From the Sector

• Revenue up 9.4 percent to EUR 1,726.6 mn
• EBITDA improvement of 23.9 percent to EUR 397.1 mn
• Retail bond of EUR 120 mn redeemed – Lenzing with net liquidity as at end of September
• State-of-the-art application innovation center opened in Hong Kong

Lenzing – The Lenzing Group generated a substantial increase in revenue and earnings in the first nine months of the 2017 financial year compared to the prior-year period. The company is continuing the implementation of its Group strategy sCore TEN in order to further expand the offering of specialty fibers and be even closer to its customers and business partners.

Consolidated revenue climbed 9.4 percent year-on-year to EUR 1,726.6 mn. This increase is mainly attributable to higher prices for all three fiber generations. Consolidated earnings before tax, depreciation and amortization (EBITDA) rose 23.9 percent to EUR 397.1 mn, corresponding to an EBITDA margin of 23 percent, up from 20.3 percent in the prior-year period. Earnings before interest and tax (EBIT) increased by 34.6 percent to EUR 298.4 mn, resulting in a higher EBIT margin of 17.3 percent (Q1-3 2016: 14 percent). The profit for the period improved by 35.3 percent to EUR 219.3 mn, and earnings per share rose 36 percent to EUR 8.12 per share. In September Lenzing redeemed the retail bond of EUR 120 mn. At the end of the reporting period the Group had net liquidity of EUR 16.9 mn.

“In the first three quarters of 2017, we successfully captured value in a very positive market environment and we continue to implement the sCore TEN strategy with great discipline. The opening of our new application innovation center in Hong Kong is an important step to boost our regional innovation capabilities. We were particularly proud to launch TENCELTM Luxe as a sign of Lenzing’s ongoing commitment to innovation and sustainability”, states Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “After three excellent quarters we are confident to deliver substantially better operating results in 2017 compared to 2016, but at the same time we do expect more headwinds in 2018.”

Focus on customer intimacy

In September 2017, the Lenzing Group opened a new application innovation center (AIC) in Hong Kong, thus setting a further milestone in strengthening its innovation offering to all partners along the value chain. New applications for Lenzing fibers will be developed and tested at the new facility, among them applications for recent innovations such as the TENCELTM Luxe branded lyocell filament, the RefibraTM branded lyocell fiber and the EcoVeroTM branded viscose fiber.

Furthermore, new sales and marketing offices were opened in Turkey and South Korea in the first half of 2017. The direct contact to customers and well-equipped showrooms featuring products made of LenzingTM fibers serve as the basis for providing even better customer support.

Investment program in progress

The Lenzing Group aims to increase the share of specialty fibers as a percentage of revenue to 50 percent by 2020. Following the capacity expansion initiatives in Heiligenkreuz (Austria) and Mobile, Alabama (USA) which are both underway, Lenzing announced its intention to construct the next plant to produce TENCEL® fibers in Thailand.

A new era of sustainable production

In October 2017, the Lenzing Group presented a new product, TENCELTM Luxe, at an exclusive event held in Paris. The TENCELTM Luxe branded filament yarn represents Lenzing’s entry in the filament market. This fiber will support the Lenzing Group’s path towards becoming a true specialty player in the market for botanic materials derived from the sustainable raw material wood.

The launch volumes of TENCELTM Luxe are being produced at the Lenzing site. The basic engineering for a commercial scale plant was commenced.

Outlook
Demand development on the global fiber market remains positive within the context of a generally friendly macroeconomic environment. Lenzing expects wood-based cellulose fibers to grow at an even higher rate than the overall fiber market. After three excellent quarters, the Lenzing Group will achieve an operating result in 2017 that is significantly better than 2016.

For 2018, Lenzing sees a number of somewhat opposing factors that limit visibility regarding fiber price developments. Overall market demand is expected to remain high. However, the Group expects a substantial increase on the supply side, especially for viscose but also for cotton. Price trends for selected key raw materials, especially caustic soda, are difficult to predict. Against this background the Lenzing Group expects a much more challenging market environment for standard viscose during the upcoming quarters.

The above-mentioned development reassures the Lenzing Group in its chosen corporate strategy sCore TEN. The Group initiated its transformation from a volume-oriented viscose player to a value-oriented specialty fiber player at the end of 2015, and will continue the disciplined implementation of its business strategy.

• Registration Phases 3 & 4 of REACH well on track
• Company is a funding member of the major consortia relevant to the textile and paper industries (Dyes, OBA, Fluorotelomer), with a role of lead registrant and expected total investment of 14.5 million USD

Reinach, Switzerland - Archroma, a global leader in color and specialty chemicals, today announced solid progress on Phases 3 and 4 of REACH (Registration, Evaluation, Authorization and restriction of Chemicals) with more than 60% of our commercial products active in EU complying already with the June 2018 requirements. In total, 369 different chemical substances are within the scope of the REACH phases 3 and 4. These include 135 dossiers where Archroma has a lead registrant position in the EU.

In the first two phases – completed, respectively, in November 2010 and May 2013 – the company recorded a total of 60 chemical substances that are produced in or imported to the countries of the European Union with volumes greater than 100 tons per year. In the third and fourth phase of REACH that is currently under way, all the remaining chemical substances of more than 1 ton per year must be registered by June 1, 2018.

With its expert chemical management system, Archroma, unlike many EU importers of textile and paper chemicals, controls the composition of its formulations and can therefore ensure full REACH compliance of each ingredient in its products.

