The New LANXESS: Stable, profitable and on a path of growth Annual Press Conference 2017 1
Safe harbor statement The information included in this presentation is being provided for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities of LANXESS AG. No public market exists for the securities of LANXESS AG in the United States. This presentation contains certain forward-looking statements, including assumptions, opinions, expectations and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of LANXESS AG to differ materially from the estimations expressed or implied herein. LANXESS AG does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecast developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, no representative of LANXESS AG or any of its affiliated companies or any of such person's officers, directors or employees accept any liability whatsoever arising directly or indirectly from the use of this document. 2
Agenda Highlights 2016 Financial data 2016 Milestones on our growth course Outlook for 2017 3
2016: A strong year for LANXESS strategically and operationally ARLANXEO: a global player in the rubber business starts New business: integration of Chemours Clean & Disinfect Chemtura acquisition: on the way to become a global champion in additives Operational strength: volumes and earnings increased Strengthened balance sheet as a solid platform for growth 4
2016: a strong year with strong figures Volume EBITDA Net income Net debt* +4% +12% +16% -78% 885 995 165 192 1,211 269 5 All EBITDA data pre exceptionals EBITDA, net income and net debt in million * after deduction of current financial assets
LANXESS stockholders benefit from success Reliable dividend policy 0.50 0.50 0.60 +17% 0.70 * 2013 2014 *Proposal to be made to the Annual Stockholders Meeting on May 26, 2017 6
Agenda Highlights 2016 Financial data 2016 Milestones on our growth course Outlook for 2017 7
Substantial increase in volumes but slight decrease in sales Sales ( million) -3% 7,902 7,699 Lower selling prices resulting from decreased raw material costs Higher volumes in all segments Ongoing price pressure in synthetic rubber business Variances -6% 4% 0% 0% -3% Price Volume Currency Portfolio Total 8
Further strong improvement in EBITDA and margins EBITDA ( million) Higher sales volumes Improved capacity utilization 885 +12% 995 Increased process efficiency Favorable currency effects EBITDA margin up from 11.2 to 12.9 percent All EBITDA data pre exceptionals 9
Substantial increase in net income Net income ( million) EPS 165 +16% 192 +16% 1.80 2.10 EPS pre* +33% 2.03 2.69 * net of exceptionals and amortization of intangible assets as well as attributable tax effects 10
Advanced Intermediates stable development despite challenging agrochemicals business Sales EBITDA EBITDA margin 1,826-5% 1,742 339-4% 326 18.6% 18.7% Increased volumes Selling prices adjusted to reflect lower raw material costs Decline in demand in agrochemicals in line with expectations 11 All EBITDA data pre exceptionals Sales and EBITDA in million
Performance Chemicals record result for the segment Sales EBITDA EBITDA margin 2,085 +3% 2,142 374 326 +15% 15.6% 17.5% Volumes up 4 percent Slight decline in raw material and selling prices Positive earnings contribution from new Clean & Disinfect business Improved capacity utilization 12 All EBITDA data pre exceptionals Sales and EBITDA in million
High Performance Materials jump in earnings due to higher-quality product mix Sales EBITDA EBITDA margin 1,085-3% 1,056 +43% 159 111 10.2% 15.1% Lower prices resulting from decrease in raw material costs Volumes increase by 6 percent, especially in high-value-added product groups Strong business in Asia 13 All EBITDA data pre exceptionals Sales and EBITDA in million
ARLANXEO stable margin despite strong price pressure Sales EBITDA EBITDA margin 2,859-5% 2,710 391-5% 373 13.7% 13.8% Ongoing price pressure in synthetic rubber business Lower selling prices outweigh decreased raw material costs Volumes up by 4 percent, primarily driven by good demand in Asia- Pacific 14 All EBITDA data pre exceptionals Sales and EBITDA in million
Agenda Highlights 2016 Financial data 2016 Milestones on our growth course Outlook for 2017 15
Planned acquisition of Chemtura well on track Status Transaction approved by Chemtura stockholders Antitrust clearance in the United States, Brazil and South Korea Integration Integration planning started across a broad scale Schedule Closing of the transaction expected for mid-2017 16
Portfolio changes making LANXESS more profitable and more stable... Areas of activity in strategic optimization Areas of activity in strategic development Reduce dependence on volatile raw materials Expand integrated value chain Strengthen North American growth market Focus on profitable mid-sized markets 17
and we will continue along this path. LANXESS portfolio 2014 2018* long term More cyclical and capitalintensive Less cyclical and capitalintensive ~60% ~80% * Indicative, including Chemtura - Closing of Chemtura transaction anticipated mid-2017 18
Organic growth: capital expenditures of EUR 100 million, especially at German sites Rationale Expansion in the intermediates business (BU AII) Support for dynamic growth by customers Growing demand requires larger capacities Scope Investment of EUR 100 million through 2020 Focus on Krefeld-Uerdingen and Leverkusen Investments also in Antwerp and Brunsbüttel Products Precursors and intermediates for the automotive, furniture, construction and agrochemical industries Synthetic menthol 19
Agenda Highlights 2016 Financial data 2016 Milestones on our growth course Outlook for 2017 20
EBITDA growth continues additional contribution expected from Chemtura Global economy U.S. and Europe with moderate growth Asia (especially China) expected to grow as strong as in 2016 Latin America sees improvement against prior year LANXESS Strong EBITDA expected in Q1/17: ~20% higher year-on-year EBITDA guidance for FY 2017: slight year-on-year increase (excluding Chemtura) Additional increase in EBITDA from Chemtura integration All EBITDA data pre exceptionals All data excluding Chemtura contribution, closing of the transaction expected mid-2017 USD exchange rate of EUR 1.10 21
Conclusion: LANXESS speeds up! Successful restructuring with good performance data New LANXESS segments operationally strong Strengthened balance sheet as a solid platform for growth Strong growth momentum: organic and from acquisitions 22
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