Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on LANXESS AG. We currently have 9 research reports from 1 professional analysts.
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Perfect landing and a good start to 2017
15 Mar 17
Lanxess reported accidentally its 2016 figures a day earlier than announced. Sales declined 3% (organic: -2%) to €7,699m, but the gross profit margin was up +7ßbp to 22.8% helped by higher volumes (+4%). EBITDA rose +13% to €945m and net income attributable to shareholders came in at €192m after €165m. Operating CF stood pretty much unchanged at €689m (€692m) as the swing in NWC (€-3m after €60m) ate completely up the stronger operating performance. Investing CF (€-2,879m after €-400m) was hit by the re-investment of the cash contribution from the creation of Arlanxeo and the proceeds of the bonds issuance for the financing of the planned Chemtura acquisition. Additionally, €-200m was spent on the external financing of pension obligations. Financing CF moved from €-333m to €2,173m, as it faced a €1,194m cash inflow from non-controlling interests (Arlanxeo) and a swing from net gross debt repayments (€-200m) to net gross debt issuance (€1,107m). Management will propose a +17% higher dividend of €0.70 (€0.60) per share at the AGM on 26 May 2017. For 2017, management expects a slight increase in EBITDA before one-offs (2016: €995m) and, after the closing of the acquisition, Chemtura will then make additional contributions.
Lower prices mist the picture – outlook again lifted
10 Nov 16
Q3 sales (-2% to €1,921m) was burdened by passing through lower raw material prices (p: -7%), whereas volumes positively developed (+5%). Gross profit margin came in unchanged at 23.2% (23.3%) and EBITDA was up +11% to €241m. Net profit attributable to shareholders rocketed +51% to €62m. Operating CF reflected the good operating performance, additionally helped by higher NWC inflow (€113m after €38m) primarily propelled by a swing in trade payables into the black. Investing CF (€-170m after €46m) was dominated by the €-198m outflow for former Chemour’s Clean and Disinfect business. Financing CF (€-264m after €-75m) mainly saw higher net gross debt repayments (€-259m after €-59m). Management again lifted FY 2016 guidance, now expecting EBITDA pre one-offs in the €960-1,000m (€930-970m) range.
Better in additives
26 Sep 16
Lanxess has announced the acquisition of Chemtura, a US-based speciality chemicals company, for an equity value of ~€1.9bn (EV: ~€2.4bn). Anticipating a positive response from Chemtura’s shareholders and positive votes from the anti-trust authorities, closure is expected to take place in mid 2017.
Another quarter of weaker sales, but profitability up
10 Aug 16
Q2 sales were down 8% (prices: -7%; volume: +1%; FX: -1%) to €1,943m, but the gross profit margin strongly rose from 23.0% to 25.0%. EBITDA came in slightly weaker (-2% to €291m) and net profit attributable to shareholders dropped 14% to €75m, facing €-8m (nil) of minority interest. Operating CF strongly moved up (+51% to €180m), lacking the previous year’s quarter minus-sign-carrying disposal gains and lower NWC outflows (€-79m after €-101m). Investing CF (€-981m after €-151m) absorbed the payments for financial assets investing in the purchase price for the ARLANEXO share and a €200m cash outflow for the addition to the German pension fund assets. Financing CF swung from €-105m to €1,115m, primarily due to the €1,194m inflow for Saudi Aramco’s interest. Management again lifted FY 2016 guidance, now expecting EBITDA pre one-offs in the €930-970m (€900-950m) range.
Guidance lifted based on good Q1 figures. Too early?
11 May 16
Despite lower Q1 sales, which declined 6% (prices: -8%; volumes: +2%; FX: +1%) to €1,920m, the gross profit margin moved strongly up from 21.7% to 24.0%. EBITDA jumped +41% to €251m and net income attributable to shareholders moved up from €22m to €53m. Operating CF did not fully reflect the strong operating performance (€48m after €33m) as NWC outflow was up (€-141m after €-124m) driven by higher receivables and lower payables. The latter looks to us like a kind of financing of suppliers and the former is linked to higher business activities in the reporting period. Investing CF swung from €-61m to €56m, nudged by cash inflows from financing assets (near cash assets are nil in the balance sheet as of 31/03/2016). Financing CF moved from €-52m to €-137m due to higher net gross debt repayments (€-151m after €-44m). Management lifted its FY 2016 guidance, now expecting EBITDA pre one-offs in the €900-950m (€880-930m) range, which wipes out the former expectation that H2 16 might be softer.
Conciliatory ending to 2015
17 Mar 16
After the long period of weaker sales, Q4 was no dramatic change, but profitability continued to stabilise. Q4 sales were -5% (price: -10%) to €1,806m, but the gross profit margin strongly increased from 17.3% to 20.2%. EBIT swung from €-62m to €71m and net profit attributable to shareholders came in at €15m after €-68m. Q4 operating CF dropped 14% to €350m mainly due to lower NWC inflows (€249m after €381m). Investing CF declined from €-91m to €-234m suffering from a swing from an inflow (€142m) to an outflow (€-25m) in financial assets. Financing CF (€-101m after €-175m) saw some lower repayments of borrowings (€-85m after €-156m). Management proposes a +20% higher dividend (€0.60 after €0.50) at the next AGM on 20 May 2016. For FY 2016, management sees EBITDA pre one-offs in the €880-930m range and at €240-260m in Q1. Furthermore, H2 16 is expected to be softer.
N+1 Singer - N1S Trend spotting - Strategy update
08 Mar 17
In this new product we present some strategy theme updates arising out of our latest analysis of macro trends and economic data and our innovative Quant work. We also look at upcoming events and suggest topping up on some of our Best Ideas for 2017.
19 Dec 16
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Small Cap Breakfast
03 Mar 17
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28 Sep 16
After the severe short-term reaction to the Brexit vote, the UK manufacturing PMI now signals a return to more normal patterns and the stock market has recovered. Nevertheless, confidence remains weak. In the short term, it has largely been a phoney war. Sterling weakness has provided an opportunity for exporters. However, imported raw materials have also increased in price, as seen in the September inflation report with the input price index up 7.6%. Factory gate prices are lagging behind so beware of factory margins being squeezed. The reporting season has largely been devoid of serious shocks, with some order placement delays. However, due to the post Brexit fall in bond yields Carclo signalled a significant rise in its pension deficit, which wiped out its distributable reserves and caused it to cancel the previously declared dividend. We see potential for further bad news on pension deficits, with a number of larger industrials having significant pension liabilities that can only have grown since the referendum.
Full-year results, trading starting to turnaround
12 Dec 16
Full-year results are in line with our expectations and offer grounds for some increased optimism as the oil & gas sector (its largest end-customer) shows some signs that it has bottomed out. Progress continues with Airbus component trials and commercial discussions, and the group’s coatings facility in the US is now operational in advance of anticipated growth in North American demand. We make no changes to our 2017 forecasts, with new 2018 forecasts moving closer to breakeven. We retain our existing 2.1p price target, which offers significant upside on oil sector recovery and positive news flow on aerospace and other developments.