Annual Report (ESEF) • Mar 17, 2022
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Annual Financial Report Lenzing Group 2021 Linear to Circular Content Management Report 2021 2 General Market Environment 3 The Development of Business in the Lenzing Group 5 The Development of Business in the Division 7 Investments 12 Research and Development 13 Non-nancial statement 14 Risk Report 15 Report on the Key Elements of the Internal Control System (Section 243a Para. 2 of the Austrian Commercial Code) 20 Shareholder structure and information on capital 22 Outlook 24 Appendix: Notes on the Financial Performance Indicators of the Lenzing Group 25 Consolidated Financial Statements of the Group 2021 30 Content Notes 31 Consolidated Income Statement 32 Consolidated Statement of Comprehensive Income 33 Consolidated Statement of Financial Position 34 Consolidated Statement of Changes in Equity 35 Consolidated Statement of Cash Flows 37 Notes to the Consolidated Financial Statements 38 Auditor’s Report 109 Declaration of the Managing Board 113 Lenzing Group Five-Year Overview 114 Jahresabschluss AG 2021 115 Bilanz 116 Gewinn- und Verlustrechnung 118 Anhang zum Jahresabschluss 120 Erläuterungen zur Bilanz 123 Erläuterungen zur Gewinn- und Verlustrechnung 130 Sonstige Angaben 133 Entwicklung des Anlagevermögens 142 Entwicklung der Zuschüsse der öentlichen Hand 144 Bestätigungsvermerk 145 Erklärung des Vorstandes 148 Imprint 149 1 Annual Financial Report 2021 Lenzing Group 2021 Management Report CHAPTER 1 /3 Content General Market Environment 3 The Development of Business in the Lenzing Group 5 The Development of Business in the Division 7 Investments 12 Research and Development 13 Non-nancial statement 14 Risk Report 15 Report on the Key Elements of the Internal Control System (Section 243a Para. 2 of the Austrian Commercial Code) 20 Shareholder structure and information on capital 22 Outlook 24 Appendix: Notes on the Financial Performance Indicators of the Lenzing Group 25 2 Annual Financial Report 2021 Lenzing Group 28 Annual Report 2021 Lenzing Group Global economy 1 In 2021, the global economy recovered from the previous year’s re- cession, despite the ongoing COVID-19 pandemic. The Interna- tional Monetary Fund estimates that growth amounted to 5.9 per- cent in 2021 (-3.1 % in 2020). The economy in industrialized nations is expected to have expanded by 5 percent (2020: -4.5 %). At 5.6 percent (2020: -3.4 %), growth in the USA was higher than that of the Eurozone at 5.2 percent (2020: -6.4 %). As in the previous year, China recorded above-average growth of 8.1 percent (2020: 2.3 %). Despite the economic recovery, 2021 was characterized by numer- ous economic challenges: supply failed to keep pace with demand in many areas of the global economy. In addition to further reasons, including structural reasons, this led to signicant price increases, particularly in the energy area, and to problems in global supply chains. For 2022, the IMF forecasts growth of 4.4 percent. However, a continuation of the economic recovery remains exposed to risks, especially the further course of the pandemic and its implications for individual economic sectors. Global ber market 2 Global demand recovers to pre-crisis levels; ber production continues to rise Following the pandemic-related shock in the previous year, the de- mand situation in the textile and apparel industry largely recovered in 2021. Retail sales of apparel returned to pre-crisis levels world- wide. However, major regional dierences were evident: in the USA, sales increased by up to 50 percent year-on-year, to stand some 10 to 15 percent above pre-crisis levels. Sales in China were stable, although only just above their 2019 level, while EU sales were almost 20 percent below their 2019 level. Sales in Japan were down by as much as 20 to 25 percent. These dierences, some of which are very signicant, are particularly due to local infection patterns and the government measures taken. The extensive recovery in the textile and apparel industry and con- tinuing high demand for medical and hygiene products, which also led to strong demand for nonwoven bers in 2021, fed through to a signicant recovery in the world ber market. Initial estimates suggest that production levels on the world ber market are likely to have risen by 2 to 3 percent year-on-year to 116 mn tonnes. 1 Source: IMF, World Economic Outlook, January 2022 Cotton production decreased by 7 percent to 24.3 mn tonnes in 2020/2021, according to preliminary estimates. This is mainly due to the eect of comparatively high crop yields in the 2019/2020 pre-season. Demand rose by 13 percent to 25.7 mn tonnes. Cotton stocks subsequently reduced, but still remained above 2019 levels. Wood-based cellulosic ber production in 2021 increased by 8 percent to set a new high of 7.3 mn tonnes, supported by strong demand and capacity expansions. The production of modal and lyocell bers rose at an above-average rate. Production volumes of synthetic polymer bers grew by almost 6 percent to 78.5 mn tonnes, according to initial estimates. Polyes- ter bers reported the fastest growth in 2021. Polyamide, polypro- pylene and acrylic bers were at lower levels, due mainly to price disadvantages compared to polyester, and diculties in raw mate- rial supplies. 2 All production-related gures in this section were updated from the initial estimates published in the Annual Report 2020. Source: ICAC, IWF, Cotton Outlook, CCFG, FAO General Market Environment 3 Annual Financial Report 2021 Lenzing Group 29 Annual Report 2021 Lenzing Group 1 Price trends further aected by COVID-19 The ongoing COVID-19 pandemic continued to aect the general price level for staple bers in 2021. Prices for a number of ber types recovered, in some cases signicantly, as demand returned. The cotton price amounted to 127.2 US cents per pound as of De- cember 31, 2021, corresponding to an increase by 50 percent com- pared with the beginning of the year. On average, the cotton price was 41 percent higher than in the previous year. The rise in cotton prices is only partly attributable to fundamental factors. It is primar- ily driven by dynamics on international commodity markets and problems in the global supply chain. Prices for standard viscose hardly changed over the year. At RMB 12,000 per tonne, the year-end price was only 4 percent higher than that at the previous year-end. However, price trends were subject to signicant uctuations over the course of the reporting year. In the rst quarter, prices recorded a signicant recovery from the COVID-19 crisis to peak at RMB 15,600 per tonne as of the end of February. As a consequence, prices came under pressure in an environment of subdued demand and rising stocks. In September, the Chinese government imposed measures to reduce energy con- sumption in industry. This also aected the textile value chain, such as spinning and weaving mills, which in turn had a negative impact on ber demand and viscose price trends. A brief recovery phase was followed by further decreases in prices from the end of No- vember with the emergence of the omicron variant. Average 2021 prices for standard viscose stood 45 percent higher than the pre- vious year’s average. Prices for wood-based specialty bers such as those of the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands were much more stable than those for standard bers. The Chinese import price for ber pulp, the key raw material for the production of wood-based cellulosic bers, rose by 24 percent to USD 905 per tonne during the year, outpacing the increase for pa- per pulp. In the meantime, the price had even risen to USD 1,106 per tonne in April. Supporting factors for the sustained high price level included a supply shortage due to supply bottlenecks and lo- gistical problems, as well as higher demand at the end of the year. At USD 991 per tonne, the average price for the year was 36 per- cent higher than in the previous year. The polyester price in 2021 was aected by signicant price uc- tuations for crude oil and intermediates, as well as a recovery in demand. The price of polyester staple ber in China rose by 19 per- cent year-on-year to RMB 7,020 per tonne at the end of the year. The average price for the year was also RMB 7,020 per tonne, 20 percent higher than the previous year’s average. 1 Source: ICAC, CIRFS, TFY, Lenzing estimates 2 Source: CCFG, CCA 2 4 Annual Financial Report 2021 Lenzing Group 29 Annual Report 2021 Lenzing Group Thanks to its strategic focus on specialty bers and a largely posi- tive market environment, the Lenzing Group recorded a signicant year-on-year improvement in revenue and earnings trends in 2021. Growing optimism in the textile and apparel industry as a conse- quence of the progress made with vaccinations and the continuing recovery in the retail sector ensured a signicant rise in demand and prices on the global ber market, particularly at the beginning of the year under review. Revenue rose by 34.4 percent to EUR 2.19 bn in 2021, reecting both higher sales volumes as well as higher ber prices. The focus on wood-based specialty bers, such as those of the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands, also exerted a positive impact on revenue growth. These positive price and mix eects more than oset negative currency eects. The earnings trend mainly reects Lenzing’s position within the current market environment. A continued focus on measures to im- prove structural earnings in all regions reinforced this positive ef- fect. Signicant increases in energy, raw material and logistics costs were recorded throughout the reporting year. Earnings be- fore interest, tax, depreciation and amortization (EBITDA) almost doubled year-on-year to EUR 362.9 mn in 2021 (compared with EUR 192.3 mn in 2020). The EBITDA margin rose from 11.8 percent to 16.5 percent. Operating prot (EBIT) amounted to EUR 200.6 mn (compared to EUR 33.9 mn in 2020). The EBIT mar- gin rose accordingly from 2.1 percent to 9.1 percent. The nancial result of EUR minus 17.7 mn includes the full write-o of the interest in Hygiene Austria LP GmbH as well as a loan to this same company. Earnings before tax (EBT) increased to EUR 182.9 mn compared with EUR 22.3 mn in 2020). Net prot for the year amounted to EUR 127.7 mn compared with EUR minus 10.6 mn in 2020) and earnings per share stood at EUR 4.16 (compared with EUR 0.24 in 2020). The income tax expense of EUR 55.2 mn (compared with EUR 32.8 mn in 2020) follows the earnings trend and reects cur- rency eects and the valuation allowance applied to individual Group companies’ tax assets. Details on revenue and earnings trends in the year under review are as follows: Condensed consolidated income statement 1 EUR mn Change 2021 2020 Absolute Relative Revenue Cost of sales () () () Gross prot Other operating income Selling expenses () () () Administrative expenses () () () Research and development expenses () () () Other operating expenses () () () EBIT Financial result () () () EBT Income tax expense () () () Net prot/loss for the year () n/a 1) Since the beginning of the 2021 nancial year, the Lenzing Group has reported its consolidated income statement by applying the cost of sales method. The previous presentation applied the nature of expense method. The complete consolidated in- come statement is presented in the consolidated nancial statements. Higher level of investment activities Gross cash ow almost tripled to EUR 372 mn in 2021 (compared to EUR 126.8 mn in 2020), which mainly reects the earnings trend. Cash ow from operating activities amounted to EUR 394 mn (compared with EUR 48.9 mn in 2020). Free cash ow stood at EUR minus 445.5 mn (2020: EUR minus 614.8 mn), which was es- pecially due to investment activities related to the projects in Thai- land and Brazil. Capital expenditure on intangible assets, property, plant and equipment, and on biological assets increased by 26.3 percent to EUR 844.3 mn in the reporting period, approxi- mately half of which was nanced from cash ow from operating activities. The sharp increase in investment volumes is primarily due to the implementation of the two key projects. The liquidity position rose by 4 percent year-on-year to stand at EUR 1.11 bn as of the end of 2021. Solid balance sheet structure The Lenzing Group’s total assets grew by 27.9 percent compared to December 31, 2020, and amounted to EUR 5.3 bn as of the end The Development of Business in the Lenzing Group 5 Annual Financial Report 2021 Lenzing Group 30 Annual Report 2021 Lenzing Group of December 2021. The most signicant changes relate to the in- crease in property, plant and equipment due to the higher level of investing activities. Adjusted equity rose by 10.9 percent to EUR 2.12 bn as of the end of 2021, primarily due to the operating prot trend in 2021. The ad- justed equity ratio decreased from 45.8 percent to 39.7 percent, due particularly to the higher level of total assets. Net nancial debt amounted to EUR 977 mn as of the end of the reporting year (com- pared to EUR 471.4 mn as of December 31, 2020). This increase re- ects the nancing of the two key projects in Thailand and Brazil. Net gearing rose to 46.2 percent as of the reporting date (com- pared with 24.7 percent as of December 31, 2020). Trading working capital increased by 0.9 percent to EUR 387.4 mn. 6 Annual Financial Report 2021 Lenzing Group 31 Annual Report 2021 Lenzing Group In order to prepare the Lenzing Group for the challenges and op- portunities deriving from the investment projects and the changed market environment, the Managing Board presented a new organ- izational structure that is to support the sCore TEN strategy objec- tives with a focus on protable, organic growth in specialty bers, and further enhance eciency and transparency. As a conse- quence, the management of the business was adjusted and divided into the two new divisions of “Fibers” and “Pulp”. 1 The Lenzing Group’s investment activities in 2021 continued to fo- cus on the expansion of the Group’s internal ber pulp production, raising the share of specialty bers, and implementing the climate targets in line with the sCore TEN corporate strategy. In September, the Lenzing Supervisory Board reached an amicable agreement with long-serving CEO Stefan Doboczky on the early termination of his contract. Mr. Doboczky informed the Supervi- sory Board that he would not be available for a further extension of his contract from 2022. The Lenzing Supervisory Board noted this with great regret, and in agreement with Mr. Doboczky terminated his contract as of the end of the third quarter. Cord Prinzhorn was appointed CEO on an interim basis. Mr. Prin- zhorn has been a member of the Lenzing Supervisory Board since the Annual General Meeting in April of this year. As of November 4, 2021, he relinquished this position until further notice, and as- sumed the CEO role. Division Fiber The Fibers Division comprises all business activities of the Lenzing Group with the dierent generations of wood-based cellulosic - bers. Specialty bers are Lenzing’s great strength. The objective is to generate more than 75 percent of ber revenues from business with wood-based specialty bers such as lyocell and modal bers by 2024. The focus of this strategic target was the start-up of the new state-of-the-art lyocell plant in Thailand with a nominal capac- ity of 100,000 tonnes. Production starts in the rst quarter of 2022. Moreover, Lenzing is investing more than EUR 200 mn in produc- tion sites in China and Indonesia to convert existing capacities for standard viscose into capacities for environmentally compatible specialty bers. In Nanjing, Lenzing is working on converting a line to TENCEL™ modal bers. The portfolio of the Chinese ber plant will thereby consist entirely of specialty bers by the end of 2022. As part of the investment in Purwakarta, Lenzing will bring its entire viscose production up to EU Ecolabel standards. The site will thereby become a pure specialty viscose supplier as of 2023. 1 Note 3 to the condensed consolidated interim nancial statements as of June 30, 2021 In addition to the new lyocell plant in Thailand, which is designed to be carbon neutral, investments at existing sites are also in line with Lenzing’s targets to reduce carbon dioxide emissions per tonne of product by 50 percent by 2030, and to be climate neutral by 2050. With the repositioning of its product brands, the Lenzing Group has been sending a strong message to consumers since 2018. With TENCEL™ und LENZING™ ECOVERO™ as umbrella brands for all specialty products in the textile segment, VEOCEL™ as the um- brella brand for all specialty nonwoven products, and LENZING™ for all industrial applications, the company showcases its strengths in a targeted manner. Lenzing continued to enhance the visibility of its brands in 2021 through targeted communication measures. The revenue of the Fibers Division reached a level of EUR 1.9 bn in 2021, 69.4 percent of which was attributable to textile bers and 30.6 percent to bers for nonwovens and special applications. Fi- ber sales volume increased by 15.5 percent in 2021 to approxi- mately 909,000 tonnes (2020: approximately 787,000 tonnes). The share of specialty bers in ber revenues decreased to 72.3 per- cent (2020: 76.2 %) as a consequence of the recovery in standard viscose prices. The division’s earnings (EBITDA) amounted to EUR 214 mn, while operating earnings (EBIT) stood at EUR 107.4 mn. Textile bers The market for textile bers performed very well in 2021, although signicant dierences in demand for standard viscose and spe- cialty bers were discernible in some cases. Prices for standard viscose were very volatile. High energy, raw ma- terial and logistics costs coupled with poor availability of contain- ers further aected the economic attractiveness of standard vis- cose bers. In contrast, the wood-based specialty bers business recorded stable and high demand in all major producing textile markets such as China, India, Pakistan, Bangladesh and Turkey, as well as for all Lenzing product groups (TENCEL™ lyocell and modal bers, LENZING™ ECOVERO™ bers), driven by growing demand for high-quality and sustainably produced bers from retailers and fashion brands. Lenzing also presented a variety of new ber innovations in 2021, which help make its partners’ product ranges more sustainable. In February, Lenzing launched TENCEL™ brand modal bers with Indigo Color technology. The single-stage spun-dyeing process used here enables indigo pigments to be incorporated directly into the ber. Compared to conventional indigo dyeing processes, this ensures better color fastness with signicantly lower resource con- The Development of Business in the Division 7 Annual Financial Report 2021 Lenzing Group 32 Annual Report 2021 Lenzing Group sumption. The product has been awarded the EU Ecolabel. This la- bel is awarded to products that meet high environmental standards throughout their life cycle. To meet demand for more recycling solutions in the textile and ap- parel industry, in September Lenzing presented carbon-neutral TENCEL™ bers enhanced by REFIBRA™ recycling technology. The carbon-free lyocell and modal bers of the TENCEL™ brand generated signicant growth in interest among customers and partners along the value chain in 2021. These bers represent an important step taken by Lenzing and its partners on their joint path to carbon neutrality. In October, Lenzing expanded its product range to include matt TENCEL™ lyocell bers. These provide a matt appearance to gar- ments, in contrast to the typical sheen of TENCEL™ lyocell bers. Feedback from fashion brands and retailers was very positive, lead- ing to good initial sales gures. In addition to environmental protection, transparency also repre- sents a great challenge for the textile industry. To address the issue, Lenzing expanded its ber identication system to include TENCEL™ lyocell and modal bers in 2021. With this step, the company once again underlined its commitment to a transparent textile value chain. In addition, Lenzing oers an innovative solution based on block- chain technology in collaboration with TextileGenesis™ to ensure traceability along the textile value chain. As of December 31, 2021, more than 600 dierent partner companies have been successfully integrated into the platform. Thanks to the innovative Fibercoin™ technology of the TextileGenesis™ platform, Lenzing is able to is- sue digital tokens in direct proportion to physical ber deliveries. These track deliveries along the value chain and act as a kind of digital twin. The feedback from leading fashion brands and retailers is positive. Lenzing also made very good progress in the development of the lyocell lament business under the TENCEL™ Luxe brand. TENCEL™ Luxe laments have been registered with The Vegan Society™ since 2021. The independent certicate proves that the wood-based laments are manufactured entirely without animal testing or animal components. In 2021, more fabrics were devel- oped as sustainable and vegan alternatives to silk fabrics for outer- wear, footwear, activewear and traditional Indian clothing. Leading fashion brands and designers have already incorporated some of these developments into their collections. Lenzing also optimized the operation of its second pilot plant in 2021 and received ap- proval for a project to eliminate capacity bottlenecks in December as a consequence of the positive market trend. In addition, Lenzing further expanded the awareness and visibility of its TENCEL™ and LENZING™ ECOVERO™ brands in 2021. In the rst half of the year, Lenzing reached more than 400 million consumers worldwide with brand activation at Earth Day (#check- whatsgood), the Oscars (with Red Carpet Green Dress and TEN- CEL™ Luxe) and #FeelsSoRight. New co-branding initiatives in collaboration with partners such as Zara, PULL&BEAR, Zalando, Massimo Dutti, Camper, H&M and Esprit have greatly increased visibility in the market. The TENCEL™ eShop was opened in Feb- ruary 2021. It now includes ten brands, including Levi’s ® , H&M, Es- prit, Jack & Jones, J.Crew, Mara Homan and West Elm. It is the world’s rst e-commerce portal from a sustainable ber producer. It was featured in Vogue magazine and has reached over 20 million people to date. The portal now has more than 100,000 page views from an international audience and is continuing to grow. To further raise awareness for sustainable fashion, Lenzing implemented the #MakeItFeelRight campaign from June to December. By the end of the year under review, 510 million consumers in nine countries had been reached. Nonwoven bers The nonwoven bers business continued to comprise an important strategic pillar for Lenzing in the second year of the pandemic. Higher demand for hygiene products as a consequence of COVID- 19 also had a positive impact on demand for nonwoven bers in the rst half of 2021. The high level of stocks worldwide weakened this eect somewhat in the second half of the year. Lenzing’s nonwoven bers business also continued to benet from the long-term global trend toward more sustainable, biodegrada- ble materials, supported by new regulations in the markets. The company welcomes the issuance of the guidelines for the imple- mentation of the Single-Use Plastics Directive (EU) 2019/904, which came into force on June 5, 2019. In this directive, the EU Commission species which products fall within its scope, thereby providing clarity in the EU member states’ joint ght against plastic waste pollution. Lenzing’s wood-based and biodegradable nonwo- ven bers, such as those under the VEOCEL™ brand, oer a sus- tainable and innovative solution to this man-made problem. The Single-Use Plastics Directive also provides for uniform labeling re- quirements for certain products on either the packaging or on the product itself from July 3, 2021. These include feminine hygiene products and wet wipes for personal and household care that con- tain plastics. With its VEOCEL™ brand, Lenzing provides consum- ers with clear guidance for their purchasing decisions: products bearing the VEOCEL™ brand logo on their packaging follow strin- gent certication criteria. This assures consumers that the bers of the labeled product are biodegradable and contain 100 percent cellulosic material. With the #ItsInOurHands environmental initiative, the VEOCEL™ brand is specically raising consumer awareness of issues such as sustainable materials, as well as climate and environmental protec- tion. In 2021, the initiative achieved a global reach of more than 70 million, again also increasing the visibility of the VEOCEL™ brand. With the “It’s In Our Hands” school project, the brand is also involved in the “Citizen Science” area, which aims to raise aware- ness among students aged 10 to 16 concerning the importance of sustainable materials in everyday products. The launch took place in the fall of 2021 in the USA, Germany and Austria. With the “Nature re-imagined” campaign, Lenzing placed an even greater focus on its particularly environmentally compatible lyocell process in its advertising activities in 2021. The process developed by Lenzing enables more than 99 percent of the solvent to be re- covered in a closed loop and to be always fed back into the pro- duction process. With VEOCEL™ brand lyocell bers, Lenzing thereby oers customers in the nonwovens sector a sustainable - ber that also features special properties in terms of quality. As part of the “Climate Care” campaign, Lenzing launched the rst carbon-neutral cellulosic bers on the global nonwovens market in 8 Annual Financial Report 2021 Lenzing Group 33 Annual Report 2021 Lenzing Group the second quarter. The launch of bers certied as CarbonNeu- tral ® products in accordance with the CarbonNeutral Protocol guidelines represents a further milestone on the joint journey of Lenzing and its partners towards carbon dioxide neutrality. This new oering in the VEOCEL™ brand portfolio is the result of tar- geted measures to reduce specic product emissions. By utilizing renewable energies, low carbon dioxide raw materials and energy sources, ecient production methods, and carbon dioxide oset- ting via veried climate protection projects, it is possible for the rst time to oer bers for nonwoven bers with a carbon-neutral footprint. The hydrophobic LENZING™ Lyocell Dry ber is a further product innovation from the year under review. This combines the benets of standard lyocell ber with the ability to repel moisture and liquid. Unlike conventional cellulosic bers, water cannot penetrate the - bers, with the water instead forming beads on the surface. The ber thereby makes it possible to tap further application areas that were previously largely dependent on petroleum-based bers. With a focus on information and education as well as innovative new products, the company succeeded in expanding its global brand presence and network of co-branding partners in 2021: in the USA, the VEOCEL™ brand cooperates with well-known brands such as Coterie and Neutrogena, and in China with Kotex, a brand of US hygiene products manufacturer Kimberly-Clark. In Turkey, the VEOCEL™ brand joined the multimedia campaign of Turkish hygiene products manufacturer DeepFresh. Co-products of ber production The Lenzing Group produces LENZING™ sodium sulfate as a co- product at all locations where viscose or modal bers are manu- factured. This is used in the detergent and glass industries and for the production of food and animal feed. Sales volumes at the Len- zing site increased by 12 percent year-on-year in 2021. Since 2019, Lenzing has produced and marketed LENZING™ cal- cium sulfate, a further co-product reporting a constant trend level. Sales volumes already amounted to 16,000 tonnes in 2021. Division Pulp The Pulp Division comprises all Lenzing Group business activities from wood procurement through to the production of ber pulp and biorenery products. In addition to the activities in Paskov and Lenzing, the division focused on the implementation of the major project in Brazil in 2021. The construction of the ber pulp mill in Minas Gerais continues to proceed according to plan, despite the challenges caused by COVID-19. Commissioning is still planned for the rst half of 2022. In addition to securing internal supplies, the new pulp mill also enables Lenzing to achieve an important mile- stone in its climate neutrality strategy. It will be one of the world’s most productive and energy-ecient mills and feed more than 50 percent of the electricity generated into the public grid as re- newable energy. In 2019, Lenzing made a commitment to reducing its greenhouse gas emissions per tonne of product by 50 percent 1 License code: FSC-C041246 and PEFC/06-33-92 (Lenzing), and FSC-C118737 and PEFC/08-31-0025 (Paskov) by 2030 compared with a 2017 baseline. The aim is to be climate- neutral by 2050. In order to further boost closed loop recycling, Lenzing signed a partnership agreement with Swedish pulp producer Södra in June. The cooperation involves the transfer of knowledge between the two companies, which have been proactively driving closed loop recycling for many years, as well as a joint new process develop- ment for the recycling of textile waste. A capacity expansion for pulp from textile waste is also planned. The aim is to be able to recycle approximately 25,000 tonnes of used textiles per year by 2025. Lenzing has proactively developed and promoted innova- tions in recycling for several years (such as the REFIBRA™ and Eco Cycle technologies) in order to provide solutions to the global tex- tile waste problem. The Pulp Division’s revenue reached a level of EUR 759 mn in 2021. Divisional earnings (EBITDA) amounted to EUR 210.1 mn, and oper- ating earnings (EBIT) stood at EUR 164.2 mn. Wood Developments on global commodity markets also had a signicant eect on the wood market in 2021. A labor shortage in the value chain, increased demand for rewood and biomass as a conse- quence of high energy prices, as well as a high level of production in almost the entire wood processing industry have tightened the availability of various types of wood and prompted an upward price dynamic. The Lenzing Group’s current procurement strategy entailing long- term master agreements achieved a good stabilizing eect on vol- umes and prices. Lenzing was consequently able to ensure a good supply situation with moderate price increases at its two pulp plants at the sites in Lenzing (Austria) and Paskov (Czech Republic) during the reporting period. In 2021, an audit in accordance with the Forest Stewardship Coun- cil® (FSC®) and Programme for the Endorsement of Forest Certi- cation™ (PEFC™) forest certication systems conrmed again for both sites that, in addition to stringent forestry laws in the supplier countries, all wood used derives from PEFC™ and FSC ® certied or controlled sources. 1 Biorenery Pulp The Pulp Division supplies the Lenzing Group’s ber production sites with high-quality ber pulp, and operates its own ber pulp plants at the Lenzing and Paskov sites. This covers around two- thirds of Lenzing’s pulp requirements. The remainder is largely pur- chased on the basis of long-term agreements. A total of approxi- mately 600,000 tonnes of ber pulp was produced at Lenzing’s two pulp plants in 2021. The price of hardwood-based ber pulp in China increased by 36 percent in 2021 to USD 991 per tonne as of December 31, re- ecting high demand along the entire value chain, especially at the start of the year. 9 Annual Financial Report 2021 Lenzing Group 34 Annual Report 2021 Lenzing Group Increasing internal ber pulp production forms a key element in the implementation of the sCore TEN strategy. Construction of the pulp mill in Brazil as part of the joint venture with Dexco (formerly Duratex) continued to run to schedule in 2021, and its commission- ing is planned for the rst half of 2022. The expected construction costs amount to USD 1.38 bn. The project is predominantly - nanced through equity and long-term debt. To provide the biomass, the joint venture secured over 44,000 hec- tares of FSC®-certied commercial forest, and leased additional land, in order to have approximately 70,000 hectares of FSC ® -cer- tied land when completed. 1 These plantations operate in full ac- cordance with the Lenzing Group’s guidelines and high standards for the sourcing of wood and pulp. Biorenery products In addition to pulp, the Lenzing Group’s bioreneries also produce and market biorenery products so that further components of the valuable raw material wood are utilized. Renowned customers from the food, animal feed, pharmaceutical and chemical indus- tries increasingly rely on biobased products from Lenzing. Sales volumes of the biorenery products LENZING™ Acetic Acid Biobased and LENZING™ Furfural Biobased rose on average by 3 percent and 14 percent, respectively. The price increases on the cost side were successfully passed on to sales products. The biorenery products business area also places a strong focus on sustainability. A lifecycle analysis performed by the research in- stitute Quantis conrmed that the carbon footprint of LENZING™ Acetic Acid Biobased is more than 85 percent less than that of comparable products based on fossil resources. Customers in- creasingly perceive this product advantage as a benet. Divisional supplies of energy and other raw materials In the Fibers and Pulp divisions, energy and other raw materials are signicant factors inuencing the Lenzing Group’s nancial posi- tion and performance. Energy Lenzing’s biorenery concept at the Lenzing and Paskov locations makes the Group a pioneer in highly self-sucient pulp and ber production. For its other locations, Lenzing is developing energy eciency enhancement programs. After historically low prices in the previous year, the 2021 nancial year was characterized by extreme price increases for all energy commodities, mainly due to a tight supply situation on the Euro- pean natural gas market caused by delay in the commissioning of the “Nord Stream 2” pipeline project. Higher demand due to the long winter of 2020/2021 and the good economic situation exac- erbated the situation. Prices for gas and electricity in Europe were well above previous record levels. Natural gas prices were up by 325 percent in 2021, and electricity prices increased by 205 percent. Coal prices rose 1 FSC license code: FSC-C006042 by 118 percent in 2021 due to the strong economic recovery cou- pled with a reduction in supply, primarily in Asia. Prices for carbon credits increased by 108 percent in the year under review, due not only to an articial shortage of credits issued but also to higher demand for solid fossil fuels such as coal as a conse- quence of the sharp rise in gas prices. Oil prices, by contrast, recorded a “moderate” increase of 54 per- cent during the year under review, due to the dampening eect of global travel restrictions on demand. The Lenzing Group’s procurement strategy for the main cost com- ponents, electricity and natural gas, is based on procurement via the spot market. Price increases on global energy markets conse- quently also led to a signicant rise in the company’s energy costs in the reporting year. The Lenzing Group’s energy production facilities operated on a largely normal basis in 2021. At the Lenzing site, the construction of the largest open-space photovoltaic plant in the province of Up- per Austria is planned on an area of 55,000 m². The project will be implemented in 2022, subject to nal regulatory approvals. In Paskov, a voltage dip in the European power grid led to the pro- longed outage of a turbine. As a consequence, less surplus energy was fed into the public power grid in 2021 than in the previous year. The power plants in Purwakarta were operated with high availabil- ity levels and were further optimized. As the coal price in Asia was still very high in historical terms, energy costs remained high in 2021. The price of coal rose by 45.3 percent year-on-year. The grid elec- tricity price recorded a small increase in comparison and was 4.1 percent higher in 2021 than in 2020. The rising coal price also aected steam prices at the Nanjing site. On average, the steam price in 2021 was 23.1 percent higher than in 2020. The grid electricity price stood 3.8 percent higher than in the previous year. The switchover in energy production from coal to natural gas, which is intended to reduce carbon emissions, was progressed further in 2021. Other raw materials The shock to global commodity markets triggered by COVID-19, especially in the fourth quarter, led to tighter supplies and signi- cant price increases in 2021. Lenzing is working on a long-term concept to enhance supply se- curity. The successful completion and commissioning of the air pu- rication and sulfur recycling plant at the Lenzing site in 2021 rep- resented an important step along this path. Since the start of con- struction in 2019, Lenzing has invested approximately EUR 40 mn in the project, which will further reduce carbon emissions and in- crease self-suciency in relation to critical process raw materials. Caustic soda Caustic soda is used in the production of pulp and is also an im- portant primary product for the production of viscose and modal bers. It arises as a co-product from chlorine production. Counter 10 Annual Financial Report 2021 Lenzing Group 35 Annual Report 2021 Lenzing Group to the general price trend on raw material markets, prices for caus- tic soda decreased in the rst half of 2021 due to oversupply in the market. Lower demand as a consequence of COVID-19 was oset by comparatively high production volumes due to generally good demand for chlorine. The market turned around in the second half of the year, and demand has increased signicantly while supply has tightened. This situation led to a signicant price increase worldwide. Sulfur Sulfur is an important starting material for the production of carbon disulde and sulfuric acid. In turn, both raw materials are used in the viscose process. Sulfur prices also recorded a signicant price increase in 2021, mainly due to higher demand and lower produc- tion volumes as a consequence of COVID-19 – with negative ef- fects on availability in the meantime. Others The “Others” area mainly comprises central headquarters functions and overarching activities as well as R&D activities and the activi- ties of BZL-Bildungszentrum Lenzing GmbH (training and person- nel development). Revenue in the “Others” area reached EUR 6.1 mn in 2021. The result (EBITDA) amounted to EUR minus 58.4 mn, while the operating result (EBIT) stood at EUR minus 68.2 mn. Hygiene Austria LP GmbH After the allegations surrounding Hygiene Austria LP GmbH be- came known in March 2021, Lenzing worked intensively to address them. Accompanied by a corresponding set of specications for the continuation of business operations on a rm footing, Lenzing also transferred its interest to Palmers Textil AG. In order to ensure the continuation of the company as a going concern in accordance with the nature of its formation, Lenzing initially waived a corre- sponding purchase price (see also press release of Lenzing AG of 04/02/2021). The entirety of this interest has been written o in the meantime. 11 Annual Financial Report 2021 Lenzing Group 36 Annual Report 2021 Lenzing Group The Lenzing Group’s investing activities in 2021 continued to focus on increasing its internal ber pulp production, raising the share of specialty bers, and implementing the climate targets in line with the sCore TEN corporate strategy. Capital expenditure on intangible assets, property, plant and equipment and biological assets increased by 26.3 percent to EUR 844.3 mn in the reporting year. The sharp rise in the volume of capital expenditure is particularly due to the implementation of key projects in Brazil and Thailand. In Brazil, Lenzing and its partner Dexco (formerly Duratex) are con- structing the largest pulp mill of its kind with a nominal capacity of 500,000 tonnes per year. Dexco acquired a 49 percent interest in the LD Celulose joint venture, with Lenzing retaining 51 percent. Construction work also progressed according to plan in the year under review, despite the challenges due to COVID-19. For this rea- son, the commissioning of the mill is still planned for the rst half of 2022. The expected construction costs for this largest project in Lenzing’s corporate history amount to USD 1.38 bn. The nancing is mainly provided by long-term debt funding. IFC, a member of the World Bank Group, and IDB Invest, a member of the IDB Group, are supporting the investment program. Export credit agency Finn- vera and seven commercial banks also participated in the approxi- mately USD 1.15 bn nancing package. In Thailand, Lenzing worked at full speed in 2021 to complete the new state-of-the-art lyocell plant with a nominal capacity of 100,000 tonnes per year. Production started in the rst quarter of 2022. The investment volume amounts to around EUR 400 mn. In addition, Lenzing is investing more than EUR 200 mn in produc- tion sites in China and Indonesia to convert existing capacities for standard viscose into capacities for environmentally compatible specialty bers. In Nanjing, Lenzing is working on converting a line to TENCEL™ modal bers. The portfolio of the Chinese ber plant will thereby consist entirely of specialty bers by the end of 2022. As part of the investment in Purwakarta, Lenzing will bring its entire viscose production up to EU Ecolabel standards. The site will thereby become a pure specialty viscose supplier as of 2023. In addition to the new lyocell plant in Thailand, which is designed to be carbon neutral, investments at existing sites are also in line with Lenzing’s targets to reduce carbon dioxide emissions per tonne of product by 50 percent by 2030 and to be climate neutral by 2050. In 2021, Lenzing also announced plans for the largest open-space photovoltaic plant in the state of Upper Austria, covering an area of 55,000 m² at the Lenzing site. In Grimsby (UK), the company is in- vesting GBP 20 mn (equivalent to EUR 23.3 mn) in the construction of a new, state-of-the-art wastewater treatment plant, thereby im- plementing a planned measure to reduce wastewater emissions by 2022. The year 2021 also saw the successful completion and commis- sioning of the air purication and sulfur reprocessing plant at the Lenzing site. Thanks to the new plant, carbon dioxide emissions will be further reduced and self-suciency in critical process raw ma- terials will be increased. Lenzing has invested approximately EUR 40 mn in this project since the start of construction in 2019. Investments 12 Annual Financial Report 2021 Lenzing Group 37 Annual Report 2021 Lenzing Group Research and development activities in the Lenzing Group are con- centrated in the Research and Development Department (R&D), a corporate unit based in Lenzing. At the end of 2021, a total of 222 sta were employed in R&D. R&D expenditures, calculated accord- ing to the Frascati method (after the deduction of grants), amounted to EUR 31.6 mn (compared with EUR 34.8 mn in 2020). Lenzing holds 1,487 patents and patent applications (from 190 pa- tent families) in 52 countries as of the end of 2021. The pandemic and its implications for public and private life con- tinued to aect R&D in the year under review. Lenzing adapted its R&D portfolio to these circumstances in order to continue to fully support key projects and to further advance strategic topics such as textile recycling and forward solutions (e.g. TENCEL™ Luxe and LENZING™ Web Technology). Focus areas in 2021 Sustainability is not only a core value within Lenzing’s strategy, but also a guiding principle for innovation and product development. In both process and product development, the R&D function is continuously working on solutions that further support the ambi- tious goal of carbon neutrality by 2050. A current focus in process development is the further integration of the biorenery concept at the pulp production sites, and consequently even better material utilization of wood as raw material. Further projects focus on clos- ing loops and reducing wastewater, as well as energy eciency enhancement and the reduction of carbon dioxide emissions. Lenzing continued to expand its product oering for the textile and nonwovens industries in 2021. The hydrophobic LENZING™ Lyocell Dry ber, for example, combines the advantages of stand- ard lyocell ber with the ability to repel moisture and liquid. Unlike conventional cellulosic bers, water cannot penetrate the bers. Instead, the water forms beads on the surface. This ber thereby makes it possible to tap further application areas that were previ- ously largely dependent on petroleum-based bers. The Indigo Color technology, which forms the basis for a further product innovation from the year under review, enables denim cus- tomers to improve their range in terms of sustainability and quality. With the aid of this pioneering technology, indigo pigments can be integrated during ber production, which ensures better color fast- ness than conventional indigo dyeing processes while consuming far fewer resources. With LENZING™ Web Technology, Lenzing developed a process for producing cellulosic nonwovens directly from textile pulp, thereby enabling processing steps along the value chain to be saved, and the ecological footprint to be reduced. The Republic of Austria highlighted this development’s innovative character in 2020 by awarding it the “State Prize for Innovation”. In 2021, Lenzing was one of the few companies to receive sought- after “Green Frontrunner” funding from the Austrian Research Pro- motion Agency (FFG). “Green Frontrunner” funding helps establish new, aggressive business area strategies that have a positive im- pact on environmental and climate protection. The project that is being funded bundles several technology areas relating to the fur- ther closing of materials loops and reducing emissions in pulp and ber production. Innovation centers and collaborations In addition, intensive communication occurs with the application and innovation centers in Hong Kong and Purwakarta, where new applications for Lenzing’s textile bers are developed on site in co- operation with customers. Based on these joint development ac- tivities, Lenzing is intensifying global collaboration with partners along the value chain. In order to give further impetus to the circular economy, Lenzing signed a partnership agreement with Swedish pulp producer Södra in 2021. As part of this cooperation, the two companies intend to share their knowledge and jointly develop new processes to recy- cle used textiles. A capacity expansion for pulp from textile waste is also planned. The aim is to be able to recycle approximately 25,000 tonnes of used textiles per year by 2025. Lenzing has been proactively developing and promoting recycling innovations such as its REFIBRA™ and Eco Cycle technologies for several years in order to provide solutions to the global textile waste problem. The rst TENCEL™ lyocell bers made from wood- and orange- based ber pulp were presented during the third quarter. The rst fabrics are currently being developed in collaboration with Italian specialist Orange Fiber. The upcycling of orange peels as part of the TENCEL™ Limited Edition Initiative represents a further suc- cessful attempt by Lenzing to develop new circular solutions to- gether with partners along the value chain. After its opening in the previous year, in 2021 the nonwovens de- velopment center at Hof University of Applied Sciences in Ger- many was commissioned for internal and external customer trials. In this state-of-the-art facility, new innovative applications for sus- tainably produced nonwoven bers from Lenzing are developed together with partners along the value chain. Research and Development 13 Annual Financial Report 2021 Lenzing Group 38 Annual Report 2021 Lenzing Group Environmental protection, sustainable business development and responsibility for people form part of Lenzing’s fundamental stra- tegic values. As a consequence, sustainability is rmly anchored within the sCore TEN strategy. Current information about sustain- ability is provided in the Lenzing Group Sustainability Report, which also forms the consolidated non-nancial report in accordance with Section 267a of the Austrian Commercial Code (UGB). Non-nancial statement 14 Annual Financial Report 2021 Lenzing Group 39 Annual Report 2021 Lenzing Group Current risk environment The risks of new virus variants and varying success with vaccination programs in the world’s regions are continuing to jeopardize stable economic growth. In 2021, the global economy recovered from the previous year’s recession, despite the ongoing COVID-19 pan- demic. The International Monetary Fund estimates that growth amounted to 5.9 percent in 2021 (-3.1 % in 2020). For 2022, the IMF forecasts growth of 4.4 percent. Signicant ination, especially in relation to commodities and en- ergy, is likely to continue to have a major bearing on the global risk environment in 2022. Risks such as supply chain problems, cyber attacks and the consequences of climate change are becoming in- creasingly signicant. In addition, it has become increasingly important to monitor geopo- litical risks. In particular, the war in Ukraine will have a negative impact on the global economy. The Lenzing Group’s business is not directly affected by the military conflicts in Ukraine. Indirectly, however, as is the case for industry as a whole, the risk of further increases in energy and raw material costs in particular, as well as negative effects on the capital markets, is also increasing for Lenzing. A detailed analysis of the trends in the global ber market during the reporting year and the related risks for the Lenzing Group is provided in the section “General Market Environment”. Lenzing risk outlook for 2022 Increasingly global risks will aect the Lenzing Group’s business to varying degrees in the future. In 2021, the global textile and apparel industry recorded a broad- based recovery from the previous year’s pandemic-related de- mand shock, which also led to a recovery in demand and subse- quently to rising prices on the world ber market. Risks to operating results arise particularly from price uctuations for key raw materi- als and energy, which lead to high volatility, especially also for standard viscose. Growing demand for sustainable solutions in the world is adding to the pressure on the standard viscose segment. The stable trend and continued price premium for wood-based specialty bers compared to standard bers such as cotton and polyester continued to have a positive eect on the Lenzing Group’s business performance in 2021. As a consequence, the company continues to regard itself as very well positioned with its sCore TEN strategy and its focus on growth deriving from specialty bers. Lenzing aims for further organic growth in this area in order to be even more resilient to volatile markets in the future. The Group’s own ber pulp supplies are secured long-term thanks to continu- ous capacity expansions and sucient market supply. Investment activities will focus on the implementation in Brazil of the world’s largest pulp mill of its kind, including securing a plantation for the supply of biomass. The commissioning of the new plant with a nominal capacity of 500,000 tonnes per year is scheduled for the rst half of 2022. Signicant increases in energy, raw material and logistics costs were recorded throughout the reporting year. Price momentum is not expected to diminish in the short term. As far as currencies are concerned, the US dollar uctuated against the euro within a 10 percent range, while the Chinese yuan uctuated against the euro in a 9 percent range. A depreciation of the two currencies would have a negative impact on Lenzing’s open currency volumes. Liquidity risk is expected to be low in 2022 thanks to the stable nancial structure. No signicant loss events arising from operational, environmental or product liability risks occurred in the reporting year. For the two key projects in Brazil and Thailand, possible cost over- runs or long-term delays that could have a negative eect on the Lenzing Group’s nancial results are not anticipated from today’s perspective. Despite the more challenging environment created by COVID-19, the implementation of these projects ran largely ac- cording to plan. In Thailand, the lyocell plant started production in the rst quarter of 2022. As at other companies, non-operational risks are playing an in- creasingly important role in the Lenzing Group. In recent years, es- pecially cyber risks, compliance risks (as well as reputational dam- age that is often associated with compliance risks) and recruitment risks have been increasingly ranked higher. Lenzing continuously counters these risks with broadly rolled-out standards and a global organizational structure. Risk management The main purpose of risk management within the Lenzing Group is to secure and strengthen the company by correctly and transpar- ently assessing nancial, operational and strategic risks, including those relating to the ESG area. The Lenzing Group’s Managing Board, together with the heads of the reporting departments, con- ducts extensive coordinating and controlling operations as part of a comprehensive integrated internal control system that covers all locations. The timely identication, evaluation and response to strategic and operational risks form essential components of these management activities and make a signicant contribution to the company’s value. This approach is based on a standardized, Group-wide monthly reporting system and the ongoing monitoring of strategic and operational plans. Lenzing has implemented a corporate risk management system for the central coordination and monitoring of risk management pro- cesses throughout the Group. This system identies and analyzes the main risks, together with input from the operating units, and Risk Report 15 Annual Financial Report 2021 Lenzing Group 40 Annual Report 2021 Lenzing Group communicates the results to the Managing Board and senior man- agers. Risk management also includes the proactive analysis of po- tential events and near-misses. Further tasks include actively con- trolling risks and evaluating appropriate measures with the respec- tive business areas. Since 2020, both long-term risks and opportu- nities related to climate change have been identied and assessed within the Lenzing Group. Mitigation measures corresponding to such risks are taken into consideration in the risk management pro- cess, including the requirements of the TCFD (Task Force on Cli- mate-related Financial Disclosures) in relation to climate-related risks. Risk management strategy Lenzing pursues a multi-step approach to risk management: Risk analysis (based on the COSO ®1 Framework) The Central Risk Management Department carries out semiannual risk assessments with a ve-year time horizon at all production lo- cations and functional units. Long-term risks and opportunities are also analyzed in connection with ESG issues. The main risks, as well as an increasing number of opportunities, are recorded and quan- titatively assessed in accordance with international COSO ® stand- ards. Those risks are presented outside the consolidated statement of nancial position and the consolidated income statement. The nancial impact of a potential loss on Group EBITDA or on cash and cash equivalents is taken into consideration. The risks are sim- ulated against EBITDA planning, and the range of potential devia- tions from the respective budget is determined. Lenzing uses a simulation software which also calculates other KPIs such as value at risk, risk-adjusted ROCE and a sensitivity analysis. Risks that can- not be measured in monetary terms are recorded qualitatively. Risk reduction The objective is to minimize, avoid or, in certain cases, intentionally accept risks based on appropriate measures. The actions taken de- pend on the expected impact of the specic risk on the Group. Responsibility Individual risks are assigned on the basis of the existing organiza- tion matrix. Each risk is assigned to a member of the Managing Board as “risk owner” and to a risk ocer. Risk monitoring/control The eectiveness of the risk management system used by the Len- zing Group was evaluated by KPMG Austria GmbH pursuant to Rule 83 of the Austrian Corporate Governance Code (ACGC) as part of a special, limited assurance audit in the reporting year. Reporting The main risks are presented in detail in a report and discussed with the Managing Board and the Audit Committee. The risk report is also submitted to the Supervisory Board. 