EANS-News: Lenzing AG / Lenzing Group weathers the crisis year 2020 and remains strategically well on track CNE

3/11, 7:30 AM (Source: euro adhoc)
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Financial Figures/Balance Sheet/Company Information

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* Successful implementation of measures to fight the COVID-19 pandemic with a
  focus on the safety and health of employees, customers and partners and
  securing sustainable business development
* Implementation of strategic investment projects progressing on schedule -
  financing contracts for the construction of the pulp plant in Brazil concluded
  according to plan
* Lenzing expands its lead in sustainability and circular economy - first TENCEL
  (TM) branded carbon-zero fibers launched
* Successful issuance of a EUR 500 mn hybrid bond further strengthens balance
  sheet structure
* Lenzing expects recovery of the fiber market to continue in 2021 and an
  operating result on pre-crisis level

In 2020, the Lenzing Group successfully responded to the extremely difficult
market environment due to the COVID-19 crisis by implementing a broad package of
measures and remains fully on track in terms of its strategy. The measures
focused on protecting Lenzing's employees and partners and on safeguarding its
operations. Lenzing flexibly adjusted production volumes and was able to offer
its customers the usual delivery service at any time. In addition, Lenzing also
intensified measures for structural earnings improvement to mitigate the effect
of the pressure on fiber prices and demand for fibers, and reduced its operating
costs.

The immediate effects of the COVID-19 crisis increased the pressure on prices
and volumes in the textile fiber segment, in particular in the second quarter of
2020. The recovery of demand in the second half of the year, primarily for wood-
based specialty fibers such as TENCEL(TM) Modal and LENZING(TM) ECOVERO(TM), had
a positive impact on the revenue and earnings development, but could not
compensate for losses. Revenue declined by 22.4 percent to EUR 1.63 bn in 2020.
The earnings development essentially reflects the decline in revenue, but was
supported by measures for structural earnings improvements in all regions.
EBITDA (earnings before interest, tax, depreciation and amortization) fell by
39.9 percent to EUR 196.6 mn. The EBITDA margin decreased from 15.5 percent to
12 percent. Net profit/loss for the year amounted to EUR minus 10.6 mn (2019:
EUR 114.9 mn) and earnings per share attributable to Lenzing shareholders to EUR
0.24 (2019: EUR 4.63).

"2020 was largely dominated by the COVID-19 pandemic, also at Lenzing. Lenzing
responded quickly and with determination to the increased pressure on prices and
volumes. In the second half of the year, we saw a broad recovery of the fiber
market; in particular, demand for our sustainably produced specialty fibers
increased significantly", says Stefan Doboczky, CEO of the Lenzing Group.
"Strategically, we remain fully on track and the implementation of our key
projects in Brazil and Thailand continues to proceed according to plan. With our
corporate priorities, we are consistently pursuing a major goal, namely to make
a zero-carbon future come true", says Doboczky.

Zwtl.: Strengthening specialty fiber growth

CAPEX (expenditures for intangible assets, property, plant and equipment and
biological assets) nearly tripled to EUR 668.8 mn in 2020. This increase is a
consequence of the implementation of the major projects in Brazil and Thailand.
The Lenzing Group's investment activities continued to focus on expanding the
internal production of pulp, increasing the share of specialty fibers and
implementing the climate targets in line with the sCore TEN corporate strategy
during the reporting year.

The construction of the dissolving wood pulp plant in Brazil continues to
progress according to plan. After the final investment decision in December
2019, the Duratex Group acquired a 49 percent share in the joint venture LD
Celulose in the first quarter of the reporting year as agreed. Lenzing holds 51
percent of the shares. The expected Industrial CAPEX will be USD 1.38 bn. The
project is predominantly financed through equity and long-term debt. The
corresponding financing contracts were concluded in the second quarter of 2020
as planned. The commissioning of the pulp plant is scheduled for the first half
of 2022.

Specialty fibers are Lenzing's great strength. The strategic target to generate
roughly 50 percent of revenue with specialty fibers in 2020 has already been
met. Lenzing aims for further organic growth in this area in order to be even
more resilient to volatile markets in the future. The focus of the coming years
will clearly be on the construction of the new, state-of-the-art lyocell plant
in Thailand, with the objective to increase the share of specialty fibers in the
revenue generated by the Segment Fibers to more than 75 percent by 2024. The
investment for the new plant with a capacity of 100,000 tons amounts to roughly
EUR 400 mn. Construction work started in the second half of 2019 and went
according to plan during the reporting year. Production is expected to be
launched at the end of 2021.

Zwtl.: Solid balance sheet structure

As one of the first companies worldwide, Lenzing placed a bonded loan bound to
its sustainability performance in 2019 in order finance further operational
growth. In November 2020, Lenzing successfully issued a subordinated hybrid bond
with a total volume of EUR 500 mn, which is classified as equity in accordance
with IFRS. The bond was oversubscribed multiple times, has a perpetual tenor and
an annual coupon of 5.75 percent. As a result, adjusted equity increased by 22.5
percent to EUR 1.91 bn as at December 31, 2020, corresponding to an adjusted
equity ratio of 45.8 percent.

