From the Sector

• Revenue of EUR 1.87 bn and EBITDA of EUR 219.1 mn in the first three quarters of 2023
• Positive free cash flow of EUR 27.3 mn in the third quarter
• Implementation of performance program focusing on positive free cash flow, strengthened sales and margin growth and sustainable cost excellence
• Modernization and conversion of Indonesian site successfully completed – EU Ecolabel received

The anticipated recovery in markets relevant for the Lenzing Group has to date failed to materialize. The continued sharp increase in raw material and energy costs on the one hand and very subdued demand on the other had a negative impact on Lenzing’s business trends as well as on industry as a whole during the reporting period.

Revenue in the first three quarters of 2023 decreased by 5.3 percent year-on-year to EUR 1.87 bn. This reduction was primarily due to lower fiber revenues, while pulp revenues were up. The earnings trend was mainly influenced by the market environment. As a consequence, earnings before interest, tax, depreciation and amortization (EBITDA) in the reporting period decreased by 16.7 percent year-on-year to EUR 219.1 mn. The net result after tax amounted to minus EUR 96.7 mn (compared with EUR 74.9 mn in the first three quarters of 2022), while earnings per share amounted to minus EUR 4.90 (compared with EUR 2.16 in the first three quarters of 2022).

Outlook
According to the IMF, a full return of the global economy to pre-pandemic growth rates appears increasingly out of reach in the coming quarters. In addition to the consequences of the pandemic and the ongoing war in Ukraine, growth is also being influenced by restrictive monetary policy and extreme weather events. The consequences of the renewed military confrontation in the Middle East are not yet foreseeable. Overall, the IMF warns of greater risks to global financial stability, and expects the growth rate to decrease to 3 percent this year and to 2.9 percent next year.

The currency environment is expected to remain volatile in the regions of relevance to Lenzing.

The general market environment is continuing to weigh on the consumer climate and on sentiment in the industries relevant to Lenzing.

In the trend-setting market for cotton, the current 2023/24 crop season is emerging as a further 1.7 mn tonnes of inventory build-up, following 1.8 mn tonnes of inventory build-up in the previous season.

Earnings visibility remains severely limited overall.

Lenzing is fully on track with the implementation of the reorganization and cost reduction program and on this basis is implementing a comprehensive performance program focused on positive free cash flow, strengthened sales and margin growth as well as sustainable cost excellence. The overarching goal is to position Lenzing even more strongly and to further increase its crisis resilience.

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 trans-formation 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 the aforementioned factors into consideration, the Lenzing Group continues to expect that EBITDA for the 2023 financial year will lie in a range between EUR 270 mn and EUR 330 mn.

• Die Zusammenarbeit mit project44, einem Anbieter von Supply-Chain-Lösungen, zielt darauf ab, die Transparenz und Effizienz zu steigern und gleichzeitig einen vollkommen neuen Überblick über die CO₂-Emissionen bis auf Containerebene zu ermöglichen
• Das neue System zur Echtzeit-Lieferverfolgung von Containern bietet Lösungen zur Bewältigung der Komplexität der Lieferketten in der Faserindustrie, die in den letzten Jahren deutlich zugenommen hat
• Mit dem auf Künstliche Intelligenz, maschinellem Lernen und Predictive-Analysis-Technologie basierenden Trackingsystem stellt Lenzing erneut unter Beweis, wie sich mithilfe digitaler Technologie agile, vernetzte und nachhaltige Lieferketten gestalten lassen

Die Lenzing Gruppe hat gemeinsam mit project44, einem Anbieter von digitalen Supply-Chain-Lösungen, ein Verfahren zur Echtzeit-Lieferverfolgung von Containern eingeführt. Im Einklang mit den Nachhaltigkeitszielen von Lenzing ermöglicht das Trackingsystem den Partnern entlang der Lieferkette auch einen besseren Überblick über die CO₂-Emissionen und optimiert dadurch das Kundenerlebnis.

Um die zunehmende Komplexität der Lieferketten innerhalb der Branche zu bewältigen, hat Lenzing eine vollständig integrierte Echtzeit-Programmierschnittstelle (API) zwischen ihre SAP-Software und der Plattform von project44 eingebunden. In Kombination mit fortschrittlicher künstlicher Intelligenz (KI), GPS-Sensoren und Technologien für maschinelles Lernen kann Lenzing ihren Kunden nun genaue Echtzeit-Informationen zu den Faserbestellungen bereitstellen – vom Lieferstatus über den Standort der Container bis hin zur Verfolgung der Schiffsrouten und den voraussichtlichen Ankunftszeiten in Häfen weltweit.

