LANXESS AG — Interim / Quarterly Report 2022

May 5, 2022

QUARTERLY STATEMENT as of March 31, 2022

LANXESS Group Key Data

€ million	Q1 2021	Q1 2022	Change %
Sales	1,693	2,432	43.7
Gross profit	427	567	32.8
Gross profit margin	25.2%	23.3%
EBITDA pre exceptionals1)	242	320	32.2
EBITDA margin pre exceptionals1)	14.3%	13.2%
EBITDA1)	215	295	37.2
EBIT pre exceptionals1)	125	182	45.6
EBIT1)	98	156	59.2
EBIT margin1)	5.8%	6.4%
Net income2)	63	98	55.6
Earnings per share (€)2)	0.73	1.13	54.8
Earnings per share adjusted for exceptional items and amortization of intangible assets (€)2)3)	1.17	1.63	39.3
Cash flow from operating activities – continuing operations	33	(177)	< (100)
Depreciation and amortization	117	139	18.8
Cash outflows for capital expenditures	70	63	(10.0)
Total assets	10,5186)	11,720	11.4
Equity (including non-controlling interests)	3,7626)	4,074	8.3
Equity ratio4)	35.8%6)	34.8%
Provisions for pensions and other post-employment benefits	8776)	748	(14.7)
Net financial liabilities5)	2,3456)	2,501	6.7
Net financial liabilities after deduction of short-term money market investments and securities5)	2,2456)	2,501	11.4
Employees (as of March 31)	14,8666)	14,886	0.1

1) EBIT: earnings before interest and taxes.

EBIT pre exceptionals: EBIT disregarding exceptional charges and income.

EBIT margin: EBIT in relation to sales.

EBITDA: EBIT before depreciation of property, plant and equipment and amortization of intangible assets, less reversals of impairment charges on property, plant, equipment and intangible assets.

EBITDA pre exceptionals: EBITDA disregarding exceptional charges and income.

EBITDA margin pre exceptionals: EBITDA pre exceptionals in relation to sales.

Please see "Notes on EBIT and EBITDA (Pre Exceptionals)" for details.

2) Prior-year figure from continuing operations.

3) Earnings per share adjusted for exceptional items and amortization of intangible assets: earnings per share disregarding exceptional charges and income, amortization of intangible assets and attributable tax effects. See "Net income/earnings per share/earnings per share adjusted for exceptional items and amortization of intangible assets" for details.

4) Equity ratio: equity in relation to total assets.

5) Net financial liabilities: sum of current and non-current financial liabilities (adjusted for liabilities for accrued interest) less cash, cash equivalents and near-cash assets. See "Statement of Financial Position and Financial Condition" for details.

6) As of December 31, 2021.

CONTENTS

LANXESS Group Key Data

1 Quarterly Statement as of March 31, 2022

• 1 Business Performance
• 3 Business Development by Region

3 Segment Information

6 Notes on EBIT and EBITDA (Pre Exceptionals)

6 Statement of Financial Position and Financial Condition

7 Outlook

8 Financial Data as of March 31, 2022

• 8 Statement of Financial Position LANXESS Group
• 9 Income Statement LANXESS Group
• 9 Statement of Comprehensive Income LANXESS Group
• 10 Statement of Changes in Equity LANXESS Group
• 11 Statement of Cash Flows LANXESS Group

12 Business Unit Key Data

Financial Calendar/Contacts/Imprint

QUARTERLY STATEMENT

as of March 31, 2022

• › Sales and earnings in all segments considerably higher than the previous year's level in the first quarter
• › EBITDA pre exceptionals up 32% year-on-year to €320 million
• › Positive earnings contribution from acquired businesses
• › Increased raw material and energy costs passed on to customers
• › Earnings per share adjusted for exceptional items and amortization of intangible assets in the first quarter up by around 40% against the previous year
• › Guidance for fiscal year 2022 confirmed: EBITDA pre exceptionals up significantly from the previous year's figure of €1,010 million

BUSINESS PERFORMANCE

Sales

Sales of the LANXESS Group amounted to €2,432 million, up by €739 million, or 43.7%, against the previous year. The sales development was influenced in particular by significantly higher selling prices driven by raw material and energy prices. Overall, higher selling prices resulted in sales growth of 30.9%. The portfolio changes had a positive effect on sales at Group level, primarily due to the contribution from the U.S. company Emerald Kalama Chemical acquired at the beginning of August 2021. Overall, there was a positive portfolio effect of 7.5% at segment level. Shifts in exchange rates increased sales by 4.2% while higher volumes resulted in a 1.1% increase in sales.

