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2016-05-20

LANXESS: Higher dividend after successful fiscal year 2015

At this year’s Annual Stockholders’ Meeting, specialty chemicals company LANXESS was able to look back on a successful fiscal 2015 which saw the company drive forward with its realignment program.

  • Proposed dividend of EUR 0.60 – 20 percent higher than in the
  • prior year
  • LANXESS seeking to increase the dividend or at least maintain
  • it at a stable level
  • Business development in 2016 reflects success of realignment
  • program
  • Good start to fiscal 2016
  • Matthias Zachert: “LANXESS’ new perspective is growth.”

At this year’s Annual Stockholders’ Meeting, specialty chemicals company LANXESS was able to look back on a successful fiscal 2015 which saw the company drive forward with its realignment program. “We made intensive use of the past year and I’m pleased that all our efforts have culminated in economic success and very gratifying financial data,” said LANXESS’ Chairman of the Board of Management Matthias Zachert in his address at the LANXESS arena in Cologne, Germany.

The Board of Management and the Supervisory Board therefore proposed to the Annual Stockholders’ Meeting that the dividend for 2015 be increased by 20 percent compared with the prior year to EUR 0.60. This would result in a total dividend payout of around EUR 55 million. “In the future – and this is a deliberately stated claim – we are seeking to increase the dividend or at least maintain it at a stable level,” said Zachert.

In fiscal 2015, LANXESS increased EBITDA pre exceptionals by around ten percent to EUR 885 million, while sales remained virtually unchanged at EUR 7.9 billion. Net income amounted to EUR 165 million – and thus more than tripled year-on-year. Net financial liabilities decreased substantially to around EUR 1.2 billion at the end of 2015. After receipt of the proceeds of EUR 1.2 billion from the joint venture transaction with Saudi Aramco on April 1, 2016, LANXESS had virtually eliminated its net financial liabilities. Added Zachert: “Today, LANXESS has much stronger earning power and a more solid financial position than it had in the past few years.”

2015: A year of realignment

For LANXESS, 2015 was a year of realignment. Overall, the company expects the measures it has implemented to generate total annual savings of EUR 300 million. These will be gradually realized through to the end of 2019, although more than half the amount had already been achieved by the end of 2015. In September 2015, LANXESS found a partner for its rubber business in Saudi Aramco, the world’s biggest integrated energy company. The 50:50 joint venture named ARLANXEO started ahead of schedule on April 1, 2016. Thanks to the rapid implementation of its realignment program, LANXESS has been able to return to a course of growth one year earlier than planned.
 
2016: A year focusing on growth

“LANXESS is now strong enough again to shape its own future. We will deploy a smart strategy in using our regained strength. LANXESS’ perspectives are now growth, a focus on quality, sustainability and innovation,” explained Zachert.

The company’s new growth platform includes businesses with specialty chemicals, intermediates and high-performance plastics. In principle, LANXESS intends to focus on mid-sized markets and the growth regions of North America, China and Southeast Asia.

In the years ahead, LANXESS plans to use some EUR 400 million of the proceeds from the rubber transaction in organic growth. The investment of EUR 60 million to expand the Saltigo business unit’s production capacities at the Leverkusen site was already announced last year.
The company is also keeping an eye out for external growth opportunities. In April this year, LANXESS reached agreement with US-based chemical company Chemours to acquire its Clean and Disinfect business. Closing is expected in the second half of 2016.

Good start to fiscal 2016

LANXESS started 2016 with a good first quarter. Although sales declined by around six percent to some EUR 1.9 billion mainly due to raw material prices, EBITDA pre exceptionals increased by around 14 percent to EUR 262 million. At EUR 53 million, net income more than doubled compared with the prior-year quarter.

Said Zachert: “Although the global economy is currently going through troubled waters, we assume that LANXESS will continue to develop positively. Following a strong first quarter, the second quarter has also begun well.” After this successful start to 2016, LANXESS expects EBITDA pre exceptionals for the full year to come in at between EUR 900 million and EUR 950 million.

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.

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