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LANXESS achieves solid result in challenging time for chemical industry
12 Aug '09
6 min read
Sales in the Advanced Intermediates segment, which includes the basic and fine chemicals business units, rose 10 percent to EUR 285 million due to volume growth in the agrochemicals sector. EBITDA pre exceptionals fell 17 percent quarter-on-quarter to EUR 38 million as a result of higher raw material costs and ongoing weaknesses in the automobile and construction sectors.
Sales in the Performance Chemicals segment, which include the specialty chemical business units, rose 14 percent sequentially to EUR 385 million in the second quarter. The increase was due to good performances from the Inorganic Pigments, Leather, and Material Protection Products business units despite ongoing difficult conditions in the automobile and construction industries. EBITDA pre exceptionals rose13 percent quarter-on-quarter to EUR 44 million supported by stronger demand and cost-cutting measures. On a year-on-year basis, sales fell 26 percent and EBITDA pre exceptionals fell 44 percent.
Performance by region - The regions EMEA (Europe excluding Germany, Middle East, Africa), Germany, North America and Latin America all achieved single-digit percentage sales increases in the second quarter in comparison to the first quarter.
Sales in the Asia-Pacific region rose 74 percent to EUR 304 million in the second quarter in comparison to a very weak first quarter, with strong contributions coming from China, South Korea and India. The sharp increase in sales in the second quarter implies the region's share of Group sales has now risen to 25 percent.
Sales in all regions in the second quarter fell year-on-year by double-digit percentage amounts except for Asia-Pacific, which fell only by a single-digit percentage amount year-on-year.
Outlook - Underlying economic demand appears to have now bottomed out also in Latin America, North America and Europe. Asia is maintaining good momentum and other regions will start to recover, albeit at a slower pace. Destocking among customers is now completed but a trend towards restocking is not yet visible.
Overall, the business environment remains tough and the potential for setbacks still exists which could hinder an economic recovery. Therefore, LANXESS will wait until the publication of the third quarter results on November 12 to give a detailed earnings outlook for the full year 2009. The previous guidance of sales and earnings being below last year's level remains valid.
LANXESS, however, is targeting for the third quarter of 2009 an EBITDA pre exceptionals around the level of the second quarter of 2009. This is an ambitious target given the fact that the company's key operating earnings number for the third quarter has been in the past always weaker – on average 15 percent – than the second quarter result. In addition, the third quarter includes the traditional summer lull.
“The combination of a pick-up in demand and our enlarged package of cost savings measures will ensure that LANXESS will emerge strengthened from the crisis,” said Heitmann.
Sales in the Performance Chemicals segment, which include the specialty chemical business units, rose 14 percent sequentially to EUR 385 million in the second quarter. The increase was due to good performances from the Inorganic Pigments, Leather, and Material Protection Products business units despite ongoing difficult conditions in the automobile and construction industries. EBITDA pre exceptionals rose13 percent quarter-on-quarter to EUR 44 million supported by stronger demand and cost-cutting measures. On a year-on-year basis, sales fell 26 percent and EBITDA pre exceptionals fell 44 percent.
Performance by region - The regions EMEA (Europe excluding Germany, Middle East, Africa), Germany, North America and Latin America all achieved single-digit percentage sales increases in the second quarter in comparison to the first quarter.
Sales in the Asia-Pacific region rose 74 percent to EUR 304 million in the second quarter in comparison to a very weak first quarter, with strong contributions coming from China, South Korea and India. The sharp increase in sales in the second quarter implies the region's share of Group sales has now risen to 25 percent.
Sales in all regions in the second quarter fell year-on-year by double-digit percentage amounts except for Asia-Pacific, which fell only by a single-digit percentage amount year-on-year.
Outlook - Underlying economic demand appears to have now bottomed out also in Latin America, North America and Europe. Asia is maintaining good momentum and other regions will start to recover, albeit at a slower pace. Destocking among customers is now completed but a trend towards restocking is not yet visible.
Overall, the business environment remains tough and the potential for setbacks still exists which could hinder an economic recovery. Therefore, LANXESS will wait until the publication of the third quarter results on November 12 to give a detailed earnings outlook for the full year 2009. The previous guidance of sales and earnings being below last year's level remains valid.
LANXESS, however, is targeting for the third quarter of 2009 an EBITDA pre exceptionals around the level of the second quarter of 2009. This is an ambitious target given the fact that the company's key operating earnings number for the third quarter has been in the past always weaker – on average 15 percent – than the second quarter result. In addition, the third quarter includes the traditional summer lull.
“The combination of a pick-up in demand and our enlarged package of cost savings measures will ensure that LANXESS will emerge strengthened from the crisis,” said Heitmann.
LANXESS AG
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