Lenzing Ag · VIE:LNZ
Lenzing — Q1 2024 Earnings Presentation
34 slides from Lenzing's earnings presentation, May 8, 2024
Slide 1: Lenzing Investor Presentation Results 01-03/2024
Shaping the future Strengthen the core Master the crisis Lenzing Investor Presentation Results 01-03/2024 May 8, 2024 www.lenzing.com 7 May 2024 - 1
Slide 2: Disclaimer
Disclaimer ● The information contained in this document has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this information or opinions contained herein.
Slide 3: Agenda
Agenda 1 Executive Summary Stephan Sielaff 2 Market update Stephan Sielaff 3 Financials Nico Reiner 4 Performance program Stephan Sielaff 5 Outlook Stephan Sielaff 6 Q&A All www.lenzing.com 7 May 2024 - 3
Slide 4: Lenzing continues to improve its top- and bottom-line performance in a still weak market environment
Lenzing continues to improve its top- and bottom-line performance in a still weak market environment Key developments Q1 2024 financial results 2024 outlook Recovery of generic markets still lacking; Increase in sales and earnings due to Laser focus on exploiting full potential of the positive impac
Slide 5: Market update
Market update www.lenzing.com
Slide 6: Global demand for apparel started slightly negative
Global demand for apparel started slightly negative Q1 2024 QoQ Q1 2024 apparel retail sales1 breakdown by region in %, Q1 2024 vs. Q4 2023, inflation-adjusted, seasonally adjusted United States World Key challenges and influencing factors Q1 2024 + 4% - 1% ● Consumer confidence ● Inflationary press
Slide 7: Generic viscose prices with no sustainable relief yet
Generic viscose prices with no sustainable relief yet Fiber and DWP market prices in China, Q1/2022-Q1/2024, USD/kg (excl. VAT) 2.2 Viscose 2.0 Viscose prices stepped up in Q1/2024 due to good demand before 1.8 Chinese New Year holidays, but then started to soften again 1.6 Cotton 4.0 International
Slide 8: Energy and NaOH market prices remain elevated
Energy and NaOH market prices remain elevated Comparison of selected energy and NaOH1 market price levels Change in Percentage Q1 2024 vs. 2020 (averages) Energy NaOH +194% +63% +54% +78% +28% +57% Coal China Coal Indonesia Gas Europe North West Europe China South East Asia NOTE: All prices indexed
Slide 9: Financials
Financials www.lenzing.com
Slide 10: Further improvement in Lenzing fiber sales volumes in weak market
Further improvement in Lenzing fiber sales volumes in weak market Development of fiber sales volumes for Lenzing 2023 - Q1 2024 +24% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Holistic performance program drives sales volumes increase, e.g.: ● Outperformance of sustainable fibers such as LENZING™ ECOVE
Slide 11: EBITDA increased by EUR 42 mn to EUR 71 mn
EBITDA increased by EUR 42 mn to EUR 71 mn Group revenue in EUR mn EBITDA in EUR mn +6% Reported 655 658 +140% 623 627 616 107 (17%) 83 84 71 24% (13%) (13%) (11%) 30 (5%) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Adjusted1,2 76% 64 44 50 (10%) (7%) (8%) Average Q1-Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2
Slide 12: EBIT increased to EUR 1.5 mn, net result improved by EUR 49 mn
EBIT increased to EUR 1.5 mn, net result improved by EUR 49 mn EBIT in EUR mn Group net profit after minorities and hybrid bond, in EUR mn EPS in EUR +2.2 +43 -3.03 -0.89 -0.97 -15.13 -0.83 29 (5%) 1 1 +49 (0%) (0%) -41 -24 -32 -44 (-7%) -80 Includes impairment of 7 -2 -27 EUR 465 mn -32 Lenzing Hyb
Slide 13: Free cash flow at EUR 87 mn - positive for three quarters in a row
Free cash flow at EUR 87 mn - positive for three quarters in a row Free cash flow¹, in EUR mn Trading working capital³, in EUR mn +220 -115 632 621 617 87 99 551 90 121 517 18 27 15 25.4 24.7 25.1 21.0 19.6 -33 -33 -48 -63 -84 -52 -85 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 -132 Q1 2023 Q2 2023 Q3 2
Slide 14: Net debt below EUR 1.5 bn, Liquidity cushion above EUR 1 bn
Net debt below EUR 1.5 bn, Liquidity cushion above EUR 1 bn Net financial debt1,2 Liquidity cushion3 in EUR mn in EUR mn +406 -438 (+63%) (-23%) 1,915 1,953 1,045 991 934 1,574 1,563 1,477 640 579 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net financial debt posi
Slide 15: Performance program
Performance program www.lenzing.com
Slide 16: Performance program aims at generating FCF & improving EBITDA
Performance program aims at generating FCF & improving EBITDA through increased sales and margin growth as well as sustainable cost excellence Lenzing’s holistic performance 1 Strengthening top line growth with defined sales initiatives in push and pull program launched in Q3 2023 ● Dedicated sales
Slide 17: Over 500 new leads and >600 initiatives optimize Lenzing globally
Over 500 new leads and >600 initiatives optimize Lenzing globally Integration of ongoing performance initiatives and projects 1 Top line growth 2 Cost excellence 3 FCF generation Processual cost Direct / indirect spend > 500 ~ 375 ~ 200 ~ 80 leads1 initiatives initiatives initiative buckets ● Top li
Slide 18: New sales approach strengthens top line development
