Lenzing Group: substantial earnings increase in the first quarter of 2016
The Lenzing Group generated a substantial increase in earnings in the first quarter of 2016, thus continuing the positive trend that emerged in recent quarterly periods and achieving the best first quarter results since the financial year 2012.
The resolute implementation of the new group strategy sCore TEN is reflected in the company’s strong operating performance.
Consolidated revenue rose by 8.1 percent in the first quarter of 2016 to EUR 512.8 mn compared to the first quarter of 2015. This increase is mainly attributable to the strong demand for Lenzing fibers and the higher fiber selling prices. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose by 54.7 percent to EUR 92.2 mn. This corresponds to an EBITDA margin of 18 percent, up from 12.6 percent in the previous year. Earnings before interest and tax (EBIT) of the Lenzing Group more than doubled to EUR 59.5 mn. Accordingly, the EBIT margin climbed to 11.6 percent from the 5.7 percent of the prior-year quarter. Net profit for the period and earnings per share increased almost threefold to EUR 44.1 mn after EUR 16.6 mn and to EUR 1.63 after EUR 0.66 per share. Lenzing also achieved a close to threefold improvement in its cash flow position. The free cash flow was up from EUR 26.5 mn to EUR 88.4 mn, whereas the operating cash flow rose from 37.6 mn to EUR 104.3 mn.
“We are proud that we have got off to a very good start in the year 2016”, says Stefan Doboczky, Chief Executive Officer of Lenzing AG. “The new Group strategy sCore TEN with its clear focus on profitable growth is taking hold. We are implementing the strategy very disciplined, which is having a noticeable effect on earnings already. Initial progress has also been made in managing our trading working capital. Assuming that the overall business environment remains unchanged, I continue to expect a substantial improvement in earnings for the entire financial year 2016.”
New organizational structure
A new organizational structure was introduced effective March 1, 2016 in order to ensure the optimal implementation of sCore TEN. Three regional, performance-responsible business units were created to more intensively focus on the fiber business in their respective regions: “Europe & Americas”, “North Asia” (China, Japan, Korea, Taiwan and Vietnam) and “AMEA” (Asia excl. North Asia; Middle East and Africa). The three regional business units are complemented by the newly established global “Pulp & Wood” business area. This new organizational structure gives the regions greater management responsibility and further increases customer proximity.
In the picture: Stefan Doboczky, Chief Executive Officer of Lenzing AG.