LANXESS Aktiengesellschaft (ETR:LXS) said its second-quarter 2026 performance showed a strong sequential improvement in EBITDA and cash flow, supported by tighter working-capital management, improved pricing and volumes, and cost actions. The specialty chemicals company maintained its full-year EBITDA guidance of between €450 million and €550 million and provided third-quarter guidance of €130 million to €150 million.
Chief Executive Officer Matthias Zachert said the company delivered EBITDA “spot on” its expectations during the quarter and generated stronger cash flow than is typical for the second quarter. He attributed the cash-flow result primarily to inventory management, noting that the company tightly controlled net working capital even though working capital would normally build during the first half of the year.
Outlook Maintained Despite Economic Uncertainty
The company said macroeconomic uncertainty remains elevated, including headwinds from a weaker U.S. dollar compared with the prior year. However, management expects operational support from a lower cost base and from anti-dumping measures.
For the third quarter, LANXESS expects sales to follow normal seasonal patterns and be somewhat softer than in the second quarter. Zachert said third-quarter performance should exceed the prior-year period but not match the strength seen in the second quarter of 2026.
Management said July and August order activity had not deteriorated sharply. Zachert characterized recent demand trends as normal seasonal softening rather than customer destocking, saying the company had not seen its order book “massively” decline.
Saltigo Restructuring and Portfolio Shift
LANXESS announced plans to further adjust capacity at Saltigo, its custom manufacturing business, aiming to remove structural costs while retaining the operational capabilities and technologies it considers necessary. Zachert said the affected capacity is not expected to be needed in future years and that the company was able to make the adjustment without contractual penalties.
Saltigo remains heavily focused on agrochemicals, which currently account for about 70% to 80% of its sales. Over time, LANXESS aims to increase the share of pharmaceutical and other specialty applications from roughly 20% to 30% currently to potentially 40% within five years.
Zachert described the change as a risk-reduction measure rather than a retreat from agrochemicals. While the company still sees prospects for innovative agricultural products, he said generic agrochemicals face greater competitive pressure from suppliers in China and India. LANXESS sees pharmaceuticals, specialty applications and electronic chemicals as higher-margin, growth-oriented markets that Saltigo can serve with its existing technology base.
Chief Financial Officer Oliver Stratmann said LANXESS expects €65 million in cost savings for the full year 2026, with the majority of those savings weighted toward the second half. The company reduced its workforce by 214 employees from the end of 2025, though Stratmann said the figure was a point-in-time measure and did not mean all employees had left at the start of the year.
Segment Commentary and Energy Costs
In Advanced Intermediates, Zachert said pricing gains in the Advanced Industrial Intermediates unit were partly offset by weaker performance at Inorganic Pigments. He added that both businesses are more energy-intensive than the rest of the group, and elevated energy prices weighed on second-quarter earnings and are expected to continue pressuring the segment in the third quarter.
LANXESS said it has increased protection against energy-price volatility through contracts and financial hedges, with roughly half of its exposure addressed by contracts or derivatives. Management indicated that Specialty Additives and Consumer Protection should provide visible contributions in the third quarter even if Advanced Intermediates remains softer.
Specialty Additives performed strongly in the second quarter, according to Zachert, with contributions from all three of its business units rather than solely from bromine pricing. Lubricant additives improved versus a softer prior-year quarter, Rhein Chemie recovered from weak results over the preceding year, and Polymer Additives performed well in both brominated and phosphorus-based products.
Management said it does not expect a sharp deterioration in the segment’s third-quarter contribution, despite lower bromine prices in China. Zachert said demand for brominated and phosphorus-based flame retardants should remain relevant over the coming decades in electronics and construction-related applications.
Financing, Logistics and Construction Markets
During the quarter, LANXESS issued a €500 million five-year bond to replace a bond maturing in October. The new bond carried a 4.375% coupon after investor demand allowed the company to tighten pricing, Zachert said.
The company also addressed low water levels on the Rhine River, saying it had reserved rail and road capacity several weeks earlier to ensure supply flexibility. Zachert said LANXESS had no force majeure events, continued to receive the raw materials it needs, and had indications that supply would remain adequate for the next one to two weeks. The company invested about €10 million after the 2018 low-water period to give important plants at least two supply routes.
LANXESS said industry utilization remains below 70%, among the lowest levels it has experienced in three decades. While some operations are currently underperforming at those utilization rates, Zachert said the company sees potential for improved results if volumes recover. He cited Inorganic Pigments, which is exposed to the weak European construction market, as a business that could benefit when construction activity improves.
However, management does not expect a construction-market recovery to affect results this year. Zachert said project development and registrations in Germany have shown early positive signs, but those trends have not yet appeared in customer orders or volumes. As a result, LANXESS has removed potential construction-related improvement from its 2026 guidance.
About LANXESS Aktiengesellschaft (ETR:LXS)
LANXESS Aktiengesellschaft, together with its subsidiaries, operates as a specialty chemicals company that engages in the development, manufacture, and marketing of chemical intermediates, additives, specialty chemicals, and consumer protection products worldwide. It operates through three segments: Consumer Protection, Specialty Additives, and Advanced Intermediates. The Consumer Protection segment provides material protection products; disinfectant, hygiene, and preservative solutions; flavors and fragrances; liquid purification technologies for the treatment of water and other liquids; and precursors and intermediates for the agrochemicals, pharmaceuticals, and specialty chemicals industries.
