Lenzing AG

EANS-Adhoc: Lenzing AG
Successful First Half of 2015

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Mid Year Results/quarterly report
25.08.2015


- Significant increase for all earnings indicators
- Strong tailwind from currency effects
- Improved cost position thanks to excelLENZ program
- Positive market development at the end of the second quarter
 
The Lenzing Group clearly improved upon all relevant performance and balance
sheet indicators compared to the first half of 2014.
 
Consolidated revenue rose by 6.2% in the first half-year, from EUR 900.0 mn to
EUR 955.4 mn. Currency effects, slightly higher sales volumes and an improved
product mix were responsible for the revenue increase. Earnings before interest,
taxes, depreciation and amortization (EBITDA) improved by 37.7% to EUR 126.5 mn,
up from EUR 91.9 mn in the previous year. The EBITDA margin was 13.2%, compared
to 10.2% in the first half of 2014. Half-year earnings before interest and taxes
(EBIT) amounted to EUR 60.5 mn, or 86.7% above the comparable EBIT of EUR 32.4
mn in the prior-year period. This corresponded to an EBIT margin of 6.3% (H1
2014: 3.6%).
 
"Lenzing delivered a solid performance in the first half of 2015. The underlying
reasons were the currency effects which turned out to be very positive for us
due to the weakness of the euro, good fiber demand in the second quarter and our
improved cost position", says Stefan Doboczky, Chief Executive Officer and
Chairman of the Management Board of Lenzing AG. "Viscose fiber prices in China,
the world's largest sales market for fibers, increased towards the end of the
second quarter due to a more favorable supply-demand ratio related to several
local viscose fiber production plants being shut down for environmental reasons.
We remain cautious concerning prospects for the rest of 2015, in light of the
fact that these capacities could be put into operation again," he adds.
 
Further reduction of net financial debt[1]
Adjusted equity of the Lenzing Group rose to EUR 1,132.7 mn at the end of June
2015, up from EUR 1,066.1 mn at the end of 2014. The adjusted equity ratio
amounted to 46.8% (December 31, 2014: 44.9%). The debt situation could be
substantially improved, with net financial debt reduced by 10.7% to EUR 401.5 mn
from the comparable level of EUR 449.5 mn at the end of 2014. As a result, net
gearing[2]fell to 35.4% (December 31, 2014: 42.2%).
 
Investments in intangible assets, property, plant and equipment (CAPEX) amounted
to EUR 26.0 mn in the first half of 2015, down from EUR 64.2 mn in the first
half-year 2014. Investment activity was cut back following the completion of the
large TENCEL®fiber production facility in Lenzing in the previous year.
Investments focused on necessary maintenance work as well as quality and
optimization measures in fiber and pulp production. Lenzing is currently
focusing on investments designed to optimize costs and quality due to the
ongoing uncertain market conditions and increasing quality demands.
 
The excelLENZ cost optimization initiative continued to be implemented in the
first half-year according to plan and proved to be very successful. From today's
perspective the targeted effects of about EUR 160 mn p.a. will be completely
achieved. Their full impact will be felt starting in 2016. The restructuring
program to adjust capacities of the technical units of Lenzing AG and the
subsidiary Lenzing Technik which was launched in the first quarter of 2015 is on
schedule.
 
Ongoing market success withTENCEL®
Lenzing was just as successful in further developing the market for high quality
viscose products in the first half of 2015 as for TENCEL®. Demand for TENCEL®
used in jeans (denim) remained consistently strong, and the number of processors
integrating TENCEL® into their denim fabrics has doubled over the last twelve
months. Furthermore, the new Lenzing fiber TENCEL® A100 MICRO was successfully
launched on the market in the first half of 2015. Lenzing also further expanded
its strong market position for nonwovens.
 
Outlook
The specific market environment for the man-made cellulose fiber industry
improved somewhat in the middle of 2015 compared to the end of the first
quarter. Solid volume demand up until now was followed by initial fiber selling
price increases. The troubled geopolitical situation, the economic situation in
China and unforeseeable exchange rate fluctuations are factors of uncertainty in
the second half of 2015.
 
Despite a volatile environment, the Lenzing Group expects a further improvement
in its operating results compared to 2014 as well as a further reduction in its
net financial debt.
 
Medium- and long-term growth rates in the man-made cellulose fiber industry are
expected to be higher than that of the global fiber market.
 
 

Key Group indicators
(IFRS) 

(in EUR mn)                                  1-6/2015                   1-6/2014
Group revenue                                   955.4                      900.0
EBITDA (Earnings before                         126.5                       91.9
interest, taxes,
depreciation and
amortization)
EBITDA margin in %                               13.2                       10.2
EBIT (Earnings before                            60.5                       32.4
interest and taxes)
EBIT margin in %                                  6.3                        3.6
Profit/loss for the period                       51.6                       15.2
Earnings per share                               1.99                       0.57
CAPEX[3]                                         26.0                       64.2

           

                                        June 30, 2015              Dec. 31, 2014
Adjusted equity ratio[4]in                       46.8                       44.9
%

Number of employees at                          6,184                      6,356
period-end


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[1]Interest-bearing financial liabilities (= non-current and current financial
liabilities) less liquid assets
[2]Ratio of net financial debt to adjusted equity as a percentage
[3]Refers to investments in intangible assets, property, plant and equipment
[4] Ratio of adjusted equity (including investment grants less prop. deferred
taxes) to total assets


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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