Quarterly Report • May 11, 2011
Quarterly Report
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Letter to SharehoLderS 01/2011 . Lenzing Group
Every challenge in life has its unique charm. But whether a fl eeting moment
| Management Report | 4 |
|---|---|
| General Market Environment | 6 |
| Development of the Lenzing Group | 7 |
| Segment Reporting | 8 |
| Outlook Lenzing Group | 10 |
| Risk Report | 11 |
| Interim Consolidated Financial Statements | 12 |
| Income Statement | 15 |
| Statement of Comprehensive Income | 16 |
| Statement of Changes in Equity | 18 |
| Statement of Financial Position | 20 |
| Cash Flow Statement | 22 |
| Key Figures | 23 |
| Selected Explanatory Notes | 24 |
| Translation of the Report on the review of the interim |
Statement of the Management Board 39
4
Beddings made of TENCEL® tempt us to drift off into a pleasant sleep. Nevertheless we stayed awake and active in the year 2011. The results speak for themselves. But the competition never sleeps. As the market leader we also want to expand our position in the future and exploit growth opportunities in the market.
World trade once again expanded signifi cantly at the beginning of the year 2011. In particular, the Asian emerging markets signifi cantly accelerated their dynamic growth and thus acted as the most important growth driver for the global economy¹. For 2011 experts anticipate worldwide economic growth of 4.5%, but with major differences between the industrialized nations and the emerging markets. Whereas the economies of the highly developed industrial countries are expected to expand by 2.5%, the International Monetary Fund (IMF) predicts a 6.5% growth rate for the emerging markets². The forecast concludes that China will register the highest GDP growth rate of 9.6% in 2011, followed by India with 8.2%³.
At the same time, the credit volume in the emerging markets will expand due to the low real interest rates, which is why the IMF warns of a potential danger of the economies overheating in these countries. China and other emerging markets are trying to counteract this development by taking measures such as raising interest rates. Moreover, the increase in raw material and energy prices are restraining business activity. Nevertheless, the economies of the Asian emerging markets should continue to develop dynamically, and also considerably contribute to global economic growth in the mediumterm4 . On balance, European markets should profi t from this development.
The macro-economic impact of the serious earthquake and tsunami as well as the nuclear accident in Japan should be limited, according to experts' opinions5 . This has also been confi rmed by the experience gained in recent weeks. However, the ultimate consequences of the catastrophe are still not discernible.
The dynamic development of the global fi ber market in 2010 continued unabatedly in the fi rst quarter of 2011. Strong private consumption in the emerging markets combined with the good economic situation in the Western industrialized nations were the main causes underlying this positive market development.
Demands for cotton and viscose were correspondingly strong, with fi ber demand exceeding the available supply by far, as was the case in the previous months. Fiber prices continued to remain at a very high level, both for textile applications as well as for nonwovens. The "cellulose gap" i.e. the structural, long-term undersupply of the market with cellulosic fi bers (cotton and viscose) is the primary reason for this development. The cotton price, which is of great signifi cance as the benchmark for the entire fi ber market, fl uctuated between approx. USD 2.44/lb and USD 2.69/lb during the fi rst quarter of 2011. The current oil price and strong demand also led to higher polyester fi ber prices.
The price of yarns also continued to rise, with the volatility of yarn prices increasing in recent weeks, particularly in Asia. The historical all-time high prices for fi bers and yarns led to some degree of uncertainty in the textile chain, price increases for fi bers are not yet passed on through the entire textile value chain to the end product.
6
1) See WIFO, Press information, March 31, 2011, "Prognose für 2011 und 2012: Aufschwung verstärkt sich, Risiken nehmen zu" 2) International Monetary Fund, World Economic Outlook, April 2011 3) International Monetary Fund, World Economic Outlook, April 2011 4) See WIFO, Press information, March 31, 2011, "Prognose für 2011 und 2012: Aufschwung verstärkt sich, Risiken nehmen zu" 5) International Monetary Fund, World Economic Outlook, April 2011
General Market Environment 6 Development of the Lenzing Group 7
The Lenzing Group can look back on the most successful quarter in the company's history to date. Although the first quarter of 2010 had developed very positively already, consolidated sales in the first three months of 2011 increased by 45.8% from the prior-year period, rising from EUR 365.0 mill. to EUR 532.1 mill. The reasons were increased shipment volumes as a result of the expansion of production capacities, as well as the significantly higher selling prices for fibers. Moreover, the pulp plant Biocel Paskov was not yet included in the consolidated financial statements in the first quarter of 2010. Adjusted for acquisitions, the growth in sales amounted to 36.3%. The cost of material and purchased services climbed 53.3% to EUR 304.6 mill. in the first quarter of 2011. This can be attributed to higher production volumes compared to the prior-year quarter, as well as price increases for wood and pulp, chemicals and energy. Personnel expenditures in the first quarter of 2011 rose 8.7% year-on-year to EUR 68.8 mill., which was also due to the consolidation of Biocel Paskov. Depreciation was up 21.3% to EUR 25.1 mill., as a result of recent investments to expand production capacities for fibers and pulp.
The increased fiber shipment volumes and higher prices enabled an 83.6% improvement in the operating profit (EBIT) during the first quarter of 2011, to EUR 90.7 mill., up from a good level of EUR 49.4 mill. in the prior year. This corresponds to an EBIT margin of 17.0% (Q1 2010: 13.5%).
The slight interest rate-related decline in the financial result to minus EUR 3.6 mill. (Q1 2010: minus EUR 1.7 mill.) led to an income before tax (EBT) of EUR 84.8 mill., which was 82.4% higher than the comparable first quarter 2010 EBT of EUR 46.5 mill. After income tax of EUR 17.9 mill. in the first quarter of 2011 (Q1 2010: EUR 11.0 mill.), the net income for the period totaled EUR 66.9 mill. (Q1 2010: EUR 35.5 mill.), a rise of 88.5%.
EBITDA in the first three months of 2011, up 65.8% to EUR 114.9 mill. (Q1 2010: EUR 69.3 mill.), and the EBITDA margin of 21.6% (Q1 2010: 19.0%) both represent a new all-time high. There was also a significant improvement of all performance indicators compared to the fourth quarter of 2010. Consolidated sales were up 10.7%, the quarterly EBITDA rose 18.4%, EBIT in the first quarter of 2011 increased by 43.7% (adjusted for non-recurring effects 19.8%) and the net income for the period was 41.8% higher.
