Lenzing Ag · VIE:LNZ
Lenzing — H1 2024 Earnings Presentation
35 slides from Lenzing's earnings presentation, Aug 7, 2024
Slide 1: Lenzing Investor Presentation Results 01-06/2024
Shaping the future Strengthen the core Master the crisis Lenzing Investor Presentation Results 01-06/2024 August 7, 2024 www.lenzing.com 7 August 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 August 2024 - 3
Slide 4: Lenzing is steadily improving its top- and bottom-line performance in a continuously weak market environment
Lenzing is steadily improving its top- and bottom-line performance in a continuously weak market environment Key developments H1 2024 financial results 2024 outlook No recovery of generic markets yet; further Continued increase in sales and Continuing to take the future in our own increasing positiv
Slide 5: Rohit Aggarwal as designated CEO
Rohit Aggarwal as designated CEO Chief Executive Officer Chief Financial Officer Chief Pulp & Technology Officer Chief Transformation Officer Chief Fiber Officer Stephan Sielaff Nico Reiner Christian Skilich Walter Bickel Rohit Aggarwal ● Rohit Aggarwal appointed as a new member of the Management Bo
Slide 6: Market update
Market update www.lenzing.com
Slide 7: Apparel demand slightly negative, however, inventory levels back to balanced levels, nonwoven markets more stable
Apparel demand slightly negative, however, inventory levels back to balanced levels, nonwoven markets more stable H1 2024 YoY Textile Markets Nonwovens Markets H1 2024 apparel retail sales 1 breakdown by region Key influencing factors H1 2024 in %, H1 2024 vs. H1 2023, inflation-adjusted, seasonally
Slide 8: Generic viscose prices remain on low levels despite slight increase
Generic viscose prices remain on low levels despite slight increase Fiber and DWP market prices in China, Q1 2022 - Q2 2024, USD/kg (excl. VAT) 2.2 Viscose 2.0 Generic viscose prices continued to decline at the beginning of Q2 1.8 2024 with partial recovery at low levels in June 1.6 Cotton 4.0 Inter
Slide 9: Energy and NaOH market prices remain elevated versus pre-crisis
Energy and NaOH market prices remain elevated versus pre-crisis Comparison of selected energy and NaOH1 market price levels Change in Percentage Q2 2024 vs. 2020 (averages) Energy NaOH +237% +69% +55% +65% +49% +19% Coal China Coal Indonesia Gas Europe Europe2 China Indonesia3 NOTE: All prices index
Slide 10: Financials
Financials www.lenzing.com
Slide 11: Good development of Lenzing fiber topline – stronger overall volumes and better product mix
Good development of Lenzing fiber topline – stronger overall volumes and better product mix with only weak market support Development of fiber sales volumes for Development of specialties share of fiber sales for Lenzing H1 2024 vs. H1 2023 Lenzing H1 2024 vs. H1 2023 In thousand tons In percentage
Slide 12: EBITDA increased to EUR 164 mn in H1 2024
EBITDA increased to EUR 164 mn in H1 2024 Group revenue in EUR mn EBITDA in EUR mn, EBITDA margin in % of revenue +5% Reported 1,311 +28 1,250 164 137 107 (13%) 83 84 93 (11%) (17%) 71 (13%) (13%) (14%) (11%) +4% 655 658 652 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2023 H1 2024 627 616 22% Adjuste
Slide 13: EBIT increased by EUR 31 mn to EUR 19 mn in H1 2024
EBIT increased by EUR 31 mn to EUR 19 mn in H1 2024 EBIT in EUR mn, EBIT margin in % of revenue Group net profit after minorities and hybrid bond, in EUR mn +31 19 EPS in EUR (1%) -0.89 -0.97 -15.13 -0.83 -1.01 -3.92 -1.84 29 17 1 1 (5%) (3%) +33 (0%) (0%) -24 -32 -39 -44 -12 (-1%) -71 H1 2023 H1 20
Slide 14: Free cash flow at EUR 54 mn - positive for four quarters in a row
Free cash flow at EUR 54 mn - positive for four quarters in a row Free cash flow¹, in EUR mn Trading working capital³, in EUR mn +87 -115 621 617 99 87 551 517 505 90 54 121 82 24.7 25.1 18 27 15 21.0 19.6 19.4 -33 -33 -28 -63 -84 -52 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q
Slide 15: Net debt at EUR 1.4 bn, Liquidity cushion above EUR 1 bn
Net debt at EUR 1.4 bn, Liquidity cushion above EUR 1 bn Net financial debt1,2 Liquidity cushion3 in EUR mn in EUR mn -525 +448 (-27% ) (+77% ) 1,953 1,045 1,027 991 934 1,574 1,563 1,477 1,428 579 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net financial debt pos
Slide 16: Performance program
Performance program www.lenzing.com
Slide 17: Performance program aims at generating FCF & improving EBITDA through increased sales and margin growth
