Lenzing AG

EANS-Adhoc: Lenzing AG
Lenzing Group: Difficult Market Environment in the First Quarter of 2013 as Expected

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Financial Figures/Balance Sheet/3-month report

Weak fiber selling prices, Lenzing counteracts trend with cost savings
EBITDA of EUR 64.5 mn above expectations
Unchanged guidance for the entire year 2013
The ongoing difficult market environment for man-made cellulose fibers shaped
the business development of the Lenzing Group in the first quarter of 2013 as
expected.Consolidated sales amounted to EUR 496.5 mn, a decline of 6.0% from the
comparable figure of EUR 528.2 mn in the prior-year quarter. However, this also
includes the shift of about EUR 25 mn from external to internal sales at the
Paskov pulp plant. In a year-on-year comparison of total fiber sales, the
selling price decline could almost be completely compensated by the higher fiber
sales volumes in the first quarter of 2013.   
Although consolidated earnings before interest, tax, depreciation and
amortization (EBITDA) in the first quarter of 2013 fell to EUR 64.5 mn (1-
3 2012: EUR 93.1 mn), the EBITDA margin at 13.0% (1-3 2012: 17.6%) was higher
than expected, and was slightly above the guidance for the first quarter of
2013. Earnings before interest and tax (EBIT) of the Lenzing Group declined by
46.1% to EUR 36.2 mn (1-3 2012: EUR 67.2 mn), comprising an EBIT margin of 7.3%
in the first three months of the year (1-3 2012: 12.7%).
"Lenzing acquitted itself quite well in the first quarter of 2013. We
counteracted the more difficult market conditions in a timely manner by
implementing the cost optimization project excelLENZ, and already achieved the
first cost improvements.Moreover, we are strengthening our specialty strategy by
putting the focus on our specialty fibers Lenzing Modal®and TENCEL®. A further
priority is the optimization of our cash management in the Lenzing Group by
postponing maintenance investments for the time being which are not absolutely
necessary", says Peter Untersperger, Lenzing's Chief Executive Officer, in
explaining the current approach.  
In the first quarter of 2013, total fiber sales volumes amounted to about
216,000 tons, at about the same level as the fourth quarter of 2012 but
approximately 13% higher than the prior-year quarter. This increase can be
attributed to the new production capacities coming on stream in Indonesia and
the USA.A fire took place at the TENCEL®fiber production site in Heiligenkreuz
in March, which will likely result in a loss of production amounting to some
5,000 tons in 2013 as a whole.
The strategic expansion program of the Lenzing Group was implemented as planned
in the first quarter of the year. Rapid progress is being made on construction
of the large TENCEL®factory at the Lenzing site. The conversion of the Biocel
Paskov pulp plant from a paper to a swing capacity paper and dissolving pulp
plant is also proceeding on schedule. On balance, capital expenditure in the
form of investments in property, plant and equipment and intangible assets
totaled EUR 56.5 mn in the first quarter of 2013, above the prior-year level of
EUR 52.9 mn.   
Adjusted Group equity as at March 31, 2013 increased once again, rising slightly
by 1.7% to EUR 1,172.9 mn from EUR 1,153.1 mn at the end of 2012. This
corresponded to an excellent adjusted equity ratio of 45.1% of the balance sheet
total (December 31, 2012: 43.8%).
From today's perspective no change in the current price situation on the global
fiber market is expected in the coming months, nor is any major impetus to
demand likely to come from the global economy for the time being. The market is
being shaped by the ongoing high cotton inventories as well as the cotton policy
of China which is difficult to predict. A sideways movement is expected with
respect to raw material prices, especially for pulp.
Business development in the second quarter of 2013 is expected to be similar to
the performance of the Group in the first quarter as a consequence of the
continued implementation of countermeasures. The guidance for EBITDA, the most
important performance indicator, has been set at EUR 65 - 70 mn in the second
quarter of 2013, even slightly above first quarter earnings. Similarly, the
solid balance sheet of the Lenzing Group comprises a good basis for the ongoing
large-scale investments.    
Lenzing confirms its guidance for the entire financial year which was published
in March 2013.

Key Group indicators

(EUR mn)                                     1-3/2013                   1-3/2012
Consolidated sales                              496.5                      528.2
EBITDA1                                          64.5                       93.1
EBITDA margin1 in %                              13.0                       17.6
Earnings before interest                         36.2                       67.2
and tax (EBIT)1
EBIT margin1 in %                                 7.3                       12.7
Profit for the period                            20.9                       48.4
CAPEX (investments in

property, plant and
equipment, intangible                            56.5                       52.3
assets and non-controlling

                                           31/03/2013                 31/12/2012
Adjusted equity ratio2in %                       45.1                       43.8
Employees at period-end                         7,062                      7,033


1) Before restructuring
2) Equity incl. government grants less prop. deferred taxes

Segment reporting3

(EUR mn)                                  1-3/2013                      1-3/2012
Segment Fibers                                                                  
Sales                                        447.1                         474.4
EBITDA                                        58.9                          87.2
Segment Engineering                                                             
Sales                                         35.3                          30.0
EBITDA                                         2.2                           2.5
Segment Discontinued                                                            
Sales                                         26.3                          32.5
EBITDA                                         2.9                           3.1
Segment Other                                                                   
Sales                                         13.3                          13.9
EBITDA                                         0.6                           0.9


3) The disposal of the Business Unit Plastics resulted in a restructuring of the
Lenzing Group's segment reporting. Lenzing now reports on its Segment "Fibers",
which encompasses the internal business units Textile Fibers, Nonwoven Fibers,
Pulp and Energy. The activities of Lenzing Technik are assigned to the Segment
"Engineering". The Segment "Discontinued Operations" includes the disposed of
Business Unit Plastics as well as European Precursor (EPG), the terminated joint
venture with SGL Carbon and Kelheim Fibres. The Segment Other mainly encompasses
the activities of Dolan GmbH/Kelheim (synthetic fibers, part of the Segment
Plastics Products up until now) as well as the educational and training center
Bildungszentrum Lenzing (BZL).

Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 7672-918-2713

end of announcement                               euro adhoc 

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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