Lanxess (LXS) Q4 2024 earnings summary

Executive summary

• 2024 was a challenging year with weak macroeconomic demand, but profitability improved due to accelerated cost savings, higher utilization rates, and operational discipline.

• The FORWARD! program delivered €110m in cost savings in 2024, with €40m more expected in 2025.

• Portfolio transformation advanced, focusing on chemicals and divesting polymers, with all regulatory clearances received for the urethane transaction, expected to close in April 2025.

• Free cash flow remained solid, and financial leverage decreased by roughly EUR 100 million, with further deleveraging planned using proceeds from the urethane sale.

• Safety performance remained top-tier in the European industry for the third consecutive year.

Financial highlights

• EBITDA increased by 20% year-over-year, reaching €614m in 2024, with margin at 9.6%.

• FY 2024 sales declined 5% to €6,366m; Q4 2024 sales up 3% to €1,483m; EBITDA pre up 64% to €159m in Q4.

• Net income for FY 2024 at -€177m, impacted by prior year goodwill impairment and lower book gains.

• Free cash flow for FY 2024 at €188m, supported by improved operating result and disciplined capex.

• Adjusted EPS for Q4 2024 at €0.21, up from -€0.30 in Q4 2023.

Outlook and guidance

• 2025 guidance for reported EBITDA is €600–650m, including pro rata Urethane Systems contribution, with only modest macroeconomic improvement expected.

• Q1 2025 EBITDA is expected to improve by 25%-35% compared to Q1 2024.

• All segments expected to contribute to EBITDA growth in 2025, though caution remains on agro demand.

• Capex planned at €330m and operational depreciation at €370m for 2025.

• Stable dividend of €0.10 proposed for 2024, maintaining focus on deleveraging.