1 Committee of Sponsoring Organizations of the Treadway Commission Market environment risks Market risk As an international corporation, the Lenzing Group is exposed to a variety of risks. The trend in prices and volumes for textile bers and, to a lesser extent, also for nonwoven bers, is cyclical as it is dependent on global and regional economic conditions. Lenzing bers compete with cotton and synthetic bers in many submar- kets. Consequently, price trends for these products also have an inuence on Lenzing bers’ revenue and sales volumes trends. The Lenzing Group counteracts this risk by steadily increasing the share of specialty bers in its global product portfolio and a con- sistent sustainability and innovation strategy. In addition to increas- ing the share of specialty bers, which now accounts for around 72 percent of ber revenue, the aim is to further expand the com- pany’s role as a leader in terms of sustainability in the ber sector. Lenzing bers also oer a dierentiating feature in the standard - ber sector with their high sustainability and quality standards com- bined with customer-oriented and solutions-oriented technical support. The Lenzing Group relies on a strong international market presence, especially in Asia, combined with a rst-class regional support net- work for customers, as well as a high level of customer-oriented product diversication. Sales risk A comparatively small number of major customers are responsible for approximately one half of the Lenzing Group’s ber revenue. A decrease in sales to these major customers, or the loss of one or more major customers without an immediate replacement, poses a certain risk. The company counteracts such risk with its global presence and the continuous broadening of its client base and sales segments. Possible default on trade receivables is covered by clear receivables management and global credit insurance. Competitive and innovation risks The Lenzing Group is exposed to the risk of losing its position on the ber market due to greater competition or new technologies developed by competitors. In particular, the Lenzing Group could relinquish its market position if it were no longer able to oer its products at competitive prices, if its products were to fail to com- ply with customer specications and quality standards, or if its cus- tomer service were to fail to meet customer expectations. Lenzing counteracts this risk with research and development activities that exceed the average for the sector, and by a high level of product innovation and steady cost optimization. The Lenzing Group – sim- ilar to other producers – is exposed to the risk that acceptable or superior alternative products may become available and at more favorable prices than wood-based cellulosic bers. Laws and regulations The Lenzing Group is confronted with dierent legal systems and regulations in its global markets. A change in laws or other regula- tions (e.g. import duties, product classications, environmental re- quirements etc.), as well as a more stringent interpretation of exist- ing regulations and laws, could lead to signicant additional costs 16 Annual Financial Report 2021 Lenzing Group 41 Annual Report 2021 Lenzing Group or competitive disadvantages. The Lenzing Group maintains certi- ed management systems for quality management according to ISO 9001, for environmental management according to ISO 14001, and for safety management according to ISO 45001. Legal compli- ance in connection with these management systems is regularly audited both internally and externally. With its own legal and compliance department, the Lenzing Group has a corporate division that performs corresponding consulting services and risk assessments. In response to the far-reaching implications of global warming for society and ecosystems, governments and further stakeholders are likely to introduce more stringent laws and regulations. For exam- ple, in addition to reducing carbon credits issued in the EU, new taxes on carbon dioxide emissions could be introduced. Other re- gions and countries are currently also planning to implement similar steps. The implementation of regionally diering measures could have a negative impact on the Lenzing Group’s civic performance and success. The Lenzing Group is implementing a number of measures to reduce climate-related transition risks, and to further enhance resilience in this area. Intellectual property risks A risk exists that Lenzing’s intellectual property may be infringed or incompletely protected. The Lenzing Group counters such risks by means of a dedicated intellectual property protection department. Climate change and marine pollution Increasing awareness of problems caused by climate change, such as rising sea levels, the frequency and severity of natural disasters, and a growing risk from pollution of the world’s oceans by plastic waste and microplastics, are creating major risks for the entire ber industry. By producing biodegradable bers, Lenzing regards this development as an opportunity for its business model. The Lenzing Group has recognized the far-reaching eects of cli- mate change on society and ecosystems and oers a sustainable alternative with its innovative and biodegradable products. Lenzing is constantly working to set clear sustainability targets and is con- tinuously seeking ways to enhance its energy eciency as well as opportunities to utilize renewable energy sources or those with lower carbon dioxide emissions. As early as 2020, Lenzing became the rst ber manufacturer to commit to carbon neutrality by 2050. ESG (Environment, Social and Governance) As part of a materiality analysis conducted in 2021, Lenzing con- ducted a multi-stage, holistic survey of the main issues relating to its sustainably oriented business model. From this analysis, the most important risks and opportunities were determined for each ESG topic area. The topics are integrated into the Enterprise Risk Management System and are successively reected in Lenzing’s long-term strategic business planning. In the environmental responsibility area (Environment), the main fo- cus topics in the risk matrix comprise climate-related issues in con- nection with global warming (carbon dioxide reduction) as well as sustainable raw material procurement (wood, chemicals) and the growing water shortage in certain regions. Increasing regulation, particularly in relation to the taxation of greenhouse gases and the pricing of carbon, represents a signicant risk for Lenzing. Regula- tions concerning greenhouse gas emissions have already been in- troduced in countries where Lenzing operates carbon-intensive processes. Lenzing is consistently working on the implementation of energy eciency measures, as well as the reduction of carbon dioxide emissions in order to reduce the potential burden of eco- taxes. For Lenzing, wood is the most important natural resource for the production of its biodegradable cellulosic bers. Despite sustaina- ble sourcing policies and backward-integrated production, a risk exists that wood prices will rise due to climate change, increasing global demand for biomass, and alternative land use. In this context, Lenzing is expanding its pulp capacities in Brazil (see Lenzing Risk Outlook). The global textile industry, especially the fashion industry in which Lenzing’s products are frequently deployed, is regarded in a critical light due to its sometimes resource-intensive consumption of raw materials and its production processes. Lenzing identies signi- cant business opportunities through access to new and emerging markets with innovative new products and technologies. Innova- tion and sustainability lie at the heart of Lenzing’s sCore TEN cor- porate strategy. The production of pulp and bers is associated with high levels of water consumption and emissions. Lenzing operates a careful global water management system that ensures compliance with both local laws and global standards. Lenzing is counteracting the increasing scarcity of water by continuously improving resource utilization and by optimizing the selection of sites for the expansion of production capacities. In the area of social responsibility (Social), the main risks were iden- tied in the area of cyber attacks (see IT risks). With regard to the corporate governance area (Governance), the risk of inadequate compliance with corporate governance and resultant risks is con- sidered material. Lenzing is continuously tightening its internal rules and expanding its compliance organization accordingly. Operational risks Procurement risk (including pulp supplies) The Lenzing Group purchases large volumes of raw materials (wood, pulp, chemicals) and energy for the manufacture of its cel- lulosic bers. Fiber production and related margins are exposed to risks arising from the availability and prices of these raw materials, which can uctuate to the Lenzing Group’s disadvantage and may increase as a consequence of climate change. Such risks are coun- tered through the careful selection of suppliers based on price, re- liability and quality criteria, EcoVadis-based sustainability assess- ments, as well as the establishment of long-standing, stable sup- plier-customer partnerships, in some cases with multi-year or long- term supply agreements. In addition, all suppliers must comply with Lenzing’s Global Supplier Code of Conduct. Nevertheless, a risk exists of violations of this code, which may have a negative im- pact on the Lenzing Group and its stakeholders along the value chain. Supply chain risks may also result from disruptions caused by natural disasters. Lenzing has also entered into long-term contractual relationships with several raw material suppliers and service partners. These 17 Annual Financial Report 2021 Lenzing Group 42 Annual Report 2021 Lenzing Group agreements require Lenzing to purchase specied quantities of raw materials on standardized terms and conditions, which may also include price adjustment clauses. Lenzing may consequently not be able to adjust prices, purchase volumes or other contract conditions over the short term in order to respond to market changes. The sCore TEN strategy includes an increased focus on backwards integration through the expansion of the Group’s own cellulose production. Operating risks, environmental risks and risks relating to climate change The production of wood-based cellulosic bers involves complex chemical and physical processes that cause certain environmental risks. These risks are very well controlled thanks to proactive and sustainable environmental management, closed production cycles, ongoing emissions monitoring and state-of-the-art production techniques. Lenzing continuously works on increasing safety and environmental standards through voluntary references such as the EU Ecolabel. As the Lenzing Group has operated production facil- ities at several locations for several decades, risks arising from en- vironmental damage in earlier periods cannot be completely ex- cluded. Although the Lenzing Group has set very high technological and safety standards for the construction, operation and maintenance of its production sites, the risk of breakdowns, disruptions and ac- cidents cannot be completely excluded. These types of disruptions can also be caused by external factors over which Lenzing has no control. It is impossible to provide direct protection against certain natural hazards, such as cyclones, earthquakes and oods. More- over, a risk exists that personal injury, material and environmental damage, both within and outside the production facilities, could result in substantial claims for damages and even criminal liability. The Lenzing Group’s production activities are concentrated at a small number of locations. Any disruption at one of these facilities has a negative impact on the company’s business operations. Product liability risk The Lenzing Group markets and sells its products and services to customers worldwide. These business activities can lead to dam- age to customers, or along the value chain, through the delivery of a defective product by Lenzing or one of its subsidiaries. Moreover, product safety can be jeopardized by pollution, which may cause problems in the value chain, such as potential health implications for employees and customers. Lenzing is also subject to local laws in the countries where its products are delivered. Especially in the USA, the potential implications are considered to be severe. Such risk is countered by a special department that focuses exclusively on customers’ problems in processing Lenzing products and on handling complaints. Appropriate precautions in the production process and regular quality inspections have been implemented. Third party damages caused by Lenzing are covered by a global liability insurance program. Financial risks For a detailed description of nancial risks refer to notes 36 to 39 in the Notes to the Consolidated Financial Statements. Tax risk The Lenzing Group’s production sites are subject to local tax reg- ulations in their respective countries and are required to pay cor- poration tax as well as other taxes. Changes in tax legislation or dif- ferent interpretations of prevailing regulations could lead to subse- quent tax liabilities. Compliance Increasingly stringent international codes of conduct and legal reg- ulations are creating additional demands on Lenzing in relation to compliance and monitoring. Inadequate controls in business pro- cesses or a lack of documentation can lead to the violation of ap- plicable laws or regulations, and signicantly jeopardize reputation and commercial success. Lenzing addresses this risk by, among other measures, continuously developing its Group-wide compli- ance organization, the corporate code of conduct that is valid throughout the Group, as well as directives addressing the areas of bribery and corruption, money laundering and antitrust practices. Further information on compliance is provided in the Corporate Governance Report. IT risks Lenzing depends on highly developed information technology (IT) systems for its daily operations. IT systems are vulnerable to a range of problems, including software and hardware malfunctions, malicious hacking and cyberattacks, physical damage to key IT centers, and computer virus infections. Consequently, any major damage, disruption and/or circumvention of its existing IT systems may disrupt Lenzing’s business operations. Personnel risks Personnel risks may arise through the turnover of key sta as well as the recruiting of new sta at all global sites. The Lenzing Group has established a Human Resources Department which operates internationally and coordinates personnel planning with the re- spective sites. It is responsible for the central management and monitoring of all personnel-related issues, including the organiza- tion of global management and training programs for potential ex- ecutives. At the production facilities, Lenzing Group employees as well as external contractors’ workers and employees are exposed to a risk of injury. Lenzing’s “Heartbeat for Health & Safety” program takes such risk into consideration and includes a strategic approach to risk reduction, precautionary measures and extensive training. For more information, please refer to the Lenzing Group Sustainability Report. In addition, risks related to compliance with legal require- ments arise when engaging contractors, particularly in connection with the two major projects in Thailand and Brazil. Risks relating to major projects The Lenzing Group is continuously expanding its capacities in nu- merous projects. Examples include the new pulp mill in Brazil and the lyocell mill in Thailand, which is being ramped up at present. These types of major projects entail an inherent risk of cost and schedule overruns. Lenzing counters such risks with a standardized planning process, consistent project management, ongoing cost controls, as well as insurance solutions and risk transfer. In addition 18 Annual Financial Report 2021 Lenzing Group 43 Annual Report 2021 Lenzing Group to ongoing risk management, Monte Carlo simulations are used for projects of this and similar size to model the sensitivity of the key nancial indicators. Despite the currently dicult environment due to the COVD-19 pandemic, progress with these two projects is largely running to schedule to date. Risks from an external perspective and for other stakeholders As a globally operating company, the Lenzing Group is aware of its social responsibility. The risks described in the risk report refer pri- marily to the eect on the Lenzing Group’s assets and earnings. As one of the sustainability leaders in its sector, the Lenzing Group seeks a balance between the needs of society, the environment and the economy. The company assumes such responsibility, par- ticularly with respect to potential eects of its operations on neigh- bors of the production sites and in relation to society as a whole. Active stakeholder work to mitigate risks (partnership for systemic change) and to create additional benets for people and the envi- ronment is a clear goal of the Lenzing Group’s innovation and op- erating activities. The Lenzing Group was awarded platinum status in EcoVadis’s CSR rating in the reporting year. This evaluation co- vers the most important practices in the Corporate Social Respon- sibility (CSR) area. In cooperation with its partners, the Lenzing Group is working on understanding the risks for stakeholders and on nding solutions to mitigate such risks. This work is based on open communication and transparency as well as continuous im- provement of technologies and sustainable practices. 19 Annual Financial Report 2021 Lenzing Group 44 Annual Report 2021 Lenzing Group The Lenzing Group’s internal control system is designed to safe- guard the reliability of nancial reporting, ensure compliance with legal regulations and corporate guidelines, and present the risks not reported on the consolidated statement of nancial position or in the consolidated income statement. The Lenzing Group’s organizational structure and processes form the main basis for the control environment and the internal control system. The organizational structure includes the assignment of specic authorities and responsibilities to the various management and hierarchy levels at the Austrian sites and at all international sub- sidiaries. Key Group functions are centralized in corporate centers which reect Lenzing’s global market presence as well as its de- centralized business and site structure. The respective manage- ment teams are responsible for coordinating and monitoring busi- ness operations at national level. Lenzing’s process organization is characterized by a well-devel- oped and comprehensive set of guidelines which provide an eec- tive foundation for a strong controlling environment and control system. Important Group-wide approval processes and responsi- bilities are dened in the Lenzing Group Mandates. The manage- ment of each business area or department is responsible for mon- itoring compliance with the respective regulations and controls. Financial reporting The Corporate Accounting & Tax Department has central respon- sibility for nancial reporting, the accounting-related internal con- trol system, and tax issues within the Lenzing Group. The goal of the accounting-related control system is to ensure the uniform application of legal standards, generally accepted ac- counting principles, and the accounting regulations specied in the Austrian Commercial Code. This system also covers the consoli- dated accounting process and thereby ensures compliance with the rules dened by International Financial Reporting Standards (IFRS) and internal accounting guidelines, in particular the Group accounting manual and schedules. The accounting-related internal control system is designed to safeguard the timely, uniform and ac- curate recording of all business processes and transactions. It thereby supports the preparation of reliable data and reports on the Lenzing Group’s nancial position and nancial performance. The subsidiaries included in the consolidated nancial statements pre- pare nancial statements in accordance with both local laws and IFRS standards at the company level on a timely basis. The subsid- iaries are responsible for the decentralized implementation of ex- isting rules and are supported and monitored in these activities by the Corporate Accounting & Tax function. The Supervisory Board’s Audit Committee is integrated in the accounting-related control system. In addition, the annual nancial statements are audited by external certied public accountants and the half-year nancial statements are reviewed on a voluntary basis. The Global Treasury Department, and above all the payments unit, is classied as a highly sensitive area due to its direct access to the company’s assets. The accompanying increased need for security is reected in comprehensive regulations and instructions for all relevant processes. The entire process, from procurement through to payment, is subject to stringent corporate guidelines. These guidelines are largely supported by a Group-wide IT system which requires stringent functional separation, a clear authorization con- cept to prevent authorization conicts as well as a stringent dual control principle for transaction settlement, in particular for pay- ments, as well as regular reporting, among other measures. The Internal Audit Department is responsible for monitoring the ap- plication of, and compliance with, controls in business operations. Compliance with legal regulations and internal guidelines The Lenzing Group’s Legal, Intellectual Property & Compliance Department is responsible for legal management. This centralized function handles legal matters within the Lenzing Group and is also responsible for the Compliance Management System (CMS). To- gether with the Managing Board, it oversees Group-wide compli- ance with legal regulations and internal guidelines as well as the prevention of legal violations and improper behavior. The Legal, In- tellectual Property & Compliance Department reports directly to the Lenzing Group CEO. The CMS evaluates compliance-relevant risks, analyzes deviations from standards and, if necessary, takes measures to reduce them (“prevent, detect, respond”). This depart- ment also draws up compliance-relevant guidelines and supports employee training activities worldwide. The Managing Board and the Supervisory Board (or the Audit Committee) receive regular re- ports on compliance measures. The Lenzing Group complies with the rules dened by the Austrian Corporate Governance Code (ACGC) and prepares a Corporate Governance Report which is published as part of the Annual Report. The Corporate Governance Report requires the participation of the Supervisory Board, which delegates the responsibility for monitor- ing compliance with the related obligations to the Audit Commit- tee. The Corporate Audit Department is independent of all other organ- izational units and business processes and reports directly to the CFO. It evaluates whether the Group’s resources are deployed le- gally, economically, eciently and correctly in the interests of sus- tainable development. The Corporate Audit Department’s activi- ties are based on the international standards published by the In- stitute of Internal Auditors (IIA). Regular reporting to the Managing Board and the Audit Committee ensure the proper functioning of the internal control system. Report on the Key Elements of the Internal Control System (Section 243a Para. 2 of the Austrian Commercial Code) 20 Annual Financial Report 2021 Lenzing Group 45 Annual Report 2021 Lenzing Group Reporting of risks outside the statement of nancial position and income statement The Risk Management Department is responsible for the reporting of risks that are not reported on the statement of nancial position or in the income statement, and prepares a semi-annual risk report for this purpose. The major risks are also discussed in the Annual Report. The risk report is based on the international COSO ® stand- ards (Committee of Sponsoring Organizations of the Treadway Commission). Enterprise Risk Management adopts a holistic approach in this context. In addition to corporate and project risks included in me- dium-term planning, the focus is increasingly on the long-term consideration and evaluation of ESG criteria and the associated opportunities and risks for the sustainable development of the Len- zing Group’s performance and protability. 21 Annual Financial Report 2021 Lenzing Group 46 Annual Report 2021 Lenzing Group Share capital and shareholder structure The share capital of Lenzing AG amounted to a total of EUR 27,574,071.43 as of the balance sheet date and is divided into 26,550,000 no-par-value shares. B&C Group is the majority share- holder with an investment in the voting rights of 50 percent plus two shares. NN Group N.V. holds approximately 5 percent of the shares. The free oat amounts to approximately 45 percent. This is divided between Austrian and international investors. The Lenzing Group holds no treasury shares. Position of shareholders Each no-par-value share grants the shareholder one vote at the Shareholders’ General Meeting of Lenzing AG. Unless provided otherwise by mandatory provisions of the Austrian Stock Corpora- tion Act (AktG), the Shareholders’ General Meeting passes resolu- tions by a simple majority of the votes cast and – if a majority of the share capital is required – by a simple majority of the share capital represented at the Shareholders’ General Meeting. Lenzing AG has no shares with special control rights. A resolution passed by the Annual General Meeting on June 18, 2020 author- ized the Managing Board, subject to the consent of the Supervisory Board, to purchase treasury shares in the company for a period of 30 months starting on the date of the resolution pursuant to Sec- tion 65 Paras. 1 no. 4 and 8 and Paras. 1a and 1b AktG. The treasury shares acquired by the company may not exceed ten percent of the company’s share capital. The consideration to be paid for the repurchase must lie within a range of plus/minus 25 percent of the weighted average closing price on the last 20 stock exchange days preceding the start of the corresponding repurchasing program of the Lenzing share. The Managing Board was also authorized, subject to the consent of the Supervisory Board, to withdraw repurchased treasury shares without any further resolution by the Shareholders’ General Meet- ing (including the authorization of the Supervisory Board to adopt changes to the articles of association resulting from withdrawing the shares), or to resell them and to determine the conditions of sale. This authorization can be exercised in full, in several parts and in pursuit of one or several objectives by the company, by a sub- sidiary (Section 189a no. 7 of the Austrian Commercial Code [UGB]) or by third parties for the company’s account. In addition, the Managing Board was authorized for a period of ve years from the date of the resolution to approve the sale of treasury shares, subject to the consent of the Supervisory Board, in any manner permitted by law other than through the stock exchange or public oer, and also to exclude shareholders’ repurchasing rights (subscription rights), and to determine the conditions of sale. A resolution passed by the Annual General Meeting on April 12, 2018 authorized the Managing Board, subject to the consent of the Supervisory Board, to increase the share capital by up to EUR 13,787,034.68 through the issue of up to 13,274,999 no-par- value bearer shares – including in tranches – in exchange for cash and/or non-cash capital contributions, within ve years from the entry of the changes in the articles of association in the commercial register and to determine the issue price and the further issue con- ditions (“authorized capital”). This authorized capital was recorded in the commercial register on May 23, 2018. The statutory subscription right may be granted to shareholders in such a manner that the convertible bonds be assumed by a bank or a syndicate of banks with the obligation to oer them to the shareholders in accordance with their subscription right (indirect subscription right). The Managing Board was also authorized, subject to the consent of the Supervisory Board, to exclude shareholders’ subscription rights in the event of a capital increase from the authorized capital in whole or in part (i) if the capital increase in exchange for non- cash capital contributions is carried out for the purpose of acquir- ing companies, parts of companies, operations, parts of operations, participating interests in companies or other assets connected with an acquisition project, (ii) to satisfy an over-allotment option (greenshoe) or (iii) to compensate for fractional amounts. In addition, the Managing Board was authorized by a resolution of the Annual General Meeting on April 12, 2018 to issue, subject to the consent of the Supervisory Board, convertible bonds in one or several tranches that grant or provide for the subscription or con- version right or a subscription or conversion obligation for up to 13,274,999 shares in the company. These can be serviced through conditional capital to be approved and/or treasury shares. The is- sue price and issue conditions are to be determined by the Man- aging Board, subject to the consent of the Supervisory Board; the issue amount and the exchange ratio are to be determined in ac- cordance with recognized methods of nancial mathematics and the price of the company’s shares in a recognized pricing proce- dure. This authorization is valid until April 12, 2023. The statutory subscription right may be granted to shareholders in such a manner that the convertible bonds be assumed by a bank or a syndicate of banks with the obligation to oer them to the shareholders in accordance with their subscription right (indirect subscription right). Shareholder structure and information on capital 22 Annual Financial Report 2021 Lenzing Group 47 Annual Report 2021 Lenzing Group The Managing Board was authorized, subject to the consent of the Supervisory Board, to exclude the subscription right of sharehold- ers when issuing convertible bonds in whole or in part (i) if the con- vertible bonds are issued in exchange for non-cash capital contri- butions for the purpose of acquiring companies, parts of compa- nies, operations, parts of operations, participating interests in com- panies or other assets relating to an acquisition project, or (ii) for the compensation of fractional amounts resulting from the sub- scription ratio. The Managing Board was also authorized, subject to the approval of the Supervisory Board, to exclude the subscription right for con- vertible bonds in whole or in part, provided that the Managing Board, after due examination, arrives at the conclusion that the is- sue price of the convertible bonds at the time of the nal determi- nation of the issue price is not less than the hypothetical market value determined according to recognized, in particular nancial- mathematical, methods and that the conversion price or subscrip- tion price (issue price) of the subscription shares is determined tak- ing into account recognized methods of nancial mathematics and the price of the company’s ordinary shares in a recognized pricing procedure, and is not lower than the stock market price of the company’s shares during the last 20 trading days prior to the date of announcement of the issue of convertible bonds. The Managing Board did not utilize the existing authorizations dur- ing the reporting year. The 77th Annual General Meeting of Lenzing AG was held in virtual format via livestream on April 14, 2021 due to the COVID-19 pan- demic. Detailed information about the Annual General Meeting, proposals for resolutions and the results of voting are published on the website Lenzing AG: https://www.lenzing.com/inves- tors/shareholders-meeting/2021. The 78th Annual General Meeting on April 26, 2022 will also be held in virtual format via livestream due to the ongoing COVID-19 pandemic. Further disclosures pursuant to Section 243a of the Austrian Commercial Code No provisions exist other than those stipulated by law that cover the appointment or dismissal of members of the Managing or Su- pervisory boards. The Dexco Group (formerly the Duratex Group) has a put option and has the right to divest its interest in the LD Celulose joint ven- ture in the event of a change of control at the Lenzing Group (change of control clause). Besides this, the company has not entered into any signicant agreements that would take eect, change or expire in the event of a change in control as the consequence of a takeover bid. No compensation agreements exist between the company and the members of the Managing and Supervisory boards or with employ- ees that would take eect in the event of a public takeover oer. 23 Annual Financial Report 2021 Lenzing Group 48 Annual Report 2021 Lenzing Group The International Monetary Fund forecasts global growth of 4.4 percent for 2022. However, the economic recovery from the deep recession caused by COVID-19 remains at risk, and continues to depend on the further course of the pandemic and its implica- tions for individual economic sectors. The sharp rise in energy costs and problems in global supply chains pose further economic challenges. In addition, it has become increasingly important to monitor geopolitical risks. In particular, the military conicts in Ukraine will have a negative impact on the global economy. The currency environment is expected to remain volatile in the regions relevant to Lenzing. The extensive recovery in demand in the global textile and apparel industry also led to a recovery in demand and rising prices on the world ber market in 2021. In the trend-setting market for cotton, signs are emerging of a slight increase in stock volumes in the cur- rent 2021/2022 harvest season, although dynamics on interna- tional commodity markets and global supply chain problems are likely to continue to have a signicant impact on price trends in 2022. At their peak, ber pulp prices rose by more than 50 percent in 2021. The price stood at USD 905 per tonne as of December 31, 2021. Lenzing continues to assume growth in demand for environmen- tally compatible bers for the textile and clothing industry as well as the hygiene and medical sectors. However, the currently posi- tive market environment continues to be characterized by uncer- tainty due to the ongoing pandemic. Visibility remains limited as a consequence. Following signicant cost increases in 2021, ongoing cost pressure on the energy, raw materials and logistics sides is expected in the rst quarters of 2022. Taking into consideration the aforementioned factors and the im- minent commissioning and completion of the key strategic pro- jects, which will already make an initial contribution to earnings starting in the current nancial year, the Lenzing Group anticipates that EBITDA in 2022 will lie signicantly above the 2021 level. Lenzing, March 01, 2022 Lenzing Aktiengesellschaft The Managing Board Outlook Cord Prinzhorn Chief Executive Ocer Thomas Obendrauf Chief Financial Ocer Robert van de Kerkhof Member of the Managing Board Stephan Siela Member of the Managing Board Christian Skilich Member of the Managing Board 24 Annual Financial Report 2021 Lenzing Group The key financial indicators for the Lenzing Group are described in detail in the following section These indicators are derived primari- ly from the IFRS consolidated financial statements of the Lenzing Group and are found in this annual report, above all, in the sections “Selected Indicators of the Lenzing Group” and “Five-Year Over- view of the Lenzing Group”. The definitions of the indicators are summarized in the glossary to the annual report. The Managing Board believes these financial indicators provide useful information on the financial position of the Lenzing Group because they are used internally and are also considered important by external stakeholders (in particular investors, banks and analysts). EBITDA, EBITDA margin, EBIT and EBIT margin EBITDA and EBIT are viewed by the Lenzing Group as the bench- marks for the strength of operating earnings and profitability (per- formance) before and after depreciation and amortization. Due to their significance – also for external stakeholders – the EBIT is presented on the consolidated income statement and EBITDA is presented in the Financial Performance Indicators and, in order to provide a comparison of margins, in relation to group revenue (as the EBITDA margin and EBIT margin). EUR mn 2021 2020 2019 2018 2017 Earnings before interest and tax (EBIT) + Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets - Income from the release of investment grants () () () () () Earnings before interest, tax, depreciation and amortization (EBITDA) EUR mn 2021 2020 2019 2018 2017 Earnings before interest and tax (EBIT) / Revenue EBIT margin 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2 of the consolidated nancial statements as at December 31, 2021). EBT EBT measures the pre-tax earnings strength of the Lenzing Group and is shown on the consolidated income statement. Gross cash flow In the Lenzing Group, gross cash flow serves as the benchmark for the company's ability to convert gains/losses from operating activ- ities (before changes in working capital) into cash and cash equivalents. This indicator is presented in the consolidated state- ment of cash flows. Free cash flow The free cash flow generated by the Lenzing Group shows the cash flow generated by operating activities – after the deduction of investments – which is available to service the providers of debt and equity. This indicator is also important for external stakehold- ers. Appendix: Notes on the Financial Performance Indicators of the Lenzing Group EUR mn 2021 2020 2019 2018 2017 Earnings before interest, tax, depreciation and amortization (EBITDA) / Revenue EBITDA margin 25 Annual Financial Report 2021 Lenzing Group EUR mn 2021 2020 2019 2018 2017 Cash flow from operating activities - Cash ow from investing activities () () () () () - Net inow from the sale and disposal of subsidiaries and other business areas () () + Acquisition of nancial assets and investments accounted for using the equity method - Proceeds from the sale/repayment of nancial assets () () () () () Free cash flow () () CAPEX CAPEX shows the expenditures for intangible assets, property, plant and equipment and biological assets. It is presented in the consolidated statement of cash flows. Liquid assets Liquid assets show the Lenzing Group's ability to meet due pay- ment obligations immediately with available funds. This indicator is also used to calculate other financial ratios (e.g. net financial debt; see below). EUR mn as at 31/12 2021 2020 2019 2018 2017 Cash and cash equivalents + Liquid bills of exchange (in trade receivables) Liquid assets Trading working capital and trading working capital to annualized group revenue Trading working capital in the Lenzing Group is a measure for potential liquidity and capital efficiency. It is used to compare capital turnover by relating it to group revenue. EUR mn as at 31/12 2021 2020 2019 2018 2017 Inventories + Trade receivables - Trade payables () () () () () Trading working capital EUR mn 2021 2020 2019 2018 2017 Latest reported quarterly group revenue (= 4th quarter respectively) x 4 (= annualized group revenue) Trading working capital to annualized group revenue 26 Annual Financial Report 2021 Lenzing Group Adjusted equity and adjusted equity ratio Adjusted equity shows the Lenzing Group's independence from the providers of debt and its ability to raise new capital (financial strength). This figure includes equity as defined by IFRS as well as government grants less the proportional share of deferred taxes. Adjusted equity is used to compare equity and debt with total assets. This (and/or a similar indicator) is occasionally used as a financial covenant by lenders. EUR mn as at 31/12 2021 2020 2019 2018 2017 Equity + Non-current government grants + Current government grants - Proportional share of deferred taxes on government grants () () () () () Adjusted equity / Total assets Adjusted equity ratio Net financial debt, net financial debt/EBITDA, net gearing and net debt Net financial debt is used by the Lenzing Group as the benchmark for its financial indebtedness and capital structure. It is also an important indicator for external stakeholders. The relation of this indicator to EBITDA shows the number of periods in which the same level of EBITDA must be generated to cover net financial debt. The ratio of net financial debt to adjusted equity (net gearing) illustrates the relation of net debt to adjusted equity. This (and/or a similar indicator) is occasionally used as a financial covenant by lenders. Net debt in the Lenzing Group measures the level of financial debt, including the provisions for severance payments and pensions. EUR mn as at 31/12 2021 2020 2019 2018 2017 Current financial liabilities + Non-current nancial liabilities - Liquid assets () () () () () Net financial debt / Earnings before interest, tax, depreciation and amortization (EBITDA) Net financial debt / EBITDA EUR mn as at 31/12 2021 2020 2019 2018 2017 Net financial debt / Adjustedequity Net gearing EUR mn as at 31/12 2021 2020 2019 2018 2017 Net financial debt + Provisions for severance payments and pensions Net debt 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2 of the consolidated nancial statements as at December 31, 2021). 27 Annual Financial Report 2021 Lenzing Group Return on capital (ROE, ROI and ROCE) Return on capital employed (ROCE) is the Lenzing Group's benchmark for the yield (return) on the capital employed in the operating business. It is also an important indicator for external stakeholders. Return on capital (ROE) and return on investment (ROI) are profitability indicators which measure the earnings strength of the Lenzing Group. EUR mn 2021 2020 2019 2018 2017 Earnings before interest and tax (EBIT) - Proportional share of current income tax expense (on EBIT) () () () () () Earnings before interest and tax (EBIT) less proportional share of current income tax expense (NOPAT) () / Average capital employed ROCE (return on capital employed) () Proportional share of current income tax expense (on EBIT) () () () () () Proportional share of other current tax expense Current income tax expense () () () () () EUR mn as at 31/12 2021 2020 2019 2018 2017 Total assets - Trade payables () () () () () - Non-current puttable non-controlling interests () () () - Other non-current liabilities () () () () () - Other current liabilities () () () () () - Current tax liabilities () () () () () - Deferred tax liabilities () () () () () - Proportional share of deferred taxes on government grants () () () () () - Current provisions () () () () () - Non-current provisions () () () () () + Provisions for severance payments and pensions - Cash and cash equivalents () () () () () - Investments accounted for using the equity method () () () () () - Financial assets () () () () () As at 31/12 As at 01/01 Average capital employed 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2 of the consolidated nancial statements as at December 31, 2021). 2) Reclassication of accruals from provisions to other liabilities in accordance with IAS 1 (see note 2 in the notes to the consolidated nancial statements 2020). 28 Annual Financial Report 2021 Lenzing Group EUR mn as at 31/12 2021 2020 2019 2018 2017 Adjusted equity 31/12 Adjusted equity 01/01 Average adjusted equity EUR mn 2021 2020 2019 2018 2017 Earnings before tax (EBT) / Average adjusted equity ROE (return on equity) EUR mn as at 31/12 2021 2020 2019 2018 2017 Total assets 31/12 Total assets 01/01 Average total assets EUR mn 2021 2020 2019 2018 2017 Earnings before interest and tax (EBIT) / Average total assets ROI (return on investment) 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2 of the consolidated nancial statements as at December 31, 2021). 29 Annual Financial Report 2021 Lenzing Group 2021 Consolidated Financial Statements of the Group Content Content Notes 31 Consolidated Income Statement 32 Consolidated Statement of Comprehensive Income 33 Consolidated Statement of Financial Position 34 Consolidated Statement of Changes in Equity 35 Consolidated Statement of Cash Flows 37 Notes to the Consolidated Financial Statements 38 CHAPTER 2 /3 30 Annual Financial Report 2021 Lenzing Group Content notes Notes to the Consolidated Financial Statements 38 Note 1. General Information 38 Note 2. Changes in accounting policies 40 Note 3. Consolidation 44 Note 4. Segment reporting 46 Notes on the Consolidated Income Statement 49 Note 5. Revenue 49 Note 6. Functional costs 49 Note 7. Other operating income 49 Note 8. Other operating expenses 49 Note 9. Cost of material and other purchased services 50 Note 10. Personnel expenses 50 Note 11. Amortization of intangible assets, depreciation of property, plant and equipment and right-of-use assets 50 Note 12. Auditor’s fees 52 Note 13. Income from investments accounted for using the equity method 53 Note 14. Income from non-current and current nancial assets 53 Note 15. Financing costs 53 Note 16. Income tax expense 53 Note 17. Earnings per share 54 Notes to the Consolidated Statement of Financial Position, the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity 55 Note 18. Intangible assets 55 Note 19. Property, plant and equipment 57 Note 20. Biological assets 59 Note 21. Right-of-use assets 60 Note 22. Investments accounted for using the equity method 62 Note 23. Financial assets 64 Note 24. Other non-current assets 64 Note 25. Inventories 64 Note 26. Trade receivables 65 Note 27. Other current assets 65 Note 28. Equity 65 Note 29. Government grants 69 Note 30. Financial liabilities 70 Note 31. Deferred taxes (deferred tax assets and liabilities) and current taxes 71 Note 32. Provisions 74 Note 33. Trade payables 79 Note 34. Other liabilities 80 Notes to the Consolidated Statement of Cash Flows 81 Note 35. Disclosures on the Consolidated Statement of Cash Flows 81 Notes on Risk Management 82 Note 36. Capital risk management 82 Note 37. Disclosures on nancial instruments 83 Note 38. Net interest and net result from nancial instruments and net foreign currency result 94 Note 39. Financial risk management 95 Disclosures on Related Parties and Executive Bodies 103 Note 40. Related party disclosures 103 Note 41. Executive Bodies 105 Other Disclosures 106 Note 42. Financial guarantee contracts, contingent assets and liabilities, other nancial obligations and legal risks 106 Note 43. Group companies 107 Note 44. Signicant events after the end of the reporting period 108 Note 45. Authorization of the consolidated nancial statements 108 31 Annual Financial Report 2021 Lenzing Group 32 Annual Financial Report 2021 Lenzing Group Lenzing AG Consolidated Income Statement for the period from January 1 to December 31, 2021 EUR '000 Note 2021 2020 Revenue () 2,194,624 1,632,607 Cost of sales () (1,692,760) (1,386,412) 1 Gross prot 501,864 246,195 Other operating income () 78,026 59,145 Selling expenses () (233,981) (156,932) Administrative expenses () (117,547) (88,236) 1 Research and development expenses () (23,993) (16,181) Other operating expenses () (3,753) (10,133) Earnings before interest and tax (EBIT) 2 200,615 33,85 8 1 Income from investments accounted for using the equity method () (3,541) 5,674 Income from non-current and current nancial assets () 7,881 (5,402) Financing costs () (22,029) (11,878) 1 Financial result (17,689) (11,607) Earnings before tax (EBT)² 182,926 22,251 Income tax expense () (55,212) (32,84 6) Net prot/loss for the year 127,714 (10,595) Attributable to: Shareholders of Lenzing AG 110,346 6,277 Non-controlling interests (11,382) (18,762) Share planned for hybrid capital owners () 28,750 1,890 Earnings per share EUR EUR Diluted = basic () 4.16 0.24 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). 