From the Sector

• 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.

• Startschuss für das Pinnacle Project

Der Eröffnungsabend des allerersten The North Face Stores war ein denkwürdiger Moment. Am 26. Oktober 1966 drängte sich eine bunte Mischung aus Punk-Kletterern, Modefans, Aktivisten, Promis und Beatniks aus der Umgebung in einem kleinen, bescheidenen Outdoor-Ausrüstungsladen an San Franciscos North Beach zusammen. Ein paar wohlgesonnene Biker fungierten als Türsteher, während die Menge ein spontanes Konzert der Rocklegende Grateful Dead genoss. Das war die Geburtsstunde des Spirits von The North Face.

Mehr als 50 Jahre reizt The North Face in Gedenken an jenen Abend die Grenzen des Outdoor-Abenteuers weiter aus: mit der Eröffnung eines spektakulären Pop-ups auf 2100 Meter Höhe inmitten der Dolomiten.  
 
Der Pop-up liegt im Val San Nicolò in den italienischen Alpen und ist nur zur Fuß erreichbar. Eine zweistündige Wanderung erwartet alle, die hier begehrte Sammlerstücke erstehen möchten, die einmal berühmten Abenteurern wie Alex Honnold, Conrad Anker, Simone Moro oder Caronline Ciavaldine gehörten. Acht Taschen und Jacken, getragen von The-North-Face-Athleten bei ihren OutdoorSternstunden, wurden liebevoll aufbereitet und mit einer Widmung des ursprünglichen Trägers versehen, um den neuen Eigentümer daran zu erinnern, dass überall das Abenteuer warten kann.
 
Der Pop-up öffnet seine Türen für zehn Tage, in denen Abenteurer die Gelegenheit haben, die geschichtsträchtigen Stücke zu sehen, bevor sie versteigert werden. Der gesamte Erlös kommt dabei den Bergen zugute. Das Projekt ist ein Verweis auf die Wurzeln von The North Face und wird Bergfreunden auf Jahre hin als permanentes Biwak dienen.
 
Die Eröffnung des Berg-Pop-ups ist auch Startschuss für das Pinnacle Project von The North Face: eine bunte Mischung aus Live-Events im Zeichen von Outdoor, Mode, Design und Musik für Abenteurer, Querdenker und andere Rebellen. Das Pinnacle Project kommt im Herbst auch nach Berlin und Manchester, wo limitierte Kollektionen für Großstadtabenteurer angeboten werden.
 
 #NeverStopExploring

FILPUCCI GROUP proceeds along the path of commitment towards an ever more responsible innovation. The group takes part in the 83rd edition of Pitti Filati (June 27-29, 2018) with unique products, high-end knitwear and creative yarns, all resulting from the authentic Smart Innovation the company has been long committed to.
 
Research, style and fashion are key words for the world-renown Tuscan company, which unveils an always more responsible approach both at a corporate level and in terms of offer.
Here are some key elements to prove Filpucci’s relentless commitment:

• The GOTS (Global Organic Textile Standard) and OCS (Organic Content Standard) certifications obtained by the Filpucci dyeing plant add to the Clear to Wear (CTW) standard developed by Inditex Group and achieved in 2014 and to the Detox commitment, which was signed in February, 2016.
• Not only the best raw materials, but also an established knowhow in the fields of dyeing and finishing, always under the key concept of Responsible Innovation. This concept extends to each and every FILPUCCI collection and their ever-increasing offer, the roughly twenty innovative new items, the Woolen line of carded yarns and the real spearhead of premium fashion, the Collection. Among this season’s new offer: Baby Camel Re.Verso™, RWS- certified merino organic wool, Re.Verso™ cashmere, organic silks and FSC-certified viscose.
• The achievement of further certifications such as the FSC (Forest Stewardship Council) for viscose shows the care and respect towards the ecosystem as a whole, guaranteeing a product derived from a forest or a plantation forest in the respect of strict environmental, social and economic standards. The RWS (Responsible Wool Standard) finally guarantees the use of wool coming from livestock managed under rigorous criteria oriented towards the wellbeing of animals and the reduction of environmental impact.
• Filpucci Group is all about a constant vocation towards new generation values and a reliable, traceable and transparent manufacturing process, as shown by the Re.Verso™ circular economy supply chain, of which the group is a unique ambassador in the field of high-end/low-impact knitwear yarns.

With absolute quality always in mind, FILPUCCI GROUP represents a corporate model that has made of sustainability a real mission, embarking on complex paths that have brought great results with fashionable textile solutions lead by ethnical and sustainable values. Thanks to this, Filpucci’s products have become part of Patagonia Collections, an important acknowledging from the brand’s part, whose managers stated: “We are always on the hunt for the highest performing, lowest impact materials. We were thrilled to find Re.Verso ™ (95/5 transformed) Cashmere yarn from Filpucci. It allowed us to create a range of products with the insulative and soft properties of cashmere while adhering to our mission statement; build the best product, cause no unnecessary harm.”
FILPUCCI GROUP’s commitment is evident and it moves forward thanks to the passion towards responsible and innovative paths that contribute to turning the group into a reliable partner, symbol of quality and excellence.

