EANS-Adhoc: Lenzing AG / Lenzing Revises Guidance for the 2013 Financial Year

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Earnings Forecast/quarterly report
13.11.2013

-EBITDA of EUR 220 - 230 mn expected for 2013 -Material costs and
personnel expenditures to be reduced by EUR 120 mn p.a. until 2015
-All fiber production facilities will continue to operate at full
capacity

The Lenzing Group, the world's leading producer of man-made cellulose
fibers, achieved business results in line with expectations in the
first three quarters of 2013 in spite of unfavorable market
conditions. This can be attributed to the countermeasures which are
already underway. Consolidated sales amounted to EUR 1,447.0 mn, a
decline of 7.7% from the comparable level of EUR 1,567.5 mn in the
previous year. Consolidated earnings before interest, tax,
depreciation and amortization (EBITDA) continued to be at a good
level, amounting to EUR 223.8 mn in the first nine months of 2013, a
drop of 20.5% from the prior-year figure of EUR 281.5 mn. This
comprised an EBITDA margin of 15.5% (Q1-3/2012: 18.0%). Earnings
before interest and tax (EBIT) in the first nine months of the year
fell by 33.0% to EUR 136.4 mn, down from EUR 203.4 mn. On the basis
of the anticipated weaker fourth quarter of 2013, Lenzing revised its
guidance for the entire year 2013 downwards. Lenzing now expects
EBITDA of between EUR 220 - 230 mn in 2013 (last guidance: EUR 280
mn).

In the light of the ongoing difficult market situation, Lenzing has
decided to proactively implement a massive, far-reaching cost
optimization program. The initiative will enable cost savings of EUR
120 mn p.a. until 2015 as a means of safeguarding Lenzing's cost
leadership on the global market for man-made cellulose fibers. In
this way Lenzing is responding to the current difficult market
environment, which has led to increasingly fierce price competition.

"The difficult market situation will continue in 2014 and possibly
well into 2015. We will resolutely counteract this unfavorable
situation and adjust our cost structures to the new circumstances as
quickly as possible", says Peter Untersperger, Chief Executive
Officer of Lenzing AG. "Our aim must not only be to expand our
quality leadership and innovative strength on a sustainable basis,
but also to regain the cost leadership in our industry. We continue
to see attractive growth potential for our products, but we are
already preparing ourselves today as optimally as possible for the
increasingly tough competition. Cost discipline and cash generation
will be our targets over the coming years."

In particular, the sales and marketing organization will be
strengthened as part of the current reorganization project. The
entire organization will sharpen its focus to more strongly orient
its activities to the important fiber markets of Asia and Turkey.
Sales efforts in China especially will be expanded on the basis of
additional technical experts and market development capabilities.

Lenzing will continue to invest, particularly in developing
TENCEL®for high quality textile applications and sustainable nonwoven
applications. Demand for Lenzing Modal®remains strong.

The expanded cost optimization program "excelLENZ 2.0" is a further,
comprehensive step to sustainably safeguard earnings and future
investment projects. It complements the initial "excelLENZ"
cost-saving program which has been underway since the beginning of
the year as well as the organizational restructuring of the Group.
Improvement potential for all cost modules encompassing all operating
units has been defined over the past weeks. The measures to be
implemented on this basis will not only result in savings in material
costs but also massive reductions in operating expenses and overhead,
extensive increases in operating efficiency as well as a reduction in
the total number of employees. All global sites will be affected.
The staff at the Group's largest production site in Lenzing, Upper
Austria will likely be downsized by up to 15% from the current level
of about 2,600 employees (including retiring employees and unfilled
vacancies). On balance, a total of up to 600 jobs will be cut or
vacant positions not filled.

The individual measures will be quickly carried out in the coming
months, and thus already partially impact earnings in 2014. Lenzing
expects one-off expenses related to the implementation of the
"excelLENZ 2.0" drive in the mid double- digit euro range.

Sales and earnings in the first three quarters in line with
expectations In spite of the increasingly difficult market
environment, business of the Lenzing Group in the first three
quarters of 2013 developed in line with expectations. The downward
pressure on selling prices could at least be partially offset by
significantly higher fiber shipment volumes, cost savings and a
marketing drive for specialty fibers Lenzing Modal®and TENCEL®.

Fiber production facilities were operating at full capacity during
the first three quarters of the year. Fiber shipment volumes
increased to approximately 660,000 tons due to capacity expansion
measures, up 12% from the prior-year level of 590,000 tons. However,
average fiber selling prices of the Lenzing Group were at EUR 1.73
per kilogram, about 14% lower than in the previous year. The
underlying reason was the price and margin pressure in China as a
consequence of surplus production capacities. This development
intensified further in the third quarter and influenced all other key
sales markets.

