The joints of the polycarbonate sheetings of the transparent roof structure of the Shenyang Olympic Stadium in China are sealed with Ethylene Propylene Rubber. Photo courtesy of LANXESS

Cologne, Germany - August 08, 2018

• Joint venture valued at EUR 3.0 billion

• LANXESS plans to reduce financial debt position

• CEO Matthias Zachert: “Another milestone on our path of transformation.”

Specialty chemicals group LANXESS plans to sell its remaining 50 percent stake in ARLANXEO to its joint venture partner Saudi Aramco.
The two companies, that founded ARLANXEO in 2016 as a 50:50 joint venture for synthetic rubber, signed a respective agreement today.


The transaction is still subject to approval of the relevant antitrust authorities.

At the same time, information or consultation of the competent employee representative bodies will take place.

The parties expect to complete the envisaged transaction by the end of 2018.

Improved safety, less fuel consumption, lower costs – high-quality tires known as “Green Tires” offer numerous advantages to car drivers. ARLANXEO produces the high-performance rubbers fundamental to the production of “Green Tires”. Photo courtesy of ARLANXEO

The total joint venture ARLANXEO is valued at EUR 3.0 billion.

LANXESS expects to receive approximately EUR 1.4 billion in cash after deducting debt and other financial liabilities for its 50 percent share.

No rubber, no tires. ARLANXEO is one of the world's leading manufacturers of high-performance synthetic rubber. Photo courtesy of ARLANXEO

LANXESS plans to use the proceeds to strengthen its financial basis and reduce net financial debt.

Originally, LANXESS and Saudi Aramco agreed on a lock-up period until 2021 for both partners.

Matthias Zachert, Chairman of the Board of Mangement of the LANXESS AG. Photo courtesy of LANXESS

“With the envisaged transaction we would complete another important milestone of our strategic transformation earlier than originally planned. This should allow us to even better focus on our position as a leading player in mid-sized specialty chemicals markets,” said Matthias Zachert, Chairman of the Board of Management.
“At the same time, we increase the resilience of our business, strengthen our financial basis and gain additional strategic flexibility for further growth.“

ARLANXEO's Krynac NBR rubber in shoe soles has damping properties. Photo courtesy of ARLANXEO

Headquartered in Maastricht/Netherlands, ARLANXEO generated sales of around EUR 3.2 billion in 2017 and employs about 3,800 people at 20 production sites in nine countries.

The company produces high-performance rubber for use in, for example, the automotive and tire industries, the construction industry, and the oil and gas industries.

The ARLANXEO Polymer Testing Center in Leverkusen analyses the characteristics of synthetic rubber with modern test methods. Photo courtesy of ARLANXEO

Back in 2016, the transfer of the business with synthetic rubber into the joint venture ARLANXEO was the foundation for LANXESS’ strategic realignment.

Since then LANXESS has been focusing on growth in mid-sized specialty chemicals markets and made various acquisitions in this area – with the takeover of the U.S. chemical company Chemtura in 2017 as the biggest one.

The ARLANXEO Polymer Testing Center in Leverkusen analyses the characteristics of synthetic rubber with modern test methods. Photo courtesy of ARLANXEO

Contacts:

LANXESS AG
Corporate Communications
50569 Cologne
Germany

Rudolf Eickeler
Phone +49 221 8885-4483
rudolf.eickeler@lanxess.com  

Alexander Böhm
Phone +49 221 8885-4746
alexander.boehm@lanxess.com  

Daniela Eltrop
Phone +49 221 8885-4010
daniela.eltrop@lanxess.com  

Diluting a sample for a chromatographic analysis in the rubber laboratory for development and quality control at the La Wantzenau site in France. Photo courtesy of LANXESS

About LANXESS

LANXESS is a leading specialty chemicals company with sales of EUR 9.7 billion in 2017 and about 19,200 employees in 25 countries.


The company is currently represented at 74 production sites worldwide.

The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics.

Since August 1, 2013, specialty chemicals Group LANXESS is steering its global business from the LANXESS Tower in Cologne. Photo courtesy of LANXESS

LANXESS is listed in the leading sustainability indices Dow Jones Sustainability Index (DJSI World and Europe) and FTSE4Good.

Since August 1, 2013, specialty chemicals Group LANXESS is steering its global business from the LANXESS Tower in Cologne. Photo courtesy of LANXESS

Information on Saudi Aramco:  www.saudiaramco.com  

Following a good second quarter, LANXESS specifies its earnings forecast for 2018

Cologne, Germany - August 02, 2018

• Full year 2018: Increase of EBITDA pre exceptionals now expected at the upper end of the guidance of five to ten percent against the previous year

• Group sales increased by 6.8 percent to around EUR 1.8 billion in the second quarter

• EBITDA pre exceptionals improved by 3.6 percent to EUR 290 million

• EBITDA margin pre exceptionals at 15.9 percent

• Sales and operating result reported without ARLANXEO for the first time

• Net income increased very sharply to EUR 126 million

• Record result in the Specialty Additives segment

Following a good performance in the second quarter, specialty chemicals company LANXESS has specified its earnings forecast for 2018.

The Group now expects an increase of the operating result at the upper end of the guidance of five to ten percent that was presented in May.

In the previous year, comparable EBITDA pre exceptionals was around EUR 925 million.

The joints of the polycarbonate sheetings of the transparent roof structure of the Shenyang Olympic Stadium in China are sealed with Ethylene Propylene Rubber. Photo courtesy of LANXESS

The contribution from ARLANXEO, the joint venture between LANXESS and Saudi Aramco for synthetic rubber, is not taken into account in the full-year forecast for 2018 and, with immediate effect, will no longer be reported in the Group’s sales and operating result.

