EANS-Adhoc: Lenzing AG / Lenzing Group: Second-Best Result in the Company's History

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Financial Figures/Balance Sheet/Company Information
22.03.2013

§ New record fiber sales volumes
§ Dividend proposal of EUR 2.00 per share
§ Outlook 2013: transitional year due to low visibility

In spite of difficult market conditions in its core fiber business,
the Lenzing Group succeeded in achieving the second best business
result in its history in the 2012 financial year. This can be
attributed to new record fiber sales volumes and the good performance
of Lenzing's specialty fiber TENCEL®.

Consolidated sales of the Lenzing Group were down slightly from the
previous year, declining by 2.3% to EUR 2.09 bn compared to EUR 2.14
bn in 2011. The decline is due to the fact that more dissolving wood
pulp from the Paskov pulp plant was used internally than in 2011.
Adjusted for this consolidation effect, consolidated sales remained
constant. The significant lower average fiber selling prices compared
to the boom year 2011 could be compensated by the strong rise in
fiber sales volumes, which climbed by close to 14% year-on-year, from
712,000 tons to 810,000 tons.

Consolidated earnings before interest, tax, depreciation and
amortization (EBITDA) amounted to EUR 358.7 mn[1], a decline of 25.3%
from the record EBITDA of EUR 480.3 mn achieved in 2011, but above
the comparable level of EUR 330.6 mn generated in the year 2010. The
EBITDA margin amounted to 17.2% (2011: 22.4%). Earnings before
interest and tax (EBIT) of the Lenzing Group amounted to EUR 255.0 mn
in the 2012 financial year, comprising a decline of 29.9% from the
prior-year level of EUR 364.0 mn. The EBIT margin was 12.2% (17.0% in
the record year 2011).

"We performed quite well in 2012 despite a very difficult market
environment", says Lenzing's Chief Executive Officer Peter
Untersperger. "Naturally, our operating margins were below those in
the boom year 2011 but still at a good level. We fully utilized our
new production capacities, and were sold out throughout the entire
year. This success proves the long-term correctness of our growth
strategy in our core business of manufacturing man-made cellulose
fibers", CEO Untersperger adds.

The one-off decommissioning costs for European Precursor (EPG), the
joint venture with SGL Carbon and Kelheim Fibres, amounted to EUR
23.5 mn (2011: EUR 0). Accordingly, consolidated EBITDA after
restructuring amounted to EUR 352.4 mn, corresponding to an EBITDA
margin after restructuring costs of 16.9% of sales.

Record investment program CAPEX (investments in property, plant and
equipment, intangible assets and non- controlling interest) rose to
the record level of EUR 346.2 mn in the 2012 financial year (2011:
EUR 196.3 mn). Lenzing's investment activity focused on the
completion of the fifth production line at the Indonesian subsidiary
PT. South Pacific Viscose (SPV), the debottlenecking program at the
plant in Nanjing (China), the capacity expansion drive at the
TENCEL®factory in Mobile/Alabama (USA), expansion investments at the
Lenzing site as well as the commencement of construction of the new
large-scale TENCEL®plant in Lenzing. These investments were
complemented by the further remodeling and upgrading of the Paskov
plant (Czech Republic) and the acquisition of the remaining shares.

"The record year 2011 must not obscure the view on the second-best
result in the company's history. As planned, 2012 represented the
peak year of investments when it comes to the implementation of our
growth strategy", says Lenzing's Chief Financial Officer Thomas G.
Winkler. "Due to Lenzing's stable financial position and low debt we
can afford this investment into the future without touching on our
strategic liquidity reserve of more than half a billion euro."

Adjusted equity of the Lenzing Group rose to EUR 1,15 bn at the end
of 2012, an increase of 10.0% from the prior-year level of EUR 1,05
bn. This corresponded to an adjusted equity ratio of 43.8% of total
assets (2011: 44.8%) which increased as a consequence of the record
investments which were made.

Segment Fibers Initial estimates[2]conclude that the rise in world
fiber production only amounted to 1.2% during the reporting year,
with total volume up only slightly from 81.0 mn tons to 82.0 mn tons.
This was in contrast to the 6.4% increase generated in 2011 and owing
to the continued slow economic development. Worldwide production of
man-made cellulose staple fibers, the core business of the Lenzing
Group, climbed 9.2% in 2012 to 3.66 mn tons, thus expanding at a
considerably faster rate than the global fiber market as a whole.

The fiber market in 2012 was dominated by a significant decrease in
selling prices for all fibers. The average price of cotton, the
benchmark for the entire fiber industry, fell more than 40% below the
prior-year level. Cotton inventories further increased, and the
global stock-to-use ratio reached a record level of more than 70%.
Spot prices for viscose fibers were down by about 15% in China, the
world's largest fiber market.

Lenzing achieved a new sales record in 2012 against the backdrop of a
very difficult market environment. The average fiber selling prices
of the Lenzing Group fell by 12%, decreasing from EUR 2.22 per
kilogram to EUR 1.96 per kilogram.

