From the Sector

• Production capacities increased to 320,000 tons p.a.
• Investments of EUR 60 mn enhance self-sufficiency and strengthen autonomy from market prices
• Project serves as a significant economic driver in the region

Lenzing AG, producer of pulp and fibers from the renewable raw material wood, has concluded its expansion and modernization drive at the pulp plant at the Lenzing site. The company invested EUR 60 mn for this purpose, increasing production capacities for dissolving pulp extracted from beech wood from 300,000 to 320,000 tons per year. The coming on stream of the additional pulp capacities over the past weeks strengthens Lenzing’s self-supply of pulp in accordance with the sCore TEN corporate strategy.

“The successful expansion brings us closer to achieving our strategic objective of increasing our self-supply of pulp to a level of 75 percent, thus making us even more resistant to price fluctuations in sourcing pulp”, says Stefan Doboczky, CEO of the Lenzing Group. “We are also pleased that this project enables us to make a further significant contribution towards strengthening the Lenzing site as well as the regional economy”, Mr. Doboczky adds.

The expansion drive was completed in less than two years. In addition to 100 Lenzing Group employees, numerous external partner companies from Upper Austria and neighboring regions were involved in implementing the project. About 40,000 working days were needed by external companies in order to install the delivered machinery on site. The Lenzing Group secured additional jobs due to the pre-production work required in the factories of these suppliers.

In line with the corporate strategy of the Lenzing Group, the self-supply of dissolving wood pulp will be successively increased in the coming years to 75 percent of consumption. At present, Lenzing’s own pulp plants in Lenzing and Paskov (Czech Republic) cover 60 percent of the Group’s pulp requirements. The Lenzing site primarily makes use of beech wood which is not suitable for producing furniture, whereas it mainly relies on spruce wood in the Czech Republic. The remaining dissolving wood pulp is sourced from a variety of hardwoods and softwoods from international partners. In this case, in the spirit of sustainability, Lenzing applies procurement rules which are just as strict as when it purchases wood for its own pulp production.

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.

• At Kingpins Show Amsterdam (24-25 October) the new “Committed Accessories” dedicated to denim take centre stage.

For the appointment with the exhibition dedicated to denim Metalbottoni focuses on its new range of increasingly green accessories which have captured the attention of the northern European brands most attentive to sustainability in the world of jeans and elsewhere. A range of proposals which, in recent months, has progressed remarkably, following the rules established by the corporate responsibility protocol called NO IMPACT.

This is a responsible approach underlined by the promise “Committed Accessories”, but also a strategic choice with a view to approaching those markets which so far have appeared to be most keen on the subject, for example northern Europe, Benelux and the United States, California in particular. This means that Metalbottoni is acting with increasing assertiveness on those scenarios where it has been present for a long time, in order to increase the segments depth, intercepting new ones, thanks to its wide-ranging eco-compatible proposal.

NO IMPACT: “Committed Accessories” expanded

It is the constant search for sustainable innovation that reveals the extent of the progress made over the past few months by Metalbottoni. For the Kingpins Show exhibition, there are many novelties in store from the company, extending its range in terms of sustainability. Firstly, there is the new MONSTER line eco-processing, special for pure denim, which – apart from metal – includes new material solutions developed through high-profile collaborations.

Also the LEATHER ACCESSORIES line is extending its range of sustainable materials. The line of tags and rear waistband labels is enhanced through interpretations based on two new eco-friendly materials: recycled jacron and cork. For denim designed to be 100% green, also in accessories. Sustainable proposals are increasingly integrated throughout the Metalbottoni range, for example the new glossy and satin finishing developed for the line LABORA on exclusive metal accessories.

