Lenzing Ag · VIE:LNZ
Lenzing — H1 2021 Earnings Presentation
48 slides from Lenzing's earnings presentation, Aug 4, 2021
Slide 1: Lenzing Investor Presentation Results 01-06/2021
Lenzing Investor Presentation Results 01-06/2021 August 4, 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 H1-2021 financial results Outlook and guidance 2021 ● Revenue of EUR 1,033 mn (EUR 810 mn in H1-2020) ● Positive environment still characterized by high level of uncertainty regarding COVID-19 pandemic ● Specialty share1 reached 73 % (72 % in H1-2020) ● Taking into account the above fact
Slide 4: Highlights
Highlights www.lenzing.com
Slide 5: New organizational structure to further increase efficiency and transparency
New organizational structure to further increase efficiency and transparency Division Fiber Division Pulp CEO CFO Board Member Fibers Board Member Fibers Board Member Pulp Stefan Thomas Robert Stephan Christian Doboczky Obendrauf van de Kerkhof Sielaff Skilich New organizational structure – division
Slide 6: Sustainability pressure on synthetic fibers further increasing
Sustainability pressure on synthetic fibers further increasing February 2021 June 2021 Fossil Fashion: hidden reliance of fast fashion Synthetics Anonymous: fashion brands’ addiction to on fossil fuels fossil fuels ● Fashion industry relies ● Investigation of behaviour heavily on use of cheap of fas
Slide 7: Lenzing continues to invest globally in its sustainability agenda
Lenzing continues to invest globally in its sustainability agenda Grimsby (UK) Purwakarta (Indonesia) and Nanjing (China) ● Building state-of-the-art wastewater treatment plant ● Improvements of emissions to air and water and increase use of biogenic fuels in Purwakarta by end of 2022 ● Investment o
Slide 8: Lenzing raises bar for sustainability by building long-term partnerships
Lenzing raises bar for sustainability in textile and nonwovens industries by building long-term partnerships TENCEL™ Limited Edition initiative Lenzing and Södra are joining Blockchain-enabled traceability forces in textile recycling platform powered by ● Collaboration with Orange Fiber as TextileGe
Slide 9: TENCEL preference with key brand initiatives
Lenzing further drives sustainability awareness in textiles and TENCEL™ preference with key brand initiatives TENCEL™ at the Oscars Earth Month campaign TENCEL™ E-shop ● 341mn reach ● 28mn reach ● 20mn PR reach ● 60 co-brand partners ● 8 brand partners incl. Levi’s, H&M, Esprit, West Elm www.lenzing
Slide 10: VEOCEL as sustainable alternative and label of trust
Lenzing welcomes EU in fighting against plastic waste by positioning VEOCEL™ as sustainable alternative and label of trust Single-Use Plastics Directive Lenzing‘s VEOCEL™ fibers as sustainable alternative ● Guidelines of the EU Commission to implement the Single- ● Lenzing’s wood-based, biodegradabl
Slide 11: Attractive alternative to fossil-based materials in personal hygiene
Lenzing with attractive alternative to fossil-based materials in personal hygiene and raising attention to biodegradability VEOCEL™ Dry technology Collaboration with One Tree Planted VEOCEL™ biodegradability & ● Eco-responsible alternative to fossil- Science@Home ● 1.3+MM impressions based materials
Slide 12: Platinum status with EcoVadis – top 1% companies
Leading sustainability position reflected by Platinum status with EcoVadis – reserved for the world’s top 1% companies • World’s largest and most trusted provider of corporate sustainability ratings • Global network of more than 75,000 rated companies in 160 countries worldwide • Lenzing awarded pla
Slide 13: Market update
Market update www.lenzing.com
