From the Sector

Over 1.2 million people came together to Move For The Planet, a new global initiative by adidas that harnessed the collective activity of sporting communities across the world.

Over 173 million active minutes were tracked overall across countries in the adidas Running app with adidas pledging to donate €1 to Common Goal for every 10 minutes of activity logged across 34 sports between June 1-12 – up to €1.5m.

The contributions will support projects around the globe that educate and engage communities through sport. One such organisation selected by adidas and Common Goal is the ISF Cambodia (ISF), a charity with 16 years of experience using education and sport to change lives.

The specific project will enable the installation of solar panels to light their football fields – creating safer spaces for girls and the wider community to practice in whilst at the same time, using renewable energy.

In addition to the solar panels, together with Football for Future and Common Goal, adidas is facilitating education on environmental sustainability through sport for ISF with a focus on helping the organization to raise awareness of environmental action in the community.

This will complement ISF workshops on environmental protection, the use of single use-plastic and waste management processes, enabling the children and young adults involved to be positive role models for their community.

Move For The Planet is part of adidas’ wider sustainability initiatives as the company continues its mission to make what’s best for the athlete. Earlier this year, adidas announced that it is ahead of schedule in its journey to replace virgin polyester with recycled polyester in its products wherever possible by the end of 2024. In 2022, 96% of all the polyester adidas used was recycled.

Fibre Extrusion Technology Ltd (FET) of Leeds, UK has strengthened its technical team with the appointment of Dr Jonny Hunter as Research & Development Manager. Hunter brings a wealth of academic credentials to the department, including a Master’s in Medicinal and Biological Chemistry and a PhD in Sustainable Chemistry. This academic background is complemented by over 10 years’ R&D experience in industry, including FMCG and, in particular, medical devices, which encompasses wound care, the medical device manufacturing process and regulatory environment.

FET designs, develops and manufactures extrusion equipment for a wide range of high value textile material applications, so the above research and industrial sectors have great relevance to the company’s focus on the international stage. A significant market for FET’s meltspinning equipment is medical devices, so in-house expertise in this area is a vital commodity. FET is also at the forefront of innovation to promote and develop sustainable fibres, so technical knowhow in sustainability is also essential. In this, Jonny Hunter has considerable experience and has in the past lead a number of innovation projects in sustainable chemistry and management.

This fresh input of knowledge and experience will benefit FET’s customers in their own drive for sustainable innovation in fibre technology. Mark Smith, the previous R&D Manager, is taking a short sabbatical and will be returning in a more strategic role as FET’s Director of Technology, so his continued presence will further contribute to FET’s breadth of technical expertise.

FET has also expanded in a number of other departments to reflect the rapid growth in sales over recent years. Mike Urey is the new Sales Engineer, bringing a wide industrial experience and strengthening all aspects of business development. Three new mechanical and electronic engineers and a new appointment in the design department all combine to take the company forward and sustain growth.

Fibre Extrusion Technology Ltd (FET) of Leeds, UK will be exhibiting at ITMA 2023, taking place between 8-14 June Milan, Italy. FET has commissioned its biggest ever stand to reflect the company’s commitment to this event and the textile industry.

FET designs, develops and manufactures extrusion equipment for a wide range of high value textile material applications worldwide. Central to FET’s success has always been its ability to provide customers with advanced facilities and equipment, together with unrivalled knowledge and expertise in research and production techniques.

The new FET Fibre Development Centre will further improve this service, allowing clients to trial their own products in an ideal environment. Resident equipment in the Fibre Development Centre reflects the wide range of fibre extrusion systems offered by FET to clients worldwide and will enable continued growth of the company through innovation.  

For the first time at ITMA, the new FET Spunbond range will feature. This system provides opportunities for the scaled development of new nonwoven fabrics based on a wide range of fibres and polymers, including bicomponents. Recent customers to benefit from FET spunbond systems include the University of Leeds and an integrated metlblown / spunbond system at the University of Erlangen-Nuremberg in Germany.

