From the Sector

Archroma, a global leader in specialty chemicals towards sustainable solutions, was highlighted for its advanced sustainable practices and innovation in Pakistan by the Swiss Embassy. Foreign Minister of Switzerland, Mr. Ignazio Cassis who was on an official state visit to Pakistan visited Archroma Center of Excellence at Karachi on 9 July 2023 along with high-level officials and three Members of Swiss Parliament.

Mr. Ignazio Cassis was greeted by Archroma employees at the Archroma Center of Excellence. He inaugurated the company’s "Wall of Pride", an impressive collection of recognitions, accolades and honors earned by Archroma in Pakistan since the company’s inception in October 2013.

Mr. Cassis visited the Research & Technology (R&T), Application, Analytical Laboratories & Training Academy spread on three floors at the Archroma Center of Excellence and saw the developmental work in progress. He was shown printing of multi-colored fabrics along with research based developmental analysis in the laboratories.

The globally acclaimed ‘Zero Liquid Discharge Sustainable Effluent Treatment Plant’ and the aniline-free* indigo produced at Jamshoro were the two of the main highlights showcased as best-in-class sustainable practices in the industry. Presentations and discussions were held on continued enhancement of these landmarks with the local industry.

• Sales up 1.9% year-on-year to €560.5 million with stable adjusted EBITDA of €88.0 million
• Strong business performance of the Graphite Solutions, Process Technology and Composite Solutions businesses
• Sales and earnings decline at Carbon Fibers due to weakness of wind market
• Impairment at Carbon Fibers of €44.7 million

Despite the increasingly difficult economic environment, SGL Carbon was able to increase sales in H1 2023 from €549.8 million in the previous year to €560.5 million. Adjusted EBITDA (EBITDApre) remained almost unchanged at €88.0 million (H1 2022: €87.9 million). The expected good business performance of the Graphite Solutions business unit and the better-than-expected sales and earnings development of Process Technology and Composite Solutions compensated the drop in demand in Carbon Fibers.

In particular, the Graphite Solutions (GS) business unit contributed to the stable development of the Company with a 15.3% increase in sales to €280.6 million (H1 2022: €243.4 million) and a 20.6% improvement in adjusted EBITDA to €65.1 million (H1 2022: €54.0 million). GS benefited especially from the high demand of the semiconductor industry. The semiconductor and LED market segment now accounts for around 45% of GS revenue (H1 2022: around 35%).

With a 30.9% increase in sales to €64.4 million (H1 2022: €49.2 million) and a significant rise in adjusted EBITDA from €4.1 million to €11.9 million, the business performance of Process Technology (PT) was significantly above the original planning. Composite Solutions (CS) also reported a higher-than-forecast sales increase of 14.4% to €79.6 million in H1 2023 (H1 2022: €69.6 million) and an improvement in adjusted EBITDA of 26.8% to €12.3 million (H1 2022: €9.7 million). By contrast, the business performance of the Carbon Fibers (CF) unit was not in line with expectations, with a 28.9% decline in sales to €125.1 million (H1 2022: €176.0 million) and a 78.4% drop in earnings to €6.1 million (H1 2022: €28.2 million).

An important market segment for the Carbon Fibers business unit is the wind industry. Demand for carbon fibers for the wind industry has declined sharply since the beginning of the year. According to current estimates, the expected recovery in demand in H2 2023 will not materialize. SGL Carbon expects customer demand from the wind industry to pick up in 2024.

As already announced in the ad hoc release of July 24, 2023, an impairment loss of €44.7 million was recognized on the assets of Carbon Fibers as of June 30, 2023.

Results situation
SGL Carbon's adjusted EBITDA (EBITDApre) remained almost stable in a half-year comparison at €88.0 million (H1 2022: €87.9 million). Due to the lack of demand from wind industry, CF's production capacity utilization decreased and idle capacity costs weighed on adjusted EBITDA. By contrast, higher margins from product mix and volume effects in the other three business units had a positive impact on adjusted EBITDA.