In the second quarter, global sales of LANXESS increased by 6.8 percent to EUR 1.83 billion against EUR 1.71 billion in the prior-year quarter.

With its tried-and-tested heat transfer fluid Diphyl, LANXESS is contributing to the cost-effective and environmentally friendly conversion of sunlight into electrical energy in the “Arenales” parabolic trough power plant in Spain. Photo courtesy of LANXESS

EBITDA pre exceptionals improved by 3.6 percent to EUR 290 million compared with EUR 280 million in the prior-year quarter.

The positive overall earnings performance was driven by three reasons primarily: firstly, the contribution of the former Chemtura businesses.

They constitute a material part of the Specialty Additives segment, which recorded the best quarterly result since the acquisition of the U.S. company.

The Ǻrsta Bridge, designed by top architect Norman Foster, has spanned the Ǻrstaviken in the Swedish capital Stockholm since 2005. The Bayferrox color pigments used for the Falu red railroad bridge come from LANXESS Photo courtesy of LANXESS

Secondly, the adjustment of selling prices due to higher raw material costs and thirdly, the synergies achieved from the integration of Chemtura had a positive impact on earnings.

In the second quarter of 2018, the EBITDA margin pre exceptionals was still on a solid level, at 15.9 percent, despite significantly adverse currency effects, compared with 16.4 percent a year ago.

Matthias Zachert, Chairman of the Board of Mangement of the LANXESS AG. Photo courtesy of LANXESS

“LANXESS is doing well in operational terms and our strategic decisions in recent years are visibly paying off. For instance, the acquired Chemtura businesses, which have now been included in our figures for a year, made a decisive contribution to the record result achieved by our Additives segment in the second quarter,” said Matthias Zachert, Chairman of the LANXESS Board of Management.
“We are therefore specifying our full-year forecast and expect the increase of the EBITDA to be at the upper end of the guidance – despite the headwind resulting from the weakness of the US dollar and geopolitical uncertainties.”

Matthias Zachert, Chairman of the Board of Mangement of the LANXESS AG. Photo courtesy of LANXESS

Net income improved significantly to EUR 126 million against EUR 3 million in the prior-year quarter in which substantial exceptional charges were posted.

Of net income, EUR 97 million was attributable to the four LANXESS segments and EUR 29 million to the so-called discontinued ARLANXEO business.

Self-levelling calcium sulfate screed based on LANXESS CAB 30 compound displays low shrinkage and therefore can be laid over large areas without joints. Photo courtesy of LANXESS

Business development in the segments

Sales in the Advanced Intermediates segment were EUR 546 million in the second quarter of 2018, 8.1 percent higher than the figure for the prior-year quarter of EUR 505 million.

At EUR 97 million, EBITDA pre exceptionals matched the figure of the prior year. Increases in procurement prices for raw materials and energy, which were significant in some cases, were passed on to customers by adjusting selling prices.
The organometallics business acquired in the prior year with the Chemtura acquisition also made a positive contribution to earnings.
Negative currency effects depressed earnings. The EBITDA margin pre exceptionals came in at 17.8 percent, against 19.2 percent a year ago.

Self-levelling calcium sulfate screed based on LANXESS CAB 30 compound displays low shrinkage and therefore can be laid over large areas without joints. Photo courtesy of LANXESS

In the Specialty Additives segment, sales increased by 15.2 percent to EUR 508 million, against EUR 441 million in the prior-year quarter.

At EUR 91 million, EBITDA pre exceptionals was 21.3 percent up on the prior-year’s figure of EUR 75 million.
The contribution of the acquired Chemtura businesses and the synergies associated with the acquisition were crucial to the positive development.
At 17.9 percent, the EBITDA margin pre exceptionals was higher than the figure of 17.0 percent a year ago.

The colored components in the striking stadium facade of glass-fiber-reinforced concrete panels are based on Bayferrox pigments from LANXESS. Photo courtesy of LANXESS

In the Performance Chemicals segment, sales decreased by 3.0 percent compared with the strong previous year to EUR 356 million, after EUR 367 million.
The sale of the Material Protection Products business unit’s chlorine dioxide business in the previous year was reflected in the reduction in sales.

At EUR 58 million, EBITDA pre exceptionals was 27.5 percent down on the prior year’s figure of EUR 80 million.
Earnings were squeezed by the persistently weak chrome ore business in the business unit Leather, unfavorable exchange rates and higher procurement prices for raw materials.
The EBITDA margin pre exceptionals decreased accordingly from 21.8 percent to 16.3 percent.

The colored components in the striking stadium facade of glass-fiber-reinforced concrete panels are based on Bayferrox pigments from LANXESS. Photo courtesy of LANXESS

In the Engineering Materials segment, sales increased significantly by 10.5 percent to EUR 399 million, against EUR 361 million a year ago.

EBITDA pre exceptionals increased by 12.5 percent to EUR 81 million after EUR 72 million.
The improvement in earnings resulted from higher volumes, especially in high-performance plastics for lightweight construction, and the contribution from the urethane business acquired with the Chemtura takeover.
Accordingly, the EBITDA margin pre exceptionals came in at 20.3 percent, against 19.9 percent in the prior-year quarter.

Courtesy of LANXESS

LANXESS successfully completes acquisition of U.S. company Chemtura

https://lanxess.com/en/corporate/media/press-releases/2017-00035e/  

Since August 1, 2013, specialty chemicals Group LANXESS is steering its global business from the LANXESS Tower in Cologne. Photo courtesy of LANXESS

Sources:

LANXESS

https://lanxess.com/en/corporate/media/press-releases/  

ARLANXEO

http://arlanxeo.com/  



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