lenzing investor presentation germany, june 21-22, 2017 · 1) viscose staple fibers, price...
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Lenzing Investor PresentationGermany, June 21-22, 2017
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The information contained in this document has not been independently verified and no representation orwarranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy,completeness or correctness of this information or opinions contained herein.
Certain statements contained in this document may be statements of future expectations and otherforward looking statements that are based on management‘s current view and assumptions and involveknown and unknown risks and uncertainties that could cause actual results, performance or events todiffer materially from those expressed or implied in such statements.
None of Lenzing AG or any of its affiliates, advisors or representatives shall have any liability whatsoever(for negligence or otherwise) for any loss howsoever arising from any use of this document or its contentor otherwise arising in connection with this document.
Certain figures in this presentation have been rounded in accordance with commercial principles andpractice. Such figures that have been rounded in various tables may not necessarily add up to the exacttotal given in the respective table.
Definition and further details on the calculation of financial key indicators can be derived from theManagement Report and the glossary in the Annual Financial Report. This report is also available onlineon the website of the Lenzing Group www.lenzing.com in the section “Investors”.
Disclaimer
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Global fiber market at a glance2016e consumption numbers
1) Incl. bast, flax, hemp, jute, silk and allied fibers2) Wood-based and cotton linter-based cellulose fibers, previously named man-made cellulosicsSource: CIRFS, The Fiber Year, The Fiber Organon, Lenzing estimates
Cellulose- &protein-based
fibers
Cotton24.3%
Synthetic fibers62.7%
Wool1.1%
Other natural fibers1
5.3%
99 mn tons
Wood-basedfibers2
Viscose/Rayon Modal TENCEL® fiber/Lyocell
Wood-basedfibers2 6.6%
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Lenzing – Our mission
“Lenzing is a performance materials company thatturns CO2 and sunlight into highly functional,emotional and aesthetic products across the globe”
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1
1
1) Lenzing brands
1
1
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Lenzing - Market leader in all three fiber generations
TENCEL® fiber, Lenzing Modal® fiber and Lenzing Viscose® fiber are registered trademarks of the Lenzing Group
Market PositionCompetitive
Intensity
# 1 Low
# 1 Medium
# 2 High
Source: Lenzing data, CCFG, CCFEI
Brands
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North Asia37%
AMEA (Asia, MiddleEast and Africa)37%
Europe &Americas
26%
Lenzing is the global leader in wood-based cellulose fibers
Source: Lenzing data as at March 31, 2017
Balanced exposure to matured andemerging markets
Fiber revenue by region
Global network of production sites andsales offices
2016 footprint
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3
3
3
Capacity 20171: A global footprint
ChinaCAGR 0 %
IndonesiaCAGR 0.2%
USACAGR 1.9%
Europe2
CAGR 5.3%
Total capacity at year endCAGR 2.4%
Paskov (CZ)dissolvingpulp capacity
1) Figures are shown in k metric tons; CAGR 2013-2017e2) Includes Lenzing (A), Heiligenkreuz (A) and Grimsby (UK)3) Lenzing brands
Lenzing (A)dissolvingpulp capacity
373
444 444 457 458
406 530 556 570 575
1,013992 995 1,009
Total pulp capacityCAGR 2.1%
50 50 50 51 54
2013 2014 2015 2016 2017e
178 178 178 178 178
2013 2014 2015 2016 2017e
320 320 323 323 323
2013 2014 2015 2016 2017e
659 660 663 666 666
107 110 110 111 112155 222 222 232 235
2013 2014 2015 2016 2017e
921
290 296 297 300 300
240 260 270 270 275
2013 2014 2015 2016 2017e
161 162 162 165 165
107 110 110 111 112
105172 172 181 181
2013 2014 2015 2016 2017e
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Lenzing is the only player with European roots in the viscose staplefibers market1 (2016e)
Source: CIRFS, FEB, Trade statistics, Company estimates
