From the Sector

The Management Board of Lenzing AG, a leading manufacturer of specialty fibers made from the renewable raw material wood, has resolved to propose to the Annual General Meeting a dividend of EUR 1.00 for the 2019 financial year. This dividend proposal reflects the large investments in the growth projects in Thailand and Brazil.

The total dividend payout to shareholders will amount to about EUR 26.6 mn, subject to the acceptance of the proposal by the Supervisory Board at its meeting scheduled for March 11, 2020 for the purpose of approving the consolidated financial statements as well as the approval granted by Lenzing AG shareholders at the Annual General Meeting on April 16, 2020.

This year’s Annual General Meeting of Lenzing AG resolved today, Thursday, April 17, 2019, to distribute a dividend of EUR 3.00 per share as well as a special dividend totaling EUR 2.00 per share. On balance, the dividend will amount to EUR 5.00 per no-par value share for the 2018 financial year (compared to EUR 5.00 per share in the previous year). The dividend payment is scheduled to take place on April 25, 2019, whereas ex-dividend day is on April 23, 2019.

The Annual General Meeting also adopted a resolution discharging the members of the Management Board and the Supervisory Board for the 2018 financial year, and also resolved upon the remuneration to be paid to the Supervisory Board members for the 2018 and 2019 financial years. KPMG Austria GmbH Wirtschaftsprüfungs- u. Steuerberatungsgesellschaft was appointed to serve as the auditor of the annual and consolidated financial statements for the 2019 financial year.

Effective at the end of this Annual General Meeting, Hanno Bästlein, the previous Chairman of the Supervisory Board, as well as Christoph Kollatz have retired from the Supervisory Board at their own request. “We would like to thank Hanno Bästlein and Christoph Kollatz for their dedicated work on the Supervisory Board of Lenzing AG. Thanks to their expertise, they made a major contribution to important strategic decisions in the company. During his four years as Chairman of the Supervisory Board, Hanno Bästlein decisively supported the strategy of the Lenzing Group and thus contributed to the enhanced resilience of the company based on the expansion with specialty fibers”, says Stefan Doboczky, Chief Executive Officer of Lenzing AG.

• Challenging market environment due to low prices for standard viscose, less favorable exchange rates and higher raw material and energy prices
• Very positive development of specialty fiber business with revenue share exceeding 45 percent
• Dividend proposal of EUR 3.00/share plus a special dividend of EUR 2.00/share
• Results for 2019 expected at about the level of 2018 despite a significantly more demanding market environment

The Lenzing Group’s business developed well in the 2018 financial year. A significantly more challenging market environment led to a decline in revenue as well as earnings compared with the record results of the previous year. This was primarily caused by lower selling prices for standard viscose, exchange rate effects as well as higher raw material and energy costs.

Group revenue declined by 3.7 percent compared with the previous year to EUR 2.18 bn. The predicted challenging market environment for standard viscose, plus less favorable exchange rates and a slight decline in sales volume were the key contributing factors. EBITDA (earnings before interest, tax, depreciation and amortization) was down by 24 percent to EUR 382 million due to price increases for key raw materials and higher energy and personnel costs. The EBITDA margin dropped from 22.2 percent in the 2017 financial year to 17.6 percent in the reporting year. EBIT (earnings before interest and tax) fell by 36 percent to EUR 237.6 mn, leading to a lower EBIT margin of 10.9 percent (2017: 16.4 percent). Net profit for the year after one-off effects dropped by 47.4 percent from EUR 281.7 mn in the previous year to EUR 148.2 mn. Earnings per share equaled EUR 5.61 (2017: EUR 10.47).

The Management Board and the Supervisory Board will propose a stable dividend of EUR 3.00 per share plus a special dividend of EUR 2.00 per share at the upcoming Annual General Meeting. In total, the paid dividend will amount to EUR 5.00 per share, corresponding to a dividend payment to shareholders of roughly EUR 133 mn.

• Revenue increased by 5.9 percent to EUR 2.26 bn
• EBITDA up 17.3 percent to EUR 502.5 mn
• Dividend proposal of EUR 3.00/share plus a special dividend of EUR 2.00/share
• New brand strategy to generate a strong message to consumers
• Limited visibility for coming quarters

In 2017, the Lenzing Group reports its best financial performance ever with record revenue and earnings due to a better product mix and higher selling prices in combination with a generally favorable market environment.

Group revenue grew by 5.9 percent in the 2017 financial year to EUR 2.26 bn (2016: EUR 2.13 bn). Group earnings before interest, tax, depreciation and amortization (EBITDA) improved by 17.3 percent to EUR 502.5 mn (2016: EUR 428.3 mn). The corresponding EBITDA margin rose to 22.2 percent (2016: 20.1 percent). Earnings before interest and tax (EBIT) increased by 25.2 percent to EUR 371 mn, resulting in a higher EBIT margin of 16.4 percent (2016: 13.9 percent). The net profit for the year totaled EUR 281.7 mn, a rise of 23 percent from the prior-year figure of EUR 229.1 mn. Earnings per share in the 2017 financial year amounted to EUR 10.47 (2016: EUR 8.48).

The Management Board and the Supervisory Board will propose at the upcoming Annual General Meeting a stable dividend of EUR 3.00 per share plus an increased special dividend of EUR 2.00 per share (2016: EUR 1.20 per share). In total, the dividend will amount to EUR 5.00 per share, corresponding to a dividend payment to shareholders of EUR 132.75 mn.

“The Lenzing Group looks back at a very successful year 2017. We continued to implement our corporate strategy sCore TEN with great discipline and focus on our investment projects and successfully captured value in a positive market environment. Our commitment to innovation and customer centricity was underpinned by the opening of an application innovation center in Hong Kong and the creation of the new sales and marketing office in Turkey. In line with sCore TEN we decided to revamp our brand architecture and image to sharpen Lenzing’s corporate and product profiles for customers and consumers. We want to put a stronger emphasis on our ambition to make the textile and nonwoven market more sustainable”, says Stefan Doboczky, Chief Executive Officer of the Lenzing Group.

“We are very positive about our chosen strategy as it will help us to be more resilient as we expect more headwinds in the upcoming quarters”, he adds.