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LENZING™ fibers are fully biodegradable in water, soil and compost (c) Lenzing
30.08.2019

LENZING™ fibers are fully biodegradable in water, soil and compost

  • Organic Waste Systems and TÜV confirm fiber biodegradability also in fresh water
  • All white LENZING™ Viscose, Modal and Lyocell fibers are now certified for all environments
  • Global legislators aim at limiting plastic waste persisting in the environment for centuries
  • EU Single-Use Plastics Directive partly regulates usage of plastic products
  • Biodegradable materials such as wood-based fibers are the best alternative to single-use plastics

The Lenzing Group received confirmation of the full biodegradability of its fibers in fresh water by the independent research laboratory Organic Waste Systems (OWS). The new and existing international certifications conducted by OWS and issued by TÜV Austria verify that LENZING™ Viscose fibers, LENZING™ Modal fibers and LENZING™ Lyocell fibers are biodegradable in all natural and industrial environments: in the soil, compost as well as in fresh and in marine water.

  • Organic Waste Systems and TÜV confirm fiber biodegradability also in fresh water
  • All white LENZING™ Viscose, Modal and Lyocell fibers are now certified for all environments
  • Global legislators aim at limiting plastic waste persisting in the environment for centuries
  • EU Single-Use Plastics Directive partly regulates usage of plastic products
  • Biodegradable materials such as wood-based fibers are the best alternative to single-use plastics

The Lenzing Group received confirmation of the full biodegradability of its fibers in fresh water by the independent research laboratory Organic Waste Systems (OWS). The new and existing international certifications conducted by OWS and issued by TÜV Austria verify that LENZING™ Viscose fibers, LENZING™ Modal fibers and LENZING™ Lyocell fibers are biodegradable in all natural and industrial environments: in the soil, compost as well as in fresh and in marine water.

The biodegradability of cellulosic products and the synthetic fiber polyester was tested in fresh water at OWS according to valid international standards, e.g. ISO 14851. At the end of the trial period, LENZING™ wood-based cellulosic fibers, cotton and paper pulp were shown to be fully biodegradable in fresh water in contrast to synthetic polyester fibers. The fact that synthetic materials are not biodegradable leads to major problems in wastewater treatment plants and potentially marine litter. In turn, this not only harms fish and birds living in and close to the oceans but also all marine organisms and us humans.

“The Lenzing Group operates a truly circular business model based on the renewable raw material wood to produce biodegradable fibers returning to nature after use. This complete cycle comprises the starting point of the core value of sustainability embedded in our company strategy sCore TEN and is the ‘raison d’etre’ of our company”, says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “In living up to this positioning, we not only enhance the business of our suppliers, customers and partners along the value chain but also improve the state of the entire textile and nonwovens industries.”

Both the textile and nonwovens industries face huge challenges with respect to littering. If current trends continue, the oceans could contain more plastic than fish by 2050. Therefore, legislative bodies worldwide can no longer ignore the issue and have moved towards plastics legislation aimed at limiting the vast amount of waste. In response, European lawmakers issued the Single-Use Plastics Directive currently being transposed into national legislation in the EU member states.

Conventional wet wipes and hygiene products mostly contain plastic and were thus identified as one of the product categories to be singled out. Less polluting alternatives are generally encouraged by NGOs and legislators, e.g. products made of biodegradable wood-based cellulosic fibers. Plastic waste including microplastic can persist in the environment for centuries. In contrast, biodegradable materials are the best alternative to single-use plastics because they fully convert back to nature by definition and thus do not require recycling.

Source:

Corporate Communications & Investor Relations
Lenzing Aktiengesellschaft

12.07.2019

LENZING™ fibers help to improve the quality of life for butterfly children

  • Undergarments, pajamas and bed linens tested for months
  • Moisture management of fibers reduce sweating and hence itching
  • Soft and smooth fibers lead to fewer skin injuries

The Lenzing Group has been providing both financial support and textiles made of its fibers to DEBRA Austria, the patient organization for “butterfly children”. The TENCEL™ branded lyocell and modal fibers which are being used are particularly soft and smooth and therefore very skin-friendly. In turn, they help to improve the quality of life for the “butterfly children”.

