Lenzing Delivers Improved Earnings and Strong Free Cash Flow as Transformation Gains Momentum

The Lenzing Group continued to make significant progress in its strategic transformation in the 2025 financial year, delivering improved earnings, strong free cash flow generation, and substantial cost savings despite a persistently challenging market environment.

The global specialty fiber producer reported stable revenues of EUR 2.6 billion, representing a modest decline of 2.3 percent year-on-year, primarily driven by lower fiber sales volumes, continued pressure on selling prices, and adverse currency effects. However, decisive operational measures and disciplined cost management enabled the company to strengthen its financial performance.

Adjusted EBITDA increased by 7.6 percent to EUR 425.6 million, reflecting the tangible impact of Lenzing’s comprehensive Performance Program, while reported EBITDA reached EUR 413 million. Free cash flow improved to EUR 173.9 million, underlining the company’s focus on liquidity and financial resilience.

Transformation Program Driving Profitability and Efficiency

Throughout 2025, Lenzing accelerated the implementation of its transformation strategy, focusing on operational excellence, structural cost reductions, and portfolio optimization.

The company achieved cost savings exceeding EUR 200 million, significantly above the EUR 130 million realized in the previous year. These savings were driven by efficiency improvements across core processes, optimized procurement strategies, and strict cost discipline.

As part of its restructuring efforts, Lenzing initiated a workforce optimization program, including a planned reduction of approximately 600 positions in Austria. This initiative is expected to generate annual savings of around EUR 45 million, with full benefits anticipated by 2027. By the end of 2025, measures implemented had already delivered approximately EUR 22 million in savings.

Strong Cash Flow and Improved Financial Position

Lenzing further strengthened its financial position during the year through robust cash flow generation and targeted financing activities.

Cash flow from operating activities rose to EUR 419.7 million, supported by a significant 21.6 percent reduction in working capital. Unlevered free cash flow reached EUR 279.3 million, highlighting improved underlying cash earnings.

To enhance liquidity and financial flexibility, the company successfully executed a comprehensive financing package, including:

• A EUR 545 million syndicated loan and revolving credit facility

• The issuance of a EUR 500 million hybrid bond

• The repayment of the existing 2020 hybrid bond

As a result, Lenzing reduced its net financial debt to EUR 1.35 billion and maintained a solid liquidity position of EUR 690.9 million at year-end.

Disciplined Capital Allocation and Strategic Investments

Capital expenditures amounted to EUR 141.1 million in 2025, reflecting a disciplined investment approach focused on:

• Maintenance and compliance (“license-to-operate”) projects

• Energy efficiency enhancements

• Operational excellence initiatives

Portfolio Optimization and Asset Review

As part of its strategic portfolio review, Lenzing completed an assessment of its Indonesian production site, resulting in a non-cash impairment of EUR 82.1 million. This reflects a prudent evaluation of market conditions and future strategic options.

Market Environment Remains Challenging

The business environment in 2025 remained demanding, characterized by:

• Persistent price pressure in staple fibers

• Declining dissolving wood pulp prices

• Elevated raw material, energy, and logistics costs

• Ongoing geopolitical and trade uncertainties

Despite these headwinds, Lenzing expanded into higher-margin markets in North America and Asia, partially offsetting volume declines. Fiber sales volumes totaled approximately 904,000 tonnes, compared to around 960,000 tonnes in 2024.

Leadership Changes to Support Transformation

Lenzing implemented key leadership changes to strengthen governance and execution capabilities:

• CEO Rohit Aggarwal stepped down in January 2026

• Transition to a three-member Managing Board:

  • Mathias Breuer (CFO)

  • Georg Kasperkovitz (COO)

  • Christian Skilich (CPO/CTO)

• Establishment of an Executive Committee

Outlook: Focus on Resilience and Growth

Looking ahead, Lenzing expects market conditions to remain uncertain due to geopolitical tensions, trade policy developments, and ongoing capacity expansions in the fiber market.

However, early indicators in the first quarter of 2026 suggest gradual improvement in demand and pricing trends across both fiber and pulp markets.

The company remains committed to:

• Advancing its Performance Program

• Executing its premiumization strategy

• Strengthening profitability, resilience, and cash generation

Management remains confident that these initiatives will support sustainable long-term growth.