LANXESS Aktiengesellschaft (ETR:LXS) executives used the company’s 2025 financial statement press conference to describe what CEO Matthias Zachert called a “perfect storm” for the European chemical industry, pointing to weak global demand, rising geopolitical uncertainty, and a surge of low-priced product inflows from Asia following tariff escalations. Against that backdrop, management said 2025 was “truly challenging,” with sales and earnings below the prior year, but also emphasized continued cost reductions, debt reduction, and the completion of a multi-year shift away from plastics.
2025 results: lower sales and earnings amid weak demand
Zachert said group sales fell 11% year-over-year and EBITDA declined 17%, attributing the sales drop not only to operational factors but also to portfolio changes and currency effects. On an operational basis, he said volumes and prices were down about 3% to 4%, which he described as a reflection of the tough market conditions.
- Consumer Protection: Zachert said EBITDA was essentially stable at EUR 290 million versus EUR 286 million a year earlier, with an EBITDA margin of 15%. He described the performance as robust and reiterated that expanding Consumer Protection remains a strategic priority to increase stability.
- Additives: Sales declined 7% and EBITDA fell 11%, which Zachert linked to weak demand and adverse currency effects. He said the segment remains tied to building and construction markets that have been weak for three years, though he noted early signs of a rebound in Europe and Germany.
- Intermediates: Sales decreased 8% and EBITDA dropped 39%. Zachert cited high energy costs, rising wages and salaries, regulatory burdens, and intense Asian competition at “irrational prices,” noting that the segment is strongly rooted in Germany with several production sites.
Despite the downturn, Zachert said LANXESS continued to reduce debt, stating that debt has been cut by 47% over the past couple of years. He also said the company would propose a dividend of EUR 0.10, framing it as part of disciplined cash and earnings management.
Portfolio transformation: exit from plastics and path for Envalior stake
Management said the company’s planned departure from plastics businesses is now complete. Zachert said LANXESS decided four years ago to exit plastics and sold its last remaining polymer business, Urethane Systems, to UBE, completing the sale in April. He said the proceeds were fully used to reduce debt.
Zachert also discussed the company’s stake in Envalior, describing it as linked to the polyamide segment and governed by contractual selling rights. He said LANXESS communicated in September 2025 that it could exercise selling rights in several steps during 2026 and 2027, with implementation at the latest by 2028, subject to a financing contingency. He emphasized, “this is not about whether we will divest, it’s just a question of when.” In the Q&A, Zachert clarified that the hard put option in 2028 relates to 50% of the stake.
On potential proceeds, management said amounts depend on Envalior’s economic performance. Zachert contrasted a previously discussed figure tied to a 100% earnings scenario with current expectations, saying that under today’s conditions the company would assume “a high three-digit million” euro figure.
Cost actions: EUR 100 million program, 550 job cuts, and reduced work week
LANXESS outlined additional measures intended to improve competitiveness. Zachert said a previously announced EUR 150 million savings program (FORWARD) was fully effective since late 2025, and additional production network savings announced in summer 2025 are also fully effective, with full implementation to be completed by the end of 2027.
He added that the company is targeting a further EUR 100 million in cost reductions over the next two to three years. As part of that effort, Zachert said LANXESS will reduce about 550 jobs, with most cuts in Germany and primarily in administrative functions. In response to questions, he said the affected administrative sites in Germany are Cologne and Leverkusen.
Zachert said the company aims to implement changes in a socially responsible way, using demographic change and early retirement where possible, but he did not rule out operational dismissals. He also noted that LANXESS and labor representatives agreed to a 35-hour work week through the end of 2026, which he said reduces costs and avoids deeper job cuts. In Q&A, he quantified the savings potential from the reduced working week at about EUR 20 million if fully implemented, and said wages and salaries are adjusted in line with reduced hours. For employees not covered by collective bargaining agreements and for management, he said LANXESS communicated no wage increase in 2026.
Utilization levels, site actions, and industry conditions
CFO Oliver Stratmann said plant utilization in 2025 averaged 65% and ended the year at an even lower level. He contrasted that with what he described as normal industry utilization of 80% to 85%, and referenced an industry association figure of roughly 70% utilization across the sector in 2025.
Zachert said he does not expect a substantial improvement in 2026 and indicated utilization is currently at a similar level to 2025, though he noted some pickup since the beginning of March before the Middle East conflict escalated. He said the company continuously reviews plant utilization and competitiveness, adding that there was “nothing new to communicate” on further closures at this time.
In response to a separate question on closures, Zachert said LANXESS previously closed cyclohexane oxidation operations in Germany in the second half of 2025 and closed the Widnes site in England by year-end, with ongoing implementation work related to that closure.
Outlook: 2026 guidance and geopolitical and energy risks
Management said the macro environment remains tense, with continued geopolitical uncertainty and unfavorable currency movements, including a weaker U.S. dollar versus the prior year. Zachert said LANXESS has only about 2% of sales in the Middle East conflict zone and therefore does not expect direct sales impacts, adding that internal task forces have been monitoring supply chains and the company has not seen disruptions so far.
At the same time, he warned that rising oil and gas prices are likely to pressure costs across derivatives and energy-intensive operations. In Q&A, Zachert said LANXESS has begun implementing price increases and expects to continue doing so in order to avoid absorbing higher input costs, while acknowledging that passing them through is “anything but easy” in the current competitive environment.
For 2026, Zachert guided to EBITDA of EUR 450 million to EUR 550 million, noting that the urethanes business will no longer contribute following the divestment and that 2026 will not include certain exceptional items referenced for 2025, including insurance-related contributions.
On financing, Zachert said LANXESS has a robust liquidity position and rejected speculation about a capital increase. He cited around EUR 500 million of liquidity on the balance sheet and undrawn loan facilities of EUR 1.35 billion without covenants or restrictions, saying the company is “fully funded.”
Stratmann also addressed leverage calculations including pensions, saying that when pension assets and deferred taxes are properly considered, leverage would be 4.55 rather than 4.8 as suggested in a question. He additionally discussed a shareholder loan to Envalior of EUR 200 million nominally, which he said is carried at more than EUR 260 million on LANXESS’s balance sheet because interest is not paid in cash. He said the loan is intended to finance investment and would become due pro rata when the stake is sold, pointing to 2028 at the latest.
About LANXESS Aktiengesellschaft (ETR:LXS)
LANXESS Aktiengesellschaft, together with its subsidiaries, operates as a specialty chemicals company that engages in the development, manufacture, and marketing of chemical intermediates, additives, specialty chemicals, and consumer protection products worldwide. It operates through three segments: Consumer Protection, Specialty Additives, and Advanced Intermediates. The Consumer Protection segment provides material protection products; disinfectant, hygiene, and preservative solutions; flavors and fragrances; liquid purification technologies for the treatment of water and other liquids; and precursors and intermediates for the agrochemicals, pharmaceuticals, and specialty chemicals industries.
