Lenzing Ag · VIE:LNZ
Lenzing — Q3 2022 Earnings Presentation
34 slides from Lenzing's earnings presentation, Nov 3, 2022
Slide 1: Lenzing Investor Presentation Results 01-09/2022
Lenzing Investor Presentation Results 01-09/2022 November 3, 2022 www.lenzing.com
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: Lenzing expects results 2022 in line with current market expectations
Lenzing expects results 2022 in line with current market expectations 01-09/2022 financial results Outlook and guidance 2022 ● Revenue of EUR 1,970 mn (EUR 1,589 mn in 01-09/2021) ● Worsened market environment is increasingly ● EBITDA of EUR 263 mn (EUR 298 mn in 01-09/2021) weighting on consumer se
Slide 4: Nico Reiner to start as CFO on January 1st 2023
Nico Reiner to start as CFO on January 1st 2023 Nico Reiner, CFO as of January 1st 2023 ● Nico Reiner will complete the managing board as of January 1st 2023 as CFO ● He previously served for more than 15 year as CFO for the VAC Group, the Pfleiderer Group, AL-KO Kober, and Schüco International ● In
Slide 5: Lenzing with reorganization and cost reduction program of EUR > 70 mn
Lenzing with reorganization and cost reduction program of EUR > 70 mn Reorganization and cost reduction program ● Worsened market environment due to slowdown in demand and drastically high energy and raw material prices ● Financial results have been heavily impacted ● Lenzing initiated reorganizatio
Slide 6: Ramp-up of new DWP mill successfully progressing
Ramp-up of new DWP mill successfully progressing New 500 kt DWP mill in Brazil ● 500 kt single line DWP mill - largest of its kind ● USD 1.38 bn industrial capex ● Absolute cost leader ● Long-term average DWP price: USD ~ 900/mt ● Successful startup - full run rate expected end of 2022 ● Commercial
Slide 7: Ramp-up phase of new Lyocell plant well on track
Ramp-up phase of new Lyocell plant well on track Lenzing’s new Lyocell plant in Thailand ● Project delivered on schedule and at budget ● New plant will help serve the growing demand for sustainably produced fibers ● The plant is operated CO2-neutral – and is therefore an important milestone towards
Slide 8: Energy autarky and sustainability further increased
Energy autarky and sustainability further increased Lenzing’s global manufacturing footprint with focus on energy related developments Paskov Czech Republic ● Renewable electricity Grimsby fed into the grid United Kingdom Lenzing Heiligenkreuz Austria Austria Nanjing ● New PV plant became ● Alternat
Slide 9: Sustainability and Market update
Sustainability and Market update www.lenzing.com
Slide 10: Leading sustainability position confirmed by strong ratings and awards
Leading sustainability position confirmed by strong ratings and awards 2022 TENCEL™ Modal fiber with Indigo Color Global network of > 90,000 rated technology won 2022 ITMF Award for companies in > 175 countries Sustainability and Innovation • Lenzing awarded platinum status for sustainability by Eco
Slide 11: Sentiment in the global TX industry worsened in the third quarter
Sentiment in the global TX industry worsened in the third quarter; weakening demand is the main concern Current business situation by survey date Major concerns in the next 6 months, Sep 2022 Percent of respondents, balance between good vs. poor 30 26 25 #1 Weakening demand 20 18 #2 High raw materia
Slide 12: Clothing inventories in retail and wholesale increased sharply
Clothing inventories in retail and wholesale increased sharply, above pre-pandemic average Increase in US clothing inventories at the end of August EXAMPLE: US USD bn, percent YoY 120 102 +44% 100 84 84 83 86 79 82 80 75 74 71 58 Retail +28% 60 53 53 53 54 51 54 50 46 45 40 20 44 Wholesale +70% 26 2
Slide 13: Dull demand on fiber markets weighs on prices
Dull demand on fiber markets weighs on prices Fiber prices in China USD/kg, excl. VAT Viscose Viscose Cotton Polyester Dissolving hardwood pulp • Prices softened further suffering from both shrinking demand and 4.00 weaker support from pulp • Operating rates in Chinese VSF industry were still far be
Slide 14: Prices of Lenzing specialties start to level out
Prices of Lenzing specialties start to level out Cellulosic fiber prices in China 6-months average, percent from January 2017, converted at constant FX rates 160 150 140 130 CC Index 120 Lenzing specialties1 110 100 VSF (TX) CCF high 90 80 70 60 1/17 7/17 1/18 7/18 1/19 7/19 1/20 7/20 1/21 7/21 1/22
Slide 15: The outlook remains positive
The outlook remains positive Expected long-term growth rates p.a., % >20% ~3% ~4-6% ~1% ~2-3% Population Fiber market GDP Wood-based Lyocell cellulosic fibers ● Global fiber demand expected to continue its long-term growth trajectory at ~2-3 % p.a. ● Wood-based cellulosic fibers (WBCF) forecasted to
Slide 16: Over the last 60 years fiber demand always exceeded pre-crisis level
Over the last 60 years fiber demand always exceeded pre-crisis level either in the following year or the year after Setbacks of global fiber demand over the last 60 years Global fiber demand, 1960-2021 Covid-19 Million tons pandemic 120 Global Financial 100 Crisis 80 Asian Financial Early 90s Crisis