Partnerships with brands from northern Europe: Bik Bok and Kings of Indigo

One of the most important collaboration in sustainable fashion is the one with the Norwegian brand Bik Bok. The brand that was founded in 1973 dedicated to young women, today offer accessible trend driven fashion through a network of over 200 single-brand stores in Norway, Sweden, Finland and Austria. The brand has since 2017 chosen to use only BCI (Better Cotton Initiative) certified cotton for their in house premium denim brand Never Denim. For Never Denim Metalbottoni has realized a series of jeans buttons and personalized rivets, all entirely produced according to the NO IMPACT protocol; which means recycled raw materials, no use of chemical agents, through processing and machinery that minimize the use of water and electricity, resulting 100% from photovoltaic panels. All these features are part of a capsule developed for the new AW 2018 collection for Never Denim entirely made with Fair Trade certified cotton. Thanks to this project, the No Impact becomes an integral part of a collection that is aimed at a very large, young and aware public.

Another important brand which has chosen the new NO IMPACT metal accessories is Kings Of Indigo, the Dutch denim mill which is presenting top-quality jeans, inspired by traditional American style, combined with Japanese attention to detail, which today has as many 250 authorised dealers in 12 countries, with a very strong focus on northern Europe.

More and more sportswear for the new Monster SS 2020 collection

The great Metalbottoni classic dedicated to denim confirms the trend of strongly merging with the world of sportswear. The MONSTER line introduces the style developments of the SS 2020 season, with the range being more and more influenced by technical and sports interpretations, alongside sustainable production processes based on the NO IMPACT protocol. The new MONSTER proposals include items made of non-metal material, using sustainable processes, of natural origin and 100% biodegradable; these accessories are similar in appearance to traditional polyester, interpreted in a responsible way, developed through a series of special and unique effects. Also the button, rivet and small plate range has been restyled, having always been the core of the MONSTER line. Today the number of solutions available increases  hanks to new vintage finishing, developed on metal accessories, which are also totally green. “The denim world is moving in a clear direction: that of sustainability.” says Maria Teresa Ricciardo, Creative Director at Metalbottoni, “This is true in particular for some markets, which are strategic for us, and where we are proving increasingly successful, thanks to constant product and process research from a green  perspective, which Metalbottoni today is able to offer within the framework of the NO IMPACT pathway which we have been pursuing for a long time”.

• September 19, 20, and 21, 2018
• This September visit Première Vision’s Smart Square for a great opportunity to meet and greet ROICA™ experts to discuss responsible innovation and well-being.

ROICA™ experts showcase the world-first ROICA™ Eco Smart family that offers 2 responsible made yarns: a GRS (Global Recycled Standard) version 3 certified yarn and the world’s first yarn awarded Cradle2Cradle Material Health Gold Level Certificate and Hohenstein Environment compatibility certification.

On display in the Smart Square, a 800-sq. m. area dedicated to shed light on a new generation of values combining creativity, innovation and sustainability, is a  unique  range of ROICA™ Eco-Smart family based fabrics, the world's first responsibly made premium stretch fibers creating ROICA™ smart yarns that offer sustainable solutions with impressive certifications:

• Global Recycled Standard (GRS) certified by Textile Exchange - ROICA™ constructed with more than 50% pre-consumer recycled content.
• Cradle to Cradle Certified™ Gold Level for Material Health product and ingredients - ROICA™ yarn evaluated throughout the supply chain for lower impacts on human and environmental health. Striving toward eliminating all toxic and unidentified chemicals for a safe continuous cycle. Hohenstein Environment Compatibility Certificate - ROICA™ proudly breaks down without releasing harmful substances.

ROICA™ experts empower attendees with knowledge, and inspire creativity as they demonstrate ROICA™ Eco-Smart family functionality. Engage the experts in the Smart Square, ask questions and learn about the company’s ongoing commitment to responsible innovation. At the corporate level, ROICA™ has achieved the following certifications: Oeko Tex 100, ISO 14001:2004, ISO 9001:2008. Moreover, ROICA™ mills in Germay achieved the certification of ISO 50001:2001.