The EBITDA of EUR 223.8 mn and the EBIT of EUR 136.4 mn include the
one-off proceeds totaling EUR 24.8 mn mainly from the sale of the
Business Unit Plastics. The financial result amounted to minus EUR
19.1 mn in the first three quarters of 2013 (Q1-3/2012: minus EUR 7.4
mn). This led to a profit for the period of EUR 86.6 mn, a decrease
of 44.2% year-on-year from EUR 155.1 mn in the first three quarters
of 2012. Earnings per share, calculated on the basis of Lenzing
shares outstanding, were EUR 3.21 in the first nine months, down from
EUR 5.67 in the previous year.

Investments in intangible assets and property, plant and equipment
(CAPEX) totaled EUR 180.6 mn in the first nine months of 2013, below
the prior-year level of EUR 213.7 mn. The focal point of the
investment activity on the part of the Lenzing Group was construction
of the new large-scale TENCEL®production plant at the Lenzing site,
completion of the conversion and refitting work at the Paskov/CZ pulp
plant as well as infrastructure investments. Adjusted Group equity as
of the end of September 2013 rose slightly to EUR 1,163.4 mn, up 0.9%
from the comparable figure of EUR 1,153.1 mn at the end of 2012. This
corresponded to an adjusted equity ratio of 46.2% of total assets
(December 31, 2012: 43.8%). Due to the investment activity of the
Lenzing Group, net financial debt increased to EUR 461.2 mn in the
first nine months of 2013: (December 31, 2012: EUR 346.3 mn).
Accordingly, net gearing was 39.6% (December 31, 2012: 30.0%).

The number of employees in the Lenzing Group as at September 30, 2013
totaled 6,772 people, down from 7,033 at the end of 2012 and 6,958 at
the end of the third quarter of 2012.

Revised guidance for 2013 No imminent change in the difficult
business environment can be expected on the global fiber market. The
continuing high level of cotton inventories has unfavorable effects
on the entire fiber industry. The International Cotton Advisory
Committee (ICAC) expects inventories to rise by an additional two
million tons to 20.8 mn tons by the end of the current season (end of
July 2014)*.

Lenzing expects price pressure to remain strong in the fourth quarter
of 2013. For this reason, Lenzing has revised its guidance for the
entire year 2013. Accordingly, consolidated sales are expected to
total about EUR 1,9 bn for 2013 as a whole (last guidance: EUR 2.0
bn). EBITDA will likely amount between EUR 220 - 230 mn due to
restructuring costs for operational restructuring measures (last
guidance: EUR 280 mn), whereas EBIT will total approximately EUR 75 -
85 mn (last guidance: EUR 160 mn), which can be attributed to one-off
costs for write-downs.

Further details are contained in the Quarterly Report 1-9/2013, which
can be downloaded from the Website of Lenzing AG at www.lenzing.com.

Key Group indicators

(IFRS) in EUR mn 1-9/2013 1-9/2012
Consolidated sales 1,447.0 1,567.5
EBITDA1 223.8 281.5
EBITDA-margin1 in % 15.5 18.0
EBIT1 136.4 203.4
EBIT margin1 in % 9.4 13.0
Profit for the period1 86.6 155.1
CAPEX(incl. Business Unit 180.6 213.7
Plastics)

Sept. 30, 2013 Dec. 31, 2012
Adjusted equity ratio2in % 46.2 43.8
Number of employees at 6,772 7,033
period-end

1) After restructuring
2) Equity incl. government grants less prop. deferred taxes (after
restructuring)

* Source:ICAC, press release, 1 November 2013

Segment reporting

(EUR mn) 1-9/2013 1-9/2012
Segment Fibers
Sales 1,326.5 1,414.3
EBITDA 184.1 262.1
Segment Engineering
Sales 97.8 89.3
EBITDA 6.0 6.1
Segment Other
Sales 41.9 39.0
EBITDA 5.5 2.4

Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 7672-918-2713
mailto:a.guldt@lenzing.com

end of announcement euro adhoc
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issuer: Lenzing AG

A-A-4860 Lenzing
phone: +43 7672-701-0
FAX: +43 7672-96301
mail: a.guldt@lenzing.com
WWW: http://www.lenzing.com
sector: Chemicals
ISIN: AT0000644505
indexes: WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien
language: English