LANXESS
Hived-off ABS pinches 2007 earnings / “Right time to sell” / Performance Polymers now largest segment
 Lanxess press conference (f.l.t.r.): Rainier van Roessel, Werner Breuers, Matthias Zachert (CFO) and Axel C. Heitmann (CEO). (Photo: Lanxess) |
Lanxess (Leverkusen / Germany; www.lanxess.com) “chose exactly the right time” to withdraw from its “Lustran Polymers” (LUP) business and quit the ABS market, CEO Axel Heitmann said at the company’s annual results press conference – see Plasteurope.com of 08.10.2007. “This strategic step means we are now much more independent of the sharply fluctuating petrochemical raw material prices and of economic cycles,” he commented. The German company will carry the 51:49 Jersey-based joint venture with Ineos (Lyndhurst / UK; www.ineos.com) as a purely financial asset until September 2009.
Following other recent portfolio measures, which included in addition to further divestments an acquisition in Brazil and the launch of a new synthetic rubber venture in Singapore, Heitmann said the former Bayer chemicals business is “positioned where it wants to be,” at the core of the chemical industry. Here, he said, Lanxess can “optimally utilise” its specialist know-how and its applications expertise.
Altogether, the company reported sales of EUR 6.6 bn for 2007, a divestment-related downturn of 5% against 2006. Adjusted for currency and portfolio factors, turnover actually improved by 5%. EBITDA pre-exceptionals rose 6.5% to EUR 719m. The ABS business, which was consolidated for the first three quarters, posted an “extremely unsatisfactory” EBITDA margin of only 3%, pre-exceptionals. It remained a drag on the Lanxess balance sheet, reducing EBIT, EBITDA and net income accordingly, Zachert said.
EBITDA for LUP, at EUR 20m, was nearly 82% above the “extremely low” figure for 2006, but “fell well short of expectations,” especially as “only part of the raw materials increase could be passed on to the market.” Following the divestment, the plastics and rubber businesses have been integrated with each other in the new Performance Polymers segment, now the company’s largest of three.
Adjusted figures for Performance Polymers in 2007 show a 4% rise in sales to EUR 2.7 bn and an increase of 10.5% in EBITDA pre-exceptionals to EUR 376m. The EBITDA margin rose to 14% from 13.2%, despite “considerably higher costs for some raw materials.” Zachert said new capacities added last year in semi-crystalline polymers and in butyl and polybutadiene rubber were “well received” by the respective markets.
e-Service:
Lanxess annual report 2007 as a PDF document (3,180 KB)
Following other recent portfolio measures, which included in addition to further divestments an acquisition in Brazil and the launch of a new synthetic rubber venture in Singapore, Heitmann said the former Bayer chemicals business is “positioned where it wants to be,” at the core of the chemical industry. Here, he said, Lanxess can “optimally utilise” its specialist know-how and its applications expertise.
Altogether, the company reported sales of EUR 6.6 bn for 2007, a divestment-related downturn of 5% against 2006. Adjusted for currency and portfolio factors, turnover actually improved by 5%. EBITDA pre-exceptionals rose 6.5% to EUR 719m. The ABS business, which was consolidated for the first three quarters, posted an “extremely unsatisfactory” EBITDA margin of only 3%, pre-exceptionals. It remained a drag on the Lanxess balance sheet, reducing EBIT, EBITDA and net income accordingly, Zachert said.
EBITDA for LUP, at EUR 20m, was nearly 82% above the “extremely low” figure for 2006, but “fell well short of expectations,” especially as “only part of the raw materials increase could be passed on to the market.” Following the divestment, the plastics and rubber businesses have been integrated with each other in the new Performance Polymers segment, now the company’s largest of three.
Adjusted figures for Performance Polymers in 2007 show a 4% rise in sales to EUR 2.7 bn and an increase of 10.5% in EBITDA pre-exceptionals to EUR 376m. The EBITDA margin rose to 14% from 13.2%, despite “considerably higher costs for some raw materials.” Zachert said new capacities added last year in semi-crystalline polymers and in butyl and polybutadiene rubber were “well received” by the respective markets.
e-Service:
Lanxess annual report 2007 as a PDF document (3,180 KB)
13.03.2008 Plasteurope.com [210351]
Published on 13.03.2008
German version of this article...