The speciality chemicals company LANXESS has achieved its forecast earnings for the first quarter of 2023: EBITDA pre-exceptionals came to EUR 189 million, within the range of EUR 180 million to EUR 220 million forecasts in March. Compared with the previous year’s figure of EUR 262 million, earnings thus declined by 27.9 per cent. Sales remained almost stable. They amounted to EUR 1.899 billion, down only 1.7 per cent from the previous year’s figure of EUR 1.931 million.
Earnings were squeezed in particular by weak demand in some customer industries, especially in construction, and continued destocking by many customers. This was particularly noticeable in the Advanced Intermediates and Specialty Additives segments.
The Consumer Protection segment proved robust in comparison, with sales and earnings increasing despite slightly lower sales volumes. The Microbial Control business acquired from the US company IFF in mid-2022 made a particularly positive contribution. LANXESS again successfully passed on the increased raw material and energy costs and benefited from positive currency effects in all segments.
Free cash flow improved significantly by EUR 264 million year-on-year and amounted to EUR 112 million. This was supported by stable working capital despite a seasonal increase pattern. Net income from continuing operations reached EUR 10 million in the first quarter after EUR 66 million in the previous year. The EBITDA margin pre-exceptionals rose 10.0 per cent, against 13.6 per cent a year ago.
“As expected, 2023 will be a tough year for the chemical industry and for LANXESS. Our figures for the first quarter make this very clear. It was therefore all the more vital that we transferred our high-performance plastics business to a joint venture as planned on 1 April. We thus geared our portfolio further toward speciality chemicals and strengthened our balance sheet. This makes us even more resilient in the current difficult waters,” said Matthias Zachert, CEO of LANXESS AG.
For the coming months, LANXESS anticipates an economically challenging environment still characterised by high levels of uncertainty. The Group, therefore, expects earnings in the second quarter of 2023 to be roughly on par with those of the first quarter. For the second half of the year, LANXESS expects a clear rebound of earnings based on a pick-up of the global economy and, in particular, a positive development of the Chinese market. Against this backdrop, the Group expects EBITDA pre-exceptionals of between EUR 850 million and EUR 950 million for the full financial year 2023.
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