LANXESS posts strong second quarter performance

Specialty chemicals Group LANXESS continued to grow in the second quarter. EBITDA pre exceptionals rose by 6.8 percent year-on-year to EUR 362 million. Sales advanced by 8.1 percent to EUR 2.42 billion.

“We believe these results confirm our view of the seasonal development, and we are therefore adhering to our target of raising EBITDA pre exceptionals by 5 to 10 percent for the full year,” said LANXESS CEO Axel C. Heitmann. “Our focus on megatrends and growth regions, combined with our technological expertise, provide stability in an increasingly challenging environment.”

Sales improved mainly as a result of currency effects and selling price increases. Raw material cost increases were fully passed on to the market in all segments. The EBITDA margin pre exceptionals, at 14.9 percent, was level with the previous year. Net income fell slightly by 3 percent to EUR 176 million due to reorganization measures in the Performance Chemicals segment.

Net debt increased by 14.7 percent compared with the end of 2011, to approximately EUR 1.74 billion. Operating cash flow for the second quarter came in at minus EUR 49 million, due partly to an increase in working capital reflecting business activity.

Sales of LANXESS in Asia-Pacific rose by nearly 24 percent to EUR 608 million, bringing the region’s share of Group sales to 25 percent. The Performance Polymers segment turned in a strong performance, with significant growth in the double-digit range. Substantial impetus in this region continued to come from Greater China, where sales advanced by 31 percent.

In North America, Group sales rose by more than 19 percent to EUR 439 million and accounted for 18 percent of Group sales, with all segments posting growth rates in the low single digits. The United States was the main factor for the development of business in this region. Sales rose by nearly 8 percent year-on-year to EUR 331 million in Latin America, which again accounted for 14 percent of Group sales. Brazil continued to be the most important country in the region. EMEA (Europe excluding Germany, Middle East, Africa) remained the strongest region, contributing 27 percent to Group sales. Sales receded by more than 2 percent compared with the prior-year period, to EUR 650 million, with business declining particularly in Italy and Spain. Russia, by contrast, saw encouraging growth. In Germany, sales fell by less than 4 percent year-on-year to EUR 396 million and thus accounted for 16 percent of Group sales.

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