Lenzing Ag · VIE:LNZ
Lenzing — Q3 2018 Earnings Presentation
81 slides from Lenzing's earnings presentation, Nov 7, 2018
Slide 1: Lenzing Investor Presentation
Lenzing Investor Presentation Results 01-09/2018 November 7, 2018 www.lenzing.com 07.11.2018 - 1
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: Highlights 01-09/2018
Highlights 01-09/2018 ● Solid nine months’ results in a demanding market environment ● Group revenue at EUR 1,636.2 mn (down 5.2% compared to 01-09/2017) ● EBITDA at EUR 290.6 mn (down 26.8% compared to 01-09/2017) ● Strong balance sheet: adjusted equity ratio at 59.5%; low net financial debt at EUR
Slide 4: Interfiber price development
Interfiber price development1 Staple fiber prices in RMB/to – Development in China RMB/to RMB/to (incl. VAT) (incl. VAT) 18,000 11,000 17,000 10,000 16,000 15,000 9,000 14,000 8,000 13,000 12,000 7,000 11,000 10,000 6,000 01/2015 07/2015 01/2016 07/2016 01/2017 07/2017 01/2018 07/2018 01/2015 07/201
Slide 5: Cotton market
Cotton market Cotton market mn tons ● Q3/2018: price decline due to 30 26.9 26.9 27.6 24.5 26.0 ● harvesting period 25 23.1 18.8 18.8 ● pressure on international prices from 20 17.2 Production 15 China’s tariffs on US cotton Consumption Ending Stocks 10 ● Cotlook A-Index price projection 2018/19 5 0
Slide 6: Chinese viscose staple fiber market
Chinese viscose staple fiber market VSF1 price trend and inventory of China ● After a drop at the end of July (to 13,950 RMB), RMB/MT (incl. VAT) day standard VSF prices bounced up to 15,180 RMB 18,000 30 in September boosted by traditional peak season 17,000 16,000 20 15,000 ● Utilization rate clim
Slide 7: Specialty fiber performance increases resilience
Specialty fiber performance increases resilience1,2 % 114 112 Lenzing Specialties China 110 Cotton Index China 108 106 104 102 100 98 96 94 92 VSF (TX) CCF high 90 88 86 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 1) 6M average in % from 01/2017 excluding FX-E
Slide 8: Lenzing leads sustainability initiatives in the industry
Lenzing leads sustainability initiatives in the industry ● September 27-29, 2018: China Textiles & Garment Industry Annual CSR Forum ● @China Sustainable Fashion Week www.lenzing.com 07.11.2018 - 8
Slide 9: TENCEL Consumer Brand Activation across the globe
TENCEL™ Consumer Brand Activation across the globe www.lenzing.com 07.11.2018 - 9
Slide 10: Status of pulp investment program
Status of pulp investment program ● Debottlenecking projects of 35 kt pulp in Lenzing and in Paskov in full swing ● Additional volumes from both projects in 2019 ● 450 kt greenfield DWP mill project in Brazil announced by Lenzing and JV partner Duratex ● Key to reach 75% backward integration ● Secur
Slide 11: Status of lyocell investment program
Status of lyocell investment program ● 90 kt brownfield project in the USA temporarily mothballed because of risk profile ● Trade tensions/looming tariffs elevated project risk ● Buoyant US labor market increased threat of substantial project cost overrun ● Successful ramp-up of 25 kt lyocell capaci
Slide 12: Acquisition of remaining 30 percent of Lenzing's Chinese operation
Acquisition of remaining 30 percent of Lenzing’s Chinese operation ● Acquisition of the remaining 30 percent of Lenzing (Nanjing) Fibers Co. Ltd. (LNF) from state-owned joint venture partner NCFC ● Closing of the transaction was finalized in the beginning of November 2018 ● Negative impact of approx
Slide 13: Financials – Revenue