FET’s established expertise remains in laboratory and pilot meltspinning equipment for a vast range of applications, such as precursor materials used in high value technical textiles, sportswear, medical devices and specialised novel fibres from exotic and difficult to process polymers. FET has successfully processed almost 30 different polymer types in multifilament, monofilament and non-woven formats, collaborating with specialist companies worldwide to promote greater sustainability through innovative manufacturing processes. Where melt spinning solutions are not suitable, FET provides a viable alternative with pilot and small scale production wet spinning systems.

A major theme at ITMA will again be sustainability. The FET range of laboratory and pilot extrusion lines is ideally suited for both process and end product development of sustainable materials. “This year we are celebrating FET’s 25th anniversary” says FET Managing Director Richard Slack “and we look forward to meeting customers at ITMA, where we can discuss their fibre technology needs.”

• Revenue rose to EUR 2.57 bn, while EBITDA declined to EUR 241.9 mn
• Implementation of EUR 70 mn cost reduction program proceeding according to plan
• Largest investment program in the company’s history including the lyocell plant in Thailand and the pulp mill in Brazil implemented on time and within budget
• Outlook: Lenzing expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn

The Lenzing Group was increasingly affected by extreme developments on the global energy and raw material markets in the 2022 financial year, in tandem with most of manufacturing industry in Europe. The market environment also deteriorated significantly in the third and fourth quarters, while worsening consumer sentiment placed an additional burden on Lenzing’s business growth.

In the year under review, revenue increased by 16.9 percent year-on-year to reach EUR 2.57 bn, primarily as a result of higher fiber prices. The quantity of fiber sold decreased, while the quantity of pulp sold rose. In addition to lower demand, the earnings trend particularly reflects the increase in energy and raw material costs. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 33.3 percent year-on-year to EUR 241.9 mn in 2022. The net result for the year was minus EUR 37.2 mn (compared with EUR 127.7 mn in the 2021 financial year), while earnings per share stood at minus EUR 2.75 (compared with EUR 4.16 in the 2021 financial year).

Outlook
The war in Ukraine and the tighter monetary policy pursued by many central banks to combat inflation will continue to exert pressure on the global economy. The easing of China’s zero-Covid policy could lead to an unexpectedly rapid recovery. However, the IMF has warned that risks remain high overall and projects growth of 2.9 percent in 2023. Exchange rate volatility looks set to continue in regions that are important to Lenzing.

These challenging market conditions are also continuing to weigh on consumer confidence and sentiment in the sectors relevant to Lenzing. The outlook has improved slightly of late, with inventory levels returning to normal across the value chain. Nonetheless, subdued demand remains a source of concern for market players.

Inventories in the bellwether cotton market have diminished recently, although they remain above pre-pandemic levels. A decline in crops is foreseeable in the current 2022/2023 harvest season. The sharp rise in prices on the energy and raw material markets will continue to pose significant challenges for the market.

Overall, earnings visibility remains restricted.

In structural terms, Lenzing expects a continued rise in demand for environmentally friendly fibers in the textile and clothing industry, as well as in the hygiene and medical sectors. Thus, with its “Better Growth” strategy, Lenzing is very well positioned and will continue to drive growth in specialty products, while pursuing its sustainability targets including the transformation from a linear to a circular economy model.

In light of these factors and assuming a further market recovery in the current financial year, the Lenzing Group expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn.

Global Fashion Summit, a leading international forum for sustainability in fashion, will convene core stakeholders across the fashion ecosystem and parallel industries to drive tangible action on social and environmental sustainability. The Summit is presented by Global Fashion Agenda (GFA). GFA is a non-profit organisation that is accelerating the transition to a net positive fashion industry, under the patronage of HRH The Crown Princess of Denmark. Global Fashion Summit: Copenhagen Edition 2023 will take place on 27-28 June in Copenhagen, Denmark.

The theme of Global Fashion Summit: Copenhagen Edition 2023 is ‘Ambition to Action’. Under this premise, the Summit will present content experiences focused on tangible impact.