New sales approach strengthens top line development Global program to strengthen sales growth with ~150 employees across all locations and functions New sales approach ● Transparent sales pipeline Push & Pull ● Increased development of new markets Performance culture ● Increase pay variabilization w
Slide 19: Reaching sustainable cost excellence is well under way
Reaching sustainable cost excellence is well under way Cost excellence Envisaged impact composition by bucket Full target (2025) Ramp-up (2024) Cumulative savings in 2024 Illustrative EUR > 100 mn 46%3 >50% May Aug Sep Nov Feb Jul Jan Mar Jun Oct Apr Dec Processual/ Direct/ indirect Personnel cost T
Slide 20: Chief Transformation Officer strengthens Managing Board
Chief Transformation Officer strengthens Managing Board Walter Bickel Appointed as new board member from April 15, 2024 to December 31, 2025 with focus on implementation and further development of the performance program Chief Executive Officer Chief Financial Officer Chief Pulp & Technology Officer
Slide 21: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 22: Apparel brands remain cautious for the first half of this year, but more optimistic for the longer term
Apparel brands remain cautious for the first half of this year, but more optimistic for the longer term Examples Company | Date Quotes from recent trading update "We think that this year is about building a solid growth, building a quality growth, making sure that we and our retail partners don't ne
Slide 23: Laser focus on exploiting full potential of the performance program
Laser focus on exploiting full potential of the performance program ● 2024 started better than expected for Lenzing Lenzing Group confirms that it expects EBITDA for the 2024 ● Stable demand in pulp assumed and cautious outlook on generic fiber market development in 2024 financial year to be higher
Slide 24: Emerging stronger from the crisis and fit for the future
Emerging stronger from the crisis and fit for the future Shaping the future 3 Innovation leadership Strengthen the core 2 Topline growth 1 Master the crisis Cost excellence www.lenzing.com 7 May 2024 - 24
Slide 25: Two capital market events in autumn 2024
Wir werden im Herbst 2024 zwei Kapitalmarktanlässe durchführen – einen für institutionelle Investoren und einen für Privatinvestoren Bitte wenden Sie sich bei Interesse an Lenzing Investor Relations www.lenzing.com 7 May 2024 - 25
Slide 26: Backup
w.lenzing.com Backup e | Lenzing Innovative by nature
Slide 27: Group revenue breakdown
Group revenue breakdown Fiber revenue by application, % Specialties share of fiber sales in Q1 2024 Standard Fibers 9% 65% 62% 64% 68% 64% Specialty Fibers1 91% 35% 38% 36% 32% 36% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Textile Fibers Nonwoven Fibers 1) LENZING™ Lyocell, LENZING™ Modal, LENZING™ Sp
Slide 28: Quarterly P&L development Q1 2024 vs Q1 2023
Quarterly P&L development Q1 2024 vs Q1 2023 Delta Q1 Delta Q1% EUR mn Q1 2024 Q1 2023 YoY YoY Revenues 658.4 623.1 35.3 5.7% Cost of Sales (555.7) (562.0) 6.3 (1.1%) % of Revenue (84.4%) (90.2%) 5.8%pt Gross Profit 102.7 61.1 41.5 68.0% % of Revenue 15.6% 9.8% 5.8%pt Selling Expenses (71.1) (65.8)
Slide 29: Topline Breakdown Q1 2024 vs Q1 2023
Topline Breakdown Q1 2024 vs Q1 2023 Delta Q1 Delta Q1% EUR mn Q1 2024 Q1 2023 YoY YoY Fiber 502.4 463.2 39.2 8.5% Wood-based cellulosic fibers 486.0 440.0 46.0 10.5% 1 Co-Products Fibers 14.6 14.1 0.5 3.7% Engineering, services and others 1.5 9.1 (7.6) (83.2%) Pulp 155.1 159.1 (4.1) (2.5%) Pulp 120
Slide 30: Quarterly cash flow development
Quarterly cash flow development Change Change (EUR mn) Q1 2024 Q4 2023 Q1/Q4 (%) Q1 2023 Q1/Q1 (%) Gross cash flow (after taxes and interest) (6.0) 53.3 - (55.8) (89.3) Change in total working capital1 126.6 45.9 175.5 8.1 - Operating cash flow 120.7 99.2 21.6 (47.7) - Investment cash flow2 (33.4) (
Slide 31: Liquidity cushion at EUR 1.05 bn
Liquidity cushion at EUR 1.05 bn Net financial debt1,2, in EUR mn Balance sheet metrics 1,915 1,953 Change According to IFRS (EUR mn) 31 Mar. 2024 31 Dec. 2023 in % 1,574 1,563 Total assets 5.323,7 5,214.6 2.1 1,477 Liquid assets3 843.6 731.0 15.4 Total liabilities 3,635.2 3,472.4 4.7 thereof financ
Slide 32: Q1-2024: Net debt bridge
Q1-2024: Net debt bridge Net Cash Net Financial Capex3 Change Financial Debt FY Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q1 20231 Tax Interest Gross CF 2 Ass.) WC other WC Dividend Translation Leasing Increase Others 20241 Change in total working capital EUR 137.1 mn4 0.2 2
Slide 33: Contact and financial calendar
Contact and financial calendar Investor contact Financial calendar Sébastien Knus VP Investor Relations Annual results 2023 March 15, 2024 Phone: +43 7672 701 3599 E-mail: s.knus@lenzing.com 80th Annual General Meeting April 18, 2024 Visit our IR website and our SRI sites https://www.lenzing.com/inv
Slide 34: Only through this trifold approach can we achieve innovative solutions
Only through this trifold approach can we achieve innovative solutions on the scale the world needs. Are you ready to join? Find out more at reports.lenzing.com. www.lenzing.com 34