Lanxess (LXS) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were €1,598 million, nearly flat year-over-year, as higher volumes offset lower prices and weak agrochemical demand; 9 out of 10 businesses grew, with one significant decline in Saltigo impacting Consumer Protection.

• EBITDA pre exceptionals rose 45.4% to €173 million, driven by cost savings, higher utilization (70% vs. 60% last year), and volume growth in most segments.

• Net income improved to €1 million from a loss of €131 million in Q3 2023; adjusted EPS from continuing operations reached €0.86.

• Portfolio transformation completed with the divestment of Urethane Systems, reported as assets held for sale; closing expected in H1 2025.

• Liquidity secured long-term through a new €800m sustainability-linked credit facility, ensuring access for 5+2 years without financial covenants.

Financial highlights

• Q3 2024 sales flat at €1,598m compared to Q3 2023; EBITDA pre rose 45% to €173m, margin improved to 10.8%.

• Net financial debt increased to €2,572m from €2,498m at FY 2023; free cash flow was -€14m, impacted by lower payables and safety stock build-up due to US harbor strike.

• 9M 2024 sales declined 7% year-over-year to €4,883m; EBITDA pre up 10% to €455m, margin at 9.3%.

• Gross profit increased 20.8% year-over-year to €349 million; gross margin rose to 21.8%.

• Net income margin improved to 0.1% from -8.2% in Q3 2023.

Outlook and guidance

• Full-year 2024 EBITDA pre exceptionals guidance reiterated, expected to rise 10–20% over 2023 (€512 million), despite macroeconomic headwinds.

• Q4 expected to be seasonally softer; margin improvement in Consumer Protection anticipated in Q4 despite seasonality.

• 2025 expected to show modest improvement over 2024, but a full return to normal trading levels may take one to two more years.

• Economic recovery remains slow, with continued weak demand in agrochemical and construction markets.

• Geopolitical instability and volatile demand remain key uncertainties.