Lenzing Ag · VIE:LNZ
Lenzing — Q1 2023 Earnings Presentation
36 slides from Lenzing's earnings presentation, May 3, 2023
Slide 1: Lenzing Investor Presentation Results 01-03/2023
Lenzing Investor Presentation Results 01-03/2023 – May 03, 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: The targeted comeback year 2023 started as expected
The targeted comeback year 2023 started as expected Key developments & strategic highlights ● First signs of demand recovery accompanied by raw material and energy cost decreases ● EUR > 70 mn cost reduction program remains well on track ● Successful production start of TENCEL™ Modal fibers in Lenzi
Slide 4: New lyocell plant and DWP mill strengthen Lenzing's foundation
New lyocell plant and DWP mill strengthen Lenzing’s foundation Fully invested and up- and running capacity expansions 100 kt lyocell plant in Thailand 500 kt single line DWP mill in Brazil1 ● On track to contribute ● On track to contribute to 2023 results to 2023 results 1) JV with Dexco www.len
Slide 5: Lenzing now offers locally produced TENCEL modal fibers to Chinese customers
Lenzing now offers locally produced TENCEL™ branded modal fibers to Chinese customers for the first time Nanjing (China) ● Conversion of a production line from generic viscose to TENCEL™ branded modal fibers for textiles and clothing successfully completed in March 2023 ● Lenzing now offers its Chin
Slide 6: Lenzing speeds up energy transition at its site in Heiligenkreuz
Lenzing speeds up energy transition at its site in Heiligenkreuz, supporting its overall sustainability strategy Heiligenkreuz (Austria) ● Lenzing acquires biomass plant for energy supply of lyocell production site Heiligenkreuz in April 2023 ● Dependence of fossil energy expected to significantly d
Slide 7: Market update
Market update www.lenzing.com
Slide 8: Energy and NaOH cost came further down but remain elevated vs. 2022
In Q1 2023 energy and NaOH cost came further down but remain elevated vs. 2022 especially in Europe Development of selected energy and NaOH market prices, 2020-Q1/2023 Indexed, Q1 2020 = 100 Energy prices NaOH prices 2,250 500 2,000 1,750 400 NaOH Europe 1,500 300 1,250 1,000 200 NaOH Southeast Asia
Slide 9: Six-months expectations in the textile industry are positive
Six-months expectations in the textile industry are positive and in line with January 2022 sentiment TX industry sentiment by survey date, balance index Percent of respondents, balance between good vs. poor Current situation Expectations in 6 months Six months expectations are in 40 36 line with Jan
Slide 10: Chinese VSF production normalized, inventories came down
Chinese VSF production normalized, inventories along the VSF value chain came down to – or even below – long-term averages Operating rates VSF China Viscose chain inventories1 in China % Days 90 35 85 30 80 VSF Yarn 75 25 Fabric 70 5-yr Ø VSF 20 5-yr Ø yarn 65 5-yr Ø fabric 60 15 55 50 10 1/22 4/22
Slide 11: Financials
Financials www.lenzing.com
Slide 12: Revenue increased to EUR 623 mn and EBITDA reached EUR 30 mn
Revenue increased to EUR 623 mn and EBITDA reached EUR 30 mn Group revenue in EUR mn EBITDA in EUR mn +1% Revenue split Q1/2023 -66% 679 677 101 615 623 88 (15%) 596 (14%) 74 26% (11%) 30 (5%) 74% -21 Fiber Pulp Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 (-4%) Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 ww
Slide 13: EBIT at EUR -41 mn
EBIT at EUR -41 mn EBIT in EUR mn Group net profit after minorities and hybrid bond, in EUR mn EPS in EUR 0.87 1.49 -0.20 -4.91 -3.03 44 52 (7%) (8%) 17 (3%) 8 40 7 -65 23 -80 Lenzing Hybrid Non- Net loss -41 -5 shareholders capital controlling (-7%) -96 owners interests -80 (-16%) -130 Q1/2022 Q2/2
Slide 14: Capex in Q1 2023 down to EUR 85 mn
Capex in Q1 2023 down to EUR 85 mn after finalization of plants in Thailand and Brazil in 2022 Free cash flow1, in EUR mn Trading working capital3, in EUR mn • Inventory levels significantly reduced in Q1 2023 with 80 636 reduction of volumes, impact 20 partially offset by valuation 567 568 571 -64
Slide 15: Liquidity cushion remains stable at EUR 640 mn
Liquidity cushion remains stable at EUR 640 mn Net financial debt, in EUR mn Balance sheet metrics Change According to IFRS (EUR mn) 31 Mar. 2023 31 Dec. 2022 in % 1,986 Total assets 5,492.0 5,525.0 (0.6) 1,869 1,714 Liquid assets3 441.7 453.3 (2.5) 1,502 Total liabilities 3,547.8 3,499.1 1.4 1,481
Slide 16: Measures to reduce costs and secure liquidity are well on track
Measures started 2022 to further reduce costs and secure liquidity are well on track Global program to define and implement cost reduction measures well under way Cash effective ● Reorganization and cost savings program with annualized and recurring impact of EUR > 70 mn on track savings ● Full impa
Slide 17: Outlook
w.lenzing.com Outlook e | Lenzing Innovative by nature
Slide 18: First signs of recovery in Q1 2023, further improvements in Q2-Q4 expected
After the “perfect storm” built up in H2 2022, first signs of recovery in Q1 2023, further improvements in Q2-Q4 expected H2 2022 – a “perfect storm” in H2 2022 Q1 2023 Expected Q2-Q4 2023 • Declining – but still elevated • Unprecedented increase in raw • Costs are expected to further - energy and r
