LANXESS reported a decline in results for the second quarter of 2025, impacted by a persistently weak global market environment. The specialty chemicals company posted an EBITDA pre exceptionals of €150 million, marking a 17.1% decrease from €181 million in the same period last year.
Lower demand across all segments and reduced sales volumes contributed to this decline. Additionally, the sale of the urethane systems business unit, effective April 1, 2025, significantly affected earnings. Quarterly sales dropped 12.6% to EUR 1.466 billion, compared with EUR 1.678 billion in Q2 2024.
CEO Highlights Market Uncertainty
“The economic environment has deteriorated significantly again in recent months,” stated Matthias Zachert, CEO, LANXESS. He emphasized that ongoing tariff discussions with the U.S. are creating further uncertainty, intensifying challenges for the European chemical industry. Zachert added, “We continue to focus on positioning ourselves effectively in terms of costs, structures, and processes. When the economy recovers, we will be ready to meet the additional demand more efficiently and profitably.” The EBITDA margin pre exceptionals stood at 10.2%, slightly lower than 10.8% in Q2 2024.
Revised Full-Year Outlook
Expecting continued weak demand for the rest of 2025, LANXESS has adjusted its full-year guidance. The company now anticipates EBITDA pre exceptionals between EUR 520 million and EUR 580 million, compared to its earlier projection of €600 million to €650 million. This includes a EUR 10 million impact from supply restrictions caused by a chlorine supplier.
Divestment of Urethane Systems to UBE Corporation
LANXESS sold its urethane systems business to Japan’s UBE Corporation, marking the final step in its shift toward specialty chemicals. The proceeds from the sale were used to redeem a €500 million bond maturing in May 2025, reducing net financial debt by 18%—from €2.512 billion in Q1 to €2.069 billion in Q2. Despite challenging market conditions, LANXESS generated a positive free cash flow of EUR 31 million in the second quarter.
Production Network Optimization for Long-Term Savings
To counteract weak global demand, LANXESS is optimizing its global production network. Key actions include:
*Closing the hexane oxidation facility at Krefeld-Uerdingen (Germany) earlier than planned, completed by the end of Q2 2025.
*Streamlining aroma chemicals production and shutting down the Widnes site (UK) by 2026 due to high operating costs.
*Boosting bromine production efficiency at the El Dorado site (USA).
These measures are expected to deliver permanent annual savings of €50 million by the end of 2027.
Segment-Wise Performance Overview
Consumer Protection
*Sales: 489 million (↓ 12.8% from €561 million).
*EBITDA pre exceptionals: €87 million (↑ 8.8% from €80 million).
*EBITDA margin: 17.8% vs 14.3% last year.
Despite lower sales, the segment improved profitability due to a better product mix, insurance compensation, and cost savings under the “FORWARD!” action plan.
Specialty Additives
*Sales: €528 million (↓ 7.0% from €568 million).
*EBITDA pre exceptionals: €58 million (↓ 17.1% from €70 million).
*EBITDA margin: 11.0% vs 12.3% last year.
Lower demand from the construction sector and higher energy costs impacted earnings.
Advanced Intermediates
*Sales: €446 million (↓ 6.7% from €478 million).
EBITDA pre exceptionals: €44 million (↓ 24.1% from €58 million).
EBITDA margin: 9.9% vs 12.1% last year.
As per the press release, weak demand and lower capacity utilization were the key drivers of the decline.
