Lenzing Group with successful first half of 2015

Lenzing Group with successful first half of 2015

Lenzing Group announced a clearly improved situation upon all relevant performance and balance sheet indicators, and as compared to the first half of 2014

Lenzing cover 27-08-_2015_16-30-10Consolidated revenue rose by 6.2% in the first half-year, from EUR 900.0 million to EUR 955.4 million. Currency effects, slightly higher sales volumes and an improved product mix were responsible for a revenue increase. Earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 37.7% to EUR 126.5 million, up from EUR 91.9 million in the previous year. The EBITDA margin was 13.2%, compared to 10.2% in the first half of 2014. Half-year earnings before interest and taxes (EBIT) amounted to EUR 60.5 million, or 86.7% above the comparable EBIT of EUR 32.4 million during the same period of 2014. This corresponded to an EBIT margin of 6.3% (3.6%).

“Lenzing delivered a solid performance in the first half of 2015. The underlying reasons were the currency effects which turned out to be very positive for us due to the weakness of the euro, good fibre demand in the second quarter and our improved cost position”, says Stefan Doboczky, CEO and Chairman of the Management Board of Lenzing AG. “Viscose fibre prices in China, the world’s largest sales market for fibres, increased towards the end of the second quarter due to a more favourable supply-demand ratio related to several local viscose fibre production plants being shut down for environmental reasons. We remain cautious concerning prospects for the rest of 2015, in light of the fact that these capacities could be put into operation again,” he adds.

Adjusted equity of the Lenzing Group rose to EUR 1132.7 million at the end of June 2015, up from EUR 1066.1 million at the end of 2014. The adjusted equity ratio amounted to 46.8% (December 31, 2014: 44.9%). The debt situation could be substantially improved, with net financial debt reduced by 10.7%. As a result, net gearing2 fell to 35.4% (December 31, 2014: 42.2%).

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Investments in intangible assets, property, plant and equipment (CAPEX) amounted to EUR 26.0 million in the first half of 2015, down from EUR 64.2 million in the first half-year 2014. Investment activity was cut back following the completion of the large TENCEL® fibre production facility in Lenzing in the previous year. Investments focused on necessary maintenance work as well as quality and optimisation measures in fibre and pulp production.

Lenzing is currently focusing on investments designed to optimise costs and quality due to the ongoing uncertain market conditions and increasing quality demands. The excelLENZ cost optimization initiative continued to be implemented in the first half-year according to plan and proved to be very successful. From today’s perspective the targeted effects of about EUR 160 million annually will be completely achieved. Their full impact will be felt starting in 2016. The restructuring program to adjust capacities of the technical units of Lenzing AG and the subsidiary Lenzing Technik which was launched in the first quarter of 2015 is on schedule.

Ongoing market success with TENCEL® Lenzing was just as successful in further developing the market for high quality viscose products in the first half of 2015 as for TENCEL®. Demand for TENCEL® used in jeans (denim) remained consistently strong, and the number of processors integrating TENCEL® into their denim fabrics has doubled over the last twelve months. Furthermore, the new Lenzing fibre TENCEL® A100 MICRO was successfully launched on the market in the first half of 2015. Lenzing also further expanded its strong market position for nonwovens.

The specific market environment for the man-made cellulose fibre industry improved somewhat in the middle of 2015 compared to the end of the first quarter. Solid volume demand up until now was followed by initial fibre selling price increases. The troubled geopolitical situation, the economic situation in China and unforeseeable exchange rate fluctuations are factors of uncertainty in the second half of 2015.

www.lenzing.com


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