ROICA™ partners exhibiting at Première Vision Paris presenting ROICA™ Eco-Smart family:

• Fukui Warp Knitting CO.,LTD  (JP) Hall 6 booth H15
• Iluna Group S.p.A (IT) Hall 5 booth N14 P13
• Jackytex (IT) Hall 5 booth M24 N23
• Lanificio Europa (IT) Hall 6 stand D12, F49
• Maglificio Ripa S.p.A. (IT) Hall 5 booth 5P29
• M.I.T.I. Spa (IT) Hall 6 booth G19
• Penn Textile Solutions GmbH / Penn Italia (DE/IT) booth 6G17
• Sofileta (FR) Hall 6 booth H18 6J13
• TINTEX Textiles (PT) Hall 5 booth N56

Additional ROICA™ partners at Première Vision also exhibiting a wide-range of other ROICA™ specialties:

• Eusebio (IT) Hall 5 booth 5P34 5R15
• Kurabo Industries LTD (JP) Hall 6 booth C20 D21

Lastly, on Friday 21st September 2018, at 1.30 pm, you are invited to join Dr. Stephan Hütte at Première Vision Smart Square as he facilitates an open discussion with exhibitors and introduces the audience to ROICA™ Eco-Smart family. Dr. Hütte will discuss ROICA™ textile innovations for contemporary consumer within the fashion, lingerie and activewear markets.

Recognizing Asahi Kasei for spearheading the premium stretch market, the Dorbinbirn-GFC Global Fiber Congress has invited Dr. Stephan Hütte, Development Manager ROICA™ Fibers at Asahi Kasei to present ROICA™ Eco-Smart family at this year’s congress. The Europe-centered innovation platform for the fiber industry is a distinguished idea and network generator hosting top-ranking international experts in fiber innovations. The event includes 700 participants from 30 nations and will take place September 12th through the 14th in Austria.

Last but not least, at Première Vision ROICA™ is proud to welcome Shinichiro Haga, Senior Executive Manager - ROICA™ Division. The company also announces an internal appointment: Mr. Hiroaki Shinohe elected as Chief Marketing Officer for European market.

Das Aachener Zentrum für Integrative Leichtbau (AZL) der RWTH Aachen installiert in seinem Technikum eine neue ENGEL-Spritzgießanlage. Die ENGEL Deutschland GmbH, in Kooperation mit dem ENGEL Technologiezentrum für Leichtbau-Composites in Österreich, wird das 2-Komponenten-Spritzgieß-System mit Drehtisch und 17.000 kN Schließkraft im Jahr 2019 in Betrieb nehmen. Dieser Maschinenaufbau ist die Basis für die Weiterentwicklung effizienter Inline-Kombinations-Technologien mit unterschiedlichen Polymerwerkstoffen.

Das ENGEL-Spritzgießsystem ermöglicht die innovative Kombination bereits etablierter Faserverbundkunststoff-Verfahren und die Entwicklung neuer individueller Verfahren. Im Mittelpunkt steht die Steigerung der Ressourceneffizienz in der Leichtbau-Produktion. Mit der neuen Anlage können neue Forschungs- und Entwicklungsinitiativen einen effizienteren Materialeinsatz adressieren, der letztlich der Schlüssel zur Massenproduktion von Leichtbauteilen ist. Der Fokus wird dabei auf Multimaterialsystemen, kontinuierlichen Prozessen und Prozessketten sowie selbstoptimierenden Prozesse liegen.

Dr.-Ing. Michael Emonts, Geschäftsführer des Aachener Zentrums für integrativen Leichtbau (AZL) freut sich darauf, mit dem neuen Spritzgießsystem neue innovative Leichtbauverfahren zu realisieren: „Diese neue Spritzgießanlage bietet uns als Spezialisten für die Leichtbau-Produktionstechnik in Kooperation mit den Spritzgießexperten des Instituts für Kunststoffverarbeitung – dem IKV – die Möglichkeit, Hybridverfahren für industrielle Leichtbau-Anwendungen zu etablieren. Das System wird unseren bestehenden Maschinenpark im AZL-Technikum erweitern und als wichtige Plattform für die Leichtbau-Forschung an der RWTH zur Verfügung stehen."