Earnings per share amounted to EUR 2.43 (Q1 2010: EUR 1.32), a rise of 84.8%.
Investments in intangible assets and property, plant and equipment in the first quarter of 2011 amounted to EUR 41.9 mill., up from EUR 30.5 mill. in the prior-year quarter. These investments almost exclusively related to the ongoing fiber production capacity expansion program. As reported in the past, Lenzing plans to invest approx. EUR 1.5 billion through 2014 including maintenance investments. Fiber production capacity shall be increased to more than one million tons, mainly through expansion and modernization investments. In addition, Lenzing plans to increase the level of own supply of its most important raw material pulp.
On the balance sheet side, equity of the Lenzing Group as of the end of March 2011 (after deducting the dividend of EUR 39.9 mill. for 2010) amounted to EUR 744.1 mill., compared to EUR 732.0 mill. at the end of 2010. Adjusted equity1 rose to EUR 773.0 mill. from the prior-year level of EUR 758.8 mill. Despite the expenditures for investments, non-current liabilities declined to EUR 705.1 mill., down from EUR 730.1 mill. at the end of 2010. Net debt at the end of the first quarter 2011 could also be reduced to EUR 256.0 mill. from EUR 307.2 mill. at year's end 2010. This corresponds to a net gearing (before the dividend payout) of 33.1% (end of 2010: 40.5%). The adjusted equity ratio as of March 31, 2011 was almost stable at 38.1% of the balance sheet total as compared to 38.6% at the end of the previous year.
Cash and cash equivalents at the end of March 2011 amounted to EUR 314.2 mill. (Dec. 31, 2010: EUR 254.5 mill.). It is important to note that the payment of the dividend totaling EUR 39.9 mill. took place only on April 1, 2011.
The number of employees of the Lenzing Group at the end of the fi rst quarter of 2011 increased to 6,244 (March 31, 2010: 5,6431 , December 31, 2010: 6,1431 ), which was mainly due to the acquisition of Biocel Paskov and the hiring of new employees at Lenzing's Austrian and Asian sites.
The business development of the Segment Fibers in the Lenzing Gruppe was shaped by the strong global demand for fi bers as well as the consequences of the "cellulose gap". All available production facilities were operating at their maximum capacities. In this regard, additional capacities were available compared to the prior-year quarter thanks to the start of operations of the fourth production line and the debottlenecking program at SPV in Indonesia, as well as higher quantities from Nanjing Fibers (China) and Heiligenkreuz (Austria).
Consolidated segment sales rose from EUR 328.1 mill. in the fi rst quarter of 2010 to EUR 481.4 mill. in the fi rst quarter of 2011, an increase of 46.7%. EBITDA of the Segment Fibers climbed 65.4% to EUR 109.7 mill. (March 31, 2010: EUR 66.4 mill.). Segment EBIT increased by 84.0%, rising from EUR 47.2 mill. to EUR 86.9 mill. year-on-year.
At the beginning of 2011, selling price increases of about 10% were implemented in the two Business Units Textile Fibers and Nonwoven Fibers, and were well accepted by the market. Although the costs of material and purchased services and personnel expenditures were higher than in the fi rst quarter of 2010, the cost rises could be held within reasonable limits compared to the fourth quarter of 2010. This enabled a further improvement in the operating margin of the two Business Units.
The expansion of fi ber production capacities is proceeding on schedule. The fi rst test runs at the second production line in Nanjing (China) will likely take place in mid-2011. Construction of the fi fth production line at SPV (Indonesia) and the conversion of the TENCEL® site in Grimsby (U.K.) to allow for the manufacturing of the specialty fi ber A-100 are progressing well. Lenzing is confi dent that it will be able to achieve a nominal fi ber production capacity of about 770,000 tons p.a. by the end of 2011, up from 710,000 tons at the end of 2010.
The global fi ber market is expected to continue developing positively in the course of the year 2011. The good economic development, strong domestic demand in the emerging markets and the "cellulose gap" continue to be the main driving forces of the fi ber market. According to the International Cotton Advisory Committee (ICAC) on April 1, 2011, cotton prices are anticipated to decline somewhat during the course of the year 2011 following the historic all-time highs reached earlier. However, ICAC anticipates only a slight cotton price drop in the year 2011/12 compared to the record year 2010/11. This is forecast, despite expectations for the global cotton harvest being high for the upcoming cotton year, due to the very high prices for cotton in the fi rst quarter leading many farmers to plant additional cotton. It is also important to note the very low cotton stocks. The continuous high price of oil should also keep polyester fi ber prices at a comparatively high level.
Demand for Lenzing fi bers remained uninterruptedly strong at the beginning of the second quarter 2011. The structural excess demand for cellulosic fi bers as a consequence of the "cellulose gap" as well as the good global positioning of Lenzing fi bers on the global market were the decisive factors underlying this development.
Segment Reporting 8 Outlook Lenzing Group 10 Risk Report 11
At the beginning of the second quarter, Lenzing was able to implement further price increases, particularly for its specialty fibers Lenzing Modal® and TENCEL®. These price adjustments equally affected the Business Units Textile Fibers and Nonwoven Fibers. In spite of these additional price raises, Lenzing fibers still cost significantly less than cotton, which underlie Lenzing's positive view concerning the further margin development of the Business Units Textile Fibers and Nonwoven Fibers in 2011. In a long-term comparison, viscose had always commanded a price premium vis-à-vis cotton.
The global pulp market in the first quarter of 2011 was characterized by a further upward movement in prices and volume demand. The market for chemical pulp (dissolving pulp), which is comparatively small compared to the market for paper pulp, saw growing demand on the part of the viscose fiber industry in the light of the continuing supply shortage on the free market, which in turn led to further price increases. All-time high prices of close to USD 2,500/ton were achieved on the spot market. This price development is causing several pulp companies to convert or refurbish their facilities from paper to chemical pulp. However, new significant capacities are unlikely to be available on the market before the end of 2012.
Despite the difficult market situation, Lenzing managed to fully cover the pulp requirements of its non-integrated fiber production in the first quarter of 2011 at competitive costs. Once more Lenzing's long-term partner-like delivery contracts and forward-looking storage policy proved their value. Similarly, the supply of the integrated fiber and pulp production plant at the Lenzing site was also secured thanks to the ongoing expansion of pulp production. However, Lenzing had to cope with rising wood prices compared to the first quarter of 2010 as well as the fourth quarter of 2010.