1) Viscose staple fibers (including Modal and TENCEL® fiber), excluding viscose filaments, acetate tow, cigarette filters2) Based on latest available company information from company websites and annual/interim reports3) Fulida Kuerle, Tiantai Xinjiang, Fulida Alaer, Shungquan Manasi
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3
Lenzing
18%
Zhongtai
10%
Birla
17%
Tangshan
9%
Aoyang
5% Sateri
8%
Others
28%
Yamei
5%
Lenzing with 18% share of production
Lenzing
17%
Birla
17%
Zhongtai
9%Tangshan
9%
Sateri
9%
Yamei
5%
Aoyang
5%
Others
29%
Lenzing with 17% share of capacities2
5.9 mn tons5.3 mn tons
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Highlights Q1/2017
Very strong start into the year
Group revenue up 14% to quarterly all-time-high of EUR 586.2 mnprimarily as a result of higher selling prices and an improved product mix
Strong EBITDA improvement by 46.6% to new quarterly all-time-highof EUR 135.1 mn
Lenzing is for the first time net debt free and showed a net liquidity ofEUR 66.5 mn in Q1/2017
Further progressing with sCore TEN strategy
Dr. Heiko Arnold started on May 1, 2017 as new Chief Technology Officer (CTO)
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Financials – Revenue (EUR mn)
+14.3%
41.5%
46.2%
12.3%
Speciality fibers Standard fibers Other business areas
512.8
522.0
543.5
555.7
586.2
Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017
Group revenue
Share of specialty fibersin Q1/2017
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Interfiber price development1
Sources: China Cotton Association, China Chemical & Fiber Economic Information Network, China Chemical Fiber Group
1) Until March 31, 2017
Staple fiber prices - Development in China
0.5
1.0
1.5
2.0
2.5
3.0
3.5
01/2014 04/2014 07/2014 10/2014 01/2015 05/2015 08/2015 11/2015 02/2016 05/2016 08/2016 12/2016 03/2017
Viscose Cotton Polyester
USD/kg (incl. VAT)
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VSF1 price trend and inventory of China
Very strong Q1 viscose price level
VSF capacity change of China since 20102
0
5
10
15
20
25
30
35
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2010 2011 2012 2013 2014 2015 2016 2017
%kt
Capacity Change
1) Viscose staple fibers, price development until March 31, 2017; Source: CCFGroup2) Source: China Chemical Fiber Group - China Viscose Industry Annual / Outlook Report
0
10
20
30
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
01/2014 05/2014 10/2014 03/2015 08/2015 12/2015 05/2016 10/2016 03/2017
yuan/MT
CCF inventory index Medium-grade VSF (incl. VAT)
day
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Financials – Earnings (EUR mn)
23.0%18.0% 19.7% 23.1% 19.4%
EBITDA margin
11.6% 17.5%13.5% 16.9% 13.4%
EBIT margin
92.2102.9
125.5
107.7
135.1
Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017
EBITDA
+46.6%
59.5
70.3
92.0
74.6
102.3
Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017
EBIT
+72.1%
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Financials 2017 – Key figures (EUR mn)
1) Including cash and cash equivalents, liquid securities and liquid bills of exchange2) Including government grants less proportionate deferred taxes on government grants
(875)(801)
(730)(683)
(577)(545)
529
296 280
355
570612
(346)
(505)(450)
(328)
(7)
67-100
0
100
200
300
400
500
600
700
800
900
2012 2013 2014 2015 2016 Q1/2017
Interest bearing financial debt Liquid assetsNet financial debt/Net liquidity
According to IFRS (EUR mn) 31 March 2017 31 Dec. 2016Change
in %
Total assets 2,690.9 2,625.3 2.5
Liquid assets1 611.9 570.4 7.3
thereof liquid funds 606.6 559.6 8.4
Total liabilities 1,250.7 1,256.8 (0.5)
thereof financial liabilities 545.4 577.5 (5.6)
Adjusted equity2 1,462.1 1,390.5 5.1
Adjusted equity ratio (%) 54.3 53.0 -
Net gearing (%) - 0.5 -
Net financial debt (-)/Net liquiditiy (+) 66.5 (7.2) -
According to IFRS (EUR mn) 31 March 2017 31 Dec. 2016Change
in %
Total liquidity cushion 835.0 788.0 6.0
thereof liquid assets1 611.9 570.4 7.3
thereof unused credit facilities 223.1 217.7 2.5
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Cash flow development and trading working capital (EUR mn)
+ 47.8% (Gross CF)
+ 1.7% (Operating CF)
(10.3%) (Free CF adj.) (10.8%)
82.490.0
110.4103.1
121.8
104.3
164.4
106.1
98.5
106.1
88.4
139.8
82.5
55.5
79.3
Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017
Gross cash flow Operating cash flow Free cash flow adj.
