LANXESS : C) Manuscript of the Chairman of the Board of Management’s speech

Good morning, ladies and gentlemen, on behalf of the entire Board of Management, I would like to welcome you to this year's Annual Stockholders' Meeting.

Twelve months ago, I told you here that we were facing a tough year in 2023. Today, one year later, I have to say: yes, unfortunately it has turned out that way.

But at the same time, I dare to predict for the coming months that we are out of the woods and that 2024 will be better than last year.

We look back on 2023 as a multi-crisis year - for the world, for the industry in general and especially for us in the chemical industry.

For LANXESS, it was perhaps the most difficult year in our company's history, and the perfect storm literally brewed over our industry.

In recent months, we have been confronted with unprecedented weakness in global demand - across almost all sectors and in almost all key market regions.

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In my entire professional career, I have never experienced a crisis that has hit the chemical industry so hard.

The upturn in industry that has been predicted at the beginning of last year for the second half of 2023 failed to materialize.

Important markets, including China, the world's largest chemical market, as well as Europe, fell well short of expectations.

In addition, the global economy has suffered and continues to suffer from geopolitical tensions, which have even increased significantly over the past year.

Ladies and gentlemen, this year has been particularly hard on the chemical industry in Germany, and therefore also on LANXESS.

This is because Germany continues to lose massive ground internationally in terms of competitiveness.

In the "Country Attractiveness Index" published by the Center for European Economic Research, Germany

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dropped four places between 2020 and 2022 alone and now ranks eighteenth out of 21 countries.

According to a study by KPMG, international investors only see Germany as a mid-table location in an international comparison.

The biggest obstacles to investment: The excessive bureaucracy and high energy costs.

Both also contributed to the aforementioned "perfect storm" for the chemical industry.

Despite these extremely adverse conditions, we at LANXESS accepted the challenge right from the start.

First of all, this includes the recognition that we have benefited in this crisis from the systematic restructuring of the company in previous years.

I would venture to say that if we were still the rubber and plastics company we were 10 years ago, this crisis would have swept us away.

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Today we can say: we have retained our ability to maneuver even in these difficult times.

Of course, we have no influence on political crises or global demand.

But we were very determined to tackle everything that was and is within our own sphere of influence.

Always with the aim of getting the company through these difficult waters of the global economy as well as possible.

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I would like to mention three steps in particular:

Firstly, we swiftly decided to adapt our structures.

Early last summer, we launched our "FORWARD!" action plan, which will enable us to make significant savings in the long term.

Secondly, we have further reduced our debt and significantly improved our cash flow.

And thirdly, even in these difficult times, we have strategically developed the Group further and systematically continued our transformation towards specialty chemicals. I would now like to report on all of this in detail.

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Balance sheet

Let's start therefore with the business performance in 2023.

At EUR 6.7 billion, our consolidated sales were 17% below the previous year's figure of EUR 8.1 billion.

Our EBITDA pre exceptionals fell by just under 45% to EUR 512 million after EUR 930 million in 2022, falling short of our expectations for the full year.

The EBITDA margin pre exceptionals reached 7.6% after 11.5% in the previous year.

At EUR 443 million, net income for 2023 was significantly higher than the previous year's figure of EUR 250 million.

This was due in particular to the proceeds we received from our joint venture partner Advent for the establishment of our joint venture Envalior.

At minus 843 million euros, the net income from continuing operations was significantly below the previous year's figure of 184 million euros.

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This was due on the one hand to the development of the operating result and on the other to impairment losses on goodwill from acquisitions.

Ladies and gentlemen, the figures show that business was extremely weak last year.

We therefore already announced our proposal to you in November to significantly reduce the dividend accordingly.

The Executive Board and Supervisory Board are therefore proposing a dividend of 10 euro cents per share today.

This corresponds to a total payout of around EUR 8.6 million.

I am aware that this is not good news.

But in such an extraordinary crisis situation in our industry, it is our responsibility and priority to maintain the financial stability of the Group.

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At the same time, we were able to reduce net working capital and significantly improve our free cash flow thanks to the corresponding reduction in capital commitment.

Forward

Dear shareholders, financial solidity also means that we launched the "FORWARD!" action plan in early summer 2023 to decisively counteract the effects of the massive economic downturn.

As a first step, we have implemented immediate measures to stabilize our results for the 2023 financial year in the short term.

These included, for example, strict cost discipline in all areas and a Europe-wide recruitment freeze.

This enabled us to achieve one-off savings of 100 million euros.

In addition, we have launched far-reaching structural measures as the second pillar of "FORWARD".

This will permanently reduce annual costs by 150 million euros from 2025 onwards.