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Lenzing Group surpassed 2 Bn euro sales for the first time

22 Mar '12

7 min read

the market”, reports Chief Opeerating Officer Friedrich Weninger, Member of the Management Board.

The pulp plant Biocel Paskov (Czech Republic) acquired within the context of the Lenzing Group's further backward integration was rapidly expanded in the reporting year to enable the production of both paper pulp and dissolving pulp. Some 60,000 tons of dissolving pulp were already produced in Paskov in 2011 and largely used for fiber production within the Lenzing Group.

Good development of the Segment Plastics Products and Segment Engineering

The Segment Plastics Products developed satisfactorily in 2011, showing an EBITDA margin of 9.5%. A new record for shipment volumes was posted during the year under review against the backdrop of very good demand.

The Segment Engineering was also able to optimally take advantage of the fundamentally positive mood in the capital goods market during the reporting year, achieving an EBITDA-margin of 8.4%. Lenzing Technik profited from both the extensive investment activity of the Lenzing Group as well as from growing demand on the part of external customers.

Outlook of the Lenzing Group

Once again the Lenzing Group expects a good year in 2012, which should see quarterly development in a mirror-inverted manner. However, in terms of margins the current financial year will not be able to fully match the exceptional record year of 2011.
For the time being prices for Lenzing's standard viscose fibers should stabilize at a low level. In the course of 2012 Lenzing anticipates a higher price level than in the first quarter as a result of rising demand for both textile and nonwoven applications.

Good volume demand is expected for Lenzing Modal®, which should continue to ensure a fair price premium vis-à-vis standard viscose fibers and cotton. However, the considerable increase in the supply of modal is resulting in temporary price adjustments compared to 2011 price levels. With respect to TENCEL®, Lenzing foresees ongoing strong demand for textile and nonwoven applications and a largely stable price premium vis-à-vis standard viscose fibers.

As a consequence of significantly higher fiber shipment volumes but in the light of lower average prices in comparison to the prior-year level, sales should rise to a level between EUR 2.2 bn and EUR 2.3 bn in 2012. EBITDA should range between EUR 400 mn and EUR 480 mn and EBIT is expected to range between EUR 285 mn and EUR 365 mn, depending on the development of fiber and raw material prices as well as the overall global economic environment.

Lenzing will press ahead with its dynamic expansion program as planned, involving investments totaling approx. EUR 350 mn in 2012. The good earnings situation and continued high liquidity will enable the company to propose a dividend to the Shareholders' Meeting amounting to EUR 2.50 per share, i.e. about 25% of the consolidated net income for the 2011 financial year.

The Lenzing Group