Despite a weakening of the global fiber market in the second half of 2011, the Lenzing Group achieved double-digit growth in sales and earnings, and surpassed the threshold of 2 billion euros, or $2.64 billion at current exchange, in consolidated sales for the first time in the company’s history.
Consolidated sales in the year ended Dec. 31 increased 21.2 percent to 2.14 billion euros, or $2.82 billion, up from 1.77 billion euros, or $2.33 billion, in the prior year. The company attributed the strong sales growth to higher average selling prices in its core fiber business, higher fiber shipment volumes, the full-year consolidation of the pulp plant Biocel Paskov acquired in May 2010 and higher sales in all other business areas.
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Consolidated earnings before interest, tax, depreciation and amortization rose 45.3 percent to 480.3 million euros, or $633.29 million, from 330.6 million euros, or $435.9 million, in the previous year. Earnings before interest and tax climbed 56.9 percent to 364 million euros, or $480 million. The EBITDA and EBIT margins reached all-time highs in 2011 at 22.4 percent and 17 percent, respectively.
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“Our dynamic growth path and specialty strategy led by the fibers Lenzing modal and Tencel once again paid off in 2011,” said Lenzing chief executive officer Peter Untersperger. “Whereas sales with standard viscose fibers increased by close to 20 percent year-on-year, we sold some 30 percent more Tencel fibers and close to 40 percent more Lenzing modal fibers than in the prior year.”
The large-scale market success of these two specialty fibers enabled Lenzing to partially detach itself from the volatile market trends of 2011, Untersperger said.
Lenzing pressed ahead with its capacity expansion program in 2011. As a result, the annual nominal production capacity of the Lenzing Group rose about 8 percent, to 770,000 tons from 710,000 tons, of man-made cellulose fibers.
The business development of the Segment Fibers unit in 2011 was characterized by strong demand for Lenzing fibers, which was fueled even more by record cotton prices in the first half of the year, the company said. Throughout the year, Lenzing raised average prices for all Lenzing fibers by close to 17 percent compared to the previous year, to 2.22 euros a kilogram.
The Lenzing Group said it expects a good year in 2012. As a consequence of significantly higher fiber shipment volumes but in the light of lower average prices in comparison to the prior-year level, sales should rise to 2.2 billion euros to 2.3 billion euros, or $2.9 billion to $3 billion, in 2012. EBITDA should range between 400 million euros and 480 million euros, or $527.4 million to $632.9 million, and EBIT is expected to range between 285 million euros and 365 million euros, or $375.8 million to $481.3 million, depending on the development of fiber and raw material prices as well as the overall global economic environment.
Lenzing will continue its aggressive expansion program as planned, involving investments of about 350 million euros, or $461.5 million, in 2012. The company also expects to propose a dividend to the shareholders’ meeting amounting to 2.50 euros a share.