From the Sector

• Revenue of EUR 1.25 bn and EBITDA of EUR 136.5 mn in the first half of 2023
• EBITDA and net result for the period significantly improved compared with the first quarter of 2023
• Cost-cutting program and measures to strengthen sales activities being implemented as planned
• Liquidity position strengthened by successful capital increase and extension of credit terms
• Production of TENCEL™ brand modal fibers successfully launched in China

The business performance of the Lenzing Group, a leading global supplier of specialty fibers for the textile and nonwoven industries, largely reflected the subdued market trends in the first half of 2023. After the market environment deteriorated significantly in the second half of 2022, signs of recovery were evident during the first and second quarters of 2023 in terms of both raw material and energy costs as well as demand. Textile fibers recorded improving demand, and business with nonwoven fibers and with dissolving wood pulp proved to be very stable.

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 3 percent for both 2023 and 2024. The currency environment is expected to remain volatile in the regions of relevance to Lenzing.

This market environment continues to weigh on the consumer climate and on sentiment in the industries relevant to Lenzing. Recently, however, the outlook brightened somewhat according to a global survey by the ITMF.*

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 also see a further buildup of stocks in 2023/24, albeit to a lesser extent.

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 its reorganization and cost-cutting program. These and further measures are aimed at positioning Lenzing in the best possible way for the expected market recovery.

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 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 consideration 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.

*Source: ITMF, 21st Global Textile Industry Survey, July 2023

OETI – a member of the internationally active TESTEX Group – has bought the German company ECS to expand its service portfolio in the field of personal protective equipment (PPE).

OETI has been offering testing services for textile work clothing since 1983 – for about 40 years. Since the introduction of CE labelling for personal protective equipment and the enactment of the PPE Directive by the European Union in 1993, OETI has not only been testing textile personal protective equipment, but now on also certifies it in conformity with EU standards. In 1995, OETI was certified in Brussels as a Notified Body (0534) for type-examinations and quality assurance monitoring of personal protective equipment end products. Testing and certification is carried out in accordance with the current PPE Regulation (EU) 2016/425.

Testing and Certification Body for Eye and Face Protection, based in Aalen, was founded 15 years ago and is a globally active institution for testing and certification of eye and face protection equipment. The company is one of the leading independent testing institutions for personal protection products in laser applications and for welding work.

ECS tests and evaluates occupational health and safety goggles with and without a filter action, passive and active switching protection filters and shields for welders, and laser protection filters, goggles, and shields. The company also tests the optical properties of sunglasses, sports glasses, ski goggles, swimming goggles and motorbike goggles.

With OETI’s takeover, the ECS location in Aalen is retained, and all employees will continue working at ECS. The new Managing Director of ECS GmbH as of 1 July 2023 is Dipl.-Ing. Rolf Diebolder.

‘We are present on the European market, on the American market and, via a representative office, on the Chinese market. With the aid of the new distribution channels through OETI and TESTEX, we want to steadily advance ECS’ expansion and be present on all five continents’, says Managing Director Rolf Diebolder, explaining his strategic plans for ECS. ‘I would like OETI and ECS to develop a joint strategy in order to be able to offer existing and new customers of both companies a complete package which, when combined, will give us a unique selling point in the marketplace’, says Diebolder.

Diebolder also sees further potential in the cooperation with regard to protective laser clothing. According to him, this is where the laser laboratory commissioned by ECS could be used to make textiles laser-safe. In the future, there will be more and more ‘hand-held’ devices, i.e. laser welding devices, for which gloves and protective jackets are needed.

MAS Holdings, a global apparel & textile manufacturing and tech conglomerate, headquartered in Sri Lanka, secures a stake in HeiQ AeoniQ™ as part of its Plan for Change initiative to support the development of next-generation cellulosic filament fibers to replace polyester and nylon.

HeiQ from Switzerland and MAS Holdings entered a partnership for MAS to secure a stake in HeiQ AeoniQ GmbH, a subsidiary of HeiQ Group that will produce HeiQ AeoniQ™, a climate-positive cellulosic yarn.

With this investment, MAS Holdings becomes the first manufacturer to partner with HeiQ AeoniQ™ in their efforts to provide a sustainable alternative to polyester and nylon. The investment to be made by MAS Holdings is part of the group’s strategy to drive a positive environmental impact. The MAS Plan for Change aims to generate 50% of the company’s revenue through sustainable products by 2025, revolutionizing the textile industry with a focus on innovation, sustainable sourcing, and pioneering circularity at scale.