Financials – Revenue EUR mn Revenue split 01-09/2018 (2.9)% (5.2)% 1,726.6 15.2% 577.5 1,636.2 560.9 550.3 44.1% 532.8 525.0 40.7% Specialty fibers 1 Standard fibers Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 01-09/2017 01-09/2018 Other business areas Group revenue Group revenue 1) LENZINGTM Lyocell, L
Slide 14: Financials – EBITDA
Financials – EBITDA EBITDA margin EBITDA margin 21.9% 19.8% 18.5% 17.7% 17.1% 23.0% 17.8% EUR mn EUR mn (24.2)% (26.8)% 397.1 126.4 105.3 101.6 95.8 290.6 93.2 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 01-09/2017 01-09/2018 EBITDA EBITDA www.lenzing.com 07.11.2018 - 14
Slide 15: Financials – EBIT
Financials – EBIT EBIT margin EBIT margin 16.3% 13.6% 12.5% 11.4% 11.0% 17.3% 11.6 % EUR mn EUR mn (34.7)% (36.2)% 94.2 298.4 72.6 68.9 59.8 61.6 190.3 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 01-09/2017 01-09/2018 EBIT EBIT www.lenzing.com 07.11.2018 - 15
Slide 16: Financials – Net profit and earnings per share
Financials – Net profit and earnings per share1 EPS1 (EUR) EPS1 (EUR) 2.57 2.35 1.89 1.55 1.62 8.12 5.06 EUR mn EUR mn (38.4)% (39.0)% 69.0 219.3 62.4 50.0 133.8 41.2 42.5 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 01-09/2017 01-09/2018 Group net profit Group net profit 1) Attributable to Lenzing AG sh
Slide 17: Financials – Key figures
Financials – Key figures 900 800 Change EUR mn According to IFRS (EUR mn) 30 Sept. 2018 31 Dec. 2017 in % 700 Total assets 2,584.2 2,497.3 3.5 Liquid assets1 275.7 315.8 (12.7) 600 thereof liquid funds 263.7 306.5 (14.0) 500 Total liabilities 1,066.5 989.4 7.8 (408) thereof financial liabilities 396
Slide 18: Cash flow development and trading working capital
Cash flow development and trading working capital (26.0)% Gross CF 5.2% Trading Working Capital (incl. factoring) EUR mn 45.8 % Operating CF EUR mn Free CF adj. 450 30.0% 0 0 0 0 400 18 427 422 108.6 414 407 98.2 384 25.0% 93.4 89.6 350 85.1 20.3% 72.7 300 19.4% 65.6 18.8% 61.4 18.5% 20.0% 250 1
Slide 19: Outlook 2018 – Fiber market and Lenzing Group
Outlook 2018 – Fiber market and Lenzing Group Demand development on the global fiber market remains positive. Lenzing expects wood-based cellulosic fibers to continue to grow at a higher rate than the overall fiber market. In a challenging market environment the Lenzing Group expects solid results f
Slide 20: Q3 2018 Back-up financial information
Q3 2018 Back-up financial information www.lenzing.com 7.11.2018 - 20
Slide 21: Q3/2018: Consolidated Group P&L
Q3/2018: Consolidated Group P&L (EUR mn) Q3/2018 Q2/2018 Q3/2017 01-09/2018 01-09/2017 Revenue 560.9 525.0 577.5 1,636.2 1,726.6 Change in inventories of finished goods and work in progress 1.9 17.8 (2.5) 4.7 (3.5) Own work capitalized 11.6 13.0 12.6 39.8 32.4 Other operating income 11.7 16.7 11.8 4
Slide 22: Q3/2018: Topline breakdown
Q3/2018: Topline breakdown Change Change Change (EUR mn) Q3/2018 Q2/2018 Q3/Q2 (%) Q3/2017 Q3/Q3 (%) 01-09/2018 01-09/2017 y-o-y (%) Breakdown of Fibers segment revenue Textile fibers (%) 71.6 70.3 1.8 70.2 2.0 70.8 70.3 0.7 Nonwoven fibers (%) 28.4 29.7 (4.3) 29.8 (4.6) 29.2 29.7 (1.6) Fibers only
Slide 23: Q3/2018 Total opex structure
Q3/2018 Total opex structure Q3/2018 (Total Opex EUR 490.4 mn) 01-09/2018 (Total Opex EUR 1,431.4 mn) 62.7 12.8% 191.6 13.4% 96.4 19.7% 282.4 19.7% 957.4 331.3 66.9% 67.6% Q3/2017 (Total Opex EUR 473.1 mn) 01-09/2017 (Total Opex EUR 1,397.0 mn) 65.6 13.9% 197.3 14.1% 89.3 18.9% 263.1 18.8% 936.6 318
Slide 24: 07-09/2018: Net debt bridge
07-09/2018: Net debt bridge 121.1 Change in total working capital EUR 7.1 mn3 93.21 57.12 12.4 0.0 0.0 0.1 0.5 5.3 20.1 144.2 0.3 Net liquidity Tax Net interest Gross CF Cash capex Change in Change in Dividend Inflow from Currency Others Net financial Q2/2018 (incl. fin. ass.) other WC trading WC th
