Group sales, at EUR 6,576 million, almost equaled the 2007 level of EUR 6,608 million. Adjusted for portfolio and currency effects, sales grew by 5.9 percent. Group net income increased by 52.7% to EUR 171 million.
Axel C. Heitmann, Chairman of the Board of Management of LANXESS AG, said, "We reached all the targets originally envisioned for 2009 one year ahead of schedule despite the increasingly tense economic climate."
- At 11%, our EBITDA margin pre exceptionals is on par with the average reported by our competitors;
- All LANXESS businesses achieved margins above 5% by the end of 2008;
- We have retained our investment-grade rating.
Asia-Pacific region performance
Sales in the Asia-Pacific region were EUR 1,156 million, down 4.8% compared to 2007. Adjusted for portfolio and currency effects, sales actually advanced by 18.5%. The growth was led by the Performance Polymers segment, followed at some distance by the other two operating segments. Extremely gratifying growth rates were recorded in countries, such as China, India, Japan and Korea.
As a share of total sales, the Asia-Pacific region fell slightly year-on-year from 18.4% to 17.6%.
LANXESS Greater China has once again achieved strong double-digit growth in sales.
Growth was mainly driven by the rubber business units. High demand from the tire industry in the first three quarters was the main reason for strong sales in the business units Butyl Rubber (BTR) and Performance Butadiene Rubbers (PBR). A further shift of production from major global tire producers into China and roughly 7 percent increase of local car production together with a healthy tire replacement market in the first nine months were the drivers for butyl rubber sales. The PBR business unit also had strong sales in the shoe industry. The Technical Rubber Products (TRP) business unit was especially successful thanks to its broad basis of applications, including high-tech applications. The Rubber Chemicals (RUC) business unit also enjoyed good sales results until the third quarter, followed by a sharp decline in demand in the fourth quarter which also lasted into the first quarter of 2009.
As a further growth driver, the Basic Chemicals (BAC) business unit realized high growth throughout fiscal 2008 with strong sales in the polyols and chlorotoluenes business and the ability to pass on raw material price increases during the peak mid of 2008.
"I am happy to say that our business grew in 2008. However, the fourth quarter results were impacted by significantly slower demand for automotive, construction and chemicals industries," said Martin Kraemer, CEO of LANXESS Greater China. "Highlights of this year were the opening of the Rubber Research Center in Qingdao and the successful acquisition of the plant in Jinshan – the largest and most modern plant for yellow iron oxide pigments in China."
LANXESS India posted the best sales year in its history and has traced a positive growth pattern in the year 2008. The driving factors for its growth were the major contributions from the business units BTR, PBR, Inorganic Pigments (IPG), RUC and BAC. LANXESS India has been witnessing dynamic changes in 2008 making it one of the fastest growing specialty chemicals companies in India.
Despite 2009 being impacted by the global economic crisis, the Jhagadia project which is a part of LANXESS India growth strategy is going ahead. The new ion exchange resins plant which will be inaugurated in Jhagadia will be Asia's largest unit of its kind. The RUC plant which is being relocated from Thane to Jhagadia is also under construction. Production starts at both plants are planned for 2010 with 225 employees.
Sales in Japan increased by nearly a fifth for 2008.
Hiroaki Ito, President and CEO of LANXESS K.K., said, "I am pleased with the good accomplishments by Japan in 2008. Positive developments in the business units BTR, TRP, Semi Crystalline Products (SCP), BAC, Material Protection Products (MPP) and RUC contributed to our success. For 2008, the achievement of strong growth mainly came from our sales of high-performance products, namely automotive and IT applications which we have been targeting. I would like to encourage all our staff in Japan to keep up the good work and continue with the efforts for delivering positive outcome this year."
LANXESS Korea has achieved double-digit growth for 2008 owing to the positive business performance by the PBR, BTR, RUC and BAC business units. These business units benefited from the positive growth trend in related industries, such as Automotive, Tire, Shipbuilding and Chemical. The highlight is the PBR business unit which has achieved close to 100% growth compared to 2007 as a result of a long-term contract with Hankook Tire.
Jewoong Ko, Managing Director, LANXESS Korea Ltd., said, "Growth of Lanxess Korea in 2008 was based on fulfillment of customers' need, which contributed to their success in the markets they are engaged with. LANXESS Korea continues to deliver not only LANXESS products, but also value to customers to help them overcome the current economic crisis."
Sales in the ASEAN countries of Thailand, Vietnam and Singapore achieved strong to moderate double-digit growth. All business units, namely BTR, PBR, TRP and SCP, under the Performance Polymer business segment did well. Under Performance Chemicals, the growth drivers were business units MPP, IPG, Leather (LEA) and RUC. Under Advanced Intermediate, the main contributor was the BAC business unit.
Ian Wood, Managing Director, LANXESS Pte Ltd, said, "LANXESS has established a strong footprint in the ASEAN region. Our customers associate our products with high quality, reliable supply, value-add services and continuous innovation. Despite the very difficult economic environment we are currently experiencing, we will continue to uphold these promises to our customers."
Sales in Australia increased by more than a tenth, as a result of positive developments in the Performance Polymers business segment as well as in the business units BAC, MPP and LEA and ION.
Grant Wakefield, Managing Director, LANXESS Australia Pty Ltd, said, "We are delighted with the double-digit growth in sales for 2008, despite a very difficult business environment. We will focus on innovation and flexibility as the levers of our strategy to help us remain competitive during this volatile period and emerge stronger from the crisis."
LANXESS is a leading specialty chemicals company with sales of EUR 6.58 billion in 2008 and currently around 14,800 employees in 21 countries. The company is represented at 44 production sites worldwide. The core business of LANXESS is the development, manu¬facturing and marketing of plastics, rubber, intermediates and specialty chemicals.