Lanses "Expecting Operating Profit of 900 Million to 1 Billion Euros This Year"

Operating Profit Before Depreciation of 862 Million Euros Last Year... 15.4% Decrease Compared to Previous Year

[Asia Economy Reporter Hwang Yoon-joo] Global specialty chemicals company LANXESS recorded an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of 800 million euros last year. This year, buoyed by the recovery of end-user industries, the company expects to achieve an EBITDA excluding special items in the range of 900 to 1 billion euros.

On the 23rd, LANXESS announced that its EBITDA last year was 862 million euros, a 15.4% decrease compared to the previous year (1.019 billion euros). The EBITDA margin excluding special items (EBITDA A margin) slightly declined to 14.1% from 15% the previous year.

During the same period, sales amounted to 6.104 billion euros, down 10.3% from 6.82 billion euros the previous year, while net income from continuing operations surged to 908 million euros from 240 million euros the previous year. This increase was attributed to the proceeds from the sale of shares in Currenta, the operator of the German chemical park, completed in April last year.

Under its specialty chemicals focus strategy, LANXESS has been laying the financial foundation to expand the proportion of high-profit, high-growth businesses by divesting membrane and chromium chemical product businesses and the leather chemicals division last year.

This year is expected to be the "first year of growth." Since the beginning of the year, the company has accelerated securing growth engines by announcing three consecutive corporate acquisitions in the consumer protection sector. The acquisition of French specialty antimicrobial company INTACE expanded its antimicrobial business for paper and packaging materials, and through the planned acquisition of animal disinfectant and hygiene solutions specialist Theseo in the second quarter, LANXESS plans to further strengthen its position in the animal hygiene market.

The acquisition of the U.S.-based specialty chemical company Emerald Kalama Chemical, the second-largest acquisition in the group's history, is expected to serve as a driving force for growth in the consumer protection business and provide an important foundation for pursuing high-profit new businesses in the food and animal health markets. The Emerald Kalama acquisition is expected to be completed in the second half of this year after regulatory approval.

The high-quality intermediates business segment was affected by decreased demand and price declines due to the spread of COVID-19. Sales were 1.999 billion euros, down 11.2% from 2.251 billion euros the previous year. EBITDA excluding special items was 336 million euros, a 12.3% decrease from 383 million euros in the same period last year, while the EBITDA margin excluding special items remained stable at 16.8%, similar to 17.0% the previous year.

The specialty additives business segment also saw sales decline due to reduced sales in the automotive and aerospace industries amid the COVID-19 impact. Sales recorded 1.728 billion euros, down 12.1% from 1.965 billion euros the previous year. EBITDA excluding special items decreased by 19.5% to 284 million euros from 353 million euros the previous year, and the EBITDA margin excluding special items fell to 16.4% from 18.0% the previous year.

The consumer protection business segment, newly launched in 2020, achieved strong performance supported by the agricultural chemicals business of the Saltigo division and robust demand for disinfectants. Sales increased 5.7% to 1.11 billion euros compared to the previous year, and EBITDA excluding special items rose 17.7% to 233 million euros. The EBITDA margin excluding special items also increased from 18.9% in the previous year to 21.0%.

The Engineering Materials business segment’s sales and profits were hit by weak demand in the automotive industry in the first half of 2020. Due to low sales prices and negative currency effects, sales fell 17.9% year-on-year to 1.19 billion euros. EBITDA excluding special items decreased 36.6% to 151 million euros. The EBITDA margin excluding special items dropped from 16.4% the previous year to 12.7%.

This content was produced with the assistance of AI translation services.