EQS-News: Lenzing Group Reports Further Improvement in Operating Result

EQS-News: Lenzing AG / Key word(s): Half Year Results
Lenzing Group Reports Further Improvement in Operating Result

07.08.2024 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

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Lenzing Group Reports Further Improvement in Operating Result

• Revenue up 4.8 percent year-on-year to EUR 1.31 bn in the first half
of 2024
• Performance program shows effect: EBITDA up 20.4 percent year-on-year
to EUR 164.4 mn in in the first half of 2024
• Free cash flow of EUR 141.5 mn (compared with minus EUR 165.4 mn in in
the first half of 2023)
• Lenzing confirms EBITDA guidance for 2024

Lenzing – The Lenzing Group, a leading supplier of regenerated cellulose
fibers for the textile and nonwovens industries, reports a gradual
improvement in its business performance in the first half of 2024. As
expected, the recovery of the markets relevant to Lenzing proved to be
sluggish. Although fiber sales volumes increased, fiber prices remained at
a low level. The cost of raw materials and energy remained high. At the
same time, logistics costs rose significantly in the reporting period.

Revenue grew by 4.8 percent year-on-year to EUR 1.31 bn in the first half
of 2024, primarily thanks to higher revenue from fibers (+9.3 percent).

The trend in the operating result primarily reflects the positive effects
of the comprehensive performance program. Earnings before interest, tax,
depreciation and amortization (EBITDA) rose by 20.4 percent from
EUR 136.5 mn in the first half of 2023 to EUR 164.4 mn in the same period
of 2024. The EBITDA margin increased from 10.9 to 12.5 percent.

The operating result (EBIT) amounted to EUR 18.9 mn (compared with minus
EUR 12 mn in the first half of 2023) and the EBIT margin stood at
1.4 percent (compared with minus 1 percent in the previous year). Earnings
before tax (EBT) amounted to minus EUR 22.3 mn (compared with minus
EUR 76.1 mn in the prior-year period). Earnings per share stood at minus
EUR 1.84 (compared with minus EUR 3.92 in the first half of 2023). Cash
flow from operating activities amounted to EUR 202.8 mn in the first half
of the year (compared with minus EUR 29.2 mn in the same period of 2023).
Free cash flow shows a clearly positive trend with an increase to
EUR 141.5 mn (compared with minus EUR 165.4 mn in the first half of 2023).

“The Lenzing Group’s business performance continues to point in the right
direction, even without a significant recovery in the relevant markets,”
comments Stephan Sielaff, Lenzing Group CEO. “We are continuing to place
pressure on expenditure within the organization, and at the same time we
are focusing on measures to strengthen our global sales activities. We are
taking action on a consistent and proactive basis, and we are making the
Lenzing Group not only more profitable but also more resilient in the
medium term.”

Since the end of 2022, the Lenzing Group has been implementing measures to
reduce costs and, building on this, has developed a comprehensive
performance program with the overriding objective of significantly
enhanced long-term resilience to crises and greater agility in the face of
market changes. Nico Reiner, Lenzing Group CFO, notes: “The performance
initiatives are showing visible results and are primarily aimed at
improving EBITDA and generating free cash flow through stronger revenue
and margin growth as well as sustainable cost excellence. We expect an
excess amount of EUR 100 mn, of which more than 50 percent will be
effective from this financial year. The performance program is currently
ahead of schedule.”

Capital expenditure on intangible assets, property, plant and equipment,
and on biological assets (CAPEX) amounted to EUR 61.6 mn in the first half
of 2024 (compared with EUR 136.5 mn in the first half of 2023), which is
partly due to reduced investment activities. Compared to December 31,
2023, cash and cash equivalents increased by 13.0 percent, from EUR 731 mn
as of December 31, 2023, to EUR 825.9 mn as of June 30, 2024.

Changes to dividend policy, ownership structure and Managing Board

On April 11, the Lenzing Group Managing Board passed a resolution to
indefinitely suspend the existing dividend policy of at least EUR 4.50 per
share.

B&C Group and Suzano S.A. announced on June 12 that they are entering a
long-term partnership in relation to B&C’s majority interest in Lenzing
AG. On the basis of this agreement, Suzano is acquiring a 15 percent
interest in Lenzing from B&C.

Also, Lenzing recently announced personnel changes on its Managing Board.
The Supervisory Board of Lenzing AG has appointed Walter Bickel as member
of the Managing Board and Chief Transformation Officer of Lenzing AG until
December 31, 2025, with effect as of April 15, 2024. Stephan Sielaff,
Lenzing AG CEO, will leave the company, at the latest, when his contract
expires at the end of March 2025, in order to devote himself to new tasks.
The Lenzing Group Supervisory Board has appointed Rohit Aggarwal as a new
member of the Managing Board of the Lenzing Group. He will take over
responsibility for the fibers business area in the course of the third
quarter and will succeed Stephan Sielaff as CEO of the Lenzing Group after
his Onboarding. Mr. Aggarwal, a graduate in business administration,
possesses decades of professional experience in leading positions in
markets relevant to Lenzing and is consequently fully familiar with
Lenzing’s core business in all its content-related and geographical
facets.

Outlook

The IMF left its growth forecast for 2024 unchanged at 3.2 percent and
raised it to 3.3 percent for 2025. Nevertheless, a number of risks for the
global economy remain.

