Home / Knowledge / News / Textiles / Specialty chemicals group Lanxess Q3 sales fall 5%
Specialty chemicals group Lanxess Q3 sales fall 5%
12
Nov '13
In an economic environment marked by continuing uncertainty, specialty chemicals Group LANXESS has narrowed its guidance range for the full year 2013: EBITDA pre exceptionals is expected to be between EUR 710 million and EUR 760 million, within the previously communicated corridor of EUR 700 million to EUR 800 million.

Highlights

- EBITDA pre exceptionals in 2013: between EUR 710 million and EUR 760 million
- Q3 with volume growth in all segments; continued pressure on prices
- Q3 sales decline by 5 percent year-on-year to EUR 2.1 billion
- Q3 EBITDA 26 percent lower at EUR 187 million
- Q3 net income drops by 88 percent to EUR 11 million
- Sales expand in Asia-Pacific
- Agrochemicals business remains stable
- Sales expand in Asia-Pacific
- Agrochemicals business remains stable

In the third quarter of 2013, the company posted a 9 percent volume increase year-on-year, with all segments contributing. However, this increase did not entirely offset the 11 percent overall price decline. Prices fell particularly in the rubber businesses belonging to the segment Performance Polymers. Negative currency effects, mainly related to the weakness of the U.S. Dollar, also had an impact. Group sales fell by 5 percent overall compared with the prior-year quarter to EUR 2.1 billion.

Apart from the gradual increase in volumes in all segments, the ongoing strong demand for agrochemicals and positive sales development in the Asia-Pacific region also had a stabilizing effect on quarterly results.

"Some of our customers have started restocking their inventories. This is highlighted by the year-on-year and quarter-on-quarter volume increases," said Axel C. Heitmann, Chairman of the Board of Management of LANXESS AG. "But, in our view, it is still too early to speak of a general recovery of the business."

EBITDA pre exceptionals receded by 26 percent year-on-year to EUR 187 million. This was largely due to lower selling prices and inventory reduction. In addition, there was a burden of around EUR 10 million in the form of inventory devaluations. The EBITDA margin pre exceptionals declined to 9.1 percent from 11.8 percent. Net income fell by 88 percent to EUR 11 million due to higher depreciation and amortization as well as exceptional charges of roughly EUR 20 million for the efficiency program "Advance".

Operating cash flow improved to EUR 378 million in the third quarter of 2013 from EUR 344 million a year earlier due to a reduction in working capital. Net financial liabilities decreased to around EUR 1.8 billion from the end of the second quarter due to strict working capital management. "We aim to further reduce net financial liabilities by year end," said LANXESS Chief Financial Officer Bernhard Duettmann.

Click here to read full results

Lanxess


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