431
362383 380 384
21.0%17.3% 17.6%
17.1% 16.4%
3.0%
8.0%
13.0%
18.0%
23.0%
28.0%
33.0%
38.0%
43.0%
48.0%
0
100
200
300
400
500
600
Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017
Trading working capital
Trading working capital in % of annualized group revenue
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Outlook 2017: Priorities
Strengthen the core
Take next step on how to achieve 75% backwardintegration by 2020
Further boost continuous improvement culture
Customer intimacy
Launch new brand architecture
Strengthen direct sales/marketing channelsto customers and brands
Specialization
Decide on future location of next productionsite of TENCEL® fiber in Asia
Unique new product launches in Q2/2017 and Q3/2017
Business
Are
asN
ew Forward
Solu-tions
Strengthenthe Core
Customer
Intimacy
Specialization
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sCore TEN specialties investment program
Debottlenecking existing specialties sites by 35 kt until Q2/2018
Around EUR 30 mn investment in Lenzing (Austria)
Around EUR 70 mn investment in Heiligenkreuz (Austria)
Lyocell brownfield project of 90 kt until around end of Q1/2019
Investment of EUR 275 mn at existing site in Mobile/USA
Lyocell greenfield expansion in Asia
Site selection and investment decision in 2017
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Outlook 2017 – Fiber market and Lenzing Group
The International Monetary Fund is forecasting a slight acceleration in global economic growth to 3.5 percent in 2017. However, thepolitical environment will be a source of greater uncertainty. Developments on the fiber markets should be slightly more positive, butstill volatile. The market will continue to feel the effects of further reductions in cotton inventories. Polyester fiber prices will remain at alow level, which will lead to a further increase in the interfiber competition.
The wood-based cellulose fiber segment, which is relevant for Lenzing, should again outpace the overall fiber market. The demand forthese cellulose fibers was very good at the beginning of 2017, with the long-term trend pointing towards further growth in viscose and,above all, wood-based cellulose specialty fibers. On the supply side, the market is not expected to see the entry of any notable newproduction capacity in 2017.
Lenzing is very well positioned in this environment. In 2017 we will continue to focus on the disciplined implementation of the sCoreTEN strategy and, specifically, on specialization and sustainability-driven innovation. The steady expansion of the specialty fibercapacities and the intensification of our brand management will be essential to increasing consumers’ awareness for the uniqueselling proposition of our fiber products.
The Lenzing Group had an excellent start into the year 2017 and registered strong demand for its fibers during the first quarter which,in turn, led to continued very high capacity utilization in all product groups. The market price index for viscose fibers was substantiallyhigher than in the comparable prior year period. Under the assumption of unchanged conditions in the fiber market and stableexchange rates, Lenzing expects a considerable improvement in results in the fiscal year 2017 compared to 2016.
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0
20
40
60
80
100
120
2000 2005 2010 2015e 2020p
Growth perspectives: Wood-based fibers1 outgrow market
Source: ICAC, CIRFS, Fiber Economics Bureau, National Statistics, The Fiber Year, Lenzing data 2015
5-6% p.a.
1-2% p.a.
Synthetic fibers
Cotton
Wood-basedfibers1
3-4% p.a.
CAGR(2015 – 2020p)
Million metric tons2
Expected growth of global fiber demand until 2020
Total fiber market 3-4% p.a.
1) Wood-based and cotton linter-based cellulose fibers, previously named man-made cellulosics (viscose, modal and lyocell only – excluding acetate, tow and filament)2) Without wool and other natural fibers
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VÖNIX (Austrian Sustainability Index)
The European Eco-Label (European Flower)
Responsible Care
OEKO-TEX® Standard 100
European Award for the Environment(TENCEL® fibers)
PEFCTM (Chain of Custody)
FSC® (Chain of Custody)
100% USDA Biobased certification for all Lenzing fibers(Lenzing FR® branded fiber at 99%)
Certificates and recognitions
OK compost HOME (Vincotte)
OK biodegradable SOIL (Vincotte)
OK biodegradable MARINE
Food contact compliance (mainly based on Europeanlegislation / certain standard fibers)
MEDICALLY TESTED – TESTED FOR TOXINS(Nonwoven fibers, Standard textile TENCEL® fiber)
FAIRTRADE INTERNATIONAL Textile StandardResponsible Fibres (Lenzing Viscose® branded fiber,Lenzing Modal® branded fiber, TENCEL® brandedfibers)
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Where you can find our sustainable fibersApparel/Home & Interiors – Nonwovens - New Business Development & Technical textiles
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Thank youYour contacts and financial calendar
Investor Relations contact
Stephanie KniepHead of Investor RelationsCorporate Communications & Investor Relations
Phone: +43 7672 701 4032
Fax: +43 7672 918 4032
E-Mail: [email protected]
Visit our IR websitehttp://www.lenzing.com/en/investors/financial-publicationsad-hoc.html
Visit our SRI siteshttp://www.lenzing.com/en/responsibility/our-approach.htmlhttp://www.lenzing.com/en/press/publications/sustainability-reports.html
Financial calendar
Half-year result 2017 August 23, 2017Result 01-09/2017 November 15, 2017Result 01-03/2017 May 16, 2017Annual General Meeting April 25, 2017
Full year result 2016 March 22, 2017