Lenzing (LNZ) Q2 2024 earnings summary

Executive summary

• Revenue increased by 5% year-over-year to EUR 1.31 billion in H1 2024, with EBITDA up 20.4% to EUR 164 million, driven by the Holistic Performance Program and improved fiber sales volumes.

• Net loss after minorities and hybrid bond improved to EUR -71 million from EUR -104 million year-over-year; EBIT improved to EUR 19 million from a loss of EUR 12 million.

• Free cash flow was positive for the fourth consecutive quarter, reaching EUR 54 million in Q2 2024, with full H1 2024 free cash flow at EUR 141.5 million.

• Management changes include the appointment of Rohit Aggarwal as Chief Fiber Officer and designated CEO, with a transition planned by March 2025.

• A strategic partnership was announced: Suzano S.A. will acquire a 15% stake in Lenzing AG from B&C Group.

Financial highlights

• Fiber sales volumes increased by 21% year-over-year in H1 2024, with specialty fibers comprising 92% of sales.

• Fiber division revenue rose to just over EUR 1 billion, while pulp revenue fell to EUR 291 million.

• EBITDA margin improved to 14% in Q2 2024, with adjusted equity ratio at 32.8% and net financial debt reduced to EUR 1.43 billion.

• Operating cash flow in H1 2024 was EUR 202.8 million, with CapEx reduced to EUR 61.6 million.

• Trading working capital reduced to EUR 505 million in Q2 2024.

Outlook and guidance

• EBITDA for 2024 is expected to exceed 2023 levels, with continued positive impact from the performance program.

• Cautious outlook for the generic fiber market in H2 2024, with stable pulp demand and elevated input costs.

• Structurally rising demand for sustainable fibers anticipated; company well positioned for profitable growth.

• Free cash flow is targeted to remain positive throughout 2024.

• Earnings visibility remains limited due to macroeconomic and market uncertainties.