With the closing of this deal, HeiQ and MAS agreed to a 5-year Offtake Agreement for 3,000 tons of HeiQ AeoniQ™ yarn in 2025 and 5,000 tons per year from 2026 to 2029, valued by HeiQ in the aggregate to US$ 100 million. MAS will finalize this commitment within a stipulated time period after achieving milestone 1, and a mutual plan for commercialization. HeiQ and MAS firmly believe that rapid scaling is key to facilitating the fast adoption of sustainable, circular technologies such as HeiQ AeoniQ™.

The HeiQ AeoniQ™ pilot plant in Austria is manufacturing this revolutionary continuous cellulosic filament yarn since Q3 2022, with up to a 100 tons capacity to be upscaled up to 300 tons by the end of 2023.

The HeiQ AeoniQ™ production scale-up is planned to have its definitive boost by early 2026 with the construction of an entirely new gigafactory capable of a 30,000-ton output per year, in a 250M USD estimated investment.

Polyester and nylon, two oil-based fibers, virtually non-recyclable, account for about 70% of all the global textile production, they take between 350 to 1000 years to degrade in nature, are currently close loop recycled at less than 1%, and are at the origin of 35% of the microplastics that can be found in today's oceans. HeiQ AeoniQ™ was innovated and is being hyper-scaled up to change this course of action.

The ROICA™ by Asahi Kasei team knows that value creation is the foundation of contemporary business. Its team is ready to take ROICA™ to the next level, responding to market demand innovations, whilst sharing its latest responsible production system with a new generation of consumer.

For this reason, the ROICA™ strategy is based on two key elements:
First, a focus on responsible innovation, able to respond to new market needs and desires without harming the environment or society at large. Thanks to the certified and eco-high tech ROICA Eco-Smart™ family, Asahi Kasei is able to meet responsible business needs and contemporary consumers’ desire for a modern wardrobe that represents a new generation of values.

Second, the dawn of ROICA™ has fueled a consolidation of partnerships along the whole supply chain through conversations and collaborations with companies sharing ROICA™’s values, including: Artistic Milliners, CIFRA, Dresdner Spitzen, Iluna Group, Innova Fabrics, Maglificio Ripa, Penn Italia - Penn Textile Solutions GmbH, Sitip S.p.A. and Tessitura Colombo.

After nearly 30 years with the company, Matthew North, Commercial Director at the viscose specialty fibre manufacturer Kelheim Fibres, will retire on July 1, 2023. Throughout his long and successful career, he has played a significant role in transforming Kelheim Fibres from a supplier of standard fibres to the European textile industry into a supplier of predominantly customized specialty fibres for the hygiene, specialty paper, and textile industries.

Mark von der Becke will assume the position of Sales Director and become part of the management team at Kelheim Fibres. The 48-year-old brings extensive experience in sales, marketing, and key account management. He has held various leadership positions in renowned companies such as Hoechst, Clariant, and DS Smith in Germany, Switzerland, and China. He is known for successfully developing and implementing strategy and change programs.

Dr. Marina Crnoja-Cosic, who has been serving as Director of New Business Development and a member of the management team at Kelheim Fibres since 2020, will take on the responsibility for marketing and communications. She will now drive the further development of the marketing strategy and communication with customers and partners.

Lectra’s Annual Shareholders’ Meeting held on April 28 appointed two new Directors, Karine Calvet and Pierre-Yves Roussel for a four-year term. They both will become members of the Strategic Committee, replacing Bernard Jourdan, Lead Director, and Anne Binder. Karine Calvet also becomes a member of the Corporate Social Responsibility (CSR) Committee.

With its new strategic roadmap for 2023-2025, the Group aims to use its expansion – mainly due to the acquisition of Gerber in June 2021 – to accelerate its growth, significantly increase the share of SaaS in its sales, and seize opportunities for external growth. Supported by the commitment of its staff and recognized by its customers, Lectra will also be at the forefront of a more sustainable future.

