Specialty chemicals company LANXESS faced a challenging second quarter in 2025, as a weak global market environment weighed on its performance. The company posted sales of EUR 1.47 billion, marking a 12.6 percent decline from EUR 1.68 billion in the same quarter last year. EBITDA pre exceptionals dropped 17.1 percent year-on-year to EUR 150 million, primarily due to lower demand, reduced sales volumes across segments, and the divestment of the Urethane Systems business unit effective April 1, 2025.

Despite these headwinds, LANXESS generated a positive free cash flow of EUR 31 million and successfully reduced net financial debt by 18 percent—from EUR 2.512 billion in Q1 2025 to EUR 2.069 billion in Q2—using proceeds from the divestment to redeem a EUR 500 million bond that matured in May.

Given the expectation of continued weak demand for the rest of the year, the company has adjusted its guidance for fiscal 2025, now projecting EBITDA pre exceptionals in the range of EUR 520 million to EUR 580 million, compared to its earlier forecast of EUR 600 million to EUR 650 million. This includes a EUR 10 million impact from supply restrictions at a chlorine supplier.

Matthias Zachert, CEO of LANXESS, commented:

“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.

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 for the quarter stood at 10.2 percent, compared with 10.8 percent in the prior-year period.

Portfolio and Production Network Optimization
LANXESS continues to implement strategic measures to enhance competitiveness. The sale of the Urethane Systems business marked the final step in shifting its portfolio entirely toward specialty chemicals. To counteract weak demand, the company is optimizing its global production network, including the early closure of the hexane oxidation facility at the Krefeld-Uerdingen site at the end of Q2 2025. It plans to streamline its global aroma chemicals network and shut down production at its Widnes (UK) site in 2026 due to high operating costs. Efficiency improvements are also planned at its El Dorado (USA) bromine production facility. These actions are expected to deliver permanent annual cost savings of EUR 50 million starting in late 2027.

Segment Performance

• Consumer Protection: Sales were EUR 489 million, a 12.8 percent decline from EUR 561 million last year. Despite the sales drop, EBITDA pre exceptionals rose by 8.8 percent to EUR 87 million, supported by a favorable product mix, insurance compensation, and cost savings from the “FORWARD!” initiative, improving the EBITDA margin to 17.8 percent from 14.3 percent.

• Specialty Additives: Sales fell 7 percent to EUR 528 million, while EBITDA pre exceptionals declined 17.1 percent to EUR 58 million due to lower demand from the construction sector and higher energy costs, resulting in a margin of 11.0 percent versus 12.3 percent last year.

• Advanced Intermediates: Sales dropped 6.7 percent to EUR 446 million. EBITDA pre exceptionals was EUR 44 million, down 24.1 percent year-on-year, with weak demand and lower capacity utilization reducing margins to 9.9 percent from 12.1 percent.