COLOGNE, Germany—Lanxess A.G. said its sales held steady while net income decreased by 12 percent because of exceptional charges from its realignment plans in a presentation of its first quarter 2015 financial results on May 7.
Sales decreased by less than a percent to about $2.3 billion compared to about $2.31 billion for the same period in 2014. Net income dropped to $24.8 million from about $28.2 million in 2014.
Lanxess said lower selling prices necessitated by raw material price development affected sales, which more or less were offset by positive currency effects.
“The good results in the first quarter show that we are on the right track,” CEO Matthias Zachert said in a statement. “The positive development in our business is driven by external effects as well as increasingly by our realignment measures. We expect this favorable trend to persist in the course of the year.”
Lanxess said its three-phase realignment program “Let's Lanxess Again” continues to progress rapidly. The firm intends to restructure its EPDM and neodymium-based performance butadiene rubber production as part of the second phase, affecting about 140 employees worldwide.
The firm will halt EPDM rubber production at its facility in Marl, Germany, and will realign both its EPDM and Nd-PBR production to four strategic regional facilities.
The third phase will focus on improving the competitiveness of its business portfolio through cooperations in the rubber business. Lanxess reaffirmed it is in talks with potential partners and will report on further steps in the second half of 2015.
While the firm provided no update on the first phase of realignment, it resulted in about 1,000 job decreases worldwide and the consolidation to 10 business units from 14. Earlier in the year, Zachert said the first phase was “nearly complete.”
Lanxess' largest business segment, Performance Polymers, saw its sales decrease 4.5 percent to about $1.13 billion for the quarter, which the firm attributed to lower selling prices in all business units because of raw material price developments.
The company said the segment spent about $28.2 million in start up costs for two new plants in Asia.
Sales in both Laxness' Advanced Intermediates and Performance Chemicals segments increased by 1.1 percent and 7.5 percent. Advanced Intermediates reported sales of about $538.3 million while Performance Chemicals came in at about $622.8 million.
Lanxess said sales of inorganic pigments and additives developed “especially positively” for Performance Chemicals, citing positive developments from realigning its additives business—Rhein Chemie, Functional Chemicals and Rubber Chemicals' specialty chemicals—into its newly formed Rhein Chemie Additives business unit earlier in the year.
Lanxess is a specialty chemicals manufacturer that employs about 16,300 in 29 countries with 52 production sites worldwide. It reported 2014 sales of about $9 billion.