Lanxess Forecasts Gradual Chemical Industry Recovery in 2026 Amidst Ongoing Challenges

By Lila Roberts, Entertainment Editor

March 19, 2026

Specialty chemicals maker Lanxess anticipates a gradual recovery for the chemical industry in 2026, though it reported annual sales below market expectations and doesn’t foresee significant improvement before the second half of the year at the earliest. The German chemical sector, the country’s third-largest industry, continues to grapple with subdued demand, high energy costs, supply chain disruptions, and a broader economic slowdown.

Sales Miss and Cost-Cutting Measures

Lanxess’s annual revenue decreased by 10.9% to €5.67 billion ($6.50 billion), falling short of the analysts’ average estimate of €5.72 billion. Shares of the Cologne-based company have declined by 24% since the beginning of the year and experienced a further 3.3% drop in early Frankfurt trading following the announcement.

In response to these challenges, Lanxess is implementing additional cost-cutting measures for 2026, aiming to generate permanent annual savings of approximately €100 million by the complete of 2028. This will involve reducing its workforce by 550 positions, with approximately two-thirds of these cuts occurring in Germany.

Geopolitical Uncertainty and Market Conditions

The company attributes some of its difficulties to the impact of the Iran war, which has significantly affected the Middle East – a crucial region for the chemical industry’s raw material supply. The conflict has disrupted supply chains, increased energy prices, and fueled concerns about rising inflation and weakening consumer demand.

“We control the things we can control, that means continuing to cut costs, streamline processes and create new market opportunities,” stated Lanxess CEO Matthias Zachert. He noted that the market environment remained weak throughout the previous year, both for Lanxess and the wider industry, and was characterized by high levels of geopolitical uncertainty.

Outlook for 2026

Lanxess expects to see positive momentum in the second half of 2026, potentially driven by the German government’s proposed infrastructure stimulus program. The company forecasts earnings before interest, taxes, depreciation, and amortization (EBITDA) pre-exceptionals of €450-550 million for 2026, compared to €510 million in the previous year. Both figures are broadly in line with market expectations.

Key Takeaways

• Lanxess reported lower-than-expected annual sales for the previous year.
• The company anticipates a gradual recovery in the chemical industry starting in the second half of 2026.
• Cost-cutting measures, including job reductions, are being implemented to improve financial performance.
• Geopolitical instability and high energy costs continue to pose significant challenges.

As the global economic landscape remains uncertain, Lanxess’s strategy focuses on internal controls and leveraging potential government stimulus to navigate the challenges and position itself for a future recovery. The company’s performance will be closely watched as a bellwether for the broader chemical industry in Europe.

($1 = €0.8724)