Lenzing AG

EANS-Adhoc: Lenzing AG
Record Results for the Lenzing Group

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Company Information

22.03.2012

-2 billion euro sales threshold surpassed for the first time
-Guidance met - proposed dividend of EUR 2.50/share
-Outlook for 2012 - mirror-inverted development compared to last year

The Lenzing Group continued its dynamic growth path of previous years by posting
record results in 2011. Despite a significant weakening of the global fiber
market in the second half of 2011, Lenzing once again achieved double-digit
growth rates in sales and earnings, and surpassed the threshold of EUR 2 bn in
consolidated sales for the first time in the company´s history. Operating
margins also improved again from the already high level achieved in 2010 and set
a new, absolute record.

Consolidated sales in the reporting year 2011 rose by 21.2% to EUR 2.14 bn, up
from EUR 1.77 bn in the prior year. This dynamic sales growth can be attributed
to higher average selling prices in its core fiber business, higher fiber
shipment volumes, the first-time full-year consolidation of the pulp plant
Biocel Paskov acquired in May 2010 as well as higher sales in all other business
areas. 

Consolidated EBITDA (earnings before interest, tax, depreciation and
amortization) amounted to EUR 480.3 mn, a rise of 45.3% from the comparable
figure of EUR 330.6 mn in the previous year. Earnings before interest and tax
(EBIT) climbed by 56.9% to EUR 364.0 mn (2010: EUR 231.9 mn). The EBITDA and
EBIT margins reached an all-time high in 2011 at 22.4% (2010: 18.7%) and 17.0%
(2010: 13.1%) respectively.

"Our dynamic growth path and specialty strategy led by the fibers Lenzing Modal®
and TENCEL® once again paid off in 2011. Whereas sales with standard viscose
fibers increased by close to 20% year-on-year, we sold some 30% more TENCEL®
fibers and close to 40% more Lenzing Modal® fibers than in the prior year",
explains Lenzing Chief Executive Officer Peter Untersperger. The large-scale
market success of these two specialty fibers enabled Lenzing to partially detach
itself from the volatile market trends of 2011, according to CEO Untersperger.

Lenzing rigorously pressed ahead with its capacity expansion program in 2011. As
a result, the annual nominal production capacity of the Lenzing Group rose by
about 8%, from 710,000 tons of man-made cellulose fibers at the beginning of
2011 to 770,000 tons at the turn of the year 2011/12. Capital expenditures of
the Lenzing Group totaled EUR 196.3 mn in the 2011 financial year, somewhat
below the comparable prior-year figure of EUR 230.0 mn which had also included
the acquisition costs for Biocel Paskov. This development was due to the
postponement of investment projects as at the reporting date. 

Despite the current level of investments, the net financial debt of the Lenzing
Group was reduced by almost half, declining to EUR 159.1 mn at the end of 2011
from the previous year´s figure of EUR 307.2 mn. The cash flow still reached a
level of EUR 113.4 mn despite the investments made. "With an adjusted equity
ratio of close to 45% and a net financial debt comprising one-third of annual
EBITDA, we are very well positioned financially. Lenzing is largely autonomous
with respect to its ability to finance growth steps in the upcoming years, says
Chief Financial Officer Thomas G. Winkler.   

Full capacity utilization in the Segment Fibers
According to preliminary estimates, global fiber production rose by 4.1% to a
new record level of 79.1 mn tons in 2011. The production of man-made cellulose
fibers also reached an all-time high of 4.6 mn tons, up 4.2% from 2010. 

The business development of the Segment Fibers in 2011 was characterized by
strong demand for Lenzing fibers, which was fueled even more by record cotton
prices in the first half of the year. The market for standard textile viscose
fibers significantly cooled off in the second half of 2011, which did not impact
fiber shipment volumes but affected selling prices. The specialty fibers Lenzing
Modal® and TENCEL® as well as the nonwovens sector were hardly impacted by this
development. Throughout the year Lenzing succeeded in raising average prices for
all Lenzing fibers by close to 17% compared to the previous year, to EUR 2.22
per kilogram. 

