Speciality chemicals company Lanxess can look back on a successful fiscal 2015 – despite a challenging market environment. Read the details of the company’s annual press conference.
Cologne/Germany – EBITDA pre exceptionals rose by 9.5 percent to €885 million, due above all to savings achieved by the company’s realignment program, the strong U.S. dollar and volume growth. The operating result was therefore within the recent guidance range of €860 million to €900 million. All segments contributed to the earnings improvement. In 2014, the operating result was €808 million.
The Group’s EBITDA margin pre exceptionals improved from 10.1 percent to 11.2 percent. Net income also increased substantially to €165 million from €47 million. Compared with the prior year, sales remained virtually stable at €7.9 billion (2014: €8.0 billion). Here, lower selling prices resulting from lower raw material prices were largely compensated by favorable currency effects.
“Fiscal 2015 was successful for Lanxess in every respect. We implemented our realignment faster than planned and, at the same time, significantly improved our profit situation and financial position. We have thus laid a stable foundation for our growth course,” said Matthias Zachert, Chairman of the Board of Management of Lanxess.
Balance Sheet Strengthened Significantly
On account of the increased operating result coupled with lower capital expenditures and the further reduction of working capital, net financial liabilities declined by a substantial €125 million, to around €1.2 billion. Thus, net financial liabilities have been cut by about 30 percent within two years. In 2015, capital expenditures amounted to €434 million, around one-third lower than the prior-year level of €614 million. For 2016, the company is planning capital expenditures of some €450 million. “Although we are on course for growth, we will continue to pursue our solid financing strategy and keep our investment-grade rating in sight,” explained Michael Pontzen, Chief Financial Officer of Lanxess AG.
Higher Dividend Targeted for 2015
The company’s good business performance is also to be reflected in a higher dividend. The Board of Management and the Supervisory Board will propose to the Annual Stockholders’ Meeting that the dividend be increased by 20 percent compared with the prior year to €0.60 per share. This would result in a total dividend payout of around €55 million.
Growth Course on a Solid Financial Footing
The realigned company with its balanced portfolio of specialty chemicals, chemical intermediates and high-performance plastics is on a growth course. In principle, this “new” Lanxess intends to focus on mid-sized markets and the growth regions of North America, China and Southeast Asia. In the years ahead, Lanxess plans to invest some €400 million of the anticipated €1.2 billion proceeds from the rubber transaction in organic growth. “The precondition for any capital expenditure is that it will contribute to creating value. The individual segments will have budgets between €50 million and €150 million for capital expenditures,” continued Zachert. It is also planned to use around €200 million for a share buyback program and some €400 million to reduce financial liabilities.
Lanxess is also looking at external growth opportunities. “On the one hand, we aim to take advantage of consolidation opportunities in those areas of business in which Lanxess already operates. On the other hand, we are also investigating options to extend our portfolio into related areas of business that are the right fit. Here, we will consider both integrated chemical value chains and suitable application-driven businesses,” explained Zachert.
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