Lanxess reports worldwide sales growth in all segments

13 Nov '08

6 min read

Sales of the Performance Chemicals segment advanced by 5.5 percent to EUR 520 million (Q3 2007: EUR 493 million). Adjusted for negative currency effects of 4.9 percent, the segment achieved organic sales growth of 10.4 percent. This improvement in sales resulted from a substantial 11.2 percent increase in selling prices and a 0.8 percent negative volume effect. Despite the adverse exchange-rate effects, EBITDA pre exceptionals came in at EUR 65 million, almost matching the high prior-year level of EUR 67 million. The EBITDA margin moved back by 1.1 percentage point to 12.5 percent.

Performance by region:
Operational sales of LANXESS rose in all regions. In the region EMEA (Europe, Middle East, Africa) excluding Germany, sales expanded by a portfolio- and currency-adjusted 23.4 percent. Unjustment third-quarter sales rose by 8.8 percent to EUR 579 million (Q3 2007: EUR 532 million).

The growth driver was again western Europe, with business in Belgium, the United Kingdom and the Netherlands developing particularly well. Sales in eastern Europe also posted a tangible improvement. The region EMEA excluding Germany remains at the focus of the Group's business activities, accounting for 31.9 percent of Group sales in the third quarter.

In Germany, sales were up by a portfolio-adjusted 3.7 percent in the third quarter of 2008. Before adjusting for portfolio changes, business was down by 7.8 percent to EUR 388 million (Q3 2007: EUR 421 million). Germany's share of Group sales thus dropped from 24.7 to 21.4 percent.

After adjusting for portfolio and currency effects, LANXESS sales in the Americas region advanced by 6.7 percent. Unadjusted sales growth came to 24.1 percent, with sales of EUR 530 million (Q3 2007: EUR 427 million). This was due especially to sales contributions from the Petroflex group. The Americas region's share of Group sales expanded by 4.2 percentage points year on year to 29.2 percent due to the consolidation of the Petroflex group.

Sales in the Asia-Pacific region expanded by a substantial 31.4 percent after adjusting for currency effects and for divested or newly integrated businesses. On an unadjusted basis, sales declined by 2.5 percent to EUR 317 million (Q3 2007: EUR 325 million). LANXESS once again achieved double-digit growth rates in China, India, South Korea and Japan. The region's share of Group sales was 17.5 percent, down slightly from the prior-year figure of 19.1 percent.

Outlook for the remainder of 2008:
LANXESS expects the financial market crisis to continue to impact the real economy in the coming months, resulting in a weaker overall economic climate for the remainder of fiscal 2008. The economic prospects for North America and western Europe will continue to deteriorate.

There should be a moderate stimulus to growth in Asia-Pacific, central and eastern Europe and Latin America. However, the global decline in consumer spending is likely to have a dampening effect on these economies as well.

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