  • Undergarments, pajamas and bed linens tested for months
  • Moisture management of fibers reduce sweating and hence itching
  • Soft and smooth fibers lead to fewer skin injuries

The Lenzing Group has been providing both financial support and textiles made of its fibers to DEBRA Austria, the patient organization for “butterfly children”. The TENCEL™ branded lyocell and modal fibers which are being used are particularly soft and smooth and therefore very skin-friendly. In turn, they help to improve the quality of life for the “butterfly children”.

In recent months, several patients with the skin disorder Epidermolysis Bullosa (EB) have tested leggings, undergarments, pajamas, leggings, quilts and bed linens made of TENCEL™ fibers and have found them to be comfortable and skin-friendly. The skin of EB patients is fragile like the wings of a butterfly. For this reason, coarse fibers, scratching seams, buttons, zippers and fibers which hardly or do not at all absorb sweat frequently lead to additional blisters and sores and increased itching. In contrast, TENCEL™ fibers feature particularly good moisture management and thus support the nature temperature-regulating properties of the body.

 

More information:
Lenzing Gruppe Lenzing AG
Source:

Lenzing AG

(c) Lenzing AG
17.05.2019

Lenzing traces its fibers with blockchain technology

  • Lenzing enters the age of digital traceability
  • Transparency ensured from wood to the finished garment
  • Partnership with Hong Kong based TextileGenesis™

The Lenzing Group, world market leader in specialty fibers made from the renewable material wood, is strengthening its leading position in sustainability in the textile industry. Lenzing will use blockchain technology to support its TENCEL™ branded fiber business, ensuring complete transparency and traceability for brands and consumers of its fibers in the finished garment. After evaluating various initiatives Lenzing decided to join the platform of the Hong Kong based technology company TextileGenesis™ to accomplish this ambition.

  • Lenzing enters the age of digital traceability
  • Transparency ensured from wood to the finished garment
  • Partnership with Hong Kong based TextileGenesis™

The Lenzing Group, world market leader in specialty fibers made from the renewable material wood, is strengthening its leading position in sustainability in the textile industry. Lenzing will use blockchain technology to support its TENCEL™ branded fiber business, ensuring complete transparency and traceability for brands and consumers of its fibers in the finished garment. After evaluating various initiatives Lenzing decided to join the platform of the Hong Kong based technology company TextileGenesis™ to accomplish this ambition.

Consumers increasingly want to understand the ingredients and suppliers of the products they buy, requesting a new level of transparency and traceability. The supply chain transparency from wood to garment and home textiles will enable all customers and partners to identify TENCEL™ fibers and the respective wood source in each production and distribution step. Thanks to a QR code on the final garment, consumers will be able to detect the origin of the clothes they intend to buy.

“With LENZING™ ECOVERO™ branded fibers Lenzing was the frontrunner in physical traceability and is now entering the age of digital traceability. This milestone in transparency is a further strong commitment to sustainability”, says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “Together with TextileGenesis™, we aim to create an unmatched level of transparency for brands and consumers. With this step Lenzing will further help to green up the textile industry.”

Lenzing will carry out several pilot tests over the next few months involving partners along the entire value chain. Lenzing expects the platform to be fully operational as of 2020.

Source:

Lenzing AG

(c) DyStar
02.05.2019

DyStar® intensifies interaction with brands at PERFORMANCE DAYS in Munich

DyStar®, the leading dyestuff and solution provider, for the first time will use the PERFORMANCE DAYS in Munich (May 8th & 9th) as a platform to showcase its innovative new products and processes, partly developed in collaboration with selected partners.
Located at Hall C6, Booth P08, show visitors will have a chance to participate in several workshops that allow direct interaction with the specialists from DyStar Group on environmental and technical solutions to improve efficiency and significantly reduce waste of valuable resources.

The workshop on the Cadira® Polyester module, for example, will highlight that reductions of 50% water usage and more than 40% of energy consumption are possible with optimized processing.

As a market leading supplier of high-quality water-based inks for digital printing, DyStar will present their renowned Jettex® reactive, acid, disperse and vat ink ranges that enable digital printers to achieve digital prints with high fastness levels, outstanding depth and sustainable processing results.

