Biz fundamentals

IT is important keep the supplier informed, mkt knowledge

Still only 34 pan euro contracts, out of 750 suppliers
25000 customers
Outsourced largest part of logistics
HSE is critically important
Ten largest distributors have 25% mkt share
Compet: Brenntag (633), Univar (287), Azelis (281)
Mkt only 14% outsourced
VA services: Logistics, warehouding, mixing blending, packaging, technical advice, logistics
Australia is more profitable than rest of group

Barriers to entry
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Track record
Knowledge
Market reach
IT
Exclusive agreements

Strengths
-

Network business model

Leading mkt positions
100% specialty chem focus
Exclusive relationships
Limited customer/Supplier concentration
Decentralized business model
Salesforce 100% focused on specialty chems, different incentives needed vs bulk sales

Weaknesses
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Only Europe and NZ/Australia

No assets to use for debt collateral
Dependent on GDP growth to some extent
Exposure to smaller clients, ie more risky/cyclical
COGS linked (somewhat) to oil price volatility

Opps
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Further bolt on acquisitions

Mkt share gains
Further develop pharma and food ingredients
Growth in CEE
Further efficiencies from rollout of rest of ERP system

Threats
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Competitive aggressiveness
Departure of CEO/Chief commercial Officer, given importance of relationships
Suppliers wanting to be more aggressive on pricing vs IMCDs +30% ROCE
Loss of key people (mitigant : key focus of company, recent guy head of russia, bonus pools)
Problems in integration of acquisitions
Oil price further deflation

Due Dil areas

Australia/New Zealand: are dynamics the same, who are the players, etc.
How satisfied are clients with IMCD. And recent cost cutting to the detriment of customer
experience ?
How have the acquired business been integrated
How good are IT systems
Working capital dynamics
Cost structure vs competitors
End market exposures of the customers
Contracts with suppliers

What are they hiding

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Is market growth driven by oil price increases, and thus dependent on that continuing
What is the real cyclicality in case of a downturn