EANS-Adhoc: Lenzing AG / Persistently Difficult Market Environment, Cost Savings Measures Positively Impact Results

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Financial Figures/Balance Sheet/quarterly report
13.11.2014

- Q1-3 EBITDA of EUR 159.8 mn (down 16% from the previous year)

The Lenzing Group is working to counteract the ongoing difficult
market environment prevailing in the fiber industry. Sales and
earnings declined in the first nine months of 2014 compared to the
prior-year performance, but cost savings are having a positive
impact. This led to a slight earnings improvement in the third
quarter of 2014, the first time in about two years. Further cost
reductions are planned in light of the fact that no significant
impetus is expected from the market.

Ongoing weak fiber prices burden Q1-3 sales and earnings The decline
in the average fiber selling prices and the high volatility on the
fiber market continue to negatively impact the company's business
operations. Consolidated sales decreased by 6.2% to EUR 1,357.7 mn in
the first three quarters of 2014, down from EUR 1,447.0 mn in the
previous year. More than half of the sales drop is due to the
non-recurring effects relating to the disposal of the Business Unit
Plastics in 2013. Consolidated sales were down by 2.8% in a
like-for-like comparison. Average fiber selling prices of the Lenzing
Group fell to 1.55 EUR/kg compared to 1.73 EUR/kg in the first three
quarters of 2013. The price decline could not be fully offset by
increasing fiber production and sales volumes, in part as a result of
the successful start-up of the new TENCEL® fiber manufacturing
facility at the Lenzing site. Fiber sales volumes rose by 7% year-
on-year to 706,900 tons in the first nine months of 2014.

In a like-for-like comparison of continuing operations, consolidated
EBITDA[1]in the first nine months of the year amounted to EUR 159.8
mn, a 16.0% decrease compared to EUR 190.2 mn for Q1-3 2013. This
corresponded to an EBITDA margin of 11.8% (Q1-3 2013: 13.6%).
Consolidated nine-month earnings before interest and taxes (EBIT)
amounted to EUR 69.5 mn, a drop of 34.8% from EUR 106.6 mn in the
previous year. This comprised an EBIT margin of 5.1% (Q1-3 2013:
7.6%). As a consequence of the excelLENZ program, the number of
employees working for the Lenzing Group fell to 6,352 people as at
September 30, 2014 (December 31, 2013: 6,675) despite the full
operation of the new TENCEL® fiber production plant in Lenzing.

Third-quarter earnings reflect cost reductions The third-quarter 2014
performance of the Lenzing Group was marked by a slight year-on-year
earnings improvement as well as in comparison to the second quarter
of 2014. "The measures are succeeding. The earnings improvement is
mainly attributable to the excelLENZ cost-cutting drive but also from
the first fiber sales volumes produced by the new TENCEL® fiber plant
in Lenzing", says Lenzing CEO Peter Untersperger.

In spite of higher sales volumes, consolidated sales in the third
quarter of 2014 stagnated at EUR 457.7 mn compared to the prior-year
level of EUR 457.1 mn, which is due to the lower average fiber
selling prices. Nevertheless, third- quarter EBITDA rose to EUR 68.0
mn (Q3 2013: EUR 61.8 mn), and EBIT in the third quarter of 2014
totaled EUR 37.1 mn (Q3 2013: EUR 33.4 mn), whereas EBT improved to
EUR 33.3 mn from the figure of EUR 28.2 mn in the prior-year quarter.

Implementation of further cost savings "We expect cost savings
exceeding EUR 90 mn for the entire year 2014, of which about one
quarter involves personnel expenses. The remaining cost decreases
equally relate to reduction in material costs and savings derived
from efficiency projects to cut general and administrative expenses",
adds CEO Untersperger. "Planning work has begun to enable a further
improvement of the Lenzing Group's cost structure to be achieved in
2015. Starting in 2016 we will achieve sustainable cost reductions of
over EUR 160 mn p.a. These measures are designed to safeguard the
long-term competitive strength of the company and its self-financing
capacity for future investments."

Outlook Lenzing Group The global market for man-made cellulose fibers
will continue to be impacted in the upcoming months by low pulp
prices and surplus fiber production capacities against the backdrop
of good volume demand.

The successful ramp-up of the TENCEL® fiber plant in Lenzing, the
initiated improvements in the product mix, and the strong expansion
of marketing and sales activities along the entire value chain will
improve the company's market position and its relative competitive
strength. In addition to an intensification of the excelLENZ cost
reduction program, the realignment initiative in the fields of
Lenzing Technik, site maintenance and repair services will make an
important contribution towards achieving operational improvements at
Lenzing.

Key Group indicators

(IFRS) in EUR mn 1-9/2014 1-9/2013(1)
Consolidated sales 1,357.7 1,447.0
EBITDA(2) 159.8 190.2
EBITDA margin(2) in % 11.8 13.6
EBIT(2) 69.5 106.6
EBIT margin(2) in % 5.1 7.6
Profit for the period(2) 44.3 65.7
CAPEX(3) 84.8 180.6

Sep. 30, 2014 Dec. 31, 2013
Adjusted equity ratio(4)in % 46.9 45.5
Number of employees at 6,352 6,675
period-end

1) The prior year figures were restated due to changes in presentation (see Note

2 to the interim consolidated financial statements). 2) From
continued operations 3) Comprising investments in intangible assets,
property, plant and equipment. 01-09/2013 incl BU Plastics 4)
Equity incl. government grants less prop. deferred taxes.

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----------- [1] Earnings before interest, taxes, depreciation on
property, plant and equipment and amortization of intangible assets
and before income from the release of investment grants.

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