COLOGNE, GERMANY: Lanxess AG projects the highest full year results in company history, following a very strong first quarter of 2017 and the successful closing of the acquisition of US-based company Chemtura. Global sales of the speciality chemicals company increased by a substantial 25 percent to €2.4 billion in the first quarter of 2017, up from €1.9 billion a year earlier.
EBITDA pre exceptionals also improved by 25 percent to €328 million, compared with €262 million in the first quarter of 2016. The very positive first-quarter development was primarily driven by a significant increase in volumes across all segments.
The EBITDA margin pre exceptionals came in at 13.7 percent, slightly above the prior-year figure of 13.6 percent. Net income rose significantly by 47 percent to €78 million, against €53 million in the year-earlier quarter. For the full year 2017, the company expects EBITDA pre exceptionals of between €1.225 billion and €1.3 billion. This forecast includes the earnings contribution from the newly acquired Chemtura businesses. 2017 could therefore be the most successful fiscal year in the company’s history. Lanxess achieved its highest operating result to date in 2012, when it posted a figure of around €1.2 billion.
“Lanxess got off to a very strong start to the new fiscal year. We recorded an increase in demand in all of our business segments and generated higher sales in all regions. This clearly shows that we have the right positioning. Good order flow and a dynamic business environment appear to continue in the second quarter — for the full year, we are even expecting record earnings. This is a clear indication of our operational strength, which will be further enhanced by the Chemtura acquisition. Our job now is to ensure the swift and smooth integration of the new businesses,” said Matthias Zachert, chairman of the board of management of lanxess AG.
Very strong performance in the segments
Sales of the advanced intermediates segment in the first quarter of 2017 were €518 million, 12 percent above the prior-year figure of €463 million. Despite being held back by higher energy costs and a delay in passing on increased raw material prices, EBITDA pre exceptionals advanced by 2 percent to €91 million, compared with €89 million a year earlier. In particular, higher demand and the expansion of volumes had a positive impact on earnings. The EBITDA margin pre exceptionals was 17.6 percent, against 19.2 percent in the prior-year quarter.
Sales in the performance chemicals segment rose by 14 percent in the first quarter of 2017, to €607 million, against €533 million a year earlier. EBITDA pre exceptionals advanced by 5 percent to €103 million, compared with the prior-year level of €98 million. Growth was driven by strong demand for additives, biocides and leather chemicals, as well as by the contribution from the Clean and Disinfect business acquired from Chemours, while higher energy costs and negative currency effects on the costs held back earnings. The EBITDA margin pre exceptionals was 17.0 percent, against 18.4 percent in the prior-year quarter.
In the high-performance materials segment, sales increased by 15 percent to €315 million, up from €273 million a year earlier. EBITDA pre exceptionals increased by 26 percent to €48 million, compared with €38 million a year earlier. Growth was once again driven by expanded volumes in all product groups and regions, very high capacity utilization and a focus on higher-margin products. As a result, the EBITDA margin pre exceptionals was 15.2 percent, compared with 13.9 percent in the prior-year quarter.
Sales in the Arlanxeo segment climbed by 48 percent to €948 million, compared with €640 million a year earlier. EBITDA pre exceptionals increased by 27 percent to €144 million, up from €113 million in the first quarter of 2016. This development was driven by strong demand in Asia, efficient use of the global production network, and positive currency effects. The EBITDA margin pre exceptionals was 15.2 percent, against 17.7 percent in the prior-year quarter.
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