Q1 2024 Results
LANXESS Group
Q1 EBITDA bottoming out, operational improvement visible; volume increase in Advanced Intermediates
Investor Relations | André Simon | |
Kennedyplatz 1 | Head of Investor Relations | |
50569 Cologne | P: +49 | 221-8885-3494 |
Germany | F: +49 | 221-8885-4944 |
Q1 2023 | Q4 2023 | Q1 2024 | Δ vs. Q1 | Comments on Q1 | ||
Lower sales prices driven by pass through of input costs; while volumes | ||||||
Sales | €1,899 m | €1,436 m | €1,607 m | -15% | ↓ picked up sequentially, yoy comparison reflects still stronger Q1 of previous | |
year | ||||||
EBITDA pre | €189 m | €97 m | €101 m | -47% | ↓ EBITDA pre and margin declined on basis of lower prices and volumes; ramp | |
Margin | 10.0% | 6.8% | 6.3% | -3.7 pp. | ↓ up of structural savings does not yet outweigh reduction of temporary savings | |
Adjusted EPS1 | €0.63 | -€0.30 | -€0.09 | >-100% | ↓ | EPS reflecting net income result; also including at-equity contribution from |
Envalior | ||||||
Operating cash flow | €171 m | €224 m | -€48 m | >-100% | ↓ Free cash flow held back by operating result and volume driven increase in | |
Free cash flow | €112 m | €92 m | -€87 m | >-100%↓ | receivables | |
Net financial debt2 | Mar 2023 | Dec 2023 | Mar 2024 | -31% | ↓ | Net financial debt significantly reduced towards year-end; increase in Q1 |
€3,796 m | €2,498 m | €2,609 m | driven by higher receivables due to positive sales development | |||
Capex | €59 m | €132 m | €39 m | -34% | ↓ Maintaining disciplined capex management amid cost savings program |
Price | Volume | FX | Portfolio |
Sales - 15% - 9% | - 5% | - 1% | 0% |
All figures apply to continuing operations (excluding BU HPM)
- Adjusted for exceptional items, amortization of intangible assets and attributable tax effects
- Deducting cash, cash equivalents, near cash assets, short-term money market investments
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Consumer Protection | § |
EBITDA stable sequentially: Agro- destocking is offset by pick-up in other markets
- YoY volume decline in all BUs, mainly in BU SGO due to intensified agro destocking and F&F still limited by steam supply outage
- Massive agro-destocking is sequentially offset by pick-up in other markets
- EBITDA pre and margin decline based on lower volumes, especially for agro end market
Specialty Additives
Moderate pick-up sequentially: Improving despite construction weakness
- Lower prices in all BUs, mainly due to pass through and market weakness
- Slightly lower volumes reflect continued weakness in construction
- Sequentially all BUs with increasing sales
- EBITDA pre and margin compared against still relatively strong previous year especially for flame retardants
Advanced Intermediates
Meaningful sequential volume improvement; volumes increase also year- over-year
- Sales decline due to price pass through clauses as input costs normalize
- Volumes have turned positive, additionally supported by customers' re-stocking for BU Inorganic Pigments
- EBITDA pre and margin remain unsatisfactory but start to improve
YoY
Sales - 21%
YoY
Sales - 15%
YoY
Sales - 10%
Price Volume FX Portfolio
- 5% - 16% - 1% 0%
Q1 2023 | Q4 2023 | Q1 2024 | |||||
EBITDA pre | €94 m | €50 m | €49 m | ||||
margin | 14.5% | 9.8% | 9.6% | ||||
Price Volume FX Portfolio
- 10% - 4% - 1% 0%
Q1 2023 | Q4 2023 | Q1 2024 | |||
EBITDA pre | €98 m | €41 m | €48 m | ||
margin | 14.8% | 8.3% | 8.5% | ||
Price Volume FX Portfolio
- 14% + 5% 0% 0%
Q1 2023 | Q4 2023 | Q1 2024 | |||
EBITDA pre | €44 m | €24 m | €37 m | ||
margin | 8.5% | 6.5% | 8.0% | ||
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FY 2024 guidance:
EBITDA pre expected to increase by 10-20%
Our view on economic environment
- Demand has stabilized and is starting to pick up
- Burden from agro customers' destocking continues
LANXESS outlook
- FY guidance: EBITDA pre expected to grow by 10-20% (incl. BU URE)
- EBITDA pre expected to sequentially increase in Q2 and Q3, with normal seasonality in Q4
- Continued focus on cash generation
- Balanced working capital approach
- Strong capex discipline
Housekeeping items 2024*
Capex: ~€350 m
Operational D&A ~€550 m (thereof ~€150 m of intangible amortization effect) All other segments: ~-€130m EBITDA pre
Underlying tax rate: ~26%- 27%
Exceptionals: ~€60 m
FX sensitivity: One cent change of USD/EUR resulting in ~€3 m EBITDA pre impact after hedging
* Including BU Urethane Systems
First signs of volume improvements visible, however agro destocking weighs on Consumer Protection
Safe harbor statement
The information included in this presentation is being provided for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities of LANXESS AG. No public market exists for the securities of LANXESS AG in the United States.
