LANXESS remains on track after a stable second quarter
by Shrutee K/DNS
At EUR 1.810 billion, sales down only
slightly year-on-year
At EUR 286 million, EBITDA pre
exceptionals almost at the prior year’s strong level
EBITDA margin pre exceptionals remains
stable at 15.8 percent
Net income increased to EUR 100 million
Share buy-back complete – shares cancelled
Guidance for full year 2019 confirmed:
EBITDA pre exceptionals of between EUR 1.000 billion and EUR 1.050 billion
Cologne – Specialty chemicals
company LANXESS is on track despite the weaker economy and geopolitical
uncertainties and can look back on a stable second quarter. EBITDA pre
exceptionals declined only slightly by 1.4 percent to EUR 286 million, nearly
reaching the figure of the strong prior-year quarter of EUR 290 million.
Due in particular to the weak demand from the automotive
industry, sales volumes declined in the Engineering Materials and Specialty
Additives segments. In addition, earnings were burdened by a weak chrome ore
business. However, this development was nearly offset by the company’s stable
portfolio and advantageous exchange-rate effects, especially from the strong
U.S. dollar. The EBITDA margin pre exceptionals remained stable at 15.8 percent
after 15.9 percent in the prior-year quarter.
“Our strategic transformation and more stable position are
paying off – especially in these economically uncertain times. We delivered
good results again in the second quarter and confirmed our guidance for the
full year,” said Matthias Zachert, Chairman of the Board of Management of
LANXESS AG.
The specialty chemicals company expects EBITDA pre
exceptionals of EUR 1.000 billion to EUR 1.050 billion for the full year 2019.
In the previous year, LANXESS generated earnings of EUR 1.016 billion. The
company expects earnings to be slightly weaker in the third quarter and
somewhat better in the fourth quarter than in the previous year.
Group sales came to EUR 1.810 billion in the second quarter
of 2019, down 1.0 percent from the previous year’s figure of EUR 1.829 billion.
Net income increased by 3.1 percent from EUR 97 million to EUR 100 million.
Earnings per share increased more strongly – by 8.6 percent from EUR 1.05 to
EUR 1.14 – on account of the lower average number of shares outstanding. LANXESS
completed its share buy-back with a volume of nearly EUR 200 million on
June 12, 2019. The shares were cancelled as planned on July 9.
More balanced portfolio ensures stability
The Advanced Intermediates segment again proved its
operating strength in the second quarter of 2019 – despite the persistently
weak demand from the agriculture market. This was mainly due to the ongoing
positive development of the Advanced Industrial Intermediates business unit and
good project business at Saltigo. The development of exchange rates likewise
had a positive effect. Sales amounted to EUR 561 million, up 2.7 percent on the
previous year’s figure of EUR 546 million. EBITDA pre exceptionals increased by
a considerable 10.3 percent from EUR 97 million to EUR 107 million. The EBITDA
margin pre exceptionals rose from 17.8 percent to 19.1 percent.
The Specialty Additives segment showed a stable
development year-on-year in the second quarter of 2019. The termination of
margin-dilutive toll manufacturing contracts and the weaker demand from the
automotive industry, especially in the Rhein Chemie business unit, led to lower
sales volumes. At EUR 506 million, sales were nevertheless on a par with the
previous year (EUR 508 million), as advantageous exchange-rate effects and higher
prices nearly offset this development. EBITDA pre exceptionals fell slightly by
2.2 percent to EUR 89 million compared with EUR 91 million in the prior-year
quarter. The EBITDA margin pre exceptionals of 17.6 percent was close to the
previous year’s level of 17.9 percent.
In the Performance Chemicals segment, the balanced
portfolio ensured stability. In particular, the operating strength of the
business units with water treatment and material protection products and
positive exchange-rate effects compensated for the weak chrome ore business in
the Leather business unit. Sales remained stable year-on-year at EUR 356
million. EBITDA pre exceptionals increased by 3.4 percent to EUR 60 million
compared with EUR 58 million in the prior-year quarter. All of the segment’s
business units except Leather contributed to the improvement in earnings. The
EBITDA margin pre exceptionals rose accordingly from 16.3 percent to 16.9
percent.
In the Engineering Materials segment, sales and
earnings were burdened by weaker demand from the automotive industry. Positive
exchange-rate effects did not compensate for this. Sales amounted to EUR 365
million, down 8.5 percent on the strong previous year’s figure of EUR 399
million. EBITDA pre exceptionals fell by 19.8 percent to EUR 65 million
compared with EUR 81 million in the prior-year quarter. After 20.3 percent in
the previous year, the EBITDA margin came to 17.8 percent and therefore
remained at a good level.
€ million
|
|
Q2 2018
|
|
Q2 2019
|
|
Change %
|
|
H1 2018
|
|
H1 2019
|
|
Change %
|
a
|
|
a
|
|
a
|
|
a
|
|
a
|
|
a
|
|
a
|
Sales
|
|
1,829
|
|
1,810
|
|
-1.0
|
|
3,645
|
|
3,632
|
|
-0.4
|
EBITDA pre exceptionals
|
|
290
|
|
286
|
|
-1.4
|
|
560
|
|
561
|
|
0.2
|
EBITDA margin pre exceptionals
|
|
15.9%
|
|
15.8%
|
|
|
|
15.4%
|
|
15.4%
|
|
|
Net income1
|
|
97
|
|
100
|
|
3.1
|
|
178
|
|
184
|
|
3.4
|
Earnings per share (€)1
|
|
1.05
|
|
1.14
|
|
8.6
|
|
1.94
|
|
2.06
|
|
6.2
|
Net financial liabilities2
|
|
2,252
|
|
1,381
|
|
-38.7
|
|
1,3813
|
|
1,902
|
|
37.7
|
Employees
|
|
15,283
|
|
15,441
|
|
1.0
|
|
15,4413
|
|
15,403
|
|
-0.2
|
1 Prior-year
figures from continuing operations
2 After
deduction of time deposits and securities available for sale
3 Dec. 31, 2018
LANXESS is a leading
specialty chemicals company with sales of EUR 7.2 billion in 2018. The company
currently has about 15,400 employees in 33 countries and is represented at 60
production sites worldwide. The core business of LANXESS is the development,
manufacturing and marketing of chemical intermediates, additives, specialty
chemicals and plastics. LANXESS is listed in the leading sustainability indices
Dow Jones Sustainability Index (DJSI World and Europe) and FTSE4Good.
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