EANS-News

Lenzing AG / Lenzing Generates Substantial Revenue and Earnings Growth in 2016 - Seite 2

fiber capacities and on sustainability-driven innovation. We look
positively at the year 2017 and expect a considerable earnings
improvement once again provided there is no significant change in the
business environment", he adds.

Further improvement in return on capital, net financial debt close to
zero The value generated by the Lenzing Group improved in 2016 thanks
to the positive earnings development. Accordingly, the return on
capital employed (ROCE) increased to 15.1 percent compared to 8.1
percent in 2015. At the same time, the return on investment (ROI)
rose from 6.3 percent to 11.8 percent.

Lenzing took advantage of its very good business development to
further optimize its balance sheet structure. Adjusted equity
increased by 14.1 percent to EUR 1.39 bn from the prior-year level of
EUR 1.22 bn. Accordingly, the adjusted equity ratio improved to 53
percent (December 31, 2015: 50.6 percent). Net financial debt was
reduced to almost zero, totaling only EUR 7.2 mn at the end of 2016
(December 31, 2015: EUR 327.9 mn).

Further cash flow increase The cash flow from operating activities
more than doubled in 2016 from EUR 215.6 mn to EUR 473.4 mn. This
development was attributable to the stronger business performance, to
higher market prices and slight rise in fiber sales volumes as well
as the company's active working capital management. At the same time,
capital expenditures (CAPEX) of the Lenzing Group climbed to EUR
107.2 mn. Liquid assets at the end of 2016 amounted to EUR 570.4 mn
(2015: EUR 355.3 mn).

Total expenditures for research and development amounted to EUR 46.4
mn in the 2016 financial year (2015: EUR 29.8 mn), putting Lenzing in
the top ranks of the industry both in absolute terms as well as in
relation to revenue. Lenzing intends to further intensify these
efforts in order to sustainably safeguard and expand upon its
innovation leadership in the production of wood-based cellulose
fibers.

Share of specialty fibers up to 42 percent of group revenue Total
fiber sales volumes in 2016 rose 1.4 percent to about 978,000 tons
(2015: 965,000 tons). The share of specialty fibers as a percentage
of total group revenue increased to 42 percent compared to the
prior-year figure of 40.5 percent. The share of standard fibers in
relation to revenue was unchanged at 47 percent, with other business
areas accounting for the remaining revenue. 71 percent of fiber
revenue was generated in the textile fiber business and 29 percent
was derived from nonwoven applications.

2016 was also a year of substantial capital commitments. In total
Lenzing committed EUR 475 mn to further expand its specialty fiber
capacities in Europe and the United States as well as to debottleneck