Lanxess Adjusts Profit Forecast Amid Challenging Market Conditions
Such a frightening experience.
Lanxess, a leading specialty chemicals group, has announced a revised EBITDA pre exceptionals guidance for fiscal year 2025. The new range is set between €520 million and €580 million, a decrease from the previous range of €600 to €650 million. This adjustment comes in response to continued weak demand and supply restrictions from a chlorine supplier.
The second-quarter results for Lanxess, published today, show a decline in both EBITDA and revenue. The EBITDA before special items for the quarter was 150 million euros, a decrease of 17 percent compared to the prior-year period, resulting in an EBITDA margin of 10.2 percent, down from 10.8 percent.
Factors Contributing to Market Challenges
Several factors are contributing to the challenging market conditions faced by Lanxess:
- Weak Global Demand: The chemical industry is experiencing a decline in demand across various sectors, including construction and agriculture, due to broader economic uncertainties, geopolitical tensions, and ongoing tariff discussions.
- Portfolio and Volume Effects: The divestment of the Urethane Systems business unit in April 2025 has impacted Lanxess' earnings, as it removed a significant source of revenue, though it helped reduce debt.
- Supply Chain Disruptions: The company faces challenges from supply restrictions, notably from a chlorine supplier, which has a direct financial impact by adding a €10 million cost.
- Geopolitical Uncertainties: Ongoing tariff discussions and geopolitical tensions are exacerbating market uncertainty, particularly for the European chemical industry.
- Fierce Competition: Excess capacity and price erosion due to competition from Asian producers are further complicating the market environment for Lanxess.
- Macroeconomic Environment: The overall economic situation has deteriorated, with no significant recovery expected in the second half of 2025. However, potential positive effects from future government stimulus programs are anticipated starting in 2026.
Preparing for Recovery
In the face of these challenges, Lanxess is focusing on the best possible positioning in the market, costs, structures, and processes. The company aims to be ready to serve the additional demand more efficiently and profitably when the economy recovers.
Matthias Zachert, the CEO of Lanxess, has stated that the economic environment has worsened in recent months, and there is no sign of an improvement for Lanxess. However, he remains optimistic, stating that when the economy recovers, Lanxess will be well-positioned to take advantage of the opportunities that arise.
For investors monitoring Lanxess's stock, a potential stop is set at 19.50 euros. Despite the current challenges, the company's stock price is historically attractively valued within the MDAX index.
[1]: [Source 1] [2]: [Source 2] [3]: [Source 3] [4]: [Source 4] [5]: [Source 5]
- Due to the challenging market conditions faced by Lanxess, the company is revising its profit forecast in the finance sector, adjusting the EBITDA pre exceptionals guidance for fiscal year 2025 from €600 to €650 million to a range between €520 million and €580 million.
- In an effort to position itself for market recovery, Lanxess is focusing on optimizing its operations and costs across various business divisions, aiming to be more efficient and profitable when the economy shows signs of recovery.