2) EBIT: Operating result, resp. earnings before interest and tax. EBT: Earnings before tax. 33 Annual Financial Report 2021 Lenzing Group Lenzing AG Consolidated Statement of Comprehensive Income for the period from January 1 to December 31, 2021 EUR '000 Note 2021 2020 Net prot/loss for the year 127,714 (10,595) Items that will not be reclassied subsequently to prot or loss Remeasurement of dened benet liability () (1 ,691) 633 Financial assets measured at fair value through other comprehensive income (equity instruments) – net fair value gain/loss on remeasurement recognized during the year () 32,926 (2,646) Income tax relating to these components of other comprehensive income () (7,802) 259 Investments accounted for using the equity method – share of other comprehensive income (net of tax) () 105 (106) 23,537 (1,861) Items that may be reclassied to prot or loss Foreign operations – foreign currency translation dierences arising during the year () 107,394 (111,317) Financial assets measured at fair value through other comprehensive income (debt instruments) – net fair value gain/loss on remeasurement recognized during the year () (36) (34) Financial assets measured at fair value through other comprehensive income (debt instruments) – reclassication of amounts relating to nancial assets disposed during the year () 124 0 Cash ow hedges – eective portion of changes in fair value recognized during the year and non-designated components () (23,337) (118,851) Cash ow hedges – reclassication to prot or loss () 3,173 3,90 1 Income tax relating to these components of other comprehensive income () (3,575) 6,447 Investments accounted for using the equity method – share of other comprehensive income (net of tax) () 79 (6,574) 83,822 (226,428) Other comprehensive income (net of tax) 107,359 (228,289) Total comprehensive income 235,073 (238,884) Attributable to: Shareholders of Lenzing AG 211,065 (160,540) Non-controlling interests (4,74 3) (80,234) Share planned for hybrid capital owners 28,750 1,890 34 Annual Financial Report 2021 Lenzing Group Lenzing AG Consolidated Statement of Financial Position as at December 31, 2021 EUR '000 Assets Note 31/12/2021 31/12/2020 Intangible assets () 36,049 29,669 Property, plant and equipment () 2,877,606 2,068,059 Biological assets () 95,767 84,254 Right-of-use assets () 70,129 65,761 Investments accounted for using the equity method () 24,840 29,088 Financial assets () 38,869 40,890 Deferred tax assets () 3,581 2,409 Current tax assets () 14,937 15,157 Other non-current assets () 42,723 25,915 Non-current assets 3,204,501 2,361,202 Inventories () 476,956 329,370 Trade receivables () 325,1 72 249,662 Current tax assets () 1,921 7,410 Other current assets () 168,710 145,347 Financial assets () 32,232 0 Cash and cash equivalents () 1,113,27 9 1,069,998 Current assets 2,118,27 0 1,801,786 Total assets 5,322,771 4,162,988 Equity and liabilities Note 31/12/2021 31/12/2020 Share capital 27,574 27,574 Capital reserves 133,9 19 133,919 Hybrid capital 496,582 496,582 Other reserves 15,134 (117,928) Retained earnings 1,206,359 1,192,800 Equity attributable to shareholders of Lenzing AG 1,879,568 1,732,947 Non-controlling interests 192,517 148,480 Equity () 2,072,085 1,881,427 Financial liabilities () 1,981,036 1,446,876 Government grants () 13,688 14,184 Deferred tax liabilities () 59,806 42,411 Provisions () 118,180 120,383 Puttable non-controlling interests () 234,409 140,3 41 Other liabilities () 6,740 26,861 Non-current liabilities 2,413,860 1,791,055 Financial liabilities () 120,125 105,616 Trade payables () 414,768 19 5,200 Government grants () 44,168 19,878 Current tax liabilities 38,293 2,390 Provisions () 39,088 25,657 Other liabilities () 180,382 141,765 Current liabilities 836,826 490,506 Total equity and liabilities 5,322,771 4,162,988 35 Annual Financial Report 2021 Lenzing Group Lenzing AG Consolidated Statement of Changes in Equity for the period from January 1 to December 31, 2021 Note Share capital Capital reserves Hybrid capital Foreign currency translation reserve As at 01/01/2020 27,574 133,919 0 61,189 Net prot/loss for the year as per consolidated income statement 0 0 0 0 Other comprehensive income (net of tax) 0 0 0 (102,259) Total comprehensive income 0 0 0 (102,259) Hedging gains and losses and cost of hedging transferred to the cost of non-current assets and cost of inventory 0 0 0 0 Acquisition/disposal of non-controlling interests and other changes in the scope of consolidation () 0 0 0 0 Increase in capital () 0 0 496,582 0 Measurement of puttable non-controlling interest recognized directly in equity () 0 0 0 0 Dividends paid 0 0 0 0 Transactions with equity holders 0 0 496,582 0 As at 31/12/2020 = 01/01/2021 27,574 133,919 496,582 (41,069) Net prot/loss for the year as per consolidated income statement 0 0 0 0 Other comprehensive income (net of tax) 0 0 0 89,522 Total comprehensive income 0 0 0 89,522 Hedging gains and losses and cost of hedging transferred to the cost of non-current assets and cost of inventory 0 0 0 0 Acquisition/disposal of non-controlling interests and other changes in the scope of consolidation () 0 0 0 0 Increase in capital () 0 0 0 0 Measurement of puttable non-controlling interest recognized directly in equity () 0 0 0 0 Dividends paid (including hybrid coupon) () 0 0 0 0 Transactions with equity holders 0 0 0 0 As at 31/12/2021 () 27,574 133,91 9 496,582 48,452 36 Annual Financial Report 2021 Lenzing Group EUR '000 Other reserves Retained earnings Equity attributable to shareholders of Lenzing AG and to hybrid capital owners Non-controlling interests Equity Financial assets measured at fair value through other comprehensive income Hedging reserve and non-designated components Actuarial gains/losses 10,698 3,770 (47,000) 1,322,856 1,513,006 24,854 1,537,860 0 0 0 8,167 8,167 (18,762) (10,59 5) (2,010) (62,69 7) 149 0 (166,817) (61,472) (228,289) (2,010) (62,697) 149 8,167 (158,650) (8 0,234) (238,884) 0 20,232 0 0 20,232 16,041 36,273 0 0 0 2,118 2,118 100,206 102,324 0 0 0 0 496,582 87,813 584,395 0 0 0 (140,341) (140,341) 0 (140,341) 0 0 0 0 0 (200) (20 0) 0 0 0 (138,223) 358,359 187,819 546,178 8,687 (38,695) (46,851) 1,192,800 1,732,947 148,48 0 1,881,427 0 0 0 139,096 139,096 (11,382) 127,714 24,760 (12,441) (1,122) 0 100,719 6,640 107,359 24,760 (12,441) (1,122) 13 9,096 239,815 (4,743) 235,073 0 32,342 0 0 32, 342 30,559 62,901 0 0 0 (2,718) (2,718) 2,718 0 0 0 0 0 0 15,678 15,678 0 0 0 (94, 068) (94,068) 0 (94,068) 0 0 0 (28,750) (28,750) (175) (28,925) 0 0 0 (125,536) (125,536) 18,221 (107,316) 33,448 (18,794) (47,973) 1,206,359 1,879,568 192,517 2,072,085 37 Annual Financial Report 2021 Lenzing Group Lenzing AG Consolidated Statement of Cash Flows for the period from January 1 to December 31, 2021 EUR '000 Note 2021 2020 Net prot/loss for the year 127,714 (10,595) + Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets () 164,269 160,448 +/– Change in the fair value of biological assets () (2,258) 10,334 – Income from the release of investment grants (1,944) (1 ,979) +/– Change in non-current provisions (4,908) (5,394) –/+ Income / expenses from deferred taxes 6,838 10,768 +/– Change in current tax assets and liabilities 42,727 (15,299) +/– Income from investments accounted for using the equity method 4,431 (4,883) –/+ Other non-cash income / expenses () 35,128 (1 6,568) Gross cash ow 371,999 126,831 +/– Change in inventories (144,902) 81,439 +/– Change in receivables (75,115) (38,360) +/– Change in liabilities 242,049 (1 20,965) Change in working capital 22,032 (77,885) Cash ow from operating activities 394,030 48,946 – Acquisition of intangible assets, property, plant and equipment and biological assets (CAPEX) (844 ,333) (668,760) – Acquisition of nancial assets and investments accounted for using the equity method (7,328) (4,050) + Proceeds from the sale of intangible assets, property, plant and equipment and biological assets 4,810 5,046 + Proceeds from the sale/repayment of nancial assets and the sale of investments accounted for using the equity method 5,567 1,546 Cash ow from investing activities (841,285) (666,219) + Capital injections to consolidated companies by non-controlling interests 1 5,577 84,458 + Increase of hybrid capital () 0 495,443 – Dividends paid (including hybrid coupon) () (28,925) (200) + Investment grants 1,095 1,618 + Increase of bonds and private placements () 0 131,691 + Increase in other nancial liabilities () 626,384 604,277 – Repayment of bonds and private placements () (56,000) (37,500) – Repayment of other nancial liabilities () (87,584) (144,691) Cash ow from nancing activities 470,548 1,135,096 Total change in liquid funds 23,293 517,823 Liquid funds at the beginning of the year 1,069,998 571, 479 Currency translation adjustment relating to liquid funds 19,987 (19,304) Liquid funds at the end of the year 1,113,279 1,069,998 Additional information on payments in the cash ow from operating activities: Interest payments received 3,963 1,742 Interest payments made 34,315 19,449 Income taxes paid 9,087 33,533 Distributions received from investments accounted for using the equity method 890 40 Annual Report 2021 Lenzing Group 9 Lenzing AG Notes to the Consolidated Financial Statements as at December 31, 2021 General Information Note 1. Basic information Description of the company and its business activities Lenzing Aktiengesellschaft (Lenzing AG), which maintains its regis- tered headquarters in 4860 Lenzing, Werkstrasse 2, Austria, is the parent company of the Lenzing Group (the “Group”). The shares of Lenzing AG are listed in the Prime Market Segment (since April 18, 2011) and in the ATX benchmark index (since September 19, 2011) of the Vienna Stock Exchange in Vienna, Austria. The core shareholder of Lenzing AG as at December 31, 2021 is the B&C Group, which directly and indirectly holds an investment of 50 percent plus two shares (December 31, 2020: 50 percent plus two shares) in the share capital of Lenzing AG. The direct majority shareholder of Lenzing AG is B&C KB Holding GmbH, Vienna. The indirect majority shareholder of Lenzing AG, which prepares and publishes consolidated nancial statements that include the Lenzing Group, is B&C Holding Österreich GmbH, Vienna. The ultimate parent company of the B&C Group, and therefore also of Lenzing AG, is B&C Privatstiftung, Vienna. The core business of the Lenzing Group is the production and mar- keting of wood-based cellulosic bers. wood-based cellulosic fibers. The pulp required for pro- duction is manufactured for the most part in the Group’s own plants and is supplemented by external purchases. Basis of Reporting The consolidated nancial statements for the period from Janu- ary 1 to December 31, 2021 were prepared in accordance with the International Financial Reporting Standards (IFRSs) and interpreta- tions which were endorsed in the EU and required mandatory application as of the reporting date. The additional requirements of Section 245a Para. 1 of the Austrian Commercial Code (“Unterneh- mensgesetzbuch”) were also met. The reporting currency is the euro (EUR), which is also the func- tional currency of Lenzing AG. The functional currency of the ma- jority of the subsidiaries is the euro (EUR) or US-Dollar (USD). The gures shown in these consolidated nancial statements and notes were rounded to the next thousand, unless indicated otherwise (“EUR '000”). The use of automatic data processing tools can lead to rounding dierences in the addition of rounded amounts and percentage rates. Eects of the COVID-19 crisis on the annual results Business trends in the 2021 nancial year improved signicantly compared to the same period of the previous year due to the pos- itive market environment. In preparing the consolidated nancial statements, the Managing Board has taken into consideration the eects of the COVID-19 crisis, in particular with regard to estima- tion uncertainties and judgments (such as in the context of the cor- porate planning used to determine recoverable amounts). Addi- tional information on the eects of the COVID-19 crisis and the measures taken by the Lenzing Group can be found in the group management report. As part of the preparation of the consolidated nancial statements, the management is responsible for assessing the company’s ability to continue as a going concern. If material uncertainty exists with regard to events or conditions that may raise signicant doubt con- cerning the company’s ability to continue as a going concern, such uncertainty must be explained. Based on the estimates of the Len- zing Group’s management and considering all available infor- mation regarding the future, which covers a minimum of twelve months after the balance sheet date, such uncertainties do not ex- ist. On the basis of the secured liquidity situation, the continued strong position in the markets relevant to Lenzing and the expec- tation that the negative eects of the COVID-19 crisis will gradually abate over the course of 2022, the management estimates that the group has sucient resources as of the approval date to enable it to continue operations in the foreseeable future. Therefore, the consolidated nancial statements were prepared based on the as- sumption of the group’s ability to continue as a going concern. 38 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 10 Measurement Assets and liabilities are principally measured at amortized or de- preciated cost. In contrast, other measurement methods are used for the following material positions: ● Biological assets are measured at their fair value. ● Provisions are measured at the present value of the expected settlement amount. ● Deferred tax assets and deferred tax liabilities are recognized at their nominal value. They are measured on the basis of the temporary dierences existing as at the reporting date and the eective tax rate expected when the dierences are realized. ● Derivative nancial instruments and nancial assets measured at fair value through prot or loss and at fair value through other comprehensive income are measured at their fair value. ● Puttable non-controlling interests are measured at fair value through other comprehensive income. Estimation uncertainty and judgments The Managing Board of Lenzing AG uses estimates, assumptions and judgments in preparing the IFRS consolidated nancial state- ments. These estimates, assumptions and judgments are based on the circumstances assumed as at the reporting date and can have a signicant eect on the presentation of the Group’s nancial po- sition and nancial performance. They involve the recognition and measurement of assets and liabilities, contingent receivables and liabilities, the reporting of cash ows and income and expenses (in- cluding other comprehensive income) as well as the presentation of disclosures in the notes. The Lenzing Group is committed to the ecologically responsible production of bers from the renewable raw material wood and is very concerned about climate protection. In preparing the consol- idated nancial statements, the Managing Board has taken into consideration the eects of climate change, in particular with re- gard to estimation uncertainties and judgments (such as in the con- text of the corporate planning used to determine recoverable amounts). Overall, no signicant discernible eects arise at present. Assumptions and estimates The following future-oriented assumptions and other major sources of estimation uncertainty at the reporting date could have signicant eects on these consolidated nancial statements of the Lenzing Group: ● Intangible assets and property, plant and equipment (see note 11): determination of the recoverable amount in connec- tion with impairment testing as dened in IAS 36 (impairment). ● Biological assets (see note 20): determination of fair value less costs to sell. ● Cash and cash equivalents (see note 37): Assessing the classi- cation of money market funds as cash equivalents. ● Financial instruments (see note 37 and 39): determination of fair values and expected credit losses. ● Provisions (see note 32): determination of the expected settle- ment amount and the net liability of the dened benet pen- sion and severance payment plans. ● Puttable non-controlling interests (see note 37): determination of fair value less costs to sell. ● Deferred taxes and receivables from current taxes (see note 31): assessment of the extent to which deferred tax assets (in par- ticular, from loss carryforwards) can be utilized and assess- ment of the recoverability of receivables from current taxes. ● Research and development expenses (see note 18): assess- ment of capitalization and impairment of development ex- penses. Assumptions and estimates are based on experience and other factors that are considered relevant by the Managing Board. How- ever, the amounts actually realized can deviate from these assump- tions and estimates if general conditions develop in a dierent way than the expectations as at the reporting date. Judgments when applying accounting policies The application of accounting policies by the Lenzing Group in- cluded the following major judgments, which had a material inu- ence on the amounts reported in the consolidated nancial state- ments: ● Liabilities within the scope of reverse factoring agreements (see note 33): assessment of the requirements for derecogni- tion as dened in IFRS 9 (nancial instruments). ● Full consolidation and equity method (see note 3, note 37, and note 43): assessment of the existence of control over subsidi- aries and assessment of the existence of joint control or signif- icant inuence. Application of the present access method to puttable non-controlling interests. ● Receivables from the sale of and measurement of investments accounted for using the equity method (see note 22): evalua- tion and measurement of the partial sale of the investment in EQUI-Fibres Beteiligungsgesellschaft mbH (EFB), Kelheim, Germany. ● Evidence of impairment (see note 11): evaluation of indications of impairment resp. for impaired cash-generating units evalu- ation of the occurrence of material changes in comparison with the previous year. 39 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 11 Note 2. Changes in accounting policies The accounting policies applied by the Lenzing Group in 2021 re- mained unchanged in comparison with the previous nancial year, with the exception of the changes described in this section. Mandatory changes in accounting policies The following new and amended standards and interpretations were adopted into EU law and required mandatory application by the Lenzing Group beginning with the 2021 nancial year: Standards/interpretations Publication by the IASB Mandatory application according to IASB for nancial years from Adopted by the EU as at 31/12/2021 IFRS 4 Extension of the temporary exemption from applying IFRS 9 in IFRS 4 // // yes IFRS 16 Extension of practical expedient: Covid-19- Related Rent Concessions // // yes IFRS 9, IAS 39, IFRS 7, IFRS 4, IFRS 16 IBOR-Reform (Phase 2) // // yes The new or amended standards and interpretations applicable as of January 1, 2021 did not result in any signicant changes to the consolidated nancial statements of the Lenzing Group. The following new or amended standards and interpretations had been published by the IASB prior to the preparation of these con- solidated nancial statements, but did not require mandatory ap- plication by the Lenzing Group for nancial years beginning on or before January 1, 2021: Standards/interpretations Publication by the IASB Mandatory application according to IASB for nancial years from Adopted by the EU as at 31/12/2021 IFRS 3 References to the Conceptual Framework // // yes IFRS 10, IAS 28 Sale or contribution of assets between an investor and its associate or joint venture // unknown no IFRS 14 Regulatory Deferral Accounts // // no IFRS 17 Insurance Contracts // // yes IFRS 17 Initial Application of IFRS 7 and IFRS 9 – Comparative Information // // no IAS 1 Amendment of classication of liabilities as current or non-current // // no IAS 1 Disclosure of Accounting Policies // // no IAS 8 Denition of Accounting Estimates // // no IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction // // no IAS 16 Property, plant and equipment – Proceeds before intended use // // Yes IAS 37 Onerous contracts – Cost of fullling a contract // // yes Various Annual Improvements of IFRSs 2018-2020 // // yes 1) The IASB has deferred the eective date of this standard indenitely. 2) The European Commission does not recommend the adoption of interim standard IFRS 14 into EU law at the present time. The Lenzing Group applies the practical relief for the accounting of COVID-19-related rent concessions. The change comprises a vol- untary practical expedient for leases in which the Lenzing Group is the lessee. For leases to which the practical expedient is applied, this permits the Lenzing Group not to assess whether qualifying rent concessions occurring as a direct consequence of the COVID- 19 pandemic are lease modications. Rent reductions EUR 0 thou- sand (2020: EUR 58 thousand) were recognized as negative varia- ble lease payments in the consolidated income statement during the 2021 nancial year. The other above-mentioned new or amended standards and inter- pretations were not adopted prematurely by the Lenzing Group. They are either not relevant for the Group or do not have a material impact on the earnings, assets or liabilities and the cash ows of the Lenzing Group. The application of these standards and interpretations is generally planned following their endorsement by the EU. 40 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 12 Voluntary changes in accounting policies Since the beginning of the 2021 nancial year, the Lenzing Group has reported its consolidated income statement applying the cost of sales method. The previous presentation was according to the nature of expense method. The modication in the presentation of the income statement aims to enhance the international compara- bility of the Lenzing Group’s consolidated income statement. As part of this transition, some amounts previously aecting EBIT/EBITDA were reclassied to the nancial result (capitalized borrowing costs for the production of non-current assets amount- ing to EUR 21,166 thousand in 2021, 2020: EUR 8,429 thousand, net interest from dened benet plans of EUR minus 1,757 thousand in 2021, 2020: EUR minus 2,144 thousand, and loan commitment fees of EUR minus 2,432 thousand in 2021, 2020: EUR minus 2,033 thousand). All amounts were adjusted retrospectively. The Lenzing Group’s performance continues to be measured by EBITDA (earnings before interest, tax, depreciation on property, plant and equipment and right-of-use assets and amortization of intangible assets and before income from the release of investment grants) (see note 4 for reconciliation). The following table shows the reconciliation from the nature of expense method to the cost of sales method: 41 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 13 Reconciliation from nature of expense method to cost of goods sold method 2021 Consolidated Income Statement – Cost of goods sold method Revenue Change in inventories of nished goods and work in progress Own work capitalized Other operating income Consolidated Income Statement – Nature of expense method Revenue Cost of sales () Gross prot Other operating income Selling expenses () Administrative expenses () Research and development expenses () Other operating expenses () Earnings before interest and tax (EBIT) Reconciliation from nature of expense method to cost of goods sold method 2020 Consolidated Income Statement – Cost of goods sold method Revenue Change in inventories of nished goods and work in progress Own work capitalized Other operating income Consolidated Income Statement – Nature of expense method () Revenue Cost of sales () () Gross prot Other operating income Selling expenses () Administrative expenses () Research and development expenses () Other operating expenses () Earnings before interest and tax (EBIT) 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result. 42 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 14 EUR '000 Gains or losses from the fair value measurement of biological assets Cost of material and other purchased services Personnel expenses Other operating expenses Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets Income from the release of investment grants Earnings before interest and tax (EBIT) () () () () () () () () () () () () () () () () () () () () () EUR '000 Gains or losses from the fair value measurement of biological assets Cost of material and other purchased services Personnel expenses Other operating expenses Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets Income from the release of investment grants Earnings before interest and tax (EBIT) () () () () () () () () () () () () () () () () () () () () () () () 43 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 15 In the 2020 nancial year, a voluntary modication was imple- mented regarding the presentation of accrued liabilities. Accrued liabilities were presented within provisions until the 2020 nancial year. In the course of the annual analysis to optimize presentation, the Lenzing Group identied that the liability character of this type of debt predominates. In accordance with IAS 1.41, current accru- als of EUR 48,925 thousand (December 31, 2019: EUR 73,016 thou- sand; January 1, 2019: EUR 94,072 thousand) were therefore re- classied from current provisions to other current liabilities and non-current accruals of EUR 1,523 thousand (December 31, 2019: EUR 538 thousand; January 1, 2019: EUR 1,109 thousand) were re- classied from non-current provisions to other non-current liabili- ties. The total amount of liabilities consequently remains un- changed. Note 3. Consolidation Scope of consolidation The consolidated nancial statements of the Lenzing Group in- clude Lenzing AG, as the parent company, and its subsidiaries, all on the basis of nancial statements as at December 31, 2021. The number of companies included in the scope of consolidation developed as follows: Development of the number of consolidated companies (incl. parent company) 2021 2020 Full- Equity Full- Equity consolidation consolidation As at 01/01 Included in consolidation for the rst time during the year Merged during the year () () Deconsolidated during the year () () () As at 31/12 Thereof in Austria Thereof abroad A list of the group companies as at December 31, 2021 is provided in note 43. The most important group companies produce and market wood-based cellulosic bers (Segment Division Fiber) and, in some cases, pulp (Segment Division Pulp). In March 2021, the interest in the joint venture Hygiene Austria LP GmbH, Wiener Neudorf, Austria, which was previously accounted for using the equity method (see note 22), was divested and de- consolidated. In October 2021, the subsidiary Nanjing Fabor Waste Water Treat- ment Co., Ltd, Nanjing, China, was merged with Lenzing (Nanjing) Fibers Co., Ltd, Nanjing, China. In November 2021, the previously fully consolidated subsidiaries Avit Investments Limited, Providenciales, Turks & Caicos, and Penique S.A., Panama, Panama, were liquidated and deconsoli- dated. In January 2020, the Dexco-Group (formerly known as Duratex Group) acquired a 49 percent share in LD Celulose S.A., Sao Paulo, Brazil as agreed. Lenzing AG holds a majority of 51 percent and thus exercisea control over LD Celulose S.A. The change in share- holdings was the result of an asymmetric capital increase, which was conducted by both parties. The pro-rata equity (49 percent) of LD Celulose S.A. amounted to EUR 100,205 thousand at the time the Duratex Group acquired the shares and corresponds to the amount recognized under non-controlling interests. The propor- tionate contribution by Duratex amounted to EUR 102,362 thou- sand. The dierence of EUR 2,158 thousand was recognized di- rectly in equity under retained earnings. As part of the capital in- crease, the Duratex Group contributed biological assets and prop- erty, plant and equipment to LD Celulose and carried out further cash capital increases. The Dexco-Group has a put option for its shares (puttable non- controlling interests). Lenzing AG applies the present access method for the accounting of this liability deriving from puttable non-controlling interests. Accordingly, the Dexco Group’s non- controlling interest in LD Celulose S.A. continues to be recognized in equity and a nancial liability is recognized for its puttable inter- est. The initial recognition and subsequent measurement of the li- ability is at fair value through retained earnings (not aecting net income). In February 2020, all shares held in the associate WWE Wohn- und Wirtschaftspark Entwicklungsgesellschaft m.b.H., Vienna were sold and deconsolidated. In April 2020, the joint venture Hygiene Austria LP GmbH, Wiener Neudorf, Austria was founded for the production of protective masks and consolidated at-equity. In July 2020, 100 percent of the shares in Nanjing Fabor Waste Wa- ter Treatment Co., Ltd, Nanjing, China, were acquired and fully consolidated. The assets sold to the Lenzing Group were predom- inantly assets which in their entirety form a wastewater treatment plant. The purchase price amounted to EUR 16,060 thousand and was paid in cash. The acquisition was therefore recognized as an asset deal in the consolidated nancial statements. The payment is recognized in the consolidated statement of cash ows under ac- quisition of intangible assets, property, plant and equipment and biological assets (CAPEX). The purchase price was allocated pro- portionately to the individual identiable assets and liabilities on the basis of their fair values at the acquisition date. 44 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 16 The assets and liabilities at the date of initial consolidation are shown below: Fair value at acquisition date EUR '000 Intangible assets Property, plant and equipment Trade receivables Current tax assets Cash and cash equivalents Total assets Current tax liabilities Total liabilities Net assets In September 2020, the subsidiary Lenzing Technik GmbH, Len- zing, Austria, was merged with Lenzing AG. In December 2020, the subsidiary Lenzing Fibers India Private Lim- ited, Coimbatore, India, was founded and included in the scope of fully consolidated companies. Basis of consolidation Subsidiaries are companies controlled by the parent company. The Lenzing Group decides individually for each acquisition whether the non-controlling interests in the acquired subsidiary will be rec- ognized at fair value or based on the proportional share of the ac- quired net assets. On acquisition, non-controlling interests are measured at fair value or the corresponding share of recognized net assets and are reported under equity and comprehensive in- come as “non-controlling interests”. The investments in associates and joint ventures are accounted for by applying the equity method. In January 2021, the Lenzing Group acquired 100 percent of the shares in an insurance cell of White Rock Insurance (Europe) Pro- tected Cell Company Limited, La Valletta, Malta. This company has an insurance concession and enables the Lenzing Group to admin- ister its operationally necessary insurance policies more eectively. As of the acquisition date, the insurance cell did not have any sig- nicant assets or liabilities. It is classied as a structured entity from acquisition date and fully consolidated. Until March 2021, Lenzing AG controlled assets in the GF 82 wholesale fund, a special fund pursuant to Section 20a of the Aus- trian Investment Fund Act (öInvFG), on the basis of its comprehen- sive co-determination rights. The fund was classied as a struc- tured entity and fully consolidated. The securities held by the fund were intended, above all, to fulll the securities coverage require- ments for the pension provisions related to Austrian pension plans as required by Section 14 of the Austrian Income Tax Act (öEStG). The material risks to which the fund wass exposed were un- changed and represented traditional investment risks (especially default and market price risks). In March 2021, the shares in whole- sale fund GF 82 were sold and deconsolidated. The structured entities include those assets and liabilities that are held by the Lenzing Group. The reporting currency of Lenzing AG and the Lenzing Group is the euro. The subsidiaries prepare their annual nancial statements in their respective functional currency. The following key exchange rates were used for translation into the reporting currency: Exchange rates for key currencies 2021 2020 Unit Currency End of the year Average End of the year Average 1 EUR USD US Dollar 1 EUR GBP British Pound 1 EUR CZK Czech Koruna 1 EUR CNY Renminbi Yuan 1 EUR BRL Brazilian Real 45 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 17 Note 4. Segment reporting Due to the introduction of a new group-wide organization, the composition of the segments has changed as of the 2021 nancial year. Internal reporting to the chief operating decision maker, i.e. the plenary Managing Board, was adjusted accordingly as at Janu- ary 1, 2021. A retrospective presentation of the segment reporting in accordance with the new composition of the segments is not possible due to the signicant changes in the segments and the resultant unavailability of nancial accounting information. For this reason, the tables below show the old composition of the seg- ments for the 2020 comparison year. The reportable segments are now the “Division Fiber”, “Division Pulp” and “Others” (previously “Fibers”, “Lenzing Technik” and “Others”). The Lenzing Group classies its segments based on the dierences between their products, which require individual tech- nologies and market strategies. The Division Fiber produces all three generations of wood-based cellulosic bers and markets them under the product brands TENCEL™, VEOCEL™, LENZING™ ECOVERO™ and LENZING™. The products made from lyocell, modal and viscose bres are used for the production of textiles as well as nonwovens and special ap- plications. The Division Pulp produces and procures dissolving pulp, which is the necessary primary and intermediate product for ber produc- tion. The pulp is used for the company’s own cellulosic ber pro- duction and marketed externally. The ber and pulp production systems are used and managed independently of each other. “Others” mainly includes central headquarters functions, overarch- ing activities and the business activities of BZL-Bildungszentrum Lenzing GmbH, Lenzing (training and personnel development). Information on business segments (new segment structure) EUR '000 2021 Division Fiber Division Pulp Others Segment total Recon- ciliation Group Revenue from external customers Inter-segment revenue () Total revenue () EBITDA (segment result) () () EBIT () () Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets Income from investments accounted for using the equity method () () () () Other material non-cash income and expenses () Acquisition of intangible assets, property, plant and equipment and biological assets (CAPEX) () EBITDA margin 1 () - EBIT margin 2 () - Information on business segments (former segment structure) EUR '000 2021 Fibers Lenzing Technik Other Segment total Recon- ciliation Group Revenue from external customers Inter-segment revenue () Total revenue () EBITDA (segment result) () EBIT () () Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets Income from investments accounted for using the equity method () () () Other material non-cash income and expenses Acquisition of intangible assets, property, plant and equipment and biological assets (CAPEX) EBITDA margin 1 - EBIT margin 2 () - 1) EBITDA margin = EBITDA (operating result before depreciation and amortization) in relation to total revenue (here: according to segment reporting). 2) EBIT margin = EBIT (operating result) in relation to total revenue (here: according to segment reporting). 46 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 18 Information on business segments (former segment structure) (previous year) EUR '000 2020 Fibers Lenzing Technik Other Segment total Recon- ciliation Group Revenue from external customers Inter-segment revenue () Total revenue () EBITDA (segment result) EBIT Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets () Income from investments accounted for using the equity method Other material non-cash income and expenses () () Acquisition of intangible assets, property, plant and equipment and biological assets (CAPEX) EBITDA margin 2 EBIT margin 3 Segment assets Thereof investments accounted for using the equity method Segment liabilities 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). 2) EBITDA margin = EBITDA (operating result before depreciation and amortization) in relation to total revenue (here: according to segment reporting). 3) EBIT margin = EBIT (operating result) in relation to total revenue (here: according to segment reporting). The other signicant non-cash operating expenses and income re- late to non-cash measurement eects from receivables, invento- ries and provisions. The performance of the segments and the Group is measured by EBITDA (earnings before interest, tax, depreciation on property, plant and equipment and right-of-use assets and amortization of intangible assets and before income from the release of investment grants). The following table shows the reconciliation of earnings before in- terest and tax (EBIT) to the earnings before interest, tax, deprecia- tion and amortization (EBITDA) and to the earnings before tax (EBT): Reconciliation of earnings before interest and tax (EBIT) to the earnings before interest, tax, depreciation and amortization (EBITDA) and to the earnings before tax (EBT) EUR '000 2021 2020 Earnings before interest and tax (EBIT) Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets Income from the release of investment grants () () Earnings before interest, tax, depreciation and amortization (EBITDA) Segment amortization and depreciation () () Consolidation () Income from the release of investment grants Earnings before interest and tax (EBIT) Financial result () () Earnings before tax (EBT) 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). The carrying amounts for segment reporting are based on the same accounting policies applied to the IFRS consolidated nancial statements. 47 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 19 Information on products and services Revenue from external customers can be classied by products and services as follows: Revenue from external customers by products and services (new segment structure) EUR '000 2021 Wood-based cellulosic bers Co-products of ber production Mechanical and plant engineering, engineering services and others Division Fiber Pulp Biorenery-products and energy Wood and other Division Pulp Others Revenue as per consolidated income statement Revenue from customers by products and services (former segment structure) EUR '000 2021 2020 Wood-based cellulosic bers Sodium sulfate and black liquor Pulp, wood, energy and other Segment Fibers Mechanical and plant engineering and engineering services Segment Lenzing Technik Other and consolidation () () Revenue as per consolidated income statement No single external customer is responsible for more than 10 percent of external revenue. Information on geographic regions The following table provides a classication of revenue from exter- nal customers by sales market by geographic area. Revenue from external customers by geographic regions EUR '000 2021 2020 Austria Europe (excl. Austria, incl. Turkey) Asia America Rest of the world Revenue as per consolidated income statement Revenue is allocated according to the geographic region of the customer. The following table shows non-current assets (excluding nancial instruments and tax assets; reconciled to the consolidated gures for total non-current assets), total assets and acquisition of intangi- ble assets, property, plant and equipment and biological assets (CAPEX) by geographic region: Information on non-current assets, total assets and CAPEX by geographic regions EUR '000 Non-current assets Total assets CAPEX 31/12/2021 31/12/2020 31/12/2021 31/12/2020 31/12/2021 31/12/2020 Austria Europe (excl. Austria, incl. Turkey) Asia America Subtotal Reconciliation to consolidated gures Consolidated total The above amounts cover all segments of the Lenzing Group. Ad- ditional information on the segments is provided in the manage- ment report of the Lenzing Group as at December 31, 2021. 48 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 20 Note 5. Revenue The breakdown of revenue is shown in the segment report (see note 4, in particular information on products and services as well as geographic regions). Revenue results exclusively from contracts with customers in ac- cordance with IFRS 15 (Revenue from Contracts with Customers). Revenue comprises all income generated by the typical business activities of the Lenzing Group. Income is recognized at a point in time, and thus when ownership of the product has been transferred to the customer (i.e. with the transfer of risks), the amount of income and the related costs can be reliably determined and the economic benets from the trans- action will probably ow to the Group. Since all performance obligations in the Lenzing Group have a term of a maximum of one year, the remaining performance obligations are not disclosed. Contract liabilities are presented under other liabilities and consist of down payments received of EUR 14,526 thousand (December 31, 2020: EUR 20,918 thousand) and accruals for discounts and re- bates of EUR 2,681 thousand (December 31, 2020: EUR 1,725 thou- sand) (see note 34). The amount of EUR 21,637 thousand included in contract liabilities as at December 31, 2020 has been recognized as revenue in 2021 (2020: EUR 18,569 thousand). Note 6. Functional costs Cost of sales The cost of sales mainly relates to the cost of materials and other purchased manufacturing services, gains and losses from changes in the fair value of biological assets, personnel expenses, depreci- ation and amortization and other operating expenses, in particular expenses for maintenance and repair, other third-party services and expenses for waste disposal. The expenses for maintenance and repair amount to EUR 35,049 thousand (2020: EUR 28,987 thousand). Selling expenses Selling expenses mainly relate to personnel expenses and other op- erating expenses, particularly expenses for outbound freight as well as rental and leasing expenses. Administrative expenses Administrative expenses mainly relate to personnel expenses and other operating expenses, in particular legal, audit and consulting expenses. Research and development expenses Research and development expenses mainly relate to personnel expenses and other operating expenses, in particular ling and de- fense costs for patents and trademarks. Research and develop- ment expenses include amortization of intangible assets, depreci- ation of property, plant and equipment and of right-of-use assets relating to leases amounting to EUR 948 thousand (2020: EUR 687 thousand) and income from the release of investment grants amounting to EUR 7 thousand (2020: EUR 0 thousand). In the 2021 nancial year, research and development expenses in the Lenzing Group according to the Frascati scheme of computation in the amount of EUR 31,625 thousand (2020: EUR 34,818 thou- sand) were incurred. Note 7. Other operating income Other operating income consists of the following: Other operating income EUR '000 2021 2020 Income from green energy bonus Income from recharging of services and other products Income from the release of deferred income for emission certicates and from subsidies Rental income Foreign currency gains Insurance compensation Sundry Total The prior-year amounts have been adjusted to the cost of sales method. Note 8. Other operating expenses Other operating expenses comprise the following: Other operating expenses EUR '000 2021 2020 Foreign exchange loss Sundry Total The prior-year amounts have been adjusted to the cost of sales method. Notes on the Consolidated Income Statement 49 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 21 Note 9. Cost of material and other purchased services The cost of material and other purchased services comprises the following: Cost of material and other purchased services EUR '000 2021 2020 Material Other purchased services Total The cost of material comprises primarily the input factors con- sumed, i.e. pulp (and wood for the internal production of pulp), key chemicals (caustic soda, carbon disulde and sulfuric acid) and merchandise. The cost of purchased services is related mainly to the consumption of energy. The cost of the raw material and supplies consumed during the year is based on the weighted average cost method. Note 10. Personnel expenses The following table shows the composition of personnel expenses: Personnel expenses EUR '000 2021 2020 Wages and salaries Expenses for severance payments and gratuity Retirement benet expenses Statutory social security expenses Other employee-related costs Total 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). In the 2021 nancial year, government grants of EUR 245 thousand (2020: EUR 13,288 thousand) in connection with short-term work assistance of Austria related to COVID-19 were oset against per- sonnel expenses and recognized in prot or loss. The main condi- tion for short-time working assistance is the temporary reduction of working hours of certain employees. In the 2021 nancial year, the Lenzing Group utilized such grants from January to March (2020: May to December). The number of employees in the Lenzing Group is as follows: Number of employees (headcount) 2021 2020 Average As at 31/12 The following table shows the number of employees in Lenzing AG and the Austrian subsidiaries of the Lenzing Group: Average number of employees in Austria (headcount) 2021 2020 Hourly workers Salaried employees Total Note 11. Amortization of intangible assets, depreciation of property, plant and equipment and right-of- use assets Amortization and depreciation include the following: Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets EUR '000 2021 2020 Amortization and depreciation Impairment Total Impairment tests of intangible assets, property, plant and equipment and cash-generating units (CGUs) If there is an indication of impairment in accordance with IAS 36, intangible assets and items of property, plant and equipment as well as cash-generating units (CGUs) are tested for impairment. A qualitative analysis is performed at the reporting dates for all con- solidated nancial statements and interim consolidated nancial statements to determine whether there are any indications of im- pairment or any material year-on-year changes in impaired CGUs. This analysis is based on criteria dened by the management of Lenzing AG. Intangible assets, property, plant and equipment and right-of-use assets allocated to a CGU that includes goodwill are also tested during the annual impairment testing of goodwill. The CGUs in the Lenzing Group represent, above all, the individual pro- duction sites. 50 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 22 The Lenzing Group initially determines the recoverable amount based on the applicable fair value less costs of disposal. The Man- agement and Supervisory Boards approve the budget and the me- dium-term plans for the next ve years. These plans are the starting point for the cash ow projections on a post-tax basis to determine the fair value less costs of disposal. Based on the assumptions used in the previous year, a perpetual yield that includes a sustainable long-term growth rate is applied after the detailed planning period. The estimate for the sustainable long-term growth rate generally equals half of the ination rate expected in the relevant country during the next few years, as projected by an international eco- nomic research agency. This value usually tends to oset general ination. A growth-related retention of nancial surpluses in the perpetual annuity is taken into consideration in the planning calcu- lations. The planned/projected cash ows are discounted to their present value with a discounted cash ow method. Fair value measurement is classied in full as level 3 of the fair value hierarchy because key input factors (in particular, cash ows) cannot be ob- served on the market. The applied discount rate is calculated on an individual basis using the capital asset pricing model (CAPM) and represents a composite gure (weighted average cost of capital – WACC) that combines the average interest rate for debt and the anticipated return on equity employed. After-tax WACCs ranging from 6.0 percent to 7.1 percent were used in 2021 (2020 5.4 percent to 7.8 percent). The WACCs were, for the most part, determined on the basis of externally available capital market data for comparable companies (in particular, to determine the risk premium). The planning and forecasts of free cash ows are based, above all, on internal and external assumptions for the expected development of selling prices and volumes (especially for bers and cellulose) and the re- lated costs (in particular, raw materials like cellulose, wood and en- ergy plus labor and taxes), including the expected market environ- ment and market positioning. Other input factors include antici- pated investments and the changes in working capital. These inter- nal assumptions are based on past experience, current operating results and the assessment of future developments. They are sup- plemented by external market assumptions such as sector-specic market studies and economic outlooks. No impairments of CGUs in accordance with IAS 36 were recog- nized in the 2021 and 2020 nancial years. Against the backdrop of the COVID-19 crisis, the Lenzing Group reviewed all assumptions that are crucial to the impairment tests in accordance with the methods previously used. In the case of the cash-generating units (CGUs), the eects of the COVID-19 crisis were taken into consideration in the budgets required for the cash ow forecasts and the medium-term plans. Impairment test of the CGU Fiber Site China The carrying amounts of the intangible assets, property, plant and equipment and right-of-use assets of the CGU Fiber Site China im- paired in previous years totaled EUR 57,081 thousand at Decem- ber 31, 2021 (December 31, 2020: EUR 43,063). This amount in- cludes accumulated impairment losses of EUR 13,586 thousand (December 31, 2020: EUR 15,850 thousand) from the previous im- pairment tests. Due to an indication of impairment in accordance with IAS 36, the recoverable amount of the CGU Fiber Site China for the consoli- dated nancial statements 2021 was determined. The recoverable amount showed sucient coverage of the carrying amounts. The carrying amounts would increase (decrease) in particular if planned EBITDA or the weighted average cost of capital (WACC) decreases (increases). In the event of an increase (decrease) in planned EBITDA by 1 percent, the recoverable amount determined would increase (decrease) by EUR 3,953 thousand. If the weighted aver- age cost of capital (WACC) decreases (increases) by 0.25 percent, the recoverable amount will increase by EUR 7,375 thousand or de- crease by EUR 6,860 thousand. Impairment test of the CGU Fiber Site Indonesia Due to an indication of impairment in accordance with IAS 36, the recoverable amount of the CGU Fiber Site Indonesia was deter- mined. The recoverable amount showed sucient coverage of the carrying amounts. The carrying amounts would increase (decrease) in particular if planned EBITDA or the weighted average cost of capital (WACC) decreases (increases). In the event of an increase (decrease) in planned EBITDA by 1 percent, the recoverable amount determined would increase (decrease) by EUR 6,539 thou- sand. If the weighted average cost of capital (WACC) decreases (increases) by 0.25 percent, the recoverable amount will increase by EUR 14,112 thousand or decrease by EUR 13,175 thousand. Impairment test of CGUs to which goodwill is allocated Goodwill was allocated to the following segments/cash-generat- ing units (CGUs) as at the reporting date: Goodwill by segment/CGU EUR '000 31/12/2021 31/12/2020 Segment Division Pulp CGU Pulp Site Czech Republic Segment Divison Fiber Other CGUs Total The recoverable amount of the largest CGU with goodwill in 2021 – the CGU Pulp Site Czech Republic – was determined on the ba- sis of fair value less costs of disposal. The measurement of fair value is classied in full under level 3 of the fair value hierarchy. The fol- lowing individual assumptions from the most recent impairment tests were used for annual testing: Assumptions for impairment testing of the largest CGU to which goodwill was allocated 2021 nancial year 2020 nancial year CGU Pulp Site Czech Republic Average annual operating margin in planning period Long-term growth rate of perpetual yield After-tax discount rate (WACC) 51 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 23 The detailed planning period for the CGU Pulp Site Czech Republic covers ve years. The average revenue growth during this period equals 1.4 percent per year (2020: 3.2 percent per year). The estimated fair value less costs of disposal of the CGU Pulp Site Czech Republic exceeds the carrying amount by EUR 78,558 thou- sand (2020: EUR 123,524 thousand). This estimate is considered appropriate, but corrections may be required if there are changes in the underlying assumptions or circumstances. The following ta- ble shows a sensitivity analysis with hypothetical scenarios for the key assumptions as well as the possible changes in value as at the reporting date which, if they occurred, would result in the recover- able amount equaling the carrying amount of the CGU plus good- will. A long-term growth rate of 1.1 percent to 1.3 percent (2020: 0.5 percent to 0.8 percent) was taken into account as perpetual yield for the other CGUs with goodwill. Sensitivity analysis of assumptions for impairment testing Values relating to key assumptions Change in values relating to key assumptions for which the recoverable amount would equal the carrying amount CGU Pulp Site Czech Republic Operating margin minuspercentagepoints After-tax discount rate (WACC) pluspercentagepoints Sensitivity analysis of assumptions for impairment testing (previous year) Values relating to key assumptions Change in values relating to key assumptions for which the recoverable amount would equal the carrying amount CGU Pulp Site Czech Republic Operating margin minuspercentagepoints After-tax discount rate (WACC) pluspercentagepoints Note 12. Auditor’s fees The fees expensed for services provided by KPMG Austria GmbH, Linz, comprise the following: Auditors’ fees expensed EUR '000 2021 Lenzing AG Subsidiaries Tot al Audit of the annual nancial statements (incl. consolidated nancial statements) Other assurance services Other services Total Auditors’ fees expensed (previous year) EUR '000 2020 Lenzing AG Subsidiaries Tota l Audit of the annual nancial statements (incl. consolidated nancial statements) Other assurance services Other services Total The fees for other assurance services consist chiey of fees for the review of the consolidated half-year nancial statements and in the 2020 nancial year for the comfort letter related to a capital market issue. 52 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 24 Note 13. Income from investments accounted for using the equity method The result of EUR minus 3,541 thousand (2020: EUR 5,674 thou- sand) corresponds to the Group’s share of the current earnings of associates and joint ventures. The 2021 nancial year includes the loss on the disposal of Hygiene Austria LP GmbH (HGA) in the amount of EUR minus 4,536 thousand (2020: EUR 0 thousand) (see note 22). Note 14. Income from non-current and current nancial assets The income from non-current and current nancial assets consists of the following items: Income from non-current and current nancial assets EUR '000 2021 2020 Income from non-current and current nancial assets Interest income from bank balances, originated loans and receivables Interest income and income from the disposal of debt instruments measured at fair value through other comprehensive income Income from dividends for equity instruments measured at fair value through other comprehensive income Measurement of nancial assets measured at fair value Net foreign currency gains from nancial assets Expenses from non-current and current nancial assets Measurement and loss from disposal of nancial assets at amortized cost () () Measurement and loss from the disposal of nancial assets at fair value through prot or loss () () Loss from the diposal of debt instruments measured at fair value directly in equity () Net foreign currency losses from nancial assets () () () Total () Note 15. Financing costs Financing costs comprise the following: Financing costs 2021 2020 Net foreign currency gains/losses from nancial liabilities () Interest expense for bonds and private placements () () Interest expense for bank loans, other interest and similar expenses () () Capitalized borrowing costs for property, plant and equipment and biological assets Total () () 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). Note 16. Income tax expense This item includes current income tax expense as well as in- come/expense from deferred taxes (changes in deferred tax assets and deferred tax liabilities) and comprises the following: Income tax expense by source EUR '000 2021 2020 Current income tax expense Austria Abroad Income/expense from deferred taxes Total Income tax expense by cause EUR '000 2021 2020 Current income tax expense Tax expense for current year Reduction due to the use of tax losses () () Adjustment for prior-period income tax Income/expense from deferred taxes Recognition and reversal of temporary dierences Eects of changes in tax rates Change in capitalized loss carryforwards () Eects of previously unrecognized temporary dierences from prior periods () Changes in valuation adjustment to deferred tax assets (excl. loss carryforwards) () () Total 53 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 25 The item “Change in capitalized loss carryforwards” relates to the utilization of loss carryforwards in the amount of EUR 3,271 thou- sand (2020: EUR 61 thousand) and an adjustment to deferred tax assets for loss carryforwards not yet utilized amounting to EUR 1,253 thousand (2020: EUR minus 6,785 thousand). The reconciliation of calculated income tax expense based on the Austrian corporate tax rate of 25 percent (December 31, 2020: 25 percent) to eective income tax expense is shown in the follow- ing table: Tax reconciliation EUR '000 2021 2020 Earnings before tax (EBT) Calculated income tax expense (25% of earnings before tax) Deductible distribution of hybrid coupon () Tax-free income and tax allowances (particularly research allowance) () () Non-deductible expenses, withholding taxes and similar permanent dierences Income from investments accounted for using the equity method () Eect of dierent tax rates () () Changes in tax rates Taxes from prior periods Exchange rate dierences resulting from the translation of deferred tax items from local into functional currency Change in unrecognized deferred tax assets from loss carryforwards, tax credits and other temporary dierences Other () Eective income tax expense As in the previous year, the ratio of eective income tax expense to earnings before tax is disproportionately high in the 2021 nan- cial year. As in the previous year, the Group reports a relatively high level of reconciliation items arising from write-downs on tax assets (in particular from non-capitalized start-up losses) and from the translation of tax items from local to functional currency (in partic- ular Indonesia, Brazil and Thailand). In addition, in the 2021 nancial year a distribution to hybrid capital holders was realized that is tax deductible. For the item “Taxes from prior periods,” see the notes relating to write-downs in note 31. The item “Changes in tax rates” mainly comprises a statutory tax rate increase in the UK. The corporate income tax rate in the UK will increase from 19 percent to 25 percent eective April 1, 2023. This resulted in an expense of EUR 941 thousand in the 2021 nan- cial year from the measurement of the UK Group companies’ de- ferred tax assets and deferred tax liabilities. The item “taxes from prior periods” includes a tax credit of EUR 747 thousand (2020: EUR 24 thousand) from the tax group with B&C Group (also see note 40). Lenzing AG and the Austrian subsidiaries of the Lenzing Group are subject to an income tax rate of 25 percent (December 31, 2020: 25 percent). The income tax rates for foreign companies range from 11 percent to 34 percent (December 31, 2020: from 11 percent to 34 percent). Note 17. Earnings per share Earnings per share are calculated as follows: Earnings per share EUR '000 2021 2020 Net prot for the year attributable to shareholders of Lenzing AG used in the calculation of earnings per share Weighted average number of shares EUR EUR Diluted = basic In the calculation of earnings per share, the share of the net prot for the year earmarked for hybrid capital holders of EUR 28,750 thousand (2020: EUR 1,890 thousand) was deducted from net prot for the year. 54 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 26 Note 18. Intangible assets Development Intangible assets developed as follows: Development of intangible assets EUR '000 2021 Goodwill Concessions, industrial property rights, licenses and similar rights Internally generated intangible assets Total Cost As at 01/01/2021 Currency translation adjustment Addition Disposals () () As at 31/12/2021 Accumulated amortization As at 01/01/2021 () () () () Currency translation adjustment () () () Amortization () () () Disposals As at 31/12/2021 () () () () Carrying amount as at 01/01/2021 Carrying amount as at 31/12/2021 Notes to the Consolidated Statement of Financial Position, the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity 55 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 27 Development of intangible assets (previous year) EUR '000 2020 Goodwill Concessions, industrial property rights, licenses and similar rights Internally generated intangible assets Total Cost As at 01/01/2020 Currency translation adjustment () () () Change in the scope of consolidation and disposal of other business areas Addition Disposals () () () As at 31/12/2020 Accumulated amortization As at 01/01/2020 () () () () Currency translation adjustment Amortization () () () Disposals As at 31/12/2020 () () () () Carrying amount as at 01/01/2020 Carrying amount as at 31/12/2020 Additions in the 2021 nancial year include purchased intangible assets of EUR 2,495 thousand (2020: EUR 1,755 thousand) and in- ternally generated intangible assets of EUR 6,182 thousand (2020: EUR 3,556 thousand) (mainly process and product developments). Development costs are recognized as intangible assets if the spe- cic requirements pursuant to IAS 38 are met, in particular, as to whether future economic benets can be generated. The revaluation option was not exercised. Amortization is calcu- lated according to the straight line method based on the estimated useful lives. The estimated useful lives of the major asset classes are as follows: Useful lives for intangible assets Years Software/computer programs to Licenses and other intangible assets Purchased to Internally generated to All items of intangible assets are tested for impairment in accord- ance with IAS 36 if there are any indications that these assets may be impaired (see note 11). 