Zusammenarbeit für das gemeinsame Ziel einer besseren CO₂-Transparenz
Im Rahmen ihres Nachhaltigkeitsversprechens bietet Lenzing durch das Echtzeit-Sendungsverfolgungssystem ihren Partnern in der Wertschöpfungskette verbesserte Lösungen, um ihre CO₂-Reduktionsziele zu erreichen. So erhalten Kunden sowohl auf Sendungs- als auch Containerebene Zugang zu Daten über Scope-3-Emissionen, die vom Global Logistics Emissions Council (GLEC) bestätigt sind. Anhand dieser Daten können Lenzing und ihre Kunden gemeinsam Ziele formulieren und Transportpläne anpassen, um die CO₂-Emissionen zu reduzieren.

Das neue Lenzing System zur Echtzeit-Lieferverfolgung steht den Kunden des Unternehmens ab September weltweit zur Verfügung.

• Revenue grows to EUR 623.1 mn – fiber sales recovered over the course of the quarter
• EBITDA and net result for the period down compared with the first quarter of 2022
• Cost reduction program of more than EUR 70 mn being implemented according to plan
• Production of TENCEL™ brand modal fibers successfully launched in China
• Lenzing confirms guidance for 2023

The business performance of the Lenzing Group during the first quarter of 2023 largely reflected market trends. However, after the market environment had deteriorated significantly in the third and fourth quarters of the previous year, signs of recovery emerged during the first quarter in terms of demand as well as raw material and energy costs. Textile fibers recorded moderate but steadily improving demand. Business with fibers for nonwovens and with dissolving wood pulp performed better than expected. Raw material and energy costs were still at an elevated albeit decreasing level.

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 2.8 and 3 percent for 2023 and 2024 respectively. The currency environment is expected to remain volatile in the regions relevant to Lenzing.

This market environment continues to weigh on the consumer climate and on sentiment in the industries relevant to Lenzing. However, the outlook has brightened somewhat recently.

Demand picked up tangibly after the Chinese New Year. As a consequence, capacity utilization improved and stocks were further reduced both at viscose producers and at downstream stages of the value chain.

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 for 2023/24 anticipate a more balanced relationship between supply and demand.

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 the reorganization and cost reduction program. These and other measures are aimed at positioning Lenzing in the best possible way for the expected market recovery.

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 “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 account 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.

Die Lenzing Gruppe, führender Anbieter von holzbasierten Spezialfasern, ist am 31. März, mit dem ÖGUT-Umweltpreis 2022 in der Kategorie „World without Waste“ ausgezeichnet worden. Die Österreichische Gesellschaft für Umwelt und Technik (ÖGUT) würdigte insbesondere den Beitrag der Unternehmensgruppe für den Wandel der Textil- und Bekleidungsindustrie von einem linearen zu einem Modell der Kreislaufwirtschaft.

Die Textil- und Bekleidungsindustrie zählt mit jährlich 40 Millionen Tonnen Abfall zu den Branchen mit der höchsten Umweltbelastung und braucht daher dringend Veränderung. Lenzing hat sich zum Ziel gesetzt, diesen Wandel voranzutreiben, und begrüßt deshalb auch die europäische Kreislaufwirtschaftsstrategie, die darauf abzielt, den Ressourcenverbrauch zu verringern, Umweltverschmutzung und Abfälle zu vermeiden, die Wertschöpfung und Ressourceneffizienz zu erhöhen sowie negative soziale Auswirkungen auf die Menschen abzufedern.

„Effektives Textilrecycling ist eines der komplexesten Kernthemen der Textilwirtschaft in den nächsten Jahren. Durch Bündelung von Know-how und Zusammenarbeit sehen wir von Lenzing eine zielgerichtete Realisierung von Lösungsmöglichkeiten. Daher freuen wir uns sehr über diese Anerkennung“, sagt Sonja Zak, Head of Circularity Initiative der Lenzing Gruppe.

Die Lenzing Gruppe präsentierte im Rahmen ihrer Einreichung ihr auf nachhaltige Innovationen ausgerichtetes Geschäftsmodell der Kreislaufwirtschaft. Exemplarisch dafür stehen die Einführung der ersten kommerziellen Cellulosefaser mit Recyclinganteil nach der REFIBRA™ Technologie und die zukunftsweisende Kooperation mit Södra.

