EQS-News: Lenzing Group reports revenue and earnings growth in the first quarter of 2024
EQS-News: Lenzing AG / Key word(s): Quarter Results
Lenzing Group reports revenue and earnings growth in the first quarter of 2024
08.05.2024 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
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Lenzing Group reports revenue and earnings growth in the first quarter of 2024
• Revenue up 5.7 percent year-on-year to EUR 658.4 million
• EBITDA more than doubles year-on-year to EUR 71.4 million
• Free cash flow of EUR 87.3 million (compared with minus EUR 132.3 million in the
first quarter of 2023) and thereby positive for the third consecutive quarter
• Performance program shows positive effect on revenue, EDITDA, and free cash flow
• Lenzing confirms EBITDA guidance for 2024
Lenzing – The Lenzing Group, a leading supplier of regenerated cellulose for the textile
and nonwovens industries, recorded a further improvement in fiber sales volumes in the
first quarter of 2024. An expected recovery in markets relevant for Lenzing has to date
failed to materialize. Fiber prices remained at a low level. Although the costs of raw
materials and energy continued to decrease, they remained higher than in the pre-crisis
2019 year.
The Lenzing Group’s revenue rose by 5.7 percent year-on-year to EUR 658.4 mn in the
first quarter of 2024. This growth is primarily attributable to higher fiber sales
volumes. Earnings before interest, tax, depreciation and amortization (EBITDA) more than
doubled to EUR 71.4 million in the reporting period (compared with EUR 29.7 million in
the first quarter of 2023). The operating result (EBIT) was slightly positive at
EUR 1.5 million (compared with minus EUR 41.4 million in the first quarter of 2023).
Earnings before tax (EBT) amounted to minus EUR 17.8 million, but were also
significantly better than in the same period of the previous year (minus
EUR 74.2 million). Earnings per share amounted to minus EUR 0.83 (compared with minus
EUR 3.03 in the first quarter of 2023). Cash flow from operating activities stood at
EUR 120.7 million in the first quarter of 2024 (compared with minus EUR 47.7 million in
the first quarter of 2023). At EUR 87.3 mn (compared with minus EUR 132.3 mn in the
first quarter of 2023), free cash flow was positive for the third consecutive quarter,
once again confirming that the measures implemented as part of the performance program
to strengthen free cash flow are taking effect.
“The business development of the Lenzing Group is heading in the right direction in the
first quarter. However, we cannot speak of a sustainable market recovery as long as
price pressure in the fiber business remains high,” notes Stephan Sielaff, Lenzing Group
CEO. “Nevertheless, improved business performance and good demand for our specialty
fibers show that we are also making good progress, especially with our initiatives to
strengthen our sales activities. We are not awaiting a tailwind from the market, but are
continuing to implement our performance program with determination.”
Since the third quarter of 2023, the Managing Board of Lenzing AG has been consistently
implementing a comprehensive performance program with the overriding objective of
significantly enhancing long-term resilience to crises, and of greater agility in the
face of market changes. The program initiatives are primarily aimed at generating free
cash flow and improving EBITDA through stronger revenue and margin growth, as well as
sustainable cost excellence. In addition to the clearly positive effects on the revenue
level, the Managing Board expects annual cost savings of in excess of EUR 100 mn from
2025 onward, of which more than 50 percent will have an increasing impact on earnings
from the current financial year onward.
Nico Reiner, Lenzing Group CFO, adds: “We are very satisfied with the impact of the
performance program to date, and expect the measures to make a greater contribution to
further earnings improvements over the course of the coming quarters. The appointment of
Walter Bickel as Chief Transformation Officer underscores the importance of this program
and ensures that the existing Managing Board can devote all the necessary resources to
its core tasks.”
Capital expenditures for intangible assets, property, plant and equipment, and
biological assets (CAPEX) amounted to EUR 33.4 mn in the reporting period (compared with
EUR 84.7 mn in the first quarter of 2023). As part of its performance program, and
following the considerable investments made in recent years, Lenzing is placing a clear
focus on maintenance-and-license-to-operate projects. Compared to December 31, 2023,
liquid assets improved further by 15.4 percent to EUR 843.6 mn as of March 31, 2024,
especially thanks to the positive free cash flow performance.
Changes to the Managing Board
Lenzing also recently announced personnel changes on its Managing Board. The Supervisory
Board of Lenzing AG has appointed Walter Bickel as member of the Managing Board and as
Chief Transformation Officer of Lenzing AG until December 31, 2025, with effect as of
April 15, 2024. Mr. Bickel, an experienced manager, will strengthen the Lenzing Managing
Board and will be responsible for the further development and implementation of the
performance program.
The 80th Annual General Meeting of Lenzing AG was held on April 18, 2024, at the Lenzing
Cultural Center. The AGM ratified the actions of the Managing and Supervisory Board
members for the 2023 financial year and set the remuneration of the Supervisory Board
members for the 2024 financial year in advance. Dr. Markus Fürst stepped down from the
Supervisory Board of Lenzing AG as of the end of the Annual General Meeting, at his own
request. Dr. Cornelius Baur was newly elected to the Supervisory Board until the Annual
General Meeting that passes resolutions relating to the 2028 financial year. The mandate
of Melody Harris-Jensbach mandate was also extended until the Annual General Meeting
that passes resolutions relating to the 2028 financial year.
