From the Sector

• Revenue up 11 percent to EUR 1,149.1 mn
• EBITDA increase of 38.8 percent to EUR 270.7 mn
• Detailed planning for new production plant for TENCEL® fibers in Thailand in Progress
• New sales offices opened in Turkey and Korea
• New EcoVeroTM branded viscose fibers with very favorable ecological footprint launched

The Lenzing Group generated new record highs in the first half of the 2017 financial year for both revenue and earnings. The key underlying factors were good capacity utilization, higher selling prices and an attractive product mix. Lenzing will continue to focus on the disciplined implementation of the Group strategy sCore TEN, in order to be even closer to the customer and to further expand the offering of specialty fibers.

Consolidated revenue increased by 11 percent from the first half of the previous financial year to EUR 1,149.1 mn. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) were up 38.8 percent to EUR 270.7 mn, corresponding to an EBITDA margin of 23.6 percent in comparison to 18.9 percent in the prior-year period. Earnings before interest and tax (EBIT) increased by 57.4 percent to EUR 204.2 mn, resulting in a higher EBIT margin of 17.8 percent (H1 2016: 12.5 percent). The profit for the period improved by 58.9 percent to EUR 150.3 mn, and earnings per share climbed 59 percent to EUR 5.55 per share.

“The first half-year developed very well for the Lenzing Group, and we are pleased with the best half-year period in the company’s history. We will continue our disciplined implementation of the sCore TEN strategy. The expansion of new state-of-the-art production capacities for our specialty fibers is proceeding well and will support our customers in their own expansion efforts for products made of our botanic fibers. The decision to set up a subsidiary and acquire a respective landplot in Thailand is the next step in the implementation of this strategy. On the innovation side we are proud that after the introduction of RefibraTM branded lyocell fibers, we launched now EcoVeroTM. This is a particularly high-performance fiber featuring a very favorable ecological footprint and sets the new benchmark for the entire industry – from fiber to garment”, states Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “Assuming that fiber market conditions remain at current levels, we expect a substantial earnings improvement in 2017 compared to 2016.”

With less than four months to go before Intertextile Shanghai Home Textiles takes place, the domestic market is showing strong signs of rejuvenation. China’s economy has stabilised recently, with 2016 GDP recording a 6.7% increase and reaching USD 10.7 trillion, while the National Bureau of Statistics also stated that the total sales of consumer goods last year rose 10.4% to nearly USD 4.8 trillion. Not only will the estimated 10 million couples getting married every year contribute to the strong demand for home textiles products, but the ascending living standards resulting from increased urbanisation together with the flourishing hospitality industry are also driving forces for the market. Apart from the domestic market, the Chinese home textiles industry is also actively opening up new markets around the world, particularly in the ASEAN region where exports continue to increase.

Along with the national 13th Five-Year Plan, the home textiles industry has also set its own development plan for the coming five years. Industry leaders, the China National Textile and Apparel Council and the China Home Textile Association, have announced that the home textiles industry is to be modernised by incorporating more innovative, technological and artistic elements. Annual growth of 5.5% and 3.2% for revenue and exports, respectively, are targeted, while automation is to be further promoted to enhance productivity.
Ms Wendy Wen, Senior General Manager of Messe Frankfurt (HK) Ltd added that the prevalent whole-home trend in China will also stimulate the market as a whole. “More and more companies are starting to promote the whole-home concept which emphasises unified styles of decoration throughout the entire home to customers. Compared to demonstrating home textile products separately, showcasing whole-home furnishing is more appealing to Chinese buyers and will encourage sales. The synergy among products, especially those between home textile products and furniture is the emerging trend at present,” said Ms Wen.