Karine Calvet is Vice-President EMEA responsible for Partners at AVEVA, a subsidiary of Schneider Electric. She began her career at CGI in 1993 and has spent most of it in IT: sixteen years in services companies, seven years in telecommunications, and six years in software. She has had leadership roles in telecommunications environments for leading global companies (CGI, Capgemini, Alcatel-Lucent, Verizon, Microsoft and currently Schneider-Aveva), focusing on digital transformation. Karine Calvet served as Head of Industry at Capgemini, then managed worldwide teams at Alcatel-Lucent as Vice-President, Eastern Europe then at Verizon as Managing Director. Her time at Microsoft strengthened her software expertise, her direct and indirect channels skills, and her experience in IT services. In the last two years, as Vice-President, Southern Europe then Vice-President, Partners and Alliances at Schneider-Aveva, Karine Calvet has worked closely with industrial companies to help them meet the challenges of operational efficiency, safety, cost management, sustainability and decarbonization by taking advantage of digitalization.

Pierre-Yves Roussel has been CEO of leading US fashion label Tory Burch since January 2019. He began his career in investment banking with HSBC in Brussels, then at Morgan Stanley in London. In 1990, he joined management consulting firm McKinsey & Company in France, where he led numerous consultancy assignments in the fashion, luxury, distribution and media sectors in Europe and Asia. In 1998, he was elected Partner then, in 2004, Global Senior Partner (Director). In 2004, he joined the LVMH Group Executive Committee as Executive Vice-President, Strategy and Operations, reporting directly to Bernard Arnault. In 2006, he was appointed Chairman and CEO of LVMH Fashion Group, one of the LVMH Group’s five branches of operational activity. From 2006 to 2018, he was Chairman of the Board of the brands Céline, Givenchy, Loewe, Kenzo, Pucci, Rossimoda, Marc Jacobs, Donna Karan, Berluti, JW Anderson and Nicolas Kirkwood. He has also been a member on several prestigious fashion juries including Andam, CFDA Fashion Incubator, and the LVMH Fashion Prize. He was a member of the management committee of the Chambre Syndicale de la Mode et de la Couture from 2010 to 2018. In 2018, he left the LVMH Group to take up the post of CEO – based in New York – of the company Tory Burch. Founded by his wife in 2004, the private family-run company has more than 350 stores worldwide, 13 retail websites, and nearly 5,000 employees.

• 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.

At the Annual General Meeting of Autoneum Holding Ltd on 24th March 2023, a clear majority of the shareholders approved the introduction of a capital band in the amount of approximately CHF 100 million net proceeds to finance the acquisition of Borgers Automotive. The proposal to waive the payment of a dividend for the 2022 financial year in view of the lower net result was also approved. In addition, Board member Rainer Schmückle as well as CEO Matthias Holzammer were given a farewell.

221 shareholders attended today’s Annual General Meeting of Autoneum Holding Ltd in Winterthur. 66.48 percent of the share capital was represented.

The shareholders approved the Annual Report, the Annual Financial Statements and the Consolidated Financial Statements for 2022. The proposal of the Board of Directors to waive the payment of a dividend for the financial year 2022 due to the lower net result was also approved by the Annual General Meeting.

In addition, the shareholders of Autoneum Holding Ltd granted discharge to all members of the Group Executive Board and the Board of Directors by a large majority of votes.

Chairman Hans-Peter Schwald and the other members of the Board of Directors Liane Hirner, Norbert Indlekofer, Michael Pieper, Oliver Streuli and Ferdinand Stutz were confirmed in office for another year. Hans-Peter Schwald, Norbert Indlekofer, Ferdinand Stutz and Oliver Streuli were re-elected to the Compensation Committee.

The consultative vote on the 2022 remuneration report was approved by 85.55%. The proposals for the remuneration of the Board of Directors and the Group Executive Board for the 2023 financial year as well as the other proposals were also approved by a large majority.

With 99.03%, a clear majority of the shareholders approved a capital band authorizing a capital increase of approximately CHF 100 million net proceeds. The purpose of the capital increase is to partially finance the acquisition of the automotive business of the Borgers Group announced by Autoneum on January 9, 2023. The Annual General Meeting also approved the other proposals of the Board of Directors for partial amendments to the Articles of Association.

Rainer Schmückle did not stand for re-election. He had been Vice Chairman of the Board of Directors, Chairman of the Audit Committee and member of the Strategy and Sustainability Committee since Autoneum became independent in 2011. CEO Matthias Holzammer, who will leave Autoneum for family reasons, was also bid farewell.

At the same time, Hans-Peter Schwald welcomed the new CEO Eelco Spoelder, who will take over the management of the Group from Matthias Holzammer on March 27, 2023: "With Eelco Spoelder, Autoneum gains an accomplished leader with many years of experience in the automotive supply industry. At Faurecia and previously at Continental, Mr. Spoelder has successfully proven that he can ensure strategic continuity and operational excellence even in a difficult market environment. I and the other members of the Board of Directors warmly welcome Eelco Spoelder and look forward to our future cooperation."

