In the first nine months of 2016, the Lenzing Group significantly increased sales and earnings compared to the same period of the previous year. Significant improvements in cash flow and thus a reduction in net debt are the basis for further investments and the implementation of the sCore TEN strategy.
Compared to the first three quarters of 2015, the group's sales revenues rose by 8.2 percent to EUR 1578.4 million, mainly due to higher sales volumes for all three fiber generations – Viscose, Modal and TENCEL – and the more attractive product mix. In the third quarter, the sharp rise in prices for Viscose boosted the results.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 52.2 percent to EUR 320.6 million in the first nine months. This led to a higher EBITDA margin of 20.3 percent compared to 14.4 percent in the comparable period. Operating profit (EBIT) almost doubled to EUR 221.7 million and brought the EBIT margin to 14 percent (after 7.7 percent). Earnings before taxes (EBT) rose by 84.2 percent to EUR 207.1 million and the result for the period of EUR 162.1 million was 91.1 percent higher than in the comparable period. Earnings per share rose by 84.6 percent to EUR 5.98.
The good business development led to a doubling of cash flow from operating activities to EUR 374.9 million in the first nine months of 2016. In addition to the very good operating result, it was mainly the successful management of working capital, which resulted in a sharp increase in cash positions allowed. This resulted in improved balance sheet ratios. At the end of September 2016, net financial debt was returned to EUR 64.2 million (after 327.9 million at the end of 2015). Net gearing fell from 26.9 percent to 4.9 percent by the end of September 2016.
The strong balance sheet structure supports the investments initiated by the Lenzing Group on the basis of the sCore TEN strategy. At the Heiligenkreuz, Lenzing and Grimsby sites, the production of special fibers is expected to reach 35,000 tonnes per year Year. In addition, pulp production in Lenzing and Paskov will be modernized and expanded by EUR 100 million by 2019, creating additional capacities of around 35,000 tonnes per year.
"The Lenzing Group is implementing the sCore TEN strategy with great discipline and the very good business development has further improved our balance sheet structure," says Stefan Doboczky, Chairman of the Management Board of Lenzing AG. "The past nine months have strengthened our confidence in further business development and are an excellent foundation for implementing our ambitious growth program," he added