56 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 28 Note 19. Property, plant and equipment Development Property, plant and equipment developed as follows: Development of property, plant and equipment EUR '000 2021 Land and buildings Technical equipment and machinery, factory and oce equipment Down payments and assets under construction Total Cost As at 01/01/2021 Currency translation adjustment Addition Disposals () () () Reclassications () As at 31/12/2021 Accumulated depreciation As at 01/01/2021 () () () () Currency translation adjustment () () () () Depreciation () () () Disposals As at 31/12/2021 () () () () Carrying amount as at 01/01/2021 Carrying amount as at 31/12/2021 1) Additions include a decrease in advance payments of EUR 106,538 thousand. 57 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 29 Development of property, plant and equipment (previous year) EUR '000 2020 Land and buildings Technical equipment and machinery, factory and oce equipment Down payments and assets under construction Total Cost As at 01/01/2020 2 Currency translation adjustment () () () () Addition Disposals () () () () Reclassications () As at 31/12/2020 2 Accumulated depreciation As at 01/01/2020 2 () () () () Currency translation adjustment Depreciation () () () Disposals As at 31/12/2020 2 () () () () Carrying amount as at 01/01/2020 Carrying amount as at 31/12/2020 1) The additions include an increase in advance payments of EUR 243,258 thousand. 2) The opening balances were adjusted for cost and accumulated depreciation. 58 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 30 Property, plant and equipment are measured at cost, including capitalized borrowing costs, less accumulated depreciation and accumulated impairment losses. Depreciation is calculated according to the straight-line method based on the estimated useful lives. The estimated useful lives of the major asset classes are as follows: Useful lives for property, plant and equipment Years Land use rights to Buildings to Fiber production lines to Energy production plants to Other machinery to Vehicles to Oce equipment and other xtures and ttings to IT hardware to All items of property, plant and equipment are tested for impair- ment in accordance with IAS 36 if there are any indications that these assets may be impaired (see note 11). Operating leases as a lessor Operating leases are in place for land and buildings with acquisition cost of EUR 38,224 thousand as at December 31, 2021 (Decem- ber 31, 2020 EUR 40,401 thousand). The carrying amount of this land and buildings is EUR 8,282 thousand as at December 31, 2021 (December 31, 2020 EUR 10,305 thousand). Depreciation of EUR 692 thousand was recognized on these assets in the 2021 - nancial year (2020: EUR 920 thousand). For further details on rental income from operating leases see note 21. Capitalization of borrowing costs Borrowing costs of EUR 21,166 thousand for property, plant and equipment were capitalized in 2021 (2020: EUR 3,981 thousand). The weighted average interest rate equaled 2.23 percent (2020: 1.1 percent). The Lenzing Group denes qualifying assets as construction pro- jects or other assets that require at least twelve months to be ready for their intended use or sale. The capitalization entries are rec- orded under “nancing costs” and the respective asset account. All other borrowing costs are expenses in the period incurred and re- ported under nancial result. Note 20. Biological assets Biological assets comprise standing trees of a plantation in Minas Gerais, Brazil, which are used as a raw material for pulp production. In accordance with IAS 41 (Agriculture), biological assets are pre- sented at fair value in the consolidated statement of nancial posi- tion. The plantation is recognized at level 3 of the fair value less estimated costs to sell at the harvest. It is assumed that fair values can be measured. The measurement of biological assets is moni- tored and reviewed by the Lenzing Group. The necessary market data are validated on the basis of the dual control principle. The measurement is based on a discounted cash ow model on the basis of sustainable forest management plans, industry bench- marks for wood prices and delivery costs and taking into account the growth potential. The annual harvest from the projected tree growth is multiplied by wood prices, and the forestry and harvest- ing costs are deducted. The fair value of the plantation is measured as the present value of the harvest from one growth cycle on the basis of the productive forest area, taking into account environ- mental restrictions and other reservations. In particular, the calcu- lated fair value would increase (decrease) if both the timber price and the timber volume were to increase (decrease). The calculated fair value would decrease (increase) if the discount rate were to in- crease (decrease). Young standing timber less than one year old is considered an im- mature asset and is recognized at cost. When harvested, biological assets are transferred to the item inventories of the consolidated statement of nancial position. Changes in the fair value of hedging instruments in relation to the foreign exchange risk are recognized in the income statement under cost of sales. As at December 31, 2021, the plantation comprised approximately 40,115 hectares of eucalypt wood (December 31, 2020: 39,892 hectares) and 975 hectares of pine wood (December 31, 2020: 1,001 hectares). The wood is up to 13 years (December 31, 2020: 12 years) old. Wood amounting to EUR 2,163 thousand (December 31, 2020: EUR 2,486 thousand) is less than one year old and therefore considered an immature asset. Biological assets developed as follows: Development of biological assets EUR '000 2021 2020 As at 01/01 Addition Acquisition Sales () () Capitalized production costs Change in the fair value () () Currency translation adjustment () Other changes () () As at 31/12 59 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 31 Gains and losses from the change in the fair value of biological as- sets of EUR 2,258 thousand (December 31, 2020 EUR minus 10,334 thousand) consisted of the regular remeasurement of EUR minus 2,001 thousand (December 31, 2020: EUR minus 12,943 thousand) and changes in the value of hedges related to the exchange rate risk of EUR 4,259 thousand (December 31, 2020: EUR 2,608 thousand). These are included in the cost of sales. In October 2020, a re occurred on the plantation. The re resulted in a reduction of the selling price for the damaged wood. The de- valuation taking into account insurance cover amounts to EUR 3,192 thousand and is included in the change in fair value. The following assumptions were made: Assumptions of level 3 input factors for biological assets 31/12/2021 31/12/2020 Market price EUR/m 3 Discount rate Wood volume m³ m A change in key input factors which cannot be observed on the market would have the following eects on the measurement of biological assets: Sensitivity analysis of level 3 input factors for biological assets as at 31/12/2021 EUR '000 Increase Decrease Change in the market price (+/- 1%) () Discount rate (+/- 1%) () Wood volume (+/- 5%) () Sensitivity analysis of level 3 input factors for biological assets as at 31/12/2020 (previous year) EUR '000 Increase Decrease Change in the market price (+/- 1%) () Discount rate (+/- 1%) () Wood volume (+/- 5%) () Note 21. Right-of-use assets The Lenzing Group as the lessee The Lenzing Group has obligations from rental and lease agree- ments for property, plant and equipment, which are recognized as right-of-use-assets in the consolidated statement of nancial posi- tion. The corresponding lease liabilities are reported as part of - nancial liabilities (see note 30). The following table shows the development of right-of-use assets classied by type of asset: Development of right-of-use assets EUR '000 2021 Land and buildings Technical equipment and machinery, factory and oce equipment Total Carrying amount as at 01/01 Addition Disposals () () Depreciation scal year () () () Currency translation adjustment Carrying amount as at 31/12 Development of right-of-use assets EUR '000 2020 Land and buildings Technical equipment and machinery, factory and oce equipment Total Carrying amount as at 01/01 Addition Disposals () () () Depreciation scal year () () () Currency translation adjustment () () () Carrying amount as at 31/12 In the 2021 nancial year, right-of-use assets relating to leases amounting to EUR 4,014 thousand for building rentals, EUR 2,927 thousand for wagons and EUR 2,217 thousand from the index increase for the land use right were recognized. Right-of-use assets of EUR 44,610 thousand were recognized in the 2020 nancial year for the land on which the biological assets are located. The terms and conditions of the main leases can be summarized as follows: ● Land use rights: The biological assets (see note 20) are lo- cated on land which is not owned by the Lenzing Group. Land use rights are in place for this land. The lease has a term of 30 years, with an option to extend the lease by 19 years after 30 years. This extension option was not taken into account in es- timating the expected term of the lease because the use of the 60 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 32 biological assets in 30 years is not suciently certain from to- day’s perspective. Price adjustment clauses exist. ● Oce and storage premises: The leases have a term of up to ve years and some contracts have an indenite term. Ordi- nary useful lives were applied to oce and storage premises with indenite useful lives where economic exit barriers exist. These leases do not include an option to purchase the oce and storage premises at the end of the contract term. Some of the leases include extension options and price adjustment clauses. ● Rail cars: The leases have a term of up to ten years and can be canceled after a minimum period. Some of the leases have price adjustment clauses. ● Wastewater treatment plant: The Lenzing Group has con- cluded nance leases for an industrial primary clarier and re- lated expansion investments. The ownership of the plant, in- cluding the land, can be transferred to Lenzing AG after the agreements expire in exchange for the payment of a transfer fee. This lease has a term of up to 16 years. Termination and extension options are taken into account when es- timating the expected term of the leases if it is suciently certain that they will or will not be exercised. The Lenzing Group estimates that possible future cash outows from extension options which were not taken into account in the measurement of the lease liabil- ity could result in an increase in the lease liability and the related future cash outows by EUR 1,286 thousand (December 31, 2020: EUR 1,129 thousand). The following expenses relating to leases were recognized in the consolidated income statement in the 2021 nancial year. Amounts recognized in prot or loss EUR '000 2021 2020 Expenses relating to short-term leases Expenses relating to variable leases Expenses relating to leases of low-value assets Non-lease components R R e e n n t t a a l l a a n n d d l l e e a a s s i i n n g g e e x x p p e e n n s s e e s s Interest on lease liabilities = Financing costs Short-term leases are leases with a term of less than one year. Where contracts have no term, leases are considered short-term leases if both parties have a right to terminate the contract, which can be exercised without the consent of the counterparty and no termination penalties or economic barriers exist. Leases for which only variable lease payments that are not coupled to an index or (interest) rate have been agreed are not capitalized as right-of-use assets. Expenses relating to variable leases mainly include variable rental payments for warehouses based on monthly storage quantities. Cash outows for leases total EUR 28,592 thousand (2020: EUR 30,216 thousand). They include expenses relating to short- term and variable leases and to leases of low-value assets. Expenses relating to the right-of-use assets and nancing costs are fully cash-eective and included in cash ow from operating activ- ities. The cash ows incurred in connection with the repayment of lease liabilities are explained in note 35. All items of right-of-use assets are tested for impairment in accord- ance with IAS 36 if there are any indications that these assets may be impaired (see note 11). The Lenzing Group as the lessor The future undiscounted minimum lease payments during the non- cancellable term of the leases relate primarily to land and buildings and are as follows, classied by year: Undiscounted annual minimum lease payments as lessor EUR '000 31/12/2021 31/12/2020 In the following year In the following 1-2 years In the following 2-3 years In the following 3-4 years In the following 4-5 years Thereafter Total The most important lease involves land on which a recycling plant is operated. The lease payments are indexed. The lease was con- cluded for an indenite term and can be canceled at the earliest as at December 31, 2029, subject to a six-year notice period. Rental income for the 2021 nancial year is shown in note 7. The Lenzing Group classies these leases as operating leases since the main risks and opportunities associated with ownership are re- tained. 61 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 33 Note 22. Investments accounted for using the equity method Investments accounted for using the equity method comprise the following: Carrying amounts of investments accounted for using the equity method EUR '000 31/12/2021 31/12/2020 EQUI-Fibres Beteiligungsgesellschaft mbH (EFB) Hygiene Austria LP GmbH (HGA) LD Florestal S.A. (LDF) Other associates Other joint ventures Total The major investments accounted for using the equity method in- clude, in particular, the investments in EQUI-Fibres Beteiligungs- gesellschaft mbH (EFB), Kelheim, Germany, which is assigned to the Segment Division Fiber, and LD Florestal S.A. (LDF), Sao Paulo, Brazil, which is assigned to the Segment Division Pulp. For the stra- tegic importance of the other investments accounted for using the equity method and their relationship with the Lenzing Group see note 40. Investments accounted for using the equity method developed as follows: Development of the carrying amounts of investments accounted for using the equity method EUR '000 2021 EFB Other associates HGA LDF Other joint ventures Total As at 01/01 Capital injection Share in prot or loss of investments accounted for using the equity method () Other comprehensive income – remeasurement of dened benet liability and other Other comprehensive income – foreign currency translation dierences arising during the year () Disposal of carrying amount () () Distributions () () () As at 31/12 Development of the carrying amounts of investments accounted for using the equity method (previous year) EUR '000 2020 EFB Other associates HGA LDF Other joint ventures Total As at 01/01 Capital injection Share in prot or loss of investments accounted for using the equity method Other comprehensive income – remeasurement of dened benet liability and other () () Other comprehensive income – foreign currency translation dierences arising during the year () () () () Disposal of carrying amount Distributions () () As at 31/12 In March 2021, the interest in the joint venture Hygiene Austria LP GmbH, Wiener Neudorf, Austria, which was previously accounted for using the equity method, was divested. The disposal led to the deconsolidation of the interest. The divestiture incurred a loss of EUR 4,536 thousand. A cash purchase price of EUR 1 was paid. Ad- ditionally, a long-term performance-related purchase price com- ponent was agreed (earn-out). This earn-out depends on the com- pany’s future protability and was set at EUR 0 thousand as at De- cember 31, 2021. The loan granted to Hygiene Austria LP GmbH in the 2020 nancial year was waived as part of the divestiture and a loss of EUR 2,000 thousand was recognized (see note 40). The Lenzing Group held 50.1 percent of the capital and voting rights of HGA as at December 31, 2020. The main activity of HGA, which is not publicly listed, was the production and sale of protective masks, in particular mouth-nose protective masks as well as FFP2 masks. 62 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 34 In the 2021 nancial year, an impairment of EUR 0 thousand (2020: EUR 1,384 thousand) was recognized on the outstanding purchase price receivables and non-current loans due from the buyer of EFB (and its subsidiaries) (see note 39, credit risk). The carrying amounts of the outstanding purchase price receivables and non- current loans due from the buyer of EFB (and its subsidiaries) total EUR 10,678 thousand as at December 31, 2021 (December 31, 2020: EUR 10,678 thousand) and are reported under nancial as- sets. They carry standard bank interest rates. The Lenzing Group holds a lien on the remaining shares of EFB. In addition, there is a non-current earnings-related component of the purchase price, which is dependent on the company’s future busi- ness development and is reported under other non-current assets at the discounted present value of EUR 4,087 thousand as at De- cember 31, 2021 (December 31, 2020: EUR 4,087). Moreover, the buyer was granted a credit line of up to EUR 5,379 (December 31, 2020: EUR 8,622 thousand), which can be utilized up to Decem- ber 31, 2025 at the latest in the event of adverse changes in the framework conditions for EFB on the market. The credit line had not been used as at December 31, 2021 and in the previous year as at December 31, 2020. The Lenzing Group held 20 percent of capital and voting rights as at December 31, 2021 (December 31, 2020: 20 percent). The core business of EFB, which is not publicly listed, is the production and marketing of wood-based cellulosic bers. The relations between the Lenzing Group and this company are described in note 40. The following table provides summarized nancial information on EFB in accordance with IFRS (100 percent): Summarized nancial information on EFB EUR '000 31/12/2021 31/12/2020 Non-current assets Current assets Equity Non-current liabilities Current liabilities 2021 2020 Revenue Earnings before tax (EBT) Total comprehensive income Thereof net prot for the year Thereof other comprehensive income () The reconciliation of equity to the carrying amount of the invest- ment in EFB is as follows: Reconciliation of equity to carrying amount of the investment in EFB EUR '000 31/12/2021 31/12/2020 Equity Thereof: Group’s interest (20%; previous year: 20%) Consolidation and other eects () () Impairment () () Carrying amount The Lenzing Group held 50 percent of the capital and voting rights in LDF as at December 31, 2021 (December 31, 2020: 50 percent). The core business of LDF, which is not publicly listed, is granting rights of use. The relations between the Lenzing Group and this company are described in note 40. The following table provides summarized nancial information on LDF in accordance with IFRS (100 percent): Summarized nancial information on LDF EUR '000 31/12/2021 31/12/2020 Non-current assets Current assets Equity Non-current liabilities Current liabilities 2021 2020 Revenue 1 Earnings before tax (EBT) Total comprehensive income Thereof net prot for the year Thereof other comprehensive income 1) LDF's revenue consists of rental income in particular. The reconciliation of equity to the carrying amount of the invest- ment in LDF is as follows: Reconciliation of equity to carrying amount of the investment in LDF EUR '000 31/12/2021 31/12/2020 Equity Thereof: Group's interest (50%; previous year: 50%) Carrying amount The investments in associates represent shares in companies in which the Lenzing Group can exert signicant inuence over nan- cial and operating policies. Joint ventures are joint arrangements managed by the Lenzing Group together with one or more partners, whereby the Lenzing Group has rights to the net assets of the ar- rangement. 63 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 35 Note 23. Financial assets Non-current nancial assets comprise the following: Non-current nancial assets EUR '000 31/12/2021 31/12/2020 Non-current securities Other equity investments Originated loans Total Non-current securities are classied as follows: Non-current securities by asset class EUR '000 Market value 31/12/2021 Market value 31/12/2020 Government bonds Other securities and book-entry securities (primarily shares) Total The Lenzing Group has designated equity instruments of a fair value of EUR 19,899 thousand as measured at “fair value through other comprehensive income” as at December 31, 2021 (Decem- ber 31, 2020: EUR 24,753 thousand). Non-current securities meas- ured at fair value through other comprehensive income and other equity investments include shares in companies in which a share of less than 20 percent is held. The option to recognize these equity instruments at fair value through other comprehensive income was exercised based on the intent to hold these instruments in the long term. The other equity investments as at December 31, 2021 con- sist primarily of the investment in LP Beteiligungs & Management GmbH, Lenzing. Non-current securities primarily consist of Ober- bank ordinary shares amounting to EUR 12,802 thousand (Decem- ber 31, 2020: EUR 11,821 thousand). In the 2021 nancial year there was a dividend payout of other investments and other securities, which amounted to EUR 960 thousand (December 31, 2020: EUR 829 thousand). Current nancial assets include the shares held in Spinnova OY, Jyväskylä, Finland, amounting to EUR 32.232 thousand, which were reclassied from other equity investments to current securi- ties in the 2021 nancial year (see note 37). Note 24. Other non-current assets Other non-current assets are classied as follows: Other non-current assets EUR '000 31/12/2021 31/12/2020 Other non-current nancial assets (particularly from derivatives and other nancial receivables) Other non-current non-nancial assets (particularly from other taxes) Total Note 25. Inventories Inventories include the following components: Inventories EUR '000 31/12/2021 31/12/2020 Raw materials and supplies Work in progress Finished goods and merchandise Advance payments made Total Raw materials and supplies consist primarily of wood for pulp pro- duction, pulp and chemicals for cellulosic ber production and var- ious incidentals. The cost of raw materials and supplies is calcu- lated using the weighted average cost method. Finished goods and work in progress include cellulosic bers, sodium sulfate, acetic acid and furfural. Write-downs totaling EUR 16,841 thousand were recognized to in- ventories in 2021 (2020: EUR 8,689 thousand). The carrying amount of inventories measured at their net realizable value equaled EUR 186,751 thousand (December 31, 2020: EUR 118,706 thousand). Expenses for inventories, which are in- cluded in the cost of material totaled EUR 1,017,914 thousand (2020: EUR 770,254 thousand). 64 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 36 Note 26. Trade receivables Trade receivables comprise the following: Trade receivables EUR '000 31/12/2021 31/12/2020 Trade receivables (gross) Bad debt provisions () () Total All trade receivables are classied as current assets. Additional in- formation on trade receivables is provided in note 37 (“Factoring“) and note 39 (“Credit risk“). Note 27. Other current assets Other current assets comprise the following: Other current assets EUR '000 31/12/2021 31/12/2020 Other current nancial assets Derivatives not yet settled (open positions) Recharging of maintenance services Receivables from grant commitments Sundry Total Other current non-nancial assets Receivables from other taxes and duties Advance payments made Emission certicates Prepaid expenses Sundry Total Total Note 28. Equity Share capital and capital reserves The share capital of Lenzing AG totaled EUR 27,574,071.43 as at De- cember 31, 2021 (December 31, 2020: EUR 27,574,071.43) and is di- vided into 26,550,000 zero par value shares (December 31, 2020: 26,550,000 shares). The proportion of share capital attributable to one share equals roughly EUR 1.04. Each ordinary share represents an equal interest in capital and conveys the same rights and obliga- tions, above all the right to a resolved dividend and the right to vote at the Annual General Meeting. The issue price of the shares is fully paid in. No other classes of shares have been issued. The Annual General Meeting on April 12, 2018 authorized the Man- aging Board – while at the same time canceling the resolutions re- garding this matter of the Annual General Meeting of April 22, 2015 – subject to the approval of the Supervisory Board, to increase share capital by up to EUR 13,787,034.68 through the issue of up to 13,274,999 zero par value shares (“authorized capital”) – also in tranches – in exchange for cash and/or contributions in kind, within ve years from entry in the commercial register. The proportion of authorized capital attributable to one share equals roughly EUR 1.04. This authorized capital was recorded in the commercial register on May 23, 2018. In addition, a resolution of the Annual General Meeting on April 12, 2018 authorized the Managing Board – while at the same time can- celing the resolutions regarding this matter of the Annual General Meeting of April 22, 2015 – to issue, subject to the approval of the Supervisory Board, convertible bonds by April 12, 2023 in one or several tranches that grant or provide for the subscription or con- version right or a subscription or conversion obligation for up to 13,274,999 shares of the company (“contingent capital”). They can be serviced through the contingent capital and/or treasury shares. The Annual General Meeting on June 18, 2020 authorized the Managing Board – while at the same time canceling the resolutions regarding this matter of the Annual General Meeting of April 12, 2018 and subject to the approval of the Supervisory Board – to pur- chase treasury shares of the company for a period of 30 months starting on the day of the resolution. The treasury shares acquired by the company may not exceed 10 percent of the company’s share capital. The equivalent to be paid for the repurchase must be within a range of +/-25 percent of the weighted average closing price of the last 20 stock exchange days prior to the start of the corre- sponding repurchasing program of the Lenzing share. The Manag- ing Board was also authorized to withdraw repurchased treasury shares without any further resolution by the Annual General Meet- ing subject to the approval of the Supervisory Board (including the authorization of the Supervisory Board to adopt changes to the ar- ticles of association resulting from withdrawing the shares), or to resell them and to determine the conditions of sale. This authoriza- tion can be exercised in full, in part and in pursuit of one or several objectives by the company, by a subsidiary (Section 189a no. 7 of the Austrian Commercial Code) or by third parties for the com- pany’s account. In addition, the Management was authorized for a period of ve years from the date of the resolution to adopt the sale of treasury shares in any manner permitted by law other than through the stock exchange or public oer, also excluding share- holders’ repurchasing rights (subscription rights), and to determine the conditions of sale. 65 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 37 The Managing Board did not utilize the authorizations in place on or up to December 31, 2021 to increase share capital, issue con- vertible bonds or repurchase treasury shares during the 2021 nan- cial year. The capital reserves represent appropriated reserves of Len- zing AG that may only be used to oset an accumulated loss by Lenzing AG. These reserves were created from the inow of funds received by Lenzing AG from shareholders in excess of share cap- ital. Other reserves Other reserves include all accumulated other comprehensive in- come and consist of the foreign currency translation reserve, the reserve for nancial assets measured at fair value through other comprehensive income, the hedging reserve and actuarial gains/losses. The amounts attributable to the components of other comprehensive income in 2021 and 2020 include the following: Other comprehensive income EUR '000 2021 2020 Before tax Tax eect After tax Before tax Tax eect After tax Consolidated subsidiaries () () () Investments accounted for using the equity method () () Foreign currency translation reserve () () () Financial assets measured at fair value through other comprehensive income () () () Consolidated subsidiaries () () () () Hedging reserve () () () () Consolidated subsidiaries () () () Investments accounted for using the equity method () () Actuarial gains/losses () () () Total () () () The hedging reserve developed as follows: Changes in the hedging reserve EUR '000 2021 2020 Gains/losses recognized in the reporting period from the valuation of cash ow hedges From forward foreign exchange contracts () () From other derivatives () () () Reclassication to prot or loss of amounts relating to cash ow hedges From forward foreign exchange contracts From other derivatives () Total () () The fair value changes recognized in the reporting period from the valuation of cash ow hedges are mostly related to the hedging of foreign currency transactions for the construction of assets and the hedging of revenue in foreign currencies. The above amounts from the reclassication to prot or loss of cash ow hedges from forward foreign exchange contracts are re- ported primarily under revenue as part of earnings before interest and tax (EBIT). The above amounts from the reclassication to prot or loss of cash ow hedges from other derivatives are re- ported under nancial result. 66 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 38 Retained earnings Retained earnings comprise the following: Retained earnings EUR '000 31/12/2021 31/12/2020 Unappropriated revenue reserves of Lenzing AG under Austrian law (Austrian Commercial Code – öUGB) Accumulated prots of Lenzing AG under Austrian law (Austrian Commercial Code – öUGB) Retained earnings of the subsidiaries, including the eect of adjusting the nancial statements of Lenzing AG and its subsidiaries from local regulations to IFRS Total (excl. other reserves) The unappropriated revenue reserves of Lenzing AG can be re- leased at any time and distributed to shareholders as part of accu- mulated prots. Austrian law only permits the distribution of divi- dends from accumulated prots as stated in the approved annual nancial statements of the parent company prepared in accord- ance with the Austrian Commercial Code. The following dividends were approved by the Annual General Meeting and paid to the shareholders of Lenzing AG: Dividends of Lenzing AG resolved and paid Total Number of shares Dividend per share EUR '000 EUR Dividend for the nancial year 2020 resolved at the Annual General Meeting on April 14, 2021 Dividend for the nancial year 2019 resolved at the Annual General Meeting on June 18, 2020 1 1) The proposed dividend payout of EUR 1.00 as published in the consolidated nan- cial statements 2019 was reevaluated due to the COVID-19 crisis. The Managing Board proposes the following use of accumulated prots for 2021 as stated in the annual nancial statements of Len- zing AG, which were prepared in accordance with the Austrian Commercial Code: Proposal on the appropriation of accumulated prots for 2021 EUR '000 Lenzing AG closed the 2021 nancial year with prot under Austrian law (öUGB) of the allocation to (unappropriated) revenue reserves of () results in accumulated prot of The Managing Board proposes the following appropriation of the accumulated prot: Distribution of a EUR 4.35 dividend per share on eligible share capital of EUR 27,574,071.43 or 26,550,000 shares Amount carried forward to new account The dividend shown in the above proposal is subject to approval by the shareholders at the Annual General Meeting and is therefore still included in equity as at the reporting date. Hybrid capital In December 2020, a subordinated perpetual bond (hybrid capital) with a total volume of EUR 500,000 thousand and a coupon of 5.75 percent was issued. The hybrid capital has a perpetual tenor and can be called or re-deemed by Lenzing AG on December 7, 2025 at the earliest. Investors have no call rights. If the hybrid capital is not called, the hybrid capital will carry a changed interest rate from December 8, 2025 (then applicable 5-year swap rate plus a margin of 11.208 percent). Interest will be due and payable in arrears on December 7 of each year unless Lenzing AG decides to defer such interest payment. Outstanding deferred interest must be paid under certain circum- stances, in particular when the Annual General Meeting of Len- zing AG resolves to pay a dividend. The bond meets the criteria for equity pursuant to IAS 32 (Financial Instruments: Presentation). Accordingly, coupons are presented as part of appropriation of prots in the consolidated income state- ment. The hybrid capital led to directly attributable transaction costs after tax of EUR 3,418 thousand, which were oset against equity. Non-controlling interests Non-controlling interests represent the investments held by third parties in consolidated group companies. The group companies with non-controlling interests are listed in note 43 under “Consoli- dated companies”. These are companies in which the Lenzing Group holds a share of less than 100 percent and which are not reported under puttable non-controlling interests. Non-controlling interests in equity include LD Celulose S.A. (LDC), Sao Paulo, Brazil, which is assigned to the Segment Division Pulp. The non-controlling interests in LDC totaled EUR 174,719 thousand as at December 31, 2021 (December 31, 2020: EUR 133,283 thou- sand). As at December 31, 2021, non-controlling shareholders held 49.0 percent (December 31, 2020: 49.0 percent) of the capital and voting rights in LDC, which is not publicly listed. After the comple- tion of the plant, the core business of LDC will consist of the pro- duction and sale of dissolving wood pulp. 67 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 39 The following table provides summarized nancial information on LDC in accordance with IFRS (100 percent): Summarized nancial information on LDC EUR '000 31/12/2021 31/12/2020 Non-current assets Current assets Equity Thereof equity attributable to shareholders of Lenzing AG Thereof equity attributable to non-controlling interests Non-current liabilities Current liabilities 2021 2020 Revenue Earnings before tax (EBT) () () Total comprehensive income () Thereof net prot/loss for the year () () Net prot/loss for the year attributable to shareholders of Lenzing AG () () Net prot/loss for the year attributable to non-controlling interests () () Thereof other comprehensive income () Other comprehensive income attributable to shareholders of Lenzing AG () Other comprehensive income attributable to non-controlling interests () Cash ow from operating activities () Cash ow from investing activities () () Cash ow from nancing activities Change in cash and cash equivalents () Dividends paid to non-controlling interests Non-controlling interests in equity include PT. South Pacic Vis- cose (SPV), Purwakarta, Indonesia, which is assigned to the Seg- ment Division Fiber. The non-controlling interests in SPV totaled EUR 17,232 thousand as at December 31, 2021 (December 31, 2020: EUR 14,615 thousand). As at December 31, 2021, non-controlling shareholders held 8.13 percent (December 31, 2020: 11.92 percent) of the capital and voting rights in SPV, which is not publicly listed. The core business of SPV is the production and sale of wood-based cellulosic bers. The following table provides summarized nancial information on SPV in accordance with IFRS (100 percent): Summarized nancial information on SPV EUR '000 31/12/2021 31/12/2020 Non-current assets Current assets Equity Thereof equity attributable to shareholders of Lenzing AG Thereof equity attributable to non-controlling interests Non-current liabilities Current liabilities 2021 2020 Revenue Earnings before tax (EBT) () () Total comprehensive income () () Thereof net prot/loss for the year () () Net prot/loss for the year attributable to shareholders of Lenzing AG () () Net prot/loss for the year attributable to non-controlling interests () () Thereof other comprehensive income () Other comprehensive income attributable to shareholders of Lenzing AG () Other comprehensive income attributable to non-controlling interests () Cash ow from operating activities () Cash ow from investing activities () () Cash ow from nancing activities () Change in cash and cash equivalents () () Dividends paid to non-controlling interests 68 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 40 The following shares of other comprehensive income are attribut- able to non-controlling interests in the subsidiaries of Lenzing AG: Other comprehensive income attributable to non-controlling interests EUR '000 2021 2020 Items that will not be reclassied subsequently to prot or loss Remeasurement of dened benet liability () Income tax relating to these components of other comprehensive income () Items that may be reclassied to prot or loss Foreign operations – foreign currency translation dierences arising during the year () Cash flow hedges – effective portion of changes in fair value recognized during the year and non-designated components () () Income tax relating to these components of other comprehensive income Other comprehensive income (net of tax) () Note 29. Government grants The amount accrued under this item resulted primarily from grants for the promotion of investments in economically underdeveloped regions, for investments in environmental protection and for gen- eral investment support. Investment grants are reported as liabilities and recognized in prot or loss on a straight-line basis over the useful life of the subsidized investments as “Income from the release of investment grants”. Government grants for cost reimbursements are recognized as other income in the period in which the related costs are incurred, unless the receipt of the grant is contingent on conditions that are not yet suciently likely to occur. Government grants of EUR 12,755 thousand were recognized to prot or loss in 2021 (2020: EUR 12,752 thousand), resulting pre- dominantly from promotion of research activities. Any conditions attached to the grants were fullled and repayment, in full or in part, is there-fore considered unlikely. Government grants also included EUR 42,254 thousand of emis- sion certicates as at December 31, 2021 (December 31, 2020: EU 18,048 thousand). In accordance with Directive 2003/87/EC of the European Parliament and the European Council on a system for trading greenhouse gas emission certicates, a total of 369,863 EU-emission certicates and 30,589 UK-emission certicates were allocated free of charge to the relevant companies in the Lenzing Group for 2021 through national allocation plans (2020: 393,758 EU-emission certicates and 34,808 UK-emission certicates). Emission certicates are capitalized at fair value on the allocation date. The dierence between the fair value and the purchase price paid by the company for the emission certicates is recorded under government grants. At the end of each reporting period, a provision is recognized for the certicates used up to that date. The amount of the provision is based on the recognized asset value of the cer- ticates if they are covered by certicates held by the company at this reporting date. If the certicates used exceed the certicates held, the provision is based on the fair value of the certicates (to be purchased subsequently) as at the relevant reporting date. Fu- ture laws and commitments on emissions, especially in the coun- tries of the Lenzing Group's production sites, could lead to further precautionary measures in the future. In the 2021 nancial year expenses for emission certicates amounted to EUR 6,557 thousand (2020: EUR 4,738 thousand). 69 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 41 Note 30. Financial liabilities The following table shows the composition of nancial liabilities as at December 31: Financial liabilities 31/12/2021 31/12/2020 EUR '000 Currency Nominal value Carrying amount Average eective interest in % Currency Nominal value Carrying amount Average eective interest in % Private placements Fixed interest EUR EUR Floating rate interest EUR EUR Floating rate interest 1 USD USD Bank loans Loans: Fixed interest EUR EUR Fixed interest USD USD Floating rate interest EUR EUR Floating rate interest 1 USD USD Operating loans 2 : Floating rate interest CNY CNY Lease liabilities Fixed interest EUR EUR Loans from other lenders Fixed interest EUR EUR Fixed and oating rate interest EUR EUR Floating rate interest USD USD Floating rate interest BRL BRL Total Thereof current Thereof non-current 1) The underlying contracts are linked to the USD-LIBOR reference interest rate as of the balance sheet date and have not yet been switched to an alternative reference interest rate. 2) Revolving credit agreements and overdrafts In the 2012 nancial year, the Lenzing Group issued private place- ments with an issue volume of EUR 200,000 thousand. The terms cover four and seven years with xed and oating interest rates, respectively, as well as a term of ten years with xed interest. The average term is approximately six years. The Lenzing Group repaid EUR 40,500 thousand of the existing private placements as sched- uled in 2016. In the 2015 nancial year, the Lenzing Group reached an agreement to renance its private placements with a corre- sponding volume increase. Existing private placements of EUR 89,500 thousand were terminated and re-issued at extended terms. Additional private placements of EUR 60,500 thousand were also issued. Overall these transactions involved the issue of private placements totaling EUR 150,000 thousand, which have an average term of seven years. In the 2021 nancial year EUR 56,000 thousand (2020: EUR 37,500 thousand) were repaid. In the 2019 nancial year, the Lenzing Group issued further private placements with an issue volume of EUR 375.000 thousand and USD 45.000 thousand. A term of 5 to 15 years with xed and oat- ing interest rates was agreed. In the 2020 nancial year, the Lenzing Group issued further private placements with an issue volume of EUR 114,000 thousand and TUSD 20,000 thousand. Terms of 5 to 7 years with xed and oat- ing interest rates were agreed. In 2020, a loan of EUR 200,000 thousand was arranged with Oes- terreichische Kontrollbank. A term of 3 to 7 years with xed and oating interest rates was agreed. In 2021, a loan of EUR 160,000 thousand was arranged with Oes- terreichische Kontrollbank. A term of 2 to 7 years with xed and oating interest rates was agreed. 70 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 42 The nancing for the construction of the dissolving wood pulp plant in Brazil was secured in the form of loans in the 2020 nancial year (volume in USD 1,147,200 thousand). As at December 31, 2021, EUR 739,462 thousand (December 31, 2020: EUR 237,504 thou- sand) of the loans were used. These liabilities are collateralized by pledged property, plant and equipment in the amount of EUR 9,558 thousand (December 31, 2020: EUR 2,091 thousand) and biological assets in the amount of EUR 95,767 thousand (De- cember 31 2020: EUR 84,254 thousand). In addition, the shares in LD Celulose S.A., Sao Paulo, Brazil were pledged for the nancing of the pulp mill. Details on the existing nancial covenants are ex- plained in note 36. The next interest rate adjustment for the oating rate loans and partially xed rate loans will take place within the next six months, depending on the loan agreement. The conditions for loans that can be utilized multiple times (revolving loans) are xed for a cer- tain period and generally carry oating interest rates. Other loans primarily involve obligations to the Austrian fund for the promotion of research in industry (“Forschungsförderungs- fonds der gewerblichen Wirtschaft”) and the ERP fund as well as loans from non-controlling shareholders. Note 31. Deferred taxes (deferred tax assets and liabilities) and current taxes Deferred tax assets and liabilities relate to the following items on the statement of nancial position: Deferred tax assets EUR '000 31/12/2021 31/12/2020 Intangible assets and property, plant and equipment Financial assets Inventories Other assets Provisions Investment grants Lease liabilities Other liabilities Loss carryforwards Gross deferred tax assets – before valuation adjustment Valuation adjustment to deferred tax assets () () Thereof relating to tax loss carryforwards () () Gross deferred tax assets Osettable against deferred tax liabilities () () Net deferred tax assets Deferred tax liabilities EUR '000 31/12/2021 31/12/2020 Intangible assets and property, plant and equipment Right-of-use assets Biological assets Financial assets Inventories Other assets Special depreciation/amortization for tax purposes Investment grants Other liabilities Gross deferred tax liabilities Osettable against deferred tax assets () () Net deferred tax liabilities Of the total gross deferred tax assets, EUR 22,501 thousand (De- cember 31, 2020: EUR 16,109 thousand) are due within one year. Of the total gross deferred tax liabilities, EUR 12,416 thousand (De- cember 31, 2020: EUR 6,480 thousand) are due within one year. The remaining amounts are due in more than one year. 71 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 43 Deferred taxes developed as follows: Development of deferred taxes EUR '000 2021 2020 As at 01/01 () () Recognized in prot or loss () () Recognized in other comprehensive income () Currency translation adjustment () As at 31/12 () () The Group held tax loss carryforwards of EUR 166,812 thousand as at December 31, 2021 (December 31, 2020: EUR 166,162 thousand). The existing tax loss carryforwards can be utilized as follows: Loss carryforwards (assessment basis) EUR '000 31/12/2021 31/12/2020 Total Thereof capitalized loss carryforwards Thereof non-capitalized loss carryforwards Possible expiration of non-capitalized loss carryforwards Within 1 year Within 2 years Within 3 years Within 4 years Within 5 years or longer Unlimited carryforward Net deferred tax assets of EUR 3,581 thousand were recognized as at December 31, 2021 (December 31, 2020: EUR 2,409 thousand), including EUR 25 thousand (December 31, 2020: EUR 18 thousand) in group companies that generated losses in the 2021 scal year or in the previous year. The tax losses in the group companies con- cerned derived mainly from one-o events which are not expected to recur in the future. Otherwise, deferred tax assets were recog- nized if sucient taxable temporary dierences were available. Certain loss carryforwards were not capitalized because their usa- bility is restricted. If all tax loss carryforwards could be utilized in full, the deferred tax assets on loss carryforwards would total EUR 37,908 thousand (December 31, 2020: EUR 38.889 thousand) instead of EUR 5,236 thousand (December 31, 2020: EUR 9,155 thousand). The nancial assets and other assets shown under deferred tax as- sets in the above table include amounts for outstanding partial write-downs to investments in accordance with Section 12 Para. 3 no. 2 of the Austrian Corporation Tax Act (“Siebentelabschreibung”, the partial write-downs of investments over a period of seven years for tax purposes) corresponding to a measurement base of EUR 14,994 thousand (December 31, 2020: EUR 17,937 thousand). Partial write-downs of EUR 4,612 thousand were utilized for tax purposes in 2021 (2020: EUR 4,419 thousand). Deferred tax liabilities were not recognized for temporary dier- ences with a measurement base of EUR 474,481 thousand (De- cember 31, 2020: EUR 446,410 thousand) in connection with in- vestments in subsidiaries, joint ventures and associates and the related proportional share of net assets held by group companies because these dierences are not expected to reverse in the fore- seeable future. The receivables from current taxes include prepayments made to foreign taxation authorities. These amounts are recognized when the recoverability is probable, while valuation adjustments are made in all other cases. The gross carrying amount of non-current receivables from current taxes as of December 31, 2021 amounts to EUR 21,819 thousand (December 31, 2020: EUR 15,496 thou- sand). Payments are sometimes uncertain, especially the timing of payments due to the sometimes long duration of proceedings. For this reason, as at December 31, 2021, write-downs of EUR 6,882 thousand were recognized (December 31, 2020: EUR 339 thousand). Lenzing AG and the subsidiaries included in the group tax agree- ment are members of the tax group between B&C Holding Öster- reich GmbH, as the head of the group, and Lenzing AG and other subsidiaries of Lenzing AG, as group members, in accordance with Section 9 of the Austrian Corporation Tax Act. The tax equalization agreement was revised with eect from the 2021 nancial year. This now also includes regulations concerning the interest barrier (Section 12a of the Austrian Corporation Tax Act [KStG]). Group taxation includes the oset of taxable prots and losses be- tween the group members. The deferred tax assets and deferred tax liabilities of the group members are also oset based on their joint tax assessment. Future tax liabilities from the oset of losses from foreign subsidiaries are recognized in the consolidated nan- cial statements without discounting. The group and tax equaliza- tion agreement requires Lenzing AG to pay a tax allocation equal to the corporate income tax attributable to the taxable prot of the company and the subsidiaries included in the tax group. The tax allocation payable by Lenzing AG is reduced by any domestic and foreign withholding taxes deductible from the overall group result by the group parent and by any transferred minimum corporate in- come taxes. The tax allocation to be paid by Lenzing AG is also reduced by any current losses/loss carryforwards caused by the group parent that can be oset against positive earnings of Lenzing AG’s tax group in the assessment year. The tax allocation is reduced by 25 percent (2020: 25 percent) of the corporate tax rate (i.e. currently 6.25 per- cent; 2020: 6.25 percent) applicable to the current losses/loss car- ryforwards recorded by the head of the tax group that are oset against positive earnings in an assessment year for the head of the tax group. Tax losses recorded by Lenzing AG and the participating subsidiaries are kept on record and oset against future tax gains. An equalization payment is made as compensation for any losses that are not oset when the contract is terminated. 72 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 44 The Lenzing Group includes the eects of uncertain tax positions in the calculation of current and deferred taxes. Tax claims are rec- ognized at the expected reimbursement amount in cases where the claim is suciently certain. The tax returns of the Lenzing Group’s subsidiaries are reviewed regularly by the taxation author- ities. Appropriate provisions have been recognized for possible fu- ture tax obligations based on a number of factors which include interpretations, commentaries and legal decisions relating to the respective tax jurisdiction and past experience. In addition, uncer- tain tax positions are evaluated on the basis of estimates and as- sumptions for future events. New information can become availa- ble in the future that leads the Group to change its assumptions regarding the appropriateness of tax positions. Any such changes will aect tax expense in the period in which they are identied. The recoverability of deferred tax assets is generally based on the positive taxable results expected in the future – after the deduction of taxable temporary dierences – in line with the forecasts ap- proved by the Managing Board. These forecasts are also used for impairment testing (see note 11). The assessment of unused tax loss carryforwards and tax credits also involves the consideration of uti- lization requirements. 73 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 45 Note 32. Provisions The Lenzing Group’s provisions are classied as follows: Provisions EUR '000 Total Thereof current Thereof non-current 31/12/2021 31/12/2020 31/12/2021 31/12/2020 31/12/2021 31/12/2020 P P r r o o v v i i s s i i o o n n s s f f o o r r p p e e n n s s i i o o n n s s a a n n d d s s i i m m i i l l a a r r o o b b l l i i g g a a t t i i o o n n s s Pensions and severance payments Jubilee benets O O t t h h e e r r p p r r o o v v i i s s i i o o n n s s Anticipated losses and other risks Emission certicates Sundry Total Provisions for pensions and similar obligations Pensions and severance payments The Lenzing Group has entered into obligations for pensions and severance payments from dened benet plans, which are re- ported under provisions for pensions and severance payments, and from dened contribution plans. Dened benet plans (for pensions and severance payments) The benets resulting from the dened benet plans for pensions and severance payments are dependent on the nal salary or wage and the length of service. They do not require any contributions by employees. The dened benet pension plans are based on contractual obli- gations. The Lenzing Group’s most important dened benet pen- sion plan is located in Austria. It applies to employees who joined the Group before January 1, 2000 and decided to remain in the plan. The claims generally arose after a vesting period of at least 10 or 15 service years. A retirement age of 58 to 63 years is assumed for the beneciaries, depending on their gender. At present, the plan primarily covers employees who have already retired. Qualify- ing insurance policies were recognized as plan assets in some cases, while coverage for these obligations is also provided by se- curities that do not qualify as plan assets. The dened benet severance plans are based on statutory obli- gations and obligations under collective agreements. The Lenzing Group’s most important dened benet severance plan is located in Austria. This plan entitles employees whose employment rela- tionship is governed by Austrian law and started before January 1, 2003 to a severance payment in specic cases, in particular when they reach the statutory retirement age and in the event of termi- nation by the employer (“old severance payment system”). The amount of the severance payment depends on the employee’s sal- ary or wage at the termination of employment and on the length of the employment relationship. There are similar major dened ben- et severance plans in Indonesia and the Czech Republic, which apply to all employees irrespective of when they joined the respec- tive company. The dened benet severance plans are not covered by assets, but are nanced entirely through provisions. 