DyStar®, the leading dyestuff and solution provider, for the first time will use the PERFORMANCE DAYS in Munich (May 8th & 9th) as a platform to showcase its innovative new products and processes, partly developed in collaboration with selected partners.
Located at Hall C6, Booth P08, show visitors will have a chance to participate in several workshops that allow direct interaction with the specialists from DyStar Group on environmental and technical solutions to improve efficiency and significantly reduce waste of valuable resources.

The workshop on the Cadira® Polyester module, for example, will highlight that reductions of 50% water usage and more than 40% of energy consumption are possible with optimized processing.

As a market leading supplier of high-quality water-based inks for digital printing, DyStar will present their renowned Jettex® reactive, acid, disperse and vat ink ranges that enable digital printers to achieve digital prints with high fastness levels, outstanding depth and sustainable processing results.

Being fully committed to sustainability, DyStar will leverage on the PERFORMANCE DAYS fair to reach out to more brands and retailers with similar goals for potential collaboration in the areas of color, color inspiration, communication and realization tools.

Two of the five workshops conducted per day will also highlight examples of successful collaborations that provided innovation and efficiency to the textile industry.

Experts from LENZING™ will present LENZING™ Lyocell, a sustainable cellulosic fiber that provides innovative solutions for workwear.

Additionally, Datacolor® will present the new ColorReader Pro, a new Ultra-Portable Color Measurement Tool for the textile and apparel industry.

DyStar cordially invites you to Performance Days Functional Fabrics Fair, where the latest trends in fabric development for the functional textile industry will be showcased.

Lenzing AG (c) Lenzing AG
Lenzing AG
03.12.2018

Lenzing applies for 25 patents for LENZING™ Web Technology

  • Twenty-five patent applications claiming product, process and application inventions published
  • New technology platform starts with botanic wood pulp and creates a nonwoven fabric made of 100 percent continuous lyocell filament

Lenzing – The Lenzing Group filed a first wave of patent applications for its new LENZING™ Web Technology with the World Intellectual Property Organization. The 25 applications focus on product, process and application inventions and are part of Lenzing’s intellectual property protection strategy.

The LENZING™ Web Technology is a nonwoven web formation process that starts with botanic wood pulp and produces a nonwoven fabric made of 100 percent continuous lyocell filament. The technology offers a unique self-bonding mechanism where filaments bond into a fabric during the laydown process. This self-bonding mechanism allows for a much wider variety of basis weight, surface textures, drapeability and dimensional stability than other nonwoven technologies.

  • Twenty-five patent applications claiming product, process and application inventions published
  • New technology platform starts with botanic wood pulp and creates a nonwoven fabric made of 100 percent continuous lyocell filament

Lenzing – The Lenzing Group filed a first wave of patent applications for its new LENZING™ Web Technology with the World Intellectual Property Organization. The 25 applications focus on product, process and application inventions and are part of Lenzing’s intellectual property protection strategy.

The LENZING™ Web Technology is a nonwoven web formation process that starts with botanic wood pulp and produces a nonwoven fabric made of 100 percent continuous lyocell filament. The technology offers a unique self-bonding mechanism where filaments bond into a fabric during the laydown process. This self-bonding mechanism allows for a much wider variety of basis weight, surface textures, drapeability and dimensional stability than other nonwoven technologies.

“Lenzing’s corporate strategy sCore TEN is very focused on driving growth via sustainability focused innovation. The new LENZING™ Web Technology is one of the most exciting Research & Development projects. The 25 patent applications related to this new technology underline our commitment to the nonwoven industry. We will continue to support our partners in their business and help consumers with sustainable innovative solutions for their everyday needs”, says Stefan Doboczky, Chief Executive Officer of the Lenzing Group.

More information:
Lenzing AG
Source:

Lenzing AG

Lenzing AG and Partners Win Austrian State Prize 2018 for Smart Packaging (c) BMDW/Silveri
(from left to right) Head of the Department DDr. Reinhard Mang, Tanja Dietrich-Huebner (Rewe), Susanne Meininger (Verpackungszentrum), Marina Crnoja-Cosic (Lenzing AG), Malte Stackebrandt (Coop), General Secretary Dipl-Ing. Esterl.
23.11.2018

Lenzing AG and Partners Win Austrian State Prize 2018 for Smart Packaging

  • The Packnatur® reusable cellulose bag wins State Prize in the B2C category
  • Bags are made from wood-based fibers of Lenzing AG, which are biodegradeable
  • Bags were developed together with VPZ Verpackungszentrum GmbH and are utilized by Coop and REWE for fruits and vegetables


