Lanxess Sees Surging Performance: Steady Sales Amid Falling Costs?

Lanxess achieved sales of 1.598 billion euros in the third quarter, which remained stable compared to the same period last year. What is striking, however, is the sharp rise in earnings, with third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) before special charges rising significantly from €119m in 2023 to €173m this year.

While sales volumes increased in most business segments, selling prices declined, primarily due to lower raw material and energy costs. Lanxess said that despite the overall weak market performance, the significant increase in earnings was mainly due to higher sales volumes and improved capacity utilization, as well as its Forward! Significant cost savings from the action plan.

Matthias Zachert, Chief Executive Officer and Chairman of the Management Board of LANXESS, said: "The sale of the LANXESS Polyurethane Systems business is expected to be completed in the first half of 2025, subject to the relevant regulatory approvals. In early October, LANXess announced the sale of its polyurethane systems business to Japan's Ube Koyo Co., LTD. The transaction is expected to generate proceeds of approximately €500 million, which the company will use to further reduce net debt and optimize its balance sheet."

Following the sale of the polyurethane Systems business, LANXess's remaining business in the polyurethane segment will focus on specialty additives, including flame retardants. In this regard, sales in the third quarter were 550 million euros, almost in line with the 549 million euros achieved in the same period in 2023.

Matthias Zachert said: "Although the chemical industry continues to face a volatile and challenging competitive environment, we remain on track. We acted in a timely manner to address the weakness in global demand, and it has paid off. Our plants operate at a higher capacity utilization rate, 'Forward! The action plan has significantly improved our cost structure. We therefore maintain our guidance for the full year - although there is no full recovery in sight."