This presentation 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 accepts any liability whatsoever arising directly or indirectly from the use of this document.
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Financial Overview Q1 2024
in € million | LANXESS | ||
Q1/2023 | |||
Sales | 1,899 | ||
Price* | |||
Volume* | |||
Currency* | |||
Portfolio* | |||
EBIT | 34 | ||
Deprec. & amortizat. | 137 | ||
EBITDA | 171 | ||
exceptionals in EBITDA | 18 | ||
EBITDA pre excep. | 189 | ||
normalized D&A | 136 | ||
EBIT pre excep. | 53 | ||
exceptionals in EBIT | 19 | ||
Capex | 59 | ||
Net financial debt | 2,498 | ||
* approximate numbers
Q1/2024
1,607
-57
140
83
18
101
139
-38
19
39
2,609
Consumer Protection
Chg. in | Q1/2023 | Q1/2024 | |||
% | |||||
-15% | |||||
647 | 509 | ||||
-9.2% | |||||
-5.4% | |||||
-0.8% | |||||
0.0% | |||||
n.m. | 47 | 3 | |||
2% | 46 | 46 | |||
-51% | |||||
93 | 49 | ||||
0% | 1 | 0 | |||
-47% | 94 | 49 | |||
2% | |||||
46 | 46 | ||||
n.m. | 48 | 3 | |||
0% | 1 | 0 | |||
-34% | |||||
17 | 12 | ||||
4% | |||||
Specialty Additives
Chg. in | Q1/2023 | Q1/2024 | ||
% | ||||
-21% | ||||
664 | 566 | |||
-4.8% | ||||
-15.9% | ||||
-0.6% | ||||
0.0% | ||||
-94% | 53 | 1 | ||
0% | 45 | 47 | ||
-47% | ||||
98 | 48 | |||
-100% | 0 | 0 | ||
-48% | 98 | 48 | ||
0% | ||||
45 | 47 | |||
-94% | 53 | 1 | ||
-100% | 0 | 0 | ||
-29% | ||||
23 | 14 | |||
Advanced Intermed.
Chg. in | Q1/2023 | Q1/2024 | ||
% | ||||
-15% | ||||
516 | 465 | |||
-9.6% | ||||
-4.1% | ||||
-1.1% | ||||
0.0% | ||||
-98% | 18 | 9 | ||
4% | 26 | 28 | ||
-51% | ||||
44 | 37 | |||
0% | 0 | 0 | ||
-51% | 44 | 37 | ||
4% | ||||
26 | 28 | |||
-98% | 18 | 9 | ||
0% | 0 | 0 | ||
-39% | ||||
16 | 11 | |||
All other Segments
Chg. in | Q1/2023 | Q1/2024 | ||
% | ||||
-10% | ||||
72 | 67 | |||
-14.1% | ||||
4.6% | ||||
-0.4% | ||||
0.0% | ||||
-50% | -84 | -70 | ||
8% | 20 | 19 | ||
-16% | ||||
-64 | -51 | |||
n.m. | 17 | 18 | ||
-16% | -47 | -33 | ||
8% | ||||
19 | 18 | |||
-50% | -66 | -51 | ||
n.m. | 18 | 19 | ||
-31% | ||||
3 | 2 | |||
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Cash Flow Statement Q1 2024
in € million | Q1/2023 | Q1/2024 | ||||
Income before income taxes | 13 | -119 | ||||
Amortization, depreciation and write-downs of intangible assets and property, plant and | ||||||
equipment | 137 | 140 | ||||
Income from investments accounted for using the equity method | -1 | 46 | ||||
Financial losses (gains) | 24 | 11 | ||||
Income taxes refunded/paid | -10 | -1 | ||||
Changes in inventories | -11 | 17 | ||||
Changes in trade receivables | 17 | -203 | ||||
Changes in trade payables | 2 | 20 | ||||
Changes in other assets and liabilities | 0 | 41 | ||||
Net cash provided by (used in) operating activities - continuing operations | 171 | -48 | ||||
Net cash provided by (used in) operating activities - discontinued operations | -10 | 0 | ||||
Net cash provided by (used in) operating activities - total | 161 | -48 | ||||
Cash outflows for purchases of intangible assets and property, plant and equipment | -59 | -39 | ||||
Cash outflows for financial and other assets held for investment purposes | -1,394 | -20 | ||||
Cash inflows from financial and other assets held for investment purposes | 0 | 140 | ||||
Cash inflows from the sale of subsidiaries and other businesses, less divested cash and | ||||||