Lenzing/ Vienna – Lenzing AG was granted the Austrian State Prize 2018 for Smart Packaging this year together with its partners. The Federal Ministry of Digital and Economic Affairs and the Federal Ministry of Sustainability and Tourism bestowed the Austrian State Prize this week in the B2C category on the Packnatur® reusable wood-based bag. This reusable bag is made with fibers produced by Lenzing AG and was developed by Lenzing and its partner VPZ Verpackungszentrum GmbH. The bags are utilized in the supermarkets of the Swiss food retailer Coop and the Austrian firm REWE International AG.

  • The Packnatur® reusable cellulose bag wins State Prize in the B2C category
  • Bags are made from wood-based fibers of Lenzing AG, which are biodegradeable
  • Bags were developed together with VPZ Verpackungszentrum GmbH and are utilized by Coop and REWE for fruits and vegetables


Lenzing/ Vienna – Lenzing AG was granted the Austrian State Prize 2018 for Smart Packaging this year together with its partners. The Federal Ministry of Digital and Economic Affairs and the Federal Ministry of Sustainability and Tourism bestowed the Austrian State Prize this week in the B2C category on the Packnatur® reusable wood-based bag. This reusable bag is made with fibers produced by Lenzing AG and was developed by Lenzing and its partner VPZ Verpackungszentrum GmbH. The bags are utilized in the supermarkets of the Swiss food retailer Coop and the Austrian firm REWE International AG.

The Packnatur® reusable cellulose bag is particularly suited for the packaging of fruit and vegetables and serves as an ideal replacement for plastic bags. The jury provided the following reasons to justify the selection of the winner: The Packnatur® reusable cellulose bag comprises a long-lasting, reusable packaging solution made of a renewable raw material but not at the expense of food. It has very pleasant haptics and supports longer shelf life of food.

LENZING™ fibers are made from the natural and renewable raw material wood. For this reason, they are biodegradable. Moreover, they pollute neither rivers nor seas with microparticles washed out in the process of washing.

The Austrian State Prize for Smart Packaging was granted on the occasion of the 3rd Austrian Packaging Day. This year for the 58th time, the objective of this award is to highlight modern packaging solutions and excellent projects as best practice examples and thus put the national packaging industry in the international limelight.

(c) Lenzing AG
07.11.2018

Lenzing Group reports solid results in a demanding market environment

Decline in revenue due to lower prices for standard viscose, less favorable currencies and lower production volume

  • Pressure on prices for key raw materials remains high
  • Positive impact due to focus on specialty fibers and further optimization of the product mix
  • Expansion project in Mobile temporarily mothballed
  • Acquisition of the remaining 30 percent of Lenzing (Nanjing) Fibers Co. Ltd.

The Lenzing Group recorded a solid business development in the first three quarters of 2018. The decline in revenue and earnings compared with the same period of the previous year was essentially based on a mix of lower prices for standard viscose, more unfavorable exchange rates and price increases for key raw materials. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment.

Decline in revenue due to lower prices for standard viscose, less favorable currencies and lower production volume

  • Pressure on prices for key raw materials remains high
  • Positive impact due to focus on specialty fibers and further optimization of the product mix
  • Expansion project in Mobile temporarily mothballed
  • Acquisition of the remaining 30 percent of Lenzing (Nanjing) Fibers Co. Ltd.

The Lenzing Group recorded a solid business development in the first three quarters of 2018. The decline in revenue and earnings compared with the same period of the previous year was essentially based on a mix of lower prices for standard viscose, more unfavorable exchange rates and price increases for key raw materials. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment.

Revenue decreased by 5.2 percent to EUR 1,636.2 mn over the comparative period of the previous year. Apart from the high starting base, this was primarily attributable to the expected challenging market environment for standard viscose, less favorable exchange rates and lower production volume. EBITDA (earnings before interest, tax, depreciation and amortization) recorded a decline by 26.8 percent to EUR 290.6 mn due to price increases for key raw materials and higher energy and dissolving wood pulp prices. The EBITDA margin dropped from 23 percent in the first three quarters of the previous year to 17.8 percent. EBIT (earnings before interest and tax) fell by 36.2 percent to EUR 190.3 mn, leading to a lower EBIT margin of 11.6 percent (01-09/2017: 17.3 percent). Net profit for the period dropped by 39 percent from EUR 219.3 mn in the previous year to EUR 133.8 mn. Earnings per share equaled EUR 5.06 (01-09/2017: EUR 8.12).