Effects on Sales

%	Q1 2022
Price	30.9
Volume	1.1
Currency	4.2
Portfolio	7.5
	43.7

EBITDA and operating result (EBIT)

The operating result before depreciation, amortization, writedowns and reversals (EBITDA) pre exceptionals amounted to €320 million in the first quarter of 2022, considerably higher than the prior-year quarter. In the previous year, EBITDA pre exceptionals amounted to €242 million. All segments generally saw positive business development, which was weakened by a continuing difficult logistics situation and the associated sharp increase in freight costs. The significantly increased raw material and energy prices were passed on to the market via a successful increase of selling prices. A positive impact was made in particular by the contribution of the U.S. company Emerald Kalama Chemical, acquired in August, but also the other acquisitions. The change in exchange rates likewise had a positive effect in the segments. Please see the table below and "Segment Information" for details on the individual segments.

EBITDA Pre Exceptionals by Segment

€ million	Q1 2021	Q1 2022	Change %
Advanced Intermediates	70	87	24.3
Specialty Additives	74	136	83.8
Consumer Protection	76	86	13.2
Engineering Materials	59	67	13.6
Reconciliation	(37)	(56)	(51.4)
	242	320	32.2

Prior-year figures restated.

Primarily due to higher freight costs, portfolio effects, and exchange rate effects, selling expenses rose by 32.2% to €275 million. Research and development costs amounted to €29 million, compared to €27 million in the prior-year period, while general administration expenses amounted to €78 million, compared to €73 million in the prior-year period, particularly due to portfolio effects. The Group EBITDA margin pre exceptionals came in at 13.2%, against 14.3% in the prior-year quarter.

Depreciation, amortization and write-downs rose by €22 million, or 18.8%, compared with the figure for the prior-year quarter to €139 million, primarily due to the acquisition of Emerald Kalama Chemical in August 2021. The depreciation, amortization and write-downs include write-downs of €3 million. Net negative exceptional items of €26 million included in other operating income and expenses affected EBITDA by a total of €25 million and resulted primarily from expenses in connection with strategic IT projects, digitalization projects, and M&A and integration activities relating to the recently completed and agreed acquisitions. In the prior-year quarter, the operating result included negative exceptional items totaling €27 million.

Reconciliation of EBITDA Pre Exceptionals to EBIT

€ million	Q1 2021	Q1 2022	Change %
EBITDA pre
exceptionals	242	320	32.2
Depreciation and amortization	(117)	(139)	(18.8)
Exceptional items in EBITDA	(27)	(25)	7.4
Operating result (EBIT)	98	156	59.2

Financial result

The financial result for the first quarter of 2022 amounted to minus €22 million, compared with minus €13 million for the prior-year period. The net interest result was minus €16 million, compared with minus €15 million in the prior-year quarter. The other financial result was minus €6 million, compared with €2 million in the prior-year quarter.

Income before income taxes

In the first quarter of 2022, income before income taxes came to €134 million, against €85 million for the prior-year period. The effective tax rate was 26.9%, compared with 25.9% for the prior-year quarter.

Net income/earnings per share/earnings per share adjusted for exceptional items and amortization of intangible assets

Net income for the reporting period amounted to €98 million. In the prior-year quarter, net income from continuing operations amounted to €63 million. The increase in earnings resulted primarily from the good development of the operating businesses and the contribution from the acquired business of Emerald Kalama Chemical. Earnings per share are calculated by dividing net income by the weighted average number of LANXESS shares outstanding during the reporting period. Earnings per share amounted to €1.13, which was higher than the prior-year figure from continuing operations of €0.73. We also calculate earnings per share pre exceptionals and amortization of intangible assets, which are not defined by International Financial Reporting Standards. This value was calculated from the earnings per share adjusted for exceptional items, amortization of intangible assets and attributable tax effects.

Earnings per share pre exceptionals and amortization of intangible assets were €1.63 in the first quarter of 2022. In the prior-year period, earnings per share from continuing operations adjusted for exceptional items and amortization of intangible assets had amounted to €1.17.

