Lanxess (LXS) Q1 2025(Media) earnings summary

Executive summary

• Q1 2025 sales remained stable at €1,601 million, with EBITDA pre exceptionals rising 32% year-over-year to €133 million, driven by cost savings, improved utilization, and higher volumes despite weak market conditions.

• Net income loss narrowed to -€57 million from -€98 million in Q1 2024, supported by better operating performance and Envalior contribution.

• Portfolio transformation completed with the divestment of Urethane Systems to UBE Corporation on April 1, 2025, marking exit from the polymer business.

• Workforce reduced by approximately 900 employees, achieving cost savings ahead of schedule.

• Adjusted EPS improved to €0.23 from -€0.09 year-over-year.

Financial highlights

• EBITDA pre margin increased to 8.3% from 6.3% year-over-year.

• Gross profit rose to €322 million from €280 million, with gross margin up to 20.1% from 17.4%.

• Capex increased 15% to €45 million; cash outflow from operating activities rose to €66 million.

• Free cash flow was -€111 million, impacted by seasonal working capital build-up.

• Net financial debt increased seasonally to €2,512 million.

Outlook and guidance

• Full-year 2025 EBITDA pre exceptionals guidance confirmed at €600–650 million, including Q1 Urethane Systems contribution.

• Q2 2025 expected to improve sequentially but remain below prior year due to absence of Urethane Systems contribution.

• Guidance marked by uncertainty due to short-term customer order behavior, volatile tariffs, and geopolitical tensions.

• Slight growth anticipated in core and consumer businesses; agrochemicals and construction markets remain weak.

• Urethane Systems will no longer contribute to earnings following its divestment.