The Austrian Lenzing AG, the world reknown producer of cellulose fibres, continues its rapid growth. The company that surpassed the threshold of EUR 2 billion for the first time in its history, expects an increase of 25 percent in 2012. According to the statement made by Lenzing Group, the company completed 2011 with record prices. Although a significant weakening took place in the second half of 2011, Lenzing achieved double-digit growth rayes in sales and earnings. The operating margins of the company increased significantly compared with the figures of 2010.
In 2011, Lenzing’s consolidated sales rose by 21,2 percent to EUR 2,14 billion from EUR 1,77 billion. The developments taking place in the pulp plant Biocel Paskov activated by the company in Czech Republic in 2010, higher fibre shipment volumes and developments in all other business areas helped achieving higher average selling prices. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to EUR 480.3 million, a rise of 45.3% from the comparable figure of EUR 330.6 million in the previous year. Earnings before interest and tax (EBIT) climbed by 56.9% to EUR 364.0 million (2010: EUR 231.9 million). The EBITDA and EBIT margins broke a record in 2011 with 22.4% (2010: 18.7%) and 17.0% (2010: 13.1%) respectively.
‘We’ve Taken a Dynamic Growth Path’
Peter Unterserger, Chief Executive Officer of Lenzing, made statements about the issue and said; “In 2011, we took a dynamic growth path and specialty strategy led by Lenzing Modal and Tencel once again. In the sales of standard viscose fibres, we achieved an increase of 20 percent year-on-year. While selling 30 percent more Tencel fibers compared with the previous years, we sold 40 percent more Lenzing Modal fibers than the prior year.” Untersperger stated that the fibers developed under the namze Lenzing Modal and Tencel are sold to large-scale markets and these two specialty fibers protected the company against the volatile market trends.
Thomas G. Winkler, Chief Financial Officer of the company stated that as Lenzing, they took an important step with the capacity expansion model in 2011. Winkler said that Lenzing Group increased its annual fiber production capacity by 8 percent and added; “Our cellulose fiber production capacity, which amounted to 710,000 tons at the beginning of 2011, increased to 770,000 tons at the end of the year. We continuously increase our capacity with successful policies. However capital expenditure, which was recorded to be EUR 196.3 million in the 2011 financial year, remained below the comparable prior-year figure of EUR 230.0 million. Biocel Paskov, the pulp plant we established in the Czech Republic is the reason for this increase in 2010.”
Debts Deduced by Half
The net financial debt of the Lenzing Group, which left a successful year behind, was reduced by almost half. This figure, which was calculated to be EUR 307.2 million in 2010, declined to EUR 159.1 million at the end of 2011. With an adjusted equity ratio of close to 45% and a net financial debt comprising one-third of annual EBITDA, Lenzing is a company that prepares its financial plans in a systematic way.Lenzing Group will continue the finance growth steps in the upcoming years.
Global Fiber Producion Increases
According to preliminary estimates, global fiber production broke a record with an increase by 4.1%. The fiber production that reached the level of 79.1 million tons, is the highest figure of the recent years. The production of man-made cellulose fibres amounted to 4.6 million tons with an increase of 4.2 percent. It is stated that Lenzing has benefited from this increase. The business development of Lenzing's Segment Fibers enjoyed a significant increase in demand in 2011. The record cotton prices in the first half of the year fuelled this increase. However, in the second half of 2011 some problems occurred in the market for standard textile viscose fibers. The fiber shipment volumes did not play a role in these problems but the selling prices were affected by these problems. In addition to the nonwoven sector, Lenzing Modal and Tencel segments were also affected by this process. Lenzing succeeded in raising average prices for all Lenzing fibers by close to 17% compared to the previous year, to EUR 2.22 per kilogram.
Speaking at the meeting, in which the year-end figures were announced, Chief Operating Officer Friedrich Weninger, Member of the Management Board, said that the production capacities continue to operate at full capacity. Weninger stated that the fiber facilities at China and Burgenland successfully appeal to the market throughout the year. Weninger continued by saying; “The pulp plant Biocel Paskov in the Czech Republic operates in order to ensure further backward integration and to solve the problems. The facility maintains its activities successfully for the future of the company. The facility produced 60,000 tons of dissolving pulp used for fibre production.”
The Aim is to Increase the Sales and Investments in 2012
In the statement made by Lenzing Group, it has been announced that the company set its goals high in 2012 and it will be a successful year for them. However it has been remarked that in terms of margins the current financial year will not be able to fully match the exceptional record year of 2011.
Lenzing emphasized that the demand for textile and nonwoven applications will increase in the first quarter of 2012 whereas the prices for viscose fibers should be stabilized at a low level. The company that anticipates a higher price and demand level in fibers of viscose fiber and cotton blends, aims to increase its sales in 2012.
Lenzing keeps its goal high in 2012. Considering the higher fibre shipment volumes, the company aims to perform sales at level between EUR 2.2 billion and EUR 2.3 billion in 2012. It is expected that EBITDA will range between EUR 400 million and EUR 480 million and EBIT is expected to range between EUR 285 million and EUR 365 million.
Lenzing will continue its investments through its dynamic expansion program as planned, involving investments totalling approximately EUR 350 million in 2012. As a result of The good earnings situation and continued high liquidity, the company is expected to increase its consolidated net income by 25 percent in the 2011 financial year.