Reconciliation to Earnings per Share from Continuing Operations Adjusted for Exceptional Items and Amortization of Intangible Assets

€ million	Q1 2021	Q1 2022
Net income1)	63	98
Exceptional items2)	27	26
Amortization of intangible assets/reversals
of impairment charges2)	25	33
Income taxes2)	(14)	(16)
Net income adjusted for exceptional
items and amortization of intangible
assets1)	101	141
Weighted average number of shares
outstanding	86,346,303	86,346,303
Earnings per share adjusted for exceptional items and amortization of
intangible assets (€)1)	1.17	1.63

1) Prior-year figure from continuing operations

2) Excluding items attributable to non-controlling interests

BUSINESS DEVELOPMENT BY REGION

Group sales in the first quarter of 2022 amounted to €2,432 million, up 43.7% on the previous year's figure of €1,693 million. All regions saw positive business development.

Sales by Market
	Q1 2021		Q1 2022		Change
	€ million	%	€ million	%	%
EMEA
(excl. Germany)	535	31.6	828	34.0	54.8
Germany	320	18.9	433	17.8	35.3
North America	363	21.4	537	22.1	47.9
Latin America	89	5.3	146	6.0	64.0
Asia-Pacific	386	22.8	488	20.1	26.4
	1,693	100.0	2,432	100.0	43.7

SEGMENT INFORMATION

Advanced Intermediates

Q1 2021		Q1 2022		Change
				%
452		613		35.6
70	15.5	87	14.2	24.3
70	15.5	87	14.2	24.3
43	9.5	59	9.6	37.2
43	9.5	59	9.6	37.2
20		18		(10.0)
27		28		3.7
				(1.1)
	3,021	€ million Margin %	2,987	€ million Margin %

Prior-year figures restated in accordance with the organizational reassignment of the business with benzyl products from the Advanced Intermediates segment's Advanced Industrial Intermediates business unit to the Consumer Protection segment in 2021.

Our Advanced Intermediates segment recorded sales of €613 million in the first quarter of 2022, up 35.6%, or €161 million, compared to the prior-year period. The sales development was particularly influenced by the sharp rise in selling prices in both business units, which were above the previous year's level as much higher raw material and energy prices were passed on. Overall, there was a positive price effect on sales of 35.8% at segment level. Lower volumes resulted in a sales decline of 3.3%. Compared with a strong prior-year quarter, the Inorganic Pigments business unit saw lower volumes due to a difficult logistics situation. Shifts in exchange rates had a positive effect on both business units and increased the

segment's sales by 3.1% in total. Sales in all regions were above the level of the prior-year quarter.

EBITDA pre exceptionals in the Advanced Intermediates segment increased by 24.3% to €87 million, compared with the previous year's figure of €70 million. The significantly increased raw material and energy prices were passed on to the market in the first quarter. Lower sales volumes had a negative effect on earnings. Earnings for both business units were improved by advantageous currency effects. The EBITDA margin pre exceptionals was 14.2%, against 15.5% in the prior-year quarter.

Specialty Additives

	Q1 2021		Q1 2022		Change
		€ million Margin %		€ million Margin %	%
Sales	517		730		41.2
EBITDA pre
exceptionals	74	14.3	136	18.6	83.8
EBITDA	72	13.9	136	18.6	88.9
Operating result (EBIT) pre
exceptionals	33	6.4	92	12.6	> 100
Operating result (EBIT)	31	6.0	92	12.6	> 100
Cash outflows for capital
expenditures	16		13		(18.8)
Depreciation and amortization	41		44		7.3
Employees as of March 31 (previous year:
as of Dec. 31)	3,030		3,028		(0.1)

Sales in our Specialty Additives segment rose by 41.2% in the first quarter of 2022 to €730 million. Higher selling prices and generally improved demand resulted in positive sales development in all business units of the segment. Higher selling prices increased sales by 22.4% at segment level. Compared with a weak prior-year quarter due to the coronavirus pandemic, the good demand in the Polymer Additives and Lubricant Additives business units in particular resulted in higher volumes and at segment level in volume-driven sales growth of 9.7%. Shifts in exchange rates, especially for the U.S. dollar, had a positive effect on all business units and increased sales in the segment by 5.8%. In addition, a positive sales contribution of 3.3% was made by the specialty chemicals business, integrated into the Polymer Additives business unit, of the U.S. company Emerald Kalama Chemical, which was acquired at the beginning of August 2021. Sales in all regions were above the level of the prior-year quarter.

