LANXESS post strong third quarter growth

14 November 2007


'That is our strongest third quarter yet and provides a basis for further sustained growth,' commented LANXESS management board chairman Axel C. Heitmann. Sales advanced slightly to €1,705 million, up from €1,691 million in the same period of 2006. After adjusting for portfolio changes and currency effects, sales were 6.0% higher. LANXESS succeeded in raising prices by 1.6 % and volumes by 4.4%. &rtreturn;LANXESS's headcount declined from 16,481 to 14,659 employees as of September 30, 2007. This was mainly due to the transfer of the former Lustran Polymers business unit to the joint venture INEOS ABS (Jersey) Limited formed with the British chemicals group INEOS and the divestment of the Borchers Group.&rtreturn;In Germany, LANXESS lifted sales 5.3 % to €421 million (Q3 2006: €400 million). Sales in the EMEA region (Europe [excluding Germany], Middle East, Africa) edged up 0.8% to €532 million (Q3 2006: €528 million). With LANXESS benefiting from strong growth in eastern European markets, a sales company was established in Bratislava, Slovakia, in October 2007.&rtreturn;In the Americas region, sales were €427 million, 4.0% below the previous year's level of €445 million. All segments contributed to this good performance in both North and Latin America. In the Asia-Pacific region, sales rose 2.2 % in the third quarter to €325 million (Q3 2006: €318 million). Adjusted for currency effects and the activities divested in the previous year, sales advanced by a substantial 6%. As a result, this region's share of total sales increased from 18.8% to a record 19.1%. Here the growth engine was again China, where sales posted double-digit gains.&rtreturn;Business in the Performance Chemicals segment was solid in the third quarter of 2007. Sales decreased by 6.6% to €493 million (Q3 2006: €528 million) due to the divestment of the Textile Processing Chemicals business unit and negative currency effects, but rose by 3.4% after adjustment for these factors. Most of this improvement came from the positive trend in the Leather, Rhein Chemie, Rubber Chemicals and Ion Exchange Resins business units. EBITDA pre exceptionals slipped 5.6% compared with the previous year to €67 million (Q3 2006: €71 million) because of the divestment of the Textile Processing Chemicals business unit. By contrast, the EBITDA margin pre exceptionals increased slightly to 13.6% (Q3 2006: 13.4%).&rtreturn;In the fourth quarter of 2007, LANXESS expects global economic growth to continue, with regional variations. Whereas expansion is slowing in the United States, the global chemical economy will be supported by robust demand in Asia-Pacific and Latin America, coupled with a stable business environment in Europe. Against this background, LANXESS continues to predict EBITDA pre exceptionals for the full year in the €700 million to €720 million range compared with €675 million in 2006, despite a significantly lower earnings contribution from Lustran Polymers.



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