Lenzing Ag · VIE:LNZ
Lenzing — Q1 2021 Earnings Presentation
45 slides from Lenzing's earnings presentation, May 5, 2021
Slide 1: Lenzing Investor Presentation
Lenzing Investor Presentation Results 01-03/2021 May 5, 2021 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: At a glance
At a glance Q1-2021 financial results Outlook and guidance ● Revenue of EUR 489 mn (EUR 466 mn in Q1-2020) ● Increasing optimism in the textile value chain, ● Specialty share1 reached 73 % (72 % in Q1-2020) however, visibility remains limited ● EBITDA of EUR 95 mn (EUR 69 mn in Q1-2020) ● FY 2021 op
Slide 4: Hygiene Austria
Hygiene Austria www.lenzing.com
Slide 5: Hygiene Austria LP GmbH: Immediate measures taken and investment fully written off
Hygiene Austria LP GmbH: Immediate measures have been taken and investment is fully written off Hygiene Austria ● The Hygiene Austria project was co-founded by Lenzing in Q2 2020 with the deep conviction that Austrian quality could make an important contribution to protecting the population in the b
Slide 6: Sustainability strategy
Sustainability strategy www.lenzing.com
Slide 7: Sustainability strategy presented to shareholders in the annual general meeting
Sustainability strategy has been presented to Lenzing‘s shareholders in the annual general meeting Core value Business driver Innovation driver www.lenzing.com 05/05/21 - 7
Slide 8: Clear responsibility and detailed roadmaps to achieve sustainability targets
Clear responsibility and detailed roadmaps to achieve defined sustainability targets have been defined CO2 roadmap (illustrative) CO2 reduction per ton of product • >40 % by 2024 • 50 % by 2030 -60 % 0 Target Target Target 2024 2030 2050 ● Clear responsibility ● Detailed roadmaps Per site for each t
Slide 9: Lenzing invests EUR >200 mn in Indonesia and China
Lenzing invests EUR >200 mn in Indonesia and China to accelerate pace towards carbon neutrality and specialization Indonesia (Purwakarta) China (Nanjing) ● Lenzing will reduce its CO2 emissions by increasingly using ● Lenzing will establish the first wood-based fiber complex in biogenic fuels and wi
Slide 10: Investments support sCore TEN and sustainability targets
The investments will have a positive impact on the implementation of sCore TEN as well as the achievement of the sustainability targets sCore TEN targets (2024) Sustainability targets ● EBITDA of EUR 800 mn ● ROCE1 > 10 % ● Financial leverage < 2.5x - 50% sulfur - 20 % waste - 50 % net CO2 emissions
Slide 11: Market update
Market update www.lenzing.com
Slide 12: Lockdowns weigh globally on textile retail sales
Lockdowns weigh globally on textile retail sales North America Apparel Weekly Retail Traffic (% vs. 2019) Retail Sales Garments China (% vs. 2019) 20 20 0 10 -20 0 -40 -10 -60 -20 -80 -30 -100 -40 J-20 F-20 M-20 A-20 M-20 J-20 J-20 A-20 S-20 O-20 N-20 D-20 J-21 F-21 M-21 A-21 D-19 J-20 F-20 M-20 A-2
Slide 13: Commodity prices improved strongly during the first quarter
Commodity prices improved strongly during the first quarter Commodity price trends VSF1 price trend and theoretical profit / loss in China Viscose VSF2 conversion margin • Textile VSF prices peaked to RMB/ton 15,600 in March; driven by rebound of demand and economic stimulus • Nonwoven peaked to RMB
Slide 14: Specialty fiber prices are not as volatile as commodity fiber prices
Specialty fiber prices are not as volatile as commodity fiber prices 120 115 110 105 Cotton Index1 100 95 Lenzing Specialties1,2 90 85 80 VSF (TX) CCF high1 75 70 65 60 55 0 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 1) In China; 6M average in % from 01/2017 converted at constant