Slide 25: 01-09/2018: Net debt bridge
01-09/2018: Net debt bridge Change in total working capital EUR 27.2 mn3 285.51 175.62 26.0 132.9 121.1 1.2 59.2 66.8 2.9 0.1 0.1 3.6 Net financial Tax Net interest Gross CF Cash capex Change in Change in Dividend Inflow from Currency Others Net financial debt FY 2018 (incl. fin. ass.) other WC trad
Slide 26: Q3/2018: Cash flow
Q3/2018: Cash flow Change Change Change (EUR mn) Q3/2018 Q2/2018 Q3/Q2 (%) Q3/2017 Q3/Q3 (%) 01-09/2018 01-09/2017 y-o-y (%) Gross cash flow (before taxes and interest) 93.2 93.3 (0.1) 130.4 (28.5) 285.5 397.0 (28.1) Taxes and interest (20.4) (27.7) (26.1) (32.1) (36.4) (62.1) (71.7) (13.4) Gross ca
Slide 27: FY 2017 Back-up financial information
FY 2017 Back-up financial information www.lenzing.com 7.11.2018 - 27
Slide 28: FY 2017: Consolidated Group P&L
FY 2017: Consolidated Group P&L (EUR mn) 2017 2016 Change y-o-y (%) Revenue 2,259.4 2,134.1 5.9 Change in inventories of finished goods and work in progress 16.8 6.4 160.5 Own work capitalized 46.1 21.8 111.1 Other operating income 49.9 45.5 9.6 Cost of material and purchased services (1,258.0) (1,2
Slide 29: FY 2017: Consolidated Group P&L - Quarters
FY 2017: Consolidated Group P&L - Quarters Change Change (EUR mn) Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q4/Q3 (%) Q4/2016 Q4/Q4 (%) Revenue 586.2 562.9 577.5 532.8 (7.8) 555.7 (4.1) Change in inventories of finished goods and work in progress (21.4) 20.4 (2.5) 20.3 - 18.2 11.2 Own work capitalized 9.3 10.
Slide 30: FY 2017: Topline breakdown
FY 2017: Topline breakdown Change Change Q4/Q3 Q4/Q4 Change (EUR mn) Q1/2017 Q2/2017 Q3/2017 Q4/2017 (%) Q4/2016 (%) 2017 2016 y-o-y (%) Breakdown of Fibers segment revenue Textile fibers (%) 71.5 69.2 70.2 69.0 (1.6) 71.0 (2.8) 70.0 70.9 (1.3) Nonwoven fibers (%) 28.5 30.8 29.8 31.0 3.9 29.0 6.8 30
Slide 31: Financials 2017 – Earnings per quarter
Financials 2017 – Earnings per quarter EBITDA margin EBIT margin EPS1 (EUR) 19.4% 23.0% 24.1% 21.9% 19.8% 13.4% 17.5% 18.1% 16.3% 13.6% 2.50 2.75 2.80 2.57 2.35 EUR mn EUR mn EUR mn (2.2)% (2.7)% (6.9)% 135.1 135.6 126.4 102.3 101.8 75.0 75.3 94.2 107.7 105.3 69.0 67.0 74.6 72.6 62.4 Q4/2016 Q1/2017
Slide 32: Financials – Earnings
Financials – Earnings EBITDA margin EBIT margin EPS1,2 (EUR) 11.8% 12.9% 14.7% 20.1% 22.2% 4.5% 1.2% 7.6% 13.9% 16.4% 1.89 (0.92) 4.78 8.48 10.47 EUR mn EUR mn EUR mn +17.3% +25.2% +23.0% 371 282 502 428 296 229 290 240 128 225 151 86 50 22 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014
Slide 33: FY 2017: OPEX as of total sales
FY 2017: OPEX as of total sales Change Change Q4/Q3 Q4/Q4 Change (EUR mn) Q1/2017 Q2/2017 Q3/2017 Q4/2017 (%) Q4/2016 (%) 2017 2016 y-o-y (%) Total sales 586.2 562.9 577.5 532.8 (7.8) 555.7 (4.1) 2,259.4 2,134.1 5.9 Total OPEX1 (451.7) (472.2) (473.1) (472.7) (0.1) (481.6) (1.9) (1,869.7) (1,779.6)
Slide 34: FY 2017: Solid balance sheet, strong ROCE
FY 2017: Solid balance sheet, strong ROCE as at Dec. 31, 2017 3,000.0 ∑ EUR 2,497.3 mn ∑ EUR 2,497.3 mn Change According to IFRS (EUR mn) 31 Dec. 2017 31 Dec. 2016 in % 2,500.0 Total assets 2,497.3 2,625.3 (4.9) Liquid assets1 315.8 570.4 (44.6) 2,000.0 thereof liquid funds 306.5 559.6 (45.2) Total
Slide 35: FY 2017 Total opex structure
FY 2017 Total opex structure 2016 (Total Opex EUR 1,779.6 mn) 2017 (Total Opex EUR 1,869.7 mn) 236.6 262.4 13.3% 14.0% 319.2 349.4 17.9% 18.7% 1,258.0 1,223.8 67.3% 68.8% Cost of material and purchased services Cost of material and purchased services Personnel expenses Personnel expenses Other opera
