Lenzing Group reports revenue and earnings growth in the first quarter of
2024
EQS-News: Lenzing AG / Key word(s): Quarter Results
Lenzing Group reports revenue and earnings growth in the first quarter of
2024
08.05.2024 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
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Lenzing Group reports revenue and earnings growth in the first quarter of
2024
* Revenue up 5.7 percent year-on-year to EUR 658.4 million
* EBITDA more than doubles year-on-year to EUR 71.4 million
* Free cash flow of EUR 87.3 million (compared with minus EUR 132.3
million in the first quarter of 2023) and thereby positive for the third
consecutive quarter
* Performance program shows positive effect on revenue, EDITDA, and free
cash flow
* Lenzing confirms EBITDA guidance for 2024
Lenzing - The Lenzing Group, a leading supplier of regenerated cellulose for
the textile and nonwovens industries, recorded a further improvement in
fiber sales volumes in the first quarter of 2024. An expected recovery in
markets relevant for Lenzing has to date failed to materialize. Fiber prices
remained at a low level. Although the costs of raw materials and energy
continued to decrease, they remained higher than in the pre-crisis 2019
year.
The Lenzing Group's revenue rose by 5.7 percent year-on-year to EUR 658.4 mn
in the first quarter of 2024. This growth is primarily attributable to
higher fiber sales volumes. Earnings before interest, tax, depreciation and
amortization (EBITDA) more than doubled to EUR 71.4 million in the reporting
period (compared with EUR 29.7 million in the first quarter of 2023). The
operating result (EBIT) was slightly positive at EUR 1.5 million (compared
with minus EUR 41.4 million in the first quarter of 2023). Earnings before
tax (EBT) amounted to minus EUR 17.8 million, but were also significantly
better than in the same period of the previous year (minus EUR 74.2
million). Earnings per share amounted to minus EUR 0.83 (compared with minus
EUR 3.03 in the first quarter of 2023). Cash flow from operating activities
stood at EUR 120.7 million in the first quarter of 2024 (compared with minus
EUR 47.7 million in the first quarter of 2023). At EUR 87.3 mn (compared
with minus EUR 132.3 mn in the first quarter of 2023), free cash flow was
positive for the third consecutive quarter, once again confirming that the
measures implemented as part of the performance program to strengthen free
cash flow are taking effect.
'The business development of the Lenzing Group is heading in the right
direction in the first quarter. However, we cannot speak of a sustainable
market recovery as long as price pressure in the fiber business remains
high,' notes Stephan Sielaff, Lenzing Group CEO. 'Nevertheless, improved
business performance and good demand for our specialty fibers show that we
are also making good progress, especially with our initiatives to strengthen
our sales activities. We are not awaiting a tailwind from the market, but
are continuing to implement our performance program with determination.'
Since the third quarter of 2023, the Managing Board of Lenzing AG has been
consistently implementing a comprehensive performance program with the
overriding objective of significantly enhancing long-term resilience to
crises, and of greater agility in the face of market changes. The program
initiatives are primarily aimed at generating free cash flow and improving
EBITDA through stronger revenue and margin growth, as well as sustainable
cost excellence. In addition to the clearly positive effects on the revenue
level, the Managing Board expects annual cost savings of in excess of EUR
100 mn from 2025 onward, of which more than 50 percent will have an
increasing impact on earnings from the current financial year onward.
Nico Reiner, Lenzing Group CFO, adds: 'We are very satisfied with the impact
of the performance program to date, and expect the measures to make a
greater contribution to further earnings improvements over the course of the
coming quarters. The appointment of Walter Bickel as Chief Transformation
Officer underscores the importance of this program and ensures that the
existing Managing Board can devote all the necessary resources to its core
tasks.'
Capital expenditures for intangible assets, property, plant and equipment,
and biological assets (CAPEX) amounted to EUR 33.4 mn in the reporting
period (compared with EUR 84.7 mn in the first quarter of 2023). As part of
its performance program, and following the considerable investments made in
recent years, Lenzing is placing a clear focus on
maintenance-and-license-to-operate projects. Compared to December 31, 2023,
liquid assets improved further by 15.4 percent to EUR 843.6 mn as of March
31, 2024, especially thanks to the positive free cash flow performance.
Changes to the Managing Board
Lenzing also recently announced personnel changes on its Managing Board. The
Supervisory Board of Lenzing AG has appointed Walter Bickel as member of the
Managing Board and as Chief Transformation Officer of Lenzing AG until
December 31, 2025, with effect as of April 15, 2024. Mr. Bickel, an
experienced manager, will strengthen the Lenzing Managing Board and will be
responsible for the further development and implementation of the
performance program.
The 80th Annual General Meeting of Lenzing AG was held on April 18, 2024, at
the Lenzing Cultural Center. The AGM ratified the actions of the Managing
and Supervisory Board members for the 2023 financial year and set the
remuneration of the Supervisory Board members for the 2024 financial year in
advance. Dr. Markus Fürst stepped down from the Supervisory Board of Lenzing
AG as of the end of the Annual General Meeting, at his own request. Dr.
Cornelius Baur was newly elected to the Supervisory Board until the Annual
General Meeting that passes resolutions relating to the 2028 financial year.
The mandate of Melody Harris-Jensbach mandate was also extended until the
Annual General Meeting that passes resolutions relating to the 2028
financial year.