The pulp plant Biocel Paskov, acquired by Lenzing in 2010, developed as planned, although wood prices rose significantly. The conversion of the Paskov facility to a swing capacity producer for both paper and chemical pulp is proceeding on schedule. Initial test quantities of fiber pulp could already be manufactured by Biocel Paskov.
Energy prices rose significantly during the period under review due to rising consumption, as well as the political unrest in North Africa and the consequences of the nuclear accident in Japan.
The supply of wood and pulp for the Lenzing Group for fiber production is secured for the rest of the year 2011 at competitive conditions.
An upward trend in prices for oil as well as electricity is expected due to the ongoing unrest in North Africa and the discussions focusing on the future of electricity supplies in connection with the events at Fukushima. Currently, rising energy prices can still be passed on to the market.
The overall business environment for the Business Unit Plastics developed positively in the first quarter of 2011. The ongoing economic recovery served as the basis for an improved order situation in most business areas, and a good volume business. Thus, the slow recovery in the construction industry had a positive impact, as did the good situation in the European automobile industry. The polytetrafluoroethylene (PTFE) business also developed better than in the previous year. In contrast, rising raw material costs had a negative impact. Nevertheless, satisfactory quarterly results could be achieved.
Segment sales in the first quarter of 2011 amounted to EUR 44.9 mill. (Q1 2010: EUR 32.8 mill.), a rise of 37.0%. EBITDA
of the Segment Plastics Products was EUR 3.3 mill., a rise of 51.2% from the previous year, whereas segment EBIT totaled EUR 1.6 mill.
Effective February 18, 2011, the plastic fi laments business was sold to a consortium led by the Global Equity Partners Group.
Business development in the Segment Engineering was characterized by a good order situation in the fi rst quarter of 2011. The main reasons were the ongoing large-scale investments of the Lenzing Group, as well as the increased volume of orders placed by external customers. The gratifying fi rstquarter earnings were above the prior-year level.
Total sales of the segment amounted to EUR 30.8 mill. in the fi rst quarter of 2011 (Q1 2010: EUR 17.8 mill.), an increase of 72.9%. Segment EBITDA improved from EUR 1.4 mill. in the previous year to EUR 2.6 mill, and segment EBIT doubled in the same period from the prior-year fi gure of EUR 1.1 mill. to EUR 2.2 mill. in the fi rst three months of 2011.
An ongoing stable and positive development is expected in both Segments for the current business year.
The core fi bers business of the Lenzing Group continues to benefi t from a continuing upward trend. Assuming a stable global economy which is not negatively infl uenced by geopolitical events, the 2011 business year of the Lenzing Group is expected to develop more favorably than originally forecast at the beginning of the year.
The main reasons are the price increases which are being accepted better than expected, especially for the specialty fi bers (Lenzing Modal® and TENCEL®), which in turn is related to the current global fi ber price structure accompanied by high cotton prices. On the one hand, the price increases announced at the beginning of the fi rst quarter of 2011 could be implemented very quickly and fully. On the other hand, they fully impact earnings in the light of cost developments which have turned out to be more moderate than originally budgeted.
The Management Board plans consolidated sales to increase to between EUR 2.1 billion and EUR 2.2 billion. Furthermore, for the business year 2011, the Management Board is targeting to achieve an EBITDA margin of 21% – 23% and an EBIT margin of 16% – 18%. The Management Board also plans investments and the payout ratio for 2011 to remain unchanged at approximately 15% of sales, and at approximately 25% of the consolidated net income for the year, respectively.
Segment Reporting 8 Outlook Lenzing Group 10 Risk Report 11
On balance, the risk situation in the first quarter of 2011 has not significantly changed compared to the risk scenario outlined in the Annual Report 2010. For this reason, we recommend reading the following current explanations together with the risk report contained in the Annual Report 2010.
Continuous growth in Asia as well as the extended use of specialty fibers in Europe and the USA will contribute to improving the competitive risk situation of the Lenzing Group.
The tight supply situation on the global pulp market has not changed since the previous risk report was published. The integration of Biocel Paskov and the extension of delivery contracts will contribute to improving the medium-term supply risk situation.
On the procurement side, higher raw material prices, in particular for pulp and chemicals, will burden the margin situation as long as the higher costs cannot be fully included in selling prices. With respect to energy costs, the earthquake catastrophe in Japan and political changes in the Northern African countries have increased the risk. A potential phasing out of nuclear power and the related effects on energy prices are not predictable from today's point of view.
A further weakening of the US dollar against the Euro will increase Lenzing's risk of incurring exchange rate losses or could lead to a negative effect on reporting in Euro.
Risks such as natural catastrophes, environmental and fire risks as well as the increasing production liability risks continue to comprise an inherently high loss potential for the Lenzing Group.
In considering risks, the worldwide interconnectedness of markets is playing an increasingly important role. The occurrence of local events can often have far-reaching consequences, which in turn can have negative effects on the business operations of the Lenzing Group.
Whoever wants to be the best in class must always be alert and diligently do his or her homework. This means Lenzing focuses on ensuring ongoing innovation, maintaining a dialog with customers and employees and developing appropriate responses to market challenges. Lenzing fi nished the fi rst quarter 2011 with the best possible marks.
