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2017-12-27

LANXESS expects positive effect from recently enacted U.S. tax reform

  • One-time exceptional P&L charge on reported net income and EPS of around €50 million in Q4 2017 based on current knowledge and interpretation - Neutral to cash flow and EPS pre in fiscal 2017
  • Positive net effect on cash flow and P&L in forthcoming years

Cologne – Specialty chemicals company LANXESS expects a positive effect from the recently enacted U.S. tax reform on its cashflow and earnings over the future years. LANXESS estimates a one-time exceptional effect of around €50 million on reported net income and earnings per share in the fourth quarter 2017 based on current knowledge and interpretation, resulting from the mandatory repatriation tax.
The P&L effect has no impact on key figures such as EPS pre and is cash neutral in fiscal 2017.

The agreed mandatory repatriation tax has to be paid over eight years and is expected to be overcompensated by the positive effect from the corporate income tax rate which has been reduced from 35% to 21% for our U.S. businesses in the forthcoming years.

On this basis, we expect a positive overall effect. As a consequence, we adjust our tax-assumption to the lower end of the previously communicated 30 – 35 % tax rate guidance for New LANXESS.

Forward-Looking Statements

This news release contains forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.