Lenzing group with improved results for 2015

Lenzing group with improved results for 2015

Thanks to a strong operational performance, the Lenzing group significantly improved just about all relevant economic and balance sheet indicators in the 2015 financial year compared to its business results in 2014

Consolidated revenue climbed by 6.0 % to EUR 1.98 billion. This increase is particularly due to higher fibre selling prices, the growing share of specialty fibres in its product mix and positive exchange rate effects. EBITDA (Earnings before interest, tax, depreciation and amortization improved by 20.7 % to EUR 290.1 million, up from the prior-year figure of EUR 240.3 million. Lenzing’s performance in 2015 corresponded to an EBITDA margin of 14.7 % (2014: 12.9 %). EBIT (Earnings before interest and tax) of the Lenzing group amounted increased to EUR 151.1 from EUR 21.9 million, corresponding to an EBIT margin of 7.6% (2014: 1.2%). Earnings before tax (EBT) amounted to 149.1 million, substantially higher than EUR 7.3 million in 2014. The group net profit for the year totaled EUR 124 million, compared to a loss of EUR 14.2 million in the previous year. Earnings per share in the 2015 financial year rose to EUR 4.63, up from minus EUR 0.51 per share in 2014. Based on this good financial performance, the Management Board and Supervisory Board will propose that the upcoming Annual General Meeting approve the distribution of a dividend of EUR 2.00 per share for the 2015 financial year, double the dividend for 2014.

Lenzing Results 2016

“We made substantial progress in 2015, and delivered the promised improvements to our business operations,” says Stefan Doboczky, Chief Executive Officer of Lenzing AG. “We strategically realigned  the  company,  improved  the  earnings  and  cost  structure  and  enhanced  our  financial strength. We also expect a considerable rise in earnings once again in 2016 provided that the underlying business framework does not significantly change.”

Lenzing boasts a solid balance sheet structure which was further optimized in the course of the 2015 financial year. Adjusted equity increased by 15 % to EUR 1.23 billion (2014: EUR 1.07 billion). The adjusted equity ratio amounted to 50.6 %, the highest level since the year 2006 (2014: 44.9 %). Net financial debt was sharply reduced by 27.0 % to EUR 327.9 million (December 31, 2014: EUR 449.5 million). Accordingly, the ratio of net financial debt to EBITDA declined from 1.9 at the end of 2014 to 1.1 at the end of 2015. The return on capital generated by the Lenzing group improved thanks to the positive earnings development. As a result, the return on capital employed (ROCE) increased to 8.0 %, compared to minus 0.1 % in the previous year. At the same time, the return on equity (ROE) rose to 13.0 % (2014: 0.7 %).

Investments in intangible assets, property, plant and equipment (CAPEX) of the Lenzing group totalled EUR 70.9 million in the 2015 financial year, compared to the prior-year level of EUR 104.3 million. Following completion of the TENCEL® fiber production plant at the Lenzing site in 2014, the focus of Lenzing’s capital expenditures in 2015 was on maintenance work as well as the implementation of quality and optimization measures. The excelLENZ cost optimization initiative was concluded in 2015. The new strategy sCore TEN was developed by the Lenzing team and is already in implementation.

Share of specialty fibres up to 40.5 % of group revenue

Demand for high-quality Lenzing fibers was strong in 2015, encompassing all regions and product groups. For this reason, the pulp and fiber production capacities of the Lenzing group were well utilized against the backdrop of high production output. In particular, sales of the specialty fibre TENCEL® increased significantly. The share of specialty fibres as a percentage of total group revenue was 40.5 % in the 2015 financial year, compared to the 35.0 % in the previous year. Expenditures for research and development were increased by 47 % to EUR 29.8 million, in line with the company’s strategy of focusing on the development, production and marketing of innovative  specialty fibres.

Outlook for 2016

The volatile development prevailing on the global fibre market is expected to continue. High cotton inventories and low polyester selling prices intensify price competition on the market i.e. inter-fibre competition. However, the market segment of wood-based cellulose fibres, which is of relevance to Lenzing, is showing signs of developing more positively than the overall fibre market. Demand for cellulose fibres remains strong, and the ratio of supply to demand is favourable. Assuming unchanged conditions on the fibre market and currency exchange rates, Lenzing expects further improvements in earnings in the current 2016 financial year compared to 2015.

www.lenzing.com

www.lenzing-fibers.com


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