‘Ambitious growth strategy’ paying off as Lanxess profits jump 60% in Q1
The year has started well for Lanxess. After achieving what it calls its “best-ever quarterly result in the first quarter,” the German specialty chemical company says it is on track to achieve EBITA pre-exceptionals in excess of one billion euros in 2011; during the first quarter its EBITA pre-exceptionals rose 38 per cent year-on-year to 322 million euros, with double-digit growth recorded in all its segments and regions. The company’s sales increased 29 per cent year-on-year in the three months to March 31, 2011 due to higher volumes and price increases that helped offset rising raw material costs. EBITDA margin pre exceptionals rose to 15.5 per cent in the first quarter from 14.4 per cent a year earlier and net profit increased 60 per cent year-on-year to 166 million euros.
“The jump in earnings clearly shows that our ambitious growth strategy is paying off,” stated Lanxess CEO Axel C. Heitmann. “We have once again outperformed the market due to our premium product portfolio and focus on megatrends such as mobility and agriculture.”
The EMEA region (excluding Germany) remained Lanxess’ largest sales region in the first quarter, accounting for 31 per cent of all group sales. This region also showed the strongest top-line growth, with sales increasing 33 per cent to 642 million euros. Russia, Hungary, Poland and Turkey achieved the strongest growth rates. Sales in Germany rose 29 per cent to 398 million euros in the first quarter and represented 19 per cent of group sales.
Sales in North America sales grew 31 per cent year-on-year to 328 million euros and represented 16 per cent of Group sales in the first quarter. Latin America increased sales by 25 per cent year-on-year to 244 million euros in the first quarter due to the company’s strong foothold in Brazil. This region represented 12 per cent of group sales. The Asia-Pacific region increased sales by 23 per cent year-on-year to 461 million euros in the first quarter, representing 22 per cent of group sales. China, India and South Korea showed the strongest relative sales growth in the first quarter. Sales in the five ‘BRICS’ countries (Brazil, Russia, India, China, South Africa) rose 25 per cent year-on-year to 458 million euros and represented 22 per cent of group sales in the first quarter.
In regards to segment performance, sales in Lanxess’ Performance Polymers segment – the business area most strongly associated with the tyre industry – rose 35 per cent year-on-year to 1.1 billion euros and EBITDA pre-exceptionals jumped 52 per cent year-on-year to 199 million euros in the first quarter. All businesses are reported to have profited from strong demand in their customer industries and were able to pass on rising raw material costs. The Butyl Rubber and Performance Butadiene Rubbers benefited from their exposure the “booming” tyre industry, while Semi-Crystalline Products and Technical Rubber Products achieved strong results in the automotive sector.
“We have enjoyed a strong start to the second quarter,” said Heitmann. In regards to the full year, he added: “We expect sales to increase year-on-year and EBITDA pre exceptionals to grow 10-15 per cent, which takes us over the one billion euro mark for the first time…In light of the current business environment, we remain confident for the rest of the year. We are well on track to achieve our target of 1.4 billion euro EBITDA pre-exceptionals in 2015.”