Turnover and profit fall at Lenzing in 2019
2019 revenue at Lenzing Group dropped by 3.3 percent to 2.11 billion euros (2.39 billion dollars), driven by lower selling prices as well as standard fibre volumes. The company said in a statement that due to positive mix effects and more resilient specialty fibre prices, the share of specialty fibres increased from 45.5 percent to 51.6 percent of revenue. The company added that earnings development was largely influenced by the decline in revenue and negative currency effects on material and personnel costs. EBITDA fell by 14.4 percent to 326.9 million euros (369.9 million dollars), while the EBITDA margin declined from 17.6 percent to 15.5 percent. Net profit, at 114.9 million euros (130 million dollars), was 22.4 percent lower than in the previous year, while earnings per share amounted to 4.63 euros compared to 5.61 euros in 2018.
“Lenzing and the entire textile value chain operated in a historically difficult market environment in 2019, which had a negative impact on our revenue and earnings development. The focus on specialty fibres has been contributing to the company’s resilience in the reporting period and we feel very well positioned with our corporate strategy,” said Stefan Doboczky, Chief Executive Officer of the Lenzing Group.
Lenzing aims to achieve 800 million euros EBITDA in 2024
Lenzing further said that the primary focus in the coming years is on the implementation and execution of set climate targets and investment projects in Thailand and Brazil. Lenzing aims to increase the share of high-quality specialty fibres in fibre revenue to 75 percent by 2024 and the share of internally produced pulp to more than 75 percent. In line with its strategic commitment for 2024, Lenzing strives to reduce CO2 emissions per ton of product by more than 40 percent compared with 2017. The EBITDA target for 2024 is 800 million euros.
Lenzing said, the International Monetary Fund expects a slight recovery of global economic growth to 3.3 percent in 2020, while at the same time warning of several risks. The increased frequency of extreme weather events and currently also the coronavirus crisis could have a strong impact on the global economy in 2020. The currency environment in the regions relevant to Lenzing is also expected to remain volatile. The company said, it currently expects the result for 2020 to be below the level of 2019.
The company’s management board will propose a dividend of 1 euro per share for the 2019 financial year, which is equivalent to a total dividend payout of 26.6 million euros.
Picture credit:Lenzing media centre