Highlights: - Q2 sales EUR 2.1 billion, down 12 percent - Q2 EBITDA pre exceptionals EUR 198 million, down 45 percent - Q2 net income EUR 9 million, down 95 percent - Outlook for 2013: EUR 700-800 million EBITDA pre - 2014 EBITDA pre target of EUR 1.4 billion no longer realistic - Strategy update underway, results in September
Compared to the strong second quarter of the previous year, sales were down by roughly 12 percent to EUR 2.1 billion in the second quarter of 2013. EBITDA pre exceptionals declined by 45 percent against the prior-year period to EUR 198 million and was in the middle of the guided range of EUR 174-220 million. Net income declined by 95 percent year-on-year to EUR 9 million.
In contrast to expectations in May, LANXESS does not see an improvement in business conditions in the second half of the year. Customers continue to destock their inventories, noticeably in Asia, and overall consumer sentiment remains weak.
For the year 2013, the company has substantiated its outlook given in May of EBITDA pre exceptionals of less than EUR one billion. LANXESS now anticipates EBITDA pre exceptionals of EUR 700-800 million, excluding potential inventory devaluations.
“The first half of 2013 does not meet our own high standards,” said LANXESS’ Chairman of the Board of Management Axel C. Heitmann. “Trading conditions for our businesses remain tough and the fragile sentiment in Europe is now evident in other markets that are important for us, such as China and Brazil.”
Against the background of the continuing weak demand in the current business year, the target of EUR 1.4 billion EBITDA pre exceptionals in 2014 is no longer realistic, even taking into account an expected upturn in demand next year.
Despite the difficult conditions, LANXESS is maintaining its mid-term target of EUR 1.8 billion EBITDA pre exceptionals in 2018, although it has become more challenging to reach it.
“The megatrends, above all mobility and agriculture, still remain intact and the growth markets will see better times again. That is why we believe we have in principle the right set-up,” said Heitmann.
LANXESS will continue with its proven counter-measures of flexible asset management and strict cost discipline in the coming months. In addition, this year’s capital expenditure budget has already been reduced to EUR 600 million. Important steps to improve the long-term competitiveness of the Rubber Chemicals business unit have already been taken in the second quarter.
“We have proven successfully in the past that we are able to handle difficult trading conditions. We are currently working on an update of our strategy as well as further measures. These include short-term as well as long-term cost savings, additional efficiency improvements and structural changes. We will present results in mid-September,” said Heitmann.
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