LANXESS stock was unable to benefit from the positive market environment in fiscal 2013. On the contrary, the challenging year the company faced was reflected in the way our stock performed. Against this background, our share price experienced corrections during the past year and closed at €48.48 on the last trading day in 2013.
The world’s stock market indices climbed to new all-time highs last year. The German lead index, the DAX, which has included our stock since September 2012, topped the 9,000-point threshold for the first time ever. At 16,500 points, the U.S. Dow Jones Industrial Average also surpassed its previous record. LANXESS’s benchmark index, the Dow Jones STOXX 600 ChemicalsSM, gained almost 100 points over the course of the year to close at more than 750 points. The positive performance of the world’s stock markets in 2013 was buoyed in particular by the continued pursuit of a relaxed monetary policy by the U.S. Federal Reserve (Fed), the reduction of interest rates by the European Central Bank (ECB) and more positive economic data from the United States. By contrast, the markets at times experienced pressure resulting from other key issues such as the U.S. budget dispute, ongoing speculation about a change to U.S. monetary policy, the Cyprus crisis, the Syrian conflict and the Italian government crisis. However, these issues had only a temporary effect on the performance of the aforementioned indices and no impact on their very positive development over the course of the full year.
In early March, the DAX moved back above 8,000 points for the first time but suffered setbacks as the first half of the year progressed because it and the other European stock markets especially were impacted by the crisis in Cyprus and the uncertain outcome of Italy’s parliamentary election. Against this background, the DAX came under occasional pressure, achieving only slight gains of 2.4% in the first quarter and 2.1% in the second quarter. In the second half of the year, it then returned to a path of growth and reached new record levels. Underpinned by improved economic data, the low interest rate policies pursued by the ECB and Fed, and continuation of the Fed’s bond-buying program, the DAX gained just under 8% in the third quarter. At the end of October, it then climbed above 9,000 points and continued its positive development until the last trading day of the year. It closed at 9,552 points on December 30, delivering growth of around 11% in the fourth quarter. Over the year as a whole, the DAX expanded by a substantial 25.5%.
In 2013, the Dow Jones STOXX 600 ChemicalsSM also benefited from the positive market factors described above. Our benchmark index moved back above 700 points for the first time in March to close the first quarter with slight growth of 3%. However, it then took losses in the subsequent months, finishing the second quarter down 1.9% at below 700 points. A sustained recovery followed in the second half of the year, raising our benchmark index to 756 points at year end for an increase of 14% over the full year.
Our stock was unable to benefit from the positive development of the market in 2013. The past year was characterized especially by the impact of the company’s corporate newsflow on the price of LANXESS stock. At the end of 2012, following what had been a very good year for our company, we reported a decline in demand which continued into 2013 and worsened over the course of the year. Persistently weak demand for the products of our Performance Polymers segment, especially from the tire and automotive industries, had a significant impact on our earnings expectations and development. In light of the modest business performance we communicated and the substantially lower earnings forecast (EBITDA pre exceptionals) compared with 2012, our stock was unable to sustain the high price level of the prior year. While our share price remained above €60 until mid-March, it fell below €50 following the announcement of our anticipated business performance for 2013. Further price reductions followed in the subsequent months and our stock closed the second quarter at €46.28. Our company’s performance combined with stock market uncertainty driven by factors such as speculation about a premature tightening of U.S. monetary policy to put our share under increased pressure during this period.
LANXESS Stock Performance since Listing
LANXESS Stock Performance 2013
|Performance Data 2013|
|Q1 2013||Q2 2013||Q3 2013||Q4 2013||Year 2013|
|Capital stock/no. of shares1)||€/no. of shares||83,202,670||83,202,670||83,202,670||83,202,670||83,202,670|
|Market capitalization1)||€ billion||4.60||3.85||3.99||4.03||4.03|
|High/low for the period||€||68.59/54.19||59.15/44.91||53.16/42.45||53.64/43.76||68.59/42.45|
|Trading volume||million shares||50.561||61.358||57.833||45.817||215.568|
|Average daily trading volume||shares||815,502||973,929||876,254||738,976||852,047|
|Earnings per share||€||0.30||0.11||0.13||(2.45)||(1.91)|
|Price/cash flow ratio1), 3), 4)||–||–||–||–||6.29|
|1) End of quarter: Q1: March 31, 2013, Q2: June 30, 2013, Q3: September 30, 2013, Q4 and full year: December 31, 2013
2) Source: Bloomberg
3) Data, especially cash flow, are influenced by exceptionals, which restricts the significance accordingly
4) Reference value: operating cash flow
The LANXESS share price remained below €50 through to the end of August, before starting to recover in September when the LANXESS Management Board announced a range of measures to counteract the persistently difficult business situation at an event for analysts and a media day held in mid-September. LANXESS’s Advance program is designed to achieve annual savings of around €100 million from 2015. This efficiency-enhancing program was welcomed by the capital market. However, the still subdued development of our business was an obstacle to a sustained upturn in our share price.
The disappointing share performance continued to the end of the year. LANXESS stock closed at €48.48 on the last trading day of 2013, a decrease of 26.9% over the reporting period. It thus underperformed the DAX and the Dow Jones STOXX 600 ChemicalsSM, the two indices of significance to LANXESS. Despite its performance in 2013, our share has developed very well since its initial listing in January 2005, increasing in value by some 227%.
|Capital Market Information|
|Share class||No-par shares|
|WKN (German securities identification number)||547040|
|Market segment||Prime Standard|
|Trading venues||XETRA, Frankfurt, Munich, Stuttgart, |
Düsseldorf, Hamburg, Hannover, Berlin
|Selective indices||DAX, Dow Jones STOXX 600 ChemicalsSM, |
DAXsupersector Basic Materials,
MSCI Germany Standard, MSCI Germany
Mid Cap, Dow Jones Sustainability Index
World, Dow Jones Sustainability Index
|Investment-grade ratings (outlook)||Standard & Poor’s: BBB (negative) |
Moody’s: Baa2 (negative)
Fitch: BBB (negative)