LANXESS cuts FY 2023 forecasts as weak demand persists

LANXESS had formerly expected Q2 2023 EBITDA pre exceptionals roughly on par with Q1 results and a FY 2023 EBITDA pre exceptionals between 850-950 million euros.

However, in a recent announcement, the specialty chemicals company said it expects Q2 2023 EBITDA pre exceptionals to remain below average market expectations and adjusts the outlook for FY 2023 downward as well.

EBITDA pre exceptionals for Q2 2023 is expected to amount to around 100 million euros which is below current average market expectations, according to LANXESS.

The company now expects a profitability level of 600 to 650 million euros EBITDA pre exceptionals for FY 2023 should trading not pick up.

LANXESS adjusts the outlook for FY 2023 downward as weak demand persists.  

Especially weak demand in construction and electronics

Very weak demand combined with continued customer de-stocking effects already seen in Q1 lasted into Q2 and are ongoing, explained LANXESS. Demand in the construction industry, electro/electronics and even from usually stable consumer related products is especially week.

The demand recovery originally expected in the second half of the year is not yet visible – neither in China nor in other meaningful end markets, said Matthias Zachert, CEO.

“This impacts us especially in Germany. Here we are massively impacted by the disadvantageous conditions such as the high energy prices and massive bureaucracy. In times of weak demand, Germany as an industrial location is just not competitive,” he added.