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Lenzing / Lenzing Group with substantial earnings increase in the first nine months of 2017

Published: November 15, 2017; 07:22 · (FriedlNews)

The Lenzing Group generated a substantial increase in revenue and earnings in the first nine months of the 2017 financial year compared to the prior-year period. The company is continuing the implementation of its Group strategy sCore TEN in order to further expand the offering of specialty fibers and be even closer to its customers and business partners.

Consolidated revenue climbed 9.4 percent year-on-year to EUR 1,726.6 mn. This
increase is mainly attributable to higher prices for all three fiber
generations. Consolidated earnings before tax, depreciation and amortization
(EBITDA) rose 23.9 percent to EUR 397.1 mn, corresponding to an EBITDA margin of
23 percent, up from 20.3 percent in the prior-year period. Earnings before
interest and tax (EBIT) increased by 34.6 percent to EUR 298.4 mn, resulting in
a higher EBIT margin of 17.3 percent (Q1-3 2016: 14 percent). The profit for the
period improved by 35.3 percent to EUR 219.3 mn, and earnings per share rose 36
percent to EUR 8.12 per share. In September Lenzing redeemed the retail bond of
EUR 120 mn. At the end of the reporting period the Group had net liquidity of
EUR 16.9 mn.

* Revenue up 9.4 percent to EUR 1,726.6 mn
* EBITDA improvement of 23.9 percent to EUR 397.1 mn
* Retail bond of EUR 120 mn redeemed - Lenzing with net liquidity as at end of
September
* State-of-the-art application innovation center opened in Hong Kong

"In the first three quarters of 2017, we successfully captured value in a very
positive market environment and we continue to implement the sCore TEN strategy
with great discipline. The opening of our new application innovation center in
Hong Kong is an important step to boost our regional innovation capabilities. We
were particularly proud to launch TENCEL(TM) Luxe as a sign of Lenzing's ongoing
commitment to innovation and sustainability", states Stefan Doboczky, Chief
Executive Officer of the Lenzing Group. "After three excellent quarters we are
confident to deliver substantially better operating results in 2017 compared to
2016, but at the same time we do expect more headwinds in 2018."

Zwtl.: Focus on customer intimacy

In September 2017, the Lenzing Group opened a new application innovation center
(AIC) in Hong Kong, thus setting a further milestone in strengthening its
innovation offering to all partners along the value chain. New applications for
Lenzing(TM) fibers will be developed and tested at the new facility, among them
applications for recent innovations such as the TENCEL(TM) Luxe branded lyocell
filament, the Refibra(TM) branded lyocell fiber and the EcoVero(TM) branded
viscose fiber.

Furthermore, new sales and marketing offices were opened in Turkey and South
Korea in the first half of 2017. The direct contact to customers and well-
equipped showrooms featuring products made of Lenzing(TM) fibers serve as the
basis for providing even better customer support.

Zwtl.: Investment program in progress

The Lenzing Group aims to increase the share of specialty fibers as a percentage
of revenue to 50 percent by 2020. Following the capacity expansion initiatives
in Heiligenkreuz (Austria) and Mobile, Alabama (USA) which are both underway,
Lenzing announced its intention to construct the next plant to produce TENCEL®
fibers in Thailand.

Zwtl.: A new era of sustainable production

In October 2017, the Lenzing Group presented a new product, TENCEL(TM) Luxe, at
an exclusive event held in Paris. The TENCEL(TM) Luxe branded filament yarn
represents Lenzing's entry in the filament market. This fiber will support the
Lenzing Group's path towards becoming a true specialty player in the market for
botanic materials derived from the sustainable raw material wood.

The launch volumes of TENCEL(TM) Luxe are being produced at the Lenzing site.
The basic engineering for a commercial scale plant was commenced.

Zwtl.: Outlook

Demand development on the global fiber market remains positive within the
context of a generally friendly macroeconomic environment. Lenzing expects wood-
based cellulose fibers to grow at an even higher rate than the overall fiber
market. After three excellent quarters, the Lenzing Group will achieve an
operating result in 2017 that is significantly better than 2016.

For 2018, Lenzing sees a number of somewhat opposing factors that limit
visibility regarding fiber price developments. Overall market demand is expected
to remain high. However, the Group expects a substantial increase on the supply
side, especially for viscose but also for cotton. Price trends for selected key
raw materials, especially caustic soda, are difficult to predict. Against this
background the Lenzing Group expects a much more challenging market environment
for standard viscose during the upcoming quarters.

The above-mentioned development reassures the Lenzing Group in its chosen
corporate strategy sCore TEN. The Group initiated its transformation from a
volume-oriented viscose player to a value-oriented specialty fiber player at the
end of 2015, and will continue the disciplined implementation of its business
strategy.

Key Group indicators
(IFRS) 1-9/2017 1-9/2016
in EUR mn
Revenue 1,726.6 1,578.4
EBITDA (earnings before
interest, tax, 397.1 320.6
depreciation and
amortization)
EBITDA margin in % 23.0 20.3
EBIT (earnings before 298.4 221.7
interest and tax)
EBIT margin in % 17.3 14.0
Net profit for the period 219.3 162.1
CAPEX(1) 128.5 64.2
30/09/2017 31/12/2016
Adjusted equity ratio in % 58.8 53.0
Number of employees 6,440 6,218

1) Capital expenditures: acquisition of intangible assets, property, plant and
equipment as per statement of cash flows.

Photo download:
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Further inquiry note:
Lenzing AG
Mag. Waltraud Kaserer
Vice President Corporate Communications & Investor Relations
Tel.: +43 (0) 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

Digital press kit: http://www.ots.at/pressemappe/1597/aom

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