Lanxess meets targets despite bad Q4

ERJ staff report (RD)

Leverkusen, Germany - Lanxess AG said it has met the targets it set for 2008, despite lower demand in the fourth quarter (Q4).

The company's Performance Polymers segment, although hampered by the steep decline in demand in Q4, performed well in 2008, according to Lanxess. The company said a positive effect was felt by the sales of Lanxess Elastomeros do Brasil (formerly Petroflex). Sales rose 22.4 percent to Euro 3 280 million from 2 680 million in 2007 and EBITDA pre exceptionals grew to Euro 413 million.

Performance Chemicals experienced the impact of weaker demand in Q4 with sales falling to Euro 1 930 million from Euro 1 970 million in 2007.

Sales for the Group were close to 2007 at Euro 6 576 million, EBITDA pre exceptionals came in at Euro 721 million, up from Euro 719 million in 2007.

“Despite the weak fourth quarter, 2008 was a very good year, partly because we succeeded in passing on the significant rise in raw material and energy costs to the market in full,” said Axel Heitmann, Lanxess chairman, during a presentation of the group's 2008 results in Düsseldorf.

In operational terms Lanxess expects 2009 to follow the trend of lower demand shown in Q4. All three segments are being hampered to varying degrees by the current weakness in demand, the Performance Polymers segment being particularly hard hit, the company said.

“There is no sign yet of a turnaround or a recovery in demand,” commented Heitmann. “That's why we are quickly and resolutely responding to this demanding situation with the Group-wide package of measures called 'Challenge09.' With the initiatives contained in this package, we aim to achieve savings of Euro 250 million over the next two years and in this way mitigate the effects of the expected drop in demand,” Heitmann concluded.

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Press release from Lanxess AG