“The Lenzing Group is currently operating in a challenging environment. Against this background, we are satisfied with the solid business development and the corporate strategy sCore TEN has a positive impact. The new production line in Heiligenkreuz started up successfully and customers’ feedback has been positive,” says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “While many viscose producers are faced with a very tense profit situation, we are well positioned due to our specialty strategy and still expect a satisfactory full year”, Doboczky adds.

Key strategic measures were implemented during the first three quarters of 2018 in line with the sCore TEN strategy. The start-up of new capacities for lyocell fibers in Heiligenkreuz, the production start of LENZING™ ECOVERO™ fibers at the Nanjing site and the investment in another pilot line for TENCEL™ Luxe filaments are important steps to accomplish the goal of increasing the share of specialty fibers in total revenue.

Project in Mobile temporarily mothballed
Due to the decision to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA), in view of the buoyant US labor market and trade tensions between the major trading blocks, the implementation of the expansion plan for specialty staple fibers will be slowed down. The Lenzing Group will put all its effort to readjust the execution of its growth plan to meet strong market demand for its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand).

Advancing forward solutions
Regarding the capacity expansion for specialty products such as TENCEL™ Luxe filaments and LENZING™ ECOVERO™ viscose fibers, Lenzing is still on track. After the introduction of TENCEL™ Luxe branded lyocell filament yarns in the previous year, Lenzing continues to drive innovations in the area of the value chain. In September, the company also announced the successful development of the LENZING™ Web Technology, a new technology platform focusing on sustainable nonwoven products, which will lead to new market opportunities for the industry. Following several years of research and development work and investments totaling EUR 26 mn, the pilot plant at the headquarters in Lenzing has been successfully put into operation.

Largest dissolving wood pulp line worldwide
At the end of June, the Lenzing Group and Duratex, the largest producer of industrialized wood panels of the southern hemisphere, announced that they had agreed on the terms and conditions to form a joint venture to investigate building the largest single line dissolving wood pulp plant in the state of Minas Gerais (Brazil). This decision supports the self-supply with dissolving wood pulp and the growth in specialty fibers. The joint venture is investigating the construction of a 450,000 t dissolving wood pulp plant, which is expected to become the largest and most competitive single line dissolving wood pulp plant in the world. The final investment decisionto build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Acquisition of Chinese operation
At the beginning of November the takeover by the Lenzing Group of the remaining 30 percent of its Chinese subsidiary Lenzing (Nanjing) Fibers Co. Ltd. (LNF) from its state-owned joint venture partner NCFC was completed. After closing of the transaction, the Lenzing Group will hold 100 percent of LNF. The acquisition will have a negative impact on net profit of approx. EUR 21 mn for the fiscal year 2018. The purchase of the shares supports Lenzing’s strategic growth as a producer of specialty fibers from the renewable raw material wood in China and worldwide. It paves the way to setting up further production lines for specialty fibers. Lenzing wants to convert LNF into a specialty fibers hub over time.

Expansion of capacities
CAPEX (investments in intangible assets and property, plant and equipment) rose by 35.5 percent year-on-year to EUR 174.1 mn in the first three quarters of 2018. This is primarily attributable to capacity expansions in Heiligenkreuz and the expansion of the existing dissolving wood pulp plant in Lenzing as well as the investments made so far in Mobile.

Outlook
Demand development on the global fiber market remains positive. Lenzing expects wood-based cellulosic fibers to continue to grow at a higher rate than the overall fiber market. In a challenging market environment the Lenzing Group expects solid results for 2018, albeit lower than in the outstanding last two years.

For 2019, Lenzing expects standard viscose markets to remain under pressure because of an ongoing oversupply and very high raw material prices. Lenzing’s specialty fiber business is expected to continue the very positive development.

The above-mentioned development reassures the Lenzing Group in its chosen corporate strategy sCore TEN. Lenzing is very well positioned in this market environment and will continue its consistent focus on growth with specialty fibers.

