Lenzing’s revenue in 2021 grew 34.4 percent to 2.19 billion euros ($2.41 billion) on the strength of its specialty fibers.
In a Nutshell: The Lenzing Group said thanks to its strategic focus on wood-based specialty fibers and the predominantly positive market environment, it recorded a significantly improved revenue and earnings performance in 2021 compared to the previous year.
The cellulosic fiber firm said increasing optimism in the textile and apparel industry as a consequence of the progress made with vaccinations and the continuing recovery in the retail sector ensured a strong rise in demand and prices on the global fiber market, particularly at the beginning of the year.
The Austrian company also announced that its supervisory board appointed Stephan Sielaff, previously chief technology officer and chief operating officer, as the new CEO, effective April 1. He succeeds Cord Prinzhorn, who took over as interim CEO in the fourth quarter of 2021.
In addition, chief financial officer Thomas Obendrauf informed the supervisory board that he will not be available for a further extension of his contract that expires in June, and Peter Edelmann will leave as chairman of the board upon his own request, effective April 26. Prinzhorn will return to the board and will take over as chairman.
“Stephan Sielaff took up his duties at the beginning of the Corona crisis and has shown outstanding efficiency over the two years,” Edelmann said. “His strong presence and leadership qualities convinced the supervisory board to offer him the role of future CEO. We are very pleased that he has accepted the offer and that with him someone from within the company will continue to shape the future of Lenzing.”
Lenzing said an extensive recovery in demand in the global textile and apparel industry also led to a recovery in demand and rising prices on the world fiber market in 2021. In the trend-setting market for cotton, signs are emerging of a slight increase in stocks in the current 2021-2022 harvest season, “although dynamics on international commodity markets and problems in the global supply chain are likely to continue to have a significant bearing on price trends in 2022.”
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The company noted that prices for dissolving pulp increased by more than 50 percent at the peak in 2021, with the price as of Dec. 31 at $9.05 per ton. Lenzing continues to anticipate rising demand for environmentally compatible fibers for the textile and clothing industry. as well as the hygiene and medical sectors. However, the current positive market environment continues to be characterized by uncertainty due to the ongoing pandemic
Following significant cost increases in 2021, cost pressure on the energy, raw materials and logistics sectors is also expected to continue in the first quarters of 2022. Given those factors, Lenzing Group expects EBITDA for 2022 to lie significantly above the level of 2021.
The company said in 2024, more than 75 percent of fiber revenues are expected to derive from the wood-based specialty fiber business. In recent years, the focus of this strategic objective has been on the construction of the new, state-of-the-art lyocell plant in Thailand, which officially opened on March 3.
With the implementation of two key projects in Brazil and Thailand, as well as with the investments at the existing Asian sites in China and Indonesia, Lenzing continues the path toward climate neutrality.
Sales: Revenue in 2021 grew 34.4 percent to 2.19 billion euros ($2.41 billion) from 1.63 billion euros ($ ) in the prior year.
In addition to the predominantly positive market environment, the focus on specialty fibers such as Tencel. Lenzing Ecovero and Veocel branded fibers also had a positive impact on revenue growth. Specialty fibers currently account for 72.3 percent of fiber revenue.
Earnings: Earnings before interest, tax, depreciation and amortization (EBITDA) almost doubled compared to the previous year to reach 362.9 million euros ($399.39 million) from 192.3 million euros ($211.64 million).
The EBITDA margin rose to 16.5 percent from 11.8 percent year over year. Net profit for the year amounted to 127.7 million euros ($140.54 million) compare to a loss of 10.6 million euros ($11.67 million) in 2020), and earnings per share stood at 4.16 euros ($4.58) versus 0.24 euros (26 cents) in 2020. Lenzing said significant increases in energy, raw material and logistics costs occurred throughout the reporting year.
CEO’s Take: Cord Prinzhorn, interim CEO of Lenzing Group, said: “Demand for our wood-based, biodegradable specialty fibers under the Tencel, Lenzing Ecovero and Veocel brands continued to perform very well in 2021. Strategically, Lenzing remains on course despite the challenges posed by the global pandemic. With the start of production at our state-of-the-art lyocell plant in Thailand a few days ago, we are further strengthening our leading position as a supplier of eco-friendly specialty fibers. The completion of our pulp mill in Brazil is imminent. We are very proud to be able to realize these projects, which are so important for Lenzing, both on time and within budget.”