Crain News Service report
COLOGNE, Germany (June 2, 2014) — Synthetic rubber producer Lanxess A.G. is facing a difficult time over the next three years as its management seeks to realign the company and counter ongoing market challenges, new CEO Matthias Zachert said.
“We are currently facing major challenges, especially as the competitive environment for our business with synthetic rubber has changed. And this is clearly reflected in our results for fiscal 2013,” Mr. Zachert told shareholders at the group's annual results meeting on May 22.
In 2013, sales fell by 8.7 percent against the prior year to about $11.3 billion. EBITDA pre exceptionals decreased by 39.9 percent to about $1 billion. The group's net loss of about $217.1 million was attributable mostly to impairment charges.
Lanxess said its start to the business year 2014 was “subdued.” First-quarter sales were down by 2.5 percent year-on-year to about $2.73 billion. EBITDA pre exceptionals rose by 17.8 percent to about $280 million. Net income came in at the prior-year level of about $34.1 million.
“We were able to increase our operating result, but business still remains at a rather low level,” Mr. Zachert said.
Lanxess will explore options to make its rubber activities more competitive and seeks to balance its business portfolio.
It said it will analyze the profitability of its sites and explore options either to temporarily or permanently shut down some plants.
The firm said it is working to optimize administrative structures and streamline decision-making processes. Customer and market orientation in the business units are going to be improved.
“We must become significantly more competitive and profitable again,” Mr. Zachert said. “All teams are working with great effort and with the goal to bring Lanxess back on track.”
To help finance the realignment and generally strengthen the financial position of the company, Lanxess has increased its share capital by 10 percent, excluding the subscription rights of the shareholders.