Lanxess Ag · XETR:LXS
Lanxess — Lanxess Ag Ord — Q3 2024 Earnings Presentation
28 slides from Lanxess's earnings presentation, Nov 7, 2024
Slide 1: LANXESS – Q3 2024 results
LANXESS – Q3 2024 results Volume growth in challenging market environment and delivering on savings Matthias Zachert, CEO Oliver Stratmann, CFO
Slide 2: Safe harbor statement
Safe harbor statement The information included in this presentation is being provided for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities of LANXESS AG. No public market exists for the securities of LANXESS AG in the United
Slide 3: Agenda
Agenda 1 Review Q3 2024 and outlook 2 Financial and business details Q3 2024 3 Appendix 3
Slide 4: Q3 2024: Solid EBITDA pre improvement
Q3 2024: Solid EBITDA pre improvement Sales EBITDA pre -4% +5% -1% 0% +45% Price Volume FX However, volume 119 173 Driven by improved 1,601 1,598 growth in 9 out of utilization & cost 10 businesses Q3 2023 Q3 2024 structures Q3 2023 Q3 2024 Net financial debt Free Cash Flow +3% -€14 m 2,498 2,572 Wo
Slide 5: Q3 in a nutshell
Q3 in a nutshell Key business developments Portfolio transformation completed Liquidity secured long-term ▪ Strong rebound in Advanced ▪ Divestment of Urethane Systems ▪ New sustainability-linked credit Intermediates and Specialty signed facility signed for €800 m Additives compared to very low base
Slide 6: US footprint significantly increased by portfolio transformation
US-footprint significantly increased by portfolio transformation Acquisitions Clean & Disinfect Phosphor-Additive Microbial Control 2016 2017 2018 2019 2020 2021 2022 2023 2024 Divestments Leder- Leather Urethane Chemikalien chemicals Systems 50% 50% USA share of total sales nearly doubled* 15% 28%
Slide 7: FY 2024 guidance confirmed again: EBITDA pre expected to increase by 10-20%
FY 2024 guidance confirmed again: EBITDA pre expected to increase by 10-20% ▪ Macro-economic uncertainty intensifying and H2 demand softening Our view on ▪ Environment especially for agro and construction economic industries remains challenging environment ▪ FY guidance: EBITDA pre expected to grow
Slide 8: Agenda
Agenda 1 Review Q3 2024 and outlook 2 Financial and business details Q3 2024 3 Appendix 8
Slide 9: LANXESS Group: Considerably improved EBITDA in still difficult market environment
LANXESS Group: Considerably improved EBITDA in still difficult market environment [€ m] Q3/2023 Q3/2024 Δ 9M 2023 9M 2024 Δ Volume increase Sales 1,601 1,598 0% 5,278 4,883 -7% EBITDA pre 119 173 45% 415 455 10% offsets price Margin 7.4% 10.8% 7.9% 9.3% decline Capex 68 73 7% 194 174 -10% ▪ Lower pr
Slide 10: Consumer Protection: General EBITDA recovery more than offset by ongoing agro weakness
§ Consumer Protection: General EBITDA recovery more than offset by ongoing agro weakness [€ m] Q3/2023 Q3/2024 Δ 9M 2023 9M 2024 Δ Cost savings Sales 581 521 -10% 1,832 1,591 -13% counteract volume EBITDA pre 84 71 -15% 260 200 -23% Margin 14.5% 13.6% 14.2% 12.6% loss from agro Capex 17 24 41% 53 53
Slide 11: Specialty Additives: Performance improvement
Specialty Additives: Performance improvement [€ m] Q3/2023 Q3/2024 Δ 9M 2023 9M 2024 Δ Higher volumes Sales 549 550 0% 1,833 1,684 -8% throughout the EBITDA pre 33 61 85% 168 179 7% segment compared Margin 6.0% 11.1% 9.2% 10.6% to weak prior year Capex 29 25 -14% 77 63 -18% ▪ Lower prices in all bus
Slide 12: Advanced Intermediates: Substantial earnings improvement compared to very weak Q3 2023
Advanced Intermediates: Substantial earnings improvement compared to very weak Q3 2023 [€ m] Q3/2023 Q3/2024 Δ 9M 2023 9M 2024 Δ Sales 403 455 13% 1,403 1,398 0% Benefitting from EBITDA pre 30 68 >100% 97 163 68% improved utilization Margin 7.4% 14.9% 6.9% 11.7% Capex 18 21 17% 51 50 -2% ▪ Lower pri
Slide 13: P&L Q3: Improved earnings driven by higher utilization and reduced cost structures
P&L Q3: Improved earnings driven by higher utilization and reduced cost structures P&L [€ m] Q3/2023 Q3/2024 yoy ▪ Flat sales: Higher volumes compensate lower prices and Sales 1,601 (100%) 1,598 (100%) 0% negative FX effect Cost of sales -1,312 (-82%) -1,249 (-78%) 5% ▪ Savings from FORWARD! Selling
Slide 14: 2024 cash flow compares to strong previous year driven by working capital reduction
2024 cash flow compares to strong previous year which was driven by significant working capital reduction Cash flow [€ m]* Q3/2023 Q3/2024 ▪ Improved profit before tax due to increased operating result and Profit before tax -142 2 better Envalior performance Depreciation & amortization 148 139 ▪ Cha
Slide 15: Ongoing strong equity ratio
