Cologne, Germany — Lanxess' sales were 3.1 billion euros ($3.7 billion) in the first half of 2020. This is a fall of 9 percent compared with the same period in 2019.
Pre-exceptional items, EBITDA across the business fell 15 percent and hit 469 million euros ($560 million). In the same period in the previous year pre-exceptional EBITDA was 553 million euros ($660 million).
The company said the "positive earnings in our Consumer Protection segment did not compensate for weak demand from the automotive industry, especially in the Engineering Materials segment."
During the half, the company's cost of travel dropped and the company managed to trim some back-office costs. R&D spend at 64 million euros ($76 million) was almost the same as 65 million euros ($77 million) in the first half of 2019.
In the company's Engineering Materials business, which contains polyurethanes, sales subsided by 21 percent between the first half of 2019 and 2020. Sales dropped by 21 percent and reached 591 million euros ($705 million) in the first half of 2020.
Pre-exceptional EBITDA in the division declined by 41 percent, reaching 77 million euros ($92 million).
The fall in sales was due to shutdowns at customers because of coronavirus. Lanxess stressed the impact that this had on the High Performance Materials or non-polyurethane part of the business. It added that the Engineering Materials business will be "significantly weaker than in the previous year due to the massive collapse in demand in the automotive industry."
The fall in sales fed through to lower earnings in the half.
Looking ahead to the rest of 2020, Lanxess said it "does not expect the performance of the global economy or of any region to quickly return to the previous year's level… We expect significant negative development in the automotive industry in 2020. We assume that the construction industry, the agro-industry and the chemical industry will all decline."
However, chairman Matthias Zachert is more optimistic than the notes to the accounts.
Announcing the results, he said: "We are already seeing initial signs of a recovery in Asia. I therefore remain confident, even though a rapid macroeconomic recovery cannot be foreseen at present."
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