The theme will underly all elements of the Summit and Main Stage speakers will showcase inspiring thought leadership for accelerated change by exploring a matrix of interconnected topics. The 2023 Copenhagen Edition will build on more than a decade’s worth of Summit guidance and outcomes by dedicating even more focus towards action-oriented workshops and case studies. Through these formats, the forum will demonstrate tangible learnings and concrete recommendations that can help drive implementation.
 
The forum will also host strategic roundtable meetings with the aim to mobilise industry leaders to build alliances with solution providers, policy makers, investors and other industry stakeholders and implement immediate solutions. Such alliances can set in motion progress towards a net positive industry. With upcoming policy expected to influence the fashion industry even further this year, the Summit will shed light on the ongoing pieces of legislation currently under discussion both within the EU and worldwide.

This year’s Global Fashion Summit: Copenhagen Edition is supported by Principal Sponsor, Maersk. A globally renowned leader in logistics that aims to deliver a more connected, agile and sustainable future for global logistics. Maersk will support the Summit's agenda to accelerate industry transformation by highlighting how logistics can help the fashion and lifestyle industry in reaching their sustainability goals.

Additionally, the Innovation Forum will present a curated exhibition of other leading sustainable solutions. Summit attendees can meet with exhibitors covering the entire value chain – from innovative materials to end-of-use solutions. Innovation Forum Matchmaking will enable small and large fashion businesses to advance their sustainability journey, by providing the unique opportunity to be matched with relevant solution providers. 

• In Spring 2022, adidas announced its partnership with Impact Hub and Blavity.org to launch a new program called Cultivate & B.L.O.O.M. (Building Legacies Out of Movements), an accelerator program for social entrepreneurs of color.
• Through knowledge sharing and funding, the program cultivates a thriving ecosystem for changemakers to accelerate impact and deliver initiatives at the intersection of sport, equity and creativity for Black and Latinx communities.

In Spring 2022, adidas announced its newest program, Cultivate & B.L.O.O.M., designed to equip entrepreneurs of color with tools and resources to enable them to accelerate growth and maximize impact. As part of adidas’ United Against Racism commitments and celebration of boundary-breaking Black women, Cultivate & B.L.O.O.M. is further closing the opportunity gap that exists for Black and Latinx social entrepreneurs by elevating, co-creating with and funding entrepreneurs creating change in their communities.

Through an intentional selection process, eight Black women social entrepreneurs were identified to participate in the first-ever Cultivate & B.L.O.O.M. cohort. The first cohort kicked off in July 2022 and will graduate in March 2023.

Throughout their nine months in the program, entrepreneurs have access to a tailored portfolio of resources and opportunities from within and outside of the adidas ecosystems that will serve to accelerate their impact. These resources include funding, access to industry experts, mentorship, workshops, fireside chats and visibility into adidas’ networks.

After graduating from the program, participants become a partner in the “Innovation Network”, a network of social impact partners that seek to drive forward change within their communities and organizations. This portfolio of partners will enable adidas to continue strengthening the diversity of our partnership network, increase our reach within key markets and deepen our relationships over time.

• Lenzing again recognized for sustainable sourcing, innovation and transparency
• Lenzing achieves the highest category for the third time already

The Lenzing Group achieved first place in the “Hot Button Ranking” of the Canadian non-profit organization Canopy, thus confirming its leading role in the areas of sustainability and responsible wood and pulp sourcing. Lenzing can also once again celebrate a dark green shirt, synonymous with the highest category.

In this ranking, which receives a lot of attention in the textile and apparel industry, Canopy evaluates the world’s 34 largest producers of cellulosic fibers in terms of their sustainable wood and pulp sourcing, their efforts with regard to the use of alternative raw materials and their achievements in the protection of ancient and endangered forests. Resource preservation is a key element of Lenzing’s corporate strategy and at the core of its innovation agenda. The sustainable production of TENCEL™, VEOCEL™ and LENZING™ ECOVERO™branded specialty fibers is based on these principles.

