Lenzing AG

EANS-News: Lenzing AG
Lenzing Presents New Group Strategy "sCore TEN": Profitable Growth Thanks to Eco-Friendly Specialty Fibers

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Company Information

-  Lenzing takes advantage of megatrends
-  Sustainability as a key innovation and growth driver
-  Share of revenue generated by specialty fibers targeted to rise to 50% by
2020
-  EBITDA growth of approx. 10% p.a. until 2020
-  Increase in ROCE to more than 10% by 2020
 
The Lenzing Group is presenting its business strategy for the coming years
entitled "sCore TEN". Accordingly, Lenzing's main priorities are strengthening
the company's core business, intensifying cooperation with customers along the
value chain, increasing the share of specialty fibers to 50% of total revenue by
2020, expanding its quality and technological leadership for man-made cellulose
fibers and opening up new attractive business areas.
 
"Our objective is to safeguard and expand Lenzing's leadership role on the
dynamic growth market for man-made cellulose fibers", says Lenzing's Chief
Executive Officer Stefan Doboczky. "To achieve this, we will focus more
intensively on the most attractive segments in the specialty fiber business.
Lenzing will put value before volume in the future. We aim at achieving volume
growth."
 
Lenzing expects demand for man-made cellulose fibers to increase by 5 to 6% p.a.
until 2020, which is nearly twice as fast as the global fiber market. The
primary factors driving demand are the continuing growth of the world's
population and rising prosperity in the emerging markets. Forecasts call for a
rise in per capita textile consumption in the emerging markets by all in all 50%
in the period 2010 to 2020. In the industrialized countries the nonwovens
industry, an important sales market for Lenzing, will profit from the increased
demand for hygiene products. The nonwovens segment is expected to expand twice
as fast as the textile market. 
 
The new Lenzing strategy entitled "sCore TEN" was designed to take account of
the major megatrends. On the one hand, the name stands for a resolute
performance orientation (scoring) and for a strengthening of Lenzing's core
business operations (core) and on the other hand, the new strategy reflects the
objective of generating sustainable growth with specialty fibers such as Lenzing
Modal® or TENCEL® (TEN). Five strategic measures comprise the cornerstones of
sCore TEN:
 
-  Strengthen the core: the target is to increase Lenzing's pulp position
through backward integration by increasing the Group's own pulp production
volumes and/or expanding strategic co-operations. Lenzing will strive to expand
upon its quality and technology leadership. A program aimed at strengthening
commercial processes is designed to deliver a positive EBITDA contribution
totaling EUR 50 mn by the year 2017. The reorganization of the technical service
units will be concluded in 2016.
-  Customer intimacy: Lenzing plans to establish regional competence centers for
product innovations and will move greater decision-making powers to the regions.
These steps will bring Lenzing closer to its customers.
-  Specialization: Lenzing aims at generating 50% of total revenue from the
business with eco-friendly specialty fibers such as TENCEL®, Lenzing Modal® and
viscose fiber specialties by the year 2020. Lenzing will further increase
production capacities for TENCEL® depending on market requirements.
-  Forward solutions: Lenzing will selectively enhance its R&D activities along
the value chain by new game-changing technologies.
-  New business areas: Based on its core competencies, Lenzing will open up new
business areas.
 
In the light of the increasing demand for textile fibers one of the major future
challenges for the fiber industry is sustainability. Lenzing boasts a major
competitive advantage in this respect. Its cellulose fibers originate in
sustainably managed forests, are produced in an environmentally-friendly manner
and are biodegradable. In particular, TENCEL® fibers are unrivalled on the
marketplace when it comes to sustainability. Taking all parameters into account,
TENCEL® is up to 17 times more environmentally compatible than other fibers.
Lenzing fibers are outstanding as blending partners for cotton and polyester,
and improve their sustainability.

"Compared to the previous year, we want to continually increase EBITDA by 10%
annually and aim to increase the return on capital employed (ROCE) to more than
10% by 2020. At the same time, our objective is to keep net financial debt at a
level which is less than 2.5 times EBITDA", Doboczky explains in reference to
the financial performance targets of sCore TEN. Lenzing plans to finance all
necessary investments required to implement this strategy from its own capital
resources and simultaneously strive for a dividend payout of up to 50% of the
Group net profit.

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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company:     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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