Slide 17: Financials
Financials www.lenzing.com
Slide 18: Group revenue increased by 24 %
Group revenue increased by 24 % Group revenue in EUR mn Fiber revenue by application, % Specialties share of fiber sales in 01-09/2022 +24% 1,970 Standard Fibers 31% 29% 32% 32% 1,589 37% 27% 679 677 606 615 555 73% 69% 71% 68% 68% 63% Specialty Fibers1 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 01- 01
Slide 19: Energy and chemicals accounted for ~40 % of production costs
Energy and chemicals accounted for ~ 40 % of production costs in first nine months 2022 Production costs breakdown 01-09/20211 Production costs breakdown 01-09/20221 Energy Energy 11% 18% Chemicals 14% 21% Chemicals 61% Others 75% Others www.lenzing.com 03/11/22 - 19 1) Production costs not equal to
Slide 20: EBITDA 01-09/2022 at EUR 263 mn
EBITDA 01-09/2022 at EUR 263 mn EBITDA in EUR mn EBIT in EUR mn -12% -37% 298 178 (19%) 52 101 263 (11%) (8%) 88 (15%) (13%) 44 80 (14%) 39 (7%) 74 (7%) 113 (14%) 65 (11%) (6%) (11%) 22 (4%) 17 (3%) Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 01- 01- Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 01- 01- 09/20
Slide 21: Earnings per share of EUR 2.16
Earnings per share of EUR 2.16 Group net profit¹ after minorities and hybrid bond, in EUR mn EPS1 in EUR EPS1 in EUR 0.71 0.39 0.87 1.49 -0.20 3.77 2.16 40 100 23 19 57 10 -5 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 01-09/2021 01-09/2022 Group net profit¹ after minorities and hybrid bond Group net pr
Slide 22: Gross cash flow at EUR 79 mn
Gross cash flow at EUR 79 mn Cash Flows and Working Capital, in EUR mn 102 108 86 86 80 84 79 602 614 71 35 45 20 430 444 387 47 22% 23% 19% -65 18% 16% -94 -103 -128 -123 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 -270 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 Factoring Gross cash flow Operating cash fl
Slide 23: Solid balance sheet with liquidity cushion of EUR 1.0 bn
Solid balance sheet with liquidity cushion of EUR 1.0 bn Change EUR mn According to IFRS (EUR mn) 30 Sep 2022 31 Dec 2021 in % Total assets 6,006.6 5,322.8 12.8 1,714 Liquid assets3 756.2 1,124.1 (32.7) 1,502 Total liabilities 3,801.4 3,250.7 16.9 thereof financial liabilities 2,470.4 2,101.2 17.6 1
Slide 24: Debt maturities are well spread over the next years
Debt maturities are well spread over the next years Liquidity cushion, EUR mn Debt maturities1, EUR mn Hybrid 756 500 538 506 463 269 241 244 364 11 Unused Liquid assets Q4 2022 2023 2024 2025 2026 2027 >2028 credit facilities Hybrid Financial liabilities www.lenzing.com 03/11/22 - 24 1) Excl. leasi
Slide 25: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 26: Lenzing expects results 2022 to be in line with current market expectations
Lenzing expects results 2022 to be in line with current market expectations Lenzing with sharpened operational focal points 2027 targets1 ● Worsened market environment is increasingly weighting on ● EBITDA of EUR > 1,000 mn consumer sentiment as well as on the relevant industries for ● ROCE2 > 12 %
Slide 27: for your attention!
for your attention! www.lenzing.com
Slide 28: Back-up
w.lenzing.com Back-up e | Lenzing Innovative by nature
Slide 29: 01-09/2022: Quarterly P&L development
01-09/2022: Quarterly P&L development MEUR Q1/2022 Q2/2022 Q3/2022 Q3/2021 Change Q3/Q3 01-09/2022 01-09/2021 Change y-o-y Revenues 615.0 678.6 676.5 555.2 21.8% 1,970.1 1,588.5 24.0% Cost of Sales -486.1 -524.4 -583.3 -433.6 34.5% -1,593.7 -1,192.1 33.7% Gross Profit 128.9 154.3 93.2 121.6 -23.3% 3
Slide 30: 01-09/2022: Topline breakdown
01-09/2022: Topline breakdown (EUR mn) Q3/2022 Wood-based cellulocic fibers 1,617.4 Co-Products Fibers 46.4 Mechanical and plant engineering, engineering services and others oters -2.7 Fiber 1,661.1 Pulp 163.0 Biorefinery Products 124.1 Wood and other 18.4 Pulp 305.6 Others (incl. Consolidation) 3.4
Slide 31: 01-09/2022: Quarterly cash flow development
01-09/2022: Quarterly cash flow development Change Change Change Q3/Q3 01- 01- 01-09/01- (EUR mn) Q3/2022 Q2/2022 Q3/Q2 (%) Q3/2021 (%) 09/2022 09/2021 09 (%) Gross cash flow (before taxes and interest) 102.9 107.8 (4.6) 100.4 2.5 299.3 335.3 (10.7) Taxes and interest (24.4) (24.2) 0.9 1.2 - (51.1)
Slide 32: Q3-2022: Net debt bridge
Q3-2022: Net debt bridge Net Cash Net Financial Capex2 Change Financial Debt Q1 Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q2 2022 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2022 Change in total working capital EUR (57.0) mn3 1,502.
Slide 33: 01-09/2022: Net debt bridge
01-09/2022: Net debt bridge Net Cash Net Financial Capex2 Change Financial Debt FY Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q2 2021 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2022 Change in total working capital EUR (216.1) mn3 97
Slide 34: Contact and financial calendar
Contact and financial calendar Investor contact Financial calendar Sébastien Knus Annual results 2021 March 10, 2022 VP Capital Markets 78th Annual General Meeting April 26, 2022 Results 01-03/2022 May 4, 2022 Phone: +43 7672 701 3599 E-mail: s.knus@lenzing.com Half-year results 2022 August 3, 2022