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.

Bobingen - On the 4th October 2017 a new brand was introduced at Trevira: Trevira SINFINECO®. This label may be carried by all textiles that contain sustainable Trevira products. Sustainable, innovative, high-value and responsible – these are the values the new brand stands for.

As an industrial enterprise, Trevira is conscious of its special responsibility for an intact environment and has long advocated the recycling of valuable raw materials and waste products. Trevira CEO Klaus Holz: “We at Trevira wish to preserve the environment and at the same time work to create value. These are the criteria of our sustainability concept.“

Creation of the new brand is therefore only a logical step, one that enables customers to label their sustainable Trevira products as such. Trevira is known for the high quality of its products. In every way recycled products are as good as the original materials in terms of quality and performance.

Two vital elements in Pre-Consumer Recycling and an important concept in Post-Consumer Recycling form part of the sustainability strategy of Trevira to conserve resources and maintain value. :

In the area of Pre-Consumer Recycling, on the one hand, residual materials resulting from the manufacture of polyester fibres and filaments in Bobingen and Guben, dependent on the manufacturing step, are processed in the agglomeration plant and restored to become serviceable primary material. The recyclates are then fed back to our fibre and filament spinning mills, to be made into new top-quality products.

On the other hand, in fibre production there occurs in the manufacture of tow a small proportion of tow that cannot be used for converting and has to be cut out. Instead of selling this material as waste, it is cut up, pressed into balls and then carded / combed by a partner, resulting in a 1A quality product. The GRS certification (Global Recycled Standard) is requested for this. As with converter tow from new material, the recycled tow is mostly incorporated into polyester wool blends (55 % PET / 45 % wool), which are used primarily in corporate wear and uniforms.

In the area of Post-Consumer Recycling, Trevira offers filament yarns consisting of 100 % recycled PET bottles. Our parent company Indorama manufactures very high quality recycled chips from PET bottles. Since only transparent PET bottles are used in Thailand, the flakes and chips are of a particularly good and very uniform quality. The recycled chips, fibres and filaments from Indorama bear the GRS certificates (Global Recycled Standard) and RCS-NL (Recycled Claim Standard). Trevira processes the regranulate made by Indorama from bottle flakes into filament yarns consisting 100 % of recycled material. The filament yarns are available in titres 167 and 76 dtex normal polyester. Alongside technical applications, they are used in the automotive and apparel sectors. In addition, many promising developments with the recycled material are on their way.

• 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.”

Based in Porto, Portugal, Rodrigo Siza will focus on nurturing new regional collaborations to benefit the needs of Lectra’s customers, and faciliate their success in the Industry 4.0 era. Rodrigo will rely on Lectra’s highly experienced teams located in the region.
“Rodrigo has very effectively established long-term partnerships with our fashion and apparel, automotive and furniture customers in Portugal. He has helped our customers to emerge stronger from the world crisis which heavily impacted them. After 10 successful years as head of Lectra Portgual, Rodrigo is now also in charge of meeting the expectations of our Spanish customers,” stated Daniel Harari, Lectra Chairman and CEO.

Players in the region are witnessing a strong dynamic, notably fashion brands in Spain and fashion and automotive industrialists with heightened added-value in Portugal. With the recent announcement of a new strategy to focus on Industry 4.0, Lectra is in a strong position to support these businesses in the digitalization of their processes.
For industries faced with more demanding consumers and ever-shorter product development and manufacturing cycles, integrating all steps along the extended supply chain, from design to cutting, is now a top priority. This is particularly apparent in Spain and Portugal, two countries positioned, in their own way, at the heart of Europe’s fashion and automotive industries.
Rodrigo started his career at Tradetex, a trading company of textiles for clothing, as a textile designer. From 1991 to 1999, he was an associate of V-Sistemas Informatica, specialized in the development and distribution of technical solutions for the textile industry. In 2000, he joined Lectra Portugal as a design and merchandising manager, and then evolved into the position of international consultant in 2004. He left Lectra in 2005 to take the position of Sales Director of RPB Têxteis e Vestuario, a company that makes clothes, before returning to Lectra in 2007 to take over the management of the Portuguese subsidiary. Rodrigo has a masters in marketing from Minho University and a degree in design and communication from Porto University, both located in Portugal.

Offering continuous process improvement for automated leather cutting, Versalis LeatherSuite V6 is a step toward an Industry 4.0-ready cutting room for makers of leather vehicle seating and interiors and leather furnishings. The new version of Versalis LeatherSuite enables companies to boost productivity, achieve exceptional cut quality and expand data monitoring capabilities. With Versalis LeatherSuite V6, furniture manufacturers can increase productivity by up to 6%, while automotive suppliers can increase theirs from 8% to 15%.
Versalis LeatherSuite V6 delivers greater precision than ever before for superior leather cutting quality. For that purpose, the new software suite embeds enhanced cutting algorithm addressing latest challenges faced by furniture and automotive customers.
The latest Versalis LeatherSuite’s expanded capabilities also enable manufacturers to manage a wider range of production indicators throughout the cutting process. Developed with the input of Lectra’s automotive and furniture customers, the latest version of the Versalis software suite offers enriched data for process optimization and streamlined execution, enabling manufacturers to reach operational excellence objectives and monitor production. LeatherSuite also empowers manufacturers with decision support, through customizable reports highlighting key performance indicators. Accurate and reliable analyses can be viewed at a glance thanks to the suite’s built-in data modeling.
“With this release, Lectra marks a milestone in terms of customer experience and productivity,” states Céline Choussy Bedouet, Chief Marketing and Communications Officer, Lectra. “Versalis LeatherSuite V6 is the technology enabler that allows producers of cut leather parts to leverage maximum performance from the Versalis cutting room solution.”

Under the motto: “Enhancing your gear, it’s our nature”, Archroma invites show visitors to discover how to:

• Create exciting color effects – with solutions ranging from high-fast dyes Foron® S-WF, Nylosan® S, Printofix® TF, Drimaren® HF, and the new-in-range Foron® S luminous dyes, to EarthColors nature inspired biomass-waste based dyes, supported by Archroma’s Color Atlas color management service to boost your creativity;
• Make gear more resistant to extreme weather conditions from heatwaves to rain pours, with thermo-control and protection solutions, coldblack®, HyDry, Smartrepel®, Appretan® S and Sanitized®;
• Bring softness and comfort to your gear whilst looking good at all times, with Archroma’s fabric care effects Siligen®, Solusoft, Ceralube® and Arkofix®;
• Take a sustainability step up - with the new online ONE WAY calculator.
Visitors at the booth will also be able to discover the new fabric collection created by Flocus and colored with Archroma’s Earthcolors. Flocus is a company producing yarns, fillings and fabrics made from kapok fibers, for which they received the 2016 OutDoor Industry award in the Sustainable Innovation category.

“Lenzing stands for a responsible approach to nature. For this reason, we use 100% of the natural resource wood, from the core to the bark – as pulp, bioenergy and biochemicals such as acetic acid”, explains Lenzing CEO Stefan Doboczky. “That is why we are very pleased that our pioneering role with respect to the issue of sustainability has gained worldwide recognition”, Mr. Doboczky adds.

The Lenzing Group produces dissolving pulp at its sites in Lenzing, Austria and Paskov, Czech Republic. All the valuable raw materials are extracted from the wood within the framework of a cascading use. Acetic acid is derived from beech wood in the pulp production process, is recovered in several process steps and processed into high quality, food-grade acetic acid, for example for the food industry. Furfural is a product utilized as a solvent in the refining of lubrication oil, to name one example. Magnesium lignosulfonate is found in animal food or fertilizers.