Outlook
Even though the IMF has upgraded its growth forecast for 2024 from 3.1
percent to 3.2 percent, a number of risks remain for the global economy:
potential geopolitical shocks, persistently higher inflation and key
interest rates, as well as market risks emanating from the Chinese real
estate market are currently considered to be the most relevant.
General inflation and falling incomes in real terms are continuing to exert
a negative impact on consumer sentiment. A recovery in the consumer clothing
market, which is important for Lenzing, will also depend on a further
normalization of stock levels.
The currency environment is expected to remain volatile in regions relevant
to Lenzing.
In the trend-setting market for cotton, a stable price trend is expected for
the 2023/2024 harvest season.
Earnings visibility remains limited overall.
Revenue and earnings in the first quarter exceeded Lenzing's expectations,
despite the persistently difficult market. Lenzing is ahead of schedule with
the implementation of its performance program. By appointing a separate
Managing Board member, the projects identified to date are to be implemented
even more rapidly, and new potentials are to be leveraged. Lenzing expects
that these measures will increasingly contribute to further earnings
improvement over the coming quarters compared to the first quarter of 2024.
Taking the aforementioned factors into consideration, the Lenzing Group
confirms its guidance for the 2024 financial year of year-on-year higher
EBITDA.
In structural terms, Lenzing continues to anticipate growth in demand for
environmentally responsible fibers for the textile and clothing industry as
well as the hygiene and medical sectors. As a consequence, Lenzing is very
well positioned with its 'Better Growth' strategy and plans to continue
driving growth with specialty fibers as well as its sustainability goals,
including the transformation from a linear to a circular economy model.
Selected indicators of the Lenzing Group EUR mn 01-03/2- 01-03/2-
024 023
Revenue 658.4 623.1
EBITDA (earnings before interest, tax, 71.4 29.7
depreciation and amortization)
EBITDA margin 10.8% 4.8%
Net result for the period -26.9 -64.9
Earnings per share in EUR -0.83 -3.03
Cash flow from operating activities 120.7 -47.7
CAPEX 33.4 84.7
31/03/2024 31/12/2023
Net financial debt 1,477.1 1,562.6
Adjusted equity ratio 32.7% 34.7%
Employees (full-time equivalents) 7,798 7,917
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Your contact for Public Relations: Investor Relations: Sébastien
Dominic Köfner Vice President Knus Vice President Capital
Corporate Communications & Public Markets Lenzing
Affairs Lenzing Aktiengesellschaft Aktiengesellschaft Werkstraße
Werkstraße 2, 4860 Lenzing, Austria 2, 4860 Lenzing, Austria Phone
Phone +43 7672 701 2743 E-mail +43 7672 701 3599 E-mail
(1)media@lenzing.com Web (1)s.knus@lenzing.com Web
(2)www.lenzing.com 1. (2)www.lenzing.com 1.
mailto:media@lenzing.com 2. mailto:s.knus@lenzing.com 2.
https://www.lenzing.com/ https://www.lenzing.com/
About the Lenzing Group The Lenzing Group stands for the ecologically responsible
production of specialty fibers based on cellulose and recycled material. As an
innovation leader, Lenzing is a partner to global textile and nonwoven manufacturers and
drives many new technological developments. The Lenzing Group's high-quality fibers are
the raw material for a wide range of textile applications - from functional, comfortable
and fashionable clothing through to durable and sustainable home textiles. Thanks to
their special properties and botanical origin, TÜV-certified biodegradable and
compostable Lenzing fibers are also ideal for demanding use in everyday hygiene
applications. The Lenzing Group's business model extends far beyond that of a
traditional fiber producer. Together with its customers and partners, Lenzing develops
innovative products along the value chain, creating added value for consumers. The
Lenzing Group strives for efficient utilization and processing of all raw materials and
offers solutions for the transformation of the textile industry from the current linear
economic system to a circular economy. In order to reduce the rate of global warming and
thereby also support the goals of the Paris Agreement and the EU Commission's Green
Deal, Lenzing has a clear, science-based climate action plan that aims for a significant
reduction in greenhouse gas emissions by 2030, and a net-zero target (Scopes 1, 2 and 3)
by 2050. Key Facts & Figures Lenzing Group 2023 Revenue: EUR 2.52 bn Nominal capacity
(fibers): 1,110,000 tonnes Number of employees (full-time equivalents): 7,917 TENCEL(TM),
LENZING(TM) ECOVERO(TM), VEOCEL(TM), LENZING(TM), and REFIBRA(TM) are trademarks of Lenzing AG.
Disclaimer: The above key financial figures are derived primarily from the condensed
consolidated interim financial statements and the consolidated financial statements of
the previous year of the Lenzing Group. Additional details are provided in 'Notes on the
Financial Performance Indicators of the Lenzing Group', available at the following link
(1)https://www.lenzing.com/notes-financial-performance-indicators-lenzing-group-2024-q1,
as well as in the condensed consolidated interim financial statements and in the Lenzing
Group's prior-year consolidated financial statements. Rounding differences can occur in
the presentation of rounded amounts and percentage rates. 1.
https://www.lenzing.com/notes-financial-performance-indicators-lenzing-group-2024-q1
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08.05.2024 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com
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Language: English
Company: Lenzing AG
4860 Lenzing
Austria
Phone: +43 7672-701-0
Fax: +43 7672-96301
E-mail: office@lenzing.com
Internet: www.lenzing.com
ISIN: AT0000644505
Indices: ATX
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1898169
End of News EQS News Service
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1898169 08.05.2024 CET/CEST