Slide 15: Branding
w.lenzing.com Branding e | Lenzing Innovative by nature
Slide 16: TENCEL Luxe filament yarn at the Oscars in partnership with RCGD
TENCEL™ Luxe filament yarn at the Oscars® in partnership with RCGD1 www.lenzing.com 05/05/21 - 16 1) Red Carpet Green DressTM
Slide 17: Downstream partners push TENCEL and ECOVERO brands; Times Square
Downstream partners continue to push TENCEL™ and ECOVERO™ Brands; Times Square in April 2021 www.lenzing.com 05/05/21 - 17
Slide 18: Expansion projects
Expansion projects www.lenzing.com
Slide 19: LDC remains on time and in budget
LDC remains on time and in budget ● JV LD Celulose (LDC): Lenzing holds 51%, Duratex 49% JV fully consolidated by Lenzing Key facts: ● 500 kt single line DWP mill Largest of its kind ● USD 1.38 bn industrial capex (USD 704 mn Lenzing’s economic share) ● Cash costs of ~USD 300 per mt Absolute cost le
Slide 20: DWP plant in Brazil: Overview
DWP plant in Brazil: Overview www.lenzing.com 05/05/21 - 20
Slide 21: DWP plant in Brazil – Recovery and Biomass boilers
DWP plant in Brazil – Recovery and Biomass boilers RB Steam Drum Recovery Boiler Biomass Boiler Power Room www.lenzing.com 05/05/21 - 21
Slide 22: DWP plant in Brazil – Effluent Treatment
DWP plant in Brazil – Effluent Treatment Tertiary Treatment www.lenzing.com 05/05/21 - 22
Slide 23: DWP plant in Brazil – Water Intake
DWP plant in Brazil – Water Intake www.lenzing.com 05/05/21 - 23
Slide 24: DWP plant in Brazil – Water Intake Plateau Areas
DWP plant in Brazil – Water Intake Plateau Areas Power Line Pump Station 2 Pressure Reduction Station Substation www.lenzing.com 05/05/21 - 24
Slide 25: Lyocell expansion project in Thailand (T3) fully on track
Lyocell expansion project in Thailand (T3) fully on track Key facts: ● 100 kt lyocell fiber plant Largest of its kind Strong boost to specialty exposure ● ~EUR 400 mn industrial capex ● Financing: ~25% equity, ~75% debt ● Debt financing fully committed ● First debt repayments from mid-2023 Project f
Slide 26: Lyocell expansion project in Thailand - Overview
Lyocell expansion project in Thailand - Overview Fiber warehouse Production building DWP warehouse Waste water treatment Utilities plant Techn. warehouse / laboratory / workshop www.lenzing.com 05/05/21 - 26
Slide 27: Lyocell expansion project in Thailand – Production building
Lyocell expansion project in Thailand – Production building www.lenzing.com 05/05/21 - 27
Slide 28: Lyocell expansion project in Thailand – Waste water treatment
Lyocell expansion project in Thailand – Waste water treatment www.lenzing.com 05/05/21 - 28
Slide 29: Lyocell expansion project in Thailand – Warehouse and utilities plant
Lyocell expansion project in Thailand – Warehouse and utilities plant www.lenzing.com 05/05/21 - 29
Slide 30: Q1-2021 Financials
Q1-2021 Financials www.lenzing.com
Slide 31: P&L – Revenue
P&L – Revenue Group revenue (EUR mn) Fiber revenue by application Group revenue by type in Q1-2021 (EUR mn) 489 430 59 +4.9% Specialties1 73% 466 489 438 385 33% 33% 32% 344 39% 53% Standard 27% 67% 61% 67% 68% 47% Fibers Other Group business revenue areas Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q1/
Slide 32: Q1/2021: Quarterly earnings development
Q1/2021: Quarterly earnings development1 EBITDA margin EBIT margin EPS2 (EUR) 14.8 % 7.7 % 11.1 % 12.3 % 19.3 % 6.4 % (3.9) % 1.0 % 3.1 % 11.3 % 0.84 (0.78) (0.16) 0.34 1.06 EUR mn EUR mn EUR mn +36.8% +85.5% +26.6% 94.5 55.4 69.1 29.9 28.1 53.9 22.2 42.9 13.7 9.0 3.7 26.5 Q1/2020 Q2/2020 Q3/2020 Q4
