Lenzing Group, a global leader in the production of regenerated cellulosic fibres for the textile and nonwoven industries, has reported further improvement in its business performance during the first three quarters of 2024. Despite challenges posed by sluggish market recovery, high raw material and energy costs, and rising logistics expenses, the Austrian fiber producer has demonstrated resilience and progress.

Key financial highlights

Lenzing’s revenue for the first nine months of 2024 reached EUR 2 billion, reflecting a 5% increase compared to the same period in 2023. This growth was primarily driven by a 10.9% rise in fibre sales, underscoring the strength of its product portfolio. However, fibre prices remained low, and the company faced pressures from elevated input costs, including raw materials and energy.

Operating earnings showed significant improvement. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 20.3% year-on-year to EUR 263.7 million, and the EBITDA margin increased from 11.7% to 13.5%. The operating result (EBIT) turned positive, reaching EUR 38.3 million, compared to a loss of EUR 10.5 million in the same period of 2023.

Net loss after tax was EUR 111.1 million, slightly up from a net loss of EUR 96.7 million in 2023, largely due to a one-time tax effect related to the withdrawal from the Austrian tax group. Despite this, Lenzing saw a sharp improvement in cash flow, with operating cash flow increasing to EUR 287 million and free cash flow rising to EUR 191.8 million - up from a negative EUR 138.2 million in the first three quarters of 2023.

Strategic focus on cost management and market positioning

Lenzing’s CEO Rohit Aggarwal, who took over the role in September 2024, highlighted the company’s ongoing recovery, emphasizing the importance of cost management and global sales efforts. Aggarwal stressed that the company is adapting to shifting market conditions to strengthen its leadership position in the fiber industry. The company is also enhancing its organizational structure to ensure long-term resilience and agility.

Lenzing’s comprehensive performance program, which started in late 2022, is ahead of schedule, with significant cost savings already realized. CFO Nico Reiner noted that annual cost savings exceeding EUR 100 million are expected, with over 50% of these savings becoming effective in the current financial year.

Investments and green bond issuance

Despite a more conservative approach to capital expenditures, Lenzing invested EUR 95.5 million in the first three quarters of 2024, down from EUR 199.7 million during the same period in 2023. The reduced investment level reflects a strategic shift towards maintaining financial flexibility in a challenging market environment.

In September, Lenzing’s Brazilian joint venture, LD Celulose (LDC), issued a successful USD 650 million green bond, attracting strong demand from institutional investors. The bond will help finance one of the world’s largest pulp plants and convert LDC into an independent financing structure. Lenzing holds a 51% stake in LDC, reinforcing its commitment to sustainable growth.

Personnel changes and corporate governance

Lenzing also announced changes to its leadership team, with Rohit Aggarwal taking over as CEO, succeeding Stephan Sielaff, who left the company by mutual agreement. Additionally, Lenzing appointed Walter Bickel as Chief Transformation Officer, focusing on driving the company’s transformation agenda through 2025.

The company also made updates to its Supervisory Board, electing new members, including Marcelo Feriozzi Bacci and Carlos Aníbal de Almeida Junior, as part of its ongoing corporate governance enhancements.

Outlook for 2024

Looking ahead, Lenzing remains cautiously optimistic, confirming its guidance for higher EBITDA in 2024 compared to the previous year. The company anticipates continued growth in demand for sustainable fibres, particularly in the textile, hygiene, and medical sectors. Although the broader economic outlook remains uncertain, with risks from global conflicts and economic protectionism, Lenzing is confident in its strategic positioning and its ability to drive profitable growth in the coming quarters.

With its focus on innovation, sustainability, and cost efficiency, Lenzing is well-equipped to navigate the challenges of the global market and continue its leadership in the fibre industry.

www.lenzing.com