LANXESS Posts Strong Second Quarter
LEVERKUSEN, Germany - Specialty chemicals group LANXESS continued to grow in the second quarter, as sales advanced by 8.1 percent to EUR 2.42 billion.
Sales improved mainly as a result of currency effects and selling price increases. Raw material cost increases were fully passed on to the market in all segments. Net income fell slightly by 3 percent to EUR 176 million due to reorganization measures in the Performance Chemicals segment.
Sales in the Asia-Pacific region rose by nearly 24 percent to EUR 608 million, bringing the region’s share of Group sales to 25 percent. The Performance Polymers segment turned in a strong performance, with significant growth in the double-digit range. Substantial impetus in this region continued to come from Greater China, where sales advanced by 31 percent.
In North America, Group sales rose by more than 19 percent to EUR 439 million and accounted for 18 percent of Group sales, with all segments posting growth rates in the low single digits. The United States was the main factor for the development of business in this region.
Sales rose by nearly 8 percent year-on-year to EUR 331 million in Latin America, which again accounted for 14 percent of Group sales. Brazil continued to be the most important country in the region.
EMEA (Europe excluding Germany, Middle East, Africa) remained the strongest region, contributing 27 percent to Group sales. Sales receded by more than 2 percent compared with the prior-year period, to EUR 650 million, with business declining particularly in Italy and Spain. Russia, by contrast, saw encouraging growth.
In Germany, sales fell by less than 4 percent year-on-year to EUR 396 million and thus accounted for 16 percent of Group sales.
In the five BRICS countries (Brazil, Russia, India, China and South Africa), sales advanced by more than 14 percent year-on-year to EUR 597 million. These countries represented nearly 25 percent of Group sales.
The Performance Polymers segment registered a year-on-year sales increase of over 11 percent in the second quarter of 2012 to EUR 1.43 billion. Rising raw material costs, especially for butadiene and isobutylene, were quickly passed on to the market through selling price increases. A positive portfolio effect from the acquisition of the Keltan EPDM business, along with favorable currency effects, contributed significantly to higher sales. The Asia-Pacific region proved a particularly strong growth driver.
Supported by strong demand for agrochemicals, sales in the Advanced Intermediates segment edged up by 1 percent in the second quarter to EUR 399 million. Demand from the construction and coatings industries, however, remained weak. Higher raw material costs were passed on to the market in full. North America acted as a growth driver, posting a particularly strong sales gain in absolute figures.
Sales in the Performance Chemicals segment rose by more than 4 percent against the same period last year to EUR 585 million. Here too, higher raw material costs were passed on to the market in full. Earnings were diminished by a decline in orders from the construction and electrical/electronics industries, as well as by maintenance shutdowns in a number of business units.
LANXESS continues to anticipate a typically seasonal business pattern for the business year 2012. Consequently, the company expects the EBITDA contributions of the first half of the year in relation to the second half in a ratio of 60:40. In view of increasing economic challenges, LANXESS does not expect to see any further momentum in the second half of the year.
“We therefore expect the operating result in the second half of 2012 to be approximately at the prior-year level,” said LANXESS CEO Axel C. Heitmann.
For Europe, LANXESS continues to predict weak economic development as a result of the euro debt crisis. The company anticipates moderate economic growth in Asia and Latin America. The U.S. economy will probably continue to expand, though possibly at a slower pace.