The stock markets were negatively impacted in the third quarter by geopolitical developments and disappointing economic data. As a result, the price of our shares also declined significantly at times during the third quarter, closing at €43.71 on September 30.
Geopolitical developments put pressure on the stock markets right at the start of the third quarter. Due to the escalation of the crisis in Ukraine, the DAX slid well below the 10,000-point threshold. At the beginning of August, it further declined to a low of 8,903 points for the reporting period. As well as the Ukraine conflict, military strikes in Iraq and Syria also had a negative effect. Added to the geopolitical factors were disappointing economic data from the eurozone later in the third quarter that put pressure especially on the German indices.
The markets were buoyed only briefly in the third quarter by positive signals such as the European Central Bank’s decision to maintain its expansionary monetary policy and the robust growth of the U.S. economy. The risks dominated the mood on the markets and led to declines particularly on the European stock markets. The DAX therefore closed the third quarter on September 30 at 9,474 points, down 3.6% on the quarter.
The LANXESS benchmark indices Dow Jones STOXX 600 ChemicalsSM and MSCI World Chemical Index also registered declines during the quarter. The Dow Jones STOXX 600 ChemicalsSM stood at 759.37 points on September 30, down 2.2%. The MSCI World Chemical Index closed the quarter down 1.0% at 251.53 points.
The performance of our stock was heavily impacted by the negative news in the market. It started the quarter at around €50, reaching a quarter high of €51.16 at the beginning of July before declining significantly at times over the rest of the period. Our stock came under pressure particularly in September. In addition to the aforementioned geopolitical events and economic developments, the price of our shares was depressed during this period by negative news from the automotive and tire industries. The price of LANXESS stock therefore fell below the €45 threshold in September and reached its lowest point in the third quarter on the final day of trading, at €43.37. Our stock closed at €43.71 on September 30, down 11.3% on the quarter.
Major company news during the reporting period concerned the “Let’s LANXESS again” program. LANXESS announced the initiation of this program to realign the company at the end of July, and we provided further details in our reporting for the second quarter of 2014 at the beginning of August. The realignment of LANXESS will be implemented in a three-phase program focused on the areas “Competitiveness of the business and administrative structure,” “Operational competitiveness” and “Competitiveness of the business portfolio.” As part of the first phase, LANXESS will combine various business units and reduce their number from 14 to 10 effective January 1, 2015. LANXESS also published information about its plans to streamline the company and its administration worldwide through cross-functional workforce reductions and to consolidate individual areas.
These company events did not have a material impact on the development of our share price during the reporting period. The negative external events remained too dominant and continued to shape stock market dynamics at the beginning of the fourth quarter.
A summary of the developments at LANXESS during the third quarter is provided on the "highlights" page.
Stock Performance vs. Indices
|Q4 2013||Q1 2014||Q2 2014||Q3 2014|
|Capital stock/no. of shares 1)||€/no. of shares||83,202,670||83,202,670||91,522,936||91,522,936|
|Market capitalization 1)||€ billion||4.03||4.56||4.51||4.00|
|High/low for the period||€||53.64/43.76||55.13/44.64||56.75/48.07||51.16/43.37|
|Closing price 1)||€||48.48||54.75||49.30||43.71|
|Trading volume||million shares||45.817||70.901||38.903||41.129|
|Earnings per share||€||(2.45)||0.30||0.63||0.38|
|1) End of quarter: Q4: December 31, 2013, Q1: March 31, 2014, Q2: June 30, 2014; Q3: September 30, 2014|