Higher costs hit Lanxess

Published:  21 March, 2014

In what Lanxess say remains a difficult competitive environment, the specialty chemicals group expects EBITDA pre-exceptionals of around €200 million for the first quarter of 2014. In the prior-year quarter, the company posted EBITDA pre exceptionals of €174 million that was burdened by several factors including start-up costs.

Sales in the Performance Chemicals segment, which includes the leather chemicals business unit, dipped slightly in 2013 by around 3% to €2.1 billion. This was attributed to unfavorable currency effects of 3% and slightly negative price and volume effects.

EBITDA pre-exceptionals declined by 18% year-on-year to €231 million. This was attributed to increased production costs and slightly higher raw material prices alongside decreasing volumes, lower selling prices and unfavorable exchange rates.

Company Performance

Overall company sales fell by 9% against the prior year to €8.3 billion. This development was primarily due to lower selling prices in the Performance Polymers segment resulting from declining raw material prices and the challenging competitive situation. EBITDA pre exceptionals decreased by 40% year-on-year to €735 million and was thus within the guided range of €710 million to €760 million. This was also attributed to an increase in production-related costs and negative currency effects. The slight increase in volumes could not compensate for the decline in earnings. The Group's EBITDA margin pre exceptionals fell to 8.9% from 13.4% in 2012.