EANS-News: Lenzing AG / Lenzing Group with an excellent start into 2021 CNE

5/5, 7:30 AM (Source: euro adhoc)

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Earnings/Quarterly Report/Company Information

Highlights -

* Significant increase in operating result: EBITDA at EUR 94.5 mn, cash flow
  from operating activities more than tripled
* Major strategic projects continue fully on track - production start of the
  lyocell plant in Thailand expected in the fourth quarter 2021
* Upper Austria's largest photovoltaic plant at the Lenzing site
* Lenzing exits Hygiene Austria joint venture
* Guidance 2021: Lenzing expects operating result at least at pre-crisis level

Lenzing - The Lenzing Group had a clearly positive revenue and earnings
development in the first quarter of 2021. Growing optimism in the textile and
apparel industry as a result of the vaccination progress and the continuing
recovery in retail led to a significant increase in demand and higher prices in
the global fiber market.

Revenue rose by 4.9 percent to EUR 489.3 mn in the first quarter of 2021. This
is mainly attributable to a strong increase in demand from China and the
resulting higher viscose prices. The focus on wood-based specialty fibers such
as TENCEL(TM) and LENZING ECOVERO(TM) branded fibers had a positive impact on
revenue development; the share of specialty fibers in fiber revenue rose from
72.2 percent to 72.6 percent. The negative impact of more unfavorable currency
effects was consequently more than offset. The earnings development essentially
reflects the increase in revenue. The continued focus on structural earnings
improvements in all regions reinforced this positive effect. EBITDA (earnings
before interest, tax, depreciation and amortization) increased by 36.8 percent
to EUR 94.5 mn in the first quarter of 2021. The EBITDA margin rose from 14.8
percent to 19.3 percent. Net profit for the period amounted to EUR 29.9 mn (01-
03/2020: EUR 17.7 mn) and earnings per share to EUR 1.06 (01-03/2020: EUR 0.84).

"Lenzing benefited from the growing optimism in the textile value chain and the
strong recovery of the fiber markets in the first quarter of 2021. Demand for
our sustainably produced specialty fibers such as TENCEL and LENZING ECOVERO saw
a clearly positive development again", says Stefan Doboczky, CEO of the Lenzing
Group. "Strategically, we remain fully on track. The implementation of the pulp
project in Brazil proceeds according to plan despite the challenges related to
COVID-19, and the new lyocell plant in Thailand will start up as planned in the
fourth quarter of 2021", Doboczky adds.

Gross cash flow in the first quarter of 2021 increased by 117.5 percent to EUR
84.3 mn compared to the first quarter of the previous year. This increase is
primarily due to the earnings development. Cash flow from operating activities
more than tripled to EUR 111.5 mn. (01-03/2020: 31.9 mn). Free cash flow
amounted to EUR minus 99 mn (01-03/2020: EUR minus 106.7 mn) due to investment
activities related to the projects in Thailand and Brazil.

Zwtl.: Strengthening specialty fiber growth

CAPEX (expenditures for intangible assets, property, plant and equipment and
biological assets) rose by 52.5 percent to EUR 211.5 mn in the reporting period,
due to the implementation of the key projects. The construction of the pulp mill
in Brazil continues to proceed according to plan despite the challenging
developments related to COVID-19. The start-up of the pulp mill is still
scheduled for the first half of 2022. The new mill will strengthen backward
integration and, consequently, Lenzing's specialty fiber growth in line with the
sCore TEN strategy.

Specialty fibers are Lenzing's great strength. The objective is to generate more
than 75 percent of fiber revenues from business with wood-based specialty fibers
such as lyocell and modal fibers by 2024. The focus of this strategic target is
on the construction of a new state-of-the-art lyocell plant in Thailand. 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 in the reporting period. The recruiting and onboarding of new
employees is also progressing successfully. Production is scheduled to start
towards the end of 2021.

Zwtl.: Vision of a zero-carbon future

With the implementation of its science-based targets, the Lenzing Group actively
contributes to combating 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 vision is to be climate-neutral by 2050. The
two key projects in Brazil and Thailand are important milestones on this
journey. Thanks to its excellent infrastructure, the location in Thailand can be
supplied with sustainable biogenic energy. In addition, the mill in Brazil will
feed more than 50 percent of the electricity generated into the public grid as
renewable energy.

Zwtl.: Sustainability in Lenzing

Lenzing continuously seeks possibilities to increase energy efficiency at
existing locations and to use renewable energy sources or sources with lower CO2
emissions. In the first quarter of 2021, the company announced the construction
of the largest ground-mounted photovoltaic plant in Upper Austria on an area of
55,000 m² at the Lenzing site. Construction is scheduled to start in the second
half of 2021.

