Lenzing (LNZ) investor relations material

Strategic Priorities and Market Context

• Persistent macroeconomic and geopolitical headwinds are driving a strategic shift toward less cyclical, structurally attractive segments, focusing on nonwovens growth, resetting textiles, and capitalizing on pulp.

• The strategy aims to create a more resilient and profitable portfolio by streamlining operations and emphasizing value creation levers such as profitable growth, cost reduction, and capital efficiency.

• The business operates in markets with strong long-term demand fundamentals, with man-made cellulosic fibers expected to grow 5.5% annually through 2040.

Financial and Operational Update

• Q2 revenue remained stable at approximately EUR 652 million, with EBITDA margin improving to 19% and EBITDA rising to EUR 123 million.

• Net financial debt decreased by 5% to EUR 1.36 billion, supported by stronger cash generation, working capital optimization, and inventory reduction.

• Unlevered free cash flow was lower year-over-year due to one-offs and higher CapEx, with full transformation benefits yet to be realized.

Portfolio Transformation and Innovation

• By 2030, the business targets a balanced mix of roughly one-third textile, one-third nonwovens, and one-third pulp, reducing exposure to cyclical textile volumes and growing nonwovens and external pulp sales.

• Asset footprint is being optimized through site closures and divestments, including exits from Heiligenkreuz, Grimsby, and the Indonesian viscose site, focusing on core sites in Austria, Brazil, Czech Republic, the U.S., China, and Thailand.

• Restructuring will result in non-cash impairment charges of up to EUR 150 million and provisions of up to EUR 40 million, mainly for headcount reductions.

• Innovation pipeline includes proprietary nonwovens technology, TreeToTextile, lyocell filament, filtration fibers, and next-gen flame-retardant fibers, with commercialization and scale-up in progress.