In the first quarter, EBITDA pre exceptionals in the Specialty Additives segment rose significantly by €62 million or 83.8% to €136 million, compared with the prior-year quarter, which was negatively affected by weather-related shutdowns in the U.S. and the effects of the coronavirus pandemic. The strong earnings development resulted primarily from a catch-up effect relating to the pass-through of increased raw material and energy prices to customers. In addition, earnings were positively affected by good demand from the construction, oil and gas industries, an ongoing recovery in the aviation industry, and the associated increase in volumes in the Polymer Additives and Lubricant Additives business units in particular. Earnings were likewise improved by advantageous currency effects. The contribution from Emerald Kalama Chemical's specialty chemicals business, acquired at the beginning of August 2021, had a slightly positive effect on earnings. The EBITDA margin pre exceptionals increased to 18.6%, against 14.3% in the prior-year period.

No exceptional items that impacted EBITDA were attributable to the segment in the first quarter. In the previous year, negative exceptional items of €2 million were incurred in the operating result. Please see "Notes on EBIT and EBITDA (Pre Exceptionals)" for details.

Consumer Protection

	Q1 2021		Q1 2022		Change
		€ million Margin %		€ million Margin %	%
Sales	341		506		48.4
EBITDA pre
exceptionals	76	22.3	86	17.0	13.2
EBITDA	76	22.3	85	16.8	11.8
Operating result (EBIT) pre
exceptionals	55	16.1	49	9.7	(10.9)
Operating result (EBIT)	55	16.1	48	9.5	(12.7)
Cash outflows for capital
expenditures	14		23		64.3
Depreciation and amortization	21		37		76.2
Employees as of March 31 (previous year:
as of Dec. 31)	3,266		3,318		1.6

Prior-year figures restated in accordance with the organizational reassignment of the business with benzyl products from the Advanced Intermediates segment in 2021 and the reassignment of the business of LANXESS Distribution GmbH, Leverkusen, Germany, from the Reconciliation segment to the Flavors & Fragrances business unit as of January 1, 2022.

In our Consumer Protection segment, sales amounted to €506 million in the reporting quarter of 2022, up 48.4% from the prior-year level. This was particularly attributable to the sales of the Flavors & Fragrances business unit, which includes the business with specialty chemicals for the consumer goods sector of U.S. company Emerald Kalama Chemical, which was acquired at the beginning of August 2021. The other businesses acquired in the past twelve months also had a positive effect on sales. Overall, there was a positive portfolio effect of 32.0% at segment level. All business units achieved higher selling prices, which pushed up sales by 17.6%. The Material Protection Products business unit also achieved slightly higher sales volumes. The segment's other business units posted lower sales volumes. At segment level, lower volumes resulted in a sales decline of 3.8%. Shifts in exchange rates had a positive effect in all business units and overall had a positive influence of 2.6% on sales at segment level. Sales in all regions were above the level of the prior-year quarter.

EBITDA pre exceptionals in the Consumer Protection segment increased by €10 million, or 13.2%, compared with the prior-year level of €76 million. A positive earnings contribution resulted from the integration of the business with specialty chemicals for the consumer goods sector of U.S. company Emerald Kalama Chemical, which was acquired at the beginning of August 2021, into the Flavors & Fragrances business unit. The other businesses acquired in the past twelve months also had a positive effect on earnings. The mostly lower sales volumes, due partly to a generally difficult logistics situation, had a negative impact on earnings. In contrast, the change in exchange rates had a positive influence on earnings development. The EBITDA margin pre exceptionals was 17.0%, against 22.3% in the prior-year period.

The segment recorded negative exceptional items of €1 million in the first quarter, which impacted EBITDA and primarily related to the strategic realignment of the specialty chemicals business and the associated integration of Emerald Kalama Chemical. No exceptional items were attributable to the segment result in the prior-year quarter. Please see "Notes on EBIT and EBITDA (Pre Exceptionals)" for details.

Engineering Materials

	Q1 2021		Q1 2022		Change
		€ million Margin %		€ million Margin %	%
Sales	377		576		52.8
EBITDA pre
exceptionals	59	15.6	67	11.6	13.6
EBITDA	59	15.6	67	11.6	13.6
Operating result (EBIT) pre
exceptionals	42	11.1	49	8.5	16.7
Operating result (EBIT)	42	11.1	49	8.5	16.7
Cash outflows for capital
expenditures	10		5		(50.0)
Depreciation and amortization	17		18		5.9
Employees as of March 31 (previous year:
as of Dec. 31)	2,264		2,293		1.3

Sales in our Engineering Materials segment rose by a significant 52.8% year-on-year in the first quarter of 2022 to €576 million. The sales development was particularly influenced by the sharp rise in selling prices, which were above the previous year's level as much higher raw material and energy prices were passed on, especially in the High Performance Materials business unit. 49.1% of the significant sales increase resulted from increased prices. The change in exchange rates had a positive influence on both business units and increased the segment's sales by 4.8%. Sales volumes in the two business units were slightly below the previous year's level. Sales in all regions were above the level of the prior-year quarter.