In occasion of the next edition of Pitti Uomo, Bemberg™ by Asahi Kasei – the unique fiber with a circular economy footprint obtained from cotton linters through a closed-loop process ensuring certified sustainability credentials through its transparent and traceable approach- reveals a very special Bemberg™ fabrics smart range dedicated to premium denimwear.

This has been made possible thanks to the partnership with PureDenim, a leading Italian company whose strategy since 10 years is based on an entire re-design of the production system, inspired by circular economy principles that combines technology and innovative materials in order to offer the highest levels of design, innovation and real responsible values derived from an holistic approach to sustainability.
The “Blue di Cupro” collection is made with seven fabrics made with Bemberg™, either 100% Bemberg™ or in blend with cotton, wool, and it applies the most advanced Pure Denim Technologies. The Blue di cupro fabrics made with Bemberg™ will also be dyed with “Smart Indigo” an indigo dye technology internally produced by PureDenim, through a chemical-free production. The only elements involved are: water, indigo pigments, and electricity. In terms of finishing, fabrics’ looks and performances are enhanced by the “Eco Sonic” ultrasounds finishing technology which brings significant reduction of water used, increased aesthetic features and controlled discoloration. And last but not least every yarn used at PureDenim is protected by NaturalReco® a 100% natural product that completely SUBSTITUTE the use of plastic films that are one of the key causes of microplastic emission for denim application.

“Blue” seems to be the new colour of Bemberg™, in fact, the company in early November 2022 announced, at the Blue Friday initiative by UNESCO's Intergovernmental Oceanographic Commission (IOC), the achievement of the OK biodegradable MARINE certification, which guarantees the biodegradability of its products even in the marine environment, as certified by TÜV AUSTRIA, meaning a lot in the context of microplastics in water issue solutions. This Bemberg™ certification’s achievement comes on top of other key ones such as the INNOVHUB report that confirms Bemberg™ biodegradability in soil without releasing hazardous substances, the RCS by Textile Exchange, and the Oeko-Tex Standard 100 and ISO 14001 corporate certifications.

• Auraloop is a brand-new range of cushioning solutions made from an innovative structure of Polyester-based fibers, 100% recyclable, aimed at the mobility markets
• One of the objectives of Auraloop is a twofold reduction in the carbon footprint of car seat pads, currently made from polyurethane foam
• Auraloop offers an increased level of performance in terms of thermal comfort and durability

R&D teams within the Faurecia seating activity have recently penned an exclusive development agreement with Indorama Ventures. This partnership between Indorama Ventures and Faurecia, a company of FORVIA Group which is one of the largest automotive industry suppliers, has the aim of developing Auraloop, a new range of cushioning solutions for the mobility markets and intended to replace polyurethane foam currently used in car seats.

“By setting out these initial milestones in our close-knit collaboration with Faurecia, this partnership is an integral part of Indorama Ventures’ commitment to expand its existing Polyester (PET)-based portfolio and related activities into wider areas. By bringing together two leading players in the automotive industry, we aim to open up further growth opportunities for both partners”, stated Arnaud Closson, Chief Executive Officer at Indorama Ventures’ Mobility Group / Fibers Segment.

“Auraloop will replace those materials currently used in car seating with innovative and sustainable materials, based on polyester fibers that offer a total recyclability of 100%. This new material will allow for a twofold reduction in the carbon footprint of car seat pad solutions compared to current materials”, explains Nicolas Michot, Director of Technology at Faurecia Seating. Development of this product, which paves the way towards wider commercial release in two or three years, falls within the FORVIA Group strategy of going carbon neutral by 2045. For this, the group is seeking to root its commercial offer fully in the circular economy, with the development and production of sustainable cutting-edge materials under the banner of MATERI’ACT.

Auraloop offers a range of new perspectives in terms of seating comfort thanks to a more open fiber structure and permeability for air than current seating pad solutions, the breathability of seating is improved, enabling a better passive thermal regulation of occupants. The durability of seating is also increased by limited subsidence of the seat over its lifetime. The market for comfort aboard vehicles is constantly growing. The development of Auraloop falls within this dynamic, with a product offering significantly improved performances in terms of static, dynamic and welcoming comfort.