"The fiber market rewarded Lenzing for its high product and service
quality as well as its close cooperation with and integration in the
textile chain", states Friedrich Weninger, Member of the Management
Board and Chief Operating Officer. "In particular, our specialty
fibers Lenzing Modal®and TENCEL®enabled us to successfully
differentiate ourselves from standard products manufactured by Asian
producers. In addition, we successfully attracted new customers and
opened up new markets while launching new innovative fiber
applications on the marketplace", COO Weninger says.

Lenzing Modal®and TENCEL®achieved price premiums of 40% - 60% in 2012
compared to standard viscose fibers. Specialty fibers accounted for
approximately 35% of fiber sales in 2012. However, in the course of
the year, selling prices for Lenzing's specialty fibers had to be
continually adjusted downwards in line with general price levels as a
result of the significant drop in cotton and viscose fiber prices.

Segments Plastics Products and Engineering The Segment Plastics
Products showed a satisfactory development during the year under
review. Lenzing reported very good volume demand, especially in the
thermoplastics business area.

The Segment Engineering profited from the positive mood in the
capital goods market in 2012. Lenzing Technik equally took advantage
of the extensive investment activity within the Lenzing Group as well
as growing demand on the part of external customers.

Outlook Lenzing Group The current market situation featuring many
uncertainty factors only allows for low visibility with respect to
further developments in the year 2013. From Lenzing's perspective the
most likely scenario is a sideways trend, with 2013 considered to be
a transitional period.

The additional production capacities which will be available to the
Lenzing Group for an entire year for the first time will serve as the
basis for an increase in sales volumes by about 13.5% to 920,000
tons. As a result, sales are expected to climb to a range between EUR
2.15 bn and EUR 2.25 bn. This includes the decline in the external
sales of the Business Unit Pulp totalling a further EUR 50 mn, which
in turn is the consequence of the full-scale conversion of the Paskov
pulp plant to manufacturing dissolving wood pulp for the Group's
internal requirements.

The anticipated decrease in average fiber selling prices in a
year-on-year comparison to EUR 1.80 to EUR 1.90 per kilogram (2012:
EUR 1.96/kg) will impact earnings directly. The earnings contribution
achieved by the additional sales volumes is expected to be largely
offset by cost increases for personnel, chemicals and other input
factors.

For this reason, in the light of the assumed development of fiber
prices, EBITDA of the Lenzing Group should range between EUR 260 mn
and EUR 290 mn in 2013, and EBIT is expected to be in the range of
EUR 140 - EUR 170 mn from today's perspective. This corresponds to an
expected EBITDA margin of about 12% - 13% and an expected EBIT margin
of approximately 6% - 8% in the 2013 financial year.

Investments (CAPEX) are likely to total approx. EUR 260 mn,
significantly below the comparable level of EUR 346 mn in 2012. Sales
negotiations focusing on the divestment of the Business Unit
Plastics, which is not part of Lenzing's core business, are already
at an advanced stage. Binding offers were submitted.

Lenzing will respond to the low market visibility in 2013 by
optimizations of market activities, cost structures as well as
replacement and maintenance investments. The targeted volume growth
of the Lenzing Group reaching the threshold of about one million tons
of annual fiber capacity by the year 2014 remains unchanged. However,
new investment projects will be subject to scrutiny with respect to
the planned timeline. In the medium- and long-term, all three
megatrends on the fiber market (population growth, increasing wealth
and sustainability) driving growth of the man-made cellulose fiber
industry will continue uninterrupted. "However, we intend to flexibly
adapt our pace of growth to current market conditions and place
additional emphasis on cash management", says Lenzing CEO Peter
Untersperger.

Key Group indicators
(IFRS)

(EUR mn) 1-12/2012 1-12/2011
Consolidated sales 2,090.4 2,140.0
EBITDA1 358.7 480.3
EBITDA margin1in % 17.2 22.4
EBIT1 255.0 364.0
EBIT margin1in % 12.2 17.0
Profit for the year1 191.9 267.4
CAPEX (investments in

property, plant and equipment, intangible
346.2 196.3 assets and non-controlling interest)

31.12.2012 31.12.2011
Adjusted equity ratio2in % 43.8 44.8
Number of employees at 7,033 6,444
period-end

1) Before restructuring

2) Equity incl. government grants less prop. deferred taxes

Segment reporting

(EUR mn) 1-12/2012 1-12/2011
Segment Fibers
Sales 1,896.0 1,939.5
EBITDA 338.7 458.6

Segment Plastics Products
Sales 159.9 172.6
EBITDA 15.9 16.5
Segment Engineering
Sales 121.8 107.0
EBITDA 10.2 9.0

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----------- [1]All earnings indicators before restructuring, unless
explicitly stated otherwise [2]Source: Lenzing Market Intelligence

Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 7672-918-2713
mailto:a.guldt@lenzing.com

end of announcement euro adhoc
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issuer: Lenzing AG

A-A-4860 Lenzing
phone: +43 7672-701-0
FAX: +43 7672-96301
mail: a.guldt@lenzing.com
WWW: http://www.lenzing.com
sector: Chemicals
ISIN: AT0000644505
indexes: WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien
language: English