LANXESS got off to a good start in the first three months of 2018, supported by a rise in prices and volumes. Scope acknowledges the increased contribution which more non-cyclical business has made to EBITDA thanks to the solid growth experienced by ‘New LANXESS’ (excluding ARLANXEO). In Q1 2018, New LANXESS divisions accounted for up to 70% of EBITDA, compared to 59% for the same period in the previous year. Furthermore, as global economic growth continued, the acquisition of Chemtura, Phosphorus Additives from Solvay (Specialty Additives segment), together with a single-digit rise on the price and volume side, increased sales by about 24% compared to Q1 2017. Scope considers this to be a significant achievement, since the company has faced headwinds of a strong euro since Q4 2017. Lastly, the constant gross margin confirms the company’s considerable ability to pass higher raw material prices on to its customers. In contrast to LANXESS’ specialty materials divisions, ARLANXEO has had to contend with tougher business conditions, due to a combination of pre-buying in 2017, the maintenance shutdown of its Singapore plant and the strong euro.

This publication does not constitute a credit rating action. On 18 December 2017, Scope assigned LANXESS AG an issuer rating of BBB. Senior unsecured debt issued by the company is rated BB+. The short-term rating is S-2. The Outlooks are Stable.

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