74 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 46 The dened benet pension and severance plans are principally connected with the following risks that inuence the amount of the obligations to be recognized: ● Investment risk: A decline in the income from plan assets be- low the discount rate will result in a plan decit and an increase in the obligations. ● Interest rate risk: A decrease in the discount rate due to lower bond interest rates on the capital market will result in an in- crease in the obligations. ● Salary and pension trend: An increase in the actual salary and pension trends over the expected future levels will result in an increase in the obligations. ● Personnel turnover and departure risk: A decline in the ex- pected personnel turnover rates will result in an increase in the obligations. ● Longevity risk: An increase in the life expectancy of the ben- eciaries will result in an increase in the obligations. The Lenzing Group is also exposed to currency risks in connection with these plans. The Lenzing Group takes various steps to reduce the risks from de- ned benet plans. The related measures include, in particular, the external nancing of dened benet plans with plan assets or the coverage of obligations with securities that do not qualify as plan assets and the settlement of existing dened benet plans with lump sum payments. In addition, pension and similar commitments are now only concluded as dened contribution commitments where possible and legally permissible. The objectives of the investment policy are to create an optimal composition of plan assets and to ensure sucient coverage for the existing claims of participating employees. The investment strategies (asset allocations) for the plan assets are contractually regulated. A reinsurance policy was concluded for part of the claims from the Austrian pension plan. It is reported as plan asset in the amount of EUR 2,598 thousand (December 31, 2020: EUR 2,730 thousand). This policy is a conventional life insurance policy which invests primarily in debt instruments that reect the maturity prole of the underlying claims and are intended to main- tain a high degree of investment security. The Lenzing Group makes no further contributions to this insurance policy. The fair values of the abovementioned equity and debt instruments were based on price quotations on an active market. The plan as- sets do not include any nancial instruments issued by or assets used by the Lenzing Group. The actual return on plan assets totaled EUR 152 thousand in 2021 (2020: EUR 149 thousand). The net inter- est expense from the dened benet plans (expenses from the ac- crued interest on the obligations and the return on plan assets) is reported under nancing costs. The most important actuarial parameters applied to the dened benet pension and severance plans are as follows: Actuarial assumptions for dened benet pension and severance plans p. a. in % 31/12/2021 Discount rate Salary increase Pension increase Sta turnover deductions Austria – pensions - Austria – severance payments N/A Indonesia N/A - Czech Republic N/A 31/12/2020 Austria – pensions - Austria – severance payments N/A Indonesia - N/A - Czech Republic N/A The major obligations from the dened benet plans are the obli- gations for pensions and severance payments in the Lenzing Group‘s Austrian companies. The discount rate for these obliga- tions was derived from high-quality xed-income corporate bonds with at least an AA rating based on an international actuary’s stand- ards. Bonds with signicantly higher or lower interest rates than the other bonds in their risk class (“statistical outliers”) were not in- cluded in the calculation. The currency and terms of the bonds used to derive the discount rate are based on the currency and ex- pected terms of the obligations to be settled. The estimated salary and pension increases, which are also considered realistic for the future, were derived from the averages of recent years. Separate employee turnover rates were applied for each company depend- ing on the composition of the workforce and the employees’ length of service. The retirement age used for the calculation is based on the applicable legal regulations. Individual, country-specic as- sumptions were made for each of the other countries to determine the discount rate, salary increases, employee turnover rates and re- tirement age. The parameters used to calculate the dened benet pension plans in Austria included the biometric data from AVÖ 2018 P – the calculation base for pension insurance for salaried employees The following biometric data and assumptions are used in other countries: ● Indonesia: Tabel Mortalita Indonesia (TMI 2019) ● Czech Republic: AVÖ 2018-P ● Other: No biometric assumptions were made because of the low number of beneciaries. 75 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 47 The obligations (carrying amounts) from dened benet pension and severance plans incl. restructuring measures reported in the consolidated statement of nancial position comprise the follow- ing: Development of dened benet plans EUR '000 Present value of pension and severance payment obligation (DBO) Fair value of plan assets Carrying amounts of dened benet pension and severance plans 2021 2020 2021 2020 2021 2020 As at 01/01 Service cost Current service cost Past service cost Gain/loss on curtailments of plan Net interest Income and expenses from dened benet plans recognized on the income statement Remeasurement during the reporting period On the basis of demographic assumptions () () On the basis of nancial assumptions () () On the basis of experience adjustments () () On the basis of income from plan assets, excl. amounts included in interest income () () Remeasurement of dened benet plans included in other comprehensive income () () Cash ows Payments made from the plan () () () () Direct payments and contributions by the employer () () () () Currency translation adjustment () () Other reconciliation items () () () () () () As at 31/12 Thereof pensions in Austria Thereof severance payments in Austria Thereof pensions and severance payments in other countries Sensitivity analyses are performed to evaluate the risk of changes in the actuarial parameters used to measure the present value of the obligations from dened benet plans. These sensitivity anal- yses show the eects on the present value of the obligations from hypothetical changes in key parameters that could have reasonably changed as at the reporting date. One parameter was changed for each analysis, while all other parameters were kept constant. The sensitivity analyses are based on the present values of the obliga- tions as at the reporting date before the deduction of plan assets (gross obligation/DBO). 76 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 48 The sensitivities of the parameters as at the reporting dates are as follows: Sensitivity analysis of the dened benet pension and severance payment obligations 31/12/2021 Change in parameters (percentage points) Decrease in parameter/ change in present value of obligation in EUR '000 Increase in parameter/ change in present value of obligation in EUR '000 Discount rate () Salary increase () Pension increase () Sensitivity analysis of the dened benet pension and severance payment obligations (previous year) 31/12/2020 Change in parameters (percentage points) Decrease in parameter/ change in present value of obligation in EUR '000 Increase in parameter/ change in present value of obligation in EUR '000 Discount rate () Salary increase () Pension increase () The above sensitivity analyses represent hypothetical changes based on assumptions. Actual deviations from these assumptions will result in other eects. In particular, the parameters changed individually for the analysis may actually correlate with each other. The deduction of plan assets will lead to a further reduction of the eects. The Lenzing Group expects that in the following nancial year, con- tributions of EUR 7,003 thousand (2020: EUR 6,488 thousand) will fall due for payment into the dened benet plans. The weighted average terms (durations) of the dened benet pen- sion and severance payment obligations in years are as follows: Weighted average durations of the dened benet pension and severance payment obligations Years 31/12/2021 31/12/2020 Austria – pensions Austria – severance payments - - Indonesia Czech Republic Dened contribution plans (for pensions and severance payments) The Lenzing Group makes payments to pension funds and similar external funds for dened contribution pension and severance plans. The most signicant dened contribution pension and sev- erance plans for the Lenzing Group are located in Austria (“new severance payment system” and individual contractual commit- ments). The expenses for dened contribution plans are as follows: Expenses for dened contribution plans EUR '000 2021 2020 Austria – pensions Austria – severance payments Other countries Total Provisions for jubilee benets Collective agreements require Lenzing AG and certain subsidiaries, particularly in Austria and the Czech Republic, to pay jubilee ben- ets to employees who have been with the company for a certain length of time. In the Austrian companies employees have the op- tion to convert the jubilee benets into time credits. No assets were segregated from the company and no contributions were made to a pension fund or any other external fund to cover these obligations. The jubilee benets do not require any contributions by employees. The obligations from jubilee benets for employees (long-service bonuses) are considered other long-term employee benets under IFRS. The net interest expense from jubilee benets (expenses from the accrued interest on the obligations) is recorded under - nancing costs. The discount rate applied to the Austrian obligations is similar to the discount rate used for the other dened benet plans. Employee turnover rates were determined separately for each company depending on the composition of the workforce and employees’ length of service. Individual, country-specic as- sumptions were made for the discount rate, employee turnover rates and salary increases in the other countries. 77 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 49 The main actuarial parameters applied to the obligations for jubilee benets are as follows: Actuarial assumptions for the jubilee benet obligations p. a. in % 31/12/2021 Discount rate Salary increase Staff turnover deductions Austria - Czech Republic 31/12/2020 Austria - Czech Republic The following table shows the development of the obligation (pro- vision) for jubilee benets: Development of the jubilee benet obligation (provision) EUR '000 2021 2020 As at 01/01 Service cost Current service cost Net interest Remeasurement during the reporting period On the basis of demographic assumptions () () On the basis of nancial assumptions On the basis of experience adjustments () Income and expenses from dened benet plans recognized on the income statement Cash ows Direct payments by employer () () Currency translation adjustment () Other reconciliation items () () As at 31/12 78 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 50 Other provisions and accruals Other provisions and accruals developed as follows: Development of other provisions EUR '000 2021 As at 01/01 Currency translation adjustment Reclassi- cation Utilization Reversal Addition As at 31/12 Thereof current Thereof non-current Anticipated losses and other risks () Emission certicates () Sundry () () Total () () Development of other provisions (previous year) EUR '000 2020 As at 01/01 Currency translation adjustment Reclassi- cation Utilization Reversal Addition As at 31/12 Thereof current Thereof non-current Anticipated losses and other risks () () Emission certicates () Sundry () () () Total () () () 1) Incl. accrued interest EUR 0 thousand (2020: EUR 144 thousand). The measurement of provisions is based on past experience, cur- rent cost and price information and estimates/appraisals by inter- nal and external experts. The assumptions underlying the provi- sions are reviewed regularly. The actual values may dier from these assumptions if general conditions develop in contrast to ex- pectations as at the reporting date. Changes are recognized in prot or loss when better information is available and the premises are adjusted accordingly. Other provisions for anticipated losses and other risks include, in particular, provisions for obligations from infrastructure services to be performed of EUR 4,553 thousand (December 31, 2020: EUR 7,973 thousand) and provisions for additional claims from pro- curement contracts of EUR 21,200 thousand (December 31, 2020: EUR 11,800 thousand) and for other onerous contracts. Other pro- visions for emission certicates comprise the equivalent value of the emission certicates used. The other current provisions and accruals are expected to lead to an outow of funds within the next twelve months. The outow of funds arising from the long-term portion of other provisions is de- pendent on various factors (in particular, guarantee and warranty periods, contract terms and other events): ● The outow of funds related to the other provisions for guar- antees and warranties is expected within the next twelve months. ● The other provisions for anticipated losses and other risks are expected to lead to an outow of funds as follows: Expected outow of funds in connection with other provisions (non-current) for anticipated losses and other risks (estimated as of the reporting date) EUR '000 31/12/2021 31/12/2020 In the 2nd year In the 3rd to 5th year In the 6th to 10th year Total Note 33. Trade payables All trade payables are classied as current assets. Liabilities that are part of reverse factoring agreements are evalu- ated to determine whether the original trade payable must still be reported or whether it must be derecognized and a new nancial liability recognized in accordance with the agreement. The decisive factor is whether the Lenzing Group was released from its original obligation. In cases where there was no release from the original obligation, the Lenzing Group evaluates whether the reverse fac- toring agreement has led to a new obligation that must be recog- nized in addition to the trade payable. If that is also not the case, a present value test is carried out to determine whether the reverse factoring agreement has resulted in signicant changes to the con- tractual terms of the trade payable which lead to derecognition of the trade payable and the recognition of a new nancial liability. Suppliers of the Lenzing Group nance their trade receivables from the Lenzing Group with reverse factoring agreements. These sup- pliers can commission their banks to forward payment for the re- ceivables at an earlier point in time. The present value test indicates that these agreements do not signicantly change the contract 79 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 51 terms (in particular payment terms and interest rates). The agree- ments do not lead to the reclassication of the involved trade pay- ables to another class of liability under civil law or IFRS regulations from the Lenzing Group’s perspective. Consequently, there are no changes to the presentation on the consolidated statement of - nancial position (under trade payables) or the consolidated state- ment of cash ows (under cash ow from operating activities). The potentially aected trade payables totaled EUR 126,693 thousand as at December 31, 2021 (December 31, 2020: EUR 54,294 thou- sand). The carrying amount of the potentially aected trade paya- bles for which the suppliers have already received payments from the banks stands at EUR 119,902 thousand (December 31, 2020: EUR 45,405 thousand). As in the previous year, the Lenzing Group has not provided any collateral. The liquidity risk of the reverse factoring agreements consists of a concentration since the reverse factoring agreements currently in place have been made with only one single nancial institution, giv- ing rise to the risk of a revocation of the reverse factoring agree- ment by this nancial institution. The liabilities aected by these re- verse factoring agreements are settled in accordance with the agreed due date. The related, estimated outows are taken into account in liquidity planning. The Lenzing Group assesses the risk concentration with regard to sucient nancing sources as rather low because the risk spread of the Lenzing Group’s nancing over dierent nancial institutions is maintained. Furthermore, the re- verse factoring agreements include no material nancing compo- nent and their discontinuation would therefore also not result in a signicant increase in nancing requirements. Liabilities relating to reverse factoring agreements amount to 6.0 percent as at the re- porting date (December 31, 2020: 3.5 percent) relative to the group’s total nancial liabilities. Information regarding the liquidity and foreign currency risk of the group exposure is presented in note 39. Note 34. Other liabilities Other non-current liabilities consist of the following: Other non-current liabilities EUR '000 31/12/2021 31/12/2020 Other non-current nancial liabilities (particularly from derivatives) Non-current non-nancial accruals for personnel expenses Other non-current non-nancial liabilities (particularly partial retirement obligations) Total Other current liabilities consist of the following: Other current liabilities EUR '000 31/12/2021 31/12/2020 Other current nancial liabilities Derivatives not yet settled (open positions) Other accruals Contract liabilities – accruals for discounts and rebates (see note 5) Other current nancial liabilities Other current non-nancial liabilities Liabilities from other taxes Wage and salary liabilities Social security liabilities Contract liabilities – down payments received (see note 5) Accruals for personnel expenses Deferred income and other Total The accruals for personnel costs consist primarily of liabilities for short-term claims by active and former employees (in particular, for unused vacation and compensation time, overtime and perfor- mance bonuses). Other accruals cover, above all, anticipated losses from revenue reductions/increases in expenses from transactions with custom- ers and suppliers (in particular, discounts and rebates) and liabilities for the delivery of goods and the performance of services by third parties which have not yet been invoiced. 80 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 52 Note 35. Disclosures on the Consolidated Statement of Cash Flows Liquid funds represent cash and cash equivalents as shown on the statement of nancial position. Cash and cash equivalents include cash in hand and cash at banks, demand deposits, checks and short-term time deposits as well as liquid current securities with a term of less than three months which are only subject to limited uctuations in value (see note 37). Other non-cash income/expenses in the 2021 nancial year in- cludes impairment losses to inventories as well as write-ups and impairment losses to nancial assets and other non-current assets. Other non-cash income/expenses also contain unrealized net ex- change rate gains/losses and measurement eects from receiva- bles. Non-cash transactions from the acquisition of intangible assets and property, plant and equipment are not included in cash ow from investing activities for the current period. These transactions essentially involve outstanding payments to suppliers of EUR 16,180 thousand (2020: EUR 41,179 thousand). Cash and cash equivalents also include bank accounts with nega- tive balances in cases where netting agreements have been con- cluded (see note 37). Reconciliation of nancial liabilities EUR '000 2021 Private placements Bank loans Loans from other lenders Lease liabilities Subtotal other nancial liabilities Total As at 01/01 Cash ows Increase in nancial liabilities Repayment of nancial liabilities () () () () () () Non-cash changes Currency translation adjustment Discounting/accrued interest () Additions to lease liabilities Other changes () () () As at 31/12 Reconciliation of nancial liabilities (previous year) EUR '000 2020 Private placements Bank loans Loans from other lenders Lease liabilities Subtotal other nancial liabilities Total As at 01/01 Cash ows Increase in nancial liabilities Repayment of nancial liabilities () () () () () () Non-cash changes Currency translation adjustment () () () () () () Discounting/accrued interest Additions to lease liabilities Other changes () () () As at 31/12 Notes to the Consolidated Statement of Cash Flows 81 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 53 Note 36. Capital risk management General information The overriding objective of equity and debt management in the Lenzing Group is to optimize the income, costs and assets of the individual operations/business units and of the Group as a whole in order to achieve and maintain sustainably strong economic performance and a sound balance sheet structure. An important role in this process is played by nancial leverage capacity, the pro- tection of sucient liquidity at all times and a clear focus on key cash-related and performance indicators in line with the Group’s strategic course and long-term goals. This protects the ability of the group companies to operate on a going concern basis. In addition, the authorized capital and contingent capital give Lenzing AG greater exibility in raising additional equity in order to take advantage of future market opportunities. The equity management strategy followed by the Lenzing Group is designed to ensure that Lenzing AG and the other group compa- nies have an adequate equity base to meet local requirements. A couple of loan agreements with banks also include nancial cove- nants, above all concerning the level of equity, the ratio of net nancial debt to EBITDA and other nancial indicators or nancial criteria for the Group or individual or aggregated group companies. A breach of these nancial covenants would allow the banks to demand early repayment of the nancial liabilities in certain cases. These nancial covenants are regularly monitored by the Global Treasury department and are considered in the determination of distributions by the involved group companies. All related capital requirements were met during the 2021 nancial year. Management uses an adjusted equity ratio for internal control pur- poses. Adjusted equity is calculated in accordance with IFRS and comprises equity as well as investment grants less the related de- ferred taxes. The adjusted equity ratio (= adjusted equity in relation to total assets) equaled 39.7 percent as at December 31, 2021 (De- cember 31, 2020: 45.8 percent). Adjusted equity is calculated as follows: Adjusted equity EUR '000 31/12/2021 31/12/2020 Equity + Government grants - Proportional share of deferred taxes on government grants () () Total The dividend policy of Lenzing AG, as the parent company of the Lenzing Group, is based on the principles of continuity and a long- term focus in order to support the future development of the com- pany, to distribute dividends to shareholders in line with the com- pany’s opportunity and risk situation, and to appropriately reect the interests of all other stakeholders who are decisive for the com- pany’s success. Net nancial debt The Supervisory Board and Managing Board of Lenzing AG regu- larly review the development of net nancial debt because this in- dicator is an extremely important benchmark not only for the Group’s management, but also for the nancing banks. The ratio of net nancial debt to EBITDA is particularly relevant. The continued optimal development of the Lenzing Group is only possible with convincing internal nancing strength as the basis for increased debt capacity. Interest-bearing nancial liabilities are classied as follows: Interest-bearing nancial liabilities EUR '000 31/12/2021 31/12/2020 Non-current nancial liabilities Current nancial liabilities Total Liquid assets consist of the following: Liquid assets EUR '000 31/12/2021 31/12/2020 Cash and cash equivalents Liquid bills of exchange (in trade receivables) Total Net nancial debt in absolute terms and in relation to EBITDA (see note 4) is as follows: Net nancial debt (absolute) EUR '000 31/12/2021 31/12/2020 Interest-bearing nancial liabilities - Liquid assets () () Total Notes on Risk Management 82 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 54 Net nancial debt in relation to EBITDA EUR '000 31/12/2021 31/12/2020 EBITDA Net nancial debt / EBITDA 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). Note 37. Disclosures on nancial instruments Carrying amounts, fair values, measurement categories and measurement methods The following table shows the carrying amounts and fair values of the nancial assets and nancial liabilities for each class and each IFRS 9 category and reconciles this information to the appropriate line items on the statement of nancial position. Other receivables (non-current and current) and other liabilities (non-current and cur- rent) as reported on the statement of nancial position include - nancial instruments as well as non-nancial assets and liabilities. Therefore, the “no nancial instrument” column allows for a com- plete reconciliation with the line items on the statement of nancial position. Lease liabilities which are to be considered nancial lia- bilities but cannot be allocated to a measurement category in ac- cordance with IFRS 9 are also reported in this column. 83 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 55 Carrying amounts, category, fair value and fair value hierarchy of nancial instruments EUR '000 Carrying amount Fair value Financial assets as at 31/12/2021 At amortized cost At fair value through prot or loss At fair value through other comprehensive income No nancial instrument Total Fair value Fair value hierarchy Debt instruments Equity instruments Cash ow hedges Originated loans Non-current securities Level Other equity investments Level Current securities Level Financal assets (current and non-current) Trade receivables Derivatives with a positive fair value (cash ow hedges) Level Derivatives with a positive fair value (cash ow hedges with the underlying already recognized in prot or loss) Level Other Level Other assets (current and non-current) Cash and cash equivalents Total Carrying amount Fair value Financial liabilities as at 31/12/2021 At amortized cost At fair value through prot or loss At fair value through other comprehensive income No nancial instrument Total Fair value Fair value hierarchy Cash ow hedges/ Fair value hedges Retained earnings Private placements Level Liabilities to banks Level Liabilities to other lenders Level Lease liabilities Financial liabilities Trade payables Provisions (current) Puttable non-controlling interests Level Derivatives with a negative fair value (cash ow hedges) Level Derivatives with a negative fair value (cash ow hedges with the underlying already recognized in prot or loss) Level Derivatives with a negative fair value (fair value hedges) Level Other Other liabilities (current and non-current) Total 1) The carrying amount approximates fair value. 2) Cash and cash equivalents include money market funds. These money market funds are allocated to the category “at fair value through prot or loss”. The carrying amount of other cash and cash equivalents approximates fair value. 84 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 56 Carrying amounts, category, fair value and fair value hierarchy of nancial instruments (previous year) EUR '000 Carrying amount Fair value Financial assets as at 31/12/2020 At amortized cost At fair value through prot or loss At fair value through other comprehensive income No nancial instrument Total Fair value Fair value hierarchy Debt instruments Equity instruments Cash ow hedges Originated loans Non-current securities Level Other equity investments Level Financal assets (current and non-current) Trade receivables Derivatives with a positive fair value (cash flow hedges) Level Derivatives with a positive fair value (cash flow hedges with the underlying already recognized in profit or loss) Level Other Level Other assets (current and non-current) Cash and cash equivalents Total Carrying amount Fair value Financial liabilities as at 31/12/2020 At amortized cost At fair value through prot or loss At fair value through other comprehensive income No nancial instrument Total Fair value Fair value hierarchy Cash ow hedges/ Fair value hedges Retained earnings Private placements Level Liabilities to banks Level Liabilities to other lenders Level Lease liabilities Financial liabilities Trade payables Provisions (current) Puttable non-controlling interests Level Derivatives with a negative fair value (cash ow hedges) Level Derivatives with a negative fair value (cash ow hedges with the underlying already recognized in prot or loss) Level Derivatives with a negative fair value (fair value hedges) Level Other Other liabilities (current and non-current) Total 1) The carrying amount approximates fair value. 85 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 57 Depending on the classication/measurement category, nancial instruments are subsequently measured at (amortized) cost or fair value. The Lenzing Group uses the following measurement cate- gories: “at amortized cost”, “at fair value through prot or loss” and “at fair value through other comprehensive income”. The measure- ment category “at fair value through prot or loss” is solely used for nancial assets that are mandatorily measured at fair value. Cash and cash equivalents include money market funds in the amount of EUR 343,515 thousand (December 31, 2020: EUR 0 thousand). In assessing the classication of money market funds as cash equivalents, an assessment is undertaken to deter- mine whether the fund meets the denition of cash equivalents. In particular, Lenzing AG examines whether regular and early callabil- ity may occur and whether the credit risk and interest rate risk are low. With regard to credit risk, the creditworthiness of the fund it- self and of the instruments it contains is assessed. Interest rate risk is examined, in particular, using the fund’s Weighted Average Ma- turity (WAM). Money market funds are allocated to the category “at fair value through prot or loss”. The fair value is derived from the latest calculated value and is to be categorized in level 1 of the fair value hierarchy. In the nancial year under review, a reclassication was realized from equity instruments measured at fair value through other com- prehensive income (level 3) to current securities (level 1). The rea- son for the reclassication is the initial public oering of the com- pany Spinnova OY, Jyväskylä, Finland, on June 24, 2021. The inter- est held by Lenzing AG was converted into shares. As a conse- quence of the issue of the new shares, the previous interest of 6.8 percent was diluted and now amounts to 4.67 percent. The se- curities are measured at fair value and recognized directly in other comprehensive income due to the exercise of the corresponding option. This leads to an adjustment of the carrying amount of EUR 31,732 thousand. The Lenzing Group accounts for reclassications in the fair value hierarchy at the end of the reporting period in which the changes occur. The measurement of nancial instruments is monitored and re- viewed by the Lenzing Group. The necessary market data are vali- dated based on the dual control principle. In light of the varying inuencing factors, the fair values presented can only be regarded as indicators of the values that could actually be realized on the market. The fair value of purchased bonds is derived from the respective current market prices and uctuates, in particular, with changes in market interest rates and the credit standing of the issuers. The fair value of shares is derived from the current stock exchange prices. These securities are assigned to the category “at fair value through other comprehensive income”. The fair value of investment funds is derived from the latest calcu- lated value. These securities are assigned to the category “at fair value through prot or loss”. The measurement of equity investments including derivatives des- ignated as a hedge (fair value hedge) is classied “at fair value through other comprehensive income”. The fair value is determined on the basis of a market approach and is to be categorized in level 3 of the fair value hierarchy. The determined fair value of the equity investment would increase (decrease) in particular if the planned EBITDA increased (decreased). The determined fair value of the derivative has an inverse correlation to the abovementioned pa- rameters. The nominal value of fair value hedge derivatives amounts to EUR 14,120 thousand as at December 31, 2021 (December 31, 2020 : EUR 11,723 thousand). The change in value for the hedged item and the hedge, which was used to calculate ineectiveness, amounts to EUR 0 thousand as at December 31, 2021 (Decem- ber 31, 2020: EUR minus 5,547 thousand). No ineectiveness was recognized through prot or loss in the current nancial year or in the previous year. The risk management goal is to hedge the value of the investment against value uctuations. The economic rela- tionship for fair value hedge derivatives is ensured by the fact that the change in the value of the hedged item is oset by the change in the value of the hedge. A put/call option is used as a hedge. The hedge ratio is determined based on the nominal value. The hedging instruments run until December 31, 2021 and December 31, 2022. The following tables show the development of the fair values of the equity investments and the associated derivatives of level 3: Development of level 3 fair values of equity investments and related derivatives EUR '000 2021 Equity investments Derivatives with a negative fair value (fair value hedges) As at 01/01 () Financial assets measured at fair value through other comprehensive income (equity instruments) – net fair value gain/loss on remeasurement recognized during the year () Transfer to Level 1 () As at 31/12 Development of level 3 fair values of equity investments and related derivatives (previous year) EUR '000 2020 Equity investments Derivatives with a negative fair value (fair value hedges) As at 01/01 () Financial assets measured at fair value through other comprehensive income (equity instruments) – net fair value gain/loss on remeasurement recognized during the year () As at 31/12 () 86 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 58 A change in key input factors which cannot be observed on the market would have the following eects on the measurement of the equity instruments and the associated derivatives: Sensitivity analysis of level 3 input factors for equity investments and related derivatives EUR '000 Other comprehensive income (net of tax) Increase Decrease Equity investments Derivatives with a negative fair value (fair value hedges) Total Equity investments Derivatives with a negative fair value (fair value hedges) Total EBITDA (+/- 5%) 31/12/2021 () () EBITDA (+/- 5%) 31/12/2020 () () () Other nancial assets from earn-out agreements are classied “at fair value through prot or loss”. The fair value of these other nan- cial assets is determined based on an income approach. It is to be categorized in level 3 of the fair value hierarchy. The measurement model is based on the planned EBITDA, the weighted average cost of capital (WACC) after tax and the repayment terms. The determined fair value would increase (decrease) in particular if EBITDA increased (decreased). The determined fair value would decrease (increase) if the WACC after tax increased (decreased). The determined fair value would increase if the repayment were to be made two years earlier. Development of level 3 fair values of other nancial assets EUR '000 2021 2020 As at 01/01 Gain/loss included in nancial result As at 31/12 A change in key input factors which cannot be observed on the market would have the following eects on other nancial assets: Sensitivity analysis of level 3 input factors for other nancial assets EUR '000 Financial result 31/12/2021 31/12/2020 Other nancial assets Increase Decrease Increase Decrease EBITDA (+/- 5%) () () Discount rate (WACC) after tax (+/- 1%) () () Repayment 2 years earlier n/a n/a The sensitivities are determined by conducting the measurements again using the changed parameters. Puttable non-controlling interests The Dexco-Group (formerly known as Duratex Group) has a put option and has the right to sell its shares if a change of control oc- curs regarding the owner of the Lenzing Group (change of control clause). This obligation is recognized under liabilities from puttable non-controlling interests. Puttable non-controlling interests are al- located to the category “at fair value through other comprehensive income”. The fair value of these puttable non-controlling interests is determined based on the planned or projected cash ows less cost of disposal and net debt at the measurement date. The budget approved by the Management and Supervisory Boards and the me- dium-term plans are the starting point for the cash ow projections. After the detailed planning period of ve years, a 25-year return based on a sustainable EBITDA margin is expected based on last year’s assumptions. The planning period for the calculation of fair value is contractually limited to a maximum of 30 years. Cash ows are discounted to their present value with a discounted cash ow method. The applied discount rate is calculated on an individual basis using the capital asset pricing model (CAPM) and represents a composite gure (weighted average cost of capital – WACC) that combines the average interest rate for debt and the anticipated re- turn on equity employed. An after-tax WACC of 8,1 percent (De- cember 31, 2020: 8.0 percent) was used at the measurement date. Fair value measurement is classied in full as level 3 of the fair value 87 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 59 hierarchy because key input factors (in particular, cash ows) can- not be observed on the market. Development of level 3 fair values of puttable non-controlling interest EUR '000 2021 2020 As at 01/01 Addition due to change in shareholding interest recognised directly in equity Measurement of puttable non-controlling interest recognized directly in equity As at 31/12 The determined fair value would increase (decrease) if the operat- ing margin increased (decreased) or if the after-tax WACC de- creased (increased). A change these unobservable input factors would have the following eects on the measurement of puttable non-controlling interests: Sensitivity analysis of level 3 input factors for puttable non-controlling interest EUR '000 Measurement result oset against retained earnings 31/12/2021 31/12/2020 Puttable non- controlling interests Increase Decrease Increase Decrease EBITDA (+/- 5%) () () Discount rate (WACC) after tax (+/- 0.25%) () () The sensitivities are determined by conducting the measurements again using the changed parameters. The loan agreements, which were concluded for the construction of the dissolving wood pulp pant in Brazil (see note 30), include, at the project company level, nancial covenants which refer in par- ticular to the ratio of net nancial debt to EBITDA and may trigger an obligation to repay the nancial liabilities if the covenants are not met. At the Lenzing Group level, market restrictive covenants are in place. These nancial covenants are regularly monitored by the Global Treasury department and are considered in the deter- mination of distributions by the group companies involved. Len- zing AG and the joint venture partner have committed to a xed debt/equity ratio of the project company (63/37) and guarantee the nancial liabilities of the project company in the amount of their share in the capital. Lenzing AG therefore guarantees 51 percent. Due to the full consolidation, 100 percent of the project company’s nancial liabilities are included in the consolidated statement of - nancial position. The fair values of the other nancial liabilities are determined in ac- cordance with generally accepted valuation methods based on the discounted cash ow method. The most important input factor is the discount rate, which incorporates the available market data (risk-free interest rates) and the credit standing of the Lenzing Group, which is not observable on the market. The fair values of the nancial guarantee contracts represent the estimated expected default arising from the maximum possible payment obligation and the expected loss. Derivative nancial instruments and hedges Derivatives are measured at fair value. Their fair value corresponds to the applicable market value, if available, or is calculated using standard methods based on the market data available at the meas- urement date (in particular exchange rates and interest rates). Cur- rency and commodity forwards are measured at the respective for- ward rate or price at the reporting date. These forward rates or prices are based on the spot rates or prices and include forward premiums and discounts. The Group’s own models are used to es- timate the measurement. The measurement of derivatives also in- cludes the counterparty risk (credit risk/counterparty risk/non-per- formance risk) in the form of discounts to the fair value that would be used by a market participant for pricing. As a matter of principle, the Lenzing Group applies the hedge ac- counting rules dened by IFRS 9 to the following derivative nan- cial instruments. The retrospective hedging eect or ineective- ness is evaluated with the dollar-oset method, which compares the accumulated changes in the fair value of the hedged items with the accumulated changes in the fair value of the hedges in line with the compensation method. 88 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 60 The measurement of the hedged item is oset by the hedge and is therefore eective. Risks of ineectiveness include the credit risk of a counterparty, a signicant change in the credit risk of a con- tractual party in the hedging relationship or the change of time of payment of the hedged item, reduction of the total invoice amount or price of the hedged item. Risks are always hedged in their en- tirety. The hedging ratio for the hedged nominal values is 100 per- cent. The critical terms of payment of the hedged items and hedging in- struments (in particular, the nominal value and time of payment) are generally identical or oset one another (“critical terms match”). Therefore, the Managing Board considers the osetting of value changes of the hedged items and hedging instrument resulting from changes in the exchange rate when forming a measurement unit as highly eective. Cash ow hedge derivatives for currency risks The Lenzing Group uses derivative nancial instruments to hedge currency risks arising from investments and from the operating business. These derivative nancial instruments serve to balance the variability of cash ows from future transactions. Hedges are determined in advance on the basis of the expected purchases and sales in the relevant foreign currency. In hedging future cash ows in foreign currencies (cash ow hedges), the Lenzing Group typi- cally hedges the risk up to the time of the foreign currency payment. Hedge eectiveness is measured by grouping the hedged items and hedging instruments together in at least quarterly maturity ranges for each hedged risk. Cash ow hedges whose underlying hedged item was already recognized in prot or loss are used to hedge foreign currency receivables/liabilities that were recognized at the reporting date but do not impact cash until a later time. Cash ow hedges were concluded during the 2020 nancial year to hedge against the currency risk of highly probable additional capital contributions in a subsidiary. With the realization of the for- ward foreign exchange contracts, the amounts of the changes in value initially recognized in other comprehensive income were reclassied to the foreign currency translation reserves. As at December 31, 2021, EUR 850 thousand (December 31, 2020 EUR 24,018 thousand) were reclassied to the foreign currency translation reserve. 89 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 61 The nominal values and fair values of the cash ow hedges are as follows as at the reporting dates: Nominal value, fair value and hedging period of cash ow hedge derivatives for currency risks 31/12/2021 EUR '000 Nominal value in '000 Positive fair value Negative fair value Net fair value Hedging period until Average hedging rate Change in fair value used to calculate ineectiveness Forward foreign exchange contracts CNY/CNH-sale / EUR-buy CNY/CNH () () / () CNY/CNH-sale / GBP-buy CNY/CNH () / () EUR-buy / USD-sale EUR () () / () BRL buy / EUR sale BRL () () / () BRL buy / USD sale BRL () () / () USD-buy / CNY-sale USD () () / () EUR-buy / GBP-sale EUR () () / () EUR-sale / GBP-buy EUR / USD-sale / CZK-buy USD () () / () USD-sale / EUR-buy USD () () / () IDR-buy / USD-sale IDR () () / Total () () () Fair value: + = receivable, – = liability from the Lenzing Group’s perspective The hedging period represents the period for the expected cash ows and their recognition in prot or loss. Nominal value, fair value and hedging period of cash ow hedge derivatives for currency risks (previous year) 31/12/2020 EUR '000 Nominal value in '000 Positive fair value Negative fair value Net fair value Hedging period until Average hedging rate Change in fair value used to calculate ineectiveness Forward foreign exchange contracts CNY/CNH-sale / EUR-buy CNY/CNH / () CNY/CNH-sale / GBP-buy CNY/CNH () () / () CZK-buy / EUR-sale CZK () / EUR-buy / USD-sale EUR / CNY/CNH-buy / GBP-sale CNY/CNH () () / () BRL buy / EUR sale BRL () () / () BRL buy / USD sale BRL () () / () THB-buy / USD-sale THB / USD-buy / CNY-sale USD () () / () EUR buy / BRL sale EUR / EUR-sale / GBP-buy EUR / USD-sale / CZK-buy USD / USD-sale / EUR-buy USD / Total () () () Fair value: + = receivable, – = liability from the Lenzing Group’s perspective The hedging period represents the period for the expected cash ows and their recognition in prot or loss. 90 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 62 The carrying amounts and the ineectiveness of the hedged items (purchases and sales) designated as hedging instruments as of the balance sheet dates are as follows: Disclosures on hedged items of cash ow hedge derivatives for currency risks – ineectiveness EUR '000 2021 2020 Currency risks Change in fair value used to calculate ineectiveness Ineectiveness Line item in the income statement Change in fair value used to calculate ineectiveness Ineectiveness Line item in the income statement Sales () Financialresult Financialresult Purchases () Financialresult () Financialresult Total () () Cash ow hedge derivatives for combined interest rate/currency risks The Lenzing Group deploys derivative nancial instruments in or- der to hedge interest rate/currency risks arising from private place- ments denominated in US dollars. Hedges are utilized to oset the variability of interest and principal payments resulting from the hedged item. The nominal values of the cash ow hedge derivatives as at De- cember 31, 2021 amount to EUR 39,704 thousand and EUR 17,646 thousand (December 31 2020: EUR 40,861 thousand and EUR 18,160 thousand). The fair value of the cash ow hedge derivatives as at December 31, 2021 amounts to EUR minus 1,442 thousand (December 31, 2020: EUR minus 6,279 thousand). The contracts of the hedging instruments and the underlying hedged items are linked to the USD-LIBOR reference interest rate as of the balance sheet date and have not yet been switched to an alternative reference interest rate. The change in fair value used to calculate ineectiveness amounts to EUR minus 911 thousand (for the tranche of USD 20 mn) (De- cember 31, 2020: EUR minus 1,890 thousand) and EUR minus 1,311 thousand (for the tranche of USD 45 mn) (December 31, 2020: EUR minus 4,258 thousand). The ineective portion as at Decem- ber 31, 2020 amounts to EUR 0 thousand (December 31, 2020: EUR 0 thousand). Over the term, the average xed interest rate amounts to 0.75 percent and the average hedging rate amounts to 1.10 USD/EUR. The hedge expires in December 2024. Cash ow hedge derivatives for interest rate risks The Lenzing Group uses derivative nancial instruments to hedge interest rate risks arising from loans taken out with variable interest rates. These hedges are used to oset the variability of cash ows from future interest payments resulting from the hedged item. The nominal values of the cash ow hedge derivatives as at De- cember 31, 2021 amount to EUR 418,211 thousand (December 31, 2020: EUR 0 thousand). The fair value of the hedge derivatives as at December 31 2021 amounts to EUR minus 1,937 thousand (De- cember 31, 2020: EUR 0 thousand). The contracts of the hedging instruments and the underlying hedged items are linked to the USD-LIBOR reference interest rate as of the balance sheet date and have not yet been switched to an alternative reference interest rate. The change in fair value used to calculate the ineectiveness amounts to EUR minus 1,937 thousand (December 31, 2020: EUR 0 thousand). The ineective portion as at December 31, 2021 amounts to EUR 0 thousand. The average xed interest rate amounts to 1.83 percent over the term. The hedge expires in June 2029. 