Slide 36: FY 2017: Net debt bridge
FY 2017: Net debt bridge EUR mn Change in total working capital EUR (148.5) mn3 245.3 2 76.7 7.2 71.8 66.8 80.6 111.7 3.1 1.8 26.1 12.5 511.8 1 Net financial Tax Net interest Gross CF Cash capex Change in Change in Dividend Inflow from Currency Others Net financial debt FY 2016 (incl. fin. ass.) oth
Slide 37: Financials 2017 – Key figures (1/2)
Financials 2017 – Key figures (1/2) EUR mn EUR mn 900 (801) 800 (730) 1,650 49.7% (683) 700 1,605 (577) 1,596 600 570 1,600 1,579 39.7% 505 1,572 500 450 1,550 1,541 29.7% (383) 400 355 316 296 300 280 1,500 19.7% 328 200 8.1% 18.6% 1,450 3.7% 15.1% 9.7% 100 67 (0.1%) 7 0 1,400 -0.3% 2013 2014 2015
Slide 38: Financials 2017 – Key figures (2/2)
Financials 2017 – Key figures (2/2) 1,800 130.0% 120.0% 1,600 EUR mn 1,528 EUR 110.0% 1,390 5.50 1.50 1,400 100.0% 5.00 1,219 1.30 90.0% 4.20 1,200 1,110 4.50 1,055 80.0% 1.10 1,000 61.2% 70.0% 3.50 1.20 2.00 53.0% 0.90 50.6% 60.0% 800 3.00 3.00 50.0% 2.50 2.00 0.70 600 1.75 40.0% 3.7% 45.5% 44.7% 4
Slide 39: FY 2017: Cash flow by quarters
FY 2017: Cash flow by quarters Change Change Change Q4/Q3 Q4/Q4 y-o-y (EUR mn) Q1/2017 Q2/2017 Q3/2017 Q4/2017 (%) Q4/2016 (%) 2017 2016 (%) Gross cash flow (before taxes and interest) 132.5 134.1 130.4 114.8 (12.1) 124.8 (8.1) 511.8 445.4 14.9 Taxes and interest (10.7) (28.9) (32.1) (21.4) (33.7) (
Slide 40: Cash flow development and trading working capital
Cash flow development and trading working capital +8.5% Gross CF (42.7)% Operating CF +9.2% (91.1)% Free CF adj. 600 40.0% EUR mn EUR mn 500 82 35.0% 473 78 0 0 83 419 400 447 30.0% 414 386 394 396 380 366 25.6% 300 25.0% 284 271 23.4% 20.8% 231 200 219 216 21.6% 19.4% 20.0% 21.3% 19.5% 145 19.4% 11
Slide 41: Appendix Equity story
Appendix Equity story www.lenzing.com 7.11.2018 - 41
Slide 42: Lenzing – Our mission
Lenzing – Our mission “Lenzing is a performance materials company that turns CO2 and sunlight into highly functional, emotional and aesthetic products across the globe” Textiles Nonwovens www.lenzing.com 7.11.2018 - 42
Slide 43: Global fiber market at a glance
Global fiber market at a glance 2017e consumption numbers ● Lyocell 6% ● Modal Wood-based ● Viscose cellulose fibers2 26% Cotton 105 mn tons 62% Synthetic fibers 1% Wool 5% Other natural fibers1 1) Incl. bast, flax, hemp, jute, silk and allied fibers 2) Wood-based and cotton linter-based cellulose f
Slide 44: Lenzing – Market leader in all three fiber generations
Lenzing – Market leader in all three fiber generations Competitive Fiber Types Market Position Intensity Lyocell #1 Low Modal #1 Medium Viscose #2 High Source: Lenzing data 2017, CCFG, CCFEI www.lenzing.com 7.11.2018 - 44
Slide 45: Lenzing is the only player with European roots in the viscose staple fibers market
Lenzing is the only player with European roots in the viscose staple fibers market1 (2017e) … Lenzing with 17% share of production Lenzing with 16% share of capacities2 Others Lenzing Others Lenzing 18% 17% 21% 16% Xiangsheng 5% Xiangsheng 5.3 mn tons 4% 6.2 6.2mn mntons tons Birla Aoyang Birla 16%
Slide 46: … and is a global leader in wood-based cellulose fibers
… and is a global leader in wood-based cellulose fibers Balanced exposure to matured and Global network of production sites and emerging markets sales offices Fiber revenue by region 2017 footprint AMEA (Asia, Middle North Asia East and Africa) 38% 36% Europe & Americas 26% Source: Lenzing data as a
Slide 47: Capacity 2018: A global footprint