Non-recurring items and one-off effects not included in adjusted EBITDA totaled minus €46.9 million in the first half of 2023, of which €44.7 million resulted from an impairment loss in the CF business unit.

In addition to the above-mentioned effects and nearly unchanged depreciation and amortization of €29.1 million (H1 2022: €28.9 million), the decline in EBIT resulted in particular from the impairment loss already described (€44.7 million). After €69.6 million in H1 2022, EBIT amounted to €12.0 million in the reporting period.

Taking into account the slightly improved financial result of minus €15.8 million (H1 2022: minus €16.6 million), consolidated net income for the first six months of the current financial year amounted to minus €10.0 million, compared to €48.8 million in the first half of the previous year.

Net financial debt and equity
To complete its refinancing, SGL Carbon issued convertible bonds with a volume of €118.7 million in June 2023 and drew an existing term loan facility of €75 million in July 2023, which was used together with cash of the Company on July 28, 2023 to repay the corporate bond (outstanding as of June 30, 2023: €237.4 million). Accordingly, cash and cash equivalents increased to €310.5 million as of June 30, 2023 (€227.3 million as of December 31, 2022) and financial debt temporarily increased to €480.4 million (€398.1 million as of December 31, 2022). Net financial debt remained nearly unchanged at €169.9 million as of June 30, 2023 (Dec. 31, 2022: € 170.8 million).

Despite the impairment loss of €44.7 million in Carbon Fibers, shareholders' equity amounted to €565.2 million as of June 30, 2023, only slightly lower than at the end of 2022 (Dec. 31, 2022: €569.3 million). This corresponds to an equity ratio of 36.1% (Dec. 31, 2022: 38.5%).

• Revenue of EUR 1.25 bn and EBITDA of EUR 136.5 mn in the first half of 2023
• EBITDA and net result for the period significantly improved compared with the first quarter of 2023
• Cost-cutting program and measures to strengthen sales activities being implemented as planned
• Liquidity position strengthened by successful capital increase and extension of credit terms
• Production of TENCEL™ brand modal fibers successfully launched in China

The business performance of the Lenzing Group, a leading global supplier of specialty fibers for the textile and nonwoven industries, largely reflected the subdued market trends in the first half of 2023. After the market environment deteriorated significantly in the second half of 2022, signs of recovery were evident during the first and second quarters of 2023 in terms of both raw material and energy costs as well as demand. Textile fibers recorded improving demand, and business with nonwoven fibers and with dissolving wood pulp proved to be very stable.

Outlook
The war in Ukraine and the more restrictive monetary policy pursued by many central banks in order to combat inflation are expected to continue to influence global economic activity. The IMF warns that risks remain elevated overall and forecasts growth of 3 percent for both 2023 and 2024. The currency environment is expected to remain volatile in the regions of relevance to Lenzing.

This market environment continues to weigh on the consumer climate and on sentiment in the industries relevant to Lenzing. Recently, however, the outlook brightened somewhat according to a global survey by the ITMF.*

In the trend-setting market for cotton, signs are emerging of a further buildup of stocks in the current 2022/23 crop season. Initial forecasts also see a further buildup of stocks in 2023/24, albeit to a lesser extent.

However, despite signs of recovery in both demand and raw material and energy costs, earnings visibility remains limited overall.

Lenzing is fully on track with the implementation of its reorganization and cost-cutting program. These and further measures are aimed at positioning Lenzing in the best possible way for the expected market recovery.

In structural terms, Lenzing continues to anticipate growth in demand for environmentally responsible fibers for the textile and clothing industry as well as the hygiene and medical sectors. As a consequence, Lenzing is very well positioned with its “Better Growth” strategy and plans to continue driving growth with specialty fibers as well as its sustainability goals, including the transformation from a linear to a circular economy model.

The successful implementation of the key projects in Thailand and Brazil as well as the investment projects in China and Indonesia will further strengthen Lenzing’s positioning in this respect.

