Lenzing Ag · VIE:LNZ
Lenzing — H1 2023 Earnings Presentation
32 slides from Lenzing's earnings presentation, Aug 2, 2023
Slide 1: Lenzing Investor Presentation Results 01-06/2023
Lenzing Investor Presentation Results 01-06/2023 – August 02, 2023 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: Today's agenda
Today’s agenda Topic Presenter 1 Executive Summary • Stephan Sielaff, CEO 2 Market update • Stephan Sielaff, CEO 3 Financials • Nico Reiner, CFO 4 Outlook • Stephan Sielaff, CEO 5 Q&A • Stephan Sielaff, CEO • Nico Reiner, CFO www.lenzing.com 1 August 2023 - 3
Slide 4: Strengthened liquidity, deleveraged, and good progress on profitability enhancement
Strengthened liquidity, deleveraged, and good progress on profitability enhancement Key developments & strategic highlights ● Fiber demand with signs of improvements vs. H2 2022 while prices remain under pressure ● Raw material and energy costs have further decreased as expected but remain on elevat
Slide 5: Market update
Market update www.lenzing.com
Slide 6: In Q2 2023 energy and NaOH costs came further down but remain elevated
In Q2 2023 energy and NaOH costs came further down but remain elevated vs. 2020 especially in Europe Development of selected energy and NaOH market prices, 2020-Q2/2023 Indexed, Q1 2020 = 100 Energy prices NaOH prices 2,250 500 2,000 1,750 400 1,500 300 1,250 1,000 200 NaOH Europe 750 NaOH China Nat
Slide 7: Chinese viscose inventories are back under control, but downstream inventories remain elevated
Chinese viscose inventories are back under control, but downstream inventories remain elevated Non-exhaustive China VSF inventories, Inventory days US apparel inventories1 (retail and wholesale), USD bn 35 2023 110 2023 2022 105 2022 30 2015-2019 100 2012-2019 range & 95 25 range & average 90 averag
Slide 8: In 2023, fiber and pulp prices oscillated in a rather narrow range
In 2023, fiber and pulp prices oscillated in a rather narrow range, but with a downward trend Fiber prices in China USD/kg, excl. VAT Viscose Cotton Dissolving hardwood pulp 4.00 Viscose 3.50 • Chinese VSF prices followed the declining DWP price from early May 3.00 Cotton • The price volatility as w
Slide 9: Lenzing's specialty fibers increased premium until 2019 and maintained it
Lenzing's specialty fibers increased premium until 2019 and could maintain it at solid level since, supported by strong branding Cellulosic fiber prices in China Overview of co-branding programs 6-months average, percent from January 2017, converted at constant FX rates 697 Lenzing specialties1 100
Slide 10: Financials
Financials www.lenzing.com
Slide 11: Group EBITDA with clear increase vs. Q1 2023
Group EBITDA with clear increase vs. Q1 2023 Group revenue in EUR mn EBITDA in EUR mn -3% -28% 1,294 189 1,250 Revenue split H1/2023 +259% 1372 +1% 26% 1071 679 677 101 596 623 627 74 74% 301 Fiber Pulp Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 H1/2022 H1/2023 H1/2022 H1/2023 -21 Q2/2022 Q3/2022 Q4/20
Slide 12: EBIT increased to EUR 29 mn in Q2 2023
EBIT increased to EUR 29 mn in Q2 2023 EBIT in EUR mn Group net profit after minorities and hybrid bond, in EUR mn EPS in EUR 1.49 -0.20 -4.91 -3.03 -0.89 2.36 -3.92 +71 96 40 63 52 29 +57 17 -5 -24 -41 -104 -80 H1/2022 H1/2023 -130 -96 -12 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 Q2/2022 Q3/2022 Q4/
Slide 13: Free Cash Flow significantly improved in Q2 2023, trading working capital came down
Free Cash Flow significantly improved in Q2 2023, trading working capital came down Free cash flow1, in EUR mn Trading working capital3, in EUR mn +99 20 18 632 621 -64 -48 -52 567 568 571 -78 -143 -33 -85 24% 25% 25% 21% 21% -132 -123 -167 -205 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 -245 -270 Q2/2
Slide 14: Net financial debt at EUR 1.56 bn after capital increase
Net financial debt at EUR 1.56 bn after capital increase Net financial debt1,2, in EUR mn Balance sheet metrics -20% According to IFRS (EUR mn) 30 Jun. 2023 31 Dec. 2022 Change in % 1,915 1,953 Total assets 5,490.7 5,525.0 (0.6) 1,799 Liquid assets4 341.5 453.3 (24.7) 1,637 1,561 Total liabilities 3
Slide 15: Liquidity cushion close to EUR 1 bn after capital increase
Liquidity cushion close to EUR 1 bn after capital increase; extension of EUR 249 mn debt maturities Liquidity cushion, EUR mn Debt maturities as of 30.6.20231, EUR mn 971 521 526 498 579 394 359 323 296 275 292 183 205 199 123 124 30.06.2023 30.06.2023 PF2 H2 2023 2024 2025 2026 2027 2028 2029 Liqui
Slide 16: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 17: Current sentiment in textiles improved for the first time since 2021