Forecasting future economic growth is rendered more difficult by
smoldering global conflicts, trade disputes, and the uncertain outcome of
elections, including the USA and the EU.

Consumers are holding back on unnecessary purchases in an environment of
rising prices, falling real wages in some cases, and concerns about
economic growth. This is hampering a revival of the consumer apparel
market, which is important for Lenzing.

The currency environment is expected to remain volatile in the regions
relevant to Lenzing.

In the trend-setting market for cotton, a reduction in stock levels and a
stable price trend at a low level is expected for the remainder of the
2023/2024 harvest season.

Earnings visibility remains limited overall.

Revenue and earnings in the first half of the year exceeded Lenzing’s
expectations, despite the persistently difficult market. Lenzing is ahead
of schedule with the implementation of its performance program. The
company expects that the measures will make a greater contribution to
further improving earnings in the coming quarters.

Taking the aforementioned factors into consideration, the Lenzing Group
confirms its guidance for the 2024 financial year of year-on-year higher
EBITDA.

Structurally, Lenzing continues to anticipate growth in demand for
environmentally responsible fibers for the textile and clothing industry
as well as for the hygiene and medical sectors. As a consequence, Lenzing
is very well positioned with its strategy and is pushing both profitable
growth with specialty fibers and the further expansion of its market
leadership in the sustainability area.

 

Selected indicators of the Lenzing Group`
EUR mn 01-06/2024 01-06/2023
Revenue 1,310.7 1,250.2
EBITDA (earnings before interest, tax, depreciation 164.4 136.5
and amortization)
EBITDA margin 12.5% 10.9%
Net profit/loss after tax (65.4) (65.8)
Earnings per share in EUR (1.84) (3.92)
Cash flow from operating activities 202.8 (29.2)
CAPEX 61.6 136.5

 

  30/06/2024 31/12/2023
Net financial debt 1,427.8 1,562.6
Adjusted equity ratio 32.8% 34.7%
Employees (full-time equivalents) 7,778 7,917

 

Photo download:

[1] https://mediadb.lenzing.com/pinaccess/showpin.do?pinCode=4tdYl61hMKjt
PIN: 4tdYl61hMKjt

 

Your contact for  
Public Relations: Investor Relations:
   
Dominic Köfner Sébastien Knus
Vice President Corporate Communications & Vice President Capital Markets
Public Affairs Lenzing Aktiengesellschaft
Lenzing Aktiengesellschaft Werkstraße 2, 4860 Lenzing,
Werkstraße 2, 4860 Lenzing, Austria Austria
   
Phone +43 7672 701 2743 Phone  +43 7672 701 3599
E-mail  [2]media@lenzing.com E-mail   [4]s.knus@lenzing.com
Web    [3] www.lenzing.com Web    [5] www.lenzing.com
   

 

About the Lenzing Group
 
The Lenzing Group stands for the ecologically responsible production of
specialty fibers based on cellulose ///
and recycled material. As an innovation leader, Lenzing is a partner to
global textile and nonwoven manufacturers and drives many new
technological developments. The Lenzing Group’s high-quality fibers are
the raw material for a wide range of textile applications – from
functional, comfortable and fashionable clothing through to durable and
sustainable home textiles. Thanks to their special properties and
botanical origin, TÜV-certified biodegradable and compostable Lenzing
fibers are also ideal for demanding use in everyday hygiene applications.
 
The Lenzing Group’s business model extends far beyond that of a
conventional fiber producer. Together with its customers and partners,
Lenzing develops innovative products along the value chain, creating added
value for consumers. The Lenzing Group strives for efficient utilization
and processing of all raw materials and offers solutions for the
transformation of the textile industry from the current linear economic
system to a circular economy. In order to reduce the rate of global
warming and thereby also support the goals of the Paris Agreement and the
EU Commission’s Green Deal, Lenzing has a clear, science-based climate
action plan that aims for a significant reduction in greenhouse gas
emissions by 2030, and a net-zero target (Scopes 1, 2 and 3) by 2050.
 
Key Facts & Figures Lenzing Group 2023
Revenue: EUR 2.52 bn
Nominal capacity (fibers): 1,110,000 tonnes
Employees (full-time equivalents): 7,917
 
TENCEL™, LENZING™ ECOVERO™, VEOCEL™, LENZING™, and REFIBRA™ are trademarks
of Lenzing AG.
 
Disclaimer: The above key financial figures are derived primarily from the
condensed consolidated interim financial statements and the consolidated
financial statements of the previous year of the Lenzing Group. Additional
details are provided in the section “Notes on the financial performance
indicators of the Lenzing Group”, in the glossary to the half-year report
and in the condensed consolidated interim financial statements as well as
the Lenzing Group’s prior year consolidated financial statements. Rounding
differences can occur in the presentation of rounded amounts and
percentage rates.

 

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07.08.2024 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com

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Language: English
Company: Lenzing AG
4860 Lenzing
Austria
Phone: +43 7672-701-0
Fax: +43 7672-96301
E-mail: office@lenzing.com
Internet: www.lenzing.com
ISIN: AT0000644505
Indices: ATX
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1962473

 
End of News EQS News Service

1962473  07.08.2024 CET/CEST

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