In crisis year 2009, Lanxess (Leverkusen / Germany; www.lanxess.com) saw EBTIDA pre-exceptionals reduced by 36% year-on-year to EUR 465m. However, CEO Axel Heitmann told the annual financial press conference that the performance was “at the upper end” of management’s revised target. Sales fell 23% to EUR 6.6 bn. Lanxess blames the “decline of historic proportions” on a “dramatic drop in demand” from important customers. As output of the automotive industry shrank by 13.5% and sales in the construction sector by 6.7%, the CEO noted that the positive operating result was achieved despite capacity utilisation rates of only 70%. Net income decreased by 78% to EUR 40m.

Sales of the Performance Polymers segment, which includes synthetic rubber as well as PA and PBT, receded by 27% to EUR 2.4 bn, as EBITDA pre-exceptionals plunged by almost 40% to EUR 250m. Heitmann blamed the earnings setback on “price and volume effects.” Under pressure from decreases in feedstock notations, polymer selling prices dropped by nearly 20%. Volume sales retreated by 11%. Heitmann said most of the weakness was seen in the first half year. An upswing in demand, in particular from Asia, set in during the second half.

Generally speaking, the revival of Asian demand saved Lanxess from an even worse financial performance in 2009. Sales in this region declined by only 1.3%, and Performance Polymers, led by rubber, even saw a 2% increase. Going forward, Heitmann pointed to “an uncertain future” for markets in Europe and North America and said Lanxess believes that Asia-Pacific will become the most important pillar of its business. In 2009, the region increased its share of the company’s sales by 5% to account for 22.6% against 21% for the German home market. EMEA, at 31%, still represents the largest share.

The upswing late last year and the trend in this year’s first quarter “give us grounds for confidence,” Heitmann said. In light of continuing risks, the “Challenge 09-12” scheme aimed at saving EUR 140m this year and EUR 360m altogether will remain in place – see Plasteurope.com of 14.08.2009. After trimming its capital spending budget to EUR 275m at the depth of the recession, Lanxess will increase spending to EUR 400m in 2010. Among the postponed projects being revived is a 10% expansion of PA feedstock caprolactam at Antwerp / Belgium – see Plasteurope.com of 18.09.2008.

e-Service:
Lanxess annual report 2009 as a PDF document (5,676 KB)