EBITDA pre exceptionals in the Engineering Materials segment increased by €8 million, or 13.6%, to €67 million. Sharply increased procurement prices for raw materials and energy were passed on to the market. Shifts in exchange rates had a positive influence on earnings. The slightly weaker demand from the automotive industry due to supply shortages led to a volume-driven decline in earnings, especially in the High Performance Materials business unit. The EBITDA margin pre exceptionals of 11.6% was below the figure of 15.6% posted in the prior-year quarter.

Reconciliation

€ million	Q1 2021	Q1 2022	Change %
Sales	6	7	16.7
EBITDA pre
exceptionals	(37)	(56)	(51.4)
EBITDA	(62)	(80)	(29.0)
Operating result (EBIT)
pre exceptionals	(48)	(67)	(39.6)
Operating result (EBIT)	(73)	(92)	(26.0)
Cash outflows for
capital expenditures	10	4	(60.0)
Depreciation and
amortization	11	12	9.1
Employees
as of March 31 (previous
year: as of Dec. 31)	3,285	3,260	(0.8)

Prior-year figures restated in accordance with the reassignment of the business of LANXESS Distribution GmbH, Leverkusen, Germany, to the Consumer Protection segment as of January 1, 2022.

EBITDA pre exceptionals for the reconciliation came to minus €56 million in the first quarter of 2022, compared with minus €37 million in the corresponding prior-year period. In the first reporting quarter, negative exceptional items of €25 million were incurred, €24 million of which impacted EBITDA. The exceptional items resulted primarily from expenses in connection with digitalization projects and M&A activities. In the prior-year period, there were negative exceptional items of €25 million, which fully impacted EBITDA. Please see "Notes on EBIT and EBITDA (Pre Exceptionals)" for details.

NOTES ON EBIT AND EBITDA (PRE EXCEPTIONALS)

In order to better assess our operational business and to steer earning power at Group level and for the individual segments, we additionally calculate the earnings indicators EBITDA, and EBITDA and EBIT pre exceptionals, none of which are defined by International Financial Reporting Standards. These indicators are viewed as supplementary to the data prepared according to IFRS; they are not a substitute.

Reconciliation to EBIT/EBITDA

€ million	EBIT Q1 2021	EBIT Q1 2022	EBITDA Q1 2021	EBITDA Q1 2022
EBIT/EBITDA pre
exceptionals	125	182	242	320
Advanced
Intermediates	0	0	0	0
Specialty Additives	(2)	0	(2)	0
Strategic realignment	(2)	0	(2)	0
Consumer Protection	0	(1)	0	(1)
Strategic realignment	–	(1)	–	(1)
Engineering Materials	0	0	0	0
Reconciliation	(25)	(25)	(25)	(24)
Strategic IT projects (SAP S/4HANA and
other IT applications)	(7)	(14)	(7)	(14)
Digitalization, M&A expenses and other	(18)	(11)	(18)	(10)
Total exceptional
items	(27)	(26)	(27)	(25)
EBIT/EBITDA	98	156	215	295

EBITDA is calculated from earnings (EBIT) by adding back depreciation and impairments of property, plant and equipment as well as amortization and impairments of intangible assets and subtracting reversals of impairment charges on property, plant, equipment and intangible assets.

EBIT pre exceptionals and EBITDA pre exceptionals

are EBIT and EBITDA before exceptional items. The latter are effects that, by nature or extent, have a significant impact on the earnings position, but for which inclusion in the evaluation of business performance over several reporting periods does not seem to be appropriate. Exceptional items may include write-downs, reversals of impairment charges or the proceeds from the disposal of assets, certain expenses for strategic projects in the fields of IT and digitalization, restructuring expenses and income from the reversal of provisions established in this connection, and reductions in earnings resulting from portfolio adjustments or purchase price allocations. Grants and subsidies from third parties for the acquisition and construction of property, plant and equipment are accounted for as deferred income using the gross method. In this respect, no adjustments other than for gross depreciation and amortization are made when calculating EBITDA pre exceptionals.

Every operational decision or achievement is judged in the short and long term by its sustainable impact on EBITDA pre exceptionals. As part of the annual budget (target) planning process, targets are set for this benchmark of our company's success, which are then taken into account in determining variable income components for the Board of Management, senior executives and the rest of the workforce.

