Lanxess takes action against weak demand

Lanxess posted lower earnings in Q1 2013 as expected, due to a weak market environment, particularly in the tyre and automotive industries.

Q1 sales were down by 12% yr-on-yr to €2.1bn, mainly due to lower volumes and fallen selling prices. EBITDA pre exceptionals moved back by 53% yr-on-yr €174M and was thus within the target corridor of between €160M-€180M communicated in March. The operating result was diminished by scheduled one-time effects of about €30M for the start-up of the new butyl rubber plant in Singapore and the conversion to Keltan ACE technology at the EPDM rubber plant in Geleen, The Netherlands.

The agrochemicals business as well as the company’s strong position in the growth region of Asia proved to be stabilising factors in the first quarter. The Group’s EBITDA margin fell from 15.5% to 8.3%. Net income receded by 87% yr-on-yr to €25M.

"We are not immune to a sharp drop in demand but we are responding to it proactively as always,” said Lanxess’ Chairman of the Board of Management Axel C Heitmann. At the start of the year, Lanxess already initiated temporary facility shutdowns in the Performance Polymers segment in line with its proven policy of flexible asset and cost management. Now additional measures are planned in the Performance Chemicals segment.