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1. Company Snapshot

1.a. Company Description

LANXESS Aktiengesellschaft, a specialty chemicals company, develops, manufactures, and markets chemical intermediates, additives, specialty chemicals, and plastics worldwide.It operates through four segments: Advanced Intermediates, Specialty Additives, Consumer Protection, and Engineering Materials.The Advanced Intermediates segment provides advanced industrial intermediates, basic and fine chemicals, organometallics, and inorganic pigments for the agrochemical, automotive, construction, aromas and flavors, semiconductors and photovoltaic, and color pigments industries.


The Specialty Additives segment offers additives, including lubricants, flame retardants, plasticizers, and bromine derivatives for various applications of rubber, plastic, paint, construction, and electrical industries.The Consumer Protection segment provides material protection products; disinfectant, hygiene, and preservative solutions; flavors and fragrances; and precursors and intermediates for the agrochemicals, pharmaceuticals, and specialty chemicals industries, as well as technologies for the treatment of water and other liquids.The Engineering Materials segment produces technical plastics, glass fibers, fiber composites, and elastomers on a urethane basis for application in the automotive and electrical/electronics, construction, and medicine industries, as well as sports and leisure sectors.


The company was founded in 1863 and is headquartered in Cologne, Germany.

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1.b. Last Insights on LXS

LANXESS Aktiengesellschaft faced a challenging quarter, with its recent earnings release revealing a significant EBITDA decline. The company's Q3 2025 earnings call highlighted its focus on cost-saving measures and strategic initiatives to address competitive pressures. However, the earnings miss and subsequent analyst forecast revisions likely impacted investor sentiment. Additionally, the ongoing US-EU trade tensions, including tariffs on European goods, pose a threat to the chemical industry's recovery. These factors, coupled with a fair value estimate of €25.10, suggest a complex operating environment.

1.c. Company Highlights

2. LANXESS' Q3 Performance: Navigating Challenging Market Conditions

LANXESS reported a decline in sales by 16% due to portfolio changes, unfavorable currency translations, price reductions, and a volume decline of 6%. The company's EBITDA was negatively impacted, and the earnings per share (EPS) came out at '-0.07', beating analyst estimates of '-0.71934'. The consumer protection segment showed resilience with a high margin of almost 16%, while Specialty Additives and Advanced Intermediates struggled with weak demand and strong competition. Analysts estimate next year's revenue growth at 0.4%, indicating a slow recovery.

Publication Date: Nov -10

📋 Highlights
  • Revised Guidance:: LANXESS expects 2023 EBITDA at the lower end of €520M–€580M due to demand weakness and cost pressures.
  • Cost-Cutting Programs:: €100M structural savings over years and €150M from existing "Forward" program by year-end, totaling €250M in efficiency measures.
  • Sales Decline:: Q3 sales fell 16% YoY, driven by portfolio changes (-2%), price reductions (-2%), and volume decline (-6%) amid challenging market conditions.
  • Strategic Divestment:: Exit polymer activities under pressure in Europe, strengthening focus on high-margin Consumer Protection segment (16% margin).
  • Market Consolidation Outlook:: Anticipated industry consolidation by 2027 from competitor exits and M&A, enhancing LANXESS' competitive position.

Segment Performance and Cost-Cutting Measures

The company's consumer protection segment demonstrated stability, while other segments faced challenges. In response, LANXESS is implementing cost-cutting measures, including a program aimed at achieving structural improvements of around €100 million over the coming years, in addition to the existing "Forward" program, which is expected to deliver €150 million in cost savings by the end of the year. As Matthias Zachert, LANXESS' CEO, noted, the company is working to improve framework conditions, including discussions with politicians on industrial electricity prices and the European emissions trading system.

Guidance and Outlook

LANXESS revised its guidance for the year, expecting to be at the lower end of the forecast range of €520 million to €580 million. The company expects some positive effects from stimulus programs for infrastructure in Germany and antidumping processes in 2026. Market consolidation and company shutdowns are expected to strengthen LANXESS' position in the market, with the company aiming to emerge stronger from the crisis.

Valuation and Financial Metrics

With a P/E Ratio of -8.99 and an EV/EBITDA of 6.89, the market is pricing in a challenging recovery for LANXESS. The company's Net Debt / EBITDA ratio stands at 4.09, indicating a relatively high debt burden. The ROE and ROIC are negative, at -3.81% and -0.63%, respectively, suggesting that the company is currently facing significant profitability challenges.