The earnings margins are calculated from the ratios of the respective earnings indicators to sales. For example, the EBITDA margin (pre exceptionals) is calculated as the ratio of EBITDA (pre exceptionals) to sales and serves as an indicator of relative earning power at Group level and for the individual segments.

STATEMENT OF FINANCIAL POSITION AND FINANCIAL CONDITION

Structure of the statement of financial position

As of March 31, 2022, the LANXESS Group's total assets stood at €11,720 million, up €1,202 million, or 11.4%, from €10,518 million on December 31, 2021. This development was particularly due to the issue of a new bond of €600 million maturing in 2028 and the positive total comprehensive income. Equity increased by €312 million compared with December 31, 2021, to €4,074 million. The equity ratio at the end of the first quarter was 34.8%, after 35.8% as of December 31, 2021.

Financial position

Changes in the statement of cash flows

In the first three months of 2022, there was total net cash outflow of €181 million from operating activities, against net cash inflow of €32 million in the prior-year period. Income before income taxes increased from €85 million to €134 million. In the reporting period, non-cash depreciation, amortization and write-downs amounted to €139 million, against €117 million in the previous year. The change in net working capital resulted in a net cash outflow of €520 million, compared with €146 million in the prioryear period. The outflow resulted in particular from the increase in inventories due to the sharp rise in raw material and energy prices. In addition, adjustments of selling prices driven by raw material and energy prices led to an increase in receivables. There was net cash inflow from the reimbursement of income taxes of €25 million, whereas income taxes paid resulted in a net cash outflow of €31 million in the prior-year period. Net cash outflow of €4 million was attributable to discontinued operations, compared with €1 million in the previous year.

There was a €854 million net cash outflow from investing activities in the first three months of 2022, compared with a €530 million net cash inflow in the same period a year ago. The net cash outflow of the reporting period resulted primarily from cash outflows for financial assets or other assets held for investment purposes, primarily for the acquisition of shares of money market funds that can be sold at any time. The net cash inflow from financial assets had the opposite effect due to the maturity of short-term money market investments. Cash outflows for purchases of intangible assets and property, plant and equipment resulted in a net cash outflow of €63 million, compared with €70 million in the first three months of the previous year.

Net cash provided by financing activities came to 893 million in the reporting period, compared with net cash used for financing activities of €13 million in the first three months of 2021. The net cash inflow in the reporting period was particularly due to the placement of a six-year Eurobond with a volume of €600 million. Further net cash inflow resulted in the reporting period from the borrowing of a bank loan of €300 million. Interest paid and other financial disbursements had the opposite effect.

Financing and liquidity

Net financial liabilities totaled €2,501 million as of March 31, 2022, compared with €2,345 million as of December 31, 2021.

In March 2022, LANXESS successfully issued a euro benchmark bond of €600 million with a term of six years and a coupon of 1.75% on the European capital market.

Net Financial Liabilities

2,829 675	3,421
	1,005
(25)	(40)
(643)	(503)
(491)	(1,382)
2,345	2,501
(100)	–
	2,501
	2,245

Provisions for pensions and other post-employment benefits totaled €748 million as of March 31, 2022, compared with €877 million as of December 31, 2021. This decrease was chiefly due to an increase in the interest rates used to discount provisions for pensions.

OUTLOOK

In light of the persistently uncertain conditions, especially due to the uncertainty over the development of the coronavirus pandemic and above all the war in Ukraine, the prospect of the economic environment recovering in the current fiscal year has diminished. The further development of the geopolitical situation and the resulting problems in the supply of raw materials and energy represent an uncertainty factor for global economic development and for our business.

Thanks to our more resilient portfolio, the positioning of our businesses in attractive markets, and the effects of the contribution from Emerald Kalama Chemical acquired in the previous year, we continue to expect EBITDA pre exceptionals to be well above the previous year's level. EBITDA pre exceptionals amounted to €1,010 million in fiscal year 2021.

