SAVE THE DATE - Hypoport AG

LANXESS
Germany/Chemicals Analyser
LANXESS (Hold)
Hold
Recommendation unchanged
Share price: EUR
closing price as of 07/05/2012
Target price: EUR
Target Price unchanged
Reuters/Bloomberg
58.99
62.00
LXSG.DE/LXS GY
Market capitalisation (EURm) 4,908
Current N° of shares (m) 83
Free float 83%
Daily avg. no. trad. sh. 12 mth 588,968
Daily avg. trad. vol. 12 mth (m) 29
Price high 12 mth (EUR) 63.05
Price low 12 mth (EUR) 32.97
Abs. perf. 1 mth -1.24%
Abs. perf. 3 mth 9.28%
Abs. perf. 12 mth -3.18%
Key financials (EUR) 12/11 12/12e 12/13e
Sales (m) 8,775 9,112 9,401
EBITDA (m) 1,101 1,124 1,204
EBITDA margin 12.5% 12.3% 12.8%
EBIT (m) 776 672 741
EBIT margin 8.8% 7.4% 7.9%
Net Profit (adj.)(m) 538 458 517
ROCE 11.9% 9.9% 10.8%
Net debt/(cash) (m) 1,570 1,394 952
Net Debt/Equity 0.8 0.6 0.3
Debt/EBITDA 1.4 1.2 0.8
Int. cover(EBITDA/Fin. int) 11.8 9.4 10.9
EV/Sales 0.6 0.8 0.7
EV/EBITDA 5.1 6.2 5.5
EV/EBITDA (adj.) 4.9 6.0 5.3
EV/EBIT 7.2 10.4 8.9
P/E (adj.) 6.2 10.7 9.5
P/BV 1.6 2.0 1.7
OpFCF yield 12.7% 12.4% 15.4%
Dividend yield 1.4% 1.5% 1.7%
EPS (adj.) 6.46 5.51 6.22
BVPS 24.73 29.06 34.04
DPS 0.85 0.90 1.00
65 vvdsvdvsdy
60
55
50
45
40
35
30
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12
Source: Factset
LANXESS MDAX (Rebased)
Shareholders: Dodge & Cox 8%; JPMorgan 4%;
Analyst(s):
Nadeshda Demidova, Equinet Bank
nadeshda.demidova@equinet-ag.de
+49 69 58997 434
Q1/12 results preview
The facts: LANXESS (LXS) will publish its Q1/12 results on May 9 th , 2012.
Our analysis:
Forecast LANXESS
EUR m Q1/12e Q1/11 yoy cons. 2012e 2011 yoy
Group Sales 2,447 2,073 18% 2,330 9,112 8,775 4%
Performance Polymers 1,431 1,084 32% na 5,322 5,059 5%
Advanced Intermediates 441 416 6% na 1,576 1,545 2%
Performance Chemicals 565 556 2% na 2,173 2,130 2%
Reconciliation 10 17 -39% na 42 41 2%
EBITDA adjusted 354 322 10% 347 1,164 1,146 2%
EBITDA margin adj. 14.5% 15.5% -110bps 14.9% 12.8% 13.1% -30bps
Performance Polymers 229 199 15% na 798 768 4%
in % of sales 16.0% 18.4% -240bps na 15.0% 15.2% -20bps
Advanced Intermediates 75 75 0% na 251 264 -5%
in % of sales 17.0% 18.0% -100bps na 15.9% 17.1% -120bps
Performance Chemicals 95 90 5% na 293 289 1%
in % of sales 16.8% 16.2% 60bps na 13.5% 13.6% -10bps
Reconciliation -45 -42 nm na -179 -175 nm
EBITDA 344 317 9% 343 1,124 1,101 2%
EBIT 236 246 -4% 260 672 776 -13%
EBT 221 219 1% 229 560 655 -14%
Net income 170 167 2% 177 430 506 -15%
EPS (EUR) 2.04 2.00 2% 2.12 5.17 6.08 -15%
Q1/12 results forecast: LXS provided no guidance for FY2012, but just an
indication for Q1/12 (EBITDA adj. of EUR 330-350m, equinet: EUR 354m). Please
note that LXS typically generates ~60% of its EBITDA adj. in H1. Additionally,
taking into account that estimated ~EUR 30m EBITDA contribution should come
from the DSM Elastomers‟ acquisition, the upper end of the EBITDA range implies
a “no-growth” figure vs. Q1/11 at EUR 322m while sales (adjusted for the
consolidation effect) are likely to increase by at least 10% (more driven by price
than volume).
View on Q2/12e and FY12e: As one of LXS‟ key raw materials butadiene
continued to increase (spot: +51% yoy, +68% yoy), the company should again
face a challenge to pass prices on to customers, otherwise suffering margin
deterioration in Performance Polymers.
Conclusion & Action: Although we appreciate LXS‟ long-term fundamental
perspectives, we believe the share to be fairly valued (2012e EV/EBITDA adj. 6.2x
vs. peers 6.1x and PE 10.7x versus peers 11.1x). Hold.
Page 29 of 80 European Securities Network
Please refer to important disclaimer on the last page
Source: LANXESS, Reuters, equinet Research