Lenzing AG · VIE:LNZ
Lenzing — FY2016 Earnings Presentation
19 slides from Lenzing's earnings presentation, Mar 22, 2017
Slide 1: Press Conference – Annual Results 2016
Press Conference – Annual Results 2016 with Lenzing Management Board Stefan Doboczky (CEO), Robert van de Kerkhof (CCO) and Thomas Obendrauf (CFO) Vienna, March 22, 2017
Slide 2: Highlights 2016
Highlights 2016 Second best year in the history of Lenzing Group revenue up 8 percent to EUR 2,13 bn Strong EBITDA improvement by 47.6 percent to EUR 428.3 mn ROCE at 15.1 percent Proposal to increase the dividend to EUR 3.00 per share plus EUR 1.20 per share as a special dividend1) Subs
Slide 3: Strategy implementation and target achievement ahead of plan
Strategy implementation and target achievement ahead of plan sCore TEN 2014 2015 2016 (targets 2020) EBITDA growth - 21% 48% 10% p.a. (vs. 2014 baseline) ROCE (0.1) 8.1 15.1 ≥10% Net financial debt/EBITDA 1.9 1.1 0.0 <2.5 3
Slide 4: sCore TEN: Strengthen the core
sCore TEN: Strengthen the core Delivered over EUR 50 mn Debottlenecking of pulp EBITDA improvement with Business capacities started commercial and operational Total increase of around excellence already per end Customer 35,000 tons p.a. 2016 Intimacy In 2017e own pulp capacity at 575,000 Are
Slide 5: sCore TEN: Customer intimacy
sCore TEN: Customer intimacy New organization to Two new regional application strenghten regional decision Business development centers making implemented Indonesian application center AMEA (Asia, Middle East, Customer (“Fiber to Yarn“) Intimacy Africa) Hong Kong application North Asia c
Slide 6: sCore TEN: Lenzing further focused on specialties
sCore TEN: Lenzing further focused on specialties Specialty fiber sales accounted for 42 Share of specialty fibers 2016 percent after 40.5 percent in 2015 Decision to expand capacities for 11,0% specialty fibers 42,0% EUR 375 mn CAPEX committed EUR 100 mn of which in Lenzing and 47,0% Heilig
Slide 7: sCore TEN: Lenzing further focused on specialties
sCore TEN: Lenzing further focused on specialties R&D expenses (2013-2017e)1 R&D expenditures increased more than 50% EUR mn % 60 2,5 Strong innovation pipeline 2,2 50 2,0 RefibraTM fiber launch 40 1,6 1,5 1,5 Latest lyocell technology to be 30 1,1 50,0 1,0 implemented in Mobile (USA) 20 46,
Slide 8: Refibra fiber: New sustainability innovation concept
RefibraTM fiber: New sustainability innovation concept Major breakthrough for the “Circular Economy” on a big scale for wood-based cellulose fibers Combination of prize-winning lyocell technology with pioneering use of recycled cotton off-cuts Upscaling of cotton and significant reduction of c
Slide 9: Fiber market 2016
Fiber market 2016 Fiber production in mn tons World fiber production up 3.6 percent to 97.8 120 3.6% mn tons Consumption up 1.5 percent to 99 mn tons 100 94,4 97.8 Wood-based cellulose fibers growth rate 2.2% 80 continues to outgrow the industry High overcapacities in synthetic fibers 60,7 6
Slide 10: Interfiber price development
Interfiber price development1 Staple fiber prices – Development in China USD/kg (incl. VAT) 3,5 3,0 2,5 2,0 1,5 1,0 0,5 01/2014 05/2014 09/2014 01/2015 05/2015 09/2015 01/2016 05/2016 09/2016 01/2017 Viscose Cotton Polyester Sources: China Cotton Association, China Chemical & Fiber Economic Informat
Slide 11: Cotton market with better supply-demand situation in 2016
Cotton market with better supply-demand situation in 2016 Cotton market In 2016 the average Cotlook A-Index was mn tons at USD 74.3 cents per pound 30 Plus 5.5 percent year-on-year 25 21,07 24,13 22,85 24,08 23,39 24,29 19,25 Chinese cotton prices still higher than world price 20 18,02 17,13 1
Slide 12: Very strong viscose pricing reflecting tight supply and increase in raw material prices
Very strong viscose pricing reflecting tight supply and increase in raw material prices VSF1 price trend and inventory of China Continuously good demand for wood-based yuan/MT day cellulose fibers versus scarce supply 18.000 30 17.000 In 2016 inventory level decreased 16.000 20 15.000 from 17 da
Slide 13: Financials 2016 – Increased revenue
Financials 2016 – Increased revenue Group revenue in EUR mn +7.3% +8.0% 555,7 2.134,1 2.090,4 543,5 1.976,8 522,0 1.908,9 518,0 1.864,2 512,8 2012 2013 2014 2015 2016 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Group revenue Group revenue 13
Slide 14: Financials 2016 – Earnings (EUR mn)
Financials 2016 – Earnings (EUR mn) EBITDA and EBITDA margin EBIT and EBIT margin 16.9% 11.8% 12.9% 14.7% 20.1% 11.1% 4.5% 1.2% 7.6% 13.9% +47.6% +96.1% 428 296 352 290 232 225 240 151 86 22 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 EBITDA EBIT 1) Error correction in accordance with IAS 8 (s
Slide 15: Improvement in return on investment – Further reduction in net debt
Improvement in return on investment – Further reduction in net debt ROCE Net financial debt in EUR mn 900 875 1.750 801 1.605 1.596 1.579 44,0% 800 1.541 730 1.550 1.409 39,0% 683 700 1.350 529 34,0% 600 577 570 505 1.150 29,0% 500 450 950 24,0% 400 346 355 750 15,1% 19,0% 296 13,7% 280 300 550 14,0
Slide 16: Group net profit up 78,9 percent – Increased Dividend proposed
Group net profit up 78,9 percent – Increased Dividend proposed Net profit and Earnings per share Dividend1) and Dividend yield2) 6.61 1.89 (0.92) 4.78 8.48 +78.9% 5,50 1,5 229 1,3 4,50 4.20 181 1,1 3,50 128 0,9 2,50 1,75 0,7 2,00 2,00 4.2% 3.7% 0,5 1,50 1,00 50 0,3 0,50 2.9% 2.9% 1.9% 0,1 2012 2013
Slide 17: Continued improvement in Cash Flow
Continued improvement in Cash Flow Cash Flow figures + 35.7% (Gross CF) Trading Working Capital + 119.6% (Operating CF) + 152.6% (Free CF adj.) (15.2%) 600,0 48,0% 500,0 43,0% 447,4 473,4 38,0% 393,7 395,7 400,0 379,6 385,9 363,8 33,0% 366,3 21,3% 28,0% 284,5 300,0 21,6% 19,5% 248,0 17,4% 23,0% 230,
Slide 18: Outlook 2017: Priorities of the Lenzing Group
Outlook 2017: Priorities of the Lenzing Group Strengthen the core Take next step on how to achieve 75 percent backward integration by 2020 Further boost continuous improvement culture Customer intimacy Launch new brand architecture Strengthen direct sales/marketing channels to customers
Slide 19: Outlook 2017: Fiber market and Lenzing Group
Outlook 2017: Fiber market and Lenzing Group Fiber market 2017e Indication for wood-based cellulose fibers to outpace the overall fiber market Cotton and polyester still increasing interfiber competition Lenzing is very well positioned Disciplined implementation of the sCore TEN strategy t