Buoyed by a better performance in second quarter, LANXESS has again raised its guidance for the full year 2021. The specialty chemicals company now expects EBITDA pre exceptionals to be between EUR 1 billion and EUR 1.05 billion.

The guidance also reflects the acquisition of Emerald Kalama Chemical, which was completed in early August, with an EBITDA contribution of around EUR 35 million for the remainder of 2021. Previously, LANXESS expected earnings of between EUR 950 million and EUR 1 billion.

LANXESS significantly increased EBITDA pre exceptionals in the second quarter compared with the prior-year period, which was dominated by the pandemic: earnings were up by 23.7 percent from EUR 224 million to EUR 277 million.

This positive development was driven by increasingly strong demand from the automotive industry, with the Engineering Materials segment benefiting in particular. The Consumer Protection segment also developed strongly, with earnings almost reaching the high level of the previous year.

The Group managed to largely pass on the sharp increase in raw material prices in all segments by adjusting selling prices. Exchange rate effects, particularly from the U.S. dollar, high freight costs and significantly higher energy costs, especially in Germany, had a negative impact on earnings. The EBITDA margin pre exceptionals was 15.1 percent, compared with 15.6 percent in the prior-year quarter.

“Our business continued to develop well in the second quarter. Volumes are back to pre-pandemic levels and we are confident about the second half of the year. With this momentum and the successful acquisition of Emerald Kalama Chemical, we are able to once again accelerate our growth path and raise our guidance for the full year,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

Group sales in the second quarter rose significantly by 27.5 percent to EUR 1.831 billion from EUR 1.436 billion in the previous year. As expected, net income from continuing operations was significantly below the prior-year figure of EUR 803 million at EUR 77 million. In the second quarter of 2020, a substantial level of extraordinary proceeds had been generated from the sale of the stake in chemical park operator Currenta.

Just last week, LANXESS completed the second-largest acquisition in its history. The acquisition of Emerald Kalama Chemical strengthens the specialty chemicals company’s position in markets with attractive growth rates and opens up new high-margin application areas, particularly in the area of consumer protection. These include, among others, products for flavors and fragrances as well as preservatives for use in foods and beverages or in cleaning and cosmetic products. The Group expects to complete the integration of the new businesses quickly. In fiscal 2021, the acquisition will already contribute around EUR 35 million to LANXESS’ annual result.