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Financial Figures/Balance Sheet/quarterly report
13.11.2014
- Q1-3 EBITDA of EUR 159.8 mn (down 16% from the previous year)
The Lenzing Group is working to counteract the ongoing difficult market
environment prevailing in the fiber industry. Sales and earnings declined in the
first nine months of 2014 compared to the prior-year performance, but cost
savings are having a positive impact. This led to a slight earnings improvement
in the third quarter of 2014, the first time in about two years. Further cost
reductions are planned in light of the fact that no significant impetus is
expected from the market.
Ongoing weak fiber prices burden Q1-3 sales and earnings
The decline in the average fiber selling prices and the high volatility on the
fiber market continue to negatively impact the company's business operations.
Consolidated sales decreased by 6.2% to EUR 1,357.7 mn in the first three
quarters of 2014, down from EUR 1,447.0 mn in the previous year. More than half
of the sales drop is due to the non-recurring effects relating to the disposal
of the Business Unit Plastics in 2013. Consolidated sales were down by 2.8% in a
like-for-like comparison. Average fiber selling prices of the Lenzing Group fell
to 1.55 EUR/kg compared to 1.73 EUR/kg in the first three quarters of 2013. The
price decline could not be fully offset by increasing fiber production and sales
volumes, in part as a result of the successful start-up of the new TENCEL® fiber
manufacturing facility at the Lenzing site. Fiber sales volumes rose by 7% year-
on-year to 706,900 tons in the first nine months of 2014.
In a like-for-like comparison of continuing operations, consolidated EBITDA[1]in
the first nine months of the year amounted to EUR 159.8 mn, a 16.0% decrease
compared to EUR 190.2 mn for Q1-3 2013. This corresponded to an EBITDA margin of
11.8% (Q1-3 2013: 13.6%). Consolidated nine-month earnings before interest and
taxes (EBIT) amounted to EUR 69.5 mn, a drop of 34.8% from EUR 106.6 mn in the
previous year. This comprised an EBIT margin of 5.1% (Q1-3 2013: 7.6%). As a
consequence of the excelLENZ program, the number of employees working for the
Lenzing Group fell to 6,352 people as at September 30, 2014 (December 31, 2013:
6,675) despite the full operation of the new TENCEL® fiber production plant in
Lenzing.
Third-quarter earnings reflect cost reductions
The third-quarter 2014 performance of the Lenzing Group was marked by a slight
year-on-year earnings improvement as well as in comparison to the second quarter
of 2014. "The measures are succeeding. The earnings improvement is mainly
attributable to the excelLENZ cost-cutting drive but also from the first fiber
sales volumes produced by the new TENCEL® fiber plant in Lenzing", says Lenzing
CEO Peter Untersperger.
In spite of higher sales volumes, consolidated sales in the third quarter of
2014 stagnated at EUR 457.7 mn compared to the prior-year level of EUR 457.1 mn,
which is due to the lower average fiber selling prices. Nevertheless, third-
quarter EBITDA rose to EUR 68.0 mn (Q3 2013: EUR 61.8 mn), and EBIT in the third
quarter of 2014 totaled EUR 37.1 mn (Q3 2013: EUR 33.4 mn), whereas EBT improved
to EUR 33.3 mn from the figure of EUR 28.2 mn in the prior-year quarter.
Implementation of further cost savings
"We expect cost savings exceeding EUR 90 mn for the entire year 2014, of which
about one quarter involves personnel expenses. The remaining cost decreases
equally relate to reduction in material costs and savings derived from
efficiency projects to cut general and administrative expenses", adds CEO
Untersperger. "Planning work has begun to enable a further improvement of the
Lenzing Group's cost structure to be achieved in 2015. Starting in 2016 we will
achieve sustainable cost reductions of over EUR 160 mn p.a. These measures are
designed to safeguard the long-term competitive strength of the company and its
self-financing capacity for future investments."
Outlook Lenzing Group
The global market for man-made cellulose fibers will continue to be impacted in
the upcoming months by low pulp prices and surplus fiber production capacities
against the backdrop of good volume demand.
The successful ramp-up of the TENCEL® fiber plant in Lenzing, the initiated
improvements in the product mix, and the strong expansion of marketing and sales
activities along the entire value chain will improve the company's market
position and its relative competitive strength. In addition to an
intensification of the excelLENZ cost reduction program, the realignment
initiative in the fields of Lenzing Technik, site maintenance and repair
services will make an important contribution towards achieving operational
improvements at Lenzing.
Key Group indicators
(IFRS) in EUR mn 1-9/2014 1-9/2013(1)
Consolidated sales 1,357.7 1,447.0
EBITDA(2) 159.8 190.2
EBITDA margin(2) in % 11.8 13.6
EBIT(2) 69.5 106.6
EBIT margin(2) in % 5.1 7.6
Profit for the period(2) 44.3 65.7
CAPEX(3) 84.8 180.6
Sep. 30, 2014 Dec. 31, 2013
Adjusted equity ratio(4)in % 46.9 45.5
Number of employees at 6,352 6,675
period-end
1) The prior year figures were restated due to changes in presentation (see Note
2 to the interim consolidated financial statements).
2) From continued operations
3) Comprising investments in intangible assets, property, plant and equipment.
01-09/2013 incl BU Plastics
4) Equity incl. government grants less prop. deferred taxes.
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[1] Earnings before interest, taxes, depreciation on property, plant and
equipment and amortization of intangible assets and before income from the
release of investment grants.
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