LANXESS on the right track20 June 2005
LANXESS expect to further improve earnings in the second quarter of 2005 based on preliminary figures. 'The current trend in the second quarter shows that we are on the right track overall. Our ongoing restructuring efforts, strict cost management and our shift toward a 'price before volume' strategy are having a positive effect', said LANXESS management board chairman Axel C Heitmann at the company's annual stockholders' meeting in Düsseldorf. He also said that LANXESS would improve their most important key internal indicator, EBITDA - operating result before taxes, depreciation and amortization - pre exceptionals compared to the same period of last year, according to currently available information. Heitmann said the company's business has benefited from the favorable chemical economy. For the full year 2005, LANXESS expect continued global economic growth. The company confirmed their goal of improving EBITDA pre exceptionals by at least 10% compared to 2004. Sales growth in the second half is expected to be moderate due to the company's 'price before volume' strategy and to the strong performance in the same period of 2004. LANXESS are taking advantage of the current positive chemicals cycle to push ahead with urgently needed restructuring measures and make the company competitive for the long term. The chemical company were spun off from the Bayer Group in early 2005 and completely realigned. In less than 20 months following the decision in November 2003 to separate them from Bayer, LANXESS have already reached important milestones along this road in addition to their successful stock-market listing in January this year. These include the placement on the capital market of the convertible bond repurchased from Bayer and, in particular, the agreement reached with the employee representatives to implement restructuring measures in the Styrenic Resins and Fine Chemicals business units. LANXESS are also launching a euro500 million bond issue with a maturity of seven years. It is intended to use the proceeds of the issue, which was more than three times oversubscribed, to repay liabilities to banks and substantially reinforce the company's financial position. A further achievement is the inclusion of LANXESS stock in the MDAX. Via the 'fast entry' route, the company's shares are now listed in the second most important German stock index. Another milestone in the company's still brief history was the first-ever annual stockholders' meeting of LANXESS AG which tooplace on June 16, at the Düsseldorf Exhibition Centre. The items on the agenda included the election of the stockholders' representatives to the company's supervisory board, whose mandate ended with the conclusion of the meeting. The supervisory board proposed the reelection of the current stockholders' representatives. The employees' representatives were named in March of this year.