Vijay Singh
Mumbai (Maharashtra) [India], September 19: A weak global market environment impacted LANXESS’ results in the second quarter of 2025. The specialty chemicals company achieved an EBITDA pre exceptionals of EUR 150 million, which is a 17.1 percent decline compared with the figure of EUR 181 million from the same quarter last year. Weaker demand in general was accompanied by lower sales volumes in all segments. The sale of the Urethane Systems business unit effective April 1, 2025, also contributed significantly to the decline in earnings. Second-quarter sales amounted to EUR 1.466 billion, down 12.6 percent on the prior-year figure of EUR 1.678 billion.
“The economic environment has deteriorated significantly again in recent months. Additionally, ongoing tariff discussions with the U.S. are causing considerable market uncertainty and exacerbating the situation for the European chemical industry. There is currently no improvement in sight for the economic situation,” says Matthias Zachert, CEO of LANXESS. “For us, this means continuing to focus fully on achieving the best possible positioning in the market, as well as in terms of costs, structures, and processes. When the economy picks up again, we will be ready and able to meet the additional demand much more efficiently and profitably.”
The EBITDA margin pre exceptionals was 10.2 percent in the second quarter, compared with 10.8 percent in the same period last year.
Due to the expected continued weak demand for the remainder of the year, LANXESS is adjusting its guidance for fiscal year 2025 and now anticipates an EBITDA pre exceptionals of between EUR 520 million and EUR 580 million. This includes a burden of EUR 10 million related to supply restrictions from a chlorine supplier. The Group had previously anticipated earnings of between EUR 600 million and EUR 650 million.
Further significant debt reduction through sale of Urethane Systems
On April 1, 2025, LANXESS sold its Urethane Systems business to Japan’s UBE Corporation, thereby divesting its last remaining polymer business. This transaction marked the final major step in the restructuring of the portfolio toward specialty chemicals.
The business unit’s contribution to earnings is no longer included in the quarterly figures. LANXESS used the proceeds from the sale to redeem the EUR 500 million benchmark bond that matured in May 2025. The proceeds from the sale reduced the company’s net financial debt by 18 percent from EUR 2.512 billion in the first quarter of 2025 to EUR 2.069 billion in the second quarter of 2025.
Despite the difficult market conditions, the company generated positive free cash flow of EUR 31 million in the second quarter.
Further optimization of the global production network
To actively counteract the global weakness in demand, LANXESS is further optimizing its global production network. The Group has already brought forward the closure of its hexane oxidation facility at the Krefeld-Uerdingen site to the end of the second quarter of 2025. LANXESS also plans to streamline its global network of aroma chemicals plants and shut down production at its Widnes site (UK) in the course of 2026. Due to high costs, the company can no longer operate the Widnes site competitively. At the El Dorado site (USA), LANXESS plans to increase efficiency of bromine production. These measures are expected to result in permanent annual savings of EUR 50 million from the end of 2027.
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