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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