In fiscal 2014, Lanxess substantially improved its operating result and net income. While sales declined slightly by 3.5% to around €8 billion, EBITDA preexceptionals increased by 9.9% to €808 million. Net income improved by €206 million to €47 million - despite exceptional charges related to the company's realignment program. At the sametime, Lanxess significantly reduced its net indebtedness and tangibly increased operating cash flow.

"Particularly against the background of the persistently challenging business situation, the substantial improvement in earnings is gratifying. The figures also reflect the first benefits from our realignment program, which we are implementing on schedule," said CEO Matthias Zachert. "Nevertheless, a great deal of work still lies ahead of us if Lanxess is to return to the path of long-term success. In the current fiscal year, we will continue to systematically implement our program and set the course for Lanxess' future."

Three-phase realignment program progressing on schedule

In August 2014, Lanxess presented a three-phase realignment program. The first phase, focused on improving the competitiveness of the company's business and administrative structure, including a reduction of around 1,000 positions worldwide, has largely been completed. The reduction of around 500 positions in Germany mainly affected administrative functions and was achieved without dismissals for operational reasons. A further 500 positions are being reduced outside Germany. To date, solutions have been found for about 70% of the employees affected. From the end of 2015, Lanxess will achieve savings of around €120 million due to the first-phase measures, rising to €150 million annually from the end of 2016.

Improved Earnings and a Strengthened Balance Sheet

In fiscal 2014, group sales fell by 3.5% year-on-year to around €8 billion. This was due above all to lower selling prices, primarily in the Performance Polymers segment. A slight increase in sales volumes at the Group level was insufficient to offset this decline.

EBITDA pre exceptionals increased by 9.9% year-on-year to €808 million, according to the preliminary figures published at the end of January 2015. All segments contributed to the earnings increase. This positive performance - despite lower selling prices - was attributable above all to a reduced cost basis, improved capacity utilization and favorable exchange rate effects. The Group's EBITDA margin pre exceptionals improved from 8.9% to 10.1%.

The Lanxess group posted net income of €47 million, an increase of €206 million year-on-year. The main reason for this improvement were lower impairment charges. Exceptional charges of around €180 million - mainly related to the realignment program - had an opposing effect. Earnings per share were €0.53 after minus €1.91 in 2013.

As previously announced, the management board and the supervisory board will propose a dividend of €0.50 per share to the annual stockholders' meeting on May 13, 2015. This would result in a total dividend payout of around €46 million. Lanxess also paid a dividend of €0.50 per share for 2013.

In the past fiscal year, capital expenditures amounted to €614 million, slightly below the prior-year level of €624 million. "Already during the current fiscal year, we intend to substantially reduce our capital expenditures to around €450 million. For 2016, we plan to achieve a level between €400 million and €450 million," said CFO Bernhard Düttmann.

In comparison with the prior year, operating cash flow increased by €156 million to €797 million. This was due to business-related reasons and the decline in working capital. Despite higher capital expenditures, net financial liabilities decreased to around €1.3 billion as of December 31, 2014, from €1.7 billion at yearend 2013. The main reasons for this were the capital increase in May 2014 and strict working capital management.