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

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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
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ots Originaltext: Lenzing AG
Im Internet recherchierbar: http://www.presseportal.de

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