Lanxess implements cost-saving plan, calls for improved German competitiveness

Cologne, Germany – Sales at Lanxess fell by 11% to €1.8bn in the second quarter of 2023, down from €2.0bn in the same quarter last year. EBITDA pre-exceptionals was down by 58% year-on-year in the quarter, falling from €253m to €107m.

The results were, once again, dominated by weak demand globally in many customer industries, it said. Other negative impacts included ongoing inventory reduction among customers, and lower selling prices.

It confirmed the provisional guidance released in June. It lowered predicted pre-exceptionals EBITDA for the full year to between €600m and €650m, a significant drop from the early guidance of €850m to €950m.

The company has implemented an action plan, “Forward!”, to counteract current weak economic development and stabilise earnings in the short term, lower costs in the long term, and refine its structures and process. It believes this will save about €100m in 2023 through one-time cost reductions and lower investment. Further efficiencies should permanently reduce annual costs by about €150m from 2025 onwards, it said.

“When the economy picks up again, we want to get back on track quickly,” said Matthias Zachert, the company’s chairman. “But that is not enough. Politicians need to finally wake up. In the current phase of economic weakness, the location Germany is not competitive internationally. We urgently need sustainable framework conditions – above all an internationally competitive electricity tariff for the industry, the reduction of excessive bureaucracy and faster approval procedures.”