LANXESS significantly increases earnings in the third quarter of 2024
Mumbai, (Maharashtra) [India], December 24, 2024: Specialty chemicals company LANXESS saw a significant earnings increase in the third quarter of 2024: EBITDA pre exceptionals came in at EUR 173 million, up 45.4 percent from the prior-year quarter’s EUR 119 million. This was mainly due to higher volumes, increased capacity utilization and cost savings from the “FORWARD!” action plan.
“Despite the continuing rough sea and the challenging competitive environment for the chemical industry, we are staying on course. Our timely actions to address the global weakness in demand are paying off. Our plants are operating at higher capacity utilization and our “FORWARD!” action plan has significantly improved our cost situation. We are therefore maintaining our guidance for the full year – even though a broad-based recovery is not yet in sight,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.
At EUR 1.598 billion, Group sales remained almost stable compared to the prior-year figure of EUR 1.601 billion. Volumes increased in almost all business units, while selling prices declined, in particular due to lower raw material and energy costs.
The EBITDA margin pre exceptionals reached 10.8 percent in the third quarter, compared to 7.4 percent in the prior-year period. Net income amounted to EUR 1 million and was generated entirely from continuing operations. In the prior-year period, net income from continuing operations was minus EUR 131 million.
LANXESS reaffirms its guidance for the current fiscal year 2024 and continues to expect an increase in earnings of 10 to 20 percent compared to prior-year figure of EUR 512 million. For the fourth quarter, the company expects a subdued performance due to the normal seasonal nature of its business.
Sale of the Urethane Systems business
At the beginning of October, LANXESS signed an agreement to sell its Urethane Systems business to Japan’s UBE Corporation. The business is valued at EUR 460 million and LANXESS expects to receive proceeds of around EUR 500 million. Zachert said: “We also made strategic progress in this quarter. With the agreed sale of our Urethane Systems business unit we have divested our last polymer business and completed the transformation of our Group into a specialty chemicals company.” LANXESS plans to use the proceeds from the sale to reduce debt. The transaction remains subject to the approval of the relevant authorities. LANXESS expects the transaction to close in the first half of 2025.
Business performance in the segments
The Consumer Protection segment posted third-quarter sales of EUR 521 million, down 10.3 percent from EUR 581 million in the year-ago quarter. EBITDA pre exceptionals came in at EUR 71 million, down 15.5 percent from EUR 84 million recorded in the prior-year period. Earnings were impacted in particular by continued very weak demand from agrochemical customers. By contrast, business with customers in the other industries was positive. The EBITDA margin pre exceptionals was 13.6 percent, compared to 14.5 percent in the prior-year quarter.