91 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 63 Hedging Reserve The change in the hedging reserve is as follows: Changes in the hedging reserve EUR '000 2021 2020 Hedging reserve Cost of hedging Total Hedging reserve Cost of hedging Total Hedging reserve as at 01/01 () () Currency risks () () () () Combined interest rate/currency risks () () Interest rate risks () () Cash ow hedges – changes in fair value recognized during the year () () () () Currency risks Reclassication to revenue Currency risks () Reclassication to inventories () Currency risks Reclassication to property, plant and equipment Combined interest rate/currency risks () () Reclassication to nancial result () () Hedging reserve as at 31/12 () () () () 92 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 64 Osetting nancial assets and liabilities The Lenzing Group has concluded a number of framework netting agreements (in particular, master netting arrangements). The amounts owed by each counterparty under such agreements on a single day in the same currency based on the total outstanding transactions are aggregated into a single net amount to be paid by one party to the other. The following tables present information on osetting nancial as- sets and liabilities in the consolidated statement of nancial posi- tion on the basis of framework netting agreements. The (gross) amounts presented in the “Financial assets” and “Financial liabilities” columns correspond to the (net) nancial assets and liabilities rec- ognized. The column “eect of framework netting agreements” shows the amounts which result from these types of agreements, but which do not meet the criteria for osetting in the IFRS con- solidated statement of nancial position. Osetting of nancial instruments EUR '000 Financial assets as at 31/12/2021 Financial assets (gross=net) Eect of framework netting agreements Net amounts Other nancial assets – derivative nancial instruments with a positive fair value () Financial assets as at 31/12/2020 Other nancial assets – derivative nancial instruments with a positive fair value () Osetting of nancial instruments EUR '000 Financial liabilities as at 31/12/2021 Financial liabilities (gross=net) Eect of framework netting agreements Net amounts Other nancial liabilities – derivative nancial instruments with a negative fair value () Financial liabilities as at 31/12/2020 Other nancial liabilities – derivative nancial instruments with a negative fair value () Transfer of nancial assets (sale of receivables/factoring) Factoring agreements are in place which require the banks to pur- chase certain trade receivables from the Lenzing Group for a re- volving monthly nominal amount. The Lenzing Group is entitled to sell these receivables. The agreements have indenite terms, whereby each party has the right to cancel the agreements with notice and allow them to expire. The factoring agreements had a maximum usable nominal volume of EUR 73,235 thousand as at December 31, 2021 (December 31, 2020 EUR 72,214 thousand). They have been suspended since the 2017 nancial year. 93 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 65 Note 38. Net interest and net result from nancial instruments and net foreign currency result Net interest and net result The following table shows the net interest and net result from - nancial instruments by class/measurement category in accordance with IFRS 9: Net interest and net result from nancial instruments EUR '000 2021 Interest income Interest expense Net interest From subsequent measure- ment at fair value through prot or loss From subsequent measure- ment at fair value through other com- prehensive income Measured at fair value through other compre- hensive income and reclassied to prot or loss From impairment/ reversal of an impairment loss Result on disposal Net result (total) Financial assets measured at amortized cost () () Financial assets measured at fair value through prot or loss () () () Equity instruments measured at fair value through other comprehensive income Debt instruments measured at fair value through other comprehensive income () () () Financial liabilities measured at amortized cost () () () Total () () () () () () Net interest and net result from nancial instruments (previous year) EUR '000 2020 Interest income Interest expense Net interest From subsequent measure- ment at fair value through prot or loss From subsequent measure- ment at fair value through other com- prehensive income Measured at fair value through other compre- hensive income and reclassied to prot or loss From impairment/ reversal of an impairment loss Result on disposal Net result (total) Financial assets measured at amortized cost () Financial assets measured at fair value through prot or loss () () Equity instruments measured at fair value through other comprehensive income () () Debt instruments measured at fair value through other comprehensive income () () Financial liabilities measured at amortized cost () () () Total () () () () () () () 94 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 66 The net result from nancial instruments comprises the following: net interest (current interest income and expenses, including the amortization of premiums and discounts and dividends from com- panies not accounted for using the equity method), gains/losses on fair value measurement which are recognized in prot or loss or through other comprehensive income and the result of impairment losses (recognition and reversal of bad debt provisions/valuation adjustments) and on disposals. Income from equity and debt in- struments measured at fair value through other comprehensive in- come includes gains/losses from remeasurement and from the re- classication of remeasurement gains/losses to prot or loss. Net result from nancial instruments does not include exchange rate gains/losses (with the exception of nancial instruments carried at fair value through prot or loss) or gains/losses from hedging in- struments (cash ow hedges). The change in the bad debt provisions for receivables measured at amortized cost is mainly recognized under “Selling expenses”. The component recognized directly in equity from the subsequent measurement of equity and debt instruments measured at fair value through other comprehensive income is reported under the “reserve for nancial assets measured at fair value through other comprehensive income”. The remaining components of the net re- sult are included under “income from non-current and current - nancial assets” and in “nancing costs”. Net foreign currency result In other operating income/expenses are included net foreign cur- rency gains/losses in the amount of EUR plus 11.557 thousand (2020: EUR minus 7,521 thousand), in income from non-current and current nancial assets in the amount of EUR plus 5.203 thou- sand (2020: EUR minus 6.696 thousand), and in nancing costs in the amount of EUR plus 4.405 thousand (2020: EUR plus 6.391 thousand). Note 39. Financial risk management As an international company, the Lenzing Group is exposed to - nancial and other market risks. A company-wide risk management system, which is regulated comprehensively in guidelines, has been implemented to identify and assess potential risks at an early stage. This system is designed to achieve maximum risk transpar- ency and provide high-quality information by quantifying all risk categories, with a particular emphasis on risk concentration. The eciency of group-wide risk management is evaluated and moni- tored on an ongoing basis by both the internal control system (ICS) and the internal audit department. The nancial risks arising from nancial instruments – credit risk, liquidity risk, currency risk (above all with regard to the BRL, CNY, CZK, HKD, IDR, THB and USD), commodity price risk and interest rate risk – are classied as relevant risks for the Lenzing Group. Corresponding hedging measures are used to minimize these risks wherever possible. Acquired shares in external companies are con- sidered long-term investments and, therefore, are not viewed as a relevant market price risk over the short- to medium-term. Credit risk Credit risk represents the risk of asset losses that may result from the failure of individual business partners to meet their contractual obligations. The credit risk from transactions involving the provision of goods and services (in particular, trade receivables) is secured to a substantial extent by credit insurance and bank security (guar- antees, letters of credit, bills of exchange etc.). Outstanding receiv- ables and customer limits are monitored on an ongoing basis. The credit risk from investments with banks (above all, cash and cash equivalents) and derivatives with a positive market value is reduced by only concluding transactions with counterparties that can demonstrate a sound credit rating. Receivables are measured individually. Individual bad debt provi- sions are recognized for receivables if there are indications of credit impairment (individual measurement) and if they are not expected to be collectible in full. This applies especially when the debtor has signicant nancial diculties, is in default or has delayed pay- ments or when there is an increased probability that the debtor will enter bankruptcy and the involved receivable is not suciently col- lateralized. The expected loss is low because of the Lenzing Group’s comprehensive receivables management (extensive col- lateralization with credit insurance and bankable security as well as continuous monitoring of accounts receivable and customer limits). To determine the required impairment for trade receivables for which no individual bad debt provisions were recognized, the de- faults of the past years were evaluated in the Lenzing Group. The analysis has shown that there is only an immaterial risk for receiva- bles overdue for a certain period. The loss ratios are based on historical default rates of the last nine years and are distinguished by companies and periods overdue. The COVID-19 crisis did not result in any signicant changes in de- fault rates during the nancial year. The relevant development is continuously monitored by the management. For non-current debt instruments assigned to the category “at fair value through other comprehensive income”, originated loans and other nancial assets (current and non-current), which are meas- ured at amortized cost, as well as cash and cash equivalents, the calculation of impairment is based on the average default rates. The impairment is based on the default rate per rating for the re- spective nancial instrument. A signicant change in credit risk is identied based on the rating and default of payment. Regarding instruments with a low credit risk, the Lenzing Group assumes that the credit risk has not increased signicantly since the rst recog- nition. Consequently, the twelve month credit loss is always recog- nized for such instruments. Since the expected impairment is im- material, no expected credit loss is recorded for these nancial as- sets. The reduced earning power and uncertainties, in particular due to a re at a plant of the buyer of EFB in 2018 (including its subsidiar- ies), result in a higher default risk for the receivables from these companies. Therefore, the calculation of bad debt provisions for these originated loans was changed from the expected twelve month credit loss to lifetime expected credit loss in 2018. The life- time expected credit loss was determined based on the dierence between the contractual payments and all payments expected by the management in the future. 95 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 67 Trade receivables are considered defaulted when they are overdue for more than 270 days or when it is unlikely that the debtor can meet the obligations without the realization of collateral. This long period of time results from the fact that about 90 percent of trade receivables are insured by credit insurance. Financial assets are only derecognized directly if the contractual rights to payments cease to exist (particularly in the event of bank- ruptcy). An impairment loss is reversed up to amortized cost if the reasons for its recognition no longer exist. The Group considers the risk concentration in trade receivables to be rather low because its customers are based in various countries, operate in dierent sectors and are active on largely independent markets. A rather small amount of the receivables is overdue and not individually impaired (see table “aging of receivables” below). Important eects for a change in bad debt provisions include pos- sible default of payment by major customers or a general increase of receivables at the reporting date. During the nancial year there was no signicant increase in defaults. Trade receivables increased as at December 31, 2021. The bad debt provisions developed as follows: Development and reconciliation of bad debt provisions EUR '000 Lifetime expected credit loss (portfolio measure- ment) Lifetime expected credit loss (individual measure- ment) Trade receivables Bad debt provisions as at 01/01/2021 Transfer to “Lifetime expected credit loss” () Reversal () () Addition Currency translation adjustment Bad debt provisions as at 31/12/2021 Development and reconciliation of bad debt provisions (previous year) EUR '000 Lifetime expected credit loss (portfolio measure- ment) Lifetime expected credit loss (individual measure- ment) Trade receivables Bad debt provisions as at 01/01/2020 Transfer to “Lifetime expected credit loss” () Reversal () () Addition Currency translation adjustment () () Bad debt provisions as at 31/12/2020 Lifetime expected credit loss (individual measurement) EUR '000 2021 2020 Originated loans at amortized cost Bad debt provisions as at 01/01 Utilization Reversal () Addition Currency translation adjustment () Bad debt provisions as at 31/12 Other nancial assets (non-current and current) Bad debt provisions as at 01/01 Utilization Addition Bad debt provisions as at 31/12 The bad debt provisions for trade receivables include bad debt pro- visions of EUR 1,810 thousand (2020: EUR 650 thousand) for com- panies accounted for using the equity method. The bad debt provisions for trade receivables are related primarily to bad debt provisions for overdue, uninsured receivables. 96 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 68 The carrying amount of the impaired receivables is as follows: Aging and expected credit loss for trade receivables EUR '000 31/12/2021 Gross carrying amount Expected credit loss Not overdue Overdue up to 30 days Overdue for 31 to 90 days Overdue for 91 to 365 days Overdue for more than one year Credit impaired receivables (individual measurement) Total Aging and expected credit loss for trade receivables (previous year) EUR '000 31/12/2020 Gross carrying amount Expected credit loss Not overdue Overdue up to 30 days Overdue for 31 to 90 days Overdue for 91 to 365 days Overdue for more than one year Credit impaired receivables (individual measurement) Total Development of expected credit loss not including credit impaired nancial assets EUR '000 As at 01/01/2020 Change As at 31/12/2020 = 01/01/2021 Change As at 31/12/2021 Aging of nancial receivables EUR '000 Originated loans Other nancial receivables (current and non-current) Gross carrying amount as at 31/12/2021 Thereof at the reporting date: Not overdue Thereof impaired Aging of nancial receivables (previous year) EUR '000 Originated loans Other nancial receivables (current and non-current) Gross carrying amount as at 31/12/2020 Thereof at the reporting date: Not overdue Thereof impaired Securities in the scope of the impairment provisions of IFRS 9 as well as cash and cash equivalents have a rating between AAA and BBB. There are currently no doubts concerning the collectability of - nancial assets that are neither past due nor impaired. The maximum exposure to credit risk from recognized nancial as- sets is as follows: Maximum exposure to credit risk from recognized nancial assets EUR '000 31/12/2021 31/12/2020 Carrying amount of asset nancial instruments (see note 37) Less risk reduction in relation to receivables due to Credit insurance received for trade receivables (not including deductibles) () () Guarantees received for trade receivables () () Total The maximum exposure to credit risk from nancial guarantee con- tracts and contingent liabilities is shown in note 42. Liquidity risk Liquidity risk represents the risk of not being able to obtain sufficient funds to settle incurred liabilities at all times. The management of liquidity risk has a high priority in the Lenzing Group. Corporate guidelines require uniform, proactive liquidity forecasts and medium- term planning throughout the entire Group. The Lenzing Group continuously monitors the risk of a possible liquidity shortage. The Lenzing Group had liquid assets totaling EUR 1,124,120 thou- sand (December 31, 2020: EUR 1,081,122 thousand) in the form of cash and cash equivalents including money market funds and liquid bills of exchange (see note 36). Unused credit facilities of EUR 454,471 thousand were available as at December 31, 2021 (December 31, 2020: EUR 1,031,364 thousand) to nance neces- sary working capital and to cover any shortfalls caused by eco- nomic cycles. The medium- and long-term nancing for the Len- zing Group is provided by equity and nancial liabilities, in particu- lar bonds, private placements and bank loans. Current nancial li- abilities can regularly be extended or renanced with other lenders. Trade payables provide short-term nancing for the goods and ser- vices purchased. The liabilities covered by reverse factoring agree- ments are settled in line with their agreed maturity, whereby the related cash outows are included in liquidity planning. For this rea- son, the Group considers the concentration of risk with regard to sucient nancing sources as rather low. 97 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 69 The contractually agreed (undiscounted) interest and principal payments for primary nancial liabilities (including nancial guar- antee contracts) are shown below: Maturity analysis of non-derivative nancial liabilities EUR '000 Carrying amount as at 31/12/2021 Cash flows 2022 Cash flows 2023 to 2026 Cash ows from 2027 Private placements Bank loans Loans from other lenders Lease liabilities Trade payables Puttable non- controlling interests Other nancial liabities 1 Total Thereof: Fixed interest Fixed and oating rate interest Floating rate interest Repayment 1) The above includes the maximum possible payment obligations from nancial guar- antee contracts. The amounts are assumed to be due in the rst year. Maturity analysis of non-derivative nancial liabilities (previous year) EUR '000 Carrying amount as at 31/12/2020 Cash ows 2021 Cash ows 2022 to 2025 Cash ows from 2026 Private placements Bank loans Loans from other lenders Lease liabilities Trade payables Puttable non- controlling interests Other nancial liabities 1 Total Thereof: Fixed interest Fixed and oating rate interest Floating rate interest Repayment 1) The above includes the maximum possible payment obligations from nancial guar- antee contracts. The amounts are assumed to be due in the rst year. The above tables include all primary nancial liabilities held at the reporting date, but exclude estimated future liabilities. Foreign cur- rency amounts were translated with the spot exchange rate in ef- fect at the reporting date. Floating rate interest payments were cal- culated according to the last interest rates set before the reporting date. Financial liabilities that are repayable at any time are always assigned to the earliest time period. 98 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 70 The contractually agreed (undiscounted) interest and principal payments for derivative nancial instruments are as follows: Maturity analysis of derivative nancial instruments EUR '000 Carrying amount as at 31/12/2021 Cash ows 2022 Cash ows 2023 to 2026 Cash ows from 2027 Currency, combined interest rate/currency and interest rate derivatives Derivatives with a positive fair value (cash ow hedges) Derivatives with a positive fair value (cash ow hedges with the underlying already recognized in prot or loss) Positive fair value Derivatives with a negative fair value (cash ow hedges) () () () () Derivatives with a negative fair value (cash ow hedges with the underlying already recognized in prot or loss) () () Negative fair value () () () () Total () () () () Cash ows consist solely of principal and do not include any interest components. Fair value: + = receivable, - = liability from the Lenzing Group’s perspective Maturity analysis of derivative nancial instruments (previous year) EUR '000 Carrying amount as at 31/12/2020 Cash ows 2021 Cash ows 2022 to 2025 Cash ows from 2026 Currency, combined interest rate/currency and interest rate derivatives Derivatives with a positive fair value (cash ow hedges) Derivatives with a positive fair value (cash ow hedges with the underlying already recognized in prot or loss) Positive fair value Derivatives with a negative fair value (cash ow hedges) () () () Derivatives with a negative fair value (cash ow hedges with the underlying already recognized in prot or loss) () () Negative fair value () () () Total () () () Cash ows consist solely of principal and do not include any interest components. Fair value: + = receivable, - = liability from the Lenzing Group’s perspective Currency risk Cash ows from capital expenditures and the operating business as well as investments and nancing in foreign currencies expose the member companies of the Lenzing Group to currency risks. Risks from foreign currencies are hedged as far as possible if they inuence the Group’s cash ows. In the operating business, the in- dividual group companies are exposed to currency risk in connec- tion with planned incoming and outgoing payments outside their functional currency. Forward foreign exchange contracts, which are recognized at fair value, are used to hedge the exchange rate risk from foreign currency positions arising from expected future transactions in foreign currencies by group companies. For companies with the same functional currency, the respective net foreign currency exposures are calculated for the following sales year as part of the budgeting process. Foreign currency pur- chases and sales are aggregated into separate groups for each cur- rency. Approximately 62 percent of the budgeted net exposure for the following nancial year was hedged for EUR/USD, the domi- nant currency pair in the Lenzing Group, as at December 31, 2021 (December 31, 2020: approximately 73 percent). The CNY also plays an important role. The resulting risk concentration at the re- porting date can be seen in the following tables (especially the ta- bles on “sensitivity analysis and risk exposure for foreign currency risks”). Translation risk is also regularly assessed and monitored at the Group level. Translation risk represents the risk arising from the consolidation of foreign investments whose functional currency is not the euro. The greatest risk exposure here is in relation to the US dollar. Commodity risk The gas price risk is hedged physically through supply contracts. The group is also subject to the usual market price risks in connec- tion with its business activities (especially relating to wood, chem- icals, pulp and energy) which are not hedged with derivatives or nancial instruments, but protected through other measures (above all, long-term and short-term supply contracts with various suppliers). Interest rate risk The Lenzing Group is exposed to interest rate risk through its busi- ness-related nancing and investing activities. Interest rate risks arise through potential changes in the market interest rate. They can lead to a change in the fair value of xed rate nancial instru- ments and to uctuations in the cash ows from interest payments for oating rate nancial instruments. Interest rate risks and the re- sulting risk concentrations are managed by monitoring and adjust- ing the composition of xed rate and oating rate primary nancial instruments on an ongoing basis and by the selective use of deriv- ative nancial instruments. The level of the resulting risk concen- tration as of the balance sheet date is presented in the following tables (see section “Sensitivity analysis and exposure for interest rate risks”). 99 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 71 Sensitivity analysis and exposure for currency risks The Lenzing Group uses the following assumptions for its sensitiv- ity analysis: ● The sensitivity of prot or loss is based on the receivables and liabilities recognized by the group companies which are de- nominated in a currency other than the functional currency of the relevant company and the open derivatives from cash ow hedges for currency risks in cases where the hedged item was already recognized in prot or loss as at the reporting date. The carrying amounts of the receivables and liabilities, respectively the nominal values of the derivatives, correspond to the expo- sure. The individual exposures are presented consistently in re- lation to the US dollar and euro for the aggregation to the Group’s exposure. ● The sensitivity of other comprehensive income as at the re- porting date is based on the open derivatives from cash ow hedges for currency risks in cases where the hedged item has not yet been recognized in prot or loss. The nominal value of the open derivatives corresponds to the exposure. The following tables show the sensitivities and exposure for cur- rency risk as at the reporting dates: Sensitivity analysis and risk exposure for foreign currency risks (EUR) EUR '000 31/12/2021 31/12/2020 Group exposure in relation to EUR Sensitivity to 10% devaluation of the EUR Sensitivity to 10% revaluation of the EUR Group exposure in relation to EUR Sensitivity to 10% devaluation of the EUR Sensitivity to 10% revaluation of the EUR EUR-USD () () EUR-GBP () () () EUR-CNY/CNH () () EUR-CZK () () () () EUR-HKD () () () () Sensitivity of net prot or loss after tax (through receivables and payables) () () Sensitivity of other comprehensive income after tax (through cash ow hedge derivatives) () () Sensitivity of equity () () Group exposure: + receivable, – liability; sensitivity: + increase in prot/other comprehensive income, - decrease in prot/other comprehensive income Sensitivity analysis and risk exposure for foreign currency risks (USD/GBP) EUR '000 31/12/2021 31/12/2020 Group exposure in relation to USD/GBP Sensitivity to 10% devaluation of the USD/GBP Sensitivity to 10% revaluation of the USD/GBP Group exposure in relation to USD/GBP Sensitivity to 10% devaluation of the USD/GBP Sensitivity to 10% revaluation of the USD/GBP USD-IDR () () () () USD-GBP () () () () USD-CNY/CNH () () USD-CZK () () () () USD-THB () () () USD-BRL () () () GBP-CNY/CNH () () Sensitivity of net prot or loss after tax (through receivables and payables) () () Sensitivity of other comprehensive income after tax (through cash ow hedge derivatives) () () Sensitivity of equity () () Group exposure: + receivable, – liability; sensitivity: + increase in prot/other comprehensive income, - decrease in prot/other comprehensive income 100 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 72 Sensitivity analysis and exposure for interest rate risks The following tables show the exposure for interest rate risks at the reporting dates in the form of the carrying amounts of interest- bearing primary nancial instruments: Risk exposure for interest rate risks EUR '000 31/12/2021 Fixed interest Fixed and oating rate interest Floating rate interest No interest Total Cash and cash equivalents Financial assets Financial liabilities () () () () Net risk position () () () () Eects from derivative instruments (hedging) () Net risk position after hedging eect () () () + Receivables, - Liabilities Risk exposure for interest rate risks (previous year) EUR '000 31/12/2020 Fixed interest Fixed and oating rate interest Floating rate interest No interest Total Cash and cash equivalents Financial assets 1 Financial liabilities () () () () Net risk position () () () Eects from derivative instruments (hedging) () Net risk position after hedging eect () () () + Receivables, - Liabilities 1) Includes, among others, the GF 82 wholesale fund whose income is distributed or reinvested. 101 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 73 Sensitivity analyses are performed for the interest rate risks arising from oating rate nancial instruments and from the uctuation in the market values of cash ow hedge derivatives. They show the eects of hypothetical changes in interest rates on prot or loss, other comprehensive income and equity. The Lenzing Group uses the following assumptions in its analysis of the interest rate risk arising from oating rate nancial instru- ments: ● The sensitivity analysis includes all oating rate primary and derivative nancial instruments as at the reporting date. ● The exposure corresponds to the carrying amount of the oat- ing rate nancial instruments. The sensitivities and exposure for the interest rate risks arising from oating rate nancial instruments are as follows as at the reporting dates: Sensitivity analysis for interest rate risks from variable-rate primary and derivative nancial instruments EUR '000 31/12/2021 Net risk position after hedging eect Sensitivity to a 100 bp increase in the interest rate level Sensitivity to a 100 bp decrease in the interest rate level 1 Sensitivity of net prot or loss after tax () ² 31/12/2020 Sensitivity of net prot or loss after tax ()² 1) A reduction in the basis points results in a proportional decrease in the sensitivity. 2) The evaluation is based on the assumption that negative interest rates are paid on cash and cash equivalents. The evaluation does not include liabilities for which no negative interest is calculated. The Lenzing Group bases the sensitivity analysis for the interest rate risk from the uctuation in market values of cash ow hedge derivatives for interest rate risks on the following assumptions: ● The sensitivity of other comprehensive income as at the re- porting date is based on the open derivative from cash ow hedges for interest rate risks in cases where the hedged item has not yet been recognized in prot or loss. ● The exposure corresponds to the nominal value of the deriva- tive amount of EUR 418,211 thousand (December 31, 2020: EUR 0 thousand). An increase in the interest rate level by 1 percentage point would lead to an increase in other comprehensive income (after taxes) of EUR 9,543 thousand (December 31, 2020: EUR 0 thousand). A de- crease in the interest rate level by 1 percentage point would lead to a reduction in other comprehensive income (after taxes) of EUR 9,532 thousand (December 31, 2020: EUR 0 thousand). The interest rate sensitivity has no eect on prot or loss, as the meas- urement of interest rate derivatives is recognized in the hedging reserve with no eect on prot or loss. The Lenzing Group holds nancial instruments that are linked to an IBOR reference interest rate and must be replaced as part of the IBOR reform. Until December 31, 2021, the previous reference in- terest rate, the Euro Overnight Index Average (EONIA), relating to aected nancial liabilities was adjusted to the Euro Short-Term Rate (€STR) reference interest rate. The changeover of the USD- LIBOR reference interest rate relating to aected nancial liabilities and corresponding cash ow hedge derivatives for combined in- terest rate/currency risks and for interest rate risks to an alternative reference interest rate has already begun. The Lenzing Group is monitoring the transition to alternative reference interest rates and is managing the resultant risks. Additional information on nancial risk management and nancial instruments is provided in the risk report of the Lenzing Group’s management report as at December 31, 2021. 102 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 74 Note 40. Related party disclosures Overview Related parties of the Lenzing Group include, in particular, the member companies of the B&C Group together with its subsidiar- ies, joint ventures and associates and its corporate bodies (execu- tive board/management and supervisory board, where applicable) as well as close relatives of the members of the corporate bodies and companies under their inuence (see note 1 “Description of the company and its business activities” and note 41). The amounts and transactions between Lenzing AG and its consolidated subsidiaries are eliminated through consolidation and are not discussed further in this section. B&C Privatstiftung is managed by a board of trustees. No member of the Managing Board of Lenzing AG is a member of this board of trustees or the management/Managing Board of a subsidiary of B&C Privatstiftung, with the exception of subsidiaries of the Len- zing Group. The Lenzing Group has no inuence over the business activities of B&C Privatstiftung. The members of the corporate bodies of Lenzing AG (in particular, the Supervisory Board) and the above-mentioned entities are, in some cases, also members of the corporate bodies or shareholders of other companies with which Lenzing AG maintains ordinary business relationships. The Lenzing Group maintains ordinary busi- ness relationships with banks that involve nancing, investing and derivatives. Relationship with related companies In connection with the tax group established with B&C Group (see note 31), the Lenzing Group recognized a tax credit of EUR 747 thousand through prot or loss in 2021 (2020: EUR 24 thousand). Contractual obligations resulted in the payment or advance payment of tax allocations totaling EUR 15,285 thou- sand in 2021 (2020: EUR 19,196 thousand). The Lenzing Group rec- ognized a liability of EUR 28,000 thousand towards B&C Group from the tax allocation, after the deduction of advance payments, as at December 31, 2021 (December 31, 2020: receivable EUR 4,568 thousand). The tax loss of EUR 0 thousand (Decem- ber 31, 2020: EUR 3,256 thousand) was recognized under deferred tax assets. Income tax expense of EUR 17,268 thousand was rec- ognized in 2021 as a result of the tax allocation to B&C Group (2020: EUR 1,229 thousand). Relationships with companies accounted for using the equity method and their material subsidiaries Transactions with companies accounted for using the equity method and their material subsidiaries relate primarily to: Material relationships with companies accounted for using the equity method EQUI-Fibres Beteiligungsgesellschaft mbH and its subsidiaries (EFB) Distribution of bers, delivery of pulp, loan assignment Lenzing Papier GmbH (LPP) Provision of infrastructure and administrative services RVL Reststoverwertung Lenzing GmbH (RVL) Operation of a recycling plant and purchase of the generated steam; letting of land Hygiene Austria LP GmbH (HGA), the shares were sold in March 2021 Supply of raw materials, provision of services, loan receivable, guarantee given and purchasing of protective masks Gemeinnützige Siedlungsgesellschaft m.b.H. für den Bezirk Vöcklabruck (GSG) Provision of infrastructure and administrative services PT. Pura Golden Lion (PGL) Loan liability Wood Paskov s.r.o. (LWP) Purchase of wood LD Florestal S.A. (LDF) Land use rights, loan liability The scope of material transactions and the outstanding balances with companies accounted for using the equity method and their major subsidiaries are as follows: Relationships with companies accounted for using the equity method and their material subsidiaries EUR '000 2021 EFB Other associates LDF Other joint ventures Total Goods and services provided Goods and services received Receivables as at 31/12 Liabilities as at 31/12 Disclosures on Related Parties and Executive Bodies 103 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 75 Relationships with companies accounted for using the equity method and their material subsidiaries (previous year) EUR '000 2020 EFB Other associates LDF Other joint ventures Total Goods and services provided Goods and services received Receivables as at 31/12 Liabilities as at 31/12 Bad debt provisions of EUR 1,160 thousand for trade receivables from companies accounted for using the equity method were rec- ognized to prot or loss as expense in 2021 (2020: EUR 2,100 thou- sand income). Kelheim Fibers GmbH, Kelheim, Germany, a subsidiary of the eq- uity-accounted investee EQUI-Fibres Beteiligungsgesellschaft mbH, Kelheim, Germany, received a long-term, unsecured loan of EUR 5,000 thousand from Lenzing AG in 2017. The interest reects standard bank rates. Hygiene Austria LP GmbH received a long-term, unsecured loan of EUR 2,000 thousand from Lenzing AG in the 2020 nancial year. The interest reects standard bank rates. In the 2021 nancial year, this loan was waived as part of the divestiture of Hygiene Austria LP GmbH. Lenzing AG guaranteed up to a maximum of EUR 1,000 thousand to a supplier of Hygiene Austria LP GmbH un- til the divestiture of Hygiene Austria LP GmbH. LD Florestal S.A., issued an unsecured loan of EUR 27,913 thousand to the fully consolidated subsidiary LD Celulose S.A. in 2019, which carries standard bank interest rates. EUR 14.748 thousand of the loan were drawn down as at December 31, 2021 (December 31, 2020: EUR 21,318 thousand). In addition, LD Florestal S.A. granted LD Celulose S.A. a land use right in the 2020 nancial year. The carrying amount of the resulting lease liability amounts to EUR 36,941 thousand as at December 31, 2021 (December 31, 2020: EUR 39,620 thousand). There were no major transactions with the other non-consolidated subsidiaries in 2020 and 2021. Relationships with members of the Managing Board and Supervisory Board of Lenzing AG The remuneration expensed for key management personnel, which comprises the active members of the Managing Board and Super- visory Board of Lenzing AG, in line with their functions is summa- rized below (including changes in provisions): Remuneration for key management personnel (expensed) EUR '000 2021 2020 Remuneration for the Managing Board Basic salary Benets in kind and other benets (in particular use of company vehicles) Short-term variable performance bonus (short-term incentive; STI) Extraordinary remuneration (special bonuses) Short-term employee benets Long-term variable performance bonus (long-term incentive; LTI) Extraordinary remuneration (special bonuses) Other long-term employee benets Contributions to multiemployer pension fund Post-employment benets Compensation for non-competition clauses and one-o gratuity Termination benets Remuneration for the Managing Board Remuneration for the Supervisory Board Short-term employee benets Total The benchmark for the long-term bonus component of the mem- bers of the Managing Board (long-term incentive/LTI) consists of selected key indicators of the Lenzing Group, each over a three- year calculation period. In addition, the company’s capital market performance is assessed in comparison with a group of selected listed companies during these periods. The employee representatives on the Supervisory Board who were delegated by the Works Council are entitled to regular compensa- tion (wage or salary plus severance and jubilee benets) under their employment contracts in addition to the compensation for their ac- tivity on the Supervisory Board (in particular attendance fees). This compensation represents appropriate remuneration for their role/activities performed in the company. In line with customary market and corporate practice, Lenzing AG also grants additional benets, which are considered non-cash benets, to the members of the Managing Board, selected senior executives and Supervisory Board members. One example of such benets is insurance coverage (D&O, accident, legal protection etc.), whereby the costs are carried by the Lenzing Group. The in- surers receive total premium payments, i.e. there is no specic al- location to the Managing Board and the Supervisory Board. In ad- dition, the members of the Managing Board and selected senior executives are provided with company vehicles. The members of 104 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 76 the Managing Board and the Supervisory Board are also reim- bursed for certain costs incurred, above all travel expenses. The principles of the remuneration system for the Managing Board and the Supervisory Board are described in detail and disclosed in the 2021 remuneration report of the Lenzing Group. The members of the Managing Board and Supervisory Board re- ceived no advances, loans or guarantees. The Lenzing Group has not entered into any contingencies on behalf of the Managing Board or Supervisory Board. Post-employment benefits of EUR 12 thousand were recognized for former members of the Managing Board of Lenzing AG or their sur- viving dependents in the form of income on the income statement and allocations to other comprehensive income (2020: EUR 607 thousand in the form of expenses). The present value of the pension provision recognized in this context, after deduction of the fair value of plan assets (net obligation), amounted to EUR 6,512 thousand as at December 31, 2021 (December 31, 2020: EUR 7,285 thousand). Note 41. Executive Bodies Members of the Supervisory Board ● Peter Edelmann Chairman ● Patrick Prügger Deputy Chairman (since April 14, 2021) ● Stefan Fida Deputy Chairman (since April 14, 2021) ● Helmut Bernkopf ● Christian Bruch ● Markus Fürst (since April 14, 2021) ● Franz Gasselsberger ● Melody Harris-Jensbach (since June 18, 2020) ● Cord Prinzhorn (April 14, 2021 up to November 3, 2021) ● Astrid Skala-Kuhmann ● Veit Sorger Deputy Chairman (up to April 14, 2021) ● Felix Fremerey (up to June 18, 2020) Appointed by the Works Council ● Johann Schernberger Chairman of the Group Works Council Chairman of the Works Committee (up to January 18, 2021) Chairman of the Works Council for Waged Employees ● Helmut Kirchmair Chairman of the Works Committee (since January 18, 2021) Deputy Chairman of the Works Council for Waged Employees ● Georg Liftinger Deputy Chairman of the Works Committee Chairman of the Works Council for Salaried Employees ● Herbert Brauneis Deputy Chairman of the Works Council for Waged Employees ● Daniela Födinger Deputy Chairwoman of the Works Council for Salaried Employees Members of the Managing Board ● Cord Prinzhorn Chairman of the Managing Board (since November 4, 2021) ● Thomas Obendrauf Chief Financial Ocer ● Robert van de Kerkhof Member of the Managing Board ● Stephan Siela Member of the Managing Board (since March 1, 2020) ● Christian Skilich Member of the Managing Board (since June 1, 2020) ● Stefan Doboczky Chairman of the Managing Board (up to September 30, 2021) 105 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 77 Note 42. Financial guarantee contracts, contingent assets and liabilities, other nancial obligations and legal risks The Lenzing Group has entered into contingent liabilities of EUR 4,905 thousand (December 31, 2020: EUR 5,484 thousand), above all to secure claims related to the sale of certain equity in- vestments and claims by suppliers, for possible default on sold re- ceivables (also see note 37 “Factoring“) and for claims by third par- ties outside the Group. Less important contingent liabilities involve granted retentions. The reported amounts represent the maximum payment obligation from the viewpoint of the Lenzing Group, and there is only a limited potential for recoveries. The Lenzing Group provides committed credit lines of EUR 5,379 thousand (December 31, 2020: EUR 8,622 thousand) to third parties. These credit lines were not used as at December 31, 2021 and December 31, 2020 (also see note 22). Bank guarantees of EUR 51,703 thousand (December 31, 2020: EUR 56,021 thousand) are in place for future equity injections of Lenzing AG for LD Celulose S.A. from 2021 to 2022. These bank guarantees were not drawn as at December 31, 2021 and Decem- ber 31, 2020. The Lenzing Group carries obligations for severance payments and anniversary benets for former employees of certain sold equity investments up to the amount of the notional claims at the sale date. Provisions were recognized for these obligations as at the reporting date at an amount equal to their present value calculated in ac- cordance with actuarial principles. Lenzing AG, in particular, has also assumed liabilities to secure third-party claims against consol- idated companies; these claims are considered unlikely to be real- ized. The Managing Board is not aware of any other nancial obli- gations with a signicant impact on the nancial position and - nancial performance of the Group. The obligations arising from outstanding orders for intangible as- sets and property, plant and equipment amounted to EUR 248,062 thousand as at December 31, 2021 (December 31, 2020: EUR 354,390 thousand). The Lenzing Group has long-term purchase obligations related to raw material supplies, in particular for wood, pulp, chemicals and energy. A lawsuit was led in a US court against Lenzing AG for unspecied damages in connection with a former investment. Lenzing AG has rejected these claims. The management does not consider of dam- ages to be probable. As an international corporation, the Lenzing Group is exposed to a variety of legal and other risks. These risks are related, above all, to product defects, competition and antitrust law, patent law, tax law, employees and environmental protection (in particular, for environ- mental damage at production locations and climate risks). It is im- possible to predict the outcome of pending or future legal pro- ceedings, and rulings by the courts or government agencies or set- tlement agreements can lead to expenses that are not fully covered by insurance which could have a material impact on the group’s future nancial position and nancial performance. Additional in- formation is provided in the risk report of the Lenzing Group’s man- agement report as at December 31, 2021. Other Disclosures 106 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 78 Note 43. Group companies In addition to Lenzing AG, the Lenzing Group includes the follow- ing companies (list of group companies in accordance with Section 245a Para. 1 in conjunction with Section 265 Para. 2 of the Austrian Commercial Code): Group companies 31/12/2021 31/12/2020 Currency Share capital Share in % Share capital Share in % Consolidated companies Avit Investments Limited, Providenciales, Turks and Caicos USD - - Beech Investment s.r.o., Zlaté Moravce, Slovakia EUR BZL – Bildungszentrum Lenzing GmbH, Lenzing, Austria EUR LD Celulose S.A., Indianopolis, Brazil BRL Lenzing Biocel Paskov a.s., Paskov, Czech Republic CZK Lenzing E-commerce (Shanghai) Co., Ltd., Shanghai, China CNY Lenzing Elyaf Anonim Şirketi, Istanbul, Turkey TRY Lenzing Fibers (Shanghai) Co., Ltd., Shanghai, China USD Lenzing Fibers GmbH, Heiligenkreuz, Austria EUR Lenzing Fibers Grimsby Limited, Grimsby, UK GBP Lenzing Fibers Holding GmbH, Lenzing, Austria EUR Lenzing Fibers (Hongkong) Ltd., Hong Kong, China HKD Lenzing Fibers Inc., Axis, USA USD Lenzing Fibers India Private Limited, Coimbatore, India INR Lenzing Fibers Ltd., Manchester, UK GBP Lenzing Global Finance GmbH, Munich, Germany EUR Lenzing Holding GmbH, Lenzing, Austria EUR Lenzing Korea Yuhan Hoesa, Seoul, Republic of Korea KRW Lenzing Land Holding LLC., Dover, USA USD Lenzing Modi Fibers India Private Limited, Mumbai, India INR Lenzing (Nanjing) Fibers Co., Ltd., Nanjing, China USD Lenzing Singapore Pte. Ltd., Singapore, Republic of Singapore EUR Lenzing Taiwan Fibers Ltd., Taipei, Taiwan TWD Lenzing (Thailand) Co., Ltd., Prachinburi, Thailand THB Nanjing Fabor Waste Water Treatment Co., Ltd, Nanjing, China 1 CNY - - Penique S.A., Panama, Panama USD - - PT. South Pacic Viscose, Purwakarta, Indonesia 2 IDR Pulp Trading GmbH, Lenzing, Austria EUR Reality Paskov s.r.o., Paskov, Czech Republic CZK Wasserreinhaltungsverband Lenzing – Lenzing AG, Lenzing, Austria 3 EUR Membership Membership Companies accounted for using the equity method Associates EQUI-Fibres Beteiligungsgesellschaft mbH, Kelheim, Germany EUR Gemeinnützige Siedlungsgesellschaft m.b.H. für den Bezirk Vöcklabruck, Lenzing, Austria 4 EUR Lenzing Papier GmbH, Lenzing, Austria EUR PT. Pura Golden Lion, Jakarta, Indonesia IDR Joint ventures Hygiene Austria LP GmbH, Wiener Neudorf EUR - - LD Florestal S.A., Indianopolis, Brazil BRL RVL Reststoverwertung Lenzing GmbH, Lenzing, Austria EUR Wood Paskov s.r.o., Paskov, Czech Republic CZK Comments: 1) In the 2021 nancial year, the interest in Nanjing Fabor Waste Water Treatment Co., Ltd, Nanjing, China, was merged with Lenzing (Nanjing) Fibers Co., Ltd, Nanjing, China. 2) The share held directly by the Lenzing Group equals 91.87 percent (December 31, 2020: 88.08 percent). A further 8.13 percent of the shares are held indirectly via PT. Pura Golden Lion, Jakarta, Indonesia, an associate of the Lenzing Group. The total calculated share therefore equals 95.12 percent. 3) The Lenzing Group participates through a membership. It holds 50 percent of the voting rights and can appoint half of the Managing Board members. Since all assets are at- tributable to the respective landowner under company law, the entity is notionally a separate company (a so-called “silo structure”). Assets located on the Lenzing Group’s land are therefore included in the consolidation. 4) This investment is not included in the consolidated nancial statements as a subsidiary, even though the Lenzing Group holds 99.9 percent of the voting rights in the company. In light of the given circumstances, the Lenzing Group does not control this company because its power is limited and because the returns hardly vary or can hardly be inuenced by the Lenzing Group. Signicant inuence is exercised by the Lenzing Group over the nancial and operating policies of this company, in particular through representation on management bodies and participation in decision-making processes. 107 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 79 Note 44. Signicant events after the end of the reporting period On January 20, 2022, a gradual reduction in the corporate tax rate in Austria from 25 percent to 23 percent with eect from Janu- ary 1, 2023 was approved. This reduction does not aect current or deferred taxes recognized as at December 31, 2021. However, this change will reduce the group’s future eective tax burden accord- ingly. If the modied tax rates had been applied for the calculation of deferred taxes as at December 31, 2021, deferred tax liabilities would have decreased by EUR 2,708 thousand (see note 31). Military clashes between Russia and Ukraine have arisen since Feb- ruary 24, 2022. The Lenzing Group has no investments, other as- sets or other signicant business relationships in either of these countries. For this reason, the consolidated nancial statements of the Lenzing Group as of December 31, 2021 are not aected. Other than that, the Lenzing Group is not aware of any signicant events occurring after the reporting date on December 31, 2021 which would have resulted in a dierent presentation of its nancial position and nancial performance. Note 45. Authorization of the consolidated nancial statements These consolidated nancial statements were approved on March 1, 2022 (consolidated nancial statements as at Decem- ber 31, 2020: March 8, 2021) by the Managing Board for review by the Supervisory Board, presentation to the Annual General Meet- ing and subsequent publication. The Supervisory Board may re- quire changes to the consolidated nancial statements as part of its review. Lenzing, March 1, 2022 Lenzing Aktiengesellschaft The Managing Board Cord Prinzhorn Chairman of the Managing Board Thomas Obendrauf Chief Financial Ocer Robert van de Kerkhof Member of the Managing Board Stephan Siela Member of the Managing Board Christian Skilich Member of the Managing Board 108 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 80 Report on the Consolidated Financial Statements Audit Opinion We have audited the consolidated nancial statements of Lenzing Aktiengesellschaft, Lenzing, Austria, and its subsidiaries (the Group), which comprise the consolidated Statement of Financial Position as at 31 December 2021, and the Consolidated Income Statement and Consolidated Statement of Other Comprehensive Income, Consolidated Statement of Changes in Equity and Con- solidated Statement of Cash Flows for the year then ended, and the Notes to the Consolidated Financial Statements. In our opinion, the consolidated nancial statements comply with the legal requirements and present fairly, in all material respects, the consolidated nancial position of the Group as at 31 Decem- ber 2021, and its consolidated nancial performance and consoli- dated cash ows for the year then ended in accordance with Inter- national Financial Reporting Standards (IFRSs) as adopted by the EU, and the additional requirements pursuant to Section 245a UGB (Austrian Commercial Code). Basis for our Opinion We conducted our audit in accordance with the EU Regulation 537/2014 (“AP Regulation”) and Austrian Standards on Auditing. These standards require the audit to be conducted in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the “Auditor’s Re- sponsibilities” section of our report. We are independent of the au- dited Group in accordance with Austrian company law and profes- sional regulations, and we have fullled our other responsibilities under those relevant ethical requirements. We believe that the au- dit evidence we have obtained up to the date of the auditor’s report is sucient and appropriate to provide a basis for our audit opinion on this date. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the nancial statements. These matters were addressed in the context of our audit of the nancial statements as a whole, however, we do not provide a separate opinion thereon. Impairment of Cash-Generating Units (“CGU”) “Fiber Site China” and “Fiber Site Indonesia” Refer to note 11 Risk for the nancial statements In the nancial year 2021 Lenzing Aktiengesellschaft asessed that there is an indication, that the cash-generating units "Fiber Site China" and "Fiber Site Indonesia" may be impaired. The estimated recoverable amounts (impairment test) of both cash-generating units exceeded their carrying amounts. The measurement of the recoverable amount of cash-generating units in accordance with IAS 36 requires assumptions and esti- mates, such as the estimated future cash ows, as well as the de- termination of the applicable discount rate. There is a risk that inappropriate assumptions and estimates used to measure the recoverable amount could have a signicant impact on the recoverable amount and therefore the carrying amounts of the cash-generating units in the consolidated statement of nan- cial position, as well as the operating result in the consolidated in- come statement. Our response We assessed the impairment tests carried out by the company with support of our internal valuation experts as follows: ● To assess the adequacy of the cash ow projections used by management to measure recoverable amount, we have evalu- ated managements planning process and discussed the as- sumptions for growth rates and operating results with man- agement. Additionally, we have compared these cash ow projections with the most recent budget approved by the su- pervisory board as well as the mid-term planning approved by the managing board. ● To assess managements historical planning accuracy we have compared actual nancial gures with prior years cash ow projections. ● Our internal valuation experts have assessed the methodology used for impairment testing for compliance with the applicable standards. Our experts furthermore compared the assump- tions, on which the determination of capital cost rates were based, with market- and industry-specic reference values and veried the mathematical accuracy of the calculation. ● Additionally, we have veried whether the descriptions in the notes to the nancial statements on impairment testing of the CGUs "Fiber Site China" and "Fiber Site Indonesia" were ap- propriate. Auditor’s Report 109 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 81 Valuation of puttable non-controlling interests Refer to note 3 and note 37 Risk for the Consolidated Financial Statements The minority shareholder of LD Cellulose S.A, Sao Paulo, Brazil, has an option to sell its non-controlling interests to Lenzing Aktien- gesellschaft upon the occurrence of contractually agreed events. As of December 31, 2021, Lenzing Aktiengesellschaft recognized a liability at a fair value of EUR 234,409 thousand for these puttable non-controlling interests. Subsequent measurement of the liability is carried out using the present access method via retained earn- ings. The fair value of the liability for the puttable non-controlling inter- ests is determined in accordance with the contractual agreement with the minority shareholder according to a discounted cash ow method. This requires assumptions and estimates, such as estimat- ing future cash ows and determining the discount rate to be ap- plied. There is a risk for the consolidated nancial statements that inap- propriate assumptions and estimates could have a signicant im- pact on the fair value and thus the valuation of the liability for the puttable non-controlling interests in the consolidated statement of nancial position and equity. Our response We assessed the valuation of puttable non-controlling interests as follows: ● We assessed whether the chosen valuation model is consistent with the contractual agreements for determining the option exercise price. ● In order to assess the appropriateness of the cash ows used in the valuation model, we gained an understanding of the planning process and discussed the assumptions about growth rates and operating results with management. ● We compared the planning data assumed in the valuation model with the current budget gures approved by the Man- agement Board and the Supervisory Board and the medium- term plan. ● Our internal valuation experts assessed the adequacy of the valuation model and veried the mathematical accuracy. Our experts compared the determined country and maturity- specic capital costs with market and industry-specic benchmarks. ● Finally, we assessed whether the explanations on the determi- nation of the fair value for the liability for puttable non-control- ling interests in the consolidated nancial statements are ap- propriate. Other information Management is responsible for other information. Other infor- mation is all information provided in the annual report, other than the consolidated nancial statements, the group management re- port, and the auditor's report. Our opinion on the consolidated nancial statements does not cover other information and we do not provide any assurance thereon. In conjunction with our audit, it is our responsibility to read this other information and to assess whether, based on knowledge gained during our audit, it contains any material inconsistencies with the consolidated nancial statements or any apparent material misstatement of fact. If we conclude that there is a material mis- statement of fact in other information, we must report that fact. We have nothing to report in this regard. Responsibilities of Management and Audit Committee for the Consolidated Financial Statements Management is responsible for the preparation and fair presenta- tion of the consolidated nancial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, the additional requirements pursuant to Section 245a UGB (Austrian Commercial Code) and for such internal controls as man- agement determines are necessary to enable the preparation of consolidated nancial statements that are free from material mis- statement, whether due to fraud or error. Management is also responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters re- lated to going concern and using the going concern basis of ac- counting, unless management either intents to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The audit committee is responsible for overseeing the Group's nancial reporting process. Auditor’s Responsibilities Our objectives are to obtain reasonable assurance about whether the consolidated nancial statements as a whole are free from ma- terial misstatement, whether due to fraud or error, and to issue an auditor's report that includes our audit opinion. Reasonable assur- ance represents a high level of assurance, but provides no guaran- tee that an audit conducted in accordance with the AP Regulation and Austrian Standards on Auditing (and therefore ISAs), will al- ways detect a material misstatement, if any. Misstatements may result from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to inuence the economic decisions of users taken on the basis of these con- solidated nancial statements. As part of an audit in accordance with the AP Regulation and Aus- trian Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. Moreover: ● We identify and assess the risks of material misstatement in the consolidated nancial statements, whether due to fraud or error, we design and perform audit procedures responsive to those risks and obtain sucient and appropriate audit evidence to serve as a basis for our audit opinion. The risk of not detecting material misstatements resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misprepresentations or override of internal control. ● We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eectiveness of the Group's internal control. 