From Linear to Circular
Die Zusammenarbeit mit dem schwedischen Zellstoffproduzenten Södra ist ein weiterer Meilenstein im Bestreben der Lenzing, deren ambitionierte Klima- und Nachhaltigkeitsziele umzusetzen. Beide Unternehmen, die sich seit vielen Jahren proaktiv für die Förderung der Kreislaufwirtschaft in der Modebranche einsetzen, bündeln ihre Kräfte, um dem Thema einen weiteren Schub zu geben und einen entscheidenden Beitrag zur Lösung des globalen Textilabfallproblems zu leisten. Auch eine Erweiterung der Kapazitäten für die Zellstoffgewinnung aus Alttextilien ist vorgesehen. Ziel ist es, bis 2025 in der Lage zu sein, 25.000 Tonnen Alttextilien pro Jahr zu recyceln.

Der ÖGUT-Umweltpreis wurde 2022 in insgesamt sechs Kategorien vergeben. Ausgezeichnet wurden dabei technologische und soziale Innovationen, die den Energie- und Ressourcenverbrauch senken und zur sozialen Nachhaltigkeit beitragen. „Wichtig für die Entscheidung der Jury war, dass die Lenzing AG auf bestehende Prozesstechnologien aufbaut und dabei gleichzeitig innovativ und skalierbar ist. Da die Lenzing AG bereits am Markt etabliert ist, ist auch eine große Sichtbarkeit des Themas gegeben“, so die Jurybegründung. Die ÖGUT ist eine unabhängige Non-Profit-Organisation, die sich seit mehr als 30 Jahren für eine nachhaltige Ausrichtung von Wirtschaft und Gesellschaft einsetzt.

The Lenzing Group has been awarded Platinum status in EcoVadis’ CSR rating. The assessment comprehensively covers the four main CSR (Corporate Social Responsibility) practices: the environment, fair working conditions and human rights, as well as ethics and sustainable procurement.

In the previous three years, Lenzing had already received outstanding ratings in all categories, and was awarded Gold status in 2018, 2019 and 2020. “We are very proud to have now achieved the step up to the Platinum level after several Gold ratings in the past few years. At Lenzing, we always think beyond fibres and take responsibility for our children and grandchildren – for whom we do our best in order to constantly improve ourselves. This attitude forms part of our strategic principles and we will continue to work hard to make a sustainable contribution to the environment and to society”, notes Stefan Doboczky, CEO of the Lenzing Group.

The Lenzing Group’s ambitious climate targets form an essential part of its strategy and responsibility to future generations. In 2019, Lenzing became one of the world’s first fiber manufacturers to commit to reducing CO2 emissions per ton of product by 50 percent by 2030, and even becoming climate-neutral by 2050. The Science Based Targets Initiative, a recognised organisation in the area of climate-relevant target-setting, has scientifically validated Lenzing’s climate targets.

This scientific validation also forms one of the essential criteria that EcoVadis highlights in its rating. In addition, the responsible procurement of raw materials – according to social and ecological aspects – was also highlighted as a further core element in the company’s sustainability strategy, as well as support for external environmental initiatives (Sustainable Apparel Coalition, Fashion Industry Charter for Climate Action) and initiatives on labour and human rights issues (Sustainable Apparel Coalition).

Among other things, Köfner will play a key role in shaping the internationalization of the Lenzing Group and contribute to the implementation of the corporate strategy sCore TEN.

Dominic Köfner (46) will take over as head of Corporate Communications & Public Affairs at Lenzing AG at the beginning of May. As Vice President, he will report directly to the Chief Executive Officer, Dr. Stefan Doboczky.

Dominic Köfner has gained national and international experience over the past two decades at renowned consulting firms, communications agencies and on the corporate side. Before joining the Lenzing Group, Mr. Köfner was Managing Director of the communications agency Serviceplan Austria and most recently Senior Consultant at the agency group Sports & Media in Munich. Before that, he was responsible for the agendas of the Zumtobel Group and the MOL Group, respectively as CMO and CCO. Before he was appointed as crisis communications manager by the Austrian Ministry of Finance to deal with the “Hypo Alpe Adria Bank” case, he managed numerous national and international mandates as a communications consultant for the Brunswick Group.