In spite of the ongoing difficult market environment, the upgraded product mix, slightly higher fibre sales volumes and the improved cost situation enabled Lenzing to achieve a clear improvement in earnings. The profit for the period more than doubled to EUR 16.6 million, climbing by 115.3% from EUR 7.7 million in the first quarter of 2014.

Consolidated revenue totalled EUR 474.6 million in the first quarter of 2015, a rise of 5.1% from EUR 451.7 million in the previous year. EBITDA improved by 28.7% from the previous year to EUR 59.6 million. Earnings before interest and taxes (EBIT) amounted to EUR 27 million in the first three months of 2015, comprising a sharp rise of 61.3% from the prior-year level of EUR 16.7 million.

Laying the groundwork for success

“The marketing drive for specialty fibres launched in 2014, especially for Tencel, has paid off. We successfully implemented initial price increases and significantly increased the share of specialty fibres in the product mix,” explained Peter Untersperger, Lenzing’s Chief Executive Officer.

“Moreover, we laid the groundwork for generating further earnings improvements against the backdrop of an ongoing difficult market environment thanks to comprehensive structural and cost optimization measures”, he added.

“The excelLENZ cost savings initiative is proceeding according to plan and will generate cost savings of up to EUR 160 million p.a. as of 2016 compared to the year 2013. Furthermore, we are adjusting technical services to the declining investment activity of the Lenzing Group, thus serving as the basis for important productivity increases.”

Strong volume demand

Lenzing continued the good operational development achieved in the fourth quarter of 2014 with respect to its core business of manufacturing man-made cellulose fibres in the first quarter of 2015 as well.

All production plants were once again operating at full capacity. Demand for the specialty fibre Lenzing Modal, as well as Tencel, was very gratifying, the company reports. Lenzing also reported a comparatively good development for standard viscose fibres used in textile applications in the first quarter of 2015 thanks to the selective focus on attractive sales markets and higher value fibre qualities, continuing the positive trend of the fourth quarter of 2014.

The improved product mix led to a rise in Lenzing’s average fibre selling prices before currency effects to EUR 1.68/kg in the first quarter of 2015 compared to EUR 1.56/kg in the first quarter of 2014.

Outlook 2015

Thanks to the ongoing high volume demand for its fibres, Lenzing continues to expect full utilization of all its production capacities. Lenzing will strive to carry out selling price increases in the second quarter of 2015. Moreover, the excelLENZ programme involving additional cost savings will be resolutely continued.

Lenzing continues to expect an ongoing improvement in the product mix and a good development of operating results in both the textile and nonwovens segments for the rest of the year. This can be attributed to the very good development of Tencel and Lenzing Modal and the intensified marking activities targeting attractive markets and new customers.

www.lenzing.com