In the face of many challenges, LANXESS still achieved its full-year target for 2019

— Sales were in line with the previous year at €6.802 billion

— EBITDA pre exceptionals up 3.3% to €1.019 billion

  — First EBITDA margin of 15% pre-order

The Leather Chemicals business unit is classified as a discontinued operation and prior year figures for sales and EBITDA have been restated accordingly

— Proposed dividend for FY 2019: €0.95

— 2020 projections: Smooth operation, but pressure from COVID-19; EBITDA pre annulus 900 million to 1 billion euros

— Future focus on consumer protection and battery technology areas

— Double-digit growth in Greater China

Shanghai, March 19, 2020 – In fiscal year 2019, specialty chemicals company LANXESS achieved good results in a challenging economic environment. EBITDA pre exceptionals rose by 3.3 percent to 1,019 million euros. As predicted, the company’s earnings are roughly between 1 billion euros and 1.05 billion euros. The company’s revenue last year was 986 million euros.

Strong results in the three business segments High Quality Intermediates, Specialty Additives and Performance Chemicals compensated for a decline in the Engineered Materials segment mainly caused by weaker demand from the automotive industry. Favorable currency effects, especially the U.S. dollar, supported earnings. For the first time, the full-year EBITDA margin routinely reached 15.0 percent, surpassing the previous year’s figure of 14.4 percent.

“In 2019, the economic environment was full of difficulties, and we also experienced the first real test since the company’s restructuring. Lanxess is now more profitable and stable than ever before,” Chang Mutian, Chairman of the Management Board of Lanxess Group Said. “Our margins are at a new high despite the challenges and our financial base for new growth projects has been further strengthened. In 2020 we will increasingly focus on our high-margin consumer protection business as well as battery technology new applications in the field.”

Since December 31, 2019, the Leather Chemicals Business Unit has been classified as a non-continuing business. The corresponding prior-year figures for sales and operating income have been restated accordingly. As part of its strategic alignment, LANXESS plans to sell the business unit. LANXESS already sold its chrome chemicals business and its chrome ore stake in 2019.

LANXESS Group’s sales amounted to 6.802 billion euros, which was basically the same as the previous year’s level (6.824 billion euros). Net income from continuing operations was EUR 240 million, down 14.9 percent compared to EUR 282 million in the previous year. This was primarily attributable to exceptional charges incurred in the restructuring of the organometallic business.

Qian Mingcheng, President of Lanxess Asia Pacific Region, explained the details of the company’s 2019 financial report, as well as the new business layout and outlook for 2020.

Qian Mingcheng, President of Lanxess Asia Pacific, said: “Despite the challenging global economic situation in 2019, the performance of Lanxess Greater China has achieved double-digit growth, which is due to our balanced business layout. This year, We have seen many uncertainties brought about by the new crown epidemic, but at the same time we have also seen the strong resilience of the market, which further strengthens our confidence in expanding development in China. At present, all offices and production bases of LANXESS Greater China have resumed work safely Resumption of production. In 2020, LANXESS will continue to promote the implementation of the Asia-Pacific Application Development Center and the comprehensive production base project in Shanghai Chemical Industry Park.”

Dividend increases again

In FY2019, the dividend will also increase again. The Board of Management and the Supervisory Board will propose a dividend of EUR 0.95 per share at the Annual General Meeting on May 13, 2020, which would represent an increase of around 6% compared to the previous year.

New Business Unit: Consumer Protection

LANXESS wants to focus more on consumer protection products in its development process, so it is currently adjusting its business segment structure, and the results of the adjustment will take effect immediately. The Saltigo Business Unit, the Liquid Purification Technology Business Unit and the Material Protection Products Business Unit form a new consumer protection business segment. The business segment’s product portfolio includes active ingredients for the agricultural and pharmaceutical industries, insect repellents and disinfectants, as well as water treatment and water purification technologies, among others.

“Our Consumer Protection segment’s products are characterized by high and steady growth. At the same time, our many years of expertise in these often heavily regulated market segments gives us a competitive advantage,” Chang Mutian said.

The Consumer Protection segment will replace the previous��Performance chemicals business segment. At the same time, the Inorganic Pigments business unit is now included in the High-Quality Intermediates business segment. From the first quarter of 2020, reporting will be adjusted accordingly.

Lithium Project: Pilot Facility Begins Trial Operation

Lanxess, in cooperation with partner Standard Lithium, has made further progress on a commercial extraction project for battery-grade lithium at its production site in El Dorado, Arkansas, USA. At the site, LANXESS operates three production plants for bromine products. Bromine is obtained from the brine extracted here, which also contains lithium. Standard Lithium has developed an innovative method to extract high-purity lithium directly from brine. A pilot facility built at the factory will begin trial operations in March 2020. LANXESS expects to have the preliminary results of the technical feasibility studies by mid-2020.

2020 Outlook: Smooth operation, but pressure from COVID-19

LANXESS expects its operating business to remain stable in the 2020 fiscal year, but the new crown epidemic will have an impact on the operating performance of the full year of 50 million to 100 million euros. Overall, LANXESS then expects its EBITDA routinely to be in the range of 900 million to 1 billion euros. The specialty chemicals company currently expects to incur expenses related to the COVID-19 pandemic of approximately EUR 20 million in the first quarter of 2020.

2019 Full Year Details: Three of Four Business Segments Achieve Revenue Growth

Overall, the High Quality Intermediates segment performed better than the previous year in 2019 due to strong project activity in the agrochemicals segment of the Saltigo business unit and favorable exchange rate effects . Despite negative price effects due to lower raw material prices, the segment’s sales rose by 1.9 percent to 2,249 million euros compared with 2,207 million euros in the previous year. EBITDA pre exceptionals rose by 8.4 percent from 359 million euros to 389 million euros. The EBITDA margin pre exceptionals increased from 16.3 percent to 17.3 percent.

Despite weak demand from the automotive industry and the termination of several low-margin contract manufacturing agreements by LANXESS, the Specialty Additives segment performed well in fiscal 2019. This was due to favorable exchange rate effects and strong business in the Polymer Additives business unit. At EUR 1,965 million, the segment’s sales were close to the previous year’s level (EUR 1,980 million). EBITDA pre exceptionals rose by 2.9 percent to EUR 353 million, slightly above the previous year’s EUR 343 million, benefiting from cost synergies from the integration of Chemtura. The EBITDA margin pre exceptionals increased to 18.0 percent from 17.3 percent in the previous year.

In 2019, sales and profit in the Performance Chemicals segment improved significantly, mainly due to the operational strength of the water treatment and material protection business units and positive exchange rate effects. Sales in this business segment amounted to 1,052 million euros, an increase of 7.8 percent compared to 976 million euros in the previous year. EBITDA pre exceptionals increased by 23.1 percent from 156 million euros to 192 million euros. The EBITDA margin pre exceptionals increased from 16.0 percent to 18.3 percent.

Effective December 31, 2019, the Leather Chemicals business unit will be classified as a discontinued business and will therefore no longer be part of the Performance Chemicals business segment. Data for the previous year has been restated accordingly.

Developments in the Engineered Materials segment continued to be affected by weak demand from the automotive industry. Favorable exchange rates eased the situation only slightly. Sales fell by 8.0% from 1.576 billion euros to 1.45 billion euros due to lower selling prices due to lower raw material costs. At EUR 238 million, EBITDA pre exceptionals was down 10.9 percent compared to EUR 267 million in the previous year. However, the EBITDA pre exceptionals margin of 16.4 percent was only slightly lower than the previous year’s 16.9 percent.