EANS-Adhoc: Lenzing AG / Lenzing Group: Satisfactory result despite global economic crisis

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04.03.2010

Lenzing Group: Satisfactory result despite global economic crisis
? Cautious optimism for 2010
? Expansion continues

The Lenzing Group managed to achieve a comparatively satisfactory
result in business year 2009 despite the difficult global economic
situation. This was made possible by timely countermeasures taken and
also by reviving demand in core business fibers from the second
quarter on. According to preliminary figures consolidated sales
declined to EUR 1.25 bill. (2008: EUR 1.33 bill.) above all due to
weaker fiber prices. EBITDA of EUR 182.0 mill (2008: EUR 200.8 mill.)
shrank by 9.3 %. EBIT fell by 22,7 % to EUR 100.7 mill. (2008:130.3
mill.). Lenzing therefore managed to achieve a result similar to
those of 2005 and 2006.

Peter Untersperger, chairman of the management board, summing up
2009: "Our policy of supplying our customers with fibers even at
temporarily unsatisfactory profit margins, of counting on an early
recovery and of making optimum use of this recovery right from the
start fully paid off in 2009. We gained share of supply, launched
innovative product applications and set the course for further
expansion. Simultaneously we successfully implemented a cost
reduction program and still managed to expand the budget for research
and development to almost EUR 20 mill." And commenting on 2010: "We
therefore take a confident view of 2010 and intend to enhance our
position as the world market leader in cellulose fibers by
introducing a number of innovative fiber products and with our
program of dynamic expansion".

Despite the crisis the Group's balance sheet structure and financial
position actually improved as compared to 2008. Peter Untersperger
comments. Peter Untersperger comments: "The well-being of the Lenzing
Group and sustainably protected expansion are at the focus of our
attention." At the reporting date equity came to EUR 606.1 mill.
(2008: 579.7 mill.). With an adjusted equity ratio of 43.5 % (2008:
42.7 %) Lenzing continues to show a solid balance sheet structure.
Net debt was reduced to EUR 315.7 mill. (2008: EUR 365.4 mill.) which
enabled continued expansion and made it possible to make the most of
market opportunities. Net gearing, too, improved from 60.4 % to 50.2
%.

Upward trend in segment Fibers from second quarter of 2009 on As in
previous years segment Fibers dominated sales: in 2009 with a share
of 85.9 % or EUR 1,090.2 mill. (2008: EUR 1,107.9 mill.). Segment
EBIT declined to EUR 109.8 mill. (2008: EUR 118.1 mill.). Total fiber
production amounted to 568,600 tons (2008: 540,300 tons).

Management board member Friedrich Weninger on the current fiber
business situation: "After the price collapse at the end of 2008 we
were able to implement price increases again from the second quarter
2009 on. In addition, our special product segment had not been
affected that severely by the decline in prices and quantity demand.
And we were successful with innovative products and partnerships with
leading textile suppliers, as well as in the nonwovens sector."
Friedrich Weninger names major textile retailers and the US infant
care retailer Costco and emphasizes the successful placement of
Lenzing fibers as eco-friendly products made from renewable
resources. The ecological advantages of Lenzing fibers have become
important sales arguments throughout the whole value creation chain.

After successful test runs Lenzing's Indonesian subsidiary PT. South
Pacific Viscose will take up regular production of 60,000 tons of
viscose fibers annually in the first half of 2010. Subsequently
further debottlenecking will increase capacity by another 18,000
tons. Further current investment programs in segment Fibers focus on
the expansion of pulp production at the Lenzing site, the TENCEL®
fiber production site at Heiligenkreuz (Burgenland) and the
modification of the TENCEL® plant in Grimsby (Great Britain).
Preparations for a new viscose fiber plant in India and the further
expansion in China are being promoted.

Plastics Products hit by the crisis The very poor economic situation
in the construction and automotive industries and in industrial and
infrastructural investment caused perceptible decline in order
bookings and results for segment Plastics Products (11.7 % of sales).
However, the development of the market for special products in other
world regions, especially in the Near East, was positive. The focus
of attention in 2009 was accordingly placed on securing operative
business and on adapting production capacity to current demand.

Segment sales declined to EUR 147.8 mill (2008: EUR 182.2 mill.) due
to lower sales volumes at lower prices. Segment EBIT came to EUR
minus 9.8 mill (2008: EUR 7.3 mill). The negative result reflects the
very difficult business development on one hand and the non-cash
write-off of goodwill relating to business unit Filaments on the
other. EBITDA of EUR 2.0 mill. were positive.

Engineering weaker due to general economic situation In segment
Engineering (2.3 % of sales) Lenzing Technik did not escape the
negative economic situation of 2009. Intra-group and external order
bookings declined significantly. Sales came to EUR 81.5 mill. (2008:
EUR 110.9 mill.) of which EUR 29.5 mill. (2008: EUR 51.3 mill.) were
generated by sales to customers outside the Lenzing Group. EBIT
according to segment reporting came to EUR 2.2 mill. (2008: EUR 10.0
mill.).

Confident outlook In 2010 segment Fibers is expected to enjoy
production at full capacity and positive results due to continuing
good demand especially from the emerging markets. Innovative fiber
applications and fiber blends, as well as rising demand for fibers
made from renewable resources are expected to power sales. The market
environment of segment Plastics Products is expected to remain
difficult. However, numerous optimization measures are intended to
improve results over those of 2009. Improving order bookings point to
a positive development for segment Engineering in 2010. All in all, a
positive result can be expected for the Lenzing Group in 2010 due to
the good prospects of core business fibers.

Consolidated key figures (IFRS)
in EUR mill. 2009 (prelim.) 2008
Sales 1,254.7 1,329.1
EBITDA 182.0 200.8
EBIT 100.7 130.3
EBT 89.0 114.7
Profit for the year attributable to
shareholders of Lenzing AG 64.4 77.7
EBITDA margin in % 14.5 15.1
EBIT margin in % 8.0 9.8
Operating cash flow 140.9 157.8
Capital expenditure (intangible assets,
property, plant and equipment) 151.7 158.6

31/12/2009 31/12/2008
Adjusted equity ratio* in % 43.5 42.7
Staff 6,021 5,945

*Equity incl. government grants less prop. 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: Berlin / free trade
Wien / official dealing