| Interim Consolidated Financial Statements | 12 |
|---|---|
| Income Statement | 15 |
| Statement of Comprehensive Income | 16 |
| Statement of Changes in Equity | 18 |
| Statement of Financial Position | 20 |
| Cash Flow Statement | 22 |
| Key Figures | 23 |
| Selected Explanatory Notes | 24 |
| Note 1. Presentation of the interim fi nancial report | 24 |
| Note 2. Accounting policies | 24 |
| Note 3. Changes in estimates | 25 |
| Note 4. Scope of consolidation | 26 |
| Note 5. Segment reporting | 26 |
| Note 6. Sales | 29 |
| Note 7. Cost of material and purchased services | 29 |
| Note 8. Personnel expenses | 29 |
| Note 9. Amortization of intangible assets and depreciation of property, plant and equipment | 29 |
| Note 10. Other operating expenses | 30 |
| Note 11. Finance costs | 30 |
| Note 12. Allocation of profi t or loss to puttable non-controlling interests | 30 |
| Note 13. Income tax | 30 |
| Note 14. Intangible assets and property, plant and equipment | 30 |
| Note 15. Inventories | 31 |
| Note 16. Trade receivables | 31 |
| Note 17. Equity | 31 |
| Note 18. Bonds, bank loans and other loans | 31 |
| Note 19. Other provisions | 32 |
| Note 20. Other liabilities | 32 |
| Note 21. Contingent liabilities and commitments | 32 |
| Note 22. Notes on the cash fl ow statement | 32 |
| Note 23. Agreed dividend | 33 |
| Note 24. Related party transactions | 34 |
| Note 25. Derivative fi nancial instruments | 34 |
| Note 26. Events after the end of the interim reporting period | 35 |
| Note 27. Corporate bodies | 36 |
Income Statement 15 Statement of Comprehensive Income 16 Statement of Changes in Equity 18 Statement of Financial Position 20 Cash Flow Statement 22 Key Figures 23 Selected Explanatory Notes 24
| 1-3/2011 | 1-3/2010* | ||
|---|---|---|---|
| Continuing operations | Note | EUR mill. | EUR mill. |
| Sales | (6) | 532.1 | 365.0 |
| Changes in inventories of finished goods and work in progress | 2.5 | (3.3) | |
| Work performed by the Group and capitalized | 7.5 | 7.2 | |
| Other operating income | 10.9 | 7.1 | |
| Cost of material and purchased services | (7) | (304.6) | (198.7) |
| Personnel expenses | (8) | (68.8) | (63.3) |
| Amortization of intangible assets and depreciation of property. plant and equipment | (9) | (25.1) | (20.7) |
| Other operating expenses | (10) | (63.8) | (43.9) |
| Income from operations (EBIT) | 90.7 | 49.4 | |
| Income from investments in associates | 0.9 | 0.5 | |
| Other investment income | 0.7 | 1.7 | |
| Finance costs | (11) | (5.2) | (3.9) |
| Financial result | (3.6) | (1.7) | |
| Allocation of profit or loss to puttable non-controlling interests | (12) | (2.3) | (1.2) |
| Income before tax (EBT) | 84.8 | 46.5 | |
| Income tax | (13) | (17.9) | (11.0) |
| Profit for the period after taxes from continuing operations | 66.9 | 35.5 | |
| Discontinued operations | |||
| Result from discontinued operations | 0.0 | 0.0 | |
| Profit for the period | 66.9 | 35.5 | |
| Attributable to shareholders of Lenzing AG | 62.6 | 33.9 | |
| Attributable to non-controlling interests | 4.3 | 1.6 | |
| Earnings per share | EUR | EUR | |
| From continuing operations and discontinued operations | 2.43 | 1.32 | |
| From continuing operations | 2.43 | 1.32 |
| Foreign currency Common Capital translation stock reserves reserve 1-3/2010 EUR mill. EUR mill. EUR mill. Profi t for the period Exchange differences arising during the period 13.1 Gains/losses from the valuation of cash fl ow hedges arising during the period Reclassifi cation adjustments for amounts from cash fl ow hedges recognized in profi t or loss Income tax relating to components of other comprehensive income Other comprehensive income for the period – net of tax 13.1 Total comprehensive income for the period 13.1 1-3/2011 Profi t for the period Exchange differences arising during the period (17.8) Net result on revaluation of available-for-sale fi nancial assets during the period Gains/losses from the valuation of cash fl ow hedges arising during the period Reclassifi cation adjustments for amounts from cash fl ow hedges recognized in profi t or loss Income tax relating to components of other comprehensive income Other comprehensive income for the period – net of tax (17.8) |
|---|
| Total comprehensive income for the period (17.8) |
Income Statement 15 Statement of Comprehensive Income 16 Statement of Changes in Equity 18 Statement of Financial Position 20 Cash Flow Statement 22 Key Figures 23 Selected Explanatory Notes 24
| Equity total | Non-controlling interests |
Share of Lenzing AG shareholders | ||||
|---|---|---|---|---|---|---|
| Actuarial gains/ (losses) on |
Available | |||||
| Retained | defined benefit | Cash flow | for-sale | |||
| Total | earnings | plans | hedging reserve | financial assets | ||
| EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | |
| 1.6 | 33.9 | 33.9 | ||||
| 0.6 | 13.1 | |||||
| (4.0) | (4.0) | |||||
| (1.1) | (1.1) | |||||
| 1.2 | 1.2 | |||||
| 0.6 | 9.2 | (3.9) | ||||
| 2.2 | 43.1 | 33.9 | (3.9) |
| 2.2 | 43.1 | 33.9 | (3.9) | |
|---|---|---|---|---|
| 62.6 4.3 |
62.6 | |||
| (0.6) | (17.8) | |||
| (0.6) | (0.6) | |||
| 1.5 0.4 |
1.5 | |||
| 3.6 (0.2) |
3.6 | |||
| (0.9) | (1.1) | 0.2 | ||
| (0.4) | (14.2) | 4.0 | (0.4) | |
| 3.9 | 48.4 | 62.6 | 4.0 | (0.4) |
Statement of Changes in Equity
| Foreign | ||||
|---|---|---|---|---|
| currency | ||||
| Common | Capital | translation | ||
| stock | reserves | reserve | ||
| EUR mill. | EUR mill. | EUR mill. | ||
| Balance at 1 Januray 2010 before | 26.7 | 63.6 | (18.7) | |
| Adjustments according to IAS 8 | ||||
| Balance at 1 Januray 2010 adjusted | 26.7 | 63.6 | (18.7) | |
| Total comprehensive income for the period | 13.1 | |||
| Balance at 31 March 2010 | 26.7 | 63.6 | (5.6) | |
| Balance at 1 Januray 2011 | 26.7 | 63.6 | (0.6) | |
| Total comprehensive income for the period | (17.8) | |||
