Lenzing Group reports first quarter results for 2014. The first quarter of 2014 for the Lenzing Group was characterized by the steady erosion of selling prices for man-made cellulose fibers against the backdrop of the ongoing strong volume demand. Lenzing is doing its best to counteract the difficult market conditions thanks to a new record volume of fiber sales and the speedy implementation of the cost optimization program excelLENZ. Nevertheless, these measures were not sufficient to prevent a considerable decline in sales and earnings. Consolidated sales amounted to EUR 451.7mn in the first quarter of 2014, comprising a drop of 9.0% from EUR 496.5mn Q1 in 2013. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to EUR 46.3mn in the first quarter of 2014, down 30.2% from EUR 66.3 million in the previous year, corresponding to an EBITDA margin of 10.2% (Q1 2013: 13.4%).
Earnings before interest and tax (EBIT) fell 52.3% to EUR 16.7mn compared to the good comparative level of EUR 35.1mn in the first quarter of 2013. This comprised an EBIT margin of 3.7% (Q1 2013: 7.1%). The profit for the period amounted to EUR 7.7mn, a drop of 63.1% from the prior-year figure of EUR 20.9mn. Adjusted Group equity as of the end of March 2014 rose to EUR 1,118.2mn, corresponding to an adjusted equity ratio of 46.6% of total assets (December 31, 2013: 45.5%). The net financial debt was reduced to EUR 500.4mn. Cost optimization program exceeds targets "Market headwinds remain strong, but we are making every effort to vigorously stand up against these unfavorable conditions with a broad range of countermeasures. Our comprehensive cost optimization program excelLENZ is having a positive impact, and already became fully effective in the course of the first quarter of the year", explains Chief Executive Officer Peter Untersperger. "In spite of the latest round of wage and salary increases, personal expenses could be pruned by 9.5% in the first three months of the year. Material costs were significantly reduced on the basis of process optimization steps and efficiency improvements. In the future we will be more streamlined and in a position to act more quickly and react more effectively to market developments, and thus be positioned as a considerably more cost-optimized company thanks to a large number of organizational and operational improvements," says a confident Peter Untersperger. Click here to view full results.
