EANS-Adhoc

Lenzing AG / Restructuring and Staff Reductions in the Corporate Business Areas Engineering, Maintenance and Lenzing Technik as well as Repositioning of Lenzing Technik

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Strategic management decisions/Company Information
28.11.2014

The Lenzing Group is resolutely and systematically counteracting the
ongoing difficult market conditions in the global fiber industry on
the basis of its cost optimization program as it reported on the
occasion of publishing its business results for the first three
quarters of 2014. The organizational optimization measures launched
one year ago at all sites and in all business areas are having a
positive impact. The results achieved up until now are encouraging
but by far insufficient to offset the decline in viscose fiber
selling prices on the international marketplace.

Lenzing continues to anticipate good volume demand for all man-made
cellulose fibers. However, fiber selling prices on the global market
are not expected to recover in upcoming quarters. This development is
also attributable to the substantial decline in polyester fiber
prices as a result of the massive oil price decrease, and the
expected longer-lasting period of low or at least volatile cotton
prices as a consequence of the surplus supply of Chinese cotton.

For these reasons, the Lenzing Group will not implement any major new
projects at the Lenzing site or abroad in the foreseeable future
which are designed to expand its viscose fiber production capacities.
The investment volume of the company will be adjusted to reflect the
current market situation and will be significantly reduced in the
subsequent years. This should contribute to improving the supply
situation on the international viscose fiber market, which the
company would like to sustainably profit from in its role as one of
the world's largest producers.

Due to the successful completion of the new TENCEL® fiber plant in
Lenzing and the reduced investment volume, technical planning and
production capacities cannot be maintained at current levels,
especially at the Lenzing site. This necessitates a reorganization of
Lenzing's internal engineering and maintenance business areas and its
subsidiary Lenzing Technik GmbH. Organizational structures in these
areas have to be adjusted to future requirements.

All in all, the restructuring measures will impact up to 250 jobs
(including one-third temporary staff), mainly at the Lenzing site.
The distribution of the job cuts among the various sites will be
determined by the beginning of 2015 within the context of a project
which is already under way. In this connection, Lenzing will try to
avoid layoffs and strive to reach a mutually acceptable solution with
the affected employees as it succeeded in doing within the context of
the first cost optimization program. During initial talks on this
issue held with the Lenzing Works Council, Lenzing agreed to extend
the current redundancy program (social plan) and to offer the
possibility for employees newly affected by the downsizing to
transfer to the Lenzing Labor Foundation.

At the same time, Lenzing is working on a strategic reorientation of
its subsidiary Lenzing Technik GmbH to enable it to focus more
strongly on the external market in the future.

Further inquiry note:
Lenzing AG

Mag. Angelika Guldt

Tel.: [phone]

Fax: [phone]

mailto:[e-mail]

end of announcement euro adhoc
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issuer: Lenzing AG

A-A-4860 Lenzing
phone: [phone]
FAX: [phone]
mail: [e-mail]
WWW: http://www.lenzing.com
sector: Chemicals
ISIN: AT0000644505
indexes: WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien
language: English