| Change valuation dividend guarantee | ||||
| Dividends | ||||
| Balance at 31 March 2011 | 26.7 | 63.6 | (18.4) |
Income Statement 15 Statement of Comprehensive Income 16 Statement of Changes in Equity 18 Statement of Financial Position 20 Cash Flow Statement 22 Key Figures 23 Selected Explanatory Notes 24
| Equity total | Non-controlling interests |
Share of Lenzing AG shareholders | ||||
|---|---|---|---|---|---|---|
| Actuarial gains/ | ||||||
| (losses) on | Available | |||||
| Retained | defined benefit | Cash flow | for-sale | |||
| Total | earnings | plans | hedging reserve | financial assets | ||
| EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. |
| 606.1 | 30.2 | 575.9 | 516.6 | (10.0) | (2.4) | 0.1 |
| (20.7) | (20.7) | |||||
| 585.4 | 9.5 | 575.9 | 516.6 | (10.0) | (2.4) | 0.1 |
| 45.3 | 2.3 | 43.0 | 33.8 | (3.9) | ||
| 630.7 | 11.8 | 618.9 | 550.4 | (10.0) | (6.3) | 0.1 |
| 732.0 | 28.1 | 703.9 | 624.3 | (11.5) | 1.5 | (0.1) |
| 52.3 | 3.9 | 48.4 | 62.6 | 4.1 | (0.5) | |
| (0.3) | (0.3) | |||||
| (39.9) | (39.9) | (39.9) | ||||
| 744.1 | 31.7 | 712.4 | 647.0 | (11.5) | 5.6 | (0.6) |
| Assets | 31/03/2011 | 31/12/2010 |
|---|---|---|
| Note | EUR mill. | EUR mill. |
| Intangible assets (14) |
83.6 | 87.7 |
| Property, plant and equipment (14) |
1,003.9 | 1,002.8 |
| Investments in associates | 25.6 | 24.7 |
| Other fi nancial assets | 70.9 | 67.3 |
| Deferred tax assets | 11.2 | 10.1 |
| Other non-current assets | 2.4 | 2.5 |
| Non-current assets | 1,197.6 | 1,195.1 |
| Inventories (15) |
221.4 | 222.8 |
| Trade receivables (16) |
210.1 | 181.5 |
| Current taxes | 16.5 | 14.8 |
| Other receivables and assets | 70.8 | 58.6 |
| Investments | 0.0 | 5.1 |
| Cash and cash equivalents | 314.2 | 249.4 |
| 833.0 | 732.2 | |
| Assets of discontinued operations | 0.0 | 36.1 |
| Current assets | 833.0 | 768.3 |
| 2,030.6 | 1,963.4 |
| Equity and Liabilities | 31/03/2011 | 31/12/2010 |
|---|---|---|
| EUR mill. | EUR mill. | |
| Common stock | 26.7 | 26.7 |
| Capital reserves | 63.6 | 63.6 |
| Currency translation reserves | (18.4) | (0.6) |
| Retained earnings and other reserves | 640.5 | 614.2 |
| Share of shareholders of Lenzing AG | 712.4 | 703.9 |
| Non-controlling interests | 31.7 | 28.1 |
| Equity (17) |
744.1 | 732.0 |
| Government grants | 37.1 | 34.3 |
| Bonds, bank loans and other loans (18) |
526.0 | 552.3 |
| Trade payables | 1.5 | 1.5 |
| Deferred taxes liabilities | 35.1 | 36.9 |
| Provisions | 96.8 | 96.2 |
| Puttable non-controlling interests | 26.6 | 24.3 |
| Other liabilities (20) |
19.1 | 18.9 |
| Non-current liabilities | 705.1 | 730.1 |
| Bank loans and other loans (18) |
94.9 | 60.5 |
| Trade payables | 109.2 | 134.1 |
| Provisions for current income tax | 49.7 | 31.8 |
| Other provisions (19) |
197.1 | 162.1 |
| Puttable non-controlling interests | 5.4 | 5.4 |
| Other liabilities (20) |
88.0 | 38.6 |
| 544.3 | 432.5 | |
| Liabilities of discontinued operations | 0.0 | 34.5 |
| Current liabilities | 544.3 | 467.0 |
| 2,030.6 | 1,963.4 |
| 1-3/2011 | 1-3/2010* | |
|---|---|---|
| Note | EUR mill. | EUR mill. |
| Gross cash fl ow | ||
| from continuing operations | 89.7 | 58.7 |
| from discontinued operations | 0.0 | 0.4 |
| (22) | 89.7 | 59.1 |
| Change in working capital | 1.0 | (2.6) |
| Net cash generated by discontinued operations | 0.0 | (2.1) |
| Operating cash fl ow (22) |
90.7 | 54.4 |
| - Acquisition of non-current assets | (45.0) | (36.0) |
| + Proceeds from the disposal/repayment of non-current assets | 0.4 | 0.2 |
| Net cash generated by discontinued operations | 0.0 | -0.3 |
| Net cash used in investing activities (22) |
(44.6) | (36.1) |
| + Payments of puttable non-controlling interests | 1.5 | 0.0 |
| - Dividends paid to shareholder | (0.1) | 0.0 |
| + Government grants | 1.2 | 0.3 |
| + Receipts from fi nancing activities/repayment of loans | 15.3 | 20.5 |
| Net cash generated by discontinued operations | 0.0 | 1.4 |
| Net cash used in (-)/ generated by (+) fi nancing activities | 17.9 | 22.2 |
| Change in cash and cash equivalents total | 64.0 | 40.5 |
| +/- Change in cash and cash equivalents of discontinued operations | 0.0 | 0.6 |
| Change in cash and cash equivalents of continuing operations | 64.0 | 41.1 |
| Cash and cash equivalents at beginning of the year | 254.5 | 123.8 |
| Currency translation adjustment relating to cash and cash equivalents | (4.3) | 2.0 |
| Cash and cash equivalents at the end of the year | 314.2 | 166.9 |
| 31/03/2011 | 31/12/2010 | ||
|---|---|---|---|
| Adjusted equity1 | EUR mill. | 773.0 | 758.8 |
| Adjusted equity in % | % | 38.1 | 38.6 |
| Net financial debt | EUR mill. | 256.0 | 307.2 |
| Net debt2 | EUR mill. | 337.9 | 388.5 |
| Net gearing | % | 33.1 | 40.5 |
| Open credit lines | EUR mill. | 233.7 | 252.2 |
| Number of employees at period end | 6,244 | 6,5303 | |
| 1-3/2011 | 1-3/2010 | ||
| EBITDA | EUR mill. | 114.9 | 69.3 |
| EBITDA margin | % | 21.6 | 19.0 |
| EBIT margin | % | 17.0 | 13.5 |
| Capital expenditure (intangible assets, property plant and equipment) | EUR mill. | 41.9 | 30.5 |
These condensed interim consolidated fi nancial statements of the Lenzing Group for the period from 1 January to 31 March 2011 have been prepared in accordance with IAS 34 ("Interim Financial Reporting"). The accounting policies and valuation methods applied are in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In accordance with IAS 34 the condensed interim consolidated fi nancial statements do not provide all of the information mandatory for the annual fi nancial statements and therefore should be read along with the annual fi nancial statements of the Lenzing Group for the year ended 31 December 2010.
The fi gures provided in the interim fi nancial statements and in these notes are presented in million euros (EUR mill.) unless stated otherwise.
