Lanxess Reports 25% Increase In Sales In 2017

German speciality chemicals firm, Lanxess, has announced that its net income for 2017 fell by 55% because of one-time exceptional expenses involving Chemtura integration and charges related to US tax reform passed in December. Net income totalled €87-mn, down from €192-mn in the previous year. Adjusted for the exceptional items as well as amortization of intangible assets, net income was up by 53.9% from €246-mn to €379-mn. Meanwhile sales rose by 26% to €9.66-bn.

EBITDA pre exceptionals rose by 29.6% in fiscal year 2017 to €1.29-bn, the highest result in the company’s history. In the previous year, EBITDA pre exceptionals amounted to €995-mn. “The main drivers of the strong rise in earnings were higher volumes in all segments as well as the strong contribution of the Chemtura businesses acquired in the previous year,” the company said.

“We achieved a lot strategically and operationally in the last fiscal year, laying firm foundations for the future,” commented Mr. Matthias Zachert, Lanxess’ Chairman. “With Chemtura, we successfully completed our biggest acquisition to date, and also significantly improved the quality of our portfolio even more. In this set-up, we achieved the best earnings in Lanxess’ history so far while further enhancing the Group’s profitability.”

German sites strengthened

Along with its acquisitions, Lanxess also accelerated its organic growth in 2017. The Group invested around €550-mn in its global plant network, including around €235-mn in the German sites. It also made progress with its aim of achieving a greater regional balance of its business in 2017.

Lanxess continued to expand its presence and its sales in the growth regions of North America and Asia. North America increased its share of global sales from 17% to 19%, while that of Asia-Pacific rose from 26% to 28%. This means that the Group now generates almost half its sales in these two market regions.

Sales and earnings up in all segments

Sales of the company’s Advanced Intermediates segment came to €1.97-bn in fiscal year 2017, 13.1% above the prior-year figure. “A solid rise in volumes for intermediates generated this positive performance, offset by weak demand in the agricultural sector and adverse currency effects,” the company said.

Sales in the Specialty Additives segment almost doubled, soaring by 90.7% to €1.60-bn. This strong earnings performance was the result of the integration of the Chemtura additives business. Higher volumes also had a positive impact on earnings, the company said.

Sales in the Performance Chemicals segment rose by 10.5% to €1.44-bn. The company attributed the improvement in earnings to strong volume growth. The Clean and Disinfect business that Lanxess acquired from Chemours in 2016 also made a substantial contribution to earnings.

Sales in the Engineering Materials segment increased by 29.4% while Arlanxeo segment posted over 19% increase in sales.