Outlook
Even though the IMF has upgraded its growth forecast for 2024 from 3.1 percent to
3.2 percent, a number of risks remain for the global economy: potential geopolitical
shocks, persistently higher inflation and key interest rates, as well as market risks
emanating from the Chinese real estate market are currently considered to be the most
relevant.
General inflation and falling incomes in real terms are continuing to exert a negative
impact on consumer sentiment. A recovery in the consumer clothing market, which is
important for Lenzing, will also depend on a further normalization of stock levels.
The currency environment is expected to remain volatile in regions relevant to Lenzing.
In the trend-setting market for cotton, a stable price trend is expected for the
2023/2024 harvest season.
Earnings visibility remains limited overall.
Revenue and earnings in the first quarter exceeded Lenzing’s expectations, despite the
persistently difficult market. Lenzing is ahead of schedule with the implementation of
its performance program. By appointing a separate Managing Board member, the projects
identified to date are to be implemented even more rapidly, and new potentials are to be
leveraged. Lenzing expects that these measures will increasingly contribute to further
earnings improvement over the coming quarters compared to the first quarter of 2024.
Taking the aforementioned factors into consideration, the Lenzing Group confirms its
guidance for the 2024 financial year of year-on-year higher EBITDA.
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.
Selected indicators of the Lenzing Group
EUR mn 01-03/2024 01-03/2023
Revenue 658.4 623.1
EBITDA (earnings before interest, tax, depreciation and 71.4 29.7
amortization)
EBITDA margin 10.8% 4.8%
Net result for the period -26.9 -64.9
Earnings per share in EUR -0.83 -3.03
Cash flow from operating activities 120.7 -47.7
CAPEX 33.4 84.7
31/03/2024 31/12/2023
Net financial debt 1,477.1 1,562.6
Adjusted equity ratio 32.7% 34.7%
Employees (full-time equivalents) 7,798 7,917
Photo download:
[1] https://mediadb.lenzing.com/pinaccess/showpin.do?pinCode=U4hxFdYQHFnw
PIN: U4hxFdYQHFnw
Your contact for
Public Relations: Investor Relations:
Dominic Köfner Sébastien Knus
Vice President Corporate Communications & Public Vice President Capital Markets
Affairs Lenzing Aktiengesellschaft
Lenzing Aktiengesellschaft Werkstraße 2, 4860 Lenzing, Austria
Werkstraße 2, 4860 Lenzing, Austria
Phone +43 7672 701 3599
Phone +43 7672 701 2743 E-mail [4]s.knus@lenzing.com
E-mail [2]media@lenzing.com Web [5] www.lenzing.com
Web [3] www.lenzing.com
About the Lenzing Group
The Lenzing Group stands for the ecologically responsible production of specialty fibers
based on cellulose and recycled material. As an innovation leader, Lenzing is a partner
to global textile and nonwoven manufacturers and drives many new technological
developments. The Lenzing Group’s high-quality fibers are the raw material for a wide
range of textile applications – from functional, comfortable and fashionable clothing
through to durable and sustainable home textiles. Thanks to their special properties and
botanical origin, TÜV-certified biodegradable and compostable Lenzing fibers are also
ideal for demanding use in everyday hygiene applications.
The Lenzing Group’s business model extends far beyond that of a traditional fiber
producer. Together with its customers and partners, Lenzing develops innovative products
along the value chain, creating added value for consumers. The Lenzing Group strives for
efficient utilization and processing of all raw materials and offers solutions for the
transformation of the textile industry from the current linear economic system to a
circular economy. In order to reduce the rate of global warming and thereby also support
the goals of the Paris Agreement and the EU Commission’s Green Deal, Lenzing has a
clear, science-based climate action plan that aims for a significant reduction in
greenhouse gas emissions by 2030, and a net-zero target (Scopes 1, 2 and 3) by 2050.
Key Facts & Figures Lenzing Group 2023
Revenue: EUR 2.52 bn
Nominal capacity (fibers): 1,110,000 tonnes
Number of employees (full-time equivalents): 7,917
TENCEL™, LENZING™ ECOVERO™, VEOCEL™, LENZING™, and REFIBRA™ are trademarks of Lenzing
AG.
Disclaimer: The above key financial figures are derived primarily from the condensed
consolidated interim financial statements and the consolidated financial statements of
the previous year of the Lenzing Group. Additional details are provided in “Notes on the
Financial Performance Indicators of the Lenzing Group”, available at the following link
[6] https://www.lenzing.com/notes-financial-performance-indicators-lenzing-group-2024-q1,
as well as in the condensed consolidated interim financial statements and in the Lenzing
Group’s prior-year consolidated financial statements. Rounding differences can occur in
the presentation of rounded amounts and percentage rates.
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08.05.2024 CET/CEST This Corporate News was distributed by EQS Group AG. www.eqs.com
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Language: English
Company: Lenzing AG
4860 Lenzing
Austria
Phone: +43 7672-701-0
Fax: +43 7672-96301
E-mail: office@lenzing.com
Internet: www.lenzing.com
ISIN: AT0000644505
Indices: ATX
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1898169
End of News EQS News Service
1898169 08.05.2024 CET/CEST
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