LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

Transcription

1

2 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry Matthias Zachert, CEO LANXESS AG GPCA Annual Forum, November 28 th, 2016, Dubai 2 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

3 We are a globally operating specialty chemicals company Specialty chemicals company Spin-off from Bayer in 2004 Specialty chemicals portfolio: plastics, rubber, intermediates and specialty chemicals Global success story 55 sites worldwide Approximately 16,700 employees in 29 countries Global sales of 7.9 billion in 2015 Strategy of profitability and resilience Enhancing its leading position in mid-sized markets 3 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

4 Agenda Recent industry trends LANXESS realignment Building the new LANXESS 4 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

5 Five major industry trends impacting the global competitive environment 1 Competitive raw material prices and continuous cost improvements will become more decisive 2 European chemical producers will be pressured by feedstock disadvantages and the erosion of export markets 3 China will remain the key growth market 4 5 Less new molecules Innovation to become more focused on development of applications and processes Environmental standards will converge globally Compliance constitutes the license to operate 5 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

6 Industry trend 1: Competitive raw material prices and continuous cost improvements will become more decisive Product cost breakdown for synthetic rubber products ~15% ~60% D&A High dependency on raw materials and energy 75% of product costs are driven by raw material and energy costs 6 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

7 Industry trend 2: European chemical companies under pressure Europe Self sufficiency US: Reduction of imports, partial export USA Middle East China Middle East: Increase of export of downstream products Feedstock advantage China: Increasing selfsufficiency Europe: Export erosion and import pressure Europe to be squeezed between import pressure and decline of former export Sources: CMAI; Shell, Chemical Week; A.T. Kearney: Chemical industry vision / LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

8 Industry trend 3: China will remain the key growth market 2030, China will represent ~40% of global chemical demand vs. only ~15% from Europe China moves towards greater selfsufficiency Building up of entire value chains with national and international players Focus on China is crucial for profitable growth 8 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

9 Industry trend 4: Less new molecules Innovation to become more focused on development of applications and processes Fields of innovation Processes and applications New chemistry Past Today Future Expertise in application technology will become a decisive competitive advantage 9 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

10 Industry trend 5: Environmental standards will converge globally - Compliance constitutes the license to operate Increasing regulations and respective costs Global convergence of standards Compliance with environmental standards is a differentiator today, but going to become license to operate Level playing field to provide opportunities for LANXESS Sustainable production strengthens the competitiveness of our sites 10 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

11 Agenda Recent industry trends LANXESS realignment Building the new LANXESS 11 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

12 Situation in 2013: LANXESS poorly positioned to capitalize on trends 2,500 2,250 2,000 Overcapacities in the global rubber market S / D [kt] Corporation facing serious difficulties 125 Overhead too high Index 2006 = 100 Net financial debt too high [ bn] 1,7 1,750 1,500 1,250 Supply 100 0,9 0,9 0,7 1, Demand '13 '14 '15 '16 '17 ' Sales (excl. raw materials inflation) Overhead and R&D costs 2014 Q LTM Net financial debt EBITDA 12 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

13 Summer 2014: Strategic realignment initiated Let s LANXESS again Competitiveness 3 Portfolio 2 competitiveness 1 Operations and alliances Business & competitiveness administration structure competitiveness Leadership excellence and performance culture Swift realignment in a dynamic competitive environment 13 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

14 The realignment focuses on long-term competitiveness Reduction of dependence on volatile raw materials Constant process and cost optimization Further expansion of our integrated value chains Sustainable growth in China, South East Asia and the USA Increase competitiveness of our Verbund -sites Adaptation to an altered competitive environment 14 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

15 Saudi Aramco and LANXESS form a highly competitive 50:50 joint venture Combination of two powerful partners World s largest integrated energy enterprise Backward integration into feedstock for synthetic rubber Strategic commitment to further develop value chain downstream Leading market and technology positions in synthetic rubber Well invested asset base Broadest product portfolio in the rubber industry with leading brands and quality #1 in feedstock #1 in synthetic rubber 15 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

16 ARLANXEO important milestone in the realignment Global number 1 in synthetic rubbers cooperates with global number 1 in petroleum Revenues of EUR 1.2 billion for further development of LANXESS Raw material backward integration ensured ARLANXEO to participate in the consolidation of the market 16 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

17 A changing industry Status 2015 Synthetic rubber* capacity Backward integration Expectation s for the future Consolidated market All players characterized by backward or forward integration * Butyl, SSBR, ESBR, Nd- Co-, Li-, PBR, EPDM, (H)NBR, CR, EVM 17 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

18 Agenda Recent industry trends LANXESS realignment Building the new LANXESS 18 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

19 Investments into organic growth to strengthen new LANXESS Advanced Intermediates Performance Chemicals High Performance Materials EUR million for organic growth EUR million for organic growth EUR million for organic growth Investment decisions take financial solidity into account 19 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

20 Going forward: The acquisition of Chemours Clean and Disinfect specialties business Annual EBITDA contribution of around EUR 20 million to increase gradually to roughly EUR 30 million by 2020 Well-established product lines in the growth and high margin sector of veterinary disinfection High share of sales in strategically important market North America New business has been integrated into LANXESS Material Protection Products business unit 20 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

21 Going forward: Planned Acquisition of Chemtura LANXESS to become a global champion for additives Well positioned in lubricant additives and flame retardant additives Urethanes Organometallics Sales: 1.5 bn EBITDA pre: 245 m Employees: 2, sites in 11 countries Lubricant additives Flame retardant additives North America Asia Europe Latin America Sales and EBITDA are based on Q LTM, USD/EUR 1.10 All EBITDA figures are pre exceptionals 21 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

22 Going forward: Planned Acquisition of Chemtura LANXESS to become a global champion for additives A global player in the attractive additives market emerges Strengthening of positions in mid-sized markets Expanding its presence in the growth market of North America Fair and balanced funding validation with clear focus on investment grade rating LANXESS a more resilient and profitable company 22 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

23 The new LANXESS: A dynamic, resilient and profitable company Clear strategic focus Growing our businesses in mid-sized markets Focus on quality, innovation, resilience and value Focus on businesses with less dependency on raw materials Strong foundation Leading technologies and market positions High technology standards and unique knowhow; A strong team with a performance culture driving entrepreneurship Active participation in the consolidation of chemical industry Delivering quality A high level of quality: products, processes, businesses and employees 23 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

24 ... and committed to deliver and being sustainable Climate protection is a material topic for society at all % (GHG* reduction) % (GHG* reduction) % (new GHG* target) * Greenhouse gas emissions (Scope 1) relative to volumes sold (tco2e / t of product) 24 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

25 Imperatives for future business success! Willingness to constantly change and to continuously question oneself! Developing, conveying and implementing a performance culture! Fostering innovation and sustainability 25 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry

26 26 LANXESS Innovation, market-focus and agility as success-factors in a fast changing chemical industry