Lenzing AG

EANS-News: Lenzing AG
Lenzing Generates Substantial Revenue and Earnings Growth in 2016

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Financial Figures/Balance Sheet

- Revenue increased by 8 percent to EUR 2.13 bn
- EBITDA up 47.6 percent to EUR 428.3 mn 
- Rise in share of specialty fibers to 42 percent
- Dividend proposal of EUR 3.00/share plus a special dividend of EUR 1.20/share
- Further earnings improvement expected in 2017  
 
Lenzing - The Lenzing Group showed an excellent development in the 2016
financial year, with substantial improvement of all economic and balance sheet
indicators. The decisive factors underlying the company's success were the
higher selling prices Lenzing obtained for all its fiber products, a better
product mix as well as the slight rise in revenue. 

Consolidated revenue grew by 8 percent in the 2016 financial year to EUR 2.13 bn
(2015: EUR 1.98 bn). EBITDA (earnings before interest, tax, depreciation and
amortization) improved by 47.6 percent to EUR 428.3 mn (2015: EUR 290.1 mn). The
corresponding EBITDA margin rose to 20.1 percent, up from 14.7 percent in the
2015 financial year. EBIT (earnings before interest and tax) of the Lenzing
Group almost doubled - with an increase from EUR 151.1 mn to EUR 296.3 mn. The
EBIT margin improved to 13.9 percent (2015: 7.6 percent). The group net profit
for the year totaled EUR 229.1 mn, a rise of 78.9 percent from the prior-year
figure of EUR 128.1 mn. Earnings per share in the 2016 financial year amounted
to EUR 8.48 (2015: EUR 4.78). 

The Management Board and the Supervisory Board will propose at the upcoming
Annual General Meeting an increase in the dividend from EUR 2.00 per share to
EUR 3.00 per share, plus a special dividend of EUR 1.20 per share. In total, the
dividend will amount to EUR 4.20 per share, corresponding to a dividend payment
to shareholders of EUR 111.51 mn.

"The Lenzing Group looks back at a very successful financial year 2016. Our new
corporate strategy sCore TEN has clearly proven its value. In a very positive
market environment for wood-based cellulose fibers we successfully expanded our
market position in specialty fibers. Furthermore, we optimized our production
processes, which also contributed to the better earnings and enhanced our
financial strength", says Stefan Doboczky, Chief Executive Officer of the
Lenzing Group. "We will continue our disciplined implementation of sCore TEN and
put particular focus on the expansion of our specialty fiber capacities and on
sustainability-driven innovation. We look positively at the year 2017 and expect
a considerable earnings improvement once again provided there is no significant
change in the business environment", he adds.

Further improvement in return on capital, net financial debt close to zero
The value generated by the Lenzing Group improved in 2016 thanks to the positive
earnings development. Accordingly, the return on capital employed (ROCE)
increased to 15.1 percent compared to 8.1 percent in 2015. At the same time, the
return on investment (ROI) rose from 6.3 percent to 11.8 percent. 

Lenzing took advantage of its very good business development to further optimize
its balance sheet structure. Adjusted equity increased by 14.1 percent to EUR
1.39 bn from the prior-year level of EUR 1.22 bn. Accordingly, the adjusted
equity ratio improved to 53 percent (December 31, 2015: 50.6 percent). Net
financial debt was reduced to almost zero, totaling only EUR 7.2 mn at the end
of 2016 (December 31, 2015: EUR 327.9 mn). 

Further cash flow increase
The cash flow from operating activities more than doubled in 2016 from EUR 215.6
mn to EUR 473.4 mn. This development was attributable to the stronger business
performance, to higher market prices and slight rise in fiber sales volumes as
well as the company's active working capital management. At the same time,
capital expenditures (CAPEX) of the Lenzing Group climbed to EUR 107.2 mn.
Liquid assets at the end of 2016 amounted to EUR 570.4 mn (2015: EUR 355.3 mn). 

Total expenditures for research and development amounted to EUR 46.4 mn in the
2016 financial year (2015: EUR 29.8 mn), putting Lenzing in the top ranks of the
industry both in absolute terms as well as in relation to revenue. Lenzing
intends to further intensify these efforts in order to sustainably safeguard and
expand upon its innovation leadership in the production of wood-based cellulose
fibers. 

Share of specialty fibers up to 42 percent of group revenue
Total fiber sales volumes in 2016 rose 1.4 percent to about 978,000 tons (2015:
965,000 tons). The share of specialty fibers as a percentage of total group
revenue increased to 42 percent compared to the prior-year figure of 40.5
percent. The share of standard fibers in relation to revenue was unchanged at 47
percent, with other business areas accounting for the remaining revenue. 71
percent of fiber revenue was generated in the textile fiber business and 29
percent was derived from nonwoven applications.  

2016 was also a year of substantial capital commitments. In total Lenzing
committed EUR 475 mn to further expand its specialty fiber capacities in Europe
and the United States as well as to debottleneck the dissolving wood pulp
operations in Paskov (Czech Republic) and Lenzing (Austria).

Lenzing increased its revenue from specialty fibers for garments as a result of
the increased integration of TENCEL® fibers in high quality applications. One
future-oriented example is the RefibraTM fiber presented in 2016. In addition to
wood, this new generation of lyocell fibers uses recycled scraps from the
textile industry as the basic raw material. The first garments made with
RefibraTM fibers were brought to market by Zara, a subsidiary of Inditex, the
world's largest fashion retailer. The nonwovens business showed a stable
development in 2016.

Outlook
In 2017 the Lenzing Group will continue to focus on the disciplined
implementation of its sCore TEN strategy and, specifically, on specialization
and sustainability-driven innovation. The steady expansion of the specialty
fiber capacities and the intensification of its brand management will be
essential to increasing customers' awareness for the unique selling proposition
of Lenzing's fiber products. 

The Lenzing Group registered strong demand for its fibers during the first weeks
of 2017, which, in turn, led to continued high capacity utilization in all
product groups. The market price index for viscose fibers was substantially
higher than in the comparable prior year period. Under the assumption of
unchanged conditions in the fiber market and stable exchange rates, Lenzing
expects a considerable improvement in results in the fiscal year 2017 compared
to 2016.

Key group indicators
(IFRS)  

(in EUR mn)                               01-12/2016               01-12/2015(3)
Revenue                                      2,134.1                     1,976.8
Earnings before interest,                      428.3                       290.1
tax, depreciation and
amortization (EBITDA)
EBITDA margin in %                              20.1                        14.7
Earnings before interest                       296.3                       151.1
and tax (EBIT)
EBIT margin in %                                13.9                         7.6
Net profit for the year                        229.1                       128.1
CAPEX(1)                                       107.2                        70.9

 

                                        Dec. 31, 2016           Dec. 31, 2015(3)
Adjusted equity Ratio(2) in %                    53.0                       50.6
Number of employees at                          6,218                      6,127
year-end

1) Capital expenditures: acquisition of intangible assets, property, plant and
equipment

2) Ratio of adjusted equity to total assets in percent 
3) The figures were partially adjusted (for further details please refer to note
2 to the Consolidated Financial Statements of the Lenzing Group).

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Further inquiry note:
Lenzing AG
Mag. Waltraud Kaserer
Vice President Corporate Communications & Investor Relations
Tel.: +43 (0) 7672 701-2713
mailto:w.kaserer@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:     office@lenzing.com
WWW:      http://www.lenzing.com
sector:      Chemicals
ISIN:        AT0000644505
indexes:     WBI, ATX, Prime Market
stockmarkets: official market: Wien 
language:   English
 

 


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