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· Sales up 23.8% yr-on-yr at €7.557bn
· EBITDA pre exceptionals increase 17.2% to €1.010bn
· Dividend proposal for fiscal year 2021: €1.05 per share
· CEO Matthias Zachert: "We promised and delivered a year of growth in 2021.”
· Significant earnings increase also expected for fiscal year 2022 – unforeseeable impact of war in Ukraine not considered
LANXESS closed fiscal year 2021 successfully. Despite immense increases in energy, raw material and freight costs, the specialty chemicals company significantly improved its sales and earnings.
Group sales amounted to €7.557bn in 2021, up 23.8% on the previous year’s figure of €6.104bn. EBITDA pre exceptionals increased by 17.2% to €1.010bn compared with €862M a year earlier. Earnings were therefore within the guided range of €1bn to €1.05bn. The good results across all of the Group’s segments were mainly driven by strong demand from customer industries such as automotive, construction, transport and manufacturing. Influenced by significantly higher costs and one-time effects, the EBITDA margin pre exceptionals was now 13.4% after 14.1% in the previous year.
"We promised that 2021 would be a year of growth – and we delivered this against all the odds. We largely passed on the extreme cost increases to the market. In addition, we accomplished four acquisitions in the middle of the pandemic and thus massively expanded our Consumer Protection segment. All this shows the strength and stability that LANXESS now enjoys,” said Matthias Zachert, Chairman of the Board of Management of LANXESS.
At €218M, net income from continuing operations was significantly down on the previous year’s figure of €908M, as expected. In 2020, high extraordinary proceeds were generated from the sale of the stake in chemical park operator Currenta.
Significant growth expected for 2022 – impacts from war in Ukraine not yet considered
Zachert was optimistic about the current fiscal year 2022 despite a further increase in costs. "We expect energy and raw material prices to continue to rise in the first half of 2022. Global supply chains also remain fragile. Nevertheless, we would anticipate further significant earnings growth in this fiscal year.” However, the impact of the war in Ukraine is yet unforeseeable. LANXESS anticipates an earnings jump in the first quarter of 2022 and expects EBITDA pre exceptionals to come in between €280M and €320M (previous year: €242M).
Dividend to increase again
The dividend is to increase again for 2021. The Board of Management and Supervisory Board will propose a dividend of €1.05/share – five percent more than in the previous year – to the Annual Stockholders’ Meeting, which will be held virtually on May 25, 2022. This corresponds to a total dividend payout of around €91M.
Four acquisitions in the middle of the pandemicDespite difficult conditions due to the coronavirus pandemic, LANXESS made four acquisitions in fiscal year 2021 and thus considerably strengthened the Consumer Protection segment. With the acquisition of the French biocide specialist INTACE, the speciality chemicals company expanded its range of fungicides for paper and packaging. LANXESS significantly expanded its product range for the growing animal health market with the portfolio of the disinfectant and hygiene provider Theseo. In August, the Group completed the acquisition of the US speciality chemicals manufacturer Emerald Kalama Chemical and thus became one of the leading providers of products for flavours and fragrances.
LANXESS likewise contractually agreed the acquisition of the Microbial Control business from US corporation International FlavorsFragrances Inc. (IFF) – one of the leading providers of antimicrobial active ingredients and formulations for material protection, preservatives and disinfectants – in August 2021. The transaction is scheduled to be completed in the second quarter of 2022.
Growth in all segments
In the Advanced Intermediates segment, LANXESS successfully passed on the increases in raw material prices. Due also to good demand, sales increased by 19.6% from €1.629bn in the previous year to €1.949bn. At €333M, EBITDA pre exceptionals was 7.8% higher than the previous year’s figure of €309M. High energy and freight costs particularly burdened earnings and margin. The EBITDA margin pre exceptionals of 17.1% was therefore below the margin of 19.0% posted in the previous year.
The Specialty Additives segment benefited from the incipient recovery in the aviation industry and the good demand from the construction, oil and gas industries. The significantly increased raw material prices were successfully passed on. Sales amounted to €2.295bn, up 16.8% on the previous year’s figure of €1.965bn. EBITDA pre exceptionals grew by 16.2% from €278M to €323M. Increased energy and freight costs also had a negative effect on earnings. The EBITDA margin pre exceptionals remained unchanged yr-on-yr at 14.1%.
The businesses in the Consumer Protection segment performed very positively throughout the year. The segment benefited highly from the portfolio effect from the acquisition of the company Emerald Kalama Chemical. Together with the benzyl products of Advanced Industrial Intermediates, the new specialty chemicals businesses were integrated into the new Flavors & Fragrances business unit. Sales and earnings were also increased by the acquisition of the biocide companies INTACE and Theseo. Due also to higher volumes and selling prices, sales amounted to €1.515bn, up 21.9% on the previous year’s figure of €1.243bn. EBITDA pre exceptionals grew by only 3.4% from €266M to €275M, due in particular to high energy and freight costs and unscheduled plant shutdowns. The EBITDA margin pre exceptionals reached 18.2%, against 21.4% a year ago.Thanks to the recovery of demand in the automotive industry and the passing on of increases in raw material prices, sales in the Engineering Materials segment rose sharply. At €1.708bn, sales were up 43.5% on the previous year’s figure of €1.190bn. EBITDA pre exceptionals grew by 59.6% from €151M to €241M, although high energy and freight costs had a negative effect on earnings. The EBITDA margin pre exceptionals amounted to 14.1% after 12.7% in the previous year.
