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Q4 23 key highlights: 1) Revenues up 10% y/y (+6% q/q); 2) EBITDA at EUR84m (+2% q/q), o/w EUR21m from the revaluation of biological assets and EUR12m from the sale of CO2 certificates; 3) FCF reached EUR22m, mainly due to a EUR66m decline in NWC q/q; 4) FY24 EBITDA should be higher than in FY23, but the extent was neither quantified nor qualified on the call. Given only moderate absolute changes to EAT/FCF 24/25e, we maintain our val. range of EUR18-EUR49. Challenging environment in the fiber
Companies: Lenzing (LNZ:VIE)Lenzing AG (LNZ:WBO)
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We have updated our numbers to reflect yesterday''s ad hoc release: 1) Mgmt. specified the FY23 EBITDA target to ''around EUR300m'' (previous range: EUR270-330m / VA consensus: EUR289m), suggesting a sequential decline in Q4; 2) non-cash impairment of EUR480m. We cut our adj. EBITA 24-26e by c.20%, now sitting 41%/28% below consensus 24/25e, to reflect a continued challenging market environment. Our new forecasts point to a new valuation range of EUR18-49 per share. Weak market conditions drov
Q3 23 key highlights: 1) Revenues down by 9% y/y (-2% q/q); 2) EBITDA down 23% q/q due to lower tailwinds from revaluation of biological assets; 3) Cost-saving measures should support a recovery from 2024 to the tune of EUR50m in 2024 and EUR100m p.a. as of 2025. We cut our EPS estimates for 2023/24 and update our valuation range to EUR28-EUR59 (from EUR31-EUR64). Fiber segment remains Lenzing''s problem child Lenzing''s Fiber division remains burdened by the current unfavorable market develop
Lenzing has gone through a ''perfect storm'' with major capex projects having come online just as end markets deteriorated. Yet payback on its EUR 2bn investment looks tangible via increased backward integration and a structurally better mix, complemented by cost cutting. With fiber markets bottoming out, EBITDA has scope to rise from EUR 330m in 23e (guidance: EUR 320-400m) to EUR 650m by 26e, supporting deleveraging to 2.5x and ROCE 10%. Our fair value range is EUR 31-64. Crystallization of p
Lenzing''s Q4 results do not prompt significant changes to our FY-23 group EBITDA estimates (Fiber higher / Pulp lower, on pulp price deflation). This can be regarded as a good start after substantial negative consensus revisions during FY-22 (amid a ''perfect storm'' of cost inflation and de-stocking of customer inventories) and the new company guidance for EUR320m-EUR420m EBITDA indicates that the company regards even higher EBITDA levels than our EUR336m as realistic, subject to market recove
Lenzing has issued a profit warning, providing an updated EBITDA 2022 guidance of EUR250m. With Q3 results on 3 November, Lenzing had called market expectations of around ~EUR300m EBITDA at that time ''realistic''. On the conference call, management stated that ~EUR15m of the profit-warning is due to one-off effects (restructuring) while FX and weaker markets had a negative profit impact of ~EUR20m each. We think the profit-warning comes as a negative surprise as the market environment has not d
Following Lenzing''s recent profit warning and negative newsflow from customers, we cut our forecasts and valuation range. Weak demand and weakening pricing Low consumer confidence has impacted demand for wood-based cellulosic fibers and commodity prices have developed unfavourably since summer. Viscose Staple Fiber (textile) prices declined by 13% since June, and Cotton (FE) prices are down 24%, both in USD-terms. At the same time, dissolving pulp prices have decreased only marginally and ener
Looking for double-digit organic growth? ESG qualities? Low P/E? Lenzing has it all. With key projects in Brazil and Thailand ramping in 2022, additional visibility on earnings and value could drive a re-rating. We analyse organic growth potential, plus the resulting cash flow and balance sheet risks, to reach a fair value range of EUR65 (assuming a $900/t mid-term pulp price) to EUR114 in a blue-sky scenario of a 18% ROIC for the Brazil project, which could be achievable at a $1,050/t DWP price
Companies: Lenzing AG (LNZ:WBO)Lenzing AG (0NCV:LON)
Q3 EBITDA came in 9% below consensus Lenzing reported implied Q3 EBITDA of EUR80m, 9% below consensus expectations mostly driven by lower margins (impacted by higher energy, dissolving wood pulp and logistics costs). Management reiterated guidance for the year (EBITDA of at least EUR360m) and 2024 targets (including the EUR800m EBITDA target). Inflation: how long will it last? Management reiterated its comments on inflation in energy, raw materials and logistics costs, adding that more press
Lenzing is a global leader in WBCF... Lenzing is an Austrian manufacturer of wood-based cellulosic fibres (WBCF). These are alternatives to cotton and synthetic fibres (mostly polyester) used in textiles (c.62% in 2020) and non-woven applications (c.38% in 2020). The company is a market leader in specialty fibres (specialty viscose, lyocell and modal), and one of the top 5 players in commodity viscose. ... and a beneficiary of an ESG shift With better CO2 profile of wood-based cellulosic fib
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