The following new or revised IFRSs and interpretations of IFRIC were adopted by the European Union and are to be applied for the fi rst time to business year 2011 and may be applied to business year 2011 for the fi rst time respectively:
Amendments to IAS 32 Financial Instruments: Presentation concerning the classifi cation of rights issues
Effective for business years beginning on or after 1 July 2010:
Effective for business years beginning on or after 1 July 2011:
Effective for business years beginning on or after 1 January 2012:
Amendments to IAS 12 Income Taxes (not yet endorsed by the EU)
IFRS 9 Financial Instruments (not yet endorsed by the EU)
Future implications – especially of IFRS 9 – are currently being analyzed. Management assumes that the expected changes will mainly affect measurement of financial assets and the presentation of changes in value of financial assets in the income statement and other comprehensive income respectively.
The amendments to the various standards concerning the presentation and measurement of financial instruments will be applied at the effective dates stated.
The other new or amended standards to be adopted from 1 January 2011 on do not cause any changes to the interim financial report of the Lenzing Group. There have been no changes since 31 December 2010 to either the other accounting and valuation policies applied or to the methods of calculation and presentation.
The following closing rates were used to translate the assets and liabilities of subsidiaries from their functional currency to the reporting currency:
| Unit | Currency | Closing rate | |||
|---|---|---|---|---|---|
| 31/03/2011 | 31/12/2010 | ||||
| 1 | EUR/USD US Dollar | 1.4229 | 1.3376 | ||
| 1 | EUR/GBP GB Pound | 0.8843 | 0.8616 | ||
| 1 | EUR/CZK CZ Koruna | 24.5330 | 25.0850 | ||
| 1 | EUR/CNY Renminbi Yuan | 9.3126 | 8.8150 | ||
| 1 | EUR/HKD Hong Kong Dollar | 11.0720 | 10.3965 |
There were no changes in estimates of amounts which had been presented in previous (interim) reporting periods during the current reporting period which had any material effect on the current interim reporting period.
On 19 January 2011 Beta LAG Holding GmbH was founded with the purpose of exercising holding functions.
As of 18 February 2011 the Group has sold the major part of the plastics fi laments business to a consortium of private investors under the leadership of the Global Equity Partners Group (GEP) for further streamlining of the portfolio. GEP has acquired 100% of the shares of the two German companies Hahl Filaments GmbH/Munderkingen and Pedex GmbH/ Affolterbach, of the US company Hahl Inc./Lexington and the Czech company Hahl Filaments s.r.o./Plana as well as the related real estate and holding companies. These entities were part of the segment Plastics Products.
| EUR mill. | |
|---|---|
| Assets of discontinued operations | 36.1 |
| Liabilities of discontinued operations | (34.6) |
| Net assets of discontinued operations | 1.5 |
| Sales price | (1.5) |
| Net result | 0.0 |
Due to the valuation of carrying amounts using the agreed sales price on 31 December 2010 there was neither a gain or loss nor an effect on earnings per share in the reporting period.
The payment of the sales price has been deferred until 2018 and the amount outstanding is included in other fi nancial assets.
Therefore the number of consolidated entities has changed as follows:
| Full Con solidation |
Equity con solidation |
|
|---|---|---|
| As at 1/1 | 43 | 7 |
| Consolidated for the fi rst time in reporting period |
1 | 0 |
| sold in reporting period | (8) | 0 |
| As at 31/3 | 36 | 7 |
Segment reporting in the Lenzing Group is based on business segments. For internal reporting to management the following business segments are used in the Lenzing Group:
The Segment Fibers comprises the Business Units Textile Fibers, Nonwoven Fibers, Pulp and Energy, as well as byproducts and timber trade. This segment constitutes the core business of the Group.
The Segment Plastics Products produces special plastic products for processing companies. This segment comprises the Business Units Plastics and Filaments.
Segment Engineering (= Business Unit Engineering) is the technical competence center of the Group and consists of three business divisions:
The residual segment Other mainly comprises the disclosures of BZL-Bildungszentrum Lenzing GmbH, an educational activity of the Lenzing Group.
| Segment sales | 1-3/2011 | 1-3/2010 | ||||
|---|---|---|---|---|---|---|
| Sales to | Inter | Sales to | Inter | |||
| external | segment | external | segment | |||
| customers | sales | Total sales | customers | sales | Total sales | |
| EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | EUR mill. | |
| Fibers | 478.6 | 2.8 | 481.4 | 325.3 | 2.8 | 328.1 |
| Plastics Products | 44.3 | 0.6 | 44.9 | 32.4 | 0.4 | 32.8 |
| Engineering | 8.8 | 22.0 | 30.8 | 7.0 | 10.8 | 17.8 |
| Other | 0.4 | 0.3 | 0.7 | 0.3 | 0.4 | 0.7 |
| Consolidation | 0.0 | (25.7) | (25.7) | 0.0 | (14.4) | (14.4) |
| Total sales | ||||||
| Continuing operations | 532.1 | 0.0 | 532.1 | 365.0 | 0.0 | 365.0 |
| Discontinued operations* | 9.4 | 0.0 | 9.4 | 12.6 | 0.0 | 12.6 |
| Segment result | Segment result (EBIT) | Segment result (EBITDA) | ||
|---|---|---|---|---|
| 1-3/2011 | 1-3/2010 | 1-3/2011 | 1-3/2010 | |
| EUR mill. | EUR mill. | EUR mill. | EUR mill. | |
| Fibers | 86.9 | 47.2 | 109.7 | 66.4 |
| Plastics Products | 1.6 | 1.2 | 3.3 | 2.2 |
| Engineering | 2.2 | 1.1 | 2.6 | 1.4 |
| Other | 0.2 | 0.1 | 0.2 | 0.1 |
| Consolidation | (0.2) | (0.2) | (0.9) | (0.8 ) |
| Segment result | ||||
| Continuing operations | 90.7 | 49.4 | 114.9 | 69.3 |
| Discontinued operations* | 0.3 | 0.3 | 0.8 | 0.8 |
| Segment assets | Segment liabilities | |||
|---|---|---|---|---|
| 31/03/2011 | 31/12/2010 | 31/03/2011 | 31/12/2010 | |
| EUR mill. | EUR mill. | EUR mill. | EUR mill. | |
| Fibers | 1,464.4 | 1,424.1 | 495.1 | 429.5 |
| Plastics Products | 122.8 | 119.4 | 37.3 | 39.5 |
| Engineering | 41.9 | 43.5 | 28.4 | 25.6 |
| Other | 0.3 | 0.4 | 0.7 | 0.8 |
| Consolidation | (38.4) | (32.7) | (17.8) | (14.3) |
| Segment assets/liabilities | ||||
| Continuing operations | 1,591.0 | 1,554.7 | 543.7 | 481.1 |
| Discontinued operations | 0.0 | 36.1 | 0.0 | 34.6 |
| Reconciliation | 439.6 | 372.6 | 705.7 | 681.4 |
| Total assets/liabilities | 2,030.6 | 1,963.4 | 1,249.4 | 1,197.1 |
Due to increases in fiber shipments and selling prices for fiber and due to the consolidation of sales from the pulp producer Biocel Paskov, which was acquired in May of last year, total sales increased by 45.8% to EUR 532.1 mill. compared to the previous year. Sales by segment are presented in Note 5.
