ERJ staff report (LMH)
Leverkusen, Germany - Lanxess said it is confirming its full-year 2012 guidance despite the challenging business environment, which saw third quarter sales drop 8 percent to Euro 2.2 billion. Earnings (EBITDA) were down 18 percent totalling Euro 255 million. The opoerating margin was 11.8 percent, down from 13.3 percent a year earlier. Net profit was down by 39 percent totalling Euro 94 million.
The speciality chemicals company expects full-year EBITDA growth to be at the lower end of the 5-10 percent range previously guided. Lanxess suffered from weakening demand in the tyre and automotive industries.
EMEA (Europe excluding Germany, Middle East, Africa) remained the largest sales region in the third quarter, with 28 percent of overall group sales. Sales fell by 9 percent year-on-year to Euro 596 million. Sales in Italy and Spain fell, while sales in Russia grew. Sales in Germany fell by 4 percent year-on-year to Euro 392 million in the third quarter and represented 18 percent of group sales.
Sales fell in all other regions, with Latin America sales down 19 percent to Euro 287 million, and sales in the BRIC countries down 18 percent totalling Euro 485 million. Sales in Asia-Pacific fell by 5 percent year-on-year to Euro 493 million in the third quarter. This development was mainly due to a business decline in Greater China, Lanxess said.
Sales in the Performance Polymers segment were down 17 percent year-on-year at Euro 1.2 billion. Selling prices declined by 12 percent year-on-year due to falling raw material prices, above all butadiene, while volumes fell by 11 percent. EBITDA pre exceptionals decreased 29 percent to Euro 152 million in the third quarter due to lower volumes in the replacement and OEM tyre markets.
In contrast to standard-grade synthetic rubbers, demand for high-performance rubbers such as neodymium-based performance butadiene rubber (Nd-PBR) and solution styrene butadiene rubber (SSBR) remained resilient. These rubbers are essential in producing â€œgreen tyresâ€ that reduce fuel consumption and help to reduce CO2 emissions, Lanxess said.
Sales of the Performance Chemicals segment rose 6 percent year-on-year to Euro 555 million in the third quarter due to positive currency effects and portfolio changes resulting from three recent acquisitions in the US. Rubber Chemicals and Rhein Chemie saw volumes decline from their customers in the automotive industry.
For the fourth quarter Lanxess expects the automotive sector in Europe to remain weak, while growth in North America and China will continue, albeit at a slower rate. Demand from the tyre industry will continue to remain weak, while agrochemicals will continue to show a stable performance.
â€œDespite the current macroeconomic situation, the long-term growth drivers for our business remain intact. With our technology-based products, we will continue to capitalise on the megatrends and focus on the growth regions,â€ Heitmann concluded.
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News release from Lanxess