LANXESS Aktiengesellschaft Q2 Earnings Call Highlights

Second-quarter performance improved sharply: Sales rose 13% sequentially and EBITDA increased 62%, with all three segments delivering gains. Higher volumes, pricing and Middle East-related demand supported results, while free cash flow turned clearly positive. Full-year guidance was maintained: LANXESS expects third-quarter EBITDA of €130 million to €150 million despite economic uncertainty, foreign-exchange headwinds and limited expected stimulus from Germany’s investment package. Management emphasized continued cost discipline and necessary plant closures. Low Rhine water levels are raising logistics costs but have not disrupted production: Barges are operating at only 20% to 30% of normal capacity, prompting a shift to rail and road transport. Additional costs are in the single-digit millions of euros, and the company is monitoring supplies closely while assessing Asian competition and potential support from EU anti-dumping measures. LANXESS Aktiengesellschaft ETR: LXS reported stronger sales and earnings in the second quarter of 2026 than in the first quarter, supported by improved volumes, pricing and demand effects linked to the Middle East conflict, Chief Executive Officer Matthias Zachert said during the company’s quarterly press conference. The company confirmed its full-year 2026 guidance despite what Zachert described as a persistently difficult economic environment, foreign-exchange headwinds from a weaker U.S. dollar and uncertainty surrounding logistics disruptions caused by low water levels on the Rhine River. Second-Quarter Sales and Earnings Improve Sequentially Sales increased 6% from the prior-year period, driven by both volume and price gains, according to Zachert. Prices rose 3%, while EBITDA increased only moderately year over year because the prior-year period included positive one-off effects. The second-quarter 2026 EBITDA result was based solely on operating performance, he said. Compared with the first quarter, sales rose 13% and EBITDA increased 62%, exceeding the company’s guidance for the period, Zachert said. All three company segments recorded sequential improvements in both sales and EBITDA. LANXESS also generated clearly positive free cash flow in the second quarter. Zachert noted that free cash flow during the first half is typically more moderate or negative before improving in the third and fourth quarters. The company said the industry’s price and volume development had been slow over the past 12 months, beginning with the escalation of tariffs in the second quarter of 2025. Momentum began to improve in the first quarter of 2026 and accelerated in the second quarter, with gains in both pricing and volumes. Full-Year Outlook Maintained Zachert said LANXESS sees no major economic stimulus in the second half of 2026 from Germany’s government investment package, although that could change in the future. The company also remains exposed to unfavorable currency effects because of its export business. Nonetheless, the company maintained its full-year outlook. LANXESS expects third-quarter EBITDA of between EUR 130 million and EUR 150 million, Zachert said, adding that the result should compare favorably with the prior-year quarter, though the improvement may be less pronounced than previously expected relative to the second quarter. Responding to a question about why LANXESS did not raise its outlook while some chemical-industry peers had done so, Zachert said the company had already issued an ambitious second-quarter forecast when it reported first-quarter results in May. He said the company had guided for an increase of more than 50% and subsequently delivered on that expectation. The CEO said...