Taking into consideration the aforementioned factors and assuming a further market recovery in the current financial year, the Lenzing Group continues to expect EBITDA in a range between EUR 320 mn and EUR 420 mn for 2023.

*Source: ITMF, 21st Global Textile Industry Survey, July 2023

adidas announced a further release of YEEZY inventory with a range of existing products being available in phases throughout the month of August across the world. As previously communicated, adidas will donate a significant amount to selected organizations working to combat discrimination and hate, including racism and antisemitism.

As with the release in May 2023, the second release will feature products which were initiated in 2022. The range available will include some of the most popular existing designs including the YEEZY BOOST 350 V2, 500 and 700 as well as the YEEZY SLIDE and FOAM RNR.

adidas will continue the support of partners combatting discrimination and hate with donations to existing and new partners. The company will continue to support the work of the Anti-Defamation League (ADL) and the Philonise & Keeta Floyd Institute for Social Change. In addition, adidas is proud to partner with Robert Kraft’s Foundation to Combat Antisemitism (FCAS) to fight all forms of hate.

To create further impact adidas will show support for the Foundation to Combat Antisemitism by including blue square pins with selected products sold directly by adidas in North America. These blue square pins were established by FCAS through their #StandUpToJewishHate campaign launched earlier this year, as the universal symbol for standing in solidarity and unity in the fight against antisemitism and all hate.

Since terminating the YEEZY partnership in October, adidas has been exploring multiple scenarios for the potential use of the existing YEEZY inventory. The process involved seeking feedback and listening to a diverse group of employees, organizations, communities, and consumers for how to responsibly manage the existing product.

In Fall/Winter 2023, Y-3 (partnership between adidas and Yohji Yamamoto) returns to present the third chapter of its year long exploratory narrative – with the subversive label taking athletic iconography, silhouettes, and materials and recontextualising them through through the lens of Yohji Yamamoto’s renegade design vision.

Inspired by adidas’ inimitable sporting legacy, Chapter 3’s apparel collection sees Y-3 evolve the collegiate motifs of previous seasons, for an entirely new context. Drawing on vintage varsity style lettering, an array of graphics are applied to jackets, t-shirts, and hoodies, in kettle stitch embroidery, chenille patches, puff prints, and engineered knits. A curated offering of quilted pieces, with cutlines inspired by the adidas Originals Aloxe tracksuit, completes the apparel highlights with a selection of jackets, vests, skirts, and pants.  

The collection is then rounded out by a host of bold accessories including elevated totes, gym bags, backpacks, body bags, knit beanies, caps, and more.  

Having traversed Yohji Yamamoto’s homeland of Japan for the brand’s Spring/Summer 2023 campaigns, the seasonal story journeys to adidas’ mother country of Germany, to capture Berlin’s unique, energetic, and prolific creative community. Shot by local photographer, Lengua, and motion director Thyago Sainte, the stills, moving images, and short film spotlight an enigmatic cast of musical figures that call Berlin home in personally resonant locations.

On June 26, 2023, the Alexander Zverev Foundation and WorldChanger founder Robert Laner hosted an exclusive charity tennis tournament at the Bio and Wellness Resort Stanglwirt in Tyrol, Austria.

Based on the motto "helping by playing", 24 top-class athletes and celebrities came together to play tennis doubles for a good cause. Participants in this special event included Olympic champion and two-time ATP world champion Alexander Zverev, actress and presenter Palina Rojinski, influencer & entrepreneur Pamela Reif, soccer world referee Dr. Felix Brych, ski legend Maria Höfl-Riesch, actor Herbert Knaup, rapper Kool Savas, ski jumper Gregor Schlierenzauer, actor Hans Sigl, tennis legends Barbara Schett and Charly Steeb, soccer world champion Roman Weidenfeller, influencer Younes Zarou, and many more.

