German chemicals manufacturer LANXESS is raising its guidance for the full year 2021 following a good first quarter. The specialty chemicals company now expects EBITDA pre exceptionals of between EUR 950 million and EUR 1 billion. Previously, the company had assumed earnings of between EUR 900 million and EUR 1 billion.

At EUR 242 million, EBITDA pre exceptionals in the first quarter came in at the good level of the prior-year quarter (EUR 245 million), which had not yet been significantly affected by the Coronavirus pandemic.

Group-wide, volumes in the first quarter of 2021 were above the prior-year level. Growing demand from the automotive sector was a key driver, particularly in the Engineering Materials segment. This was offset by the effects of weather-related production shutdowns in the United States in the Advanced Intermediates, Specialty Additives and Consumer Protection segments. Moreover, negative exchange rate effects, particularly from the US dollar, and significantly higher energy costs, especially in Germany, had a negative impact.

Group sales in the first quarter of EUR 1.693 billion were at the good level of the previous year (EUR 1.704 billion). Group income from continuing operations also remained stable at EUR 63 million.

“The positive momentum from the fourth quarter has continued and we have made a good start to the new year. We are benefiting from a further increase in demand, particularly in the automotive sector. Operationally, we have thus left Corona behind us and are now very confident about the rest of the year,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG. “Now we are focusing on our growth course and are doing everything we can to ensure that our new businesses quickly develop their full potential.”

In the first quarter, LANXESS also pursued strategic growth. In the Consumer Protection segment, the specialty chemicals company completed two acquisitions. With the French biocide specialist INTACE, the company has expanded its range of fungicides for paper and packaging. With the successful acquisition of disinfection and hygiene provider Theseo, LANXESS has significantly expanded its offering for the growth market of animal hygiene.

In mid-February 2021, the specialty chemicals company announced the second-largest acquisition in its corporate history. The acquisition of US-based group Emerald Kalama Chemical will enable LANXESS to open up high-margin new fields of application, such as in the food industry and animal health. The Group expects the transaction to be completed in the second half of the year following regulatory approvals.

LANXESS has also been involved in the future field of battery chemistry since this year, entering into a cooperation agreement with Tinci, a leading global manufacturer of lithium-ion battery materials, at the end of March. From 2022, LANXESS will produce electrolyte formulations for lithium-ion batteries in Leverkusen under the authorization of the Chinese company.