Filpucci is also a C.L.A.S.S. (Creativity Lifestyle And Sustainable Synergy) partner.

• Spanish outdoor and sportswear market leader expands international presence thanks to Lectra’s latest product lifecycle management solution

Ismaning/Paris – Lectra, the technological partner for companies using fabrics and leather, is pleased to announce that the Ternua Group, a world-renowned Spanish outdoor clothing and sportswear group, has chosen Lectra Fashion PLM 4.0 to increase their geographical presence by improving global teamwork.

Founded in 1994, the Ternua Group has achieved worldwide success by promoting adventure through respect for nature, producing sustainable technical clothing for outdoor sports enthusiasts worldwide. The group’s strong commitment to the environment is shown through their R&D that focuses on developing their own fabric by using eco-friendly materials such as organic cotton and recycled down.

Today, the group’s portfolio includes three brands Ternua, Astore and Lorpen, currently exporting to more than 50 countries, with operations in Europe, America and Asia. Compounding this global success, the ambitious group plans to penetrate more markets across the globe.

The group is implementing Lectra Fashion PLM 4.0 into their entire production process. Specifically developed to help fashion companies navigate the digital era, this modular and user-friendly solution will help the Ternua Group centralize and store information coming from their brands by digitalizing their supply chain. This will connect all teams involved in the design-to-production process, regardless of geographic location. Team members will also be able to comm unicate better with external suppliers, access accurate information and keep track of every collection’s development progress. The group can hence speed up the entire production process and help their brands deliver their collections to markets all over the world on time.

“We manage our design and product development processes in-house but outsource our production in Europe, north of Africa and Asia. For our business to expand globally, we need to go fully digital. By having a system that consolidates and standardizes data coming from all supply chain actors across the world, we can respond faster to consumer demand,” explains Aitor Barinaga, Chief Operations Officer, Ternua Group. “We have assessed all other vendors—and Lectra Fashion PLM 4.0 is clearly the winner. It has the ability to fully integrate all processes and improve communication and teamwork across all departments through sound data management. We are more than happy to have a trusted partner as Lectra for such an ambitious project.”

“Ternua Group is constantly pushing the boundaries of innovation. This is shown through their desire to help customers achieve their personal best by providing them with high-performance technical wear that is also environmentally friendly. We are thrilled to embark on this new journey with the Ternua Group, and we are confident that our solution and expertise will help them get their collections out to new markets on time,” says Rodrigo Siza, Managing Director, Spain and Portugal, Lectra.

Innovationen gibt es für Lauf-, Bike- und Fitness- sowie für Yoga- und Outdoor-Bekleidung

creora®, die innovative Elastanmarke des koreanischen Herstellers Hyosung Corporation, wird auf der ISPO in München erstmals seine neuen Stoffinnovationen aus recycelten Materialien sowie die neue Kollektion der creora®-Elastanstoffe vorstellen.

Als weltgrößter Hersteller von recyceltem Nylon und recyceltem Polyester arbeitet Hyosung stetig daran, sowohl die produktionsbedingten Abfälle als auch den Energie- und Wasserverbrauch so gut wie möglich zu reduzieren. Für die Verwendung von recycelten Materialien und der Sicherstellung einer umweltfreundlichen Produktion hat das Unternehmen das „Global Recycle Standard“-Zertifikat (GRS) erhalten.

Auf der ISPO wird der Hersteller Hyosung seine Stoffinnovation MIPAN regen aqua-X präsentieren, ein recyceltes Nylon mit kühlender Wirkung. In Kombination mit creora® Color+ eignet sich dieser Stoff besonders gut für Lauf-, Bike- und Fitnessbekleidung. Für eine höhere Chlorbeständigkeit für Schwimm- und Triathlonbekleidung wird MIPAN regen aqua-X zusätzlich mit creora® highclo™ verarbeitet.

Außerdem hat creora® das recycelte Polyester regen cotna entwickelt. In Kombination mit dem Elastan creora® Fresh eignet sich der Stoff perfekt für jede Art von Outdoor-Bekleidung.

Weitere nachhaltige Stoffe enthalten das spinngefärbte Elastan creora® Black mit dem Nylon MIPAN Black, das Durchscheineffekte etwa bei Laufbekleidung oder Unterwäsche vermeidet. Speziell für Yoga-
Bekleidung kommt das spinngefärbte Nylon creora® eco-soft zum Einsatz.