Great new impetus - belief in the turnaround is growing.

Some time ago, I already presented Lanxess in more detail. A lot has happened since then, which is why I would like to provide an update on the chemicals niche.

Lanxess is still $LXS (-0,87 %) is one of the few German industrial stocks that I prefer, because the story on the stock market can be diverse and the ideas behind it are almost endless.

The portfolio convinces with its innovative strength in various future markets and its market position is undisputed.

However, it must also be borne in mind that there is still huge tension on the demand side. However, this is currently the case for almost every industrial company with predominantly European production capacities.

Here is a brief overview of important stimuli:

Lanxess delivered its Q3 figures in November, which were poor as expected. The forecast for the financial year was adjusted and the Management Board proposed a reduction in the dividend. There were no major surprises, but there were some interesting approaches.

I paid particular attention to the balance sheet. Despite the even worse year in 2023 compared to 2022, the balance sheet improved significantly.

This indicates certain trends in terms of market position, pricing methods and adapted management. Efficiency is increasing massively. 📈

Of course, there are also other factors to consider here:

• China is currently struggling with deflationary trends, which is why producers are coming under increasing pressure. Diversification into other Asian markets should be supported.

• Europe is weakening in terms of overall demand due to weak private consumption.

• South America continues to have a robust market, but political risks are now gradually receding. The Brazilian market in particular is currently showing great signs of recovery.

Unfortunately, the rating agency Moody's has downgraded the credit rating as a result. However, this was to be expected.

In the course of the cost-cutting program initiated by CEO Matthias Zachert, however, this should only be a temporary effect. Larger investments should generally not be expected due to market saturation.

The pipeline of modified specialty products continues to grow and the Group's innovative strength is confirmed time and again.

In the water treatment market, Lewatit MonoPlus TP 109 is a potential new bestseller. At least it has the potential to be. The product is an exchanger resin for water treatment. The resins are needed where water is of inadequate quality. This can be relevant on an industrial scale using pure water, but can also be used for domestic drinking water treatment if the groundwater tends to be unsuitable for use.

The product was presented at Aquatech.

There was also a press release today announcing that the cooperation with Standard Lithium $SLI (+2,31 %) for the supply of lithium-containing brine. An investment in the company is still not planned and is not foreseeable.

Nevertheless, the partnership offers a huge opportunity to acquire new customers on the lithium market and thus a broad field of business in so-called future markets.