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euro adhoc: Lenzing AG
Quarterly or Semiannual Financial Statements / The Lenzing Group: Off to a Good Start in 2005

Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.
12.05.2005
…. but Substantially More Difficult Overall Conditions
The 2005 business year has been off to a satisfactory start, in spite
of substantially more difficult overall conditions. The consolidated
sales of the Group according to IFRS rose by 22.9% during the first
quarter 2005 and amounted to EUR 233.8 million (EUR 190.3 million the
year before). This reflects the full consolidation of the Tencel
group of companies, as well as a new fiber-production record. Income
from operations (EBIT) improved by 13.6% to EUR 27.4 mill. (compared
to EUR 24.1 mill.) As a result of higher raw-material prices and
lower average earnings for fibers, the increase in the operating
result fell short of the increase in sales. With a slightly improved
financial result, income before taxes (EBT) was up by 17.1%,
amounting to EUR 27.3 mill., as compared to the first quarter 2004
(EUR 23.3 mill.). Net income amounted to EUR 20.5 mill. (after EUR
16.6 mill. for the comparable quarter of the previous year). The EBIT
margin amounted to 11.7% for the first quarter 2005 (compared to
12.7%), while the EBITDA margin was 18.8% (after 19.4%).
Positive Demand for Fiber Volumes in Asia - Difficult Business
Activities in Europe
While the fiber volumes sold in Asia at declining prices continued to
be satisfactory, business activities came to be increasingly
difficult in Europe (including Turkey), both for the Business Unit
Textile Fibers and the Business Unit Nonwoven Fibers. It was possible
to successfully counter the trend by producing record quantities of
fibers and improving the product mix. Sales of modal fibers reached
an all-time high. With regard to nonwovens, demand in Asia and the
USA was very gratifying. Europe lagged behind, both in terms of
prices and volumes. The large stocks amassed by competitors are a
strain on the market.
Outlook
Although the first weeks of the 2005 business year took a positive
course, Lenzing expects considerably more difficult overall
conditions throughout the world for the year as a whole, especially
strong pressure on raw-material and viscose prices. The consistently
unfavorable euro/dollar rate and the liberalization of the textile
import quotas are a major strain on our business in Europe. Lenzing
will counter these unfavorable overall conditions by stepping up its
production and concentrating further on special fibers. However,
margins will inevitably go down in the further course of the 2005
business year. The non-fiber-specific business sectors, i.e. Lenzing
Technik and Lenzing Plastics, can be expected to continue their
positive development. No substantial reversal of the trend can be
expected for the paper sector, given the difficult overall
conditions.
Altogether, the Lenzing Group looks forward to a comparatively good
development in the coming months. However, it will not be possible to
match the results of the previous year.
Important Key Data 1-3/2005
according to IFRS, on a Group basis
~
in EUR mill.              1-3/2005 1-3/2004
Sales                     233.8    190.3
EBITDA                     43.9     37.0
EBIT                       27.4     24.1
Income before taxes (EBT)  27.3     23.3
Net income                 20.5     16.6
~
end of announcement                    euro adhoc 12.05.2005 07:59:30 

Further inquiry note:

Angelika Guldt

Branche: Chemicals
ISIN: AT0000644505
WKN: 064450
Index: WBI
Börsen: Berliner Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Bayerische Börse / free trade
Wiener Börse AG / official dealing

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