Lanxess to reinstate bonuses after strong growth in Q2

ERJ staff report (DS)

Leverkusen - Lanxess AG achieved better-than-expected results in the second quarter of 2010. The company has also raised its earnings forecast for the business year 2010. It now expects EBITDA pre exceptionals of roughly Euro 800 million for the full year after previously forecasting Euro 650-700 million in May 2010.

Sales of the Performance Polymers segment rose 71 percent year-on-year to Euro 958 million in the second quarter, driven by price increases and strong demand in Asia and notably Latin America. The segment's EBITDA pre exceptionals jumped to EUR 171 million from EUR 52 million a year earlier, with all business units benefiting from the recovery in the tyre replacement and OEM industries.

The company also said it will reinstate Christmas bonuses and some other incentives to staff, which were cut during the crisis. In a statement, the company said, "Due to the company's positive business development, Lanxess will partly put on hold its 'Challenge09-12' package of global measures, which were introduced to mitigate the effects of the economic crisis."

It continued, "More than 6,000 German non-managerial employees will once again receive the full Christmas allowance, due to be paid in November 2010. In addition, it was agreed to return the majority of non-managerial employees in Germany to a full-working week as of January 1, 2011, and make a one-off payment in April 2011.

The reductions in the variable salary of the managerial employees, as well as the Board of Management, will not be fully enforced.

Nevertheless, lanxess will not completely abandon its flexible cost structures. It said that tough trading conditions still exist in several of the business units and countries.

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Press release from Lanxess