With its broad product portfolio, Archroma is one major registrant of substances relevant to the textile and paper industries at the European Chemicals Agency (ECHA). The company expects the total investment needed to be REACH ready to amount to 14.5 million USD.

“The REACH objective to improve the protection of human health and the environment from the risks that can be posed by chemicals is fully in line with our own belief that we can make our industry sustainable. Hence our early commitment to REACH without the slightest hesitation – because it’s our nature,” comments Carole Mislin, Global Head of Product Stewardship at Archroma.

“Everyone benefits from more sustainability – the people, the planet, our customers and even us here at Archroma,” Mislin adds. “Archroma will benefit because we will be able to reapply the invaluable expertise we have gained from the REACH registration process in the EU to other regulations under way or expected soon in countries such as South Korea or Turkey. And our customers and partners will gain because they can count on a reliable supply source and an expert partner to accompany them through the REACH preparation process.”

At Heimtextil, which is to be held in Frankfurt from 9 to 12 January 2018, Trevira GmbH will be represented together with some important Trevira CS clients in Hall 4.2 at a 1,305 m2 booth.
The core of this joint booth will be a Trevira exhibition. Participating clients will present their latest Trevira CS collections for home textiles and commercially used textiles at individual stands around this core exhibit. The joint stand is located in close proximity to the new exhibition “Interior. Architecture. Hospitality. EXPO” of Messe Frankfurt.
“We are delighted to be able to make a significant contribution to the new thematic focus of Hall 4.2 with our trade fair concept for next year. It enables us to offer a platform to our clients allowing them to reach important decision-makers. In

addition, visitors to the trade fair will appreciate being able to find such a large number of Trevira CS novelties and collections in a one-stop-shop,” says Anke Vollenbröker, Head of Marketing at Trevira GmbH.
Trevira CEO Klaus Holz is pleased that the idea of a joint stand has been so well received by their clients. “The high level of demand shows that our concept of a comprehensive partnership with our clients pays off. Our long-standing clients appreciate that we not only offer them high quality and sustainably produced fibres and yarns, but that we also support them with our technical expertise and in marketing their Trevira fabrics.”

The following clients will be represented with a large selection of their beautiful and modern Trevira CS fabrics at the joint booth in January: Baumann Dekor Ges.m.b.H., Engelbert E. Stieger AG, FIDIVI Tessitura Vergnano S.p.A., Jenny Fabrics AG, Johan van den Acker Textielfabriek B.V., Mattes & Ammann GmbH & Co. KG, Pugi R.G. S.R.L., Spandauer Velours GmbH & Co. KG, SR Webatex GmbH / Getzner Textil AG, Swisstulle AG, Tessitura Mario Ghioldi & C. srl, Torcitura Fibre Sintetiche S.p.A., Torcitura Lei Tsu S.r.l., Vlnap a.s. / Wagenfelder Spinning Group, Wintex S.r.l., Mersem Teksil San. Ve Tic. Ltd. Sti, Teksko Kadife Kumas San. Ve Tic. A.S.

Lectra has developed partnerships with over 850 fashion schools across the world, providing them with solutions and expertise to help the teachers prepare students with the skills they require for the workplace. Working with leading education partners, Lectra organises regular student competitions in association with customers. The latest competition with Istituto Secoli, renowned for its pattern-making savoir-faire, and organized with Armani, is a clear example of industry and education working hand-in-hand to nurture young fashion designers.
Students at Istituto Secoli developed their collections using Lectra’s Modaris® and Diamino® solutions to create their patterns, prototypes and markers. In addition, students from the master’s program in menswear cut their creations with Vector®, Lectra’s state-of-the-art fabric cutting solution.

Thanks to the trusted relationship that Lectra has with its customer G.A. Operations of the Giorgio Armani group, one of the winning students, graduating in menswear, has the opportunity to take up an internship in the collection development department. "We were very pleased with Lectra's initiative and were delighted to offer educational internships at G.A. Operations. We chose the winning student for his creative skills and for his training on Modaris and Diamino. This gives us the important advantage of bringing somebody with proven technical skills into our team," stated Giorgio Ferremi, industrial director G.A. Operations at Trento.

Composites use in Building and Construction will be highlighted at JEC newest event dedicated to this specific Composites Industry next month in Chicago, IL, USA. The numerous and diverse benefits that these innovative materials bring to the Building Industry will help overcome the coming challenges such as, urbanization, increase of natural disasters (floods, storms, tsunamis, earthquakes…), along with the decrease of non-renewable raw materials and the high standard levels set by the society in terms of lightness and fluidity. Composites Materials bring answers and opportunities to tackle those issues in sustainable, durable and reliable manners. Solutions like ease of fabrication (Owens Corning), structures durability (Biteam), anti-seismic reinforcement (DowAksa), use of end-of-life products such as recycled bottles of water (Premier Composites Technologies), aerial forms (Optima Projects Ltd) or again energy saving (Armageddon Energy).

Following its strategy to address every Composites End-user, the JEC Innovation Awards will reward these 6 Composites Innovators in Building & Construction that will change the way we build.
If the majority of submissions relied on glass fibers, which is common in the Construction field, we see an increased interest in carbon fibers, especially for structural applications. And similarly to all sectors of the composite industry, thermoplastics are gaining in importance in Construction. Therefore, to promote the growing use of composites as a construction material, 6 categories are awarded, covering a large panel of applications and possibilities.