Lenzing AG · VIE:LNZ
Lenzing — H1 2014 Earnings Presentation
20 slides from Lenzing's earnings presentation, Aug 21, 2014
Slide 1: Press Conference Results H1 2014
Press Conference Results H1 2014 Vienna, August 21, 2014
Slide 2: Challenging H1 2014
Challenging H1 2014 Ongoing difficult market environment, massive countermeasures implemented in the Group, successful startup of TENCEL® plant Development impacted by difficult market conditions Consolidated sales1): EUR 900.0 mn (H1 2013: EUR 940.0 mn) EBITDA1): EUR 91.9 mn (H1 2013: EUR 129.1
Slide 3: Basic situation in the fiber industry
Basic situation in the fiber industry Imbalances on the global fiber market continue: Change in China‘s cotton subsidy policy Cotton inventories continue to rise Persistent price pressure on all fibers Cotton price down 18% since March Viscose in China stabilized at a low level Threat of
Slide 4: Paradox: High volatility between cotton and viscose fiber prices
Paradox: High volatility between cotton and viscose fiber prices 4
Slide 5: Countermeasures: excelLENZ more effective than planned
Countermeasures: excelLENZ more effective than planned Cost savings of up to EUR 90 mn in 2014 Distribution of cost savings in 2014 Reduction of 500 employees (full-time equivalents) by the middle of July 2014 No layoffs up until now Personnel Implementation of creative working time models O
Slide 6: Intensification of excelLENZ
Intensification of excelLENZ Why: No sustainable recovery of fiber prices on the horizon Further EBITDA decline of about EUR 140 mn p.a. since Q4 2013 Ongoing maintenance/upkeep of assets/equipment Interest for net debt Additional selective growth investments New product developments and
Slide 7: Segment Fibers
Segment Fibers QLENZING
Slide 8: Record fiber sales and higher share of specialty fibers
Record fiber sales and higher share of specialty fibers Lenzing defended its global market leadership position - Lenzing Viscose® sold at price premium vis-a-vis competitors New record half-year sales volume of 474,000 tons of fibers (H1 2014: 438,000 tons) Further rise in production and sales
Slide 9: Average Lenzing fiber selling prices down 12.5% from H1 2013
Average Lenzing fiber selling prices down 12.5% from H1 2013 Further EBITDA decline of about EUR 140 mn p.a. 2.90 600 2.33 2.29 2.13 2.15 2.40 2.03 2.04 1.95 500 1.83 1.77 1.75 1.67 1.61 1.56 1.90 400 1.52 1.40 300 200 399 396 405 387 406 389 403 389 0.90 382 383 371 371 367 363 100 199 199 221 216
Slide 10: Successful startup of jumbo TENCEL production plant in Lenzing
Successful startup of jumbo TENCEL® production plant in Lenzing Further expansion of global market leadership for TENCEL® Successful ramp-up phase Lenzing‘s annual nominal TENCEL® production capacity increased to about 220,000 tons p.a. Largest TENCEL® production line with a capacity of 67,0
Slide 11: Marketing focus on TENCEL
Marketing focus on TENCEL® Preparations stepped up to market additional TENCEL® volumes Intensification of “Natural Connection“ program Mixture of cotton with 30% TENCEL for denim, shirts, bed linen, etc. TENCEL® brings substantially higher quality and improved hand Upcoming season: focus of
Slide 12: TENCEL for nonwovens
TENCEL® for nonwovens Preparations stepped up to market additional TENCEL® volumes TENCEL® wipes introduced on the European market for the first time Sold under the brand name “Sweeps“ 15 different types e.g. smart phone cleaning clothes, hand disinfecting wipes etc. TENCEL® Skin for facial
Slide 13: Group results H1 2014
Group results H1 2014 QLENZING
Slide 14: Weak fiber prices negatively impact sales and earnings in H1
Weak fiber prices negatively impact sales and earnings in H1 Only continuing operations 1-6/2014 1-6/2013 Change (“like for like“)1) in % Consolidated sales (EUR mn) 900.0 940.0 -4.3 Personnel expenses (EUR mn) 152.9 152.9 - Cost of material and purchased services (EUR mn) 600.2 577.2 +4.0 Other ope
Slide 15: Stable balance sheet, reduced CAPEX, high cash flow
Stable balance sheet, reduced CAPEX, high cash flow June 30, Dec. 31, Change in % 2014 2013 Property, plant and equipment (EUR mn) 1,325.6 1,324.5 +0.1 Adjusted equity1) (EUR mn) 1,082.5 1,109.6 -2.4 Adjusted equity ratio2) (%) 46.3 45.5 - Net financial debt3) (EUR mn) 511.4 504.7 +1.3 Net gearing4)
Slide 16: Q2 largely at the same level as Q1
Q2 largely at the same level as Q1 Q2/2014 Q1/2014 Change in % Consolidated sales (EUR mn) 448.3 451.7 -0.8 EBITDA (EUR mn) 45.6 46.3 -1.5 EBIT (EUR mn) 15.7 16.7 -6.0 Profit for the period (EUR mn) 7.5 7.7 -2.6 16
Slide 17: Outlook for the global fiber market
Outlook for the global fiber market No easing of the situation in H2 2014 Strong pressure on international cotton prices ICAC1) forecast: only 2% drop in cotton production in 2014/15 Record high cotton inventories Persistent price pressure on man-made cellulose fibers Excess supply of stan
Slide 18: Outlook for the Lenzing Group
Outlook for the Lenzing Group Focus on cost management and the strategy process Intensification of the excelLENZ cost reduction and efficiency enhancement program Cost saving effects increased to up to EUR 90 mn in 2014 Groundwork laid to further raise amount of originally targeted structural
Slide 19: Thank you for your attention!
Thank you for your attention!
Slide 20: 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.