Promoting the circular economy
With its REFIBRA™ and Eco Cycle technologies, Lenzing offers solutions for transforming the textile and nonwovens industries towards a circular economy. In line with its vision for the circular economy, “We give waste a new life. Every day.” Lenzing is driving the industry toward a full circular economy by striving to give waste a new life in all aspects of its core business and developing circular solutions together with potential partners inside and outside the current value chain. A milestone on this path is the cooperation with the Swedish pulp producer Södra. The two global market leaders, who have been proactively promoting the circular economy in the fashion industry for many years, are joining forces to give the topic a further boost and make a decisive contribution to solving the global textile waste problem by making fibers from post-consumer textiles.

Today, Lenzing offers lyocell fibers made from 30 percent recycled cotton waste. The company aims to launch lyocell, modal and viscose staple fibers with up to 50 percent recycled post-consumer content on a commercial scale by 2025 and to develop a new circular business model by closing the loops for post-consumer waste. By 2025, the company plans to enter into further partnerships with 25 key supply chain companies.

• Currency-neutral sales up 4%, reflecting continued double-digit growth outside Greater China
• Gross margin down 1.0pp to 49.1% as price increases were more than offset by increased supply chain costs, higher discounting, and an unfavorable market mix
• Operating profit of € 564 million reflecting an operating margin of 8.8%
• Net income from continuing operations of € 66 million negatively impacted by several one-off costs totaling almost € 300 million as well as extraordinary tax effects in Q3

“The market environment shifted at the beginning of September as consumer demand in Western markets slowed and traffic trends in Greater China further deteriorated. As a result, we saw a significant inventory buildup across the industry, leading to higher promotional activity during the remainder of the year which will increasingly weigh on our earnings,” said adidas CFO Harm Ohlmeyer. “We are encouraged by the enthusiasm for the upcoming FIFA World Cup which is already noticeable in our Football revenue growth. And in North America we are gearing up for an exciting upcoming basketball launch.”

In the third quarter, adidas’ currency-neutral revenues increased 4%. While the company experienced high-single-digit top-line growth during the first two months of the period, deteriorating traffic trends in Greater China as well as slowing consumer demand in major Western markets weighed on the revenue development in September. In addition, the company’s decision to suspend its own operations in Russia at the end of Q1 significantly reduced revenues by more than € 100 million during the third quarter, particularly impacting the company’s direct-to-consumer (DTC) business. In euro terms, the company’s revenues grew 11% to € 6.408 billion in the third quarter (2021: € 5.752 billion).

From a category perspective, revenue growth was the highest in adidas’ strategic growth categories Football and Running, both growing at strong double-digit rates. In Football, the jersey launches ahead of the FIFA World Cup 2022 fueled consumer excitement prior to the tournament. Revenues in Running were driven by the latest iterations of adidas’ successful running franchises, including Adizero and Supernova, which both grew more than 50% during the quarter. On the Lifestyle side, the further scaling of the successful Forum and Ozweego franchises led to strong double-digit growth for both product families. At the same time, additional highly limited drops as part of the Gucci and Balenciaga partnerships continued to spark excitement around the adidas brand.   

From a regional perspective, revenue growth was driven by the company’s Western markets and APAC, which combined continued to grow at a double-digit rate (+12%). In EMEA, revenues grew 7% despite the loss of revenue in Russia/CIS of more than € 100 million. Revenues in North America increased 8% during the quarter driven by a double-digit increase in the company’s DTC channel. In APAC and Latin America, revenue growth accelerated compared to Q2, reaching 15% and 51% respectively, year-on-year. In contrast, the company’s top-line development in Greater China continues to be severely impacted by the challenging market environment, mainly related to the ongoing covid-19-related restrictions. While the company’s own retail revenues in Greater China increased 7% in the third quarter reflecting a robust sell-out, the significant product takebacks reduced the company’s sell-in and resulted in a revenue decline of 27% for the market as a whole during the three-month period.  