FINANCIAL DATA

as of March 31, 2022

STATEMENT OF FINANCIAL POSITION LANXESS GROUP

	Dec. 31,	March 31,
€ million	2021	2022
ASSETS
Intangible assets1)	2,526	2,540
Property, plant and equipment1)	3,153	3,147
Investments in other affiliated companies	56	52
Non-current derivative assets	28	59
Other non-current financial assets	62	70
Non-current income tax receivables	56	55
Deferred taxes	192	159
Other non-current assets	56	55
Non-current assets	6,129	6,137
Inventories	1,633	1,897
Trade receivables	1,050	1,311
Cash and cash equivalents	643	503
Near-cash assets	491	1,382
Current derivative assets	34	60
Other current financial assets	249	146
Current income tax receivables	96	51
Other current assets	193	233
Current assets	4,389	5,583
Total assets	10,518	11,720

€ million	Dec. 31, 2021	March 31, 2022
EQUITY AND LIABILITIES
Capital stock and capital reserves	1,317	1,317
Other reserves	2,401	2,761
Net income	267	98
Other equity components	(229)	(108)
Equity attributable to non-controlling interests	6	6
Equity	3,762	4,074
Provisions for pensions and other post-employment benefits	877	748
Other non-current provisions	360	373
Non-current derivative liabilities	1	1
Other non-current financial liabilities	2,829	3,421
Non-current income tax liabilities	37	45
Other non-current liabilities	50	55
Deferred taxes	223	235
Non-current liabilities	4,377	4,878
Other current provisions	492	557
Trade payables	1,008	986
Current derivative liabilities	21	27
Other current financial liabilities	675	1,005
Current income tax liabilities	25	38
Other current liabilities	157	154
Liabilities directly related to assets held for sale and discontinued operations	1 1
Current liabilities	2,379	2,768
Total equity and liabilities	10,518	11,720
1) Prior-year figure restated.

INCOME STATEMENT LANXESS GROUP

€ million	Q1 2021	Q1 2022
Sales	1,693	2,432
Cost of sales	(1,266)	(1,865)
Gross profit	427	567
Selling expenses	(208)	(275)
Research and development expenses	(27)	(29)
General administration expenses	(73)	(78)
Other operating income	14	9
Other operating expenses	(35)	(38)
Operating result (EBIT)	98	156
Interest income	1	1
Interest expense	(16)	(17)
Other financial income and expense	2	(6)
Financial result	(13)	(22)
Income before income taxes	85	134
Income taxes	(22)	(36)
Income after income taxes from continuing operations	63	98
Income after income taxes from discontinued operations	1	0
Income after income taxes	64	98
of which attributable to non-controlling interests	0	0
of which attributable to LANXESS AG stockholders (net income)	64	98
Earnings per share (basic/diluted) (€)
from continuing operations	0.73	1.13
from discontinued operations	0.01	–
from continuing and discontinued operations	0.74	1.13

STATEMENT OF COMPREHENSIVE INCOME LANXESS GROUP

€ million	Q1 2021	Q1 2022
Income after income taxes	64	98
Items that will not be reclassified subsequently to profit or loss
Remeasurements of the net defined benefit liability for
post-employment benefit plans	193	131
Financial instruments fair value measurement	–	(5)
Income taxes	(56)	(37)
	137	89
Items that may be reclassified subsequently to profit or loss if specific conditions are met
Exchange differences on translation of operations outside the eurozone	142	93
Financial instruments fair value measurement	(18)	47
Financial instruments cost of hedging	1	(1)
Income taxes	5	(14)
	130	125
Other comprehensive income, net of income tax	267	214
Total comprehensive income	331	312
of which attributable to non-controlling interests	0	0
of which attributable to LANXESS AG stockholders	331	312
Total comprehensive income attributable to LANXESS AG stockholders	331	312
from continuing operations	329	312
from discontinued operations	2	–

STATEMENT OF CHANGES IN EQUITY LANXESS GROUP

	Capital stock	Capital reserves	Other reserves	Net income (loss)		Other equity compoanents		Equity attributable to	Equity attributable	Equity
€ million					Currency	Financial instruments		LANXESS AG stockholders	to non controlling
						translation adjustment	Fair value measurement	Cost of hedging		interests
Dec. 31, 2020	87	1,230	1,359	885	(569)	9	0	3,001	(2)	2,999
Allocations to retained earnings			885	(885)				0		0
Total comprehensive income			137	64	142	(13)	1	331	0	331
Income after income taxes				64				64	0	64
Other comprehensive income, net of income tax			137		142	(13)	1	267	0	267
March 31, 2021	87	1,230	2,381	64	(427)	(4)	1	3,332	(2)	3,330
Dec. 31, 2021	86	1,231	2,401	267	(257)	28	0	3,756	6	3,762
Allocations to retained earnings			267	(267)				0		0
Total comprehensive income			93	98	93	29	(1)	312	0	312
Income after income taxes				98				98	0	98
Other comprehensive income, net of income tax			93		93	29	(1)	214	0	214
March 31, 2022	86	1,231	2,761	98	(164)	57	(1)	4,068	6	4,074

