· Proposed dividend of EUR 0.70 – 17 percent higher than in the
prior year
· Good business development reflects success of realignment program
· LANXESS back on a path of growth
· Record earnings targeted in 2017 after a good start to the yea
At this year’s Annual Stockholders’ Meeting, specialty chemicals company
LANXESS was able to look back at a year of strong figures and groundbreaking
changes. “LANXESS today is a realigned enterprise that is profitable, stable
and fast-growing,” stressed Matthias Zachert, Chairman of the Board of
Management at LANXESS, in his presentation before the stockholders at the
LANXESS arena in Cologne.
In view of the encouraging business results, the Board of Management and the
Supervisory Board proposed to the Annual Stockholders’ Meeting that a
dividend of EUR 0.70 be paid out – an increase of 17 percent against the
previous year. This would result in a total dividend payout of around EUR 64
million. “We are thus achieving our goal of paying an increasing but at
least stable dividend,” said Zachert.
EBITDA pre exceptionals of LANXESS rose by 12.4 percent to EUR 995 million
in 2016, compared with EUR 885 million a year earlier. The main drivers of
this positive development were higher volumes in all segments, the
associated increase in capacity utilization and cost savings resulting from
the improved competitiveness of the company’s plants and processes. The
Group’s EBITDA margin pre exceptionals improved from 11.2 percent to 12.9
percent. Net income rose by a substantial 16.4 percent to EUR 192 million
from EUR 165 million. Sales declined slightly, from EUR 7.9 billion in 2015
to EUR 7.7 billion, primarily due to the adjustment in selling prices to
reflect lower raw material costs. At the end of the past fiscal year, net
financial liabilities fell very substantially from EUR 1.2 billion to EUR
269 million. This was mainly due to the proceeds from the joint venture for
synthetic rubber with Saudi Aramco. In 2016, capital expenditures amounted
to EUR 439 million, which was more or less level with the prior-year figure
of EUR 434 million.
2016: progress with reorganization, growth course set
For LANXESS, 2016 was a year of realignment. With the establishment on April
1, 2016, of ARLANXEO, a joint venture for synthetic rubber with Saudi
Aramco, the Cologne-based company improved the future prospects of its
rubber business, considerably lowered its debt and improved its options for
further growth. The acquisition of the fast-growing, high-margin Clean and
Disinfect business of Chemours on August 31, 2016, underscored the new
strategy of becoming a leading player in profitable, medium-sized markets.
LANXESS reached a milestone on this path with the announcement on September
26, 2016, that it had acquired the U.S. chemical company Chemtura – the
biggest acquisition in the company’s history with a transaction volume of
EUR 2.4 billion
2017: ensuring rapid integration
Zachert stressed that the transformation of LANXESS is not yet complete: “We
are focused on organic growth here, but we are also prepared to help
actively shape the consolidation process in the chemical industry.” Zachert
said the focus will initially be on the rapid integration of the former
Chemtura businesses with specialty additives for lubricants and flame
retardants, urethanes and organometallics. Since the acquisition
successfully closed on April 21, 2017, the integration has been proceeding
at full steam. With effect from June 1, 2017, former Chemtura Executive Vice
President Stephen C. Forsyth will join the leadership team of LANXESS as
Chief Integration Officer and will be responsible for integrating the new
businesses and employees. The company is also driving forward organic growth
and plans, for example, to invest some EUR 100 million through 2020 in its
network of production facilities for chemical intermediates, particularly at
its German sites.
Record earnings targeted
LANXESS started 2017 with a very good first quarter. Global sales of the
specialty chemicals company increased by a substantial 25 percent to EUR 2.4
billion, up from EUR 1.9 billion a year earlier. EBITDA pre exceptionals
also improved by 25 percent to EUR 328 million, compared with EUR 262
million in the first quarter of 2016. Net income rose by a substantial 47
percent to EUR 78 million, against EUR 53 million in the year-earlier
quarter.
In view of the positive operational development and the successfully
completed acquisition of Chemtura, the company expects to post EBITDA pre
exceptionals of between EUR 1,225 million and EUR 1,300 million for the full
year 2017. This forecast takes account of the earnings contribution from the
newly acquired Chemtura businesses. 2017 could therefore be the most
successful fiscal year in the company’s history.
Free trade guarantees increased prosperity
According to Zachert, the right political framework conditions are also
crucial for the company’s future success. He referred to raising
protectionist tendencies in different European countries and voiced his
support for an open Europe and global free trade. “Even if loud voices try
to convince us otherwise: protectionism has never led to increased
prosperity in the long term. On the contrary, nations and economies always
decline as a result. We therefore do not need isolationism in our markets,
tariffs or other obstacles to trade. We need cooperation and concerted
action. We need free trade.”
Forward-Looking Statements
This company release contains certain forward-looking statements, including
assumptions, opinions, expectations and views of the company or cited from
third party sources. Various known and unknown risks, uncertainties and
other factors could cause the actual results, financial position,
development or performance of LANXESS AG to differ materially from the
estimations expressed or implied herein. LANXESS AG does not guarantee that
the assumptions underlying such forward-looking statements are free from
errors nor does it accept any responsibility for the future accuracy of the
opinions expressed in this presentation or the actual occurrence of the
forecast developments. No representation or warranty (expressed or implied)
is made as to, and no reliance should be placed on, any information,
estimates, targets and opinions, contained herein, and no liability
whatsoever is accepted as to any errors, omissions or misstatements
contained herein, and accordingly, no representative of LANXESS AG or any of
its affiliated companies or any of such person's officers, directors or
employees accept any liability whatsoever arising directly or indirectly
from the use of this document.
Information for editors:
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