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Investing.com -- Shares of Lanxess AG (ETR:LXSG) (ETR:LXS) declined by 1.8% following the release of its first-quarter results, which revealed mixed financial performance with sales missing consensus estimates and a drop in operating cash flow.
The German specialty chemicals company reported group sales of €1,601 million, falling short of the consensus forecast of €1,632 million and experiencing a 1.5% decline on an organic basis.
Despite the sales miss, Lanxess achieved a slight increase in adjusted EBITDA, which rose to €133 million, a 1% improvement compared to consensus expectations of €132 million. This increase translated into a 200 basis points improvement in adjusted EBITDA margins year-over-year (YoY). However, the company’s operating cash flow for the first quarter was reported at €-66 million, compared to €-48 million in the same quarter the previous year, indicating a larger seasonal working capital build.
The company’s outlook remains unchanged, with full-year guidance for EBITDA pre-exceptionals reiterated at €600-650 million. However, the second-quarter guidance suggests a sequential improvement over the first quarter’s €133 million, yet anticipates performance to be below the prior year’s €181 million due to the absence of URE contribution and trading uncertainty, with consensus estimates at €165 million.
Segment-wise, the Advanced Intermediates division underperformed against consensus, with adjusted EBITDA at €40 million, a 17% decrease from the expected €48 million. The Specialty Additives segment, on the other hand, posted a modest gain with adjusted EBITDA of €52 million, slightly above the consensus of €50 million. The Consumer Protection segment was a standout, with adjusted EBITDA reaching €73 million, significantly exceeding the consensus of €63 million.
Lanxess also highlighted an increase in net financial debt, which stood at €2,512 million, representing a leverage ratio of 3.9 times net debt to adjusted EBITDA.
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