110 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 82 ● We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. ● We conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the respective note in the consolidated nancial statements. If such disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. ● We evaluate the overall presentation, structure and content of the consolidated nancial statements, including the notes, and whether the consolidated nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. ● We obtain sucient appropriate audit evidence regarding the nancial information of the entities and business activities within the Group to express an opinion on the consolidated nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. ● We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our audit as well as signicant ndings, including any signicant deciencies in internal control that we identify during our audit. ● We communicate to the audit committee that we have complied with the relevant professional requirements in respect of our independence, that we will report any relationships and other events that could reasonably aect our independence and, where appropriate, the related safeguards. ● From the matters communicated with the audit committee, we determine those matters that were of most signicance in the audit i.e. key audit matters. We describe these key audit matters in our auditor's report unless laws or other legal regulations preclude public disclosure about the matter or when in very rare cases, we determine that a matter should not be included in our audit report because the negative consequences of doing so would reasonably be expected to outweigh the public benets of such communication. Report on Other Legal Requirements Group Management Report In accordance with Austrian company law, the group management report is to be audited as to whether it is consistent with the con- solidated nancial statements and prepared in accordance with le- gal requirements. Management is responsible for the preparation of the group man- agement report in accordance with Austrian company law and other legal or regulatory requirements. We have conducted our audit in accordance with generally ac- cepted standards on the audit of group management reports. Opinion In our opinion, the group management report is consistent with the consolidated nancial statements and has been prepared in ac- cordance with legal requirements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate. Statement Based on our knowledge gained in the course of the audit of the consolidated nancial statements and our understanding of the Group and its environment, we did not note any material misstatements in the group management report. Additional Information in accordance with Article 10 AP Regulation We were elected as auditors at the Annual General Meeting on April 14, 2021 and were appointed by the supervisory board on April 27, 2021 to audit the nancial statements of Company for the nan- cial year ending on December 31, 2021. We have been auditors of the Company, without interruption, since the consolidated nancial statements as at December 31, 2017. We declare that our opinion expressed in the "Report on the Con- solidated Financial Statements" section of our report is consistent with our additional report to the Audit Committee, in accordance with Article 11 AP Regulation. We declare that we have not provided any prohibited non-audit services (Article 5 Paragraph 1 AP Regulation) and that we have en- sured our independence throughout the course of the audit, from the audited Group. 111 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 83 Engagement Partner The engagement partner on this engagement is Ms Gabriele Lehner. Linz, March 01, 2022 KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Gabriele Lehner Austrian Chartered Accountant This report is a translation of the original report in German, which is solely valid. The nancial statements, together with our auditor's opinion, may only be published if the nancial statements and the management report are identical with the audited ver- sion attached to this report. Section 281 Paragraph 2 UGB (Austrian Commercial Code) applies. 112 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 84 Declaration of the Managing Board according to Section 124 (1) No. 3 of the Stock Exchange Act We conrm to the best of our knowledge that the consolidated - nancial statements of the Lenzing Group as at December 31, 2021 that were prepared in accordance with the applicable accounting standards pursuant to International Financial Reporting Standards (IFRSs) give a true and fair view of the assets, liabilities, nancial position and prot or loss of the Lenzing Group and that the group management report gives a true and fair view of the development and performance of the business and the position of the Lenzing Group, together with a description of the principal risks and uncer- tainties the Lenzing Group faces. Lenzing, March 1, 2022 Lenzing Aktiengesellschaft The Managing Board Cord Prinzhorn Chairman of the Managing Board Thomas Obendrauf Chief Financial Ocer Robert van de Kerkhof Member of the Managing Board Stephan Siela Member of the Managing Board Christian Skilich Member of the Managing Board Declaration of the Managing Board 113 Annual Financial Report 2021 Lenzing Group Annual Report 2021 Lenzing Group 85 Key earnings and protability gures EUR mn 2021 2020 2019 2018 2017 Revenue EBITDA (earnings before interest, tax, depreciation and amortization) EBITDA margin EBIT (earnings before interest and tax) EBIT margin EBT (earnings before tax) Net prot/loss for the year () Earnings per share in EUR ROCE (return on capital employed) () ROE (return on equity) ROI (return on investment) Key cash ow gures EUR mn Gross cash ow Cash ow from operating activities Free cash ow () () CAPEX Liquid assets as at 31/12 Unused credit facilities as at 31/12 Key balance sheet gures EUR mn as at 31/12 Total assets Adjusted equity Adjusted equity ratio Net nancial debt Net nancial debt / EBITDA Net debt Net gearing Trading working capital Trading working capital to annualized group revenue Key stock market gures EUR Market capitalization in mn as at 31/12 Share price as at 31/12 Dividend per share Employees Number (headcount) as at 31/12 1) Reclassication of capitalized borrowing costs, net interest from dened benet plans and commitment fees from EBIT/EBITDA to the nancial result (see note 2). 2) On the basis of proposed distribution of prots. The above nancial indicators are derived primarily from the IFRS consolidated nancial statements of the Lenzing Group. Additional details are provided in the section “Notes on the nancial performance indicators of the Lenzing Group”, in the glossary to the Annual Report and in the consolidated nancial statements of the Lenzing Group. Rounding dierences can occur in the presentation of rounded amounts and percentage rates. Lenzing Group Five-Year Overview 114 Annual Financial Report 2021 Lenzing Group 2021 Jahres- abschluss AG Inhalt Bilanz 116 Gewinn- und Verlustrechnung 118 Anhang zum Jahresabschluss 120 Erläuterungen zur Bilanz 123 Erläuterungen zur Gewinn- und Verlustrechnung 130 Sonstige Angaben 133 Entwicklung des Anlagevermögens 142 Entwicklung der Zuschüsse der öentlichen Hand 144 Bestätigungsvermerk 145 Erklärung des Vorstandes 148 CHAPTER 3 /3 115 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 2 Lenzing AG Bilanz zum 31. Dezember 2021 Aktiva 31.12.2021 31.12.2020 A. Anlagevermögen EUR TEUR I. Immaterielle Vermögensgegenstände 1. Rechte 2. Firmenwert II. Sachanlagen 1. Grundstücke, grundstücksgleiche Rechte und Bauten, einschließlich der Bauten auf fremdem Grund 2. Technische Anlagen und Maschinen 3. Andere Anlagen, Betriebs- und Geschäftsausstattung 4. Anlagen in Bau 5. Geleistete Anzahlungen III. Finanzanlagen 1. Anteile an verbundenen Unternehmen 2. Ausleihungen an verbundene Unternehmen 3. Beteiligungen 4. Wertpapiere (Wertrechte) des Anlagevermögens 5. Sonstige Ausleihungen B. Umlaufvermögen I. Vorräte 1. Roh-, Hilfs- und Betriebsstoe 2. Unfertige Erzeugnisse 3. Fertige Erzeugnisse und Waren 4. Noch nicht abrechenbare Leistungen 5. Geleistete Anzahlungen II. Forderungen und sonstige Vermögensgegenstände 1. Forderungen aus Lieferungen und Leistungen davon mit einer Restlaufzeit von mehr als einem Jahr 2. Forderungen gegenüber verbundenen Unternehmen davon mit einer Restlaufzeit von mehr als einem Jahr 3. Forderungen gegenüber Unternehmen, mit denen ein Beteiligungsverhältnis besteht davon mit einer Restlaufzeit von mehr als einem Jahr 4. Sonstige Forderungen und Vermögensgegenstände davon mit einer Restlaufzeit von mehr als einem Jahr III. Wertpapiere 1. sonstige Wertpapiere und Anteile IV. Kassenbestand, Guthaben bei Kreditinstituten C. Rechnungsabgrenzungsposten 4.467.975,75 5.312,6 D. Aktive latente Steuern 13.086.208,49 23 . 24 7, 3 116 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 3 Passiva 31.12.2021 31.12.2020 A. Eigenkapital EUR TEUR I. Eingefordertes, einbezahltes und gezeichnetes Grundkapital II. Kapitalrücklagen 1. Gebundene 2. Nicht gebundene III. Gewinnrücklagen Freie Rücklagen IV. Bilanzgewinn, davon Gewinnvortrag EUR 0,00 (31.12.2020: TEUR 26.550,0) B. Zuschüsse der öentlichen Hand 50.518.350,82 25.183,1 C. Rückstellungen 1. Rückstellungen für Abfertigungen 2. Rückstellungen für Pensionen 3. Steuerrückstellungen 4. Sonstige Rückstellungen D. Verbindlichkeiten 1. Hybridkapital davon mit einer Restlaufzeit von mehr als einem Jahr 2. Verbindlichkeiten aus Schuldscheindarlehen davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr 3. Verbindlichkeiten gegenüber Kreditinstituten davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr 4. Sonstige zinstragende Verbindlichkeiten davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr 5. Erhaltene Anzahlungen auf Bestellungen davon mit einer Restlaufzeit von bis zu einem Jahr 6. Verbindlichkeiten aus Lieferungen und Leistungen davon mit einer Restlaufzeit von bis zu einem Jahr 7. Verbindlichkeiten gegenüber verbundenen Unternehmen davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr 8. Verbindlichkeiten gegenüber Unternehmen mit Beteiligungsverhältnis davon mit einer Restlaufzeit von bis zu einem Jahr 9. Sonstige Verbindlichkeiten davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr davon aus Steuern EUR 581.557,84 (31.12.2020: TEUR 1.194,3) davon im Rahmen der sozialen Sicherheit EUR 5.277.740,17 (31.12.2020: TEUR 4.993,9) davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr E. Rechnungsabgrenzungsposten 262.894,39 233,0 117 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 4 Lenzing AG Gewinn- und Verlustrechnung für den Zeitraum 01. Jänner 2021 bis 31. Dezember 2021 2021 2020 EUR TEUR 1. Umsatzerlöse 2. Veränderung des Bestandes an fertigen und unfertigen Erzeugnissen - 3. Andere aktivierte Eigenleistungen 4. Sonstige betriebliche Erträge: a) Erträge aus dem Abgang vom und der Zuschreibung zum Anlagevermögen mit Ausnahme der Finanzanlagen b) Erträge aus der Auösung von Rückstellungen c) Übrige 5. Aufwendungen für Material und sonstige bezogene Herstellungsleistungen a) Materialaufwand - - b) Aufwendungen für bezogene Leistungen - - - - 6. Personalaufwand: a) Löhne - - aa) davon Erträge aus Zuschüssen iZm Kurzarbeitsbeihilfen EUR 65.712,66 (2020: TEUR 4.142,5) b) Gehälter - - aa) davon Erträge aus Zuschüssen iZm Kurzarbeitsbeihilfen EUR 178.645,17 (2020: TEUR 6.499,8) c) soziale Aufwendungen - - aa) davon Aufwendungen für Altersversorgung EUR -1.764.928,70 (2020: TEUR -2.901,4) 1 bb) davon Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen EUR -5.496.443,55 (2020: TEUR -3.084,1) 1 cc) davon Aufwendungen für gesetzlich vorgeschriebene Sozialabgaben sowie vom Entgelt abhängige Abgaben und Pichtbeiträge EUR -56.820.987,00 (2020: TEUR -50.292,8) - - 7. Abschreibungen auf immaterielle Gegenstände des Anlagevermögens und Sachanlagen a) Planmäßige Abschreibungen - - b) Auösung Investitionszuschüsse der öentlichen Hand - - 8. Sonstige betriebliche Aufwendungen a) Steuern, soweit sie nicht unter Zier 19 fallen - - b) Übrige - - - - 9. Zwischensumme aus Zier 1 bis 8 (Übertrag) 1) Umgliederung von Nettozinsen aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis (siehe Abschnitt „Personalaufwand“ und „Finanzergebnis“) 118 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 5 2021 2020 EUR TEUR 9. Zwischensumme aus Zier 1 bis 8 (Übertrag) 10. Erträge aus Beteiligungen davon aus verbundenen Unternehmen EUR 76.926.595,35 (2020: TEUR 73.070,0) 11. Erträge aus anderen Wertpapieren und Ausleihungen des Finanzanlagevermögens davon aus verbundenen Unternehmen EUR 15.440.739,08 (2020: TEUR 6.964,3) 12. Sonstige Zinsen und ähnliche Erträge davon aus verbundenen Unternehmen EUR 992.323,96 (2020: TEUR 944,5) 13. Erträge aus dem Abgang von und der Zuschreibung zu Finanzanlagen davon aus verbundenen Unternehmen EUR 6.708.996,93 (2020: TEUR 0,0) 14. Aufwendungen aus Finanzanlagen - - a) davon Abschreibungen EUR -3.756.151,81 (2020: TEUR -1.548,9) b) davon Aufwendungen aus verbundenen Unternehmen EUR 0,00 (2020: TEUR -21.969,0) 15. Zinsen und ähnliche Aufwendungen 1 - - davon betreend verbundene Unternehmen EUR -1.283.548,00 (2020: TEUR -672,2) 16. Zwischensumme aus Zier 10 bis 15 17. Ergebnis vor Steuern (Zwischensumme aus Zier 9 und Zier 16) 18. Einbringungs- und Verschmelzungsergebnis 19. Steuern vom Einkommen und vom Ertrag - a) davon laufende Steuern EUR -12.389.194,39 (2020: TEUR 2.485,8) b) davon latente Steuern EUR -10.161.050,95 (2020: TEUR 4.013,9) 20. Ergebnis nach Steuern = Jahresüberschuss 21. Zuweisung zu Gewinnrücklagen (freie) - - 22. Gewinnvortrag aus dem Vorjahr 23. Bilanzgewinn 1) Umgliederung von Nettozinsen aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis (siehe Abschnitt „Personalaufwand“ und „Finanzergebnis“) 119 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 6 Lenzing AG Anhang zum Jahresabschluss für das Geschäftsjahr 2021 Allgemeine Angaben Der Vorstand der Lenzing Aktiengesellschaft (Lenzing AG) hat den vorliegenden Jahresabschluss zum 31. Dezember 2021 nach den Vorschriften des österreichischen Unternehmensgesetzbuches (UGB) in der aktuellen Fassung aufgestellt. Er umfasst das Ge- schäftsjahr vom 1. Jänner bis zum 31. Dezember 2021. Die Lenzing AG ist eine börsennotierte Aktiengesellschaft österrei- chischen Rechts. Sie ist im Firmenbuch beim Handels- als Landes- gericht Wels, Österreich, unter der Nummer FN 96499 k eingetra- gen. Ihr Sitz ist in 4860 Lenzing, Werkstraße 2, Österreich. Die Ak- tien der Lenzing AG sind im Prime Market (seit 18. April 2011) und im Leitindex ATX (seit 19. September 2011) der Wiener Börse in Wien, Österreich, gelistet. Das Kerngeschäft der Lenzing AG liegt in der Erzeugung und Ver- marktung von botanischen Cellulosefasern. Der zur Erzeugung notwendige Zellsto wird zu einem großen Teil im eigenen Zell- stowerk hergestellt und teilweise zugekauft. Der wichtigste Roh- sto zur Zellstoerzeugung ist Holz, das zugekauft wird. Bei der Gesellschaft handelt es sich um eine große Kapitalgesell- schaft. Die Form der Darstellung wurde bei der Erstellung des vorliegen- den Jahresabschlusses im Vergleich zum Vorjahr beibehalten. Die Lenzing AG ist das Mutterunternehmen der Lenzing Gruppe und erstellt einen Konzernabschluss. Der Konzernabschluss der Lenzing AG ist beim Firmenbuch Wels hinterlegt, am Sitz der Gesellschaft in Lenzing erhältlich und auf der Homepage http://www.lenzing.com abrufbar. Die Hauptaktionärin der Lenzing AG zum 31. Dezember 2021 ist die B&C Gruppe, welche direkt oder indirekt mit 50 Prozent plus zwei Aktien (31. Dezember 2020: 50 Prozent plus zwei Aktien) am Grundkapital der Lenzing AG beteiligt ist. Die unmittelbare Mehrheitsgesellschafte- rin der Lenzing AG ist die B&C KB Holding GmbH, Wien. Die mit- telbare Mehrheitsgesellschafterin der Lenzing AG, die einen Kon- zernabschluss aufstellt und veröentlicht, in den die Lenzing Gruppe einbezogen ist, ist die B&C Holding Österreich GmbH, Wien. Das oberste Mutterunternehmen der B&C Gruppe, und so- mit auch der Lenzing AG, ist die B&C Privatstiftung, Wien. Die Zahlenangaben im vorliegenden Jahresabschluss und in den Erläuterungen werden auf die nächsten Tausend gerundet angege- ben („TEUR“), sofern keine abweichende Angabe erfolgt. Bei Sum- mierung von gerundeten Beträgen und Prozentangaben können durch Verwendung automatisierter Rechnungshilfen rundungsbe- dingte Rechendierenzen auftreten. Bilanzierungs- und Bewertungsmethoden Allgemeine Grundlagen Die Aufstellung des Jahresabschlusses erfolgte unter Beachtung der Grundsätze ordnungsmäßiger Buchführung sowie der Gene- ralnorm des § 222 Abs. 2 UGB, ein möglichst getreues Bild der Ver- mögens-, Finanz- und Ertragslage des Unternehmens zu vermitteln. Bei der Erstellung des Jahresabschlusses wurde der Grundsatz der Vollständigkeit eingehalten. Bei den Vermögensgegenständen und Schulden wurde der Grund- satz der Einzelbewertung angewandt. Das Unternehmen hat dem Vorsichtsgrundsatz Rechnung getragen, indem insbesondere nur die am Abschlussstichtag verwirklichten Gewinne ausgewiesen werden. Alle erkennbaren Risiken und dro- henden Verluste, die bis zum Bilanzstichtag entstanden sind, wur- den berücksichtigt. Schätzungen beruhen auf einer umsichtigen Beurteilung. Soweit statistisch ermittelbare Erfahrungen aus gleich gelagerten Sach- verhalten vorhanden sind, werden diese bei Schätzungen berück- sichtigt. Die im Vorjahr angewandten Bilanzierungs- und Bewertungsme- thoden wurden im Geschäftsjahr 2021 beibehalten. Die Geschäftsentwicklung im Geschäftsjahr 2021 hat sich aufgrund des positiven Marktumfelds deutlich gegenüber dem Vorjahresver- gleichszeitraum verbessert. Bei der Erstellung des Jahresabschlus- ses hat der Vorstand die Auswirkungen der COVID-19-Krise be- rücksichtigt, insbesondere bei Schätzungsunsicherheiten und Er- messensentscheidungen (etwa im Rahmen der Unternehmenspla- nung). In der Berichtsperiode wurden Zuschüsse aus Kurzarbeitsbeihilfen aufgrund von COVID-19 in Höhe von TEUR 244,4 (2020: TEUR 10.642,3) erfolgswirksam erfasst. Aufgrund einer gesicherten Liquiditätssituation, einer weiterhin starken Position auf den für die Lenzing AG relevanten Märkten so- wie einem zu erwartendem sukzessiven Abklingen der negativen Auswirkungen der COVID-19-Krise im Laufe des Jahres 2022 hat das Management die Einschätzung getroen, dass die Lenzing AG zum Zeitpunkt seiner Genehmigung über ausreichende Ressour- cen verfügt, um in absehbarer Zukunft operativ weiter bestehen zu können. Daher wurde der Jahresabschluss unter Zugrundelegung der Annahme der Unternehmensfortführung aufgestellt. 120 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 7 Zusätzliche Angaben zu den Auswirkungen der COVID-19-Krise und den gesetzten Maßnahmen finden sich im Lagebericht im Ab- schnitt „Geschäftsentwicklung“. Anlagevermögen Erworbene immaterielle Vermögensgegenstände und Sachan- lagen werden mit den Anschaungs- bzw. Herstellungskosten, vermindert um die planmäßige, nach der linearen Methode vorge- nommenen Abschreibung angesetzt. Selbst erstellte immaterielle Vermögensgegenstände werden als Aufwand erfasst. Die Herstellungskosten von selbsterstellten Sachanlagen umfassen die Einzelkosten, angemessene Teile der Material- und Fertigungs- gemeinkosten sowie Aufwendungen für freiwillige soziale Leistun- gen, für betriebliche Altersversorgung und für Abfertigungen. Vom Wahlrecht der Aktivierung von Fremdkapitalzinsen wird nicht Ge- brauch gemacht. Der Rahmen der Nutzungsdauer beträgt für die einzelnen Anlagegruppen: Nutzungsdauer in Jahren von bis Immaterielle Vermögensgegenstände a) Lizenzen, Know-how und Mietrechte b) Software c) Firmenwert Sachanlagen a) Gebäude Wohngebäude Geschäfts- und Fabriksgebäude b) Technische Anlagen und Maschinen c) Andere Anlagen, Betriebs- und Geschäftsausstattung Außerplanmäßige Abschreibungen auf einen zum Abschlussstich- tag niedrigeren beizulegenden Wert erfolgen, wenn die Wertmin- derung voraussichtlich von Dauer ist. Für Firmenwerte, die vor dem 1. Jänner 2016 zugegangen sind, wurde die bisherige Nutzungsdauer von 15 Jahren beibehalten. Anteile an verbundenen Unternehmen und Beteiligungen wer- den mit den Anschaungskosten oder, bei voraussichtlich dauern- der Wertminderung, mit dem niedrigeren beizulegenden Wert zum Bilanzstichtag angesetzt. Zur Beurteilung der Werthaltigkeit von Beteiligungen wird bei Vor- liegen von Anhaltspunkten für eine Wertminderung grundsätzlich das Discounted Cash-Flow-Verfahren gemäß dem Fachgutachten zur Unternehmensbewertung KFS/BW 1 der Kammer der Wirt- schaftstreuhänder herangezogen. Der beizulegende Wert bzw. der Unternehmenswert wird aus den mit den gewichteten Kapitalkos- ten diskontierten geschätzten künftigen Cashows abgeleitet. Die Cashows werden aus den Planungen bzw. Prognosen abge- leitet und beruhen auf zukunftsbezogenen Annahmen, im Unter- nehmensbereich Division Fiber insbesondere auf Preis- und Men- genentwicklungen beim Absatz, den Produktionsmengen sowie den dazu notwendigen Kosten speziell für Rohstoe, Energie, Per- sonal und Steuern. Diese Daten basieren insbesondere auf internen Annahmen unter Berücksichtigung des erwarteten Marktumfeldes und der Marktpositionierung sowie auf externen Marktannahmen aus Marktstudien oder Konjunkturaussichten. Nach dem Detailpla- nungszeitraum wird basierend auf den Annahmen des letzten Plan- jahres mit einer ewigen Rente unter Berücksichtigung einer nach- haltigen langfristigen Wachstumsrate gerechnet. Als Abzinsungssatz wird ein individuell nach dem Capital Asset Pri- cing Model ermittelter Mischsatz aus der Fremdkapitalverzinsung und der Verzinsung des eingesetzten Eigenkapitals herangezogen (WACC). Dieser Abzinsungssatz spiegelt die gegenwärtigen Markteinschätzungen und die speziellen Risiken der betroenen Beteiligungen wider. Ausleihungen werden mit dem Nominalwert, bei Unverzinslich- keit mit dem Barwert bzw. bei voraussichtlich dauernder Wertmin- derung mit dem niedrigeren beizulegenden Wert zum Bilanzstich- tag angesetzt. Wertpapiere (Wertrechte) des Anlagevermögens und des Um- laufvermögens werden mit den Anschaungskosten oder dem niedrigeren Kurswert zum Bilanzstichtag bewertet. In den Wertpapieren (Wertrechten) des Anlagevermögens sind auch Ansprüche aus einer Rückdeckungsversicherung für Pensions- verpflichtungen enthalten, die in Höhe des Deckungskapitals akti- viert werden. Die Erträge aus dieser Rückdeckungsversicherung werden in den Aufwendungen für Altersversorgung erfasst. Zuschreibungen zu Vermögensgegenständen des Anlagevermö- gens werden vorgenommen, wenn die Gründe für die außerplanmä- ßige Abschreibung nicht mehr bestehen. Die Zuschreibung erfolgt auf maximal den Nettobuchwert, der sich unter Berücksichtigung der Normalabschreibungen, die inzwischen vorzunehmen gewesen wären, ergibt. Beim Firmenwert unterbleibt gemäß § 208 Abs. 2 UGB die Zuschreibung. Umlaufvermögen Roh-, Hilfs- und Betriebsstoe werden mit den Anschaungs- kosten nach dem gleitenden Durchschnittspreisverfahren oder dem niedrigeren beizulegenden Wert am Bilanzstichtag bewertet. Unfertige Erzeugnisse und fertige Erzeugnisse sind zu Herstel- lungskosten (im Sinne des § 206 UGB), jedoch höchstens zum voraussichtlichen Verkaufserlös – abzüglich der bis zum Verkauf noch anfallenden Kosten – angesetzt. Die Herstellungskosten um- fassen neben den Einzelkosten auch anteilige Material- und Ferti- gungsgemeinkosten auf Basis einer Normalauslastung sowie Auf- wendungen für freiwillige soziale Leistungen, für betriebliche Alters- versorgung und für Abfertigungen. Aufwendungen für Fremdkapi- talzinsen sowie allgemeine Verwaltungs- und Vertriebskosten wer- den nicht aktiviert. Wirtschaftliche und technische Risiken werden durch Abschläge angemessen berücksichtigt. Forderungen und sonstige Vermögensgegenstände werden gemäß dem strengen Niederstwertprinzip angesetzt. Forderungen werden einzeln bewertet. Falls Risiken hinsichtlich der Einbringlich- keit bestehen, werden Einzelwertberichtigungen gebildet. Bei der Ermittlung der Höhe der Einzelwertberichtigung werden erhaltene Sicherheiten, wie Bankgarantien und Kreditversicherungen, ange- messen berücksichtigt. Ist eine Forderung gänzlich uneinbringlich, wird die Forderung mit 100 Prozent wertberichtigt (auf Basis des Nettobetrages). 121 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 8 Zuschreibungen zu Vermögensgegenständen des Umlaufvermö- gens werden vorgenommen, wenn die Gründe für die Abschrei- bung nicht mehr bestehen. Betreend die Bewertung von Forderungen in Fremdwährungen verweisen wir auf den Punkt Fremdwährungsumrechnung. Die gemäß Emissionszertikategesetz unentgeltlich zugeteilten Emissionszertikate werden in der Bilanz entsprechend der AFRAC-Stellungnahme „Bilanzierung von CO2-Emissionszertika- ten gemäß UGB“ vom Dezember 2015 dargestellt. Emissionszerti- kate werden mit dem Marktwert zum Zeitpunkt der Zuteilung in den sonstigen Forderungen und Vermögensgegenständen aktiviert. Die Dierenz zwischen dem Zeitwert und dem von der Gesell- schaft für die Anschaung aufgewendeten Betrag wird in den Zu- schüssen der öentlichen Hand eingestellt. Die aus dem aktuellen Geschäftsjahr und dem Vorjahr nicht verbrauchten Emissionszerti- kate belaufen sich auf insgesamt 1.412.116 Stück (31. Dezember 2020: 1.246.821 Stück). Betreend die Bewertung von Guthaben bei Kreditinstituten in Fremdwährungen wird auf die unter dem Punkt Fremdwährungs- umrechnung beschriebene Vorgehensweise verwiesen. Latente Steuern werden gemäß § 198 Abs. 9 und 10 UGB nach dem bilanzorientierten Konzept und ohne Abzinsung auf Basis des aktuellen Körperschaftsteuersatzes von 25 Prozent gebildet. Das Wahlrecht zum Ansatz von aktiven latenten Steuern auf Verlustvor- träge wird ab dem Geschäftsjahr 2020 ausgeübt. Rückstellungen Rückstellungen für Pensionen, Abfertigungen und Jubiläums- gelder werden im Einklang mit der AFRAC-Stellungnahme „Rück- stellungen für Pensions-, Abfertigungs-, Jubiläumsgeld- und ver- gleichbare langfristig fällige Ve rpichtungen nach den Vorschriften des Unternehmensgesetzbuches“ nach versicherungsmathemati- schen Grundsätzen entsprechend den Vorschriften des IAS 19 „Leistungen an Arbeitnehmer“, wie dieser in der EU anzuwenden ist, unter Anwendung der Projected-Unit-Credit-Method (laufendes Einmalprämienverfahren) berechnet. Dabei werden die erwarteten Versorgungsleistungen auf den gesamten Zeitraum der Beschäfti- gung verteilt. Zukünftige Gehalts- und Pensionssteigerungen sowie Fluktuationsabschläge werden berücksichtigt. Versicherungsma- thematische Gewinne und Verluste werden zur Gänze im Perioden- aufwand in der Periode erfasst, in der sie anfallen. Die in der Bilanz erfasste leistungsorientierte Verpichtung aus einem Versorgungs- plan stellt den Barwert der leistungsorientierten Verpichtung dar. Änderungen der oben genannten Personalrückstellungen werden in der Gewinn- und Verlustrechnung im Personalaufwand ausge- wiesen, mit Ausnahme der Aufwendungen aus der Aufzinsung die- ser Rückstellungen, welche im Finanzergebnis dargestellt werden. Übersteigen in einem Geschäftsjahr die Verminderungen insge- samt die Zuweisungen an die jeweiligen Personalrückstellungen, wird der positive Saldo im Posten Erträge aus der Auösung von Rückstellungen ausgewiesen. Zahlungen für beitragsorientierte Verpichtungen werden im Personalaufwand erfasst. In den sonstigen Rückstellungen werden unter Beachtung des Vorsichtsprinzips alle zum Zeitpunkt der Bilanzerstellung erkenn- baren Risiken und der Höhe sowie dem Grunde nach ungewisse Verbindlichkeiten mit den Beträgen berücksichtigt, die nach ver- nünftiger unternehmerischer Beurteilung erforderlich sind. Bei der Bewertung werden Rückgrisansprüche auf andere Parteien ange- messen berücksichtigt. Langfristige Rückstellungen werden mit ei- nem marktüblichen und laufzeitadäquaten Zinssatz abgezinst. Verbindlichkeiten Verbindlichkeiten werden mit dem Erfüllungsbetrag angesetzt. Die Bewertung von Verbindlichkeiten in Fremdwährungen wird un- ter dem Punkt „Fremdwährungsumrechnung“ erläutert. Fremdwährungsumrechnung Bestehen Sicherungsgeschäfte in Bezug auf eine Währung, so wer- den auf diese Währung lautende monetäre Posten bis zum Nomi- nale der Sicherungsgeschäfte mit einem Kurs umgerechnet, der dem gewogenen Durchschnitt aus den Terminkursen der Siche- rungsgeschäfte entspricht. Soweit das Nominale der monetären Posten über das Nominale der Sicherungsgeschäfte hinausgeht und sofern keine Sicherungs- geschäfte bestehen, so werden auf diese Währung lautende mo- netäre Posten entsprechend dem imparitätischen Realisationsprin- zip mit dem Kurs zum Zeitpunkt der Ersterfassung, im Fall eines Kursverlustes aber mit dem Stichtagskurs umgerechnet. Folgende wesentliche Kurse wurden für die Währungsumrechnung in Euro herangezogen: Fremdwährungskurse Forderungen 31.12.2021 31.12.2020 Stichtagskurs EUR/USD Stichtagskurs EUR/CNY Durchschnittlicher Sicherungskurs EUR/CNY Stichtagskurs EUR/BRL Verbindlichkeiten 31.12.2021 31.12.2020 Stichtagskurs EUR/USD 122 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 9 Aktiva Anlagevermögen Die Aufgliederung des Anlagevermögens und seine Entwicklung im Berichtsjahr sind im Anlagenspiegel angeführt. Immaterielle Vermögensgegenstände und Sachanlagen Der Posten Rechte beinhaltet zum Großteil ein Mitbenützungs- recht an der Abwasserreinigungsanlage des Wasserreinhaltungs- verbandes Lenzing - Lenzing AG sowie das Recht auf Energiebe- zug von der RVL Reststoverwertung Lenzing GmbH, einer von der Gesellschaft gemeinsam mit der Energie AG Oberösterreich Um- welt Service GmbH betriebenen Reststoverwertungsanlage. In den immateriellen Vermögensgegenständen sind solche imma- teriellen Vermögensgegenstände, die von einem verbundenen Unternehmen erworben wurden, mit einem Buchwert von TEUR 327,7 (31. Dezember 2020: TEUR 414,4 1 ) enthalten. In den Geschäftsjahren 2021 und 2020 gab es keine Zugänge von imma- teriellen Vermögensgegenständen von verbundenen Unternehmen. Der Firmenwert wird planmäßig, nach der linearen Methode über die Nutzungsdauer von 15 Jahren abgeschrieben. Die gewählte Nutzungsdauer orientiert sich an der durchschnittlichen Restlauf- zeit der im Zuge der Übernahme übernommenen Verpichtungen. Nach Unternehmensbereichen ergibt sich folgende Aufgliederung der Zugänge zu den immateriellen Vermögensgegenständen und Sachanlagen: Unternehmensbereich 2021 2020 TEUR TEUR Division Fiber Division Pulp Others Gesamt Die Abgänge von immateriellen Vermögensgegenständen und von Sachanlagen hatten Anschaungs- und Herstellungskosten von TEUR 3.208,7 (2020: TEUR 4.531,7) und einen Buchwert von TEUR 286,9 (2020: TEUR 187,0). 1) Änderung Vorjahreswert Finanzanlagen Die Auistung der Anteile an verbundenen Unternehmen der Lenzing AG kann im Abschnitt „Direkte Beteiligungen zum 31.12.2021“ dieses Anhangs entnommen werden. Die Zugänge bei den Anteilen an verbundenen Unternehmen betreen im Wesentlichen eine Kapitalerhöhung der PT. South Pa- cic Viscose in Höhe von TEUR 98.985,4 (2020: TEUR 0,0), Lenzing (Thailand) Co., Ltd. in Höhe von TEUR 29.713,8 (2020: TEUR 16.949,9) sowie einen Zuschuss für die Kapitalerhöhung der indirekten Tochtergesellschat Lenzing (Nanjing) Fibers Co., Ltd. in Höhe von TEUR 7.613,3 (2020: TEUR 10.595,1). Weiters wurde an die LD Celulose S.A. eine Kapitalerhöhung in Höhe von TEUR 17.185,7 (2020 TEUR 221.003,7) geleistet. Im Geschäftsjahr 2020 wurden die Anteile in Höhe von TEUR 88.106,0 an der indi- rekten Tochtergesellschaft PT. South Pacic Viscose von den di- rekten Tochtergesellschaften Avit Investments Limited sowie Peni- que S.A. erworben, sowie die Anteile an der indirekten Tochterge- sellschaft Lenzing Technik GmbH in die Lenzing AG eingebracht. Als gesellschaftsrechtliche Begleitmaßnahme wurde im Jahr 2020 von der Lenzing AG ein Gesellschaftszuschuss in Höhe von TEUR 28.100,0 an die direkte Tochtergesellschaft Pulp Tra- ding GmbH geleistet. Die Abgänge bei den Anteilen an verbundenen Unternehmen betreen mit TEUR 72.491,2 die Avit Investments Limited sowie die Penique S.A. mit TEUR 22.158,0, welche aufgrund der Liquidation im Geschäftsjahr 2021 abgegangen sind. Aufgrund eines Anhaltspunktes für Wertminderung wurde der bei- zulegende Wert der PT. South Pacic Viscose ermittelt, dieser ergab eine ausreichende Deckung des Buchwertes. Der Abgang bei den Beteiligungen in Höhe von TEUR 1.669,6 be- trit den Verkauf der Hygiene Austria GmbH. Die Ausleihungen setzen sich wie folgt zusammen: Ausleihungen Bilanzwert mit einer Restlaufzeit bis zu 1 Jahr mit einer Restlaufzeit über 1 Jahr TEUR TEUR TEUR Ausleihungen an verbundene Unternehmen Vorjahr Sonstige Ausleihungen Vorjahr Gesamt Vorjahr Bei den Ausleihungen gegenüber verbundenen Unternehmen waren die wesentlichen Zugänge gegenüber der Lenzing (Thai- land) Co., Ltd. in Höhe von TEUR 168.809,0 sowie der Pulp Trading Erläuterungen zur Bilanz 123 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 10 GmbH in Höhe von TEUR 4.197,5, und die wesentlichen Abgänge gegenüber der Pulp Trading GmbH in Höhe von TEUR 59.493,8, der Lenzing Fibers Inc. in Höhe von TEUR 20.488,3 und der PT. South Pacific Viscose in Höhe von TEUR 20.478,0. In den Sonstigen Ausleihungen sind ausstehende Kaufpreisfor- derungen bzw. langfristige Darlehen aus der teilweisen Veräuße- rung der EQUI-Fibres Beteiligungsgesellschaft mbH im Jahr 2016 gegenüber dem Käufer (einschließlich dessen Tochterunterneh- men) in Höhe von TEUR 10.678,2 (31. Dezember 2020: TEUR 10.678,2) enthalten. Sie sind bankmäßig verzinst. Die Ein- bringlichkeit wurde insbesondere auf Basis der wirtschaftlichen Lage beurteilt. Im Vorjahr wurde eine Abschreibung in Höhe von TEUR 1.384,0 vorgenommen. Die Lenzing AG besitzt ein Pfand- recht an den übrigen Anteilen der EQUI-Fibres Beteiligungsgesell- schaft mbH. Darüber hinaus wurde dem Käufer ein Kreditrahmen in Höhe von bis zu TEUR 5.379,0 (2020: TEUR 8.622,0 1 ) eingeräumt, der im Fall von vordenierten nachteiligen Veränderungen der Rah- menbedingungen der EQUI-Fibres Beteiligungsgesellschaft mbH am Absatzmarkt bis längstens 31. Dezember 2025 in Anspruch ge- nommen werden kann. Dieser Rahmen war per 31. Dezember 2021 sowie im Vorjahr per 31. Dezember 2020 nicht ausgenützt. Der Ab- gang bei den sonstigen Ausleihungen betrit im Wesentlichen das vergebene Darlehen an die Hygiene Austria LP GmbH in Höhe von TEUR 2.000,0. Die Zugänge bei den Wertpapieren (Wertrechte) des Anlage- vermögens betreen im Wesentlichen den Raieisen Nachhaltig- keit Diversied Fonds in Höhe von TEUR 6.482,7, der zur Deckung der Pensionsrückstellung dient. Der Raieisen Nachhaltigkeit Diversied Fonds veranlagt nach den Vorschriften des Pensions- kassengesetzes und im Wesentlichen in Euro-Anleihen per Jahres- ende. Die Lenzing AG hat im Jänner 2021 100 Prozent der Anteile an einer Versicherungszelle, der White Rock Insurance (Europe) Protected Cell Company Limited, La Valletta, Malta, erworben. Diese Gesellschaft verfügt über eine Versicherungskonzession und ermöglicht der Lenzing AG, ihre betrieblich notwendigen Versi- cherungen eektiver zu administrieren. Zum Erwerbsstichtag ver- fügte die Versicherungszelle über keine wesentlichen Vermögens- werte und Schulden. Die Abgänge bei den Wertpapieren (Wertrechte) des Anlagever- mögens betreen im Wesentlichen den Großanlegerfonds GF82 in Höhe von TEUR 5.971,8. Im Geschäftsjahr wurde ein Fondsergeb- nis aus 2021 in Höhe von TEUR 66,7 (2020: TEUR 68,8) ausge- schüttet. Ebenfalls beinhaltet dieser Posten Ansprüche aus Rückdeckungs- versicherungen von TEUR 2.598,0 (31. Dezember 2020: TEUR 2.729,5) betreend Pensionsverpichtungen und sonstige Wertpapiere (Wertrechte) des Anlagevermögens von TEUR 6.483,7 (31. Dezember 2020: TEUR 7.600,3). 1) Änderung Vorjahreswert Umlaufvermögen Die Roh-, Hilfs- und Betriebsstoe beinhalten im Wesentlichen Holz und Zellsto für die Faserproduktion, Chemikalien für sämtli- c he Geschäftsbereiche sowie diverse Kleinmaterialien und Ersatz- teile. Die Bestände an unfertigen und fertigen Erzeugnissen betref- fen im Wesentlichen Fasern und Faserzellsto. Von den Forderungen aus Lieferungen und Leistungen sind TEUR 58.022,4 (31. Dezember 2020: TEUR 46.177,9) nach Abzug von Selbstbehalten versichert und in Höhe von TEUR 5.685,0 (31. Dezember 2020: TEUR 4.597,0) durch Garantien sowie durch Akkreditive in Höhe von TEUR 29.638,7 besichert. Wechselmäßige Verbriefungen liegen weder zum 31. Dezember 2021 noch zum 31. Dezember 2020 vor. Es wurde zum Bilanzstichtag eine pauschale Wertberichtigung in Höhe von TEUR 393,9 (31.12.2020: TEUR 0,0) gebildet. Forderungen gegenüber verbundenen Unternehmen resultie- ren aus Lieferungen und Leistungsverrechnungen in Höhe von TEUR 78.556,3 (31. Dezember 2020: TEUR 69.451,4) sowie sonsti- gen Verrechnungen von TEUR 6.335,5 (31. Dezember 2020: TEUR 3.819,5) und Forderungen aus Steuerumlagen in Höhe von TEUR 6.743,1 (31. Dezember 2020: TEUR 16.573,9) sowie Forde- rungen aus Dividenden in Höhe von TEUR 6.400,0 (31. Dezember 2020: TEUR 0,0). Soweit Forderungen und Verbindlichkeiten zwischen verbundenen Unternehmen in wirtschaftlicher Betrachtungsweise einander auf- rechenbar gegenüberstehen, werden diese bei gleichem Gläubiger und Schuldner gegeneinander aufgerechnet. Forderungen gegenüber Unternehmen, mit denen ein Beteili- gungsverhältnis b b e e s s t t e e h h t t , resultieren im Wesentlichen aus der Leistungsverrechnung an die Lenzing Papier GmbH. Die sonstigen Forderungen und Vermögensgegenstände bein- halten: Sonstige Forderungen und Vermögensgegenstände 31.12.2021 31.12.2020 TEUR TEUR Guthaben aus der Verrechnung mit dem Finanzamt Emissionszertikate Abgrenzung von Kostenersätzen An- und Vorauszahlungen Übrige Gesamt In den sonstigen Forderungen und Vermögensgegenständen sind Erträge in Höhe von TEUR 32.157,7 (31. Dezember 2020: TEUR 45.903,9) enthalten, die erst nach dem Bilanzstichtag zah- lungswirksam werden. Es wurde zum 31. Dezember 2021 unter dem Posten sonstige For- derungen die „COVID-19-Investitionsprämie“ in Höhe von TEUR 628,5 aktiviert. Diese wird mittels der Bruttomethode bilan- ziert und unter den Zuschüssen öentlicher Hand entsprechend 124 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 11 der Nutzungsdauer der geförderten Anlagen aufgelöst und wird offen mit den Abschreibungen saldiert Im Posten Wertpapiere des Umlaufvermögens wurden im Ge- schäftsjahr EUR-Geldmarktfonds in Höhe von TEUR 344.514,9 er- worben. Es handelt sich hierbei um Wertpapiere, die hochliquide sind und nur einem unwesentlichen Wertschwankungsrisiko unter- liegen. Aktive latente Steuern Die latenten Steuern zum Bilanzstichtag wurden für temporäre Dif- ferenzen zwischen dem steuerlichen und unternehmensrechtli- chen Wertansatz für folgende Posten gebildet: Stand der temporären Dierenzen 31.12.2021 31.12.2020 TEUR TEUR Sachanlagen und immaterielle Vermögensgegenstände - Finanzanlagen Forderungen Unversteuerte Rücklagen und Zuschüsse der öfentlichen Hand - - Rückstellungen Finanzverbindlichkeiten Verbindlichkeiten - Betrag Gesamtdierenzen Daraus resultierende aktive latente Steuern per 31.12. (25%) Verlustvortrag Gesamte aktive Steuerlatenz Im Posten Rückstellungen sind im Wesentlichen zeitliche Unter- schiede zwischen dem unternehmensrechtlichen und dem steuer- rechtlichen Wertansatz bei Rückstellungen für Sozialkapital (Pensi- onen und Abfertigungen) und Jubiläumsgelder sowie Unterschiede bei den Wertansätzen von sonstigen Rückstellungen einbezogen. Temporäre Unterschiede aufgrund von steuerlichen Siebentelab- schreibungen (§ 12 Abs. 3 Z 2 KStG) sind mit TEUR 14.844,9 (31. Dezember 2020: TEUR 17.253,1) im Posten Finanzanlagen ent- halten. Weitere temporäre Standunterschiede ergeben sich aufgrund der Inanspruchnahme der steuerlichen degressiven Abschreibung. Diese betragen zum 31. Dezember 2021 TEUR 21.532,1 (31. Dezem- ber 2020: TEUR 2.971,0). Die unversteuerten Rücklagen sind entsprechend RÄG 2014 in den Gewinnrücklagen enthalten (Umgliederung per 31. Dezember 2015). Temporäre Unterschiede zum steuerrechtlichen Wertansatz führen zu passiven latenten Steuern (vor Saldierung). Die Lenzing AG und die in den Gruppenvertrag mit der B&C Hol- ding Österreich GmbH einbezogenen Konzerngesellschaften ha- ben im Vorjahr insgesamt einen steuerlichen Verlust realisiert, für den im Abschluss 2020 aktive latente Steuern in Höhe von TEUR 3.255,9 gebildet wurden. Diese Verlustvorträge sind im Ge- schäftsjahr 2021 vollständig mit dem laufenden steuerlichen Ge- winn verrechnet worden. Entwicklung der latenten Steuern 31.12.2021 31.12.2020 TEUR TEUR Stand am 01.01. (aktive latente Steuern) Zugang aus Umgründung Erfolgswirksame Veränderung - Verlustvortrag - Stand am 31.12. (aktive latente Steuern) Passiva Eigenkapital Das Grundkapital der Lenzing AG zum 31. Dezember 2021 beträgt EUR 27.574.071,43 (31. Dezember 2020: EUR 27.574.071,43) und ist in 26.550.000 Stückaktien (31. Dezember 2020: 26.550.000) ein- geteilt. Der auf eine Stückaktie entfallende Anteil am Grundkapital beträgt etwa EUR 1,04. Jede Stammaktie ist am Kapital im gleichen Ausmaß beteiligt und vermittelt die gleichen Rechte und Pichten, insbesondere das Recht auf eine beschlossene Dividende und das Stimmrecht in der Hauptversammlung. Der Ausgabebetrag der Ak- tien ist voll einbezahlt. Andere Klassen von Anteilen sind nicht aus- gegeben worden. Mit Hauptversammlungsbeschluss vom 12. April 2018 – unter gleichzeitiger Aufhebung der diesbezüglichen Hauptversamm- lungsbeschlüsse vom 22. April 2015 – wurde der Vorstand neuer- lich ermächtigt, mit Zustimmung des Aufsichtsrates das Grundka- pital innerhalb von fünf Jahren ab Eintragung in das Firmenbuch – allenfalls in Tranchen – gegen Bar- und/oder Sacheinlage um bis zu EUR 13.787.034,68 durch Ausgabe von bis zu 13.274.999 Stück- aktien zu erhöhen („genehmigtes Kapital“). Dieses genehmigte Ka- pital wurde im Firmenbuch am 23. Mai 2018 eingetragen. Darüber hinaus wurde der Vorstand mit Hauptversammlungsbe- schluss vom 12. April 2018 – unter gleichzeitiger Aufhebung der diesbezüglichen Hauptversammlungsbeschlüsse vom 22. April 2015 – ermächtigt mit Zustimmung des Aufsichtsrates bis spätes- tens 12. April 2023 auch in mehreren Tranchen Wandelschuldver- schreibungen auszugeben, die ein Bezugs- oder Umtauschrecht bzw. eine Bezugs- oder Umtauschpflicht auf bis zu 13.274.999 Aktien ge- währen bzw. vorsehen („bedingtes Kapital“). Die Bedienung kann über das bedingte Kapital und/oder über eigene Aktien erfolgen. Mit Hauptversammlungsbeschluss vom 18. Juni 2020 – unter gleichzeitiger Aufhebung der diesbezüglichen Hauptversamm- lungsbeschlüsse vom 12. April 2018 – wurde der Vorstand für die Dauer von 30 Monaten vom Tag der Beschlussfassung an ermäch- tigt, mit Zustimmung des Aufsichtsrates eigene Aktien der Gesell- schaft zu erwerben. Dabei dürfen die von der Gesellschaft erwor- benen eigenen Aktien 10 Prozent des Grundkapitals der Gesell- schaft nicht überschreiten. Der beim Rückerwerb zu leistende Ge- genwert muss innerhalb einer Bandbreite von +/-25 Prozent zum gewichteten durchschnittlichen Börsenschlusskurs der letzten 20 Börsetage vor Beginn des entsprechenden Rückkaufpro- gramms der Lenzing Aktie liegen. Der Vorstand wurde zudem ermächtigt, erworbene eigene Aktien ohne weiteren Hauptver- sammlungsbeschluss mit Zustimmung des Aufsichtsrates einzuzie- hen (samt Ermächtigung des Aufsichtsrates Änderungen der Satzung, die sich durch die Einziehung der Aktien ergeben, zu be- 125 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 12 schließen) oder wieder zu veräußern und die Veräußerungsbedin- gungen festzusetzen. Diese Ermächtigung kann ganz oder teil- weise und in Verfolgung eines oder mehrerer Zwecke durch die Gesellschaft, durch ein Tochterunternehmen (§ 189a Z7 UGB) oder für Rechnung der Gesellschaft durch Dritte ausgeübt werden. Wei- ters wurde der Vorstand für die Dauer von fünf Jahren vom Tag der Beschlussfassung an ermächtigt, für die Veräußerung eigener Ak- tien mit Zustimmung des Aufsichtsrates eine andere gesetzlich zu- lässige Art der Veräußerung als über die Börse oder ein öentliches Angebot, auch unter Ausschluss des Wiederkaufrechts (Bezugs- rechts) der Aktionäre, zu beschließen und die Veräußerungsbedin- gungen festzusetzen. Der Vorstand hat von den am bzw. bis 31. Dezember 2021 beste- henden Ermächtigungen zur Erhöhung des Grundkapitals, zur Aus- gabe von Wandelschuldverschreibungen und zum Rückkauf eige- ner Aktien in der Berichtsperiode keinen Gebrauch gemacht. Die gebundenen Kapitalrücklagen dürfen nur zum Ausgleich ei- nes Bilanzverlustes verwendet werden. Sie wurden durch Zufuhr von Mitteln gebildet, welche von den Aktionären über das Grund- kapital hinaus zugeossen sind. Die freien Gewinnrücklagen können jederzeit aufgelöst und als Teil des Bilanzgewinnes an die Aktionäre ausgeschüttet werden. Zuschüsse der öentlichen Hand Die Investitionszuschüsse der öentlichen Hand einschließlich der Emissionszertikate sowie Investitionsprämien werden als gesonderter Hauptposten zwischen Eigenkapital und Fremdkapital ausgewiesen. Die Aufgliederung ist aus der Übersicht über die Ent- wicklung der Zuschüsse der öentlichen Hand ersichtlich. Die Auösung der Investitionszuschüsse der öentlichen Hand so- wie Investitionsprämien erfolgt entsprechend der Nutzungsdauer der geförderten Anlagen und wird oen mit den Abschreibungen saldiert. Der Zuschuss aus Emissionsze rtikaten wurde dem Ver- brauch entsprechend aufgelöst. Rückstellungen Die sonstigen Rückstellungen entwickeln sich wie folgt: 2021 Rückstellungen für Stand 31.12.2020 Verbrauch Auösung Zuführung Umgliederung Stand 31.12.2021 TEUR TEUR TEUR TEUR TEUR TEUR Drohende Verluste - - Schadensfälle Noch nicht abgerechnete Lieferungen/Leistungen - - - Jubiläumsgelder - Sonderzahlungen - - - Resturlaube - - Sonstige Personalaufwendungen - - Übrige - - Gesamt - - - 2020 Rückstellungen für Stand 31.12.2019 Verbrauch Auösung Zuführung Zugang aus Verschmelzung Stand 31.12.2020 TEUR TEUR TEUR TEUR TEUR TEUR Drohende Verluste - - Schadensfälle - - Noch nicht abgerechnete Lieferungen/Leistungen - - Jubiläumsgelder - Sonderzahlungen - - Resturlaube - Sonstige Personalaufwendungen - - Übrige - - Gesamt - - Die Rückstellungen für drohende Verluste betreen im Wesent- lichen Vorsorgen für nachteilige Verträge und Verpichtungen aus zu erbringenden Infrastrukturleistungen. Die übrigen Rückstellungen betreen vor allem verbrauchte Emissionszertikate, Prüfungs- und Beratungskosten sowie Nach- lässe, Rabatte und Provisionen. 126 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 13 Die Entwicklung der Rückstellung für Pensionen, Abfertigungen und Jubiläumsgelder stellt sich wie folgt dar: 2021 Rückstellungen für Pensionen Abfertigungen Jubiläums- gelder TEUR TEUR TEUR In der Bilanz erfasste Werte: Rückstellung zum 31.12.2020 Periodenaufwand Auszahlungen - - - Rückstellung zum 31.12.2021 Wert nach § 14 EStG Aufwand im Geschäftsjahr: Laufender Dienstzeitaufwand Zinsaufwand Realisierung versicherungsmathematischer Verlust (+) / Gewinn (-) Periodenaufwand Annahmen zur Berechnung der erwarteten leistungsorientierten Ansprüche zum 31.12.2021: Diskontierungszinssatz Pensionssteigerung biszu - - Gehaltssteigerung Pensionseintrittsalter Frauen/Männer/Schwerarbeiter // Jahre //Jahre // Jahre Fluktuationsabschlag - - - 2020 Rückstellungen für Pensionen Abfertigungen Jubiläums- gelder TEUR TEUR TEUR In der Bilanz erfasste Werte: Rückstellung zum 31.12.2019 Zugang aus Verschmelzung der Lenzing Technik GmbH Periodenaufwand Auszahlungen - - - Rückstellung zum 31.12.2020 Wert nach § 14 EStG Aufwand im Geschäftsjahr: Laufender Dienstzeitaufwand Zinsaufwand Realisierung versicherungsmathematischer Verlust (+) / Gewinn (-) - - Periodenaufwand Annahmen zur Berechnung der erwarteten leistungsorientierten Ansprüche zum 31.12.2020: Diskontierungszinssatz Pensionssteigerung biszu - - Gehaltssteigerung Pensionseintrittsalter Frauen/Männer/Schwerarbeiter // Jahre //Jahre // Jahre Fluktuationsabschlag - - - Am 1. Jänner 2020 wurden durch die Verschmelzung der Lenzing Technik GmbH mit der Lenzing AG die Personalverpichtungen gegenüber den Mitarbeiter/innen übernommen. Für die Berechnung der Pension-, Abfertigungs- und Jubiläums- geldrückstellung wurde ein Abzinsungssatz verwendet, der aus erstrangigen festverzinslichen Industrieanleihen mit AA-Rating nach dem Standard eines international tätigen Versicherungsma- thematikers abgeleitet wurde. Anleihen, die im Vergleich zu den anderen Anleihen in ihrer Risikoeinstufung deutlich höhere oder niedrigere Zinsen aufweisen („statistische Ausreißer“), wurden da- bei nicht berücksichtigt. Die Währung und die Laufzeiten der zu Grunde gelegten Anleihen orientieren sich an der Währung und den voraussichtlichen Laufzeiten der zu erfüllenden Verpflichtungen. Die geschätzten Gehalts- und Pensionssteigerungen, die auch für die Zukunft als realistisch angesehen werden, wurden aus einer Durchschnittsbetrachtung der vergangenen Jahre abgeleitet. Das für die Berechnung herangezogene Pensionsantrittsalter rich- tet sich nach den jeweiligen gesetzlichen Bestimmungen. Für die Berechnung der leistungsorientierten Pensionspläne werden im Geschäftsjahr die biometrischen Rechnungsgrundlagen AVÖ 2018 P-Rechnungsgrundlagen für die Pensionsversicherung Angestellte verwendet. Die Berechnung der Abfertigungs- und Jubiläumsgeldrückstellung erfolgt unter Berücksichtigung der unternehmensspezischen Fluktuationsraten. Diese werden nach Dienstjahren gestaelt er- mittelt und beruht auf den durchschnittlichen Austrittszahlen der letzten fünf Jahre. Bei der Berechnung der Rückstellungen für die leistungsorientierten Abfertigungspläne werden dabei nur Austritte mit Abfertigungsanspruch berücksichtigt. In der Lenzing AG gibt es sowohl beitrags- als auch leistungsorien- tierte Pensionsvorsorgepläne. Bei beitragsorientierten Pensionszu- sagen treen die Gesellschaft nach Zahlung der vereinbarten Prä- mien keine Verpichtungen mehr. Eine Rückstellung wird daher nicht angesetzt. Den leistungsorientierten Pensionsverpichtungen wird durch die Bildung von Pensionsrückstellungen Rechnung getragen. Das Ri- siko im Zusammenhang mit diesen leistungsorientierten Pensions- plänen verbleibt bei der Lenzing AG. Die Berechnung erfolgt nach versicherungsmathematischen Grundsätzen entsprechend den Vorschriften des IAS 19 „Leistungen an Arbeitnehmer“. Mitarbeiter/innen, deren Dienstverhältnisse österreichischem Recht unterliegen und nach dem 31. Dezember 2002 begonnen haben, erwerben keine Abfertigungsansprüche. Für sie sind Bei- träge in Höhe von 1,53 Prozent des Lohnes bzw. Gehaltes an eine Mitarbeitervorsorgekasse zu zahlen. Aufgrund kollektivvertraglicher Regelungen ist die Lenzing AG ver- pichtet, Jubiläumsgeldzahlungen zu leisten, sofern ein Arbeitneh- mer für eine bestimmte Dauer im Unternehmen beschäftigt war. Diese Zahlungen basieren auf der Höhe des Bezuges zum Zeit- punkt des betreenden Dien stne hmerjubiläums. Die bei den be- treenden Jubiläen voraussichtlich zu zahlenden Beträge werden auf die Dienstzeit bis zu den Jubiläen verteilt. Der Barwert des auf die Dienstzeit bis zum Bilanzstichtag entfallenden Betrages wird rückgestellt. In der Lenzing AG besteht eine Umwandlungsoption 127 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 14 für die Mitarbeiter, das Dienstjubiläum in Zeitguthaben umwandeln zu können. Die Verpichtungen gegenüber ehemaligen Mitarbeitern des ver- kauften Geschäftsbereiches Kunststomaschinen (nunmehr SML Maschinengesellschaft mbH) und Folie (nunmehr Lenzing Plastics GmbH & Co KG) sowie Bildungszentrum (nunmehr BZL-Bildungs- zentrum Lenzing GmbH) werden bis zur Höhe der ktiven Ansprü- che zum Zeitpunkt des Verkaufs bzw. der Ausgliederung weiterhin von der Gesellschaft getragen. Der Barwert zum Bilanzstichtag wird in Bezug auf diese Verpichtungen rückgestellt, wobei für die Barwertermittlung angenommen wird, dass die Abfertigungen mit dem Übertritt der betreenden Dienstnehmer in den Ruhestand fällig werden. Mit dem Vertrag vom 27. September 2021 wurde die indische Be- triebstätte (LIN) von der Lenzing AG in die indische Tochtergesell- schaft Lenzing Fibers India Private Ltd . mit Wirkung vom 31. Au- gust 2021 übertragen. Dabei wurden insbesondere die Personal- verpichtungen für die betroenen Mitarbeiter/innen von der Lenzing Fibers India Private Ltd. übernommen. In Summe ergab sich daraus ein Ausgliederungsgewinn iHv TEUR 27,8. Verbindlichkeiten In den Verbindlichkeiten sind folgende Verbindlichkeiten mit ei- ner Restlaufzeit über 5 Jahren enthalten: Verbindlichkeiten 31.12.2021 31.12.2020 TEUR TEUR Hybridkapital Verbindlichkeiten aus Schuldscheindarlehen Verbindlichkeiten gegenüber Kreditinstituten Sonstige zinstragende Verbindlichkeiten Verbindlichkeiten gegenüber verbundenen Unternehmen Das Hybridkapital beträgt zum 31. Dezember 2021 TEUR 500.000,0 (31. Dezember 2020: TEUR 500.000,0). Es ist keine vertragliche Restlaufzeit vorgesehen. Im Dezember 2020 wurde eine nachrangige unbefristete Anleihe mit einem Nominalvolumen von TEUR 500.000,0 und einer Verzin- sung von 5,75% p.a. emittiert. Die Anleihe hat eine unendliche (ewige) Laufzeit und kann erstmals am 7. Dezember 2025 durch die Lenzing AG gekündigt und getilgt werden. Die Investoren haben kein Kündigungsrecht. Falls die Anleihe nicht gekündigt wird, wird die Anleihe ab dem 8. Dezember 2025 mit einem veränderten- Zinssatz verzinst (dann geltender 5-Jahres Swapsatz plus Marge von 11,208%). Die Zinsen sind nachträglich am 7. Dezember eines jeden Jahres zur Zahlung fällig, sofern sich die Lenzing AG nicht entscheidet, die betreende Zinszahlung aufzuschieben. Ausstehende aufgescho- bene Zinszahlungen müssen unter bestimmten Umständen bezahlt werden, insbesondere wenn die Hauptversammlung der Lenzing AG beschließt, eine Dividende zu leisten. Die Verbindlichkeiten aus Schuldscheindarlehen stellen sich wie folgt dar: Verbindlichkeiten aus Schuldscheindarlehen per 31.12.2021 Fälligkeit Ursprungs- laufzeit Buchwert Verzinsung bis Jahre TEUR 2022/05 x 2022/11 x Restlaufzeit von bis zu 1 Jahr 2024/12 x 2024/12 variabel 2025/05 x 2025/11 x 2026/12 x 2026/12 variabel 2026/12 x 2029/12 variabel 2029/12 x 2034/12 x Restlaufzeit von mehr als 1 Jahr Verbindlichkeiten aus Schuldscheindarlehen per 31.12.2020 Fälligkeit Ursprungs- laufzeit Buchwert Verzinsung bis Jahre TEUR Restlaufzeit von bis zu 1 Jahr 2022/05 x 2022/05 variabel 2022/11 x 2024/12 x 2024/12 variabel 2025/05 x 2025/11 x 2026/12 x 2026/12 variabel 2026/12 x 2029/12 variabel 2029/12 x 2034/12 x Restlaufzeit von mehr als 1 Jahr Im Geschäftsjahr 2021 hat die Lenzing Gruppe keine weiteren Schuldscheindarlehen begeben. Im Vorjahr belief sich das Emissi- onsvolumen auf TEUR 114.000,0 und TUSD 20.000,0 (Buchwert TEUR 18.001,8). Es wurde eine Laufzeit von 5 bis 7 Jahren mit xer und variabler Verzinsung vereinbart. Von den bestehenden Schuldscheinen hat die Lenzing AG im Ge- schäftsjahr 2021 TEUR 42.000,0 (2020: TEUR 23.500,0) vorzeitig zurückgezahlt. Die sonstigen zinstragenden Verbindlichkeiten enthalten ERP- Kredite, Forschungsförderungskredite und Verbindlichkeiten aus Finanzierungsleasing. 