Slide 33: Cash flow and trading working capital development
Cash flow and trading working capital development 111.5 EUR mn (0.9) % Trading Working Capital 84.3 62.9 38.8 31.9 43.5 500 0.45 25.1 19.5 453 439 3.7 450 436 0.40 400 31.7% 384 381 0.35 28.5% (49.6) 350 0.30 24.3% 300 21.9% 0.25 (99.0) 19.4% (106.7) 250 0.20 (153.9) 200 0.15 (175.1) Q1/2020 Q2/2020
Slide 34: Balance sheet metrics
Balance sheet metrics Change According to IFRS (EUR mn) 31 Mar 20215 31 Dec 20205 in % Total assets 4,548.6 4,163.0 9.3 Liquid assets3 1,200.1 1,081.1 11.0 823 787 Total liabilities 2,599.6 2,281.6 13.9 701 701 thereof financial liabilities 1,772.5 1,552.5 14.2 Adjusted equity4 1,974.1 1,907.0 3.5 5
Slide 35: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 36: Outlook
Outlook 2021 guidance: Operating results expected at least at the level of the pre-crisis year 2019 ● Strong market sentiment, but uncertainty remains due to COVID-19 pandemic ● Fiber pricing peaked mid March, but remains on high level ● DWP prices with strong increase in Q1 2021 remain unchanged on
Slide 37: 2021 strategic milestones
2021 strategic milestones Major decisions to be taken Project Finalization Further steps to Conversion of VSF decarbonize portfolio Start-up of lyocell Modal expansion commodity into ● Lenzing fiber plant in ECOVERO™ ● Nanjing Thailand (T3) expansion ● Prachinburi www.lenzing.com 05/05/21 - 37
Slide 38: sCore TEN targets 2024
sCore TEN targets 2024 sCore TEN value drivers 2024 targets Financial targets EBITDA (EUR mn) 800 Specialization ROCE1 > 10 % Leverage < 2.5x Vertical integration Strategic targets Specialty share2 > 75 % Sustainability DWP integration > 75 % CO2 emission reduction3 > 40 % 1) Adjusted for plants und
Slide 39: for your attention!
for your attention! www.lenzing.com
Slide 40: Appendix
Appendix Q1-2021 detailed financials www.lenzing.com
Slide 41: Q1-2021: Quarterly P&L development
Q1-2021: Quarterly P&L development1 Change Change (EUR mn) Q1/2021 Q4/2020 Q1/Q4 (%) Q1/2020 Q1/Q1 (%) Revenue 489.3 437.7 11.8 466.3 4.9 Cost of sales (368.8) (364.2) 1.2 (375.5) (1.8) Gross profit 120.6 73.5 64.1 90.7 32.9 Other operating income 15.5 13.9 11.8 15.9 (2.6) Selling expenses (49.0) (4
Slide 42: Q1-2021: Quarterly topline breakdown
Q1-2021: Quarterly topline breakdown Change Change (EUR mn) Q1/2021 Q4/2020 Q4/Q1 (%) Q1/2020 Q1/Q1 (%) Breakdown of Fibers segment revenue Textile fibers (%) 68.4 67.0 2.1 66.9 2.2 Nonwoven fibers (%) 31.6 33.0 (4.2) 33.1 (4.5) Fibers only 431.4 379.1 13.8 389.5 10.7 Other1 53.9 58.0 (7.2) 73.8 (26
Slide 43: Q1-2021: Quarterly cash flow development
Q1-2021: Quarterly cash flow development Change Change (EUR mn) Q1/2021 Q4/2020 Q1/Q4 (%) Q1/2020 Q1/Q1 (%) Gross cash flow (before taxes and interest) 95.0 61.7 53.9 52.6 80.7 Taxes and interest (10.7) (18.2) (41.5) (13.8) (22.7) Gross cash flow (after taxes and interest) 84.3 43.5 93.9 38.8 117.5
Slide 44: Q1-2021: Net debt bridge
Q1-2021: Net debt bridge Net Cash Net Financial Capex2 Change Financial Debt FY Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q1 2020 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2021 Change in total working capital EUR 26.4 mn3 471.4 8.
Slide 45: Contact and financial calendar
Contact and financial calendar Investor contact Financial calendar Sébastien Knus Annual results 2020 March 11, 2021 VP Capital Markets a.i. 77th Annual General Meeting April 14, 2021 Results 01-03/2021 May 5, 2021 Phone: +43 7672 701 3599 E-mail: s.knus@lenzing.com Half-year results 2021 August 4,