News from Notch Consulting, Inc.

May 13, 2013

LANXESS points to weak tire and automotive markets for 12% sales decline in 1Q

Filed under: Auto, General, Rubber Chemicals, Tires — Notch @ 10:35 am

LANXESS reported lower-than-expected earnings in its first quarter due to a weak market environment, particularly in the tire and automotive industries. First-quarter sales were down by 12 percent year-on-year to EUR 2.1 billion, mainly due to lower volumes and fallen selling prices.

Sales in the Performance Chemicals segment, which includes both the Rubber Chemicals and Rhein Chemie businesses, decreased by 7 percent to EUR 520 million. Volumes declined as a result of the weak demand from the construction industry due to the long winter and from the business units linked to the tire industry. Selling prices were stable. EBITDA pre exceptionals, at EUR 51 million, was EUR 32 million below the prior-period figure.

LANXESS anticipates a slight improvement in business for the second quarter. “The weak demand from the tire and automotive industries persists, but customer destocking is slowing down. We currently anticipate EBITDA pre exceptionals in the second quarter to improve sequentially but to be below EUR 220 million,” said LANXESS’ Chairman of the Board of Management Axel C. Heitmann. “The market environment will remain weak and volatile with low visibility persisting. We nevertheless expect an economic improvement in the second half of this year. Asia, particularly China, will perform substantially better, whereas market conditions in Europe will remain difficult.”

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