More information:
Lenzing Group
Source:

Lenzing AG

(c) Lenzing AG
26.09.2018

Lenzing temporarily mothballs lyocell expansion project in Mobile, Alabama

  • Trade tensions among major economies elevate project risk
  • Buoyant US labor market increases threat of substantial project cost overrun
  • Lenzing will reassess this decision on an ongoing basis
  • Intensified focus on lyocell expansion project in Prachinburi (Thailand)

Lenzing’s Managing Board concluded today to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA). The rising likelihood of increasing trade tariffs, paired with the potential surge in construction costs due to the buoyant US labor market, have increased the risk profile of this project. Consequently, Lenzing will put all its effort to readjust the execution of its growth plan to meet strong market demand of its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand). Lenzing will reassess this decision on a regular basis but no substantial additional lyocell volumes, over and above the successful 25.000 tons expansion in Heiligenkreuz (Austria), will be added to the market in 2019 and 2020 by Lenzing.

  • Trade tensions among major economies elevate project risk
  • Buoyant US labor market increases threat of substantial project cost overrun
  • Lenzing will reassess this decision on an ongoing basis
  • Intensified focus on lyocell expansion project in Prachinburi (Thailand)

Lenzing’s Managing Board concluded today to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA). The rising likelihood of increasing trade tariffs, paired with the potential surge in construction costs due to the buoyant US labor market, have increased the risk profile of this project. Consequently, Lenzing will put all its effort to readjust the execution of its growth plan to meet strong market demand of its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand). Lenzing will reassess this decision on a regular basis but no substantial additional lyocell volumes, over and above the successful 25.000 tons expansion in Heiligenkreuz (Austria), will be added to the market in 2019 and 2020 by Lenzing.

Lenzing continues to be fully committed to implement its sCore TEN strategy and remains on track for the specialty expansions such as TENCEL™ Luxe filaments and LENZING™ ECOVERO™ viscose fibers, however this decision will slow down the implementation of the lyocell specialty staple fiber growth.

More information:
Lenzing Lenzing Gruppe
Source:

Lenzing AG

@Lenzing
Leo Neumayr
08.08.2018

Lenzing Group reports solid results in a demanding market environment

  • Decline in revenue due to volatile standard viscose prices and currencies
  • Prices for key raw materials still high
  • New production line in Heiligenkreuz in start-up phase
  • Backward integration into dissolving wood pulp to be strengthened via joint venture in Brazil

Lenzing – The Lenzing Group generated solid results in a challenging market environment in the first half of 2018. The decline in revenue and earnings compared with the first half of the previous year, which was the best half-year in the company’s history, was based on a mix of volatile prices for standard viscose and price increases for key raw materials, coupled with currency effects. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment and is increasingly bearing fruit. The corporate strategy sCore TEN is being implemented with great discipline in order to expand the company’s offering of specialty fibers and even more extensively support customers and business partners.

  • Decline in revenue due to volatile standard viscose prices and currencies
  • Prices for key raw materials still high
  • New production line in Heiligenkreuz in start-up phase
  • Backward integration into dissolving wood pulp to be strengthened via joint venture in Brazil

Lenzing – The Lenzing Group generated solid results in a challenging market environment in the first half of 2018. The decline in revenue and earnings compared with the first half of the previous year, which was the best half-year in the company’s history, was based on a mix of volatile prices for standard viscose and price increases for key raw materials, coupled with currency effects. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment and is increasingly bearing fruit. The corporate strategy sCore TEN is being implemented with great discipline in order to expand the company’s offering of specialty fibers and even more extensively support customers and business partners.

Revenue declined by 6.4 percent compared with the first half of the previous year to EUR 1,075.4 mn. This decrease is primarily attributable to less favorable currency exchange rates. EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 28.1 percent to EUR 194.8 mn, especially due to price increases for key raw materials and higher energy prices. The EBITDA margin fell from 23.6 percent in the first half of 2017 to 18.1 percent in the first half of 2018. EBIT (earnings before interest and tax) declined by 37 percent to EUR 128.7 mn, leading to a lower EBIT margin of 12 percent (H1 2017: 17.8 percent). The net profit for the period dropped by 39.3 percent from EUR 150.3 mn in the previous year to EUR 91.3 mn. Earnings per share equaled EUR 3.44 (H1 2017: EUR 5.55).