Slide 19: Apparel brands confirm positive expectations for market recovery in 2023
Apparel brands confirm positive expectations with regards to market recovery in 2023 Quotes from selected apparel brands Company Date Quotes on 2023 outlook "We definitely see a good tendency when it comes to how the spring collections are received. March 30, H&M Group February and March are quite v
Slide 20: Lenzing confirms 2023 EBITDA expectation of EUR 320-420 mn
Lenzing confirms expectation of EBITDA in 2023 to be in the range of EUR 320 mn - 420 mn Lenzing expects improving operating performance leading to increased EBITDA for Q2-Q4 2023 ● First signs of demand recovery accompanied by raw material and energy cost decreases in Q1 2023 ● Whilst visibility re
Slide 21: Positive prospects ahead
Positive prospects ahead www.lenzing.com
Slide 22: Cellulose gap and sustainable fiber gap remain key drivers
Cellulose gap and sustainable fiber gap expected to remain unchanged key drivers for the future Expected long-term growth rates p.a., % >20% ~3% ~4-6% ~1% ~2-3% Population Fiber market GDP Wood-based Lyocell cellulosic fibers ● Global fiber demand expected to continue its long-term growth trajectory
Slide 23: Textiles market comes back stronger after crises
History has shown that textiles market comes back stronger after crises Setbacks of global fiber demand over the last 60 years Global fiber demand, 1960-20221 Covid-19 Million tons pandemic 120 Global Financial 100 Crisis 80 Asian Financial Early 90s Crisis 60 Early 80s Recession Oil Crisis Recessio
Slide 24: Conclusion: Positive prospects remain unchanged, 2023 the comeback year
Conclusion: Positive prospects for Lenzing remain unchanged, 2023 targeted to be the comeback year Prospects remain positive 2024+ The comeback year 2023 ● Strong position to tackle megatrends of sustainability and circularity ● Demand recovery expected in the course of ● Specialty fibers forecasted
Slide 25: Thank you for your attention!
for your attention! www.lenzing.com
Slide 26: Backup
w.lenzing.com Backup e | Lenzing Innovative by nature
Slide 27: Group revenue breakdown
Group revenue breakdown Fiber revenue by application, % Specialties share of fiber sales in Q1 2023 Standard Fibers 32% 32% 37% 41% 35% 23% 68% 68% 63% 59% 65% 77% Specialty Fibers1 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Textile fibers Nonwoven fibers 1) LENZING™ Lyocell, LENZING™ Modal, LENZING™ S
Slide 28: Quarterly P&L development
Quarterly P&L development Delta Q1 % MEUR Q1 2023 Q1 2022 Delta Q1 YoY YoY Revenues 623,1 615,0 8,1 1,3% Cost of Sales -562,0 -486,1 -75,9 15,6% % of Revenue -90,2% -79,0% Gross Profit 61,1 128,9 -67,8 -52,6% % of Revenue 9,8% 21,0% Selling Expenses -65,8 -65,0 -0,8 1,3% % of Revenue -10,6% -10,6% A
Slide 29: Topline Breakdown Q1 2023 vs Q1 2022
Topline Breakdown Q1 2023 vs Q1 2022 Revenue from external customers by products and services EUR mn 01-03/2023 01-03/2022 Wood-based cellulosic fibers 440.0 513.5 Co-products of fiber production 14.1 14.8 Mechanical and plant engineering, engineering services and others 9.1 4.0 Division Fiber 463.2
Slide 30: Quarterly cash flow development
Quarterly cash flow development Change Change (EUR mn) Q1/2023 Q4/2022 Q1/Q4 (%) Q1/2022 Q1/Q1 (%) Gross cash flow (after taxes and interest) (55.8) (3.4) - 86.0 - Change in total working capital1 8.1 (74.6) - (6.3) - Operating cash flow (47.7) (78.0) (38.9) 79.7 - Investment cash flow2 (84.6) (166.
Slide 31: Q1 2023: Net debt bridge
Q1 2023: 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 2022 Tax Interest Gross CF 1 Ass.) WC other WC Dividend Translation Leasing Increase Others 2023 1,869.0 1,986.2 Change in total working capital EUR 8
Slide 32: Balance sheet structure and return on capital employed
Balance sheet structure and return on capital employed Balance sheet positions, in EUR mn EUR 5,492 mn 1,944.2 Equity 3,583.5 PP&E1 2,427.9 Financial liabilities 640.9 Inventories 325.7 Trade receivables 334.7 Trade payables 434.8 144.1 Cash and equiv. Provisions 507.1 Others 641.1 Others Assets Lia
Slide 33: Many macro indicators support further positive development
While starting from a low level, many macro indicators support further positive development Macro growth IMF adjusted its 2023 global GDP forecast to now +2.8 % YoY Textile industry In March survey, global textile industry business expectations further sentiment improved after turnaround in January
Slide 34: Fiber and pulp prices oscillated in a narrower range
After heavy swings in the previous year, fiber and pulp prices oscillated in a narrower range Fiber prices in China USD/kg, excl. VAT Viscose Viscose Cotton Polyester Dissolving hardwood pulp • Chinese VSF market focused on domestic demand due to the 4.00 disappointing performance of foreign markets
Slide 35: Cotton price down after last year's spike
Cotton price down after last year's spike, Lenzing specialties similar to other cellulosics Cellulosic fiber prices in China 6-months average, percent from January 2017, converted at constant FX rates 160 150 140 130 120 Lenzing specialties1 110 CC Index 100 90 VSF (TX) CCF high 80 70 60 1/17 7/17 1
Slide 36: 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