Lanxess' sales drop, reports net loss
By Chris Sweeney, Crain News Service
COLOGNE, Germany (March 24, 2014) — Lanxess A.G. reported a decline of 9 percent in sales to $11.4 billion for 2013 and a net loss of approximately $219 million, compared with net income of nearly $700 million in 2012.
The Cologne-based specialty chemicals company said lower prices in the performance polymers segment that resulted from declining raw material prices and a challenging competitive situation as the reason for the parent company's sales decline.
“Behind us lies a challenging year,” said Chief Financial Officer Bernhard Duettmann, who is acting CEO until Matthias Zachert assumes the role on April 1. Mr. Zachert is chief financial officer of Merck K.G.a.A. in Darmstadt, Germany.
Net income was impacted by impairment charges of approximately $354 million in the performance polymers segment — specifically the business units of Keltan and high-performance elastomers — and the business units of rubber chemicals in the performance chemicals segment, as well as charges of approximately $41.2 million for its efficiency program, “Advance.”
Under the program, Lanxess said it will seek “strategic options” for some of its non-core businesses. It divested its wholly owned subsidiary, Perlon-Monofil GmbH—a producer of polyamide and polyester monofilament products—to the Serafin Group based in Munich, Germany. Financial details were not disclosed.
Lanxess is seeking options for its rubber chemicals' accelerators and antioxidants lines and its nitrile-butadiene rubber business.
The company is aiming to save $135.3 million by 2015 and beyond by eliminating 1,000 jobs worldwide. Lanxess said approximately 730 employees have accepted voluntary layoffs by the end of 2015, accepting either early retirement or severance packages A total of approximately $151.5 million of the estimated $206.5 million in exceptional charges budgeted for the program were incurred in 2013.
Lanxess said it expects the market environment for synthetic rubber to remain challenging in 2014 in light of the competitive and capacity situation. It expects exchange rates—especially the U.S. dollar—and raw material prices to remain volatile.
The firm said its earnings for the first quarter 2014 will be impacted by a strike at the company's site in Zwijndrecht, Belgium. Butyl rubber production has been at a standstill for three weeks.
Lanxess employs approximately 17,300 in 31 countries with 52 production sites worldwide. It primarily develops, manufactures and markets plastics, rubber, intermediates and specialty chemicals.
This report appeared on rubbernews.com, the website of Rubber & Plastics News, an Akron-based sister publication of Tire Business.
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