Slide 14: Global apparel retail sales at 2019 levels
Global apparel retail sales at 2019 levels and at least partly decoupled from rising Covid-19 cases Monthly global apparel retail sales1 Percent of 2019 10 Further development dependent on 0 many variables and uncertainty remains high -10 ● Development of Covid-19 cases, new virus variants, and vacc
Slide 15: Fiber prices reflect seasonality and ongoing pandemic
Fiber prices reflect influences of seasonality and the ongoing pandemic on important markets Fiber prices in China Viscose Polyester Cotton USD/kg, excl. VAT Cotton FE Dissolving hardwood pulp • Good demand – especially for imported cotton in China, and expectation of 2.25 further procurement by Chi
Slide 16: Numerous Chinese VSF plants make losses again
Numerous Chinese VSF plants make losses again RMB/ton RMB/ton USD/ton (incl. VAT) VSF1 price trend and theoretical profit / loss in China (excl. VAT) VSF2 conversion margin 16,000 3,500 1,400 15,000 2,500 1,200 14,000 1,500 13,000 1,000 12,000 500 800 11,000 -500 10,000 600 -1,500 9,000 8,000 -2,500
Slide 17: Cellulosic fiber prices are recovering from trough in 2020
Cellulosic fiber prices are recovering from trough in 2020 Cellulosic fiber prices in China1 6-months average, percent from 1/17, converted at constant FX rates 120 110 CC Index 100 Lenzing specialties1 90 VSF (TX) CCF high 80 70 60 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-
Slide 18: Expansion projects
Expansion projects www.lenzing.com
Slide 19: DWP mill in Brazil remains on time and in budget
DWP mill in Brazil 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 A
Slide 20: Overview
Overview www.lenzing.com 03/08/21 - 20
Slide 21: Recovery and Biomass boilers
Recovery and Biomass boilers Recovery Boiler Biomass Boiler Power Room www.lenzing.com 03/08/21 - 21
Slide 22: Effluent Treatment
Effluent Treatment www.lenzing.com 03/08/21 - 22
Slide 23: Wood handling
Wood handling Biomass silo www.lenzing.com 03/08/21 - 23
Slide 24: 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 Project fully on track – incl. recruiting and onboarding ● Ramp-up expected end of 2021 ● Fully ramped by H2-2022 ●
Slide 25: Overview
Overview Fiber warehouse Production building DWP warehouse Waste water treatment Utilities plant Techn. warehouse / laboratory / workshop www.lenzing.com 03/08/21 - 25
Slide 26: Production building
Production building www.lenzing.com 03/08/21 - 26
Slide 27: Technical warehouse / laboratory / workshop
Technical warehouse / laboratory / workshop www.lenzing.com 03/08/21 - 27
Slide 28: Utilities plant
Utilities plant www.lenzing.com 03/08/21 - 28
Slide 29: Q2-2021 Financials
Q2-2021 Financials www.lenzing.com
Slide 30: P&L – Revenue
P&L – Revenue Group revenue (EUR mn) Fiber revenue by application Specialties share of fiber sales +28% 1,033 27% 27% 33% 32% 31% 39% 53% 810 +58% 544 73% 73% 489 67% 68% 69% 438 61% 344 385 47% Q1/2021 Q2/2021 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 H1/2020 H1/2021 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q
Slide 31: P&L - EBITDA
P&L - EBITDA EBITDA margin EBITDA margin 7.7 % 11.1 % 12.3 % 19.3 % 22.7 % 11.8% 21.1% EUR mn EUR mn +366% +128% 123.2 217.8 94.5 53.9 95.6 42.9 26.5 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 H1/2020 H1/2021 EBITDA EBITDA www.lenzing.com 03/08/21 - 31
Slide 32: P&L - EBIT
P&L - EBIT EBIT margin EBIT margin 2.0% 13.4% (3.9) % 1.0 % 3.1 % 11.3 % 15.4 % EUR mn EUR mn +745% 83.5 138.9 55.4 13.7 3.7 16.4 (13.4) H1/2020 H1/2021 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 EBIT EBIT www.lenzing.com 03/08/21 - 32
Slide 33: P&L - Divisions
