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Lenzing AG

euro adhoc: Lenzing AG
Financial Figures/Balance Sheet
Lenzing Group: improved sales and results for first half-year 2008

  Disclosure announcement transmitted by euro adhoc. The issuer is responsible
  for the content of this announcement.
6-month report
25.08.2008
All essential corporate key data improved - perceptible weakening of 
the fiber business
The business development of the Lenzing Group in the first six months
of 2008 was again gratifying. Lenzing was able to carry the good 
market situation of business year 2007 over into the first six months
of 2008, despite signs of a slowing fiber business.
Consolidated sales of the first half-year rose by 17.4% from EUR 
587.5 mill.? to EUR 689.5 mill. The increase was based on improved 
prices over previous year´s, higher sales volumes in fibers and the 
first-time full consolidation of the new acquisitions in segment 
Plastics. The above-average rise of cost of material and purchased 
services by 24% from EUR 333.6 mill. to EUR 412.9 mill. was largely 
the consequence of rapidly rising prices for energy, chemicals and 
other raw materials. These costs could not be passed on the customers
to the same extent as in the previous quarters.
EBIT improved by 8% from EUR 66.7 mill. to EUR 72.1 mill. The change 
in the financial result from minus EUR 4.6 mill. to minus EUR 7.3 
mill. is a result of increased net debt due to investments made and 
rising interest rates.
EBT rose from EUR 62.1 mill. to EUR 64.8 mill. and period net income 
from EUR 46.1 mill. to EUR 46.8 mill. Earnings per share improved 
from EUR 11.53 to EUR 12.02.
As at 30 June 2008, the Lenzing Group employed a staff of 5,952 (31 
December 2007: 5,918) in its continued business operations.
Perceptible weakening in segment Fibers
First signs of a weakening global fiber market were perceptible 
already from the beginning of the second quarter. In line with 
expected global economic developments, fiber demand started to 
decline after two boom years. Moreover, the rise in cost of material 
and purchased services was disproportional and burdened the second 
quarter sales figures of segment Fibers.
It was still possible to raise sales prices in the first quarter, but
the market decline from the second quarter on exerted distinct 
pressure on prices in segment Fibers. This in particular affected 
textile fibers. Lenzing continued to implement its corporate strategy
and secured its global position by intensive marketing activity in 
the top segment, despite difficult general conditions. Part of this 
strategy is the expansion of the product portfolio favoring specialty
products with good margins. This markedly contributed to the still 
good business development of Fibers in the first six months.
Business Unit Textile Fibers developed new customer groups and market
segments in the targeted product groups high-quality sportswear, 
lingerie and home textiles. The good demand situation of 2007 in 
Business Unit Nonwoven Fibers continued into the first six months of 
2008. The price levels of 2007 were held.
The supply situation for dissolving pulp eased up considerably. This 
was due to weaker demand for viscose fibers and the imminent start-up
of new production capacity.
Stable development of segments Plastics and Engineering
The focus in segment Plastics was put on the integration of the new 
companies acquired in 2007. Moreover, site optimization and 
structural improvements were consistently implemented. The segment 
was reorganized into two new business units (Business Unit Filaments 
and Fibers, Business Unit Performance Polymers), adapting the segment
structure to market realities. According to expectations, business 
development was positive even if there were first signs of impact 
from the weakening European economy. The first half of the segment 
Engineering's business year was characterized by strong order 
bookings from the fiber industry due to continued investment 
activity.
Outlook
The unfavorable economic development that started in the USA clouds 
expectations for the global economy. The current business year will 
see the start-up of more production capacity for cellulose fibers in 
Asia. The global undersupply of the past two years will therefore 
give way to a phase of overcapacity. The weak dollar and turbulent 
raw material and energy markets will add further pressure.
The Lenzing Group will counter the increasingly difficult market 
situation in its core business fibers with a high-quality product 
portfolio with less susceptibility to cyclical volatility and further
orientation towards specialty products. The company will thereby 
maintain its global market leadership. However, margins in the fiber 
business will inevitably decline in the further course of the 
business year. Segments Plastics will have to face challenges in the 
second half of the business year. Segment Engineering  is expected to
have a good and stable business development. Results for business 
year 2008 are expected to be on par with the very good results of the
past years. It is, however, rather likely that the record result of 
2007 will not be reached.
Consolidated company key figures (IFRS)
(EUR mill.)                                                  1-6 2008 1-6 2007*
Sales                                                            689.5    587.5
EBITDA                                                           107.3     98.7
EBIT                                                             72.1      66.7
Net income of the period                                         46.8      46.1
EBITDA margin in %                                               15.6      16.8
EBIT margin in %                                                 10.5      11.4
Capital expenditure (intangibles, property, plant and equipment) 66.3      72.4
Operating cash flow                                              30.9     103.0
30.06.2008    31.12.2007*
Adjusted equity **                                        569.3     586.4
Staff                                                     5,952     5,918
*Due to the sale of segment Paper, comparative figures were adjusted 
** Equity including government grants less proportionate deferred 
taxes
end of announcement                               euro adhoc

Further inquiry note:

Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 07672-96301
mailto:a.guldt@lenzing.com

Branche: Chemicals
ISIN: AT0000644505
WKN: 852927
Index: WBI
Börsen: Börse Berlin / free trade
Wiener Börse AG / official dealing

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Plus de actualités: Lenzing AG