EANS-News: Lenzing AG / Lenzing Group generates solid results in a more demanding market environment

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Quarterly Report

Highlights -

* Revenue down 6.1 percent to EUR 550.3 mn primarily due to currency effects
* EBITDA decline of 24.8 percent to EUR 101.6 mn mainly due to softening prices
for commodity viscose and increasing costs for key raw materials
* Company is intensively pushing ahead with expansion of production capacities
for specialty fibers
* Strong message to consumers - new master brand and new product brands
presented

Lenzing - The Lenzing Group started the 2018 financial year with solid business
results. Revenue and earnings decreased compared to the first quarter of the
previous year against the backdrop of a challenging market environment for
standard viscose combined with changes in currency exchange rates. The corporate
strategy sCore TEN is being implemented with great discipline in order to expand
the company's offering of specialty fibers and even more extensively support
customers and business partners.

Group revenue in the first three months of 2018 decreased by 6.1 percent from
the prior-year quarter to EUR 550.3 mn. This drop is mainly attributable to less
favorable currency exchange rates. Group earnings before interest, tax,
depreciation and amortization (EBITDA) fell 24.8 percent to EUR 101.6 mn mainly
due to softening prices for commodity viscose and increasing costs for key raw
materials. The EBITDA margin decreased to 18.5 percent in the first quarter of
2018 compared to 23 percent in the first quarter of 2017. Earnings before
interest and tax (EBIT) declined by 32.7 percent to EUR 68.9 mn, which resulted
in a lower EBIT margin of 12.5 percent (Q1 2017: 17.5 percent). The net profit
for the period dropped by 33.3 percent from EUR 75 mn in the first quarter of
the previous year to EUR 50 mn. Earnings per share equaled EUR 1.89 (Q1 2017:
EUR 2.75).

"Following the record year of 2017, Lenzing began the expected challenging 2018
financial year with a decline in revenue and earnings. Market headwinds were
clearly noticeable in the first quarter but still we are pleased with the solid
results given the more demanding market environment. At the same time, we are
forging ahead with implementation of our corporate strategy sCore TEN. Expansion
of production capacities for our specialty fibers is also progressing", says
Stefan Doboczky, Chief Executive Officer of the Lenzing Group. "We are convinced
of the merits of our chosen strategy, which will help us to be more resilient in
the upcoming quarters", he adds.

Zwtl.: Expansion of capacities

Capital expenditures (CAPEX) more than doubled in the first quarter of 2018 to
EUR 58.9 mn, up from EUR 26.9 mn in the prior-year period. This is mainly due to
the expansion of production capacities for specialty fibers in Heiligenkreuz,
Burgenland and Mobile, Alabama in the USA as well as the expansion and
modernization of the dissolving pulp plants in Lenzing, Austria and Paskov,
Czech Republic. In line with the corporate strategy sCore TEN, the company is
pressing ahead with these projects as well as with planning work on construction
of the next state-of-the-art lyocell production facility in Prachinburi,
Thailand.

Zwtl.: New brand identity

In February 2018, Lenzing launched a new phase in its positioning on the market
by repositioning the TENCEL(TM) brand as the umbrella brand for the textile
applications of all specialty fibers within the context of Première Vision in
Paris, one of the most prominent textile trade fairs in the world. Lenzing
decided to carry out a new brand strategy in order to sharpen its company and
product profile as a sustainable innovation leader for customers and partners
along the value chain as well as for consumers. The most important pillar of
this new brand strategy is a brand architecture with a focus on fewer brands and
a strong message to consumers. The new image of the Lenzing master brand
presented in March enables the company to showcase its strengths in a targeted
manner.

Zwtl.: Outlook

The International Monetary Fund expects a further acceleration in global
economic growth to 3.9 percent in 2018. However, growing protectionist
tendencies in the political arena represent a source of uncertainty. Export-
oriented companies in the Eurozone will also be faced with an additional
challenge from the currency environment.

Developments on the fiber markets should remain positive, but with continuing
volatility. The rising demand for cotton should support prices and will help
inventory levels to remain at the current levels despite the increase in
production. Polyester fiber prices have stabilized after the increase in
previous years.

The wood-based cellulose fiber segment, which is relevant for Lenzing, should
see further strong demand. After years of moderate capacity expansion in the
viscose sector, significant additional volumes are expected to enter the market
in 2018. This was reflected in rising pressure on commodity viscose prices
beginning in the first quarter and a further increase during the second quarter.
The Lenzing Group is very well positioned in this market environment with its
corporate strategy sCore TEN and will continue its consistent focus on growth
with specialty fibers.

The Lenzing Group sees a number of, in part contradictory, factors which limit
the visibility over fiber prices in 2018. The prices for several key raw
materials, e.g. caustic soda, remain at a very high level and their further
development is difficult to estimate. These general conditions are expected to
form the basis for a challenging market environment in the commodity viscose
fiber business during the coming quarters. Coupled with anticipated exchange
rate fluctuations, the Lenzing Group expects its results for 2018 to be lower
than the outstanding results in the last two years.

Key group indicators
(IFRS) 01-03/2018 01-03/2017
(in EUR mn)
Revenue 550.3 586.2
Earnings before interest,
tax, depreciation and 101.6 135.1
amortization (EBITDA)
EBITDA margin in % 18.5 23.0
Earnings before interest 68.9 102.3
and tax (EBIT)
EBIT margin in % 12.5 17.5
Net profit for the period 50.0 75.0
CAPEX(1) 58.9 26.9

31.03.2018 31.12.2017
Adjusted equity ratio(2) 60.5 61.2
in %
Number of employees 6,569 6,488

1) Capital expenditures: i.e. acquisition of intangible assets, property, plant
and equipment as per statement of cash flows
2) Ratio of adjusted equity to total assets in percent

Photo download:
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Further inquiry note:
Lenzing AG
Mag. Waltraud Kaserer
Vice President Corporate Communications & Investor Relations
Tel.: +43 7672 701-2713
mailto: w.kaserer@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: office@lenzing.com
WWW: http://www.lenzing.com
ISIN: AT0000644505
indexes: ATX, WBI
stockmarkets: Wien
language: English

Original-Content von: Lenzing AG, übermittelt durch news aktuell