P&L - Divisions EBITDA per Division H1 2021 18.8 % 23.5 % 21.1 % EUR mn -32 218 79 171 Fiber Pulp Other1 Group ● Management and control of Lenzing’s activities has been updated and organized into new divisions: Pulp, Fiber, and Other www.lenzing.com 03/08/21 - 33 1) Incl. consolidation
Slide 34: P&L – Net profit and earnings per share
P&L – Net profit and earnings per share EPS1 (EUR) EPS1 (EUR) (0.78) (0.16) 0.34 1.06 2.00 0.06 3.06 EUR mn EUR mn 53.1 81.2 28.1 9.0 (4.3) 1.5 (20.7) H1/2020 H1/2021 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Group net profit after minorities and hybrid bond Group net profit after minorities and hybri
Slide 35: Cash flow and trading working capital development
Cash flow and trading working capital development EUR mn 111.5 115.1 EUR mn 84.3 88.3 62.9 43.5 +9% 25.1 19.5 435.6 438.7 413.2 3.7 383.8 380.5 31.7 28.5 (49.6) 21.9 19.4 19.0 (99.0) (125.3) (153.9) Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 (179.0) (175.1) Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Tradi
Slide 36: Balance sheet metrics
Balance sheet metrics Change EUR mn According to IFRS (EUR mn) 30 Jun 20215 31 Dec 20205 in % Total assets 4,700.8 4,163.0 12.9 823 787 Liquid assets3 1,076.2 1,081.1 (0.5) 701 701 706 Total liabilities 2,641.9 2,281.6 15.8 thereof financial liabilities 1,782.0 1,552.5 14.8 572 Adjusted equity4 2,08
Slide 37: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 38: Outlook
Outlook 2021 guidance: Lenzing Group expects the EBITDA in 2021 to reach at least a level of EUR 360 mn ● Currently positive market environment still characterized by high level of uncertainty regarding the COVID-19 pandemic ● Commodity fiber pricing peaked mid March, stable after phase of decline ●
Slide 39: 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 03/08/21 - 39
Slide 40: 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 41: for your attention!
for your attention! www.lenzing.com
Slide 42: Appendix: H1-2021 detailed financials
Appendix H1-2021 detailed financials www.lenzing.com
Slide 43: H1-2021: Quarterly P&L development
H1-2021: Quarterly P&L development1 Change Change Change (EUR mn) Q2/2021 Q1/2021 Q2/Q1 (%) Q2/2020 Q2/Q2 (%) H1/2021 H1/2020 H1/H1 (%) Revenue 544.0 489.3 11.2 343.9 58.2 1,033.3 810.2 27.5 Cost of sales (389.7) (368.8) 5.7 (309.6) 25.9 (758.5) (685.1) 10.7 Gross profit 154.3 120.6 28.0 34.3 349.4
Slide 44: H1-2021: Quarterly topline breakdown
H1-2021: Quarterly topline breakdown (EUR mn) H1/2021 Wood-based cellulosic fibers 880.8 Co-products of fiber production 25.1 Mechanical and plant engineering, engineering services and others 5.6 Division Fiber 911.5 Pulp 65.8 Biorefinery-products and energy 36.3 Wood and other 17.1 Division Pulp 11
Slide 45: H1-2021: Quarterly cash flow development
H1-2021: Quarterly cash flow development Change Change Q2/Q2 Change (EUR mn) Q2/2021 Q1/2021 Q2/Q1 (%) Q2/2020 (%) H1/2021 H1/2020 H1/H1 (%) Gross cash flow (before taxes and interest) 139.9 95.0 47.2 29.8 370.0 234.9 82.3 185.3 Taxes and interest (24.7) (10.7) 131.7 (4.7) 431.0 (35.4) (18.5) 91.8 G
Slide 46: Q2-2021: Net debt bridge
Q2-2021: 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 2021 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2021 Change in total working capital EUR (25.1) mn3 572.4
Slide 47: H1-2021: Net debt bridge
H1-2021: Net debt bridge Net Cash Net Financial Capex2 Change Financial Debt FY Net (incl. Fin. in Trading Change in Currency IFRS 16 Capital Debt Q2 2020 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2021 Change in total working capital EUR 1.3 mn3 471.4 26.
Slide 48: 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,