LENZING – Austrian wood-based fibre manufacturer has reported another gloomy set of financials. The company said subdued demand and a continued rise in raw material and energy costs exerted a negative impact the earnings. Revenues fell to €2.52bn compared with €2.57bn in 2022. Lenzing said prices for wood-based fibres were also down due to weaker demand, particularly from brands, as well as additional market capacity.
“The price premium commanded by the Tencel, Lenzing Ecovero, and Veocel brands proved to be resilient. Revenues generated with dissolving wood pulp as well as biorefinery and co-products grew during the reporting year,” the company said in a statement.
It added that the, “largely absent recovery in the textile and clothing industry had a negative impact across the entire sector.”
“The anticipated recovery of markets relevant to the Lenzing Group has failed to materialise to date. Subdued demand and the still sharply increased raw material and energy costs have led to a result in 2023 that we are not satisfied with,” said Stephan Sielaff, chief executive officer of the Lenzing Group. “This makes the measures we have taken at an early stage to keep Lenzing on track and boost its resilience to crises all the more significant.”
Lenzing has implemented a performance programme which it says is aimed at improving EBITDA and generating free cash flow through stronger revenue and margin growth, as well as “sustainable cost excellence.” In addition to the positive effects at the revenue level, the company said it expects annual cost savings in excess of €100m, of which over 50 per cent will be effective from the current financial year onwards.
Nico Reiner, Lenzing Group CFO, adds: “This performance programme is a powerful instrument to tackle the current economic challenges and enhance Lenzing’s resilience to crises. We are very satisfied with how the programme has unfolded so far. The cash flow trend in the second half of the year shows that these measures are taking effect.”