Personnel expenses of EUR 68.8 mill. (reference period 2010: EUR 63.3 mill.) include EUR 2.8 mill. (reference period 2010: EUR: 3.5 mill.) of expenses for severance payments and pensions.
Cost of material and purchased services amounted to EUR 304.6 mill., which is an increase of 53.3% compared to the first quarter of 2010. This higher increase compared to the increase in sales results from a disproportionate development of pulp price for the fiber sites as well as from the first consolidation of Biocel Paskov.
Note 9. Amortization of intangible assets and depreciation of property, plant and equipment
Amortization of intangible assets and depreciation of property, plant and equipment of EUR 25.1 mill. (reference period 2010: EUR 20.7 mill.) exclusively comprises amortization/depreciation. The increase in comparison to the first quarter 2010 is mainly due to the start-up of production line four in Indonesia and the acquisition of Biocel Paskov.
Note 10. Other operating expenses
In addition to the increase in freight outward and commissions caused by a higher shipping volume, additional expenses from existing contractual relationships cause the overall increase of other operating expenses.
Income tax is accrued per taxable entity on the basis of estimated average tax rates. Deferred tax assets arising from unused tax loss carry forwards are recognized only to the extent that the amount carried forward is likely to be used in the foreseeable future.
Finance costs include interest and interest-like expenses of EUR 5.4 mill. (reference period 2010: EUR 3.7 mill.) and foreign exchange gains resulting from the revaluation of fi nancial liabilities of EUR 0.2 mill. (reference period 2010: foreign exchange losses of EUR 0.2 mill.).
The share of income attributable to other shareholders of Lenzing (Nanjing) Fibers Co., Ltd. and European Precursor GmbH respectively is recognized as an expense due to time limitations under corporate law.
During the reporting period the Lenzing Group invested EUR 41.9 mill. (fi rst quarter in 2010: EUR 30.5 mill.) in intangible assets and property, plant and equipment. The investments mainly pertained to the construction of the production line III in Nanjing, the modifi cation/extension of production of modal fi ber and pulp at the site in Lenzing and the investments for reconstructions in Paskov.
Commitments from open purchase orders for property, plant and equipment as at 31 March 2011 amounted to EUR 81.6 mill. (31 December 2010: EUR 53.4 mill.).
Despite higher production volumes, inventories basically remained constant. There was no significant impairment to the net realizable value in 2011.
mentioned above to issue convertible bonds, which grant or intend a purchase right or exchange obligation respectively, for up to 12,862,500 ordinary shares (equals 50% of common stock) with the consent of the supervisory board until 9 December 2015 ("contingent capital").
These authorizations were not used in the interim reporting period.
The increase in trade receivables by EUR 28.6 mill. since 31 December 2010 results from the high volume of fiber shipments in March 2011, which is the highest ever achieved in the Lenzing Group.
The resolution passed by the general shareholders' meeting of 10 December 2010 authorizes the management board – together with the consent of the supervisory board – to increase common stock by a maximum amount of EUR 13,358,625.00 (equals 12,862,500 ordinary shares or 50% of common stock) within 5 years for contribution in cash or in kind ("authorized capital stock").
Furthermore, the management board has been authorized in the resolution passed by the general shareholders' meeting
These financial liabilities (current and non-current) marginally increased to the amount of EUR 620.9 mill. compared to EUR 612.8 mill. as at 31 December 2010. Due to agreed dates of repayment the maturity changed which resulted in higher current liabilities.
Net financial debt was reduced from EUR 307.2 mill. to EUR 256.0 mill. whereas it has to be considered, that dividend payments in the amount of EUR 39.9 mill. were carried out on 1 April 2011.
Note 19. Other provisions
Other current provisions mainly comprise provisions for services rendered but not invoiced, for measures of restoration, for increases of commodity prices, for additional expenses from existing contractual relationships and deferrals.
| 31/03/2011 | 31/12/2010 | |
|---|---|---|
| EUR mill. | EUR mill. | |
| Assumption of liability for associated companies |
1.7 | 3.3 |
Additionally, there are bank guarantees for liability escrow paid in the amount of EUR 5.4 mill. (31 December 2010: EUR 4.1 mill.). It is considered unlikely that the Group will be held liable as a result of these commitments.
The increase in other current liabilities is mainly due to the dividend of the Lenzing AG with an amount of EUR 39.9 mill., which was determined in the general shareholders' meeting on 29 March 2011 and will be payable on 1 April 2011 and to the advances from customers which increased by an amount of EUR 6.4 mill. compared to 31 December 2010.
Various legal proceedings resulting from the ordinary course of business are pending. The management board assumes that these proceedings will not have material adverse effects on the present and future earnings of the Group.
Contingent liabilities and commitments of the Lenzing Group developed as follows compared to the previous reporting date.
Compared to the fi rst quarter of 2010 gross cash fl ow increased to EUR 89.7 mill. mainly due to the good profi t situation. Cash fl ow from operations amounts to EUR 90.7 mill. in the fi rst quarter of 2011.
Cash flow from investing activities in non-current assets mainly results from the investments of Lenzing AG, the expansion of Lenzing (Nanjing) Fibers Co, Ltd and the reconstruction of the pulp production facilities at Biocel Paskov.
Cash and cash equivalents include cash in hand, demand deposits and short-term deposits at banks. As at 31 December 2010, the Group held securities qualifying as cash equivalents, that is securities with a maturity of less than three months from the time of acquisition. These securities were sold during the reporting period.
