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      MONDAY, 07/07/2025 - Scope Ratings GmbH
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      Scope places LANXESS’ ratings under review for a possible upgrade following methodology update

      The rating action follows the publication of Scope’s updated Chemicals Rating Methodology which could have a positive rating impact.

      The latest information on the rating, including rating reports and related methodologies, is available on this LINK.

      Rating action

      Scope Ratings GmbH (Scope) has placed the BBB- issuer rating of LANXESS AG under review for a possible upgrade. Scope has also placed the BBB- senior unsecured debt rating under review for a possible upgrade, while the S-2 short-term debt rating has been left unchanged.

      The rating actions follow the publication of Scope’s updated Chemicals Rating Methodology on 30 June 20251,2. The updated methodology has introduced new elements to the assessment of a chemicals corporate’s business risk profile, which could have a positive effect on LANXESS' business risk profile and consequently its issuer and senior unsecured debt ratings.

      The full list of rating actions and rated entities is at the end of this rating action release.

      Key rating drivers

      The application of the updated methodology could positively affect LANXESS’ ratings, as it is deemed likely that its business risk assessment could improve, thereby supporting a higher issuer rating and senior unsecured debt rating (currently both at BBB-). In particular, a more positive assessment of the rated entity's business risk profile (currently at BBB-) could be driven by a more substantiated view on the company’s diversification and operating profitability. Considering these potential positive effects, both ratings have been placed under review for a possible upgrade.

      The rating review will likely be resolved within the next three months, once Scope has received all the information necessary to do so.

      The resolution of the under-review status will also take into account the correction of previous calculation errors which affect the calculation of credit metrics and its components. The errors relate to the computation of Scope-adjusted interest*, EBITDA and consequently funds from operations and free operating cash flow. Scope deems it likely that the correction of the errors will have a material impact on the rating construct for the issuer rating.

      The S-2 short-term debt rating remains unaffected by the methodology update as there is substantial headroom to a potentially higher short-term debt rating.

      All rating actions and rated entities

      LANXESS AG

      Issuer rating: BBB-/Under Review for a possible upgrade, under-review placement

      Short-term debt rating: S-2, no action

      Senior unsecured debt rating: BBB-/Under Review for a possible upgrade, under-review placement

      *All credit metrics refer to Scope-adjusted figures.

      1. Scope publishes final Chemicals Rating Methodology
      2. Chemicals Rating Methodology

      Stress testing & cash flow analysis
      No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

      Methodology
      The methodologies used for these Credit Ratings, (General Corporate Rating Methodology, 14 February 2025; Chemicals Rating Methodology, 30 June 2025), are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
      Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.

      Solicitation, key sources and quality of information
      The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
      The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
      Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
      Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and the principal grounds on which the Credit Ratings are based. Following that review, the Credit Ratings were not amended before being issued.

      Regulatory disclosures
      These Credit Ratings are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings are UK-endorsed.
      Lead analyst: Sebastian Zank, Managing Director
      Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
      The Credit Ratings/Outlook were first released by Scope Ratings on 30 January 2018. The Credit Ratings/Outlook were last updated on 19 February 2025.

      Potential conflicts
      See www.scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

      Conditions of use/exclusion of liability
      © 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5 D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.

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