By Joshua Kirby
Shares in Lanxess slid after the company said it doesn't expect any uptick in its business until at least the second half of the year amid mounting challenges for Europe's chemicals industry.
The German supplier booked an 11% drop in sales last year to 5.67 billion euros ($6.49 billion), it said Thursday. Adjusted earnings before interest, taxes, depreciation and amortization fell more sharply, declining 17% to 510 million euros as the profit margin contracted to 9.0% from the 9.6% posted in 2024.
Weak demand across Lanxess's customer base weighed on sales volumes, while competition from Asian rivals forced it to lower some prices, the company said. The sale last year of urethane-systems business to Japan's UBE Corp. meanwhile removed the division's earnings contribution, and currency effects also hit performance.
Frankfurt-listed shares traded 6.4% lower in morning trading at 12.51 euros.
As well as fiercer competition from abroad, Europe's chemicals suppliers are facing a fresh blow from war in the Middle East. Iran's attacks on energy infrastructure, and its effective blockade of shipping through the Persian Gulf's Strait of Hormuz, are already leading to a spike in raw-materials costs, the German chemicals-industry association warned last week. Giant supplier BASF said this week it was hiking some prices in Europe by as much as 30%, or even more for some products, in response to the surge in raw-materials costs.
The weak market environment and high levels of geopolitical uncertainty that dogged performance last year meanwhile show no signs of ebbing, Lanxess said. The group expects adjusted Ebitda of between 450 million euros and 550 million euros for 2026, it said. Any impetus won't show until the latter part of the year, Lanxess said.
"For 2026, we expect to see positive momentum in the second half of the year at the earliest, for example through the German government's infrastructure stimulus program," Chief Executive Officer Matthias Zachert said. The government of Chancellor Friedrich Merz last year set out a package worth some $1 trillion to boost demand in defense and infrastructure over several years, rousing hopes of a revival in the country's moribund industrial sector and exports.
"This implies that a significant step-up in earnings may be needed over the rest of the year to deliver even the low end of the guidance range," JPMorgan analysts said in a note.
Lanxess meanwhile said it will aim to shore up its bottom line through job cuts this year. The company will shed some 550 jobs, the bulk of them in Germany. Alongside other cost efficiencies, the lower headcount should help the company save some 100 million euros a year by the end of 2028, it said.
"The guiding principle for 2026 remains that we control the things we can control," Zachert said. "That means continuing to cut costs, streamline processes, and create new market opportunities."
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
March 19, 2026 05:24 ET (09:24 GMT)
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