Ongoing strong equity ratio Balance sheet [€ m] 31.12.2023 30.06.2024 30.09.2024 ▪ Decrease in total assets mainly FX driven Total assets 9,665 9,689 9,448 ▪ As of 30th September 2024, net Equity 4,507 4,563 4,378 working capital reported without BU URE (Reported as “Assets Equity ratio 47% 47% 46%
Slide 16: Q3 2024: Weak agro business burdens CP; improved EBITDA pre in AI & SA
Q3 2024: Weak agro business burdens CP; improved EBITDA pre in AI & SA due to savings & better utilization Sales [€ m] EBITDA pre [€ m] Consumer Specialty 0% Protection Additives +45% LPT SGO RCH LAB 173 1,601* 1,598* -10% MPP 119 71 CP 581 521 F&F PLA -15% CP 84 61 SA 549 0% 550 Advanced +85% Inter
Slide 17: Q3 2024: Lower sales in Americas due to agro compensated by other regions
Q3 2024: Lower sales in Americas due to agro is com- pensated by positive development in all other regions Q3 2024 sales by region [%] Regional development of sales [€ m] Operational 1,601 1,598 development* Asia/ Americas Asia/Pacific 306 +7% 327 Pacific +8% 21 34 Americas 600 -9% 544 -7% 16 German
Slide 18: Q3 2024: Exceptional items decreased significantly
Q3 2024: Exceptional items decreased significantly [€ m] Q3 2023 Q3 2024 9M 2023 9M 2024 Excep. thereof Excep. thereof Excep. thereof Excep. thereof D&A D&A D&A D&A Strategic realignment and restructuring -15 -5 2 -1 -19 -5 -3 -2 (incl. FORWARD!) Strategic IT projects -10 -1 -7 0 -26 -1 -18 0 M&A, d
Slide 19: Significant reduction in gross debt due to envisaged bond repayment in May 2025
Significant reduction in gross debt due to envisaged repayment of bond maturing in May 2025 Long-term financing secured Liquidity and maturity profile as per September 2024 [€ m] ▪ Average interest rate of financial Bond ▪ Bond Bond Bond Bond 1000 2025 2026 2027 2028 2029 liabilities ~1.0%* €500 m €
Slide 20: Agenda
Agenda 1 Review Q3 2024 and outlook 2 Financial and business details Q3 2024 3 Appendix 20
Slide 21: Housekeeping items 2024
Housekeeping items 2024* Capex ~€330 m Operational D&A ~€550 m (thereof ~€150 m of intangible amortization effects) All other segments ~-€130 m EBITDA pre Exceptionals ~€60 m FX sensitivity One cent change of USD/EUR resulting in ~€3 m EBITDA pre impact after hedging Remnant Costs 2025: ~€15 m 2026:
Slide 22: 9M 2024: Earnings improvement due to higher utilization and reduced cost structures
9M 2024: Earnings improvement due to higher utilization and reduced cost structures P&L [€ m]* 9M 2023 9M 2024 yoy ▪ Lower sales mainly due to pass Sales 5,278 (100%) 4,883 (100%) -7% through of lower input costs, slightly lower volumes and Cost of sales -4,242 (-80%) -3,890 (-80%) 8% negative FX ef
Slide 23: 9M 2024: Operating cash flow compares with high previous year
9M 2024: Operating cash flow compares with high pre- vious year which was supported by inventory reduction Cash flow [€ m]* 9M 2023 9M 2024 ▪ Significantly higher profit before Profit before tax -286 -129 tax due to increased operating Depreciation & amortization 422 420 and financial result ▪ Chang
Slide 24: 9M 2024: weak agro business burdens CP; improved EBITDA pre in AI & SA
9M 2024: weak agro business burdens CP; improved EBITDA pre in AI & SA due to savings & better utilization Sales [€ m] Consumer Specialty EBITDA pre [€ m] -7% Protection Additives +10% LPT 5.278* SGO RCH LAB 455 4.883* 415 CP 1,832 -13% MPP 200 1,591 F&F PLA CP 260 -23% SA 1,833 179 -8% 1,684 Advanc
Slide 25: 9M 2024: Sales decline in all regions
9M 2024: Sales decline in all regions 9M 2024 sales by region [%] Regional development of sales [€ m] 5,278 Operational 4,883 development* Asia/ 999 Americas Asia/Pacific Pacific -7% 934 -5% 19 34 1,837 Americas -9% 1,667 -9% 17 Germany EMEA 1,563 -6% 1,473 -6% (excl. Germany) 30 EMEA (excl. Germany
Slide 26: Contact details Investor Relations
Contact details Investor Relations Ulrike Rockel André Simon Doreen Pickartz Head of Treasury & Investor Relations Head of Investor Relations Investor Relations Assistant Tel.: +49 221 8885 5458 Mob.: +49 175 302 3494 Tel.: +49 221 8885 9834 Mob.: +49 175 30 50458 E-Mail: andre.simon@lanxess.com Mob
Slide 27: Abbreviations
Abbreviations § Consumer Protection Specialty Additives MPP Material Protection Products PLA Polymer Additives F&F Flavors & Fragrances LAB Lubricant Additives Business SGO Saltigo RCH Rhein Chemie LPT Liquid Purification Technologies Advanced Intermediates AII Advanced Industrial Intermediates IPG
Slide 28: Upcoming events 2024/2025 - Proactive capital market communication
Upcoming events 2024/2025 - Proactive capital market communication Nov Apr Dec Jan 07 Q3 2024 Results 03 Citi Basic Materials Conference New York 09/10 ODDO BHF Forum Lyon 12 MS Global Chemicals Conference Boston 04 Berenberg European Conference Pennyhill 13/14 Commerzbank & ODDO German Investment S