COLOGNE, Germany – Specialty chemicals group LANXESS has confirmed its preliminary figures for fiscal 2013, published on February 26, 2014. The company reports sales fell by nine percent against the prior year to €8.3 billion, primarily due to lower selling prices in the Performance Polymers segment resulting from declining raw material prices and the challenging competitive situation.
In the fourth quarter of 2013, group net income was impacted by impairment charges of €257 million in the Performance Polymers segment (the Keltan Elastomers and High Performance Elastomers business units) and the Performance Chemicals segment (the Rubber Chemicals business unit), as well as by exceptional charges of some €30 million for the company’s “Advance” efficiency program. These resulted in a net loss for the full year of €159 million, representing earnings per share of minus €1.91. In 2012, group net income amounted to €508 million, with earnings per share of €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 €0.50 per share be paid for 2013. This would result in a total dividend payment of around €42 million. A dividend of €1.00 per share was paid for 2012.
Sales in the Asia-Pacific region were virtually level with the prior year, decreasing by around three percent to €2.1 billion. The Performance Polymers and Performance Chemicals segments achieved operational growth in the low- to mid-single-digit percentage range. LANXESS saw positive development in Greater China, exceeding the sales threshold of €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 €2.4 billion. The region's share of group sales increased to 29 percent.
In Germany, LANXESS posted sales of around €1.5 billion, almost eight percent below the prior-year figure. Germany accounted for 17 percent of group sales.
Sales in North America were around 17 percent lower than in the previous year, at €1.3 billion, contributing 16 percent to group sales.
In the Latin America region, sales declined by almost 19 percent to €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 €2 billion; its share of group sales remained at 24 percent.
In the reporting year, sales in the Performance Polymers segment declined substantially by around 13 percent to about €4.5 billion. A persistently difficult market environment coupled with significantly lower and volatile prices for raw materials, especially butadiene, resulted in a negative price effect of 15 percent. Currency effects also had a negative impact. Volumes increased by around four percent, due in part to capacity expansions in the Butyl Rubber and High Performance Materials business units.
The Advanced Intermediates segment recorded sales of €1.6 billion in 2013, slightly below the prior-year level. An increase in selling prices compensated for the slight decline in volumes. Exchange rates had a negative effect. Both of the segment's business units saw stable demand for agrochemicals in particular.
Sales in the Performance Chemicals segment dipped slightly in 2013 by around three percent to €2.1 billion. This was mainly attributable to unfavorable currency effects of three percent and slightly negative price and volume effects.
Within the context of the company’s “Advance” efficiency program, around 730 employees have already taken up the offer to voluntarily leave the company by the end of 2015 and have accepted either early retirement or severance packages. In 2013, a total of €110 million was incurred of the €150 million in exceptional charges budgeted for this program. From 2015 onward, LANXESS expects to achieve annual savings of around €100 million.