LANXESS Aktiengesellschaft (ETR:LXS) used its annual stockholders meeting to warn that Europe’s chemical industry remains under “immense pressure,” citing weak demand, global overcapacity, geopolitical tension, high energy costs and regulatory burdens as key challenges facing the sector.
The company said the European chemical industry is in the midst of a “perfect storm,” with demand weak across major customer industries including building and construction, automotive and agriculture. It also pointed to increased competition from China, other Asian countries and the Middle East, where it said overcapacity has been built up and products are being pushed into European markets at very low prices.
2025 Sales and Earnings Decline
For fiscal 2025, LANXESS reported group sales of EUR 5.7 billion, down about 11% from the prior year. EBITDA pre exceptionals fell 17% to EUR 510 million. The company attributed the decline primarily to persistently weak demand across many customer industries, which reduced sales volumes and lowered capacity utilization at its facilities.
The sale of the company’s Urethane Systems business also reduced sales and earnings. LANXESS said strengthening the balance sheet was a key focus during the year, noting that net financial debt stood at about EUR 2 billion at the end of 2025, nearly 50% lower than in 2022. The reduction was supported by the Urethane Systems sale and cash and working capital management.
The company ended the year with cash reserves of about EUR 500 million and undrawn credit lines of about EUR 1.4 billion. Despite what it described as a tight earnings situation, the board of management and supervisory board proposed a stable dividend of EUR 0.10 per share, equal to a total payout of about EUR 9 million.
Specialty Chemicals Focus and Cost Cuts
LANXESS said it essentially completed its strategic realignment in 2025 with the sale of Urethane Systems, its last polymer business. The company said it is now focused on specialty chemicals organized around three segments: Consumer Protection, Specialty Additives and Advanced Intermediates.
The company said its FORWARD! action program, launched in 2023, is producing lasting savings through more efficient processes, a leaner organization and improved competitiveness. By the end of 2025, LANXESS expects annual savings of around EUR 150 million from the program.
Management also outlined additional structural measures in response to the deteriorating economic environment and tariff escalation. These measures are expected to generate around EUR 50 million in additional annual savings starting in 2027. The company said it closed its cyclohexane oxidation facility at Krefeld-Uerdingen at the end of the second quarter of 2025, plans to close its Widnes site in the U.K. this year and will streamline bromine product production at its El Dorado site in the U.S.
A third package of measures, started at the beginning of this year, is intended to save about EUR 100 million per year by the end of 2028. The package includes strict cost discipline and a reduction of approximately 550 positions across the group, particularly in administrative functions. LANXESS said it aims to implement the measures in a socially responsible manner.
Innovation and Sustainability Remain Priorities
LANXESS said it continues to invest in new offerings for future customer needs, including ion exchange products for carbon capture applications and iron oxides and iron phosphates intended to improve battery durability and performance. The company also highlighted the expansion of its Scopeblue product line, which applies to products made with at least 50% circular raw materials or with a very low carbon footprint. Over the past 12 months, LANXESS launched Scopeblue products for rubber additives and lubricants.
The company reiterated its sustainability targets, including climate neutrality for Scope 1 and Scope 2 emissions by 2040 and for Scope 3 emissions along the value chain by 2050. LANXESS said Scope 1 and Scope 2 emissions reached 1.7 million tons in 2025, down 73% from the 2004 baseline. Scope 3 emissions fell to around 10 million metric tons of CO2-equivalent last year, down 62% from the 2015 baseline.
2026 Outlook Reflects Uncertainty
Looking ahead, LANXESS said geopolitical risks have increased, particularly because of the war in the Middle East. The company said the direct impact of the conflict on its business is currently minimal, while supply chain disruptions affecting some Asian competitors have led customers to turn more strongly toward European suppliers.
LANXESS said it has seen slight positive momentum in demand since March and has raised prices for many products to pass on higher raw materials, energy and logistics costs. However, it cautioned that the market situation may be temporary and that the duration and financial impact remain uncertain.
For the second quarter of 2026, LANXESS expects EBITDA pre exceptionals to rise significantly compared with the first quarter, reaching between EUR 130 million and EUR 150 million. For full-year 2026, the company expects EBITDA pre exceptionals of EUR 450 million to EUR 550 million. It said sustained positive economic momentum, particularly in Europe, is not expected until the second half of the year at the earliest, if at all.
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.
