Lanxess remains committed to divesting its Urethane Systems business, disclosing substantial interest from potential buyers. Nonetheless, CEO Matthias Zachert cautioned during the company's annual results press conference that detailed information cannot yet be disclosed.

"We are in the initial stages," he stated. "There is considerable interest in acquiring this segment, so we must evaluate the most suitable candidates. We will engage in discussions only with the most promising options and then narrow down our selection. We are encouraged by the numerous parties expressing interest, but we cannot provide further details at this time."

In terms of financial performance, sales for 2023 experienced a notable decline of 17% compared to the previous year, dropping from €8.09 billion in 2022 to €6.71 billion. EBITDA also saw a substantial decrease of 45%, falling to €512 million from €930 million in the preceding year. "It has been a challenging year for both Lanxess and the chemical industry," remarked Zachert.

Weak demand leading to reduced sales volume, coupled with increased idle costs, were identified as the primary factors contributing to the significant earnings decline, particularly affecting its specialty additives and advanced intermediates segments. Additionally, lower raw material prices and energy costs influenced selling prices.

The implementation of the company's Forward! action plan, initiated last summer, remains ongoing. One-time savings of €100 million were achieved in 2023 through cost reductions and decreased investments. The plan aims to achieve annual cost savings of approximately €150 million by 2025 through structural measures, including the elimination of 870 positions, 460 of which are in Germany.

The company anticipates continued challenges in the business environment at least through the first half of 2024, with no anticipated improvement in Q1 compared to Q4 2023. However, it expects a modest increase in sales volumes starting from the second quarter, assuming that customer inventory reduction efforts across most sectors will have been completed.

For the full year, EBITDA before exceptional items is projected to be moderately higher than the 2023 figure. Nonetheless, earnings are expected to remain significantly below the average levels of previous years. "When I provided the outlook for 2023, I anticipated a tough year for the chemical industry, and 2024 would be somewhat easier but still challenging," stated Zachert. "Although there may be some positive signs, 2024 will still present difficulties. Improvement is expected in 2025 and 2026."

Source: Lanxess