STATEMENT OF CASH FLOWS LANXESS GROUP

€ million	Q1 2021	Q1 2022
Income before income taxes	85	134
Amortization, depreciation, write-downs and reversals of impairment charges
of intangible assets, property, plant and equipment	117	139
Gains on disposals of intangible assets and property, plant and equipment	0	0
Financial losses (gains)	10	19
Income taxes paid/refunded	(31)	25
Changes in inventories	(35)	(242)
Changes in trade receivables	(131)	(249)
Changes in trade payables	20	(29)
Changes in other assets and liabilities	(2)	26
Net cash provided by (used in) operating activities –
continuing operations	33	(177)
Net cash used in operating activities – discontinued operations	(1)	(4)
Net cash provided by (used in) operating activities – total	32	(181)
Cash outflows for purchases of intangible assets and property,
plant and equipment	(70)	(63)
Cash inflows from sales of intangible assets and property, plant and equipment	0	1
Cash outflows for financial and other assets held for investment purposes	(152)	(892)
Cash inflows from financial and other assets held for investment purposes	756	100
Cash outflows for the acquisition/sale of subsidiaries and other businesses,
less acquired cash and cash equivalents	(8)	(3)
Interest and dividends received	4	3

€ million	Q1 2021	Q1 2022
Net cash provided by (used in) investing activities –
continuing operations	530	(854)
Net cash used in investing activities – discontinued operations	0	–
Net cash provided by (used in) investing activities – total	530	(854)
Proceeds from borrowings	–	910
Repayments of borrowings	(11)	(15)
Interest paid and other financial disbursements	(2)	(2)
Net cash (used in) provided by financing activities –
continuing operations	(13)	893
Net cash used in financing activities – discontinued operations	0	–
Net cash (used in) provided by financing activities – total	(13)	893
Change in cash and cash equivalents – continuing operations	550	(138)
Change in cash and cash equivalents – discontinued operations	(1)	(4)
Change in cash and cash equivalents – total	549	(142)
Cash and cash equivalents at beginning of period – total	271	643
Exchange differences and other changes in cash and cash equivalents – total	4	2
Cash and cash equivalents at end of period – total	824	503
of which continuing operations	821	503
of which discontinued operations	3	–

BUSINESS UNIT KEY DATA

Key Data by Segment First Quarter

Advanced Intermediates		Specialty Additives		Consumer Protection		Engineering Materials		Reconciliation		LANXESS
Q1 2021	Q1 2022	Q1 2021	Q1 2022	Q1 2021	Q1 2022	Q1 2021	Q1 2022	Q1 2021	Q1 2022	Q1 2021	Q1 2022
452	613	517	730	341	506	377	576	6	7	1,693	2,432
9	11	2	3	13	18	0	0	(24)	(32)	0	0
461	624	519	733	354	524	377	576	(18)	(25)	1,693	2,432
70	87	74	136	76	86	59	67	(37)	(56)	242	320
											13.2
70	87	72	136	76	85	59	67	(62)	(80)	215	295
43	59	33	92	55	49	42	49	(48)	(67)	125	182
43	59	31	92	55	48	42	49	(73)	(92)	98	156
23	22	19	16	16	27	12	6	15	6	85	77
27	28	41	44	21	37	17	18	11	12	117	139
3,021	2,987	3,030	3,028	3,266	3,318	2,264	2,293	3,285	3,260	14,866	14,886
	15.5	14.2	14.3	18.6	22.3	17.0	15.6	11.6			14.3

Financial Calendar 2022

Contacts & Masthead

MASTHEAD

LANXESS AG Kennedyplatz 1 50569 Cologne, Germany Tel. +49 (0) 221 8885 0 www.lanxess.com

Agency: Kirchhoff Consult AG, Hamburg, Germany

English edition: EVS Translations GmbH, Offenbach, Germany

CONTACTS

Corporate Communications Christiane Minderjahn Tel. +49(0) 221 8885 2674 mediarelations@lanxess.com

Investor Relations André Simon Tel. +49(0) 221 8885 3494 ir@lanxess.com

Date of publication: May 5, 2022

Disclaimer

This publication contains certain forward-looking statements, including assumptions, opinions 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 the company to differ materially from the estimations expressed or implied herein. The company 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 herein or the actual occurrence of the forecasted developments. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the company nor any of its parent or subsidiary undertakings nor any officers, directors or employees of such entities accepts any liability whatsoever arising directly or indirectly from the use of this document.

PUBLISHER

LANXESS AG

50569 Cologne

Germany

www.lanxess.com