Capacity 20181: A global footprint Europe2 China Total pulp capacity 457 493 570 575 181 209 178 178 270 275 111 119 165 165 2017 2018e 300 300 2017 2018e 2017 2018e Lenzing (A) Paskov (CZ) USA Total capacity Indonesia dissolving dissolving pulp capacity pulp capacity 1,009 1,048 232 263 51 54 111 1
Slide 48: Market environment with multiple headwinds
Market environment with multiple headwinds Expected viscose net capacity in mn tons1 IHS index (Caustic soda, IHS Europe low, EUR/t) ~ 6.7 – 7.0 ~ 6.3 800 5.7 600 400 200 2017 2018 2019 Q1-17 Q3-17 Q1-18 Q3-18 China viscose staple fiber prices in RMB/ton Euro strengthened substantially against USD a
Slide 49: Long-term interfiber price development
Long-term interfiber price development1 Staple fiber prices – Development in China RMB/to (incl. VAT) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 01/10 08/10 03/11 10/11 05/12 12/12 07/13 02/14 09/14 04/15 11/15 06/16 01/17 08/17 03/18 10/18 Viscose Cotton Polyester 1) Price development until
Slide 50: Textile and Nonwovens are the two main applications
Textile and Nonwovens are the two main applications Textile Nonwovens Size ~90 mt ~10 mt Regional Over 90% of spinning and fabric making Mainly a regional market (due to high logistic costs) focus located in China, India and Asia-Pacific High Low: Top 5 to 10 players hold between 60-80% share Fragme
Slide 51: Sales and marketing – Customer concentration
Sales and marketing – Customer concentration Textiles Percent of sales by customers Nonwovens Percent of sales by customers (20171) (20171) 61.2% 47.5% 44.5% 30 % 35% 21 % Top 5 Top 10 Top 20 Top 5 Top 10 Top 20 Source: Lenzing data 2017 www.lenzing.com 7.11.2018 - 51
Slide 52: Lenzing underpins its innovation leadership
Lenzing underpins its innovation leadership Industry leading R&D spend (EUR 55.41 mn in 2017) ● R&D is an essential part of the sCore TEN strategy and contributes to R&D expenses (2014-2017)1 all five fields EUR mn ● Substantial progress with respect to strategic innovations and thus looking at a he
Slide 53: LENZING ECOVERO: the new standard in eco-responsible viscose
LENZING™ ECOVERO™ The new standard in eco-responsible viscose 30 ● LENZING™ ECOVERO™ fibers are the innovative 25 and unique answer to the increasing demand MSI score, points/kg fiber for sustainable products along the textile 20 value chain Fossil resource depletion 15 ● Worldwide highest environme
Slide 54: Lyocell fibers with REFIBRA technology
Lyocell fibers with REFIBRA™ technology Contribution to circular economy ● Solves waste problems in the society and saves resources by replacement of virgin cotton fibers ● Environmentally responsible closed loop process ● High resource efficiency and low ecological impact ● Solvent-spinning process
Slide 55: Looking forward: Megatrends support fiber demand growth
Looking forward: Megatrends support fiber demand growth Population growth and higher purchasing power in the emerging markets drive overall fiber growth World CAGR 2010-2020 6.9 7.8 Population 6.1 +1.1% bn 12.2 GDP per capita 9.7 (current prices) 5.7 +2.4% ths. USD/capita 14.8 Fiber consumption 11.9
Slide 56: Wood-based fibers outgrow market
Wood-based fibers1 outgrow market Expected growth of global fiber demand until 2020 Million metric tons CAGR 130 120 Wood-based fibers Synthetic fibers (2017e – 2022p2) 110 Cotton Other natural fibers & wool 100 Wood-based 5-6% p.a. 90 fibers1 80 70 Synthetic fibers 4-5% p.a. 60 50 40 30 Cotton 0-1%
Slide 57: Asia Pacific remains the growth engine in global textiles
Asia Pacific remains the growth engine in global textiles Global apparel demand by value1 (2005-2020) CAGR (2015-2020e) USD bn 1,517 1,306 38% Asia Pacific 4% 988 36% 23% 22% North America 2% 22% 26% 26% Europe 27% 2% 39% 14% 14% ROW 12% 3% 2005 2015 2020e 1) Based on current prices and historic yea
