EANS-Adhoc: Lenzing AG / Lenzing Group: Best half year result in company history Very good development in core business Fibers

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6-month report

24.08.2010

As in the first quarter of 2010, the Lenzing Group made optimum use
of the good global market environment and achieved an excellent
result in the second quarter.

Consolidated sales in the first half of 2010 climbed by 43.6 %
(excluding acquisition effects: 38.8 %) to EUR 847.2 mill. from EUR
589.9 mill. This was the strongest rise in sales in the past years.
It was enabled by higher fiber quantity, the price dynamics of global
markets, as well as by the first-time full consolidation, from early
May of 2010 on, of the pulp production site Biocel Paskov (Czech
Republic), acquired in April 2010.

The operative result developed even more dynamically than sales. Half
year EBIT increased sevenfold from EUR 15.4 mill. to EUR 108.6 mill.
Due to the higher cost of financing investment EBT increased
thirteen-fold from EUR 8.0 mill. to EUR 105.0 mill. Profit for the
period, after deduction of income taxes of EUR 24.6 mill. (2009: EUR
2.1 mill.), came to EUR 80.4 mill. (2009: EUR 5.9 mill.). The profit
of the first half of 2010 already now exceeds that of the total
annual profits of 2008 and 2009, respectively. The first half year of
2010 was therefore the best half year in the history of the company.

Peter Untersperger, CEO of Lenzing AG, comments: "The half year
result shows that the company's anti-cyclical investment strategy of
the years 2008 and 2009 was absolutely right. The startup of new
fiber capacity in Indonesia in the first half of 2010, investment in
debottlenecking in China and the expansion of Heiligenkreuz (Austria)
put us in a position to make optimum use of the expected fiber market
dynamics and to give our customers what they need. Despite all these
considerable investments and the acquisition of Biocel Paskov Lenzing
today has an equity ratio of 42.1 % of the balance sheet total at a
net gearing rate of 54.3 %. These provide the company with a
sustained solid balance sheet structure."

Positive development of all segments

Sales of segment Fibers grew by 46.3% to EUR 741.0 mill. and the
result improved from past year's EUR 13.0 mill. to EUR 102.9 mill.
despite raw material prices beginning to rise considerably in the
second quarter of 2010. Higher production capacity along with full
utilization at all sites and significantly higher prices were the
reason for this excellent development. Business unit Textile Fibers
as well as Nonwoven Fibers performed excellently. In particular the
special fibers Lenzing Modal® and TENCEL® met with above-average
broad-based success due to innovative applications. Demand from all
major sales markets in Asia, but Europe and USA as well, was strong.

Sales of segment Plastics Products grew by 32.8% to EUR 95.9 mill.
Improved capacity utilization and the cost efficiency measures
implemented in 2009 resulted in a significantly improved result of
EUR 3.2 mill. over the previous balanced result.

The development of business unit Engineering in the first half of the
year was characterized by the continued high investment activity of
the Lenzing Group and good order bookings from external customers.
Stable half year sales of EUR 38.4 mill. (2009: EUR 38.8 mill.)
provided a segment result of EUR 2.5 mill. (first half year 2009: EUR
3.5 mill.).

Outlook

In the second half of the year core business fibers is expected to
experience weakening fiber demand in view of recent first signs of
overheating. New cellulose fiber production capacity in China will
begin to supply the market in 2010 and 2011 and may temporarily
reinforce this trend. The strong momentum of the first half of the
year will therefore lose some of its force in the second half of the
year and continued high raw material prices (pulp and wood) are
expected to weaken margins. Lenzing´s special fibers will not be
affected by this development to the same degree. The raw material
price situation, in particular for dissolving pulp, is foreseen to
calm down in the fourth quarter. The business development of segments
Plastics Products and Engineering should remain stable.

Pending a sustained recovery of the global economy, the Lenzing Group
expects a satisfactory second half of the year, however, with a
result below that of the first half.

Consolidated key figures (IFRS)
in EUR mill. 1-6/2010 1-6/2009
Consolidated sales 847.2 589.9
EBITDA 151.6 53.2
EBIT 108.6 15.4
EBT 105.0 8.0
Profit for the period 80.4 5.9
EBITDA margin in % 17.9 9.0
EBIT margin in % 12.8 2.6
Gross cash flow 122.3 41.6
Investments (intangible assets,
property plant and equipment) 66.7 78.4
30.06.2010 31.12.2009
Adjusted equity ratio* in % 42.1 43.5
Staff 6,395 6,021

*equity incl. government grants less deferred prop. 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 market