Strategic Focus and Future Plans

LANXESS is focusing on cost-cutting efforts, improving competitiveness, and strengthening its global position. The company has made significant progress in reducing costs, particularly in IT, and expects to realize substantial savings from this sector in 2026. With a strong consumer protection element and divestment from polymer activities, LANXESS aims to become more resilient and future-proof.

3. NewsRoom

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Earnings Miss: LANXESS Aktiengesellschaft Missed EPS And Analysts Are Revising Their Forecasts

Nov -09

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Lanxess AG (LNXSF) Q3 2025 Earnings Call Highlights: Navigating Challenges with Strategic Cost ...

Nov -06

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Calculating The Fair Value Of LANXESS Aktiengesellschaft (ETR:LXS)

Oct -29

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Decabromodiphenyl Ether (DecaBDE) Market to Reach USD 465.19 Million by 2032, Growing At An 2.4% CAGR - Credence Research

Oct -27

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Analysis: Trump's tariffs threaten to choke European chemicals recovery

Sep -03

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LANXESS Second Quarter 2025 Earnings: Misses Expectations

Aug -15

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Basic Materials Roundup: Market Talk

Aug -14

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Telescope Innovations Selected to Join ALTA: the First US-Based Lithium Technology Accelerator

Jul -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.70%)

6. Segments

Specialty Additives

Expected Growth: 3.0%

The segment is likely to grow faster than the global average due to its exposure to diverse end-markets and the increasing demand for specialty chemicals. The growth is driven by the need for high-performance additives in various industries.

Consumer Protection

Expected Growth: 2.9%

The segment is likely to grow in line with the global average, driven by the increasing demand for consumer goods and the growing awareness of hygiene and health. The segment is relatively stable, with a steady demand for its products.

Advanced Intermed

Expected Growth: 3.2%

The segment is likely to grow faster than the global average due to its exposure to the agricultural sector, which is driven by the increasing demand for food production. The growth is also driven by the need for high-performance coatings in various industries.

ALL Other Segments

Expected Growth: 2.7%

The segment is likely to grow in line with the global average, as it comprises a diverse range of businesses. The growth is driven by the overall performance of the various businesses within this segment.

Consolidation

Expected Growth: 2.7%

The consolidation segment is expected to grow in line with the global average, as it represents the overall performance of the company. The growth is driven by the performance of the individual segments.

7. Detailed Products

Advanced Industrial Intermediates

LANXESS offers a wide range of advanced industrial intermediates, including aldehydes, ketones, and specialty solvents, used in various industries such as agrochemicals, pharmaceuticals, and coatings.

Inorganic Pigments

LANXESS's inorganic pigments, including iron oxide, chromium oxide, and titanium dioxide, are used in various applications such as coatings, plastics, and construction materials.

Leather Chemicals

LANXESS's leather chemicals, including tannins, fatliquors, and finishing agents, are used in the production of high-quality leather goods.

Rhein Chemie Additives

LANXESS's Rhein Chemie additives, including polymer-bound rubber chemicals and release agents, are used in various industries such as tire manufacturing and rubber processing.

Specialty Chemicals

LANXESS's specialty chemicals, including flame retardants, plasticizers, and lubricants, are used in various industries such as electrical, construction, and automotive.

8. LANXESS Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for LANXESS Aktiengesellschaft is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for LANXESS Aktiengesellschaft is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for LANXESS Aktiengesellschaft is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for LANXESS Aktiengesellschaft is low due to the high barriers to entry in the chemical industry.

Intensity Of Rivalry

The intensity of rivalry for LANXESS Aktiengesellschaft is high due to the competitive nature of the chemical industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.82%
Debt Cost 3.95%
Equity Weight 61.18%
Equity Cost 12.17%
WACC 8.98%
Leverage 63.45%

11. Quality Control: LANXESS Aktiengesellschaft passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Elkem

A-Score: 5.0/10

Value: 8.8

Growth: 2.6

Quality: 3.2

Yield: 5.6

Momentum: 7.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Victrex

A-Score: 4.7/10

Value: 6.1

Growth: 1.9

Quality: 6.4

Yield: 8.1

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Elementis

A-Score: 4.0/10

Value: 5.1

Growth: 1.7

Quality: 3.8

Yield: 1.2

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Essentra

A-Score: 3.5/10

Value: 4.0

Growth: 1.3

Quality: 3.6

Yield: 6.2

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Zotefoams

A-Score: 3.5/10

Value: 3.7

Growth: 5.4

Quality: 3.8

Yield: 3.1

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
LANXESS

A-Score: 3.1/10

Value: 8.3

Growth: 1.4

Quality: 1.9

Yield: 2.5

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.34$

Current Price

17.34$

Potential

-0.00%

Expected Cash-Flows