Strong bottom-line improvement in 2023  
In 2023, the company expects the non-recurrence of the one-off costs of around € 500 million occurred in 2022 to have a positive impact on the net income development in the same magnitude. In addition, in light of the challenging market environment, adidas established a business improvement program to safeguard the company’s profitability in 2023. As part of this program the company has launched several initiatives to mitigate the significant cost increases resulting from the inflationary pressure across the company’s value chain as well as unfavorable currency movements. In total, the program, which will result in one-off costs of around € 50 million in the fourth quarter of 2022, is expected to compensate cost headwinds of up to € 500 million in 2023. In addition, it is expected to deliver a positive profit contribution of around € 200 million next year. 

After two years of joint collaboration and research the Swiss Textile Recycling Project “Texcircle” comes to an end. Partners and stakeholders have worked on the vision of a textile cluster where materials flow in circular loops. The goal of the project was to develop high-quality yarns and products incorporating such a large amount of recycled textiles as possible. In the end, several product prototypes from carpets, socks, and curtains to pullovers, padding and accessories have been developed with at least 50 % recycled fiber up to 80 % recycled fibers and yarns.

Europe has a waste problem of 7.5 million waste of which only 30-35 % is collected and less than 1 % of the textile and clothing worldwide is recycled into textiles and clothing again. It is as well found that around 80 % of the impact of a textile product lies in the design.

Together with the design research expertise of the Lucerne University of Applied sciences and arts, the spinning expertise of Rieter and the sorting and collection expertise of Texaid, systems should be created where products of high quality can be produced of recycled fiber. On board were the expertise of further Cluster partners of Brands, Retailers, and the public sector to see how a joint Cluster and system coukld be established.

The Project Texcircle and cluster is led by the Lucerne University of Applied Sciences and Arts – Art  & Design, and in collaboration with Coop, Rieter, Jacob Rohner AG, Ruckstuhl AG, TEXAID as well as workfashion.com ag. Furthermore, Bundesamt für Zivildienst ZIVI, NIKIN AG, and Tiger Liz Textiles are supporting the project. The project is funded by Innosuisse.

Furthermore, collaboration partners from all over Europe contributed to the project to enable these prototypes and systems.

Through joint developments from the design, the collecting, sorting trials, tearing, and spinning trials until the actual production trials and product testing. The partners were able to recycle 2.5 Tons of pre-and post-consumer textile waste into product prototypes with a promising commercial interest. From socks, west, and pullovers to non-woven felts and accessories to carpets and curtains. Through our 2 years of collaboration, the teamcame across several hurdles in the textile recycling value chain which could be tackled. This was a proof of concept that a circular system is possible and the industry now has to enable this at full scale.

Wild Wonder – a hue inspired by the warm tones of harvested crops – is AkzoNobel’s Color of the Year 2023. Its upbeat glow connects with nature, creating a sense of energy and positivity.

As people search for support, connection, inspiration and balance in the world today, they’re diving into the wonders of the natural world to find it. Extensive research conducted by a team of in-house paints and coatings color experts and international design professionals found hope at the heart of global social, design and consumer trends.

“Wild Wonder speaks to us in a language we instinctively understand,” says Heleen van Gent, Creative Director of AkzoNobel’s Global Aesthetic Center. “Nature is what inspires us and makes us feel better in our lives and in our homes. That’s why, for the first time in 20 years, our entire color palette is inspired by the rhythms of nature.”

Four decorative paint color palettes have been designed around Wild Wonder: Lush Colors (the forest hues), Buzz Colors (meadow brights), Raw Colors (harvest shades) and Flow Colors (seashore tones). For consumers personalizing their homes and urban environments, the palettes make it easy to choose wall colors for a timeless look that’s also bang on trend.

Color of the Year is the spark of inspiration that ignites a long-term design partnership with industrial coatings customers. On-trend colors, textures and special effects have been designed for the aerospace, automotive, consumer electronics, metal furniture, lighting, cabinetry, flooring, building products and architecture markets, as well as decorative paints. Using innovative digital tools such as the AkzoNobel Design app, coatings experts and customers work together to create the best finish for their products. 2

The year 2023 brings two major milestones to the Global Aesthetic Center. Its ColourFutures trend forecast will celebrate its 20^th anniversary, while the team also reaches three decades of trend analysis, color research, color design and art direction at AkzoNobel.