The downgrade is due to the ongoing destocking in the chemicals sector, which has led to a significantly weaker Scope-adjusted EBITDA in 2023 compared to LANXESS' guidance.

The Outlook change is driven by LANXESS reducing its forecasted FY 2023 EBITDA to EUR 600m-650m from previous estimate of EUR 900m due to slower-than-expected demand recovery.

The rating continues to reflect the company’s strong position in medium-sized chemicals markets with considerable barriers to entry and a conservative financial policy.

The rating still reflects the company’s strong position in medium-sized markets with considerable barriers to entry, together with its conservative financial policy.

The rating still reflects the company’s strong position in medium-sized markets with considerable barriers to entry, together with its conservative financial policy.

The rating still reflects the company’s strong position in medium-sized markets with considerable barriers to entry, together with its conservative financial policy, balancing share-and debt-holder interests.

LANXESS has agreed to sell its stake in ARLANXEO to Saudi Aramco. The result is a significantly stronger financial risk profile due to lower leverage, supported by a conservative financial policy, favouring shareholder and debtholders.

A protected industry position, strong niche market positions, and conservative financial policy are credit-positive; weaker profitability and free cash flow than sector levels, and medium industry cyclicality of specialty chemicals industry are limits.