Lanxess Exceeds Expectations with Strong Q4 Performance
Surprising Demand from US Customers Boosts Profits
German specialty chemicals maker Lanxess has announced that its fourth-quarter core profit is expected to surpass market expectations by over 20%. This impressive performance is largely attributed to pre-buying by US customers, which has led to a significant increase in demand.
Stronger-than-Expected December Drives Growth
The Cologne-based company anticipates its quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA) pre-exceptionals to reach approximately 159 million euros ($164 million), exceeding market analysts’ forecast of 130 million euros. This robust growth is primarily driven by a stronger-than-expected December, which saw customers stockpiling Lanxess’ products.
2024 Outlook Remains Positive
Lanxess also expects its EBITDA, adjusted for special items, to reach around 614 million euros for 2024, representing a 20% increase from the previous year’s level. This growth is expected to be driven by the company’s specialty additive and consumer protection product segments, which have benefited from pre-buying in the US.
Sustainability of Volume Improvement in Focus
While Lanxess’ strong Q4 performance is a positive indicator, analysts are keenly focused on whether the volume improvement can be sustained in 2025. Sebastian Bray, an analyst from Berenberg, notes that the market will be closely watching for signs of continued growth.
Positive Share Reaction Expected
Analysts at Jefferies predict a positive share reaction to Lanxess’ announcement, citing the company’s strong performance as a key driver. Shares in the company were up 5.6% in afternoon trading.
Full-Year Results to be Released in March
Lanxess will release its full-year 2024 results on March 20, providing further insight into the company’s performance and future outlook.
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