“So far, the financial year 2018 proved to be as challenging as expected, and market headwinds were clearly noticeable. In this market environment, we are satisfied with the solid results we report. We are proud that with our corporate strategy sCore TEN and the focus on growth with specialty fibers we show big steps in the right direction. The recently announced joint venture with Duratex is another important step in executing this corporate strategy,” says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “We will continue to implement our strategy with great discipline and are convinced that this will steadily improve the long-term profitability of Lenzing,” Doboczky adds.

Largest dissolving wood pulp line worldwide

In June, the Lenzing Group and Duratex, the largest producer of industrialized wood panels of the southern hemisphere, announced that they had agreed on the terms and conditions to form a joint venture to investigate building the largest dissolving wood pulp plant (single line concept) in the state of Minas Gerais, (Brazil). This decision supports the self-supply with dissolving wood pulp and the growth in specialty fibers, defined in Lenzing’s sCore TEN strategy. The joint venture will investigate the construction of a 450,000 t dissolving wood pulp plant, which is expected to become the largest and most competitive single line dissolving wood pulp plant in the world. The final investment decision to build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Even stronger focus on sustainable products

As a pioneer in sustainable fiber solutions, the Lenzing Group is committed to higher standards in the textile and nonwoven sectors. More than EUR 100 mn will be invested in sustainable manufacturing technologies and production facilities by 2022 in order to realize this vision. In line with the Group’s specialty strategy, another two milestones were set in the first half of 2018: Lenzing announced an investment of up to EUR 30 mn in another pilot line for the production of TENCEL™ Luxe filaments at the Lenzing site. In addition, the company also introduced the environmentally friendly process for the production of LENZING™ ECOVERO™ branded viscose fibers at its Chinese site. Both decisions contribute to better meeting the strong demand for environmentally compatible products.

Expansion of capacities

CAPEX (investments in intangible assets and property, plant and equipment) rose by 60.8 percent year-on-year to EUR 117.2 mn in the first half of 2018. This is primarily attributable to the capacity expansions in Heiligenkreuz (Austria) and Mobile, Alabama (USA) and the expansion of the existing dissolving wood pulp plant in Lenzing. The company is pressing ahead with these projects as well as with planning work on the construction of the next state-of-the-art lyocell production facility in Prachinburi (Thailand).

New brand identity

With the new positioning of its master brand and its product brands, the Lenzing Group started a new phase of branding and brand communication in the first half of 2018. Lenzing decided to carry out a new brand strategy in order to sharpen its company and product profile as a sustainable innovation leader for customers and partners along the value chain as well as for consumers. The most important pillar of this new brand strategy is a brand architecture with a focus on fewer brands and a strong message to consumers. With the TENCEL™ brand as an umbrella brand for all specialty products in the textile segment and the VEOCEL™ brand as the umbrella brand for all specialty fibers in the nonwoven segment as well as the new master brand, which was presented in March, Lenzing showcases its strengths in a targeted manner.

Outlook

The International Monetary Fund expects a further acceleration in global economic growth to 3.9 percent for 2018. However, growing protectionist tendencies in the political arena represent a source of uncertainty. Export-oriented companies in the Eurozone are faced with additional challenges from the currency environment.

Developments on the fiber markets should remain positive, but with continuing volatility. The rising demand for cotton should support prices despite the increase in production. Polyester fiber prices have stabilized after the increase in previous years.

The wood-based cellulosic fiber segment, which is relevant for Lenzing, should see further strong demand. After years of moderate capacity expansion in the viscose sector, significant additional volumes will enter the market in 2018 and 2019. As a result, standard viscose prices will remain under pressure. The Lenzing Group is very well positioned in this market environment with its corporate strategy sCore TEN and will continue its consistent focus on growth with specialty fibers.

The Lenzing Group still sees challenging market conditions for the second half of 2018. In addition to the price pressure on standard viscose, the prices of some key raw materials such as caustic soda are still at a very high level and exchange rates continue to be volatile. Our specialty fibers are expected to continue their very positive development. In this context, the Lenzing Group is satisfied with the earnings development to date, but underlines its estimate that the results for the year 2018 will be lower than the outstanding results in the last two years.

More information:
Lenzing Gruppe Sustainability
Source:

Lenzing Aktiengesellschaft