BOGNER took part in this event and equipped the participants with suitable sports and tennis wear. The collected proceeds of more than 100,000 euros will benefit the Alexander Zverev Foundation, which supports children and young people affected by diabetes. The Alexander Zverev Foundation is helping to raise awareness and acceptance of diabetes within the public discourse, as Alexander Zverev himself is affected by the disease. To wrap up this unforgettable experience, the tennis tournament then evolved into an exclusive Red Carpet evening event. The invited guests met for the award ceremony and a closing speech by Alexander Zverev and Robert Laner on the topic of "Diabetes, the right mindset on the way to the world's best and positive change" at the mountain chalet Hüttlingmoos, directly below the Wilder Kaiser. The grand finale of the day in the mountains was then the outdoor party, again in Hüttlingmoos, with live music from the Fast Boys and star DJ Topic.

OETI – a member of the internationally active TESTEX Group – has bought the German company ECS to expand its service portfolio in the field of personal protective equipment (PPE).

OETI has been offering testing services for textile work clothing since 1983 – for about 40 years. Since the introduction of CE labelling for personal protective equipment and the enactment of the PPE Directive by the European Union in 1993, OETI has not only been testing textile personal protective equipment, but now on also certifies it in conformity with EU standards. In 1995, OETI was certified in Brussels as a Notified Body (0534) for type-examinations and quality assurance monitoring of personal protective equipment end products. Testing and certification is carried out in accordance with the current PPE Regulation (EU) 2016/425.

Testing and Certification Body for Eye and Face Protection, based in Aalen, was founded 15 years ago and is a globally active institution for testing and certification of eye and face protection equipment. The company is one of the leading independent testing institutions for personal protection products in laser applications and for welding work.

ECS tests and evaluates occupational health and safety goggles with and without a filter action, passive and active switching protection filters and shields for welders, and laser protection filters, goggles, and shields. The company also tests the optical properties of sunglasses, sports glasses, ski goggles, swimming goggles and motorbike goggles.

With OETI’s takeover, the ECS location in Aalen is retained, and all employees will continue working at ECS. The new Managing Director of ECS GmbH as of 1 July 2023 is Dipl.-Ing. Rolf Diebolder.

‘We are present on the European market, on the American market and, via a representative office, on the Chinese market. With the aid of the new distribution channels through OETI and TESTEX, we want to steadily advance ECS’ expansion and be present on all five continents’, says Managing Director Rolf Diebolder, explaining his strategic plans for ECS. ‘I would like OETI and ECS to develop a joint strategy in order to be able to offer existing and new customers of both companies a complete package which, when combined, will give us a unique selling point in the marketplace’, says Diebolder.

Diebolder also sees further potential in the cooperation with regard to protective laser clothing. According to him, this is where the laser laboratory commissioned by ECS could be used to make textiles laser-safe. In the future, there will be more and more ‘hand-held’ devices, i.e. laser welding devices, for which gloves and protective jackets are needed.

Amanda Rajkumar [51], Executive Board member and Labor Director of adidas AG, responsible for Global Human Resources, People and Culture, has informed adidas AG’s Supervisory Board that she will not extend her Executive Board mandate beyond December 31, 2023. The Supervisory Board has accepted her decision and agreed on the termination of her appointment as an Executive Board member effective July 15, 2023.

With 28 years of human resources experience in global organizations, Amanda Rajkumar joined the adidas board as Head of Global Human Resources, People and Culture at the beginning of 2021. At adidas, she devised and implemented a People strategy aimed at efficiently harmonizing and unifying employee experience across the company and establishing adidas as a global values-led organization.

Michelle Robertson, SVP Workplaces & Global Functions at adidas, will assume responsibility for Global Human Resources, People and Culture on an interim basis, reporting to adidas CEO Bjørn Gulden.

ADVANSA and Asia Pacific Fibers (APF) join forces to launch REMOTION®, a premium fibre for sports and activewear, made from recycled ocean-bound plastic bottles with full end-to-end traceability from Prevented Ocean Plastic™. REMOTION® offers a solution for textiles that merges ocean protection with built-in biodegradability. The fibres break-down in marine environments to prevent microplastic pollution of the oceans, a problem which can be the consequence of fibre-shedding from apparel laundry waste-water.