Slide 58: Sustainability is gaining importance
Sustainability is gaining importance Less than 1% of global water Arable land is decreasing due to Oil is a finite resource causing resources is available as fresh erosion and urbanization negative externalities water for people ● With a growing global population, ● Sooner or later “peak oil” will b
Slide 59: Lenzing's sustainability strategy
Lenzing’s sustainability strategy “Lenzing balances the needs of society, the environment and shareholders and is a sustainability leader in its industry. Creating substantially more positive impacts or benefits is the guiding torch for our innovation and business practices.” ● Four focus areas ● Wo
Slide 60: Certificates and recognitions
Certificates and recognitions ● VÖNIX (Austrian Sustainability Index) ● 100% USDA Biobased certification for all Lenzing fibers (LENZINGTM FR at 99%) ● The European Eco-Label (European Flower) ● OK compost HOME (TÜV AUSTRIA BELGIUM) ● Responsible Care® ● OK biodegradable SOIL (TÜV AUSTRIA BELGIUM) ●
Slide 61: Responsible wood and pulp sourcing
Responsible wood and pulp sourcing ● Lenzing has a strict wood and pulp sourcing policy in place ● Lenzing does not source any wood or dissolving wood pulp from ancient and endangered forests as well as high conservation value areas. ● Lenzing is committed to sourcing wood and dissolving wood pulp e
Slide 62: Responsible wood and pulp sourcing
Responsible wood and pulp sourcing ● Certification status of total wood and pulp used by Lenzing production sites, own and purchased pulp 2017 ● Basis: Pulp used by Lenzing for fiber production ● Non-certified pulp was used for R&D purposes www.lenzing.com 7.11.2018 - 62
Slide 63: Wood and pulp certifications in the Lenzing Group
Wood and pulp certifications in the Lenzing Group ● Certification status of total wood and pulp used by Lenzing production sites, own and purchased pulp 2017 ● Basis: Pulp used by Lenzing for fiber production ● Non-certified pulp was used for R&D purposes www.lenzing.com 7.11.2018 - 63
Slide 64: Highly efficient use of the raw materials
Highly efficient use of the raw materials The Lenzing site is fully integrated. Dissolving wood pulp production at the Lenzing and Paskov sites achieve a wood utilization rate of about 100% (incl. energy use) Highly efficient use of the raw material wood in the Lenzing Group‘s biorefineries www.lenz
Slide 65: Fiber production fully secured by a robust pulp supply
Fiber production fully secured by a robust pulp supply Level of backward integration: Own pulp supply in percentage of annual fiber capacity ● >50% secured by own pulp production ● Remaining pulp is secured Total annual through long-term contracts fiber capacity (100%) 58% 56% 56% 56% 56% 2013 2014
Slide 66: DWP market is relatively concentrated with significant link to paper pulp market
DWP market is relatively concentrated with significant link to paper pulp market DP for WBCF supply, 2017, mt Capacity distribution, 2017, % Forecasted capacity, mt Merchant thereof swing capacity (PP/DWP) Integrated 2 8 7 ~80% Birla 1 6 Sappi 6 Lenzing 10% 21% 10% 5% Sun Paper Sateri 15% 4% 4% Rayo
Slide 67: Key facts about the DWP greenfield project
Key facts about the DWP greenfield project ● Lenzing and Duratex S.A. to investigate a greenfield DWP plant in Brazil ● Lenzing to hold 51% and Duratex 49% ● FSC® certified wood supply ● Key facts of project under investigation ● 450 kt/a capacity → largest single line DWP plant ● Kraft pulp technol