cash equivalents | 1,267 | 0 | ||||
Interest and dividends received | 4 | 2 | ||||
Net cash provided by / used in investing activities - continuing operations | -182 | 83 | ||||
Net cash provided by / used in investing activities - discontinued operations | -6 | 0 | ||||
Net cash provided by / used in investing activities - total | -188 | 83 | ||||
Proceeds from borrowings | 267 | 1 | ||||
Repayments of borrowings | -227 | -16 | ||||
Interest paid and other financial disbursements | -17 | -13 | ||||
Net cash provided by / used in financing activities - continuing operations | 23 | -28 | ||||
Net cash provided by / used in financing activities - discontinued operations | -1 | 0 | ||||
Net cash provided by /used in financing activities - total | 22 | -28 | ||||
Change in cash and cash equivalents - continuing operations | 12 | 7 | ||||
Change in cash and cash equivalents - discontinued operations | -17 | 0 | ||||
Change in cash and cash equivalents - total | -5 | 7 | ||||
Cash and cash equivalents as of beginning of period | 360 | 146 | ||||
Exchange differences and other changes in cash and cash equivalents - total | -4 | 2 | ||||
Cash and cash equivalents as of end of period | 351 | 155 | ||||
of which continuing operations | 277 | 155 | ||||
of which discontinued operations | 74 | 0 | 5 | |||
Income Statement Q1 2024
in € million | Q1/2023 | Q1/2024 | Chg. in | ||||
% | |||||||
-15% | |||||||
Sales | 1,899 | 1,607 | |||||
Cost of sales | -1,463 | -1,327 | 9% | ||||
Gross profit | 436 | 280 | -36% | ||||
19% | |||||||
Selling expenses | -276 | -223 | |||||
Research and development expenses | -27 | -28 | -4% | ||||
General administration expenses | -71 | -68 | 4% | ||||
Other operating income | 12 | 21 | 75% | ||||
Other operating expenses | -40 | -39 | 3% | ||||
Operating result (EBIT) | 34 | -57 | n.m. | ||||
n.m. | |||||||
Income from investments accounted for using the equity method | 1 | -46 | |||||
Interest income | 4 | 2 | -50% | ||||
Interest expense | -30 | -11 | 63% | ||||
Other financial income and expense | 4 | -7 | n.m. | ||||
Financial result | -21 | -62 | <-100% | ||||
n.m. | |||||||
Income before income taxes | 13 | -119 | |||||
n.m. | |||||||
Income taxes | -3 | 21 | |||||
Income after income tax from continuing operations | 10 | -98 | n.m. | ||||
Income after income tax from discontinued operations | -54 | 0 | -100% | ||||
Income after income taxes | -44 | -98 | <-100% | ||||
of which attributable to non-controlling interests | 0 | 0 | 0% | ||||
Net income (attributable to LANXESS AG stockholders) | -44 | -98 | <-100% | ||||
EPS total (in €) | -0.51 | -1.13 | <-100% | ||||
thereof EPS (in €) from continuing operations | 0.12 | -1.13 | n.m. | ||||
thereof EPS (in €) from discontinued operations | -0.63 | 0.00 | -100% | ||||
EPS adjusted (in €)* | 0.63 | -0.09 | n.m. |
* continuing operations only
Abbreviations:
Consumer Protection
F&F Flavors & Fragrances
LPT Liquid Purification Technologies
MPP Material Protection Products
SGO Saltigo
Specialty Additives
LAB Lubricant Additives Business
PLA Polymer Additives
RCH Rhein Chemie
Advanced Intermediates:
AII Advanced Industrial Intermediates IPG Inorganic Pigments
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Lanxess AG published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 05:08:10 UTC.