Sales flat, earnings down at Lanxess in Q1 as demand remains weak

Cologne, Germany – First quarter sales at Lanxess were down 1.7% from the same quarter in 2022, at €1.90bn, down from €1.93bn. EBITDA before exceptional items was down 28%, falling from €262m last year to €189m this year.

The decline in earnings was attributed to weak demand in some sectors, notably construction. Destocking also played a part, particularly in its advanced intermediates and specialty additives segments.

The EBITDA figure is in line with guidance, the company said, and it expects second quarter earnings to be similar. For the full year, it anticipates pre-exceptionals EBITDA will be in the range €850m to €950m, with an improvement of the global economy predicted.

“As expected, 2023 will be a tough year for the chemical industry and for Lanxess,” said CEO Matthias Zachert. “Our figures for the first quarter make this very clear. However, I expect the economic situation to brighten considerably in the second half of the year, which will also be reflected in our earnings.”

He added that the transfer of its high performance plastics business to Envalior, a joint venture with private equity investor Advent International in April, strengthened the balance sheet, gearing the portfolio further toward specialty chemicals. “This makes us even more resilient in the current difficult waters,” he said. The Urethanes Systems business remains with Lanxess.

Meanwhile, Zachert’s term of office as CEO has been extended by a further five years. He is now set to remain at the helm until April 2029. “Matthias Zachert has decisively transformed Lanxess in just a few years: a manufacturer of commodities has become a true specialty chemicals company,” said Matthias Wolfgruber, chairman of the supervisory board. “This new focus offers great opportunities for Lanxess’s continued economic success.”