No effect of volatile market trends last year – Lenzing

The Lenzing Group continued its dynamic growth path of previous years by posting record results in 2011. Despite a significant weakening of the global fiber market in the second half of 2011, Lenzing once again achieved double-digit growth rates in sales and earnings, and surpassed the threshold of EUR 2 bn in consolidated sales for the first time in the company’s history. Operating margins also improved again from the already high level achieved in 2010 and set a new, absolute record.

Consolidated sales in the reporting year 2011 rose by 21.2% to EUR 2.14 bn, up from EUR 1.77 bn in the prior year. This dynamic sales growth can be attributed to higher average selling prices in its core fiber business, higher fiber shipment volumes, the first-time full-year consolidation of the pulp plant Biocel Paskov acquired in May 2010 as well as higher sales in all other business areas.

Consolidated EBITDA (earnings before interest, tax, depreciation and amortization) amounted to EUR 480.3 mn, a rise of 45.3% from the comparable figure of EUR 330.6 mn in the previous year. Earnings before interest and tax (EBIT) climbed by 56.9% to EUR 364.0 mn (2010: EUR 231.9 mn). The EBITDA and EBIT margins reached an all-time high in 2011 at 22.4% (2010: 18.7%) and 17.0% (2010: 13.1%) respectively.

“Our dynamic growth path and specialty strategy led by the fibers Lenzing Modal and TENCEL once again paid off in 2011. Whereas sales with standard viscose fibers increased by close to 20% year-on-year, we sold some 30% more TENCEL fibers and close to 40% more Lenzing Modal fibers than in the prior year”, explains Lenzing Chief Executive Officer Peter Untersperger.

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Lenzing Sees Good Development In First Nine Months

In the first nine months of 2011, the Lenzing Group succeeded in significantly improving all relevant indicators in comparison to the previous year, and is thus performing in line with the expectations defined in the half-yearly report.

Consolidated sales in the first nine months of 2011 climbed 23.9% year-on-year, from EUR 1,285.5 mill. to EUR 1,592.2 mill. A total of 3.5 percentage points of this increase can be attributed to the higher fiber shipment volumes, whereas 13.6 percentage points are the result of the higher average fiber selling prices. Growth in other business areas as well as the full consolidation of the Paskov pulp plant over three quarters also contributed to the rise in consolidated sales.

EBITDA in the first three quarters of 2011 improved by 55.3% to EUR 362.9 mill. from the prior-year level of EUR 233.6 mill. This corresponds to an EBITDA margin of 22.8% (Q1-3 2010: 18.2%). The operating profit (EBIT) in the first nine months of 2011 was up 71.6% to EUR 289.7 milll. (Q1-3 2010: EUR 168.8 mill.), equivalent to an EBIT margin of 18.2% (Q1-3 2010: 13.1%). The profit for the period climbed to EUR 217.9 mill. from EUR 122.8 mill. in the previous year, an increase of 77.5%.

“Following the outstanding second quarter, the market for standard viscose fibers weakened as expected in the third quarter. Nevertheless, we were able to post third-quarter earnings which matched the very good first quarter of 2011“, says Lenzing CEO Peter Untersperger. “This was primarily due to the quantitatively higher share of the specialty fibers Lenzing Modal and TENCEL along with their stable price development. New record shipment volumes were achieved with Lenzing Modal“.

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