Current sentiment in textiles improved for the first time since 2021; six-months expectations continue to remain on the positive side TX industry sentiment by survey date, balance index Percent of respondents, balance between good vs. poor Current situation Expectations in 6 months 40 36 Six months
Slide 18: TX brands/retailers remain cautious, visibility continues to be low
TX brands/retailers remain cautious, visibility continues to be low Company Date Quotes recent trading updates "It's early state and we do not have the full visibility… expect to end more like in the lower half of the guided range July 12, for the quarter and then further acceleration in the H2. We
Slide 19: After the "perfect storm" in H2 2022, first signs of recovery in H1 2023
After the “perfect storm” built up in H2 2022, first signs of recovery in H1 2023, further improvements in H2 expected H2 2022 – a “perfect storm” in H2 2022 H1 2023 Expected H2 2023 Declining – but still elevated - Costs are expected to further Unprecedented increase in decrease, however at slower
Slide 20: Lenzing is uniquely positioned to take full advantage of market rebound
Lenzing is uniquely positioned to take full advantage of market rebound Best positioned in terms of megatrends • Benefitting from increased sustainability awareness Strongest brand portfolio • Growing demand for WBCF 1 due to the widening of the cellulosic gap driven by cotton supply constraints • H
Slide 21: Lenzing on the pink carpet with Barbie
Lenzing on the pink carpet with Barbie Selected circularity, fiber and brands highlights in 2023 so far Lenzing and partners reach VEOCEL™ upgrades lyocell Lenzing and NFW partner provide Lenzing reveals collaboration milestone to develop circular-based shortcut fiber offering for the sustainable le
Slide 22: Lenzing keeps cautious optimism for second half of 2023
Lenzing keeps cautious optimism for second half of 2023 Lenzing expects improving operating performance leading to increased EBITDA for H2 2023 ● Slow but continued demand recovery accompanied by raw material and energy cost decreases in H1 2023 ● Whilst visibility remains restricted, further upside
Slide 23: Thank you for your attention!
for your attention! www.lenzing.com
Slide 24: Backup
w.lenzing.com Backup e | Lenzing Innovative by nature
Slide 25: EBITDA per division
EBITDA per division EBITDA per Division in EUR mn H1 / 2023 H1 / 2022 126 189 204 -48 137 -22 111 Fiber Pulp Other1 Group -45 Fiber Pulp Other1 Group 1) Incl. reconciliation 1) Incl. reconciliation www.lenzing.com 1 August 2023 - 25
Slide 26: Fiber revenue breakdown
Fiber revenue breakdown Fiber revenue by application, % Specialties share of fiber sales in Q2-2023 Standard Fibers 32% 37% 41% 35% 38% 21% 68% 63% 59% 65% 62% Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 79% Textile fibers Nonwoven fibers Specialty Fibers1 1) LENZING™ Lyocell, LENZING™ Modal, LENZING™ S
Slide 27: Quarterly P&L development
Quarterly P&L development Delta Q2 % MEUR Q2 2023 Q1 2023 Q2 2022 Delta Q2 YoY YoY Revenues 627,1 623,1 678,6 -51,5 -7,6% Cost of Sales -502,4 -562,0 -524,4 22,0 -4,2% % of Revenue -80,1% -90,2% -77,3% Gross Profit 124,7 61,1 154,3 -29,5 -19,2% % of Revenue 19,9% 9,8% 22,7% Selling Expenses -67,2 -6
Slide 28: Topline Breakdown H1 2023 vs H1 2022
Topline Breakdown H1 2023 vs H1 2022 Revenue from external customers by products and services EUR mn 01-06/2023 01-06/2022 Wood-based cellulosic fibers 882.4 1,080.0 Co-products of fiber production 30.4 30.6 Mechanical and plant engineering, engineering services and others 14.6 7.1 Division Fiber 92
Slide 29: Quarterly cash flow development
Quarterly cash flow development Change Change (EUR mn) Q2/2023 Q1/2023 Q2/Q1 (%) Q2/2022 Q2/Q2 (%) Gross cash flow (after taxes and interest) 36.5 (55.8) - 83.7 (56.4) Change in total working capital1 (18.0) 8.1 - (148.1) (87.9) Operating cash flow 18.5 (47.7) - (64.5) - Investment cash flow2 (51.6)
Slide 30: Q2-2023: Net debt bridge
Q2-2023: 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 20231 Tax Interest Gross CF 2 Ass.) WC other WC Dividend Translation Leasing Increase Others 20231 Change in total working capital EUR (16.1) mn4 1,91
Slide 31: H1-2023: Net debt bridge
H1-2023: 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 20221 Tax Interest Gross CF 2 Ass.) WC other WC Dividend Translation Leasing Increase Others 20231 Change in total working capital EUR (7.3) mn4 1,799
Slide 32: Contact and financial calendar
Contact and financial calendar Investor contact Financial calendar Sébastien Knus Annual results 2022 March 9, 2023 VP Capital Markets 79th Annual General Meeting April 19, 2023 Results 01-03/2023 May 3, 2023 Phone: +43 7672 701 3599 E-mail: s.knus@lenzing.com Half-year results 2023 August 2, 2023 R