings less experience as a non-executive Board member in large European companies.
• Therefore, Richard is an ideal candidate to assume the Chair position, who will contribute unparalleled experience and track record to the Supervisory Board, while ensuring the continuity in the supervision.

B) Suja Chandrasekaran

• In order to continue to successfully drive Brenntag's ongoing transformation, including its digital transformation as part of the DiDEX program and associated investments, the Supervisory Board requires expertise in the areas of digital transformation, IT and supply chain. Suja is the ideal candidate who meets all those requirements.
• In contrast to this, competencies that Joanna Dziubak would bring to the Supervisory Board are already well represented among the current members. Stefanie Berlinger brings extensive experience in capital markets and Wijnand Donkers has a strong track record in capital allocation from his background as private equity executive.
• Suja is a seasoned executive with profound expertise in developing and implementing digitalization strategies as well as large-scale transformation projects, who has served in multiple C-level and executive roles across various sectors and industries globally.
• She has an exceptionally strong commercial background and deep expertise in the areas of supply chain, technology and business aspects of global transaction-driven businesses.
• With more than two decades of experience in the U.S., Suja brings not only a global mindset and thorough understanding of complex geopolitical environments but also detailed knowledge of one of Brenntag's most important market.

In addition, we would like to make certain clarifications regarding statements in the Glass Lewis report

• The report published by Glass Lewis is solely based on available disclosure: Glass Lewis declined Brenntag's proposal for a meeting to present the company's perspective and arguments.
• Contrary to the claim made by PrimeStone and repeated by Glass Lewis that BSP has enjoyed "two decades of professional oversight", Brenntag would like to clarify that BSP has been established only in January 2021 and the process to make it more independent has been initiated, with substantial further work to be done.
• PrimeStone did not disclose the names of their proposed candidates to Brenntag ahead of the receipt of PrimeStone's proposed countermotions from PrimeStone's law firm. Only shortly before, Engine Capital (and not PrimeStone) suggested in an e-mail to Brenntag that Geoff Wild could be a potential candidate. At that time the Supervisory Board had already concluded its diligent and structured selection process to meet the timeline for the upcoming AGM. Brenntag was not made aware of the other candidate's name until the receipt of PrimeStone's countermotions.
• Contrary to statements made repeatedly by PrimeStone, the decisions to terminate the Univar transaction and to set up a share buyback program in 2023 were clearly fact-based decisions by the Management Board, supported by the approvals from the Supervisory Board as required, and not influenced to any extent by PrimeStone. The company had already envisaged further shareholder returns by asking the AGM 2022 to renew the authorization to buy back shares and with its updated capital allocation framework announced at the Capital Markets Day in November 2022. With the decision on the dividend proposal for 2022, it was concluded that additional shareholder returns were warranted based on a very strong FY 2022 performance and balance sheet position - consequently, Brenntag announced and implemented a share buyback program in 2023.
• Both of Brenntag's candidates are fully independent in the sense of the German Corporate Governance Code. On the other hand, contrary to Glass Lewis assessment, we do believe Geoff Wild can clearly be seen as a representative of PrimeStone and therefore does not pursue an independent agenda. He has served as CEO of AZ Electronic Materials during the ownership of Carlyle with Franck Falezan, now PrimeStone's Managing Partner, being in a leadership role at Carlyle and a member of the Board of Directors of AZ Electronic Materials at the time. Geoff is quoted as a testimonial on PrimeStone's website and subsequently worked at Atotech, another Carlyle-owned company.
• Further, we would like to re-iterate our view that allowing PrimeStone to replace two members of Brenntag's Supervisory Board and thereby achieving a 33 % representation (2 out of 6 Board members), whilst owning just around 2 % of Brenntag's outstanding shares, would prevent the company from having a truly independent Board that acts in the interest of all of its shareholders.
• Contrary to statements made by PrimeStone, both Management and the Supervisory Board have at all times maintained a constructive dialogue with both PrimeStone and Engine Capital, having already held six meetings with PrimeStone and four meetings with Engine Capital this year and have responded to all questions received. The company agreed to every single meeting request by both PrimeStone and Engine Capital, as part of Brenntag's commitment to continued shareholder dialogue.
• Please find additional relevant information in thispresentationelaborating on the points above as well as in theReasoned Statementon our website.

To state it clearly: Brenntag's Management Board and Supervisory Board are driving, not opposing, change. With a fully revamped, strong management team, a successfully launched strategy and a clear roadmap to create two world-leading best-in-class businesses we will create sustainable shareholder value. Suja, as a new member with a fresh perspective and a complementary skillset, as well as Richard, envisaged to lead the Board as new Chairman, stand for this change.

Based on the above, and the importance of the upcoming AGM for Brenntag's future development in the interest of ALL shareholders, Brenntag asks shareholders to vote:

"FOR"item 9.1 - Elect Richard Ridinger to the Supervisory Board

"FOR" item 9.2 - Elect Sujatha Chandrasekaran to the Supervisory Board