In its Sustainability Report 2020 [https://www.lenzing.com/
index.php?type=88245&tx_filedownloads_file%5bfileName%5d=fileadmin/content/PDF/
04_Nachhaltigkeit/Nachhaltigkeitsberichte/EN/NHB_2020_EN.pdf] "Stand up for
future generations", Lenzing re-emphasized its commitment to take responsibility
beyond the products it makes. The non-financial report, prepared in accordance
with the reporting standards of the Global Reporting Initiative (GRI) and the
Austrian Sustainability and Diversity Improvement Act (NaDiVeG) and reviewed by
KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft,
illustrates how the company is responding to the global challenges of our time.

Zwtl.: Hygiene Austria LP GmbH

After the allegations regarding Hygiene Austria LP GmbH became known in March
2021, Lenzing worked intensively with Palmers Textil AG to address them. The
following steps were taken together: Along with a committed action plan to
ensure the sound and continuing existence of the company as a going concern, the
two shareholders have agreed that Lenzing's stake in Hygiene Austria will be
transferred to Palmers. Lenzing waived its right to a suitable purchase price
for the time being in order to ensure the continued existence of Hygiene Austria
in line with its founding principle (see also Press release of Lenzing AG of 04/
02/2021 [https://www.lenzing.com/newsroom/press-releases/press-release/lenzing-
update-on-hygiene-austria]). The investment was fully written off in the first
quarter.

Lenzing stands for strong values and an internationally recognized process and
governance system. However, mistakes were made in implementing the business idea
of Hygiene Austria. The Managing Board of Lenzing AG is drawing the necessary
lessons for the future in consultation with the Supervisory Board.

Zwtl.: Guidance for 2021

The International Monetary Fund expects global growth of 6 percent for 2021.
However, the economic recovery after the deep recession caused by COVID-19 is
subject to risks and largely depends on the vaccination progress and successful
containment 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. In February/March of this year, the market turned again and has since
moved sideways. In the cotton market, a shortage in production volume is
anticipated in the current 2020/2021 harvest and, consequently, a slightly
decline in inventory levels. The prices for dissolving wood pulp remain at a
high level.

Lenzing 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 progressing active immunization of a broad population
against COVID-19, 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, also due to
the increased occurrence of virus mutations and the extreme occurrence of
infections in countries such as Brazil and India. Therefore, the visibility
remains limited.

Taking into account the above factors, the Lenzing Group expects the operating
result in 2021 to reach at least the level of the pre-crisis year 2019.

In view of these developments, Lenzing considers itself well-positioned with its
sCore TEN corporate strategy, and will continue to drive the completion of the
major strategic projects, which will make a significant contribution to earnings
from 2022. In addition to its targets for EBITDA (EUR 800 mn) and ROCE (>10 %
[1]), Lenzing also confirms its four other medium-term targets for 2024: net
debt/EBITDA (<2.5 x), share of specialty fibers (>75% of fiber revenue),
internal production of dissolving wood pulp (>75 %), decarbonization (>40 %
fewer CO2 emissions per ton of product).

Selected indicators of the
Lenzing Group                              01-03/2021                 01-03/2020
EUR mn
Revenue                                         489.3                      466.3
EBITDA (Earnings before
interest, tax,                                   94.5                      69.11
depreciation and
amortization)
EBITDA margin                                   19.3%                   14.8%[2]
Net profit for the period                        29.9                       17.7
Earnings per share in EUR                        1.06                       0.84
Cash flow from operating                        111.5                       31.9
activities
CAPEX[3]                                        211.5                      138.6


                                          31.03.2021                  31.12.2020
Net financial debt                             572.4                       471.4
Adjusted equity ratio[4]                      43.4 %                       45.8%
Number of employees                            7,554                       7,358


1) To be adjusted for assets under construction
2) Reclassification of capitalized borrowing costs, net interest from defined
benefit plans and commitment fees from EBIT/EBITDA to the financial result (see
footnote 1 of the consolidated income statement of the Group Interim Report Q1/
2021)
3) Capital expenditures: expenditures for intangible assets and property, plant
and equipment and biological assets as per statement of cash flows
4) Ratio of adjusted equity to total assets in percent

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Further inquiry note:
Daniel Winkelmeier
Communications Manager
Lenzing AG
Phone: +43 676 7579843
E-mail: d.winkelmeier@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

EAX0003    2021-05-05/07:30

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