In what remains a difficult competitive environment, specialty chemicals group Lanxess expects EBITDA pre exceptionals of around EUR 200 million for the first quarter of 2014. In the prior-year quarter, the company posted EBITDA pre exceptionals of EUR 174 million that was burdened by several factors including start-up costs.
Lanxess also confirmed the preliminary figures for fiscal 2013 published on February 26, 2014.
Sales fell by nine percent against the prior year to EUR 8.3 billion. This development was primarily due to lower selling prices in the Performance Polymers segment resulting from declining raw material prices and the challenging competitive situation. EBITDA pre exceptionals decreased by 40 percent year on year to EUR 735 million and was thus within the guided range of EUR 710 million to EUR 760 million. This was also attributable to an increase in production-related costs and negative currency effects. The slight increase in volumes could not compensate for the decline in earnings. The Group's EBITDA margin pre exceptionals fell to 8.9 percent from 13.4 percent in 2012.
In the fourth quarter of 2013, Group net income was impacted by impairment charges of EUR 257 million in the Performance Polymers segment (business units Keltan Elastomers and High Performance Elastomers) and the Performance Chemicals segment (business unit Rubber Chemicals), as well as by exceptional charges of some EUR 30 million brought forward for the "Advance" efficiency program. These resulted in a net loss for the full year of EUR 159 million, representing earnings per share of minus EUR 1.91. In 2012, Group net income amounted to EUR 508 million, with earnings per share of EUR 6.11.
"Behind us lies a challenging year," said Lanxess Chief Financial Officer Bernhard Duettmann. "Negative effects were the volatile raw material prices and increasing competition, especially in the synthetic rubber business."
The company will propose to the Annual Stockholders’ Meeting on May 22, 2014, that a dividend of EUR 0.50 per share be paid for 2013. This would result in a total dividend payment of around EUR 42 million. A dividend of EUR 1.00 per share was paid for 2012.
Cash outflows for capital expenditures declined to EUR 624 million, compared with EUR 696 million a year earlier. Operating cash flow decreased against the prior year to EUR 641 million, a business-related decline of EUR 197 million. Net financial liabilities increased by EUR 248 million from the previous year to EUR 1.7 billion. "In the fourth quarter, we were able to reduce net debt by EUR 91 million compared to the prior quarter on account of our strict working capital management," said Duettmann.
Sales in the Asia-Pacific region were virtually level with the prior year, decreasing by around three percent to EUR 2.1 billion. The Performance Polymers and Performance Chemicals segments achieved operational growth in the low- to mid-single-digit percentage range. Lanxess saw a pleasing development in Greater China, exceeding the sales threshold of EUR 1 billion as in the previous year. The share of the Asia-Pacific region in Group sales increased to 26 percent.
Sales in the EMEA region (excluding Germany) receded by around five percent to EUR 2.4 billion. This region's share of Group sales increased to 29 percent.
In Germany, Lanxess posted sales of around EUR 1.5 billion, almost eight percent below the prior-year figure. This country accounted for 17 percent of Group sales.
Sales in North America were around 17 percent lower than in the previous year, at EUR 1.3 billion. The region thus contributed 16 percent to Group sales.
In the Latin America region, sales declined by almost 19 percent to EUR 1 billion. This region's share of Group sales decreased to 12 percent.
In the BRICS countries (Brazil, Russia, India, China and South Africa), sales fell by around seven percent to EUR 2 billion. Their share of Group sales remained at 24 percent.
Lanxess: Behind us lies a challenging year