EANS-Adhoc: Lenzing AG
Difficult first quarter for the Lenzing Group
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quarterly report
08.05.2009
Difficult first quarter for the Lenzing Group
Global economic decline burdens fiber industry
The decline of the global economy, triggered by the financial crisis, has massively affected the world fiber industry, too. The sales and results figures of the Lenzing Group for the first quarter of 2009 reflect this process. In comparison to the excellent result of last year´s first quarter, consolidated quarterly sales dropped by 18.1%, from EUR 346.8 mill. to EUR 284.0 mill. The dramatic collapse of fiber prices, particularly in Asia, and lower quantity sales were the main reason for this development. The fiber prices of the first quarter 2008 had been above the annual average, the decline is therefore particularly pronounced: compared to the fourth quarter of 2008 sales only dropped by about 10%.
First quarter EBIT came to minus EUR 1.9 mill. (2008: plus EUR 42.1 mill.). Increased interest expenses and highly volatile currency markets resulted in a financial result of minus EUR 4.6 mill. (2008: minus EUR 3.6 mill.) and EBT of minus EUR 6.5 mill. (2008: plus EUR 38.5 mill.) and a net loss attributable to the shareholders of Lenzing AG of EUR 3.6 mill. (2008: net attributable income EUR 26.5 mill.). Earnings per share fell to minus EUR 0.98 (2008: plus EUR 7.22).
Peter Untersperger, chairman of the Lenzing management board comments on the current situation "The recession already left a very clear mark on the fourth quarter of 2008 and this negative trend has become even more pronounced with the beginning of 2009. The Lenzing Group could not defy this situation, either. But precisely in this environment Lenzing will maintain its position as a solid and reliable supplier and partner, a fact that is very much appreciated by our customers. It is a strategy that currently gains market share for Lenzing fibers in a recessive climate and from which we will benefit with the next economic upswing."
The period EBIT margin came to minus 0.7% (2008: 12.1%) and the EBITDA margin to 6.0% (2008: 17.2%). The Group at the reporting date, 31 March 2009, employed a staff of 5,824 (31 December 2008: 5,945). The decline is mainly attributable to structural changes in Segment Plastics.
Business Units Textile Fibers and Nonwoven Fibers
The first weeks of 2009 brought a decline in fiber prices which was in part dramatic. Lenzing production capacity had to be adjusted to market demand, in particular in Asia, with the turn of the year due to the difficult market situation. Full production shut-down, as implemented by some competitors, was not considered an option. The general fiber price level and quantity demand showed tentative signs of consolidation by the end of the first quarter. Nonwovens report slightly rising sales volumes after a steep decline. Here too, however, the price level is very low.
Segment Plastics was considerably affected by the general decline of the European economy, despite lower raw material prices. The segment immediately adapted production to the difficult market situation. Short work hours had to be introduced at some German sites. The US demand for special products, on the other hand, remained fairly stable.
Segment Engineering reached its set business targets for the first quarter.
Outlook
The year 2009 will be a difficult and volatile business year for the Lenzing Group, in particular in view of the further marked decline of the global economy in the first months of 2009. Domestic demand in western industrialized nations remains weak. There are first signs of quantity demand in business sector fibers firming up. There is, however, no indication to which extent this will lead to sustainable stabilization. Prices remain at absolutely unsatisfactory levels and margins are depressed. The global market situation remains uncertain, highly volatile and currently unpredictable.
As unsatisfactory is the situation for Segment Plastics. The recent easing of raw material prices and the expected comprehensive spending by the public sector may have positive impact on the construction industry and by implication the business development of Lenzing Plastics. Due to good order bookings, Segment Engineering expects a stable development of its business.
Further cost optimization and savings potential in the double-digit million euro range will be realized in all business units and at all sites, in production as well as in sales and administration. Segment Plastics will press ahead with optimizing its products and restructuring its organization.
Business development is expected to recover slightly at a low level with the end of the second half-year 2009, provided the global economy becomes less volatile and provided that the perceptible stabilization of demand will endure throughout the summer months.
Consolidated company key figures (IFRS)
in EUR mill. 1-3/2009 1-3/2008
Sales 284.0 346.8
EBITDA 16.9 59.6
EBIT -1.9 42.1
EBT -6.5 38.5
Net income attributable to shareholders -3.6 26.5
EBITDA margin in % 6.0 17.2
EBIT margin in % -0.7 12.1
Gross cash flow 12.6 40.1
Investment in property, plant and
equipment and intangible assets 40.0 28.3
31/03/09 31/12/08
Adjusted equity ratio* in % 42.5 42.7
Staff 5,824 5,945*Equity including government grants less proportionate deferred taxes
end of announcement euro adhoc --------------------------------------------------------------------------------
Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 07672-96301
mailto:a.guldt@lenzing.com
Branche: Chemicals
ISIN: AT0000644505
WKN: 852927
Index: WBI
Börsen: Börse Berlin / free trade
Wiener Börse AG / official dealing
Original content of: Lenzing AG, transmitted by news aktuell