128 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 15 Von den Verbindlichkeiten gegenüber Kreditinstituten und sonstigen zinstragenden Verbindlichkeiten von TEUR 613.470,0 (31. Dezember 2020: TEUR 502.257,3) sind wie im Vorjahr keine durch Grundpfandrechte und sonstige dingliche Sicherheiten be- sichert. Von den Verbindlichkeiten gegenüber verbundenen Unternehmen betreen TEUR 10.190,2 (31. Dezember 2020: TEUR 6.499,3) Liefe- rungen und Leistungsverrechnungen, TEUR 493,0 (31. Dezember 2020: TEUR 92.226,9) sonstige Verrechnungen, davon betreen zum 31. Dezember 2021 TEUR 0 (31. Dezember 2020: TEUR 88.000,0) die Kaufpreisverbindlichkeit für den Erwerb von 43,81 % an der PT. South Pacic Viscose sowie TEUR 28.043,8 (31. Dezember 2020: TEUR 7.625,6) Verbindlichkeiten aus Steu- erumlagen. Weiters bestehen Verbindlichkeiten aus Darlehen in Höhe von TEUR 24.000,0 (31. Dezember 2020: TEUR 38.000,0) gegenüber der Lenzing Global Finance GmbH aus der Weiterver- rechnung der vereinnahmten nanziellen Mittel aus den von der Lenzing Global Finance GmbH im Geschäftsjahr 2015 und 2012 begebenen Schuldscheinen. In den sonstigen Verbindlichkeiten sind Aufwendungen in Höhe von TEUR 15.178,5 (31. Dezember 2020: TEUR 19.445,7) enthalten, die erst nach dem Bilanzstichtag zahlungswirksam werden. Davon betreffen TEUR 1.890,4 (31. Dezember 2020: TEUR 1.890,4) noch nicht bezahlte Zinsen für die unbefristete Anleihe und TEUR 3.809,4 (31. Dezember 2020: TEUR 4.484,5) Verbindlichkeiten für das Altersteilzeitmodell gem. § 27 ALVG. Rechnungsabgrenzungsposten Die passive Rechnungsabgrenzung beinhaltet im Wesentlichen transitorisch abgegrenzte Zinsenzuschüsse des Umwelt- und des Forschungsförderungsfonds. Haftungsverhältnisse Haftungsverhältnisse liegen in folgendem Umfang vor: Haftungsverhältnisse 31.12.2021 31.12.2020 TEUR TEUR Bürgschafts- und Garantieerklärungen für den Wasserreinhaltungsverband Lenzing - Lenzing AG für den Bau der zweiten und dritten Ausbaustufe der Abwasserreinigungsanlage Haftungsübernahmen für verbundene Unternehmen Haftungsübernahmen gegenüber Dritten Gesamt Die Lenzing AG hat harte Patronatserklärungen, die in ihrer Höhe unbestimmt sind, abgegeben. Die Lenzing AG verpichtet sich da- rin, die Lenzing Fibers (Grimsby) Limited sowie die Lenzing Fibers Inc. mit ausreichenden Mitteln auszustatten, damit sie ihre nanzi- ellen Verpichtungen aus abgeschlossenen Energielieferverträgen erfüllen können. Die Patronatserklärungen können von Seiten der Lenzing AG gekündigt werden. Des Weiteren besteht eine Garantieerklärung der Lenzing AG, die in ihrer Höhe unbestimmt ist, in der sie garantiert, dass die Pulp Trading GmbH ihre nanziellen Verpichtungen aus einem abge- schlossenen Liefervertrag erfüllt. Darüber hinaus bestehen Garantieerklärungen der Lenzing AG, in der sie garantiert, dass die Lenzing (Thailand) Co., Ltd. ihre Bank- verpichtungen bis maximal TUSD 36.000,0 – d.s. TEUR 31.762,8 (31.12.2020: bis maximal TUSD 36.000,0 – d.s. TEUR 29.313,6) und bis maximal TEUR 16.000,0 erfüllt. Des Weiteren bestehen Garantieerklärungen der Lenzing AG, in der sie garantiert, dass die LD Celulose S.A. ihre Bankverpichtun- gen bis maximal TUSD 114.200,0 – d.s. TEUR 100.758,8 (31.12.2020: bis maximal TUSD 0,0 – d.s. TEUR 0,0) und bis maximal TEUR 25.000,0 (31.12.2020: TEUR 0,0) erfüllt. Die Lenzing AG ist zu Kapitaleinschüssen in die Versicherungszelle White Rock Insurance (Europe) Protected Cell Company Limited verpichtet, falls die nanziellen Mittel in der Zelle durch Scha- denszahlungen an die Lenzing Töchter nicht ausreichen. Die maxi- male Einschusspicht pro Jahr sind TEUR 16.000,0. 129 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 16 Umsatzerlöse Der Umsatz setzt sich wie folgt zusammen: Umsatzerlöse nach Märkten 2021 2020 TEUR TEUR Österreich Europa inkl. Türkei ohne Österreich Asien Amerika Sonstige Gesamt Umsatzerlöse nach Bereichen 2021 2020 TEUR TEUR Division Fiber Division Pulp Others Gesamt Sonstige betriebliche Erträge Die übrigen sonstigen betrieblichen Erträge beinhalten: Übrige sonstige betriebliche Erträge 2021 2020 TEUR TEUR Forschungs- Lehrlings- und Bildungsprämien Beiträge des österreichischen Forschungsförderungsfonds Auösung von Wertberichtigungen Auösung von Zuschüssen (Emissionszertikaten) Fremdwährungsdierenzen Übrige Gesamt Personalaufwand Die Aufwendungen für Altersversorgung (inkl. Rückstellungs- dotierungen und -auösungen sowie Erträgen aus der Rückde- ckungsversicherung) setzen sich wie folgt zusammen: Aufwendungen für 2021 2020 TEUR TEUR Beitragsorientierte Pläne (Pensionskassenbeiträge) Leistungsorientierte Pläne - Gesamt 1) Umgliederung von Nettozinsen in Höhe von TEUR 225,0 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis Die Aufwendungen für Altersversorgung (inkl. Rückstellungsdotie- rungen und -auösungen sowie Erträgen aus der Rückdeckungs- versicherung) verteilen sich wie folgt: Aufwendungen für 2021 2020 TEUR TEUR Mitglieder des Vorstandes Aktive Mitglieder Ehemalige Mitglieder und deren Hinterbliebene - Leitende Arbeitnehmer/innen Andere Arbeitnehmer/innen Gesamt 1) Umgliederung von Nettozinsen in Höhe von TEUR 63,3 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis 2) Umgliederung von Nettozinsen in Höhe von TEUR 161,7 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis Die Lenzing AG hat eine Rückdeckungsversicherung für Pensions- ansprüche abgeschlossen. Der Aufwand aus diesen Pensionszusa- gen (exkl. Rückstellungsdotierungen und -auösungen) in Höhe von TEUR 701,8 (2020: TEUR 688,8) sowie der Ertrag aus der Rück- deckungsversicherung von TEUR 151,9 (2020: TEUR 149,5) sind im Posten Aufwendungen für Altersversorgung enthalten. Die Aufwendungen für Abfertigungen und Leistungen an be- triebliche Mitarbeitervorsorgekassen (inkl. Rückstellungsdotie- rungen und -auösungen der Rückstellung für Abfertigungen) set- zen sich wie folgt zusammen: Aufwendungen für 2021 2020 TEUR TEUR Abfertigungen (inkl. freiwilligen Abfertigungen) Leistungen an betriebliche Mitarbeitervorsorgekassen Gesamt 1) Umgliederung von Nettozinsen in Höhe von TEUR 607,5 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis Erläuterungen zur Gewinn - und Verlustrechnung 130 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 17 Die Aufwendungen für Abfertigungen und Leistungen an betriebli- che Mitarbeitervorsorgekassen (inkl. Rückstellungsdotierungen und -auösungen) verteilen sich wie folgt: Aufwendungen für 2021 2020 TEUR TEUR Mitglieder des Vorstandes Aktive Mitglieder Leitende Arbeitnehmer/innen Andere Arbeitnehmer/innen Gesamt 1) Umgliederung von Nettozinsen in Höhe von TEUR 6,3 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis 2) Umgliederung von Nettozinsen in Höhe von TEUR 601,2 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis Die Aufwendungen für Jubiläumsgelder (inkl. Rückstellungs- dotierungen und -auösungen) verteilen sich wie folgt: Aufwendungen für 2021 2020 TEUR TEUR Löhne Gehälter Soziale Aufwendungen Gesamt 1) Umgliederung von Nettozinsen in Höhe von TEUR 59,9 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis 2) Umgliederung von Nettozinsen in Höhe von TEUR 119,8 aus leistungsorientierten Plänen vom Personalaufwand in das Finanzergebnis Abschreibungen Die Abschreibungen auf immaterielle Gegenstände des Anla- gevermögens und Sachanlagen beinhalten die planmäßigen Ab- schreibungen in Höhe von TEUR 76.783,6 (2020: TEUR 76.572,6). Die Erträge aus der Auösung der Investitionszuschüsse der öf- fentlichen Hand vermindern die Abschreibungen in Höhe von TEUR 847,9 (2020: TEUR 805,2). Sonstige betriebliche Aufwendungen Die übrigen sonstigen betrieblichen Aufwendungen umfassen: Übrige sonstige betriebliche Aufwendungen 2021 2020 TEUR TEUR Vertriebsaufwendungen (inkl. Werbeaufwendungen) Instandhaltungen und Fremdleistungen Konzernleistungen Rechts-, Prüfungs- und Beratungsaufwendungen Versicherungsaufwendungen Miet- und Leasingaufwendungen Gebühren, Spesen und sonstige Beiträge Schulung der Belegschaft Abfallentsorgung Reise- und Fahrtkosten Fremdwährungsdierenzen Sonstige Aufwendungen Gesamt In den sonstigen Aufwendungen sind vor allem Aufwendungen für Patente und Lizenzen, allgemeine Verwaltungskosten, Wertberich- tigungen, Aufwendungen für den Verbrauch von Büromaterial, Auf- wendungen des Aufsichtsrates, Aufwendungen für Schutzartikel und Schutzkleidung sowie der Verbrauch von Lebensmitteln der werkseigenen Küche enthalten. Finanzergebnis Die Erträge aus Beteiligungen betreen im Wesentlichen Divi- denden der Pulp Trading GmbH in Höhe von TEUR 62.000,0 (2020: TEUR 37.300,0), der Lenzing Fibers Holding GmbH von TEUR 14.400,0 (2020: TEUR 35.167,6), des BZL – Bildungszentrum Lenzing GmbH in Höhe von TEUR 525,0 (2020: TEUR 600,0) der Lenzing Papier GmbH in Höhe von TEUR 600,00 (2020: TEUR 0,0) und der EQUI-Fibres Beteiligungsgesellschaft mbH in Höhe von TEUR 250,0 (2020: TEUR 0,0). In den Erträgen aus anderen Wertpapieren und Ausleihungen des Finanzanlagevermögens sind Erträge aus Zinsforderungen an verbundene Unternehmen von TEUR 15.440,7 (2020: TEUR 6.964,3) erfasst. Sonstige Zinsen und ähnliche Erträge resultieren im Wesent- lichen aus der Aufzinsung von Ausleihungen in Höhe von TEUR 985,5 (2020: TEUR 944,5) und aus Guthaben bei Kreditinsti- tuten von TEUR 61,0 (2020: TEUR 54,2). Die Erträge aus dem Abgang von und der Zuschreibung zu Finanzanlagen enthalten im Wesentlichen Fremdwährungsge- winne bzw. Fremdwährungseekte auf Ausleihungen in Höhe von TEUR 15.085,4 und Erträge aus der Liquidation der Penique S.A in Höhe von TEUR 6.079,4 und Avit Investments Limited in Höhe von TEUR 629.6, sowie die Zuschreibung von Ausleihungen in Höhe von TEUR 600,0. Im Vorjahr waren Erträge aus dem Verkauf der Beteiligung der WWE Wohn- und Wirtschaftspark Entwicklungs- gesellschaft m.b.H. in Höhe von TEUR 750,0. enthalten. 131 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 18 Die Aufwendungen aus Finanzanlagen beinhalten im Abschrei- bungen von Beteiligungen in Höhe von TEUR 1.669,6 (2020: TEUR 0,0) sowie Abschreibungen von Ausleihungen und zugehö- rigen Zinsforderungen in Höhe von TEUR 2.086,5 (2020: TEUR 1.466,0) und Abschreibungen von Wertpapieren des Umlauf- vermögens in Höhe von TEUR 1.000,0 (2020: TEUR 0,0). Die Einbringung der Anteile an der Lenzing Technik GmbH im Jahr 2020 durch die Pulp Trading GmbH erfolgte zum unternehmens- rechtlichen Buchwert in Höhe von EUR 6.942,7 und ergibt einen Einbringungsgewinn. Aus der Verschmelzung der Lenzing Tech- nik GmbH auf die Lenzing AG ergibt sich ein Verschmelzungsge- winn in Höhe von TEUR 13.452,0. Dem unternehmensrechtlichen Beteiligungsbuchwert an der Lenzing Technik GmbH in Höhe von TEUR 6.942,7 stand ein unternehmensrechtliches Eigenkapital der Lenzing Technik GmbH zum 1. Jänner 2020 (= 31. Dezember 2019) von TEUR 20.394,7 gegenüber. Im Geschäftsjahr 2021 wurden zur verbesserten Darstellung die Nettozinsen aus leistungsorientierten Plänen vom Personalauf- wand in das Finanzergebnis in Höhe von TEUR 718,7 (2020: TEUR 1.012,2) umgegliedert. Steuern vom Einkommen und vom Ertrag Die laufenden Steuern vom Einkommen und vom Ertrag setzen sich wie folgt zusammen: Laufende Steuern vom Einkommen und vom Ertrag 2021 2020 TEUR TEUR Körperschaftsteuer aus der Gruppenbesteuerung Steuergutschrift vom Gruppenträger - - Steuerumlagen der Gruppenmitglieder Steuerumlagen an Gruppenmitglieder - - Sonstige Steuern vom Einkommen und vom Ertrag Gesamt - In der Position Steuergutschrift vom Gruppenträger sind auch Be- träge aus Vorperioden enthalten; dies führt im Geschäftsjahr 2021 zu einem Steuerertrag in Höhe von TEUR 747,1 (2020: TEUR 24,1). Der im Vorjahr aus Verlustvorträgen aktivierte latente Steuerertrag in Höhe von TEUR 3.255,9 wurde im Geschäftsjahr 2021 gänzlich mit laufenden steuerlichen Gewinnen verrechnet. Weiters wurde ein latenter Steueraufwand für die Verminderung der aktiven laten- ten Steuern in Höhe von TEUR 6.905,1 (2020: latenter Steuerertrag in Höhe von TEUR 758,0) erfasst. Die sonstigen Steuern vom Einkommen und vom Ertrag enthalten wie im Vorjahr im Wesentlichen Körperschaftsteuern aus Vorperi- oden und ausländische Quellensteuern. 132 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 19 Angaben zu sonstigen nanziellen Verpichtungen und außerbilanziellen Geschäften Verpichtungen aus der Nutzung von in der Bilanz nicht ausgewie- senen Sachanlagen liegen aufgrund von Leasing-, Pacht- und Mietverträgen in folgendem Umfang vor: Nutzungsverpichtungen 31.12.2021 31.12.2020 TEUR TEUR Im Folgejahr In den folgenden fünf Jahren Verpichtungen aus oenen Bestellungen für die Lieferung von Sachanlagen liegen in folgender Höhe vor: Bestellobligo 31.12.2021 31.12.2020 TEUR TEUR Bestellobligo für Investitionsvorhaben Davon gegenüber verbundenen Unternehmen Es gibt es rechtlich unverbindliche Erklärungen der Lenzing AG, Tochtergesellschaften mit ausreichend nanziellen Mitteln auszu- statten („weiche Patronatserklärungen“), die sich nicht an be- stimmte Personen richten. Die Bankgarantien für Verbindlichkeiten aus laufenden Geschäfts- beziehungen betragen zum 31. Dezember 2021 TEUR 1.937,0 (31. Dezember 2020: TEUR 1.357,8). Für die zukünftigen Eigenkapitaleinschüsse der Lenzing AG in die LD Celulose S.A. im Jahr 2022 bestehen Bankgarantien in Höhe von TEUR 55.143,5 (31. Dezember 2020: TEUR 64.489,0). Diese Bankgarantien waren zum 31. Dezember 2021 nicht gezogen. Vor einem US-Gericht wurde eine Klage auf nicht bezierte Scha- denersatzansprüche in Zusammenhang mit einer ehemaligen Be- teiligung gegen die Lenzing AG eingebracht. Die Lenzing AG hat diese Ansprüche zurückgewiesen. Eine Leistung von Schadener- satzzahlungen wird vom Management als nicht wahrscheinlich ein- geschätzt. Verkauf von Forderungen / Factoring Es bestehen Factoring-Vereinbarungen, aufgrund derer Banken zum Ankauf bestimmter Forderungen aus Lieferungen und Leis- tungen der Lenzing Gruppe über ein monatlich revolvierendes Nominalvolumen verpichtet sind. Die Lenzing Gruppe ist zum Verkauf dieser Forderungen berechtigt. Die Vereinbarungen haben eine unbestimmte Laufzeit; jede Partei hat das Recht, die Verein- barungen mit einer Frist aufzukündigen und dann auslaufen zu las- sen. Die Factoring-Vereinbarungen haben per 31. Dezember 2021 ein maximal ausnutzbares Nominalvolumen von insgesamt TEUR 50.000,0 (31. Dezember 2020: TEUR 50.000,0). Diese sind seit dem Geschäftsjahr 2017 stillgelegt. Sonstige Angaben 133 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 20 Verwendung von derivativen Finanzinstrumenten Die Lenzing AG setzt Devisentermingeschäfte sowie Zinswäh- rungsderivate als Sicherungsgeschäfte ein, um Zins- und Wäh- rungsrisiken aus dem operativen Geschäft zu vermindern. Die De- visentermingeschäfte werden jährlich im Vorhinein auf Basis der voraussichtlichen Umsatzerlöse bzw. Materialaufwendungen in der betreenden Fremdwährung festgelegt. Die Zinswährungsde- rivate dienen zur Absicherung des Zins- und Währungsrisikos eines Schuldscheindarlehens in USD mit variabler Verzinsung. Zum Bilanzstichtag bestanden folgende Devisentermingeschäfte und Zinswährungsderivate: 31.12.2021 Beizulegender Wert Art der derivativen Finanzinstrumente Nominale 1 Sicherungs- zeitraum positiv negativ Buchwert Bilanzposten FW 1.000 bis TEUR TEUR TEUR Devisentermingeschäfte CNY/CNH-Verkauf / EUR-Kauf CNY/CNH / - BRL-Verkauf / EUR-Kauf BRL / - - übrige Rückstellungen USD-Kauf / EUR-Verkauf USD / - Summe - - Zinswährungsderivate USD-Kauf / EUR-Verkauf USD / - - Nettoposition - 1) Der Nominalwert wird als Bruttovolumen ausgewiesen 2) beizulegender Wert: + = Forderung / - = Verbindlichkeit aus Sicht der Lenzing AG 31.12.2020 Beizulegender Wert Art der derivativen Finanzinstrumente Nominale 1 Sicherungs- zeitraum positiv negativ Buchwert Bilanzposten FW 1.000 bis TEUR TEUR TEUR Devisentermingeschäfte CNY/CNH-Verkauf / EUR-Kauf CNY/CNH / - - übrige Rückstellungen BRL-Verkauf / EUR-Kauf BRL / - - übrige Rückstellungen CZK-Verkauf / EUR-Kauf CZK / - - Summe - - Zinswährungsderivate USD-Kauf / EUR-Verkauf USD / - - Nettoposition - 1) Der Nominalwert wird als Bruttovolumen ausgewiesen. 2) beizulegender Wert: + = Forderung / - = Verbindlichkeit aus Sicht der Lenzing AG Die in den obigen Tabellen angegebenen beizulegenden Werte der derivativen Finanzinstrumente entsprechen den Marktwerten zum Bilanzstichtag. Sie wurden unter Anwendung anerkannter nanz- mathematischer und ggf. statistischer Bewertungsmodelle und ak- tueller Marktparameter zum Bilanzstichtag durch Banken, andere externe Partner bzw. intern ermittelt. 134 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 21 Bei den beizulegenden Werten der Sicherungsgeschäfte handelt es sich um unrealisierte Gewinne bzw. Verluste, die sich mit den gegenläugen Verlusten bzw. Gewinnen aus den dazugehörigen Grundgeschäften ausgleichen. In Anwendung der AFRAC-Stellungnahme „Die unternehmens- rechtliche Bilanzierung von Derivaten und Sicherungsinstrumen- ten“ vom Dezember 2020 werden zum Bilanzstichtag dokumen- tierte Sicherungsbeziehungen (Bewertungseinheiten) zwischen Devisentermingeschäften bzw. Zinswährungsderivaten, die als Si- cherungsinstrumente dienen, und Grundgeschäften zur Absiche- rung von Fremdwährungs- bzw. Zinsrisiken gebildet. Liegt eine derartige Bewertungseinheit vor, ist ein Derivat am Bilanzstichtag nicht gesondert zu bewerten. Bewertungsobjekt ist vielmehr das bereits bilanzierte abgesicherte Grundgeschäft (Fremdwährungs- forderung bzw. -verbindlichkeit, bzw. die variabel verzinste Ver- bindlichkeit) zusammen mit dem Sicherungsgeschäft (Devisenter- mingeschäft bzw. Zinswährungsswap). Zur Absicherung gegen Zins- und Währungsrisiken aus der Auf- nahme von Schuldscheindarlehen in Fremdwährung werden in der Lenzing AG Zinswährungsswaps eingesetzt. Diese derivativen Fi- nanzinstrumente dienen dazu die Variabilität zwischen den Zins- und Tilgungszahlungen der erhaltenen Schuldscheindarlehen in USD auszugleichen. Die Sicherungsgeschäfte werden zur Absiche- rung des Fremdwährungsänderungsrisikos aus der Aufnahme der Schuldscheindarlehen in USD und den Rück- und Zinszahlungen in Fremdwährung sowie des Zinsrisikos, welches aus den variablen Zinszahlungen des gesicherten Grundgeschäfts resultiert, festge- legt. Die ineektiven Anteile der Derivate werden, sofern negativ, als Drohverlust rückgestellt (per 31. Dezember 2021: TEUR 0,0 und per 31. Dezember 2020: TEUR 0,00). Die Bestimmung der Ineek- tivität erfolgt unter Anwendung der Dollar-Oset-Methode unter Rückgri auf ein hypothetisches Derivat. Bei Devisentermingeschäften werden bei der Bemessung einer all- fälligen Drohverlustrückstellung mit an Sicherheit grenzender Wahrscheinlichkeit eintretende gegenläuge, erfolgswirksame Zahlungsströme berücksichtigt (zukünftige Zahlungseingänge aus geplanten Umsatzerlösen bzw. Zahlungsausgänge aus geplanten Materialaufwendungen in Fremdwährung). Im Jahresabschluss 2021 wurde eine Rückstellung für drohende Verluste für negative Marktwerte von Derivaten mit einer ursprünglichen Laufzeit von mehr als 12 Monaten in Höhe von TEUR 6.134,3 (31. Dezember 2020: TEUR 7.971,4) gebildet. Zum 31. Dezember 2021 wurde auf eine Drohverlustrückstellung aus kurzfristigen Sicherungsbezie- hungen zukünftiger Zahlungsströme in Höhe von TEUR 5.124,3 (31. Dezember 2020: TEUR 596,7 1 ) verzichtet, da sich diese unrea- lisierten Verluste mit hoher Eintrittswahrscheinlichkeit mit den ge- genläugen unrealisierten Gewinnen aus den zukünftigen Zah- lungseingängen bzw. Zahlungsausgängen in Fremdwährung aus- gleichen werden. 1) Änderung Vorjahreswert Der wirksame Ausgleich zwischen unrealisierten Verlusten und Gewinnen wird durch Effektivitätstests nachgewiesen. Bei Fremd- währungsabsicherungen werden die Grundgeschäfte und die Si- cherungsinstrumente für die Effektivitätsmessung je Währung in zu- mindest quartalsweisen Laufzeitbändern zusammengefasst. Die prospektive Sicherungswirkung der Sicherungsbeziehungen wird durch einen Vergleich der wesentlichsten Konditionen nachgewiesen. Dabei werden die geplanten Grundgeschäfte den abgeschlossenen Sicherungsinstrumenten gegenübergestellt. Die retrospektive Siche- rungswirkung der Bewertungseinheiten wird durch Vergleich der seit Sicherungsbeginn tatsächlich erfolgten Zahlungsströme der Grundgeschäfte mit den tatsächlichen Zahlungsströmen der Siche- rungsinstrumente nach der Kompensierungsmethode beurteilt. Aufgrund der identen, aber gegenläufigen Parameter kann von einer hoch wirksamen Sicherungsbeziehung ausgegangen werden. An der Bonität der Kontrahenten, die an einer Bewertungseinheit beteiligt sind, bestehen zum Bilanzstichtag keinerlei Zweifel. Organe und Arbeitnehmer/innen Durchschnittliche Zahl der Mitarbeiter/innen (Köpfe) 2021 2020 Angestellte Arbeiter/innen Gesamt Beziehungen zu den Mitgliedern des Vorstandes und den Mitgliedern des Aufsichtsrates der Lenzing AG Die aufgewendeten Vergütungen für das Management in Schlüs- selpositionen im Rahmen ihrer Funktion, das sich aus den aktiven Mitgliedern des Vorstandes und des Aufsichtsrates der Lenzing AG zusammensetzt, stellen sich zusammengefasst wie folgt dar (inklu- sive Rückstellungsveränderungen): 135 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 22 Vergütung des Managements in Schlüsselpositionen (aufgewendet) TEUR 2021 2020 Vergütung des Vorstandes Grundgehalt Sachbezüge und andere Vorteile (insb. zur Nutzung überlassene Geschäftsfahrzeuge) Kurzfristiger variabler Leistungsbonus (Short-Term Incentive; STI) Außerordentliche Vergütungsleistungen (Sonderboni) Kurzfristig fällige Leistungen Langfristiger variabler Leistungsbonus (Long-Term Incentive; LTI) Außerordentliche Vergütungsleistungen (Sonderboni) Andere langfristig fällige Leistungen Beiträge zur überbetrieblichen Pensionskasse Leistungen nach Beendigung des Arbeitsverhältnisses Einmalige Abndung Leistungen aus Anlass der Beendigung des Arbeitsverhältnisses Vergütung des Vorstandes Vergütung des Aufsichtsrates Kurzfristig fällige Leistungen Summe Die Zielgröße für den langfristigen Bonusanteil (Long-Term Incen- tive / LTI) der Vorstände setzt sich aus ausgewählten Kennzahlen der Lenzing Gruppe zusammen, jeweils über einen dreijährigen Be- rechnungszeitraum. Zusätzlich wird in diesen Berechnungszeiträu- men die Kapitalmarktperformance der Gesellschaft im Vergleich zu einer ausgewählten Gruppe börsennotierter Unternehmen bewer- tet. Den vom Betriebsrat delegierten Arbeitnehmervertretern im Auf- sichtsrat steht neben der Vergütung für Ihre Tätigkeit im Aufsichts- rat (insbesondere Sitzungsgelder) eine reguläre Entlohnung (Lohn oder Gehalt und Abfertigungs- sowie Jubiläumsgeldzahlungen) im Rahmen ihres Dienstvertrages zu. Die Entlohnung entspricht einer angemessenen Vergütung für die ausgeübte Funktion bzw. Tätig- keit im Unternehmen. In markt- und konzernüblicher Weise gewährt die Lenzing AG den Mitgliedern des Vorstandes, wie auch teilweise ihren leitenden An- gestellten und dem Aufsichtsrat, weitere Leistungen, die als geld- werte Vorteile angesehen werden. So besteht Versicherungsschutz (D&O, Unfall- und Rechtsschutzversicherung etc.), dessen Kosten von der Lenzing Gruppe getragen wird. Es erfolgen Gesamtprä- mienzahlungen an die Versicherer, sodass eine spezische Zuord- nung an den Vorstand und Aufsichtsrat nicht stattndet. Außerdem werden den Mitgliedern des Vorstandes und teilweise den leiten- den Angestellten Geschäftsfahrzeuge zur Nutzung überlassen. Da- neben erhalten die Mitglieder des Vorstandes und des Aufsichts- rates Aufwandersatz für angefallene Kosten, insbesondere für Rei- sespesen. Die Grundsätze des Vergütungssystems für Vorstand und Aufsichtsrat sind im Vergütungsbericht laut Konzernnotes 2021 der Lenzing Gruppe detailliert ausgeführt und veröentlicht. Mitgliedern des Vorstandes und des Aufsichtsrates wurden keine Vorschüsse, Kredite oder Haftungen gewährt. Die Lenzing Gruppe ist keine Haftungsverhältnisse zu Gunsten des Vorstandes und des Aufsichtsrates eingegangen. Für die ehemaligen Mitglieder des Vorstandes der Lenzing AG oder deren Hinterbliebene wurden Leistungen nach Beendigung des Arbeitsverhältnisses in Form von Erträgen in der Gewinn- und Verlustrechnung in Höhe von TEUR 12,1 (2020: Aufwendungen in Höhe von TEUR 607,0) erfasst. Der Barwert der dafür gebildeten Pensionsrückstellung nach Abzug des beizulegenden Zeitwerts des Planvermögens (Nettoschuld) beträgt zum 31. Dezember 2021 TEUR 6.511,5 (31. Dezember 2020: TEUR 7.284,8). Honorare des Abschlussprüfers Die aufgewendeten Honorare für Leistungen der KPMG Austria GmbH, Linz setzten sich wie folgt zusammen: Aufgewendete Honorare des Abschlussprüfers 2021 2020 TEUR TEUR Prüfung des Jahresabschlusses (inkl. Konzernabschluss) Andere Bestätigungsleistungen Sonstige Leistungen Gesamt 136 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 23 Angaben zur Gruppenbesteuerung Die Lenzing AG und die im Gruppenvertrag einbezogenen Toch- tergesellschaften sind Gruppenmitglieder in der zwischen der B&C Holding Österreich GmbH als Gruppenträger und der Lenzing AG sowie weiteren Tochtergesellschaften der Lenzing AG als Grup- penmitglieder am 27. Juli 2017 abgeschlossenen steuerlichen Un- ternehmensgruppe gemäß § 9 öKStG (österreichisches Körper- schaftsteuergesetz). Der Steuerausgleichsvertrag wurde mit Wir- kung ab dem Wirtschaftsjahr 2021 der Lenzing Aktiengesellschaft sowie der (un)mittelbaren Tochtergesellschaften, die ebenfalls Gruppenmitglieder sind, am 04. November 2021 neu gefasst, in dem auch die Neuregelungen betreend Zinsschranke (§ 12a KStG) berücksichtigt sind. Im Zuge der Gruppenbesteuerung kommt es zwischen den einbe- zogenen Gruppenmitgliedern zu einer Aufrechnung von steuerli- chen Gewinnen und Verlusten. Zukünftige Steuerverpichtungen aus der Anrechnung von Verlusten ausländischer Tochtergesell- schaften werden ohne Abzinsung im Jahresabschluss erfasst. Der Gruppen- und Steuerausgleichsvertrag verpichtet die Lenzing AG, eine Steuerumlage in Höhe der auf den steuerpflichti- gen Gewinn der Gesellschaft und der in die Gruppe einbezogenen Tochtergesellschaften entfallenden Körperschaftsteuer zu entrich- ten. Allfällige beim Gruppenträger auf das gesamte Gruppener- gebnis eektiv anrechenbare in- und ausländische Quellensteuern sowie weitergeleitete Mindestkörperschaftsteuern kürzen die von der Lenzing AG zu zahlende Steuerumlage. Sofern im Veranlagungsjahr laufende Verluste bzw. Verlustvorträge, die vom Gruppenträger selbst verursacht wurden, gegen positive Ergebnisse der Steuergruppe der Lenzing AG verrechnet werden können, kommt es zu einer Reduktion der von der Lenzing AG zu leistenden Steuerumlage. Die Reduktion der Steuerumlage beträgt 25 Prozent des geltenden Körperschaftsteuersatzes (somit 6,25 Prozent) der in einem Veranlagungsjahr des Gruppenträgers mit positiven Ergebnissen verrechneten gruppenträgereigenen laufenden Verluste bzw. Verlustvorträge. Aus der steuerlichen Unternehmensgruppe hat die Lenzing AG im Geschäftsjahr 2021 (inklusive Beträge aus Vorperioden) eine Steu- ergutschrift in Höhe von TEUR 747,1 (2020: TEUR 24,1) ergebnis- wirksam verbucht. Im Geschäftsjahr 2021 erfolgten gemäß der ver- traglichen Verpichtung und aufgrund des steuerlichen Verlustes im Vorjahr die Rückzahlung der Vorauszahlungen der Steuerumlage 2020 vom Gruppenträger an die Lenzing AG in Höhe von TEUR 15.285,0 (2020: Zahlung bzw. Vorauszahlung der Steuerum- lage an den Gruppenträger in Summe von TEUR 19.195,7). Zum 31. Dezember 2021 bilanziert die Lenzing AG aus der Steu- erumlage nach Abzug der Vorauszahlung eine Verbindlichkeit in Höhe von TEUR 27.999,7 gegenüber dem Gruppenträger. Diese wird im Bilanzposten „Verbindlichkeiten gegenüber verbundenen Unternehmen“ ausgewiesen (per 31. Dezember 2020: unter „For- derungen gegenüber verbundenen Unternehmen“ TEUR 4.568,2). Der steuerliche Verlust aus dem Jahr 2020 in Höhe von TEUR 13.023,7 wurde im Geschäftsjahr 2021 zur Gänze mit Gewin- nen verrechnet. Ein steuerlicher Verlust der Lenzing AG inklusive der beteiligten Tochtergesellschaften wird evident gehalten und mit künftigen steuerlichen Gewinnen verrechnet. Für bei Beendigung des Ver- trages nicht verrechnete Verluste ist eine Ausgleichszahlung ver- einbart. Mit den einbezogenen Tochtergesellschaften wurde ein Ergän- zungsvertrag abgeschlossen, welcher ebenfalls mit Wirkung ab dem Wirtschaftsjahr 2021 neu gefasst wurde. Dieser Vertrag ver- pichtet das jeweilige österreichische Gruppenmitglied, eine Steu- erumlage in Höhe der auf seinen steuerpichtigen Gewinn entfal- lenden Körperschaftsteuer an die Lenzing AG zu entrichten. Die Lenzing AG ist verpicht et, de r jeweiligen Gesellschaft im Fall ei- nes Verlustes eine Steuergutschrift in der Höhe der durch den Ver- lust bewirkten Steuerentlastung zu erteilen. Steuerliche Verluste von ausländischen Gruppenmitgliedern, welche in die Gruppenbe- steuerung einbezogen werden, kürzen die geschuldete Steuerum- lage des betreenden Gruppenmitglieds maximal auf Null. Die darüberhinausgehenden ausländischen Verluste werden in einem internen Verlustvortrag evident gehalten und mit künftigen auslän- dischen Gewinnen, die nachversteuert werden müssen, gegenver- rechnet. 137 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 24 Direkte Beteiligungen zum 31.12.2021 Beteiligung Währung Nennkapital Anteil in Prozent Eigenkapital 31.12.2021 Jahresüberschuss/- fehlbetrag 2021 TEUR TEUR Beech Investment s.r.o., Zlaté Moravce, Slowakei EUR BZL-Bildungszentrum Lenzing GmbH, Lenzing EUR EQUI-Fibres Beteiligungsgesellschaft mbH, Kelheim, Deutschland EUR - Gemeinnützige Siedlungsgesellschaft m.b.H. für den Bezirk Vöcklabruck, Lenzing EUR LD Celulose S.A., Sao Paulo, Brasilien BRL - LD Florestal S.A., Sao Paulo, Brasilien BRL - Lenzing (Thailand) Co., Ltd., Bangkok, Thailand THB - Lenzing Fibers (Hongkong) Ltd., Hong Kong, China HKD Lenzing Fibers (Shanghai) Co., Ltd., Shanghai, China USD Lenzing Fibers Holding GmbH, Lenzing EUR Lenzing Fibers India Private Ltd. INR Lenzing Global Finance GmbH, München, Deutschland EUR Lenzing Land Holding LLC., Dover, USA USD Lenzing Modi Fibers India Private Limited, Mumbai, Indien INR - Lenzing Papier GmbH, Lenzing EUR Lenzing Singapore Pte. Ltd., Singapur, Republik Singapur EUR PT. Pura Golden Lion, Jakarta, Indonesien IDR PT. South Pacic Viscose, Purwakarta, Indonesien IDR - Pulp Trading GmbH, Lenzing EUR RVL Reststoverwertung Lenzing GmbH, Lenzing EUR 1) 2020 2) Der direkt von der Lenzing AG gehaltene Anteil beträgt 91,87 Prozent, inkl. der indirekt gehaltenen Anteile beträgt der durchgerechnete Anteil 95,12 Prozent. 3) Eigenkapital und Ergebnis wurden nach lokalem Recht ermittelt. 4) Eigenkapital und Ergebnis wurden aus den zur Erstellung des Konzernabschlusses herangezogenen Abschlüssen, welche entsprechend IFRS aufgestellt wurden, entnommen. 5) Vorläug 138 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 25 Direkte Beteiligungen zum 31.12.2020 Beteiligung Währung Nennkapital Anteil in Prozent Eigenkapital 31.12.2020 Jahresüberschuss /-fehlbetrag 2020 TEUR TEUR Avit Investments Limited, Providenciales, Turks & Caicos USD - Beech Investment s.r.o., Zlaté Moravce, Slowakei EUR BZL-Bildungszentrum Lenzing GmbH, Lenzing EUR EQUI-Fibres Beteiligungsgesellschaft mbH, Kelheim, Deutschland EUR Gemeinnützige Siedlungsgesellschaft m.b.H. für den Bezirk Vöcklabruck, Lenzing EUR Hygiene Austria LP GmbH EUR LD Celulose S.A., Sao Paulo, Brasilien BRL - LD Florestal S.A., Sao Paulo, Brasilien BRL Lenzing (Thailand) Co., Ltd., Bangkok, Thailand THB - Lenzing Fibers (Hongkong) Ltd., Hong Kong, China HKD Lenzing Fibers (Shanghai) Co., Ltd., Shanghai, China USD Lenzing Fibers Holding GmbH, Lenzing EUR Lenzing Global Finance GmbH, München, Deutschland EUR Lenzing Land Holding LLC., Dover, USA USD Lenzing Modi Fibers India Private Limited, Mumbai, Indien INR - Lenzing Fibers India Private Ltd. INR - Lenzing Papier GmbH, Lenzing EUR Lenzing Singapore Pte. Ltd., Singapur, Republik Singapur EUR Penique S.A., Panama, Panama USD PT. Pura Golden Lion, Jakarta, Indonesien IDR PT. South Pacic Viscose, Purwakarta, Indonesien IDR - Pulp Trading GmbH, Lenzing EUR RVL Reststoverwertung Lenzing GmbH, Lenzing EUR 1) 2019 2) Der direkt von der Lenzing AG gehaltene Anteil beträgt 88,08 Prozent, inkl. der indirekt gehaltenen Anteile beträgt der durchgerechnete Anteil 92,85 Prozent. 3) Eigenkapital und Ergebnis wurden nach lokalem Recht ermittelt. 4) Eigenkapital und Ergebnis wurden aus den zur Erstellung des Konzernabschlusses herangezogenen Abschlüssen, welche entsprechend IFRS aufgestellt wurden, entnommen. 5) Vorläug 6) Änderung Vorjahreswert Gewinnverteilungsvorschlag für den Bilanzgewinn 2021 EUR Das Geschäftsjahr 2021 endet mit einem Jahresüberschuss von nach Zuweisung zu (freien) Gewinnrücklagen von - und nach Hinzurechnung des Gewinnvortrages 2020 von verbleibt ein Bilanzgewinn von Der Vorstand schlägt folgende Verteilung des Bilanzgewinnes vor: Ausschüttung einer Dividende entsprechend einem Betrag von EUR 4,35 je Aktie auf das dividendenberechtigte Grundkapital von EUR 27.574.071,43 bzw. 26.550.000 Stückaktien Auf neue Rechnung werden vorgetragen Vorbehaltlich des Beschlusses der Hauptversammlung erfolgt auf je eine Aktie die Auszahlung einer Dividende in der oben angege- benen Höhe. Die Dividendenauszahlung erfolgt ab 3. Mai 2022 bei der UniCredit Bank Austria AG Rothschildplatz 1 1020 Wien Die Aktien werden ab 28. April 2022 an der Wiener Börse ex Divi- dende gehandelt. 139 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 26 Organe der Gesellschaft Mitglieder des Aufsichtsrates ● Dipl.-Bw. Peter Edelmann Vorsitzender ● Mag. Patrick Prügger Stellvertretender Vorsitzender (seit 14. April 2021) ● Dr. Stefan Fida Stellvertretender Vorsitzender (seit 14. April 2021) ● Mag. Helmut Bernkopf ● Dr. Christian Bruch ● Dr. Markus Fürst, MBA (seit 14. April 2021) ● KR Dr. Franz Gasselsberger, MBA ● Melody Harris-Jensbach (seit 18. Juni 2020) ● Cord Prinzhorn, MBA (14. April 2021 bis 3. November 2021) ● Dr. Astrid Skala-Kuhmann ● Dr. Veit Sorger Stellvertretender Vorsitzender (bis 14. April 2021) ● Dr. Felix Fremerey (bis 18. Juni 2020) Vom Betriebsrat delegiert ● Johann Schernberger Vorsitzender des Konzernbetriebsrates Vorsitzender des Betriebsausschusses (bis 18. Jänner 2021) Vorsitzender des Arbeiterbetriebsrates ● Helmut Kirchmair Vorsitzender des Betriebsausschusses (seit 18. Jänner 2021) Stellvertretender Vorsitzender des Arbeiterbetriebsrates ● Georg Liftinger Stellvertretender Vorsitzender des Betriebsausschusses Vorsitzender des Angestelltenbetriebsrates ● Herbert Brauneis Stellvertretender Vorsitzender des Arbeiterbetriebsrates ● Ing. Daniela Födinger Stellvertretende Vorsitzende des Angestelltenbetriebsrates Mitglieder des Vorstandes ● Cord Prinzhorn, MBA Vorstandsvorsitzender (seit 4. November 2021) ● Mag. Thomas Obendrauf, MBA Finanzvorstand ● Robert van de Kerkhof, MBA Mitglied des Vorstandes ● DI Stephan Siela Mitglied des Vorstandes (seit 1. März 2020) ● DI Christian Skilich, MBA, LLM Mitglied des Vorstandes (seit 1. Juni 2020) ● Dr. Stefan Doboczky, MBA Vorstandsvorsitzender (bis 30. September 2021) 140 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 27 Wesentliche Ereignisse nach dem Bilanzstichtag Am 20. Jänner 2022 wurde in Österreich die stufenweise Senkung des Körperschaftsteuersatzes von 25 Prozent auf 23 Prozent mit Wirkung ab dem 1. Jänner 2023 beschlossen. Diese Senkung wirkt sich nicht auf die zum 31. Dezember 2021 erfassten tatsächlichen oder latenten Steuern aus. Allerdings wird diese Änderung die künftige tatsächliche Steuerlast der Lenzing AG entsprechend senken. Wenn die geänderten Steuersätze für die Berechnung der Steuerabgrenzung zum 31. Dezember 2021 verwendet worden wä- ren, hätten sich die aktiven latenten Steuern um TEUR 570,5 ver- mindert. Seit dem 24. Februar 2022 gibt es militärische Auseinandersetzun- gen zwischen Russland und der Ukraine. Die Lenzing AG verfügt in beiden Staaten über keine Beteiligungen, sonstige Vermögens- werte bzw. andere wesentliche Geschäftsbeziehungen. Auf den Jahresabschluss per 31. Dezember 2021 der Lenzing AG ergeben sich daher keine nanziellen Auswirkungen. Darüber hinaus sind nach dem Bilanzstichtag 31. Dezember 2021 keine Vorgänge von wesentlicher Bedeutung für die Lenzing AG bekannt geworden, die zu einer anderen Darstellung der Vermö- gens-, Finanz- und Ertragslage geführt hätten. Lenzing, am 1. März 2022 Lenzing Aktiengesellschaft Der Vorstand Cord Prinzhorn, MBA Vorstands vorsitzender Mag. Thomas Obendrauf, MBA Finanzvorstand Robert van de Kerkhof, MBA Mitglied des Vorstandes DI Stephan Siela Mitglied des Vorstandes DI Christian Skilich, MBA, LLM Mitglied des Vorstandes 141 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 28 Lenzing AG Entwicklung des Anlagevermögens für den Zeitraum 01. Jänner 2021 bis 31. Dezember 2021 Anschaungskosten Anschaungs- bzw. Herstellungskosten Zugänge Umbuchungen Abgänge Anschaungs- bzw. Herstellungskosten 01.01.2021 2021 2021 2021 31.12.2021 I. Immaterielle Vermögensgegenstände EUR EUR EUR EUR EUR 1. Rechte - 2. Firmenwert Summe Immaterielle Vermögensgegenstände - II. Sachanlagen 1. Grundstücke, grundstücksgleiche Rechte und Bauten, einschließlich der Bauten auf fremdem Grund a) Wohngebäude Grundwert - Gebäudewert - b) Geschäfts- und Fabriksgebäude und andere Baulichkeiten Grundwert Gebäudewert - c) Unbebaute Grundstücke - 2. Technische Anlagen und Maschinen - 3. Andere Anlagen, Betriebs- und Geschäftsausstattung - 4. Anlagen in Bau - 5. Geleistete Anzahlungen - Summe Sachanlagen - - III. Finanzanlagen 1. Anteile an verbundenen Unternehmen - 2. Ausleihungen an verbundene Unternehmen - 3. Beteiligungen - 4. Wertpapiere (Wertrechte) des Anlagevermögens - 5. Sonstige Ausleihungen - Summe Finanzanlagen - - 1) inklusive geringwertige Vermögensgegenstände in Höhe von EUR 925.717,21. 142 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 29 Abschreibungen kumuliert Buchwert Abschreibungen kumuliert Abschreibungen Zuschreibungen Umbuchungen Abgänge Abschreibungen kumuliert Buchwert Buchwert 01.01.2021 2021 2021 2021 2021 31.12.2021 31.12.2021 31.12.2020 EUR EUR EUR EUR EUR EUR EUR EUR - - - - - - - - - - - - - - - 143 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 30 Lenzing AG Entwicklung der Zuschüsse der öentlichen Hand für den Zeitraum 01. Jänner 2021 bis 31. Dezember 2021 Zuschüsse der öentlichen Hand Stand am 01.01.2021 Zugang Abgang Auösung Umbuchung Stand am 31.12.2021 A. Investitionszuschüsse EUR EUR EUR EUR EUR EUR I. Investitionszuschüsse der öentlichen Hand 1. Grundstücke, grundstücksgleiche Rechte und Bauten, einschließlich der Bauten auf fremdem Grund - 2. Technische Anlagen und Maschinen - 3. Andere Anlagen, Betriebs- und Geschäftsausstattung - - II. Emissionszertikate - - III. Investitionsprämien - - - 144 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 31 Bericht zum Jahresabschluss Prüfungsurteil Wir haben den Jahresabschluss der Lenzing Aktiengesellschaft, Lenzing, bestehend aus der Bilanz zum 31. Dezember 2021, der Gewinn- und Verlustrechnung für das an diesem Stichtag endende Ge- schäftsjahr und dem Anhang, geprüft. Nach unserer Beurteilung entspricht der Jahresabschluss den ge- setzlichen Vorschriften und vermittelt ein möglichst getreues Bild der Vermögens- und Finanzlage zum 31. Dezember 2021 sowie der Ertragslage der Gesellschaft für das an diesem Stichtag endende Geschäftsjahr in Übereinstimmung mit den österreichischen unter- nehmensrechtlichen Vorschriften. Grundlage für das Prüfungsurteil Wir haben unsere Abschlussprüfung in Übereinstimmung mit der EU-Verordnung Nr 537/2014 (im Folgenden AP-VO) und mit den österreichischen Grundsätzen ordnungsgemäßer Abschlussprü- fung durchgeführt. Diese Grundsätze erfordern die Anwendung der International Standards on Auditing (ISA). Unsere Verantwort- lichkeiten nach diesen Vorschriften und Standards sind im Ab- schnitt "Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses" unseres Bestätigungsvermerks weiterge- hend beschrieben. Wir sind von der Gesellschaft unabhängig in Übereinstimmung mit den österreichischen unternehmens- und berufsrechtlichen Vorschriften und wir haben unsere sonstigen be- ruichen Pichten in Übereinstimmung mit diesen Anforderungen erfüllt. Wir sind der Auassung, dass die von uns erlangten Prü- fungsnachweise bis zum Datum dieses Bestätigungsvermerkes ausreichend und geeignet sind, um als Grundlage für unser Prü- fungsurteil zu diesem Datum zu dienen. Besonders wichtige Prüfungssachverhalte Besonders wichtige Prüfungssachverhalte sind solche Sachver- halte, die nach unserem pichtgemäßen Ermessen am bedeut- samsten für unsere Prüfung des Jahresabschlusses des Geschäfts- jahres waren. Diese Sachverhalte wurden im Zusammenhang mit unserer Prüfung des Jahresabschlusses als Ganzes und bei der Bil- dung unseres Prüfungsurteils hierzu berücksichtigt und wir geben kein gesondertes Prüfungsurteil zu diesen Sachverhalten ab. Werthaltigkeit der Anteile an verbundenen Unternehmen Siehe Anhang Seite 6. Das Risiko für den Abschluss Die Anteile an verbundenen Unternehmen mit einem Buchwert in Höhe von EUR 831 Mio. stellen rund 26 % des ausgewiesenen Ver- mögens im Jahresabschluss der Lenzing Aktiengesellschaft dar. Für sämtliche bedeutsamen Anteile an verbundenen Unternehmen beurteilt Lenzing Aktiengesellschaft, ob Anhaltspunkte für einen wesentlich gesunkenen beizulegenden Wert vorliegen. Liegen sol- che Anhaltspunkte vor, wird für das betroene verbundene Unter- nehmen eine Unternehmensbewertung durchgeführt und der Buchwert der Anteile gegebenenfalls auf den niedrigeren beizule- genden Wert abgeschrieben. Zum 31. Dezember 2021 hat Lenzing Aktiengesellschaft für die Anteile an der PT. South Pacic Viscose Anhaltspunkte für einen wesentlich gesunkenen beizulegenden Wert identiziert. Der in Folge ermittelte beizulegende Wert ergab eine ausreichende Deckung des Buchwertes der Anteile. Die Bewertung des beizulegenden Wertes von Anteilen an verbun- denen Unternehmen erfordert Annahmen und Schätzungen, wie beispielsweise die Schätzung der künftigen Einzahlungsüber- schüsse sowie die Festlegung des anzuwendenden Diskontie- rungszinssatzes. Für den Jahresabschluss besteht damit das Risiko, dass nicht angemessene Annahmen und Schätzungen eine we- sentliche Auswirkung auf den beizulegenden Wert und damit den Wertansatz der Anteile an verbundenen Unternehmen in der Bilanz und das Finanzergebnis in der Gewinn- und Verlustrechnung ha- ben können. Unsere Vorgehensweise in der Prüfung Wir haben die Werthaltigkeit der Anteile an verbundenen Unter- nehmen wie folgt beurteilt: ● Wir haben die vom Unternehmen durchgeführte Analyse der Anhaltspunkte für einen wesentlich gesunkenen beizulegen- den Wert (einschließlich der Deckung des Beteiligungsansat- zes durch das anteilige Eigenkapital) der Anteile an verbunde- nen Unternehmen nachvollzogen. ● Zur Beurteilung der Angemessenheit der zugrunde gelegten internen Planungen haben wir uns ein Verständnis über den Planungsprozess verschat, die Annahmen über Wachstums- raten und operative Ergebnisse in Gesprächen mit den zustän- digen leitenden Personen im Unternehmen erörtert und die der Bewertung zugrunde gelegten Planungsdaten mit den aktuel- len vom Aufsichtsrat genehmigten Budgetzahlen sowie der vom Vorstand freigegebenen Mittelfristplanung abgeglichen. ● Die Planungstreue haben wir durch Vergleich der in den Vor- jahren erfolgten Planungen mit den tatsächlich eingetretenen Werten beurteilt. ● Unsere Bewertungsspezialisten haben die Methodik der durchgeführten Wertminderungstests nachvollzogen und be- urteilt, ob diese angemessen ist. Die zur Festlegung der Kapi- talkostensätze herangezogenen Annahmen haben unsere Be- wertungsspezialisten mit markt- und branchenspezischen R ichtwerten abgeglichen und die rechnerische Richtigkeit des Berechnungsschemas überprüft. Bestätigungsvermerk 145 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 32 Verantwortlichkeiten der gesetzlichen Vertreter und des Prüfungsausschusses für den Jahresabschluss Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Jahresabschlusses und dafür, dass dieser in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften ein möglichst getreues Bild der Vermögens-, Finanz- und Ertrags- lage der Gesellschaft vermittelt. Ferner sind die gesetzlichen Ver- treter verantwortlich für die internen Kontrollen, die sie als notwen- dig erachten, um die Aufstellung eines Jahresabschlusses zu er- möglichen, der frei von wesentlichen falschen Darstellungen auf- grund von dolosen Handlungen oder Irrtümern ist. Bei der Aufstellung des Jahresabschlusses sind die gesetzlichen Vertreter dafür verantwortlich, die Fähigkeit der Gesellschaft zur Fortführung der Unternehmenstätigkeit zu beurteilen, Sachverhalte im Zusammenhang mit der Fortführung der Unternehmenstätigkeit – sofern einschlägig – anzugeben, sowie dafür, den Rechnungsle- gungsgrundsatz der Fortführung der Unternehmenstätigkeit anzu- wenden, es sei denn, die gesetzlichen Vertreter beabsichtigen, ent- weder die Gesellschaft zu liquidieren oder die Unternehmenstätig- keit einzustellen oder haben keine realistische Alternative dazu. Der Prüfungsausschuss ist verantwortlich für die Überwachung des Rechnungslegungsprozesses der Gesellschaft. Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses Unsere Ziele sind hinreichende Sicherheit darüber zu erlangen, ob der Jahresabschluss als Ganzes frei von wesentlichen falschen Darstellungen aufgrund von dolosen Handlungen oder Irrtümern ist und einen Bestätigungsvermerk zu erteilen, der unser Prüfungs- urteil beinhaltet. Hinreichende Sicherheit ist ein hohes Maß an Si- cherheit, aber keine Garantie dafür, dass eine in Übereinstimmung mit der AP-VO und mit den österreichischen Grundsätzen ord- nungsgemäßer Abschlussprüfung, die die Anwendung der ISA er- fordern, durchgeführte Abschlussprüfung eine wesentliche falsche Darstellung, falls eine solche vorliegt, stets aufdeckt. Falsche Dar- stellungen können aus dolosen Handlungen oder Irrtümern resul- tieren und werden als wesentlich angesehen, wenn von ihnen ein- zeln oder insgesamt vernünftigerweise erwartet werden könnte, dass sie die auf der Grundlage dieses Jahresabschlusses getroe- nen wirtschaftlichen Entscheidungen von Nutzern beeinussen. Als Teil einer Abschlussprüfung in Übereinstimmung mit der AP- VO und mit den österreichischen Grundsätzen ordnungsgemäßer Abschlussprüfung, die die Anwendung der ISA erfordern, üben wir während der gesamten Abschlussprüfung pichtgemäßes Ermes- sen aus und bewahren eine kritische Grundhaltung. Darüber hinaus gilt: ● Wir identizieren und beurteilen die Risiken wesentlicher falscher Darstellungen aufgrund von dolosen Handlungen oder Irrtümern im Abschluss, planen Prüfungshandlungen als Reaktion auf diese Risiken, führen sie durch und erlangen Prüfungsnachweise, die ausreichend und geeignet sind, um als Grundlage für unser Prüfungsurteil zu dienen. Das Risiko, dass aus dolosen Handlungen resultierende wesentliche falsche Darstellungen nicht aufgedeckt werden, ist höher als ein aus Irrtümern resultierendes, da dolose Handlungen kollusives Zusammenwirken, Fälschungen, beabsichtigte Unvoll- ständigkeiten, irreführende Darstellungen oder das Außerkraftsetzen interner Kontrollen beinhalten können. ● Wir gewinnen ein Verständnis von dem für die Abschlussprü- fung relevanten internen Kontrollsystem, um Prüfungshandlun- gen zu planen, die unter den gegebenen Umständen ange- messen sind, jedoch nicht mit dem Ziel, ein Prüfungsurteil zur Wirksamkeit des internen Kontrollsystems der Gesellschaft abzugeben. ● Wir beurteilen die Angemessenheit der von den gesetzlichen Vertretern angewandten Rechnungslegungsmethoden sowie die Vertretbarkeit der von den gesetzlichen Vertretern darge- stellten geschätzten Werte in der Rechnungslegung und damit zusammenhängende Angaben. ● Wir ziehen Schlussfolgerungen über die Angemessenheit der Anwendung des Rechnungslegungsgrundsatzes der Fortfüh- rung der Unternehmenstätigkeit durch die gesetzlichen Vertre- ter sowie, auf der Grundlage der erlangten Prüfungsnachweise, ob eine wesentliche Unsicherheit im Zusammenhang mit Er- eignissen oder Gegebenheiten besteht, die erhebliche Zweifel an der Fähigkeit der Gesellschaft zur Fortführung der Unter- nehmenstätigkeit aufwerfen können. Falls wir die Schlussfol- gerung ziehen, dass eine wesentliche Unsicherheit besteht, sind wir verpichtet, in unserem Bestätigungsvermerk auf die dazugehörigen Angaben im Jahresabschluss aufmerksam zu machen oder, falls diese Angaben unangemessen sind, unser Prüfungsurteil zu modizieren. Wir ziehen unsere Schlussfol- gerungen auf der Grundlage der bis zum Datum unseres Be- stätigungsvermerks erlangten Prüfungsnachweise. Zukünftige Ereignisse oder Gegebenheiten können jedoch die Abkehr der Gesellschaft von der Fortführung der Unternehmenstätigkeit zur Folge haben. ● Wir beurteilen die Gesamtdarstellung, den Aufbau und den In- halt des Jahresabschlusses einschließlich der Angaben sowie ob der Jahresabschluss die zugrunde liegenden Geschäftsvor- fälle und Ereignisse in einer Weise wiedergibt, dass ein mög- lichst getreues Bild erreicht wird. ● Wir tauschen uns mit dem Prüfungsausschuss unter anderem über den geplanten Umfang und die geplante zeitliche Eintei- lung der Abschlussprüfung sowie über bedeutsame Prüfungs- feststellungen, einschließlich etwaiger bedeutsamer Mängel im internen Kontrollsystem, die wir während unserer Ab- schlussprüfung erkennen, aus. ● Wir geben dem Prüfungsausschuss auch eine Erklärung ab, dass wir die re levanten beruichen Verhaltensanforderungen zur Unabhängigkeit eingehalten haben und uns mit ihm über alle Beziehungen und sonstigen Sachverhalte austauschen, von denen vernünftigerweise angenommen werden kann, dass sie sich auf unsere Unabhängigkeit und – sofern einschlägig – damit zusammenhängende Schutzmaßnahmen auswirken. ● Wir bestimmen von den Sachverhalten, über die wir uns mit dem Prüfungsausschuss ausgetauscht haben, diejenigen Sachverhalte, die am bedeutsamsten für die Prüfung des Jah- resabschlusses des Geschäftsjahres waren und daher die be- sonders wichtigen Prüfungssachverhalte sind. Wir beschrei- ben diese Sachverhalte in unserem Bestätigungsvermerk, es sei denn, Gesetze oder andere Rechtsvorschriften schließen die öentliche Angabe des Sachverhalts aus oder wir bestim- men in äußerst seltenen Fällen, dass ein Sachverhalt nicht in unserem Bestätigungsvermerk mitgeteilt werden sollte, weil vernünftigerweise erwartet wird, dass die negativen Folgen ei- ner solchen Mitteilung deren Vorteile für das öentliche Inte- resse übersteigen würden. 146 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 33 Sonstige gesetzliche und andere rechtliche Anforderungen Bericht zum Lagebericht Der Lagebericht ist aufgrund der österreichischen unternehmens- rechtlichen Vorschriften darauf zu prüfen, ob er mit dem Jahresab- schluss in Einklang steht und ob er nach den geltenden rechtlichen Anforderungen aufgestellt wurde. Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Lageberichtes in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften. Wir haben unsere Prüfung in Übereinstimmung mit den Berufs- grundsätzen zur Prüfung des Lageberichtes durchgeführt. Urteil Nach unserer Beurteilung ist der Lagebericht nach den geltenden rechtlichen Anforderungen aufgestellt worden, enthält die nach § 243a UGB zutreenden Angaben, und steht in Einklang mit dem Jahresabschluss. Erklärung Angesichts der bei der Prüfung des Jahresabschlusses gewonne- nen Erkenntnisse und des gewonnenen Verständnisses über die Gesellschaft und ihr Umfeld haben wir keine wesentlichen fehler- haften Angaben im Lagebericht festgestellt. Zusätzliche Angaben nach Artikel 10 AP-VO Wir wurden von der Hauptversammlung am 14. April 2021 als Ab- schlussprüfer gewählt und am 27. April 2021 vom Aufsichtsrat mit der Abschlussprüfung der Gesellschaft für das am 31. Dezember 2021 endende Geschäftsjahr beauftragt. Wir sind ohne Unterbrechung seit dem Jahresabschluss zum 31. Dezember 2017 Abschlussprüfer der Gesellschaft. Wir erklären, dass das Prüfungsurteil im Abschnitt „Bericht zum Jahresabschluss“ mit dem zusätzlichen Bericht an den Prüfungs- ausschuss nach Artikel 11 der AP-VO in Einklang steht. Wir erklären, dass wir keine verbotenen Nichtprüfungsleistungen (Artikel 5 Abs 1 der AP-VO) erbracht haben und dass wir bei der Durchführung der Abschlussprüfung unsere Unabhängigkeit von der geprüften Gesellschaft gewahrt haben. Auftragsverantwortliche Wirtschaftsprüferin Die für die Abschlussprüfung auftragsverantwortliche Wirtschafts- prüferin ist Frau Mag. Gabriele Lehner. Linz, am 1. März 2022 KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft qualiziert elektronisch signiert: Mag. Gabriele Lehner Wirtschaftsprüferin Dieses Dokument wurde qualiziert elektronisch signiert und ist nur in dieser Fassung gültig. Die Veröentlichung oder Weitergabe des Jahresabschlusses mit unserem Be- stätigungsvermerk darf nur in der von uns bestätigten Fassung erfolgen. Dieser Bestä- tigungsvermerk bezieht sich ausschließlich auf den deutschsprachigen und vollständi- gen Jahresabschluss samt Lagebericht. Für abweichende Fassungen sind die Vor- schriften des § 281 Abs 2 UGB zu beachten. 147 Annual Financial Report 2021 Lenzing Group Geschäftsbericht 2021 Lenzing AG 34 Erklärung des Vorstandes gemäß § 124 (1) Z 3 Börsegesetz Wir erklären nach bestem Wissen, dass der im Einklang mit den maßgebenden Rechnungslegungsstandards gemäß UGB aufge- stellte Jahresabschluss der Lenzing AG zum 31. Dezember 2021 ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage der Lenzing AG vermittelt. Ebenso erklären wir nach bestem Wissen, dass der Lagebericht den Geschäftsverlauf, das Geschäftsergebnis und die Lage der Lenzing AG so darstellt, dass ein möglichst getreues Bild deren Vermögens-, Finanz- und Ertragslage entsteht, und dass der Lage- bericht die wesentlichen Risiken und Ungewissheiten beschreibt, denen die Lenzing AG ausgesetzt ist. Lenzing, am 1. März 2022 Lenzing Aktiengesellschaft Der Vorstand Cord Prinzhorn, MBA Vorstandsvorsitzender Mag. Thomas Obendrauf, MBA Finanzvorstand Robert van de Kerkhof, MBA Mitglied des Vorstandes DI Stephan Siela Mitglied des Vorstandes DI Christian Skilich, MBA, LLM Mitglied des Vorstandes Erklärung des Vorstandes 148 Annual Financial Report 2021 Lenzing Group Eigentümer & Herausgeber Lenzing Aktiengesellschaft 4860 Lenzing, Österreich www.lenzing.com Konzeption, Redaktion GW+Co (www.gilmarwendt.com), Lenzing Gruppe Layout und Gestaltung nexxar GmbH (www.nexxar.com) Textseiten 3-329, 32-114, 116-148 Inhouse produziert mit FIRE.sys Impressum Dieser Geschäftsbericht enthält auch zukunftsbezogene Aussagen, die auf gegenwärtigen, nach bestem Wissen vorgenommenen Einschätzungen und Annahmen der Lenzing Gruppe beruhen. Angaben unter Verwendung der Worte „sollen“, „dürfen“, „werden“, „erwartet“, „angestrebt“, „geht davon aus“, „nimmt an“, „schätzt“, „plant“, „beabsichtigt“, „ist der Ansicht“, „nach Kenntnis“, „nach Einschätzung“ oder ähnliche Formulierungen deuten auf solche zukunftsbezogene Aussagen hin. Die Prognosen, die sich auf die zukünftige Entwicklung der Lenzing Gruppe beziehen, stellen Einschätzungen dar, die auf Basis der zum Zeitpunkt der Drucklegung des Geschäftsberichts vorhandenen Informationen gemacht wurden. Sollten die den Prognosen zugrundeliegenden Annahmen nicht eintreen oder Risiken in nicht kalkulierter Höhe eintreten, so können die tatsächlichen Ergebnisse von den Prognosen abweichen. Bei der Summierung von gerundeten Beträgen und Prozentangaben können Rundungsdierenzen auftreten. Der Geschäftsbericht wurde mit größtmöglicher Sorgfalt erstellt, um die Richtigkeit und Vollständigkeit der Angaben in allen Teilen sicherzustellen. Rundungs-, Satz- und Druckfehler können dennoch nicht ganz ausgeschlossen werden. Hinweise 149 Annual Financial Report 2021 Lenzing Group
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