In the reporting period it was agreed on that the shareholders of the parent company will receive the following dividends:
| Total | Number of shares |
Dividend per share |
|
|---|---|---|---|
| EUR mill. | EUR | ||
| Dividend 2010 agreed in 2011 (paid 1 April 2011) | 39.9 | 25,725,000 | 1.55 |
| Dividend 2009 agreed in 2010 (annual shareholders' meeting 30 April 2010) | 51.4 | 3,675,000 | 14.00 |
Subsidiaries paid EUR 0.1 mill. (first quarter 2010: EUR 0.0 mill.) of dividends to non-controlling interests in the first quarter of 2011.
The group of related parties (companies and persons) did not change compared to the fi nancial statements of 31 December 2010.
Scope and amount of signifi cant business transactions as well as outstanding balances with associated companies are as follows:
| 1-3/2011 | 1-3/2010 | |
|---|---|---|
| EUR mill. | EUR mill. | |
| Sales | 16.1 | 12.7 |
| Other operating income | 0.4 | 0.2 |
| Cost of material and purchased services | 13.4 | 11.6 |
| 31/03/2011 | 31/12/2010 | |
| Trade receivables incl. amounts due resulting from construction contracts | 6.9 | 10.2 |
| Liabilities | 7.5 | 9.0 |
In order to hedge currency exchange rate risk, the Lenzing Group makes use of foreign currency forward contracts which are measured at market value.
The market values of the instruments employed as at the reporting dates are as follows:
| Foreign currency forward contracts | 7.3 | (0.7) |
|---|---|---|
| EUR mill. | EUR mill. | |
| 31/03/2011 | 31/12/2010 | |
| Type of derivative financial instrument | gain (+)/loss (-) |
| Foreign currency forward contracts | 7.7 | 3.1 |
|---|---|---|
| EUR mill. | EUR mill. | |
| 31/03/2011 | 31/12/2010 | |
| Type of derivative financial instrument | gain (+)/loss (-) |
The hedges as at 31 March 2011 have maturities of up to 13 months.
The Group employs futures to hedge and manage raw material price risk (natural gas). As at 31 March 2011, these hedges have maturities of up to 33 months. Unrealized gains as at 31 March 2011 from the valuation of open futures or, respectively, the gain from the closing of contracts with delivery in the subsequent period amounted to EUR 1.5 mill. (31 December 2010: EUR 0.6 mill.) and are recognized directly in other comprehensive income.
There were no material reportable events after the end of the interim reporting period.
Note 27. Corporate bodies
The condensed interim fi nancial statements of the Lenzing Group at hand have been reviewed by Deloitte Audit Wirtschaftsprüfungs GmbH, Vienna.
Lenzing, 10 May 2011
Members of the supervisory board
The general shareholders' meeting of 29 March 2011 newly elected Patrick Prügger to the supervisory board. Hermann Bell's seat on the supervisory board was not renewed at his own request.
The constitutive meeting of the new supervisory board held after the general shareholders' meeting elected Michael Junghans as chairman and Veit Sorger as deputy chairman of the supervisory board.
The changes in the supervisory board of Lenzing AG are summarized as follows:
Hermann Bell, Vienna Chairman (until 29 March 2011)
Michael Junghans, Vienna
Deputy chairman (until 29 March 2011) Chairman (from 29 March 2011)
Veit Sorger Deputy chairman (from 29 March 2011)
Member of the supervisory board (from 29 March 2011)
The Management Board:
Peter Untersperger
Friedrich Weninger
Thomas G. Winkler
We have reviewed the accompanying condensed consolidated interim fi nancial statements of Lenzing AG, Lenzing, for the period from January 1, 2011 to March 31, 2011 including the condensed consolidated balance sheet as of March 31, 2011, the related income statement, statement of comprehensive income, condensed statement of cash fl ows and statement of changes in equity for the period from January 1, 2011 to March 31, 2011 as well as selected explanatory notes.
Management is responsible for the preparation and fair presentation of these condensed consolidated interim fi nancial statements in accordance with International Financial Reporting Standards (IFRS) applicable on interim fi nancial reporting, as adopted by the EU.
Our responsibility is to issue a report on the condensed consolidated interim fi nancial statements based on our review.
The execution of this engagement and our responsibility, also in relation to third parties, shall be governed, as agreed by signing the engagement letter, by the general conditions of contract for the public accounting professions as issued by the Austrian Chamber of Public Accountants and Tax Advisors (AAB 2011) dated March 8, 2000 and February 21, 2011 respectively. Our liability for negligence is agreed to be limited to EUR 12 million. This total maximum liability cap may only be utilized up to its maximum amount even if there is more than one claimant or more than one claim has been asserted.
We conducted our review in accordance with applicable Austrian laws and professional standards (e.g. KFS/PG 11) and International Standard on Review Engagements (ISRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim fi nancial information consists of making inquiries, primarily of persons responsible for fi nancial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all signifi cant matters that might be identifi ed in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim fi nancial statements do not present fairly, in all material respects, the fi nancial position of Lenzing AG as of March 31, 2011 in accordance with IFRS applicable on interim fi nancial reporting, as adopted by the EU.
We have read the accompanying condensed interim group management report of Lenzing AG as of March 31, 2011 and assessed whether it contains any obvious contradictions to the condensed consolidated interim fi nancial statements. Based on our review nothing has come to our attention that causes us to believe that the accompanying condensed interim group management report contains obvious contradictions to the condensed consolidated interim fi nancial statements.
Vienna, May 10, 2011
Deloitte Audit Wirtschaftsprüfungs GmbH
Harald Breit Chartered Accountant
ppa. Christoph Hofer Chartered Accountant
We confi rm to the best of our knowledge that the condensed interim fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Group as required by the applicable accounting standards and that the interim Group management report gives a true and fair view of important events that have occurred during the fi rst three months of the fi nancial year and their impact on the condensed interim fi nancial statements, of the principal risks and uncertainties for the remaining nine months of the fi nancial year and of the major related party transactions to be disclosed.
Lenzing, 10 May 2011
The Management Board:
Peter Untersperger Chairman of the Board
Friedrich Weninger Member of the Board
Thomas G. Winkler Member of the Board
Lenzing Aktiengesellschaft 4860 Lenzing, Austria www.lenzing.com
Lenzing Aktiengesellschaft Corporate Communications Mag. Angelika Guldt Phone: +43 (0)7672 701-2696 Fax: +43 (0)7672 918-2696 E-mail: [email protected]
Metrum Communications GmbH, Vienna
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Lenzing Aktiengesellschaft . 4860 Lenzing, Austria . Tel.: +43 (0)7672 701-0 Fax: +43 (0)7672 701-3880 . E-Mail: [email protected] . www.lenzing.com
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