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BASIC INDUSTRIES: Lanxess (LXSGR Baa3[N]/NR/NR): 2Q24 Results

BASIC INDUSTRIES

Small credit positive. Margin beat is encouraging but weak market conditions leave FY guidance unchanged. Leverage is set to remain uncomfortably high for the rating and we remain cautious on the name.

  • Lanxess reports revenue 2% below consensus. Demand remains weak, particularly in agro, with prices still lower YoY.
  • Adj. EBITDA beat by 22%. Lower imput costs and better utilisation rates helped margins reach 10.8%, 2% ahead of expectations. The destocking cycle seems to have bottomed at least in some products, helping utilisation.
  • Significantly higher EBITDA helped FCF reach €83mn, up from €0 YoY. Net debt is left marginally lower QoQ.
  • Overall it sees no consistent demand recovery for now with construction and agro still weak. FY24 guidance confirmed.
  • Webcast 12.00 BST https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID%3DF3A34ECD-E943-4AA7-AB43-3C438A60B86A

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