Lenzing: Recovery in H2/2020 cannot compensat...
Lenzing

Recovery in H2/2020 cannot compensate for losses

Lenzing

Due to the corona crisis, the producer of cellulosic fibers, Lenzing AG, Lenzing/Austria, responded to the extremely difficult market environment by implementing a broad package of measures and remains on track in terms of its strategy. In 2020 sales decreased by 22.4% to € 1.63 billion. The recovery of demand in the 2nd half of 2020 (H2/2020), in particular for wood-based specialty fibers such as Tencel Modal and Lenzing Ecovero, had a positive impact on the development of sales and earnings, but could not offset the losses. EBITDA (Earnings before interest, tax, depreciation and amortization) declined from € 326.9 million in 2019 to € 196.6 million. The EBITDA margin declined from 15.5% to 12%.

The measures focused on protecting Lenzing’s employees and partners and on safeguarding its operations. Lenzing flexibly adjusted production volumes. In addition, Lenzing also intensified measures for structural earnings improvement to mitigate the effect of the pressure on fiber prices and demand, and reduced its operating costs.
Capital expenditure almost tripled in 2020 to € 668.8 million. This increase is a consequence of the implementation of the major projects in Brazil and Thailand. The Lenzing Group’s investment activities continued to focus on expanding the internal production of pulp, increasing the share of specialty fibers and implementing the climate targets in line with the sCore TEN corporate strategy during the reporting year.
The strategic target to generate roughly 50 % of revenue with specialty fibers in 2020 has already been met. The focus of the coming years will clearly be on the construction of the new, state-of-the-art lyocell plant in Thailand, with the objective to increase the share of specialty fibers in the revenue generated by the Segment Fibers to more than 75 % by 2024. The investment for the new plant with a capacity of 100,000 tons amounts to roughly € 400 million. Production is expected to be launched at the end of 2021.

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