The Lenzing Group, a global leader in specialty fibers for textiles and nonwovens, is grappling with an unexpected downturn in its markets. The surge in raw material and energy costs, coupled with sluggish demand, has cast a shadow over the company's performance. In the first three quarters of 2023, Lenzing reported a 5.3% drop in revenue, landing at EUR 1.87 billion, primarily attributed to decreased fiber revenues.
The harsh market environment led to a 16.7% year-on-year decline in earnings before interest, tax, depreciation, and amortization (EBITDA), down to EUR 219.1 million. The net result after tax dipped to a deficit of EUR 96.7 million compared to a profit of EUR 74.9 million in the same period last year.
In response, Lenzing initiated a cost-cutting program in late 2022, generating a positive free cash flow of EUR 27.3 million in Q3 2023. The company aims to enhance its long-term resilience through a comprehensive performance program, including annual cost savings exceeding EUR 100 million and reductions in personnel costs.
The "Better Growth" strategy, emphasizing eco-friendly specialty fibers, remains on track. Lenzing has marked significant progress in converting production lines to meet sustainability goals. However, external factors, including pandemic repercussions, geopolitical tensions, and extreme weather events, pose challenges to future growth.
Despite these uncertainties, Lenzing remains committed to its transformation towards a circular economy model, expecting an EBITDA for 2023 between EUR 270 million and EUR 330 million, as it navigates the evolving economic landscape.
