Half Year 2026 Lenzing AG Earnings Call Transcript
Key Points
- Lenzing AG (LNZNF) demonstrated resilience with revenue only modestly lower than the strong H1 2025, while improving gross profit and EBITDA in the fiber division.
- The company's strategic focus on 'value over volume' is paying off, with average selling prices for fibers increasing approximately 6% in Q2 2026, both in USD and EUR.
- EBITDA grew around 9% year-on-year, and operational EBITDA is clearly above the EUR100 million run rate, excluding one-off items.
- The company is actively managing cost headwinds through cost pass-through and pricing excellence, with EUR25 million of the EUR120 million cost program already realized.
- Demand remains robust across all three portfolio parts (textiles, non-wovens, dissolving wood pulp), supported by a structurally undersupplied market and elevated prices for competing fibers like cotton and polyester.
- Working capital management is disciplined, with trading working capital down to around 17.6% of revenue, driven by significant inventory optimization.
- Input costs remain elevated and volatile, particularly for caustic soda (over EUR10 million monthly spend) and sulfur (up threefold year-to-date), driven by the Middle East conflict.
- The company is running at full capacity and cannot increase volumes to meet demand, limiting potential volume growth in the near term.
- Net debt to EBITDA increased to 3.6 times from 3.3 times at the end of 2025, reflecting weaker performance in H2 2025.
- SG&A costs increased in Q2 due to inflationary salary increases and higher outgoing freight costs.
- The company faces ongoing uncertainty and volatility in the market, with geopolitical tensions and cost inflation expected to persist, requiring continuous monitoring and mitigation efforts.
- Unleveraged free cash flow in Q2 2026 was lower year-on-year, partly due to a deliberate step-up in capex to support the new strategy and a flattering comparison base in Q2 2025.
Good afternoon, everyone. Thank you for joining us. We are excited to present Lenzing's half year one 2026 results after recently presenting our new strategy to you. For the course of today's presentation, we will walk you through the key highlights of the last six months, discuss the market dynamics, and of course, present our half year one 2026 financial results.
I will take you through the highlights in the market, and Matthias Breuer, our CFO, will lead you through the financials. The headline for the first half is strengthened with resilience. Against the backdrop of hated demand volatility and uncertainty, as well as the cost increases caused by the Middle East conflict, the business demonstrated resilience and improvement. Revenue was only modestly lower than half year one 2025.
By the particularly strong half-year one 2025 comparison base and the consequent pruning of low margin volumes in half-year one 2026, so holding close to that level with increased average case prices is a reassuring achievement. It reflects our
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