LANXESS Aktiengesellschaft (ETR:LXS) said it is pursuing additional cost reductions, portfolio adjustments and debt-reduction measures as it works through continued weakness in several chemical end markets, including agriculture and construction.
In a presentation to investors, Catharina Kaiser, who works in investor relations at Lanxess, said the specialty chemicals company generated approximately €5.7 billion in sales at the end of 2025 and employs about 11,700 people globally. The company operates through three segments—Consumer Protection, Specialty Additives and Advanced Intermediates—encompassing nine business units.
U.S. Presence and Portfolio Strategy
Lanxess has expanded its U.S. business significantly since 2016, with the region rising from 15% of sales to nearly one-third of group sales in 2025, Kaiser said. On an adjusted portfolio basis, U.S. sales have almost doubled over the past decade, supported by acquisitions including Chemtura, Emerald Kalama Chemical and IFF’s microbial control business.
Kaiser said the larger U.S. footprint provides access to a large specialty-chemicals customer base and innovation opportunities, while potentially providing benefits amid tariff-related uncertainty. The company also sees its chemical products as supporting structural trends including battery and electrification technologies, renewable energy, water treatment and recovery and reuse of valuable materials.
Still, she said the industry environment remains difficult. “Persistently weak agro and construction industries are tearing our earnings down,” Kaiser said, adding that Lanxess is focusing on measures it can control rather than relying solely on a cyclical recovery.
Cost-Savings Programs Continue
Lanxess’ FORWARD! cost-reduction program had generated about €150 million in savings by the end of 2025, according to Kaiser. The company is implementing further actions through 2028 that are expected to provide roughly €170 million in additional savings.
Those measures include organizational efficiencies, production-network changes and position reductions worldwide. Lanxess has closed its hexane oxidation plant in Uerdingen in the Advanced Intermediates business and one plant in Widnes, U.K., serving its flavors and fragrances operation.
In Germany, the company recently added planned Saltigo production-network adjustments that it expects will save €20 million. Kaiser said Saltigo is also seeking to shift capacity away from the weaker agricultural market toward the higher-margin and more resilient pharmaceutical industry.
Second-Quarter Improvement, Guidance Maintained
Lanxess reported an improvement in EBITDA pre in the second quarter, to €152 million from €94 million in the first quarter. Kaiser attributed the increase to higher volumes, positive pricing and contributions from cost-saving actions. Free cash flow improved to positive €56 million in the second quarter from negative €29 million in the first quarter.
She cautioned, however, that one quarter does not establish a trend. The company also benefited from demand shifts tied to the Middle East crisis and supply-chain disruptions affecting Asian competitors, she said.
Lanxess confirmed its full-year 2026 EBITDA pre guidance of €450 million to €550 million. It expects third-quarter EBITDA pre of about €130 million to €150 million, below the second-quarter level. The company does not assume a material improvement in the second half compared with the first half, with cost savings and operational measures expected to remain the primary earnings drivers.
Capacity utilization averaged about 65% to 70% in recent quarters, Kaiser said, improving toward 70% in the second quarter. She described roughly 80% as a healthy utilization level for the chemicals industry and said Lanxess retains capacity to support volume growth if demand improves.
Deleveraging Remains a Priority
Lanxess is targeting a net debt-to-EBITDA ratio below 2.5 times and aims to restore sustainable investment-grade status. Kaiser said the strategy includes cost savings, disciplined capital allocation, working-capital management and monetization of the company’s stake in the Envalior joint venture, including repayment of a related shareholder loan.
She said deleveraging through internally generated cash remains challenging at current earnings levels. Using the midpoint of the company’s 2026 EBITDA pre guidance, Kaiser cited expected capital expenditures of roughly €330 million, as well as tax, interest and leasing expenses.
Lanxess recently issued a new bond carrying a 4.375% coupon despite its non-investment-grade rating, Kaiser said. The company’s bonds have no financial covenants, and she said Lanxess currently has strong access to debt markets and a manageable maturity profile, while continuing to evaluate options to further reduce net financial debt.
About LANXESS Aktiengesellschaft (ETR:LXS)
LANXESS Aktiengesellschaft, together with its subsidiaries, operates as a specialty chemicals company that engages in the development, manufacture, and marketing of chemical intermediates, additives, specialty chemicals, and consumer protection products worldwide. It operates through three segments: Consumer Protection, Specialty Additives, and Advanced Intermediates. The Consumer Protection segment provides material protection products; disinfectant, hygiene, and preservative solutions; flavors and fragrances; liquid purification technologies for the treatment of water and other liquids; and precursors and intermediates for the agrochemicals, pharmaceuticals, and specialty chemicals industries.
