EANS-Adhoc

Lenzing AG / Sales and Earnings Decline in 2013 - Countermeasures Well Underway

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annual result/annual report
21.03.2014

-Ongoing good volume demand, new record sales volumes -Unsatisfactory
earnings situation due to very weak fiber selling prices -Initial
effects of cost optimization measures already have a positive impact
in H1 2014

The business development of the Lenzing Group in 2013 was
characterized by the continuation of good volume demand, new record
shipment volumes and full capacity utilization against the backdrop
of extremely weak fiber selling prices. Lenzing has moved to
counteract this situation on the basis of a comprehensive cost
optimization program, a marketing offensive for specialty fibers,
adjustments made to the business strategy in order to minimize risk
and an optimized organizational structure in the Group.

Consolidated sales[1]in the 2013 financial year fell by 8.7% from EUR
2.09 bn to EUR 1.91 bn, which can be attributed to the drop in fiber
selling prices, which declined by 13% year-on-year to EUR 1.70 per
kilogram, as well as the divestment of the Business Unit Plastics.
Moreover, there was a loss of external sales totaling EUR 61.8 mn as
a consequence of the complete conversion of the Paskov pulp plant in
2013 from paper to dissolving pulp which is used within the Lenzing
Group.

Consolidated earnings before interest, taxes, depreciation on
property, plant and equipment and amortization (EBITDA)[2]totaled EUR
225.4 mn, down from the adjusted figure of EUR 352.4 mn in 2012[3])
but in line with the most recently published guidance for the year.
The EBITDA margin amounted to 11.8%, compared to the adjusted level
of 16.9% in the previous year. Consolidated earnings before interest
and taxes (EBIT)[4]amounted to EUR 86.4 mn in the 2013 financial
year, compared to the prior-year level of EUR 231.5 mn (adjusted).
The EBIT margin was 4.5%, down from the adjusted figure of 11.1% in
2012.

Comprehensive countermeasures "We assume that the difficult market
environment will continue in 2014 and perhaps far into the year 2015.
For this reason, we have implemented timely and comprehensive
countermeasures", explains Peter Untersperger, Chief Executive
Officer of Lenzing. "We are massively reducing costs at the same time
adding impetus to the marketplace by promoting our specialty fibers
TENCEL® and Lenzing Modal®. Our market and quality offensive is being