Zwtl.: Sustainability at Lenzing

With the implementation of its science-based targets, the Lenzing Group actively
contributes to mastering the problems caused by climate change. In 2019, Lenzing
made a strategic commitment to reducing its greenhouse gas emissions per ton of
product by 50 percent by 2030. The target is to be climate-neutral by 2050. The
implementation of the two key projects in Brazil and Thailand is an important
milestone on this journey. Thanks to its excellent infrastructure, the location
in Thailand can be supplied with sustainable biogenic energy. In addition, the
plant in Brazil will feed more than 50 percent of the electricity generated into
the public grid as renewable energy.

The introduction of the first TENCEL(TM) branded CarbonNeutral® fibers and the
establishment of the Renewable Carbon Initiative with the aim of speeding up the
transition to renewable carbon are further important events from the reporting
year, which serve as examples of the successful path that Lenzing and its
partners are taking towards carbon neutrality.

The Lenzing Group received several awards for its achievements during the 2020
financial year, most notably in the field of sustainability:

* Lenzing underwent assessment by the non-profit environmental organization CDP
  for the first time in 2020 and was the first new entrant to secure a double
  'A' score in the categories climate and forest.
* ISS ESG, one of the most recognized rating agencies in the field of
  sustainability, raised Lenzing's sustainability rating from "C+" to "B-", the
  highest rating in the category "Paper & Forest Products", positioning the
  Lenzing Group among the top 10 percent of rated companies. The "Prime Status"
  of the Lenzing Group was also confirmed.
* In Canopy's Hot Button Ranking Lenzing achieved the highest category for the
  first time. The Canadian environmental organization particularly highlighted
  our continuous leadership regarding sustainable procurement and efficient use
  of resources over the past years.
* In December Lenzing won the prestigious "Building Public Trust Award 2020" for
  the best climate reporting on the Austrian ATX. The jury emphasized Lenzing's
  commitment to a holistic climate-related strategic alignment and clear
  targets.
* In addition, Lenzing won the Austrian State Prize for Innovation. This award
  recognizes Lenzing's achievements and its strategy to grow exclusively on the
  basis of sustainable innovations. Lenzing convinced the jury with its LENZING
  TM Web Technology. The novel process combines fiber and nonwovens production
  in only one step, setting new standards in terms of efficiency, circularity
  and ecological sustainability.

Zwtl.: Guidance for 2021

The International Monetary Fund expects global growth of 5.5 percent for 2021.
However, the economic recovery after the deep recession caused by COVID-19 is
subject to risks and largely depends on the further development of the pandemic.
The currency environment is expected to remain volatile in the regions relevant
to Lenzing.

The global fiber and pulp markets came under considerable pressure as a result
of the COVID-19 crisis. The significant recovery of demand from the third
quarter of 2020 onwards, starting in China, continued into the first quarter of
2021 and is currently providing a friendly market environment. In the cotton
market, a shortage of supply, in particular for organic cotton, is anticipated
in the current 2020/2021 harvest and, consequently, an unchanged development in
inventory levels.

At the same time, Lenzing still expects a continued increase in demand for
sustainably produced fibers for the textile and apparel industry as well as for
the hygiene and medical industry. This trend is likely to continue unabated
after the COVID-19 pandemic, not least due to a number of legislative
initiatives.

With the prospect of a broad population being vaccinated against COVID-19 in the
near future, optimism and confidence in an early return to normality are also
growing within the textile value chain. However, the currently positive
environment is still characterized by a high level of uncertainty due to the
COVID-19 pandemic. Therefore, the earnings visibility remains limited. Taking
into account the above factors, the Lenzing Group expects the operating result
to develop at a similar level in 2021 as in the pre-crisis year 2019.

Lenzing considers itself well-positioned in view of these developments and based
on its sCore TEN corporate strategy, and will in particular continue the
disciplined implementation of the strategic investment projects, which will make
a significant contribution to earnings from 2022.

Selected indicators of the
Lenzing Group                                    2020                       2019
EUR mn
Revenue                                       1,632.6                    2,105.2
EBITDA (Earnings before
interest, tax,                                  196.6                      326.9
depreciation and
amortization)
EBITDA margin                                  12.0 %                     15.5 %
Net profit/loss for the                        (10.6)                      114.9
year
Earnings per share in EUR                        0.24                       4.63
CAPEX(1)                                        668.8                      244.0
Free cash flow                                (614.8)                        0.8


                                          31.12.2020                  31.12.2019
Net financial debt                             471.4                       400.6
Adjusted equity ratio(2)                      45.8 %                      50.0 %
Number of employees                            7,358                       7,036


1) Capital expenditures: expenditures for intangible assets and property, plant
and equipment and biological assets as per statement of cash flow
2) Ratio of adjusted equity to total assets in percent

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Further inquiry note:
Filip Miermans
Vice President Corporate Communications & Public Affairs
Lenzing AG
Phone: +43 664 8477802
E-mail: f.miermans@lenzing.com

end of announcement                         euro adhoc
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issuer:       Lenzing AG

A-4860 Lenzing
phone:        +43 7672-701-0
FAX:          +43 7672-96301
mail:         office@lenzing.com
WWW:          http://www.lenzing.com
ISIN:         AT0000644505
indexes:      WBI, ATX
stockmarkets: Wien
language:     English

EAX0002    2021-03-11/07:30

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