Lenzing Group with substantial earnings Increase in the first nine months of 2016
Lenzing Group generated a substantial increase in revenue and earnings in the first nine months of 2016, compared to the first nine months of 2015. Significant improvements of cash flow and thus reduction of net debt provide the basis for further investments and the implementation of the sCore TEN strategy.
Consolidated revenue rose by 8.2 % in the first nine months of 2016 to EUR 1578.4 million year- on-year. Next to slightly higher sales volumes it was primarily higher selling prices of all three fibre generations – Viscose, Modal and TENCEL® – and a more attractive product mix that contributed to higher revenues. In the third quarter it was specifically the sharp increase in viscose prices that fuelled the results.
Consolidated earnings, before interest, tax, depreciation and amortization (EBITDA), rose by 52.2 % to EUR 320.6 million. This corresponds to an EBITDA margin of 20.3 %, up from 14.4 year-on-year. Earnings before interest and tax (EBIT) of the Lenzing Group almost doubled to EUR 221.7 million. Accordingly, the EBIT margin increased to 14 % from 7.7 % previously. Earnings before tax (EBT) totalled EUR 207.1 million, up 84.2 %. The net profit for the period at EUR 162.1 million was 91.1 % percent higher than in the first three quarters of 2015. As a result, earnings per share increased 84.6 % to EUR 5.98.
In the first nine months of 2016, the good business development resulted in a twofold increase in the operating cash flow to EUR 374.9 million. Next to the very strong operational performance it was particularly good working capital management that fuelled cash generation. As a consequence key EUR 64.2 million (December 31, 2015: EUR 327.9 million). Net gearing was down to 4.9 % from 26.9 % previously.
The strong balance sheet supports the investment program already initiated: The expansion of specialty fiber production by 35,000 tons per year at the Heiligenkreuz, Lenzing and Grimsby sites is already underway. Investment volume will total about EUR 100 million. In addition, pulp production will be modernized in Lenzing and Paskov by 2019, also at a cost of around EUR 100 million. This will lead to additional capacities of approximately 35000 tons annually.
“The Lenzing Group continues to implement the sCore TEN strategy with great discipline and the excellent business performance further helped our already strong balance sheet,” says Stefan Doboczky, CEO of Lenzing AG. “These nine months underpin our confidence and are an excellent basis for the implementation of our ambitious growth program.”
The macroeconomic environment remains volatile especially given the recent political events. Against this background the fundamentals of the wood-based cellulosic fiber industry should stay favorable in the mid-term. Lenzing expects however viscose prices to be notably lower than the high peaks of the third quarter due to seasonality effects. Under the assumption of unchanged positive fiber market conditions and foreign exchange rates Lenzing will deliver excellent business results in the financial year 2016.
The Lenzing Group is a world market leader headquartered in Austria, with production sites in all major markets as well as a worldwide network of sales and marketing offices. Lenzing supplies the global textile and nonwovens industry with high-quality, botanic fibers. Its portfolio ranges from dissolving pulp to standard and specialty cellulose fibers.
Lenzing quality and innovative strength set global standards for cellulose fibers. With 78 years of experience in fibre production, the Lenzing Group is the only company worldwide combining the manufacturing of all three cellulose fiber generations on a large scale under one roof – from the classic viscose to modal and the lyocell fiber TENCEL®.