Remotion® offers a solution with various sustainable features such as biodegradability and recyclability, with customized performance features such as anti-bacterial properties and moisture management built-in to the fibre. Moreover, the fibre is also offered in customer curated colours that guarantee very good colour fastness. Thus, this “all-in-one” fibre contributes to a sustainable and healthy environment with savings in water, energy, chemicals, and CO2. The fibre is available in a range of filament and staple options with two variants: REMOTION® Blue made from ocean-bound plastic bottles, REMOTION® Green made from domestic recycled plastic bottles.

REMOTION® Blue is a specially engineered polyester fibre made from ocean-bound plastic as a premium raw material with a social aspect. ADVANSA and APF are cooperating with Prevented Ocean Plastic™, a global recycling initiative that helps tens of thousands of people around the world to clean their coastlines, prevent ocean plastic pollution and earn additional income. Discarded plastic bottles are picked up by plastic collectors from coastal areas at risk of ocean plastic pollution and are taken to collection centres. The plastic bottles are then sorted out, cleaned and processed into raw material flakes which are used as a premium ingredient for REMOTION® Blue range of products.

ADVANSA and Asia Pacific Fibers are launching REMOTION® at the Performance Days in Munich from 3-5 October 2023.

Leaders assembled at the renowned forum for sustainability in fashion to mobilise action and usher in a transformative phase for the industry.

Hosted in the Copenhagen Concert Hall, on 27-28 June, Global Fashion Summit convened over 1000 revered representatives from brands, retailers, NGOs, policy, manufacturers, and innovators to transform ambition into action. The Summit was presented by Global Fashion Agenda (GFA), the non-profit organisation that is accelerating the transition to a net positive fashion industry, under the patronage of HRH The Crown Princess of Denmark.

This year’s theme ‘Ambition to Action’, galvanised participants to transform ambitions into concrete actions that can drive the industry towards more sustainable practices, both socially and environmentally. Under this premise, the event presented content experiences focused on tangible and evidence-based impact, with over half of the programme dedicated to educational and action-oriented business case studies.

This edition included more speakers and content than ever before, with the dynamic and action-orientated sessions spanning across four different stages. The Summit also facilitated more than 10 strategic roundtable meetings that brought together executives and policy makers for productive dialogues on how to address pressing sustainability issues and act accordingly. The content integrated the five priorities of the Fashion CEO Agenda, alongside critical challenges and tangible opportunities relating to some of the key forces that are shaping the fashion industry today: data, policy and storytelling.

Attendees heard from 137 speakers including HRH The Crown Princess of Denmark; Antoine Arnault, Image & Environment, LVMH Group; Jonathan Anderson, Creative Director & Founder, JW Anderson and Creative Director, Loewe; Virginijus Sinkevičius,  Commissioner for the Environment, Oceans and Fisheries, European Commission; Henriette Hallberg Thygesen, Chief Delivery Officer, Maersk; Aude Vergne, Chief Sustainability Officer, Chloé; Nicolaj Reffstrup, Founder, GANNI; Fanny Moizant, Co-Founder & President, Vestiaire Collective; Noel Kinder, Chief Sustainability Officer, Nike; Óscar García Maceiras, CEO, Inditex; Dr. Lewis Akenji, Managing Director, Hot or Cool Institute; Rachel Arthur, Advocacy Lead, Sustainable Fashion, United Nations Environment Programme; and many more.

Innovation Forum connected fashion companies with sustainable solution providers
This year’s Summit also presented an Innovation Forum, enabling small and large companies to meet with 26 sustainable solution providers – equipping them with the concrete tools to quickly turn words into meaningful actions. More than 350 facilitated business meetings between fashion companies and sustainable solution providers took place during the Summit.

Global Fashion Summit: Boston Edition will take place on 27 September 2023, which will mark the second time the Summit has been hosted outside of Copenhagen in its 14-year history.