The Lenzing Group has successfully transitioned back to profitability in Q1, FY26, recording a net profit of €24 million. This achievement follows three consecutive loss-making quarters in 2025 and signals the effectiveness of the group’s ‘Performance Program.’ While consolidated revenue experienced a 10.8 per cent Y-o-Y decline to €615.7 million - primarily due to softer pulp prices and strategic production curtailments - the company’s EBITDA stood at a resilient €116.3 million. This operational stability is largely attributed to disciplined pricing and the realization of over €200 million in cost savings during the previous fiscal year.
Advancing the premiumization strategy
Lenzing is intensifying its focus on high-margin specialty fibers to insulate itself from the price volatility of generic commodities. A significant milestone in this transition is the recent majority acquisition of TreeToTextile AB, a move designed to boost Lenzing’s portfolio in next-generation sustainable fibers. Despite a downward revision in global growth forecasts to 3.1 per cent for 2026, Lenzing’s free cash flow more than doubled to €33.8 million in Q1. The significant improvement in free cash flow demonstrates that our structural measures are taking effect, noted Mathias Breuer, CFO, Lenzing Group.
Navigating supply chain and cost pressures
The textile industry continues to face headwinds from elevated energy and logistics costs, alongside geopolitical uncertainties. To counter these pressures, Lenzing is implementing a further cost-optimization plan aimed at achieving an additional €45 million in annual savings by 2027. This includes a workforce reduction of approximately 600 positions in Austria to streamline core processes. By focusing on North American and Asian market expansion, the group aims to mitigate the impact of sluggish European demand and maintain its trajectory toward a debt-free, high-margin business model.
Sustainable fiber innovation
Lenzing Group is a global leader in the production of wood-based cellulosic fibers, primarily serving the fashion and hygiene sectors under brands like Tencel and Veocel. Headquartered in Austria, the company is executing a transformation strategy focused on premiumization and achieving net-zero emissions by 2050.