Als aktive Partnerfirma des AZL-Partnernetzwerks arbeitet ENGEL bereits seit vielen Jahren eng mit dem AZL zusammen. Dr. Stefan Engleder, CEO der ENGEL-Gruppe, betont die Bedeutung dieser engen Zusammenarbeit mit den Technischen Universitäten und insbesondere mit dem AZL: „Das AZL bietet beste Voraussetzungen für industrienahe Forschungsaktivitäten im Bereich Leichtbau-Verbundwerkstoffe, da es sich durch einen starken interdisziplinären Ansatz auszeichnet. Das AZL profitiert von der guten Infrastruktur und der Zusammenarbeit mit namhaften Instituten der RTWH Aachen. ENGEL freut sich auf die Zusammenarbeit mit dem AZL bei der Entwicklung effizienter Leichtbau-Verbundwerkstoff-Massenproduktionsverfahren.“

Das AZL-Technikum umfasst neben den zahlreichen Faserverbund- und Leichtbauanlagen auf dem Campus der RWTH Aachen zusätzliches Großserien-Equipment für die Entwicklung von Verfahren zur Leichtbau-Produktion, wie zum Beispiel eine Composite-Presse der Schuler Pressen GmbH mit 18.000 kN Schließkraft.

• 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.

At its meeting on December 13, the Supervisory Board of Lenzing AG decided to reappoint Stefan Doboczky as Chief Executive Officer of the Management Board. Stefan Doboczky’s new contract will begin on June 1, 2018 and runs until the end of 2022.

“In recent years, Stefan Doboczky and his colleagues on the Management Board have been able to make excellent use of the favourable market conditions on the basis of the previous restructuring in order to transform an Austrian company with foreign investments into a truly global player with strong Austrian roots. This has created the basis for consistently pursuing the growth strategy we have embarked on with the entire team, even under difficult conditions, and thus securing the long-term future of the Lenzing Group. We are very pleased that Stefan Doboczky will continue to dedicate himself to these tasks over the next five years”, said Hanno Bästlein, Chairman of the Supervisory Board of Lenzing AG on the occasion of Doboczky’s reappointment.
In addition to Stefan Doboczky, the Management Board of Lenzing AG consists of Chief Commercial Officer Robert van de Kerkhof, Chief Financial Officer Thomas Obendrauf and Chief Technology Officer Heiko Arnold.

Lenzing – The Lenzing Group aims to substantially increase its share of specialty fibers as a proportion of total revenue. Following the expansion drive already underway in Lenzing and Heiligenkreuz (both in Austria), Grimsby (Great Britain) and Mobile, Alabama (USA), the Supervisory Board of Lenzing AG approved the proposal of the Management Board yesterday to build the next state-of-the-art facility to produce lyocell fibers in Thailand. For this purpose, Lenzing is establishing a subsidiary in Thailand and purchasing a commercial property in Industrial Park 304 located in Prachinburi near Bangkok. In the coming months, the required permits and licenses as well as technical planning will be finalized. A definitive decision on constructing the new production plant will be made in the first quarter of 2018. Completion is scheduled for the end of 2020.
The selection of Industrial Park 304 in Prachinburi was based on its excellent overall infrastructure, outstanding expansion opportunities and the sustainable biogenic energy supply. Similar to the plant in Mobile, the planned production facility will be constructed on the basis of the latest state-of-the-art technology and feature a capacity of up to 100,000 tons annually. This site will strengthen the worldwide lyocell network of the Lenzing Group and enable its global customers to source TENCEL® branded fibers from Europe, North America and Asia.