"All our fiber production facilities were running at full capacity throughout
the entire year. The additional fiber volumes generated in the course of the
year by the second expansion stage of the plant in Nanjing (China), the capacity
expansion for Lenzing Modal® fibers produced at the Lenzing site and TENCEL®
fibers manufactured at the Heiligenkreuz (Burgenland) facility were very
successfully placed on the market", reports Chief Operating Officer Friedrich
Weninger, Member of the Management Board. 

The pulp plant Biocel Paskov (Czech Republic) acquired within the context of the
Lenzing Group´s further backward integration was rapidly expanded in the
reporting year to enable the production of both paper pulp and dissolving pulp.
Some 60,000 tons of dissolving pulp were already produced in Paskov in 2011 and
largely used for fiber production within the Lenzing Group. 

Good development of the Segment Plastics Products and Segment Engineering 
The Segment Plastics Products developed satisfactorily in 2011, showing an
EBITDA margin of 9.5%. A new record for shipment volumes was posted during the
year under review against the backdrop of very good demand. 

The Segment Engineering was also able to optimally take advantage of the
fundamentally positive mood in the capital goods market during the reporting
year, achieving an EBITDA-margin of 8.4%. Lenzing Technik profited from both the
extensive investment activity of the Lenzing Group as well as from growing
demand on the part of external customers. 

Outlook of the Lenzing Group
Once again the Lenzing Group expects a good year in 2012, which should see
quarterly development in a mirror-inverted manner. However, in terms of margins
the current financial year will not be able to fully match the exceptional
record year of 2011.

For the time being prices for Lenzing´s standard viscose fibers should stabilize
at a low level. In the course of 2012 Lenzing anticipates a higher price level
than in the first quarter as a result of rising demand for both textile and
nonwoven applications.  

Good volume demand is expected for Lenzing Modal®, which should continue to
ensure a fair price premium vis-à-vis standard viscose fibers and cotton.
However, the considerable increase in the supply of modal is resulting in
temporary price adjustments compared to 2011 price levels. With respect to
TENCEL®, Lenzing foresees ongoing strong demand for textile and nonwoven
applications and a largely stable price premium vis-à-vis standard viscose
fibers.

As a consequence of significantly higher fiber shipment volumes but in the light
of lower average prices in comparison to the prior-year level, sales should rise
to a level between EUR 2.2 bn and EUR 2.3 bn in 2012. EBITDA should range
between EUR 400 mn and EUR 480 mn and EBIT is expected to range between EUR 285
mn and EUR 365 mn, depending on the development of fiber and raw material prices
as well as the overall global economic environment.    

Lenzing will press ahead with its dynamic expansion program as planned,
involving investments totaling approx. EUR 350 mn in 2012. The good earnings
situation and continued high liquidity will enable the company to propose a
dividend to the Shareholders´ Meeting amounting to EUR 2.50 per share, i.e.
about 25% of the consolidated net income for the 2011 financial year.  


Key Group indicators (IFRS) 
in EUR mn                                                    2011     2010(1)
Consolidated sales                                        2,140.0   1,766.3
EBITDA                                                      480.3     330.6
Earnings before interest and tax (EBIT)                     364.0     231.9
Earnings before tax and minority interest (EBT)             351.9     216.9
Profit for the year attributable to 
Lenzing AG shareholders                                     258.7     159.1
EBITDA margin in %                                           22.4      18.7
EBIT margin in %                                             17.0      13.1
Gross cash flow                                             389.0     292.9
CAPEX                                                       196.3     230.0

                                                    31.12.2011   31.12.2010
Adjusted equity ratio(2) in %                              4.8         38.6
Number of employees(3)                                   6,593        6,530


(1) Values adjusted according to IFRS 5
(2) Equity incl. government grants less prop. deferred taxes
(3) Incl. trainees, excl. leased labor, headcount


Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 7672-918-2713
mailto:a.guldt@lenzing.com

end of announcement                               euro adhoc 
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issuer:      Lenzing AG
               
             A-A-4860 Lenzing
phone:       +43 7672-701-0
FAX:         +43 7672-96301
mail:     a.guldt@lenzing.com
WWW:      http://www.lenzing.com
sector:      Chemicals
ISIN:        AT0000644505
indexes:     WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien 
language:   English
 



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