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 18: Over 550 leads, more than 600 cost excellence initiatives and a rigid cash focus
Over 550 leads, more than 600 cost excellence initiatives and a rigid cash focus 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 > 550 ~ 600 ~ 80 leads1 initiatives init
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 60% EUR > 100 mn >50% Nov Aug Sep Apr Feb Mar Oct Jan Jun Jul Dec May Processual/ Direct/ indirect Personnel cost To
Slide 20: Outlook
Outlook e | Lenzing Innovative by nature
Slide 21: Some major brands and retailers with slight optimism for the second half of 2024 – others remain cautious
Some major brands and retailers with slight optimism for the second half of 2024 – others remain cautious Examples Company | Date Quotes from recent trading update "Market conditions are quite stable. We have seen a subdued consumer…to some extent looking for savings. Costs keep challenging our marg
Slide 22: Continuing to take the future in our own hands
Continuing to take the future in our own hands ● 2024 started better than expected for Lenzing with Lenzing Group confirms that improved operational performance in Q2 2024 it expects EBITDA for the 2024 compared to Q1 2024 financial year to be higher than ● Stable demand in pulp assumed and cautious
Slide 23: 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 August 2024 - 23
Slide 24: Two capital market events in autumn 2024 for institutional and private investors
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 August 2024 - 24
Slide 25: Backup
Backup e | Lenzing Innovative by nature
Slide 26: Group revenue breakdown
Group revenue breakdown Fiber revenue by application, % Specialties share of fiber sales in H1 2024 Standard Fibers 7.9% 62% 64% 68% 64% 65% 38% 36% 32% 36% 35% Specialty Fibers 1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Textile Fibers Nonwoven Fibers 92.1% 1) LENZING Lyocell, LENZING Modal, LENZING
Slide 27: Quarterly P&L Development
Quarterly P&L Development Delta Q2 2024 - Delta % Q2 2024 - EUR mn Q2 2024 Q1 2024 Q1 2024 Q1 2024 Revenues 652.3 658.4 (6.1) (0.9%) Cost of Sales (532.4) (555.7) 23.3 (4.2%) % of Revenue (81.6%) (84.4%) Gross Profit 119.9 102.7 17.2 16.8% % of Revenue 18.4% 15.6% Selling Expenses (73.9) (71.1) (2.8
Slide 28: Top-Line Breakdown Q2 2024 vs Q2 2023
Top-Line Breakdown Q2 2024 vs Q2 2023 Delta Q2 Delta Q2% EUR mn Q2 2024 Q2 2023 YoY YoY Fiber 511.0 464.3 46.8 10.1% Wood-based cellulosic fibers 493.6 442.4 51.1 11.6% 1 Co-Products Fibers 15.9 16.3 (0.4) (2.4%) Engineering, services and others 1.6 5.6 (4.0) (71.0%) Pulp 140.5 161.9 (21.3) (13.2
Slide 29: EBITDA per division
EBITDA per division EBITDA per Division in EUR mn H1 2024 H1 2023 184 204 137 164 -22 -41 21 Fiber Pulp Other11 Group -45 Fiber Pulp Other1 Group 1) Incl. reconciliation 1) Incl. reconciliation www.lenzing.com 7 August 2024 - 29
Slide 30: Quarterly cash flow development
Quarterly cash flow development Change Change (EUR mn) Q2/2024 Q1/2024 Q2/Q1 (%) Q2/2023 Q2/Q2 (%) Gross cash flow (after taxes and interest) 52.4 (6.0) - 36.5 43.6 Change in total working capital 1 29.8 126.6 (76.5) (18.0) - Operating cash flow 82.2 120.7 (31.9) 18.5 344.6 Investment cash flow2 (28
Slide 31: Liquidity cushion at EUR 1.03 bn
Liquidity cushion at EUR 1.03 bn Net financial debt1,2, in EUR mn Balance sheet metrics 1,953 Change According to IFRS (EUR mn) 30 Jun. 2024 31 Dec. 2023 in % 1,574 1,563 Total assets 5.289,3 5,214.6 1.4 1,477 1,428 Liquid assets 3 825.9 731.0 13.0 Total liabilities 3,630.8 3,472.4 4.6 thereof loans
Slide 32: Q2-2024: Net debt bridge
Q2-2024: Net debt bridge Net Cash Net Financial Capex3 Change Financial Debt Q1 Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q2 20241 Tax Interest Gross CF2 Ass.) WC other WC Dividend Translation Leasing Increase Others 20241 -0.9 1,427.8 0.0 9.2 -12.4 6.4 -19.1 33.8 -13.8 1,47
Slide 33: H1-2024: Net debt bridge
H1-2024: Net debt bridge Net Cash Net Financial Capex3 Change Financial Debt FY Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt H1 20231 Tax Interest Gross CF2 Ass.) WC other WC Dividend Translation Leasing Increase Others 20241 0.2 1,427.8 -7.5 31.7 12.6 -34.9 -74.0 1,562.6 23.9
Slide 34: 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 35: 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 35