Slide 68: Brazil – perfect for a lowest cost DWP mill worldwide
Brazil – perfect for a lowest cost DWP mill worldwide ● Very favorable wood economics, strong local talent pool and excellent supplier network ● Brazil has a lot of experience in pulp projects ● Since year 2000, ~50% of new pulp capacity was built in Brazil Brazil ● Duratex – strong JV partner ● Lea
Slide 69: The strategy – driving value growth
The strategy – driving value growth www.lenzing.com 7.11.2018 - 69
Slide 70: Strengthen the Core
Strengthen the Core ● Further strengthen pulp position via backward integration and/or strategic co- operations 1 ● Maintain quality leadership ● Deliver EUR 50 mn EBITDA by 2017 with commercial and operational excellence program (done) ● Strengthen our bio-refinery business ● Grow viscose position
Slide 71: Customer Intimacy, Specialization, Forward Solutions and New Business Areas
Customer Intimacy, Specialization, Forward Solutions and New Business Areas Increase management presence and decision power in the regions Move selectively forward 4 in the value chain via new Establish two additional game-changing 2 regional application and technologies customer innovation centers
Slide 72: Backup
Backup www.lenzing.com 7.11.2018 - 72
Slide 73: Successful launch of new branding concept
Successful launch of new branding concept For Textile B2C Specialties For Non-Woven B2C Specialties For Industrial B2B www.lenzing.com 7.11.2018 - 73
Slide 74: Succesful launch of TENCEL in textiles
Succesful launch of TENCEL™ in textiles TENCEL™ Denim TENCEL™ Intimate TENCEL™ Active TENCEL™ TENCEL™ Home Luxe Feel good with Feel ready with Feel your best with a touch of softness a touch of comfort Feel relaxed with Feel the touch of a touch of smoothness a natural touch conscious luxury www.len
Slide 75: LENZING fibers field of application
LENZING™ fibers field of application Textile Active Home Denim Luxe Intimate www.lenzing.com 7.11.2018 - 75
Slide 76: Followed by the launch in nonwovens…
Followed by the launch in nonwovens… VEOCEL™ VEOCEL™ VEOCEL™ VEOCEL™ Beauty Body Intimate Surface gentle care, reliable care, natural care, effective care, purely for you purely for you purely for you purely for you www.lenzing.com 7.11.2018 - 76
Slide 77: LENZING fibers field of application
LENZING™ fibers field of application Nonwovens Body Surface Beauty Intimate www.lenzing.com 7.11.2018 - 77
Slide 78: …and the launch in the industrial segment
…and the launch in the industrial segment LENZING™ LENZING™ LENZING™ LENZING™ LENZING™ LENZING™ LENZING™ for for for Protective for Workwear for for for Co- Agriculture Packaging Wear Engineered Biorefinery Products Products Products www.lenzing.com 7.11.2018 - 78
Slide 79: LENZING fibers field of application
LENZING™ fibers field of application Industrial Packaging Biorefinery Products Workwear Agriculture Footwear Protective Wear Engineered Products www.lenzing.com 7.11.2018 - 79
Slide 80: Lenzing share information
Lenzing share information Oberbank AG 3.97% ISIN LNZ / AT0000644505 Bloomberg LNZ:AV Reuters LNZNF.PK ATX Prime, ATX Global Players, Indices VÖNIX Sustainability Index B&C Privatstiftung Number of shares 26,550,000 50.00% Share price September 30, 2018 EUR 90.05 Free float 46.03% Market capitalizati
Slide 81: Contacts and financial calendar
Contacts and financial calendar Investor Relations contact Financial calendar ● Stephanie Kniep Full year results 2018 March 14, 2019 Head of Investor Relations 75th Annual General Meeting April 17, 2019 Corporate Communications & Investor Relations Results 01-03/2019 May 8, 2019 ● Phone: +43 7672 7