Previous state of Lanxess prior to the shift?
Lanxess, a leading specialty chemicals manufacturer listed on the MDAX, has revised its full-year EBITDA forecast for 2025, citing a weak global market environment as the primary reason. The new range stands at €520 million to €580 million, a decrease from the previous estimate of €600 million to €650 million.
The revision is largely attributed to declining sales volumes and lower demand across all segments, exacerbated by the sale of its Urethane Systems business unit effective April 1, 2025. Ongoing macroeconomic uncertainties such as US tariff policy, continued geopolitical tensions, and excess capacity from Asian competitors have also negatively impacted the company's economic outlook.
In the second quarter of 2025, Lanxess reported a 12.6% drop in sales compared to the previous year, mainly driven by portfolio and volume effects. EBITDA pre exceptionals fell by 17.1% year-on-year to €150 million. The market weakness persists in key sectors such as agro and construction, with little demand recovery expected in the latter half of 2025.
Fierce competition from Asia creates excess capacity and price pressure in many end markets. Additionally, a force majeure at a chlorine supplier has caused about a €10 million EBITDA shortfall. However, Lanxess is pursuing cost savings and optimizing its global production network to counteract the weak market environment.
CEO Matthias Zachert remains optimistic, stating that the company is focused on positioning itself for when economic conditions improve. Despite the challenges, Lanxess is continuing its restructuring efforts, which include the closure of certain sites.
The revised forecast comes after Lanxess reported a 65% drop in second-quarter net profit, due to lower sales and higher raw material costs. The revised forecast is lower than the previous forecasts of companies like BASF and Covestro.
Analyst Oliver Schwarz of Warburg Research has reiterated his "Buy" rating for Lanxess, confirming his price target at €30 euros. Those who are already invested in Lanxss should continue to monitor a stop at 19.50 euros.
Clarity on the US trade issue would also be helpful, as it has caused significant uncertainty among many companies and consumers. JPMorgan analyst Chetan Udeshi found the move more pronounced than expected, but was not completely surprised.
Lanxess remains hopeful about 2026, expecting positive effects from customers preparing for a recovery in their businesses by the end of 2025. The company remains focused on positioning itself for the future, ready to capitalize on opportunities as economic conditions improve.
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