Sales down 26.7 percent to EUR 1.601 billion in the third quarter of 2023

EBITDA pre exceptionals down 50.4 percent year-on-year at EUR 119 million

Mumbai (Maharashtra) [India], November 21: In the third quarter of 2023, LANXESS’ business figures were again influenced by the persistently weak economy. Sales amounted to EUR 1.601 billion, down 26.7 percent on the previous year’s figure of EUR 2.185 million. EBITDA pre exceptionals fell by 50.4 percent from EUR 240 million to EUR 119 million. 

The main reasons for this development were the low demand from nearly all industries and customers’ ongoing albeit diminishing inventory reduction. The associated reduction in sales volumes and high idle costs led to declining earnings, especially in the Specialty Additives and Advanced Intermediates segments. The Consumer Protection segment saw only a comparatively moderate earnings decline 

The Group’s EBITDA margin pre exceptionals was 7.4 percent, against 11.0 percent in the prior-year quarter. Net income declined to minus EUR 131 million in the third quarter compared with EUR 80 million in the prior-year quarter.

“The weak demand in the global chemicals industry persists, and we see no signs of recovery for the rest of the year. On the contrary, demand in the fourth quarter to date seems to be even weaker than expected,” said Matthias Zachert, Chairman of the Board of Management at LANXESS AG. 

LANXESS had already announced the unexpectedly weak start to the fourth quarter on November 6. Initiated destocking of customers in the agroindustry and a supplier-related production limitation for the Business Unit Flavors & Fragrances at its production site in Botlek (NL) impact results additionally. LANXESS therefore expects EBITDA pre exceptionals for the full year 2023 to be between EUR 500 and  550 million. LANXESS’ previous guidance was EUR 600 to 650 million for EBITDA pre exceptionals for the total year. 

Given the weak business development, the Board of Management intends to propose a reduction of the full year 2023 dividend to EUR 0.10. The hereby avoided cash outflow would result in a further reduction of net financial debt. Expected proceeds from the now initiated sale of the Business Unit Urethane Systems would contribute as well.

In the third quarter, LANXESS reduced its net financial liabilities by a further 11 percent from EUR 2.863 billion as of June 30, 2023 to EUR 2.557 billion. The decline was mainly the result of a consistent reduction in net working capital. Compared to EUR 3.814 billion on the balance sheet date of December 31, 2022, net financial liabilities fell by 33 percent.

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