Technical Absorbents
Techtextil Frankfurt

Free membership

Receive our weekly Newsletter
and set tailored daily news alerts.

Fibres/​Yarns/​Fabrics

Lenzing Group reports significant income growth in first half-year 2016

Lenzing significantly increased revenue and profitability and substantially improved the cash flow whilst continuing the reduction of net debt.

24th August 2016

Innovation in Textiles
 |  Lenzing

Clothing/​Footwear

According to the company, the implementation of the new group strategy sCore TEN with a clear focus on profitable growth based on environmentally friendly specialty fibres has already impacted its business results. The Lenzing Group significantly increased revenue and profitability and substantially improved the cash flow whilst continuing the reduction of net debt.

Results

At largely unchanged production volumes, consolidated revenue rose by 8.3% to EUR 1,034.8 million as a consequence of higher fibre selling prices and an attractive product mix compared to the first half-year of 2015.

The Lenzing Group also profited from the increase of spot market prices for viscose fibres. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) improved by 54.3% to EUR 195.1 million, boosting the EBITDA margin to 18.9% compared to the prior-year level of 13.2%. Earnings before interest and tax (EBIT) more than doubled to EUR 129.7 million. The EBIT margin increased to 12.5%, up from 6.3% in the previous year.

The cash flow from operating activities more than doubled to EUR 268.8 million compared to the prior-year period. The free cash flow rose three-fold to EUR 228.3 million.

Substantial improvement

“The Lenzing Group looks back at a very successful first half-year 2016”, said Stefan Doboczky, Chairman of the Management Board and CEO of Lenzing AG. “On the one hand, we benefitted from a positive market environment. On the other hand, we continued our implementation of sCore TEN, our new group strategy, in a very disciplined and intense fashion.”

“We further optimized the product mix and profited from higher selling prices thanks to ongoing strong demand for all Lenzing fibres. All this was clearly reflected in our half-year 2016 business results, and therefore we also expect a substantial improvement of our business performance for the full year compared to 2015.”

Expansion of production capacities for specialty fibres

As announced earlier this month, the Lenzing Group decided to expand its production capacities for specialty fibres by a total of 35,000 tons by 2018 with an investment programme amounting to EUR 100 million.

The capacity increase will be mainly carried out at the Austrian sites in Heiligenkreuz, Burgenland and Lenzing, Upper Austria. This decision is the first step of the strategic investment programme announced by the Lenzing Group.

Outlook for 2016

The Lenzing Group expects a friendly market environment for the global fibre industry in the second half of 2016. The market for wood-based cellulose fibres is currently developing especially favourably due to strong demand at stable supply, the company reports.

The strong earnings figures for the first half of 2016 paired with the positive market environment reinforces the optimism of the Lenzing Group for the full year. Lenzing says it expects excellent business results in the financial year 2016 and consequently a substantial earnings improvement compared to the financial year 2015.

www.lenzing.com

Latest Reports

Business intelligence for the fibre, textiles and apparel industries: technologies, innovations, markets, investments, trade policy, sourcing, strategy...

Find out more