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Investing.com -- Lanxess (ETR:LXSG) warned on Thursday that its earnings for 2025 are likely to be affected by sluggish economic growth and potential political disruptions.
The German specialty chemicals company expects market challenges to persist, particularly across the Americas, Europe, the Middle East, and Africa.
Shares declined around 5% in European trading.
For the full year, Lanxess projected EBITDA pre exceptionals to range between 600 million euros ($653.82 million) and 650 million euros, including the contribution from Urethane Systems.
This outlook falls short of analyst expectations, with Vara Research previously forecasting 674.8 million euros in EBITDA for 2025.
For the first quarter of 2025, Lanxess expects it to be better by 25-35% year-over-year than €101 million in Q1 2024, implying a range of €126-136 million. This also missed consensus expectations of €143 million.
“We expect investors to focus on the outlook statement today. Given the strong move higher in the shares year-to-date on back of the German Fiscal package, we would expect to see a correction today,” Morgan Stanley (NYSE:MS) analysts said.
“We expect shares to open lower on the 1Q & FY guide, but expect shares to recover through the day,” they added.
The company confirmed that its 2024 EBITDA pre exceptionals remained in line with preliminary figures released in January. Stronger-than-expected results were supported by U.S. customers stockpiling ahead of potential tariffs under a second Trump administration.
For Q4 2024, Lanxess reported EBITDA of €159 million, in line with its preliminary release, supported by a 3% increase in volumes, while pricing declined by 1%.
Free cash flow for the quarter came in at €206 million, significantly above the estimated €47 million.