Lenzing
(Source: Lenzing)
Lenzing has announced a comprehensive performance program in response to a slower than anticipated market recovery. Amid the rising costs of raw materials and energy, alongside subdued demand, the program emphasizes positive free cash flow, strengthened sales, margin growth, and sustainable cost excellence.
In the first 3 quarters of 2023, the producer of specialty fibers from renewable wood Lenzing AG, Lenzing/Austria, generated a revenue of €1.87 billion and earnings before interest, tax, depreciation, and amortization (EBITDA) of €219.1 million. Despite these figures showing a decrease from year-on-year indicators, the company secured a positive free cash flow of €27.3 million during Q3.
Amid these challenges, Lenzing successfully completed the modernization and conversion of an Indonesian site, securing the EU Ecolabel for its environmentally conscious efforts.
Moving forward, Lenzing's Managing Board is implementing a comprehensive performance program aimed at long-term resilience, agility to market changes, and sustainable cost excellence. The board expects that this initiative will result in annual cost savings of over €100 million, with approximately 50% becoming effective from the upcoming financial year. Lenzing anticipates a future reduction in global personnel costs of up to €30 million.
As part of its "Better Growth" strategy, Lenzing continues to focus on servicing structural demand growth for eco-friendly high-quality specialty fibers, which includes the Tencel, Lenzing Ecovero and Veocel brands. This approach aligns with the company’s broader vision of transforming from a linear to a circular economy model, positioning it on a path to increased resilience and growth amidst the ongoing market turbulence.
Tencel, Lenzing Ecovero, Veocel = registered trademarks
