Lenzing Ag Ord

Gentlemen, welcome to the Lansing AG Q2 and half-year results 2026 conference call-in live webcast. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star N1 on your telephone. For operator assistance, please press star N0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Georg Kasperkovitz, CEO. Please go ahead, sir.

Good afternoon, everyone. Thank you for joining us. We are excited to present Lansing Staff Year 1, 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. Mathias Breuer, our CFO, will lead you through the financials. The headline for the first half is 20 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 1, 2025, despite a particularly strong half year 1, 2025 comparison base and the consequent pruning of low margin volumes in half year 1, 2026. So holding close to that level with increased average sales prices is a reassuring achievement. It reflects our deliberate focus on value over volume and the self-help measures which we already rigorously pursued. Below the top line, the same discipline shows through in strong cost-profit and EBITDA improvement of the fiber division, cash generation, and the further reduction in net debt, a development towards a healthier financial profile also at the core of our recently announced new strategy. So the takeaway for you is simple. A robust first half that keeps us firmly on track and a strong platform from which to execute. Overall, the market backdrop through the first half was constructive. Demand across our portfolio was robust as customers built up some inventory along the empty value chain and supply-demand dynamics worked in our favor. evidenced by net margin improvement of most fiber products. In textiles, end demand was stable across Europe and North America, and the apparel retail remained resilient. The underlying consumer demand actually held up better than the headlines might suggest. In non-wovens, demand remained firm, underpinned by high downstream operating rates. The continuous brand-led shift towards cellulosic plays directly to our positioning. Lastly, the Dissolving Woods part's demand is tied to cellulosic fiber production, so a structurally under-supplied market kept the pricing environment favorable. The bottom line for us, stable demand across all three parts of the portfolio and a supportive pricing environment, which is exactly what you want to see underpinning the strategy. The key point of this slide is that Elevated prices of competing fibers are a structural tailwind for us, and one we expect to persist. White matters, our cost competitiveness versus alternative fibers continues to improve. Year to date, cotton is up around 17% and polyester around 20%, against these costs at roughly plus 15%. That gap means cellulotic fibers have become relatively cheaper than the substitute mills blend against. which pulls demand towards our fiber family and gives us pricing headroom over time. Crucially, this is sustainably rather than a one-off. Cotton remains supply constrained, and polyester pricing is expected to stay elevated by higher crude oil and natural gas prices in the wake of the Middle East conflict. So we expect these elevated competing fiber prices to persist, supporting both demand and pricing for cellulosics over the medium term. On the cost side, input costs remain above historic levels and the drivers are largely structural, including the Middle East conflict. Energy prices, and particularly caustic soda, remain elevated through the second quarter. Initial easing in Q1 2025 has already reversed. Hence, we expect volatility to persist while the geopolitical situation remains unresolved. Caustic Soda, in particular, remains one of our key cost headwinds. And Salsa has been even more pronounced, up as much as a three-fold year today, which continues to pressure the cost base. The reassurance in this, while these headwinds are real, they're actively managing them. So the cost pass-through and the self-help measures I will come to. And that is what has perfected our margin. Let me put the conflict in perspective. The important distinction is that its main impact is on our input cost and supply chain volatility, not on customer demand, which has, as in previous crises, remained resilient.

I will follow up on the response that Lansing is providing to the current market uncertainties. A good afternoon also from my side, Mathias here. So, and this is the part that really matters. We as Lansing, we don't react passively. We take an active approach with full cost pass-through and pricing excellence which remain a key strategic priority to us. We use the cost increases to adjust the overall pricing level. The order intake remains robust, supported by positive demand and on the supply side we continue to diversify especially with regard to key chemicals. We monitor the pricing and the cost structure in a weekly structured process and we addressed the developments proactively. And, and I think this we have proven with our track record, our cost measures are well underway. Around 25 million of the Euro 120 million program that we announced also last week are already fully in the books and successfully realized and contribute to the current profitability. So while the conflict creates some volatility, we have a clear action plan going forward to mitigate as much as possible. If we go into quantities and price developments, we can see on the Fiverr side that the volumes remained broadly stable in the quarter, which is a solid result in a still challenging market and with our efforts to cut down on generic segments. At the same time, selling prices increased during quarter two 2026, approximately 6% both in US dollars and in Euro. The stable volumes together with the higher prices demonstrate the continuous pricing discipline that sits in the heart of our value over volume approach. In pulp, production volumes increased quarter on quarter, so at 300,000 tons production in the second quarter. Sales volumes continue to reflect the normal quarterly fluctuations we see in this business, which is driven by shipment patterns. Average selling prices improved quarter-in-quarter, leaving the rock-bottom level of 780 USD per ton, you remember, by end of last year, to currently a level of 850 USD per ton, reaching a level of approximately 900 USD within quarter three. On that slide you can see the translation into Euro per kilogram, but as the market is trading in USD, I just tried to refer on that level. A steady, dependable power performance that added to the group's progress in the quarter. To sum up the market, overall we continue to see a constructive backdrop. Challenges remain, particularly on the cost side, but the demand across our portfolio is robust and favorable supply-demand dynamics continue to support our results. With the market backdrop in mind, let us now turn to the financial performance. Looking across the past five quarters, revenue has remained broadly stable, a sign of resilience given everything that is happening around us. The strategic focus remains firmly on value over volume, I need to repeat that, including the deliberate pruning of unprofitable volumes. That discipline is increasingly reflected in the profitability. EBITDA grew by around 9% year on year, despite largely unchanged revenues. supported by both pricing initiatives and the cost excellence and the self-help measures that we have communicated and that we have discussed. The conclusion is that the improvement of our profitability does not only start with the new strategy that we announced last week, it is well underway and it will be amplified going forward. Very important also to understand our performance is the quarterly development. and this bridge shall show you the way from quarter one into quarter two and how we drove the improvement. Positive contributions from pricing, from volume and from mix effects across fiber and pulp supported the quarter. Compared to the first quarter, we had accounted for significantly lower one-offs. So no positive impact from tree to textile first time consolidation which impacted first quarter performance. lower sales of CO2 certificates and a lower impact from bioasset valuation compared to quarter one. On the cost side, the cost inflation or higher input cost amounted to 11 million Euro quarter on quarter. So our cost basis increased by 11 million. That delivered an EBITDA increase of roughly 6% versus the first quarter. And more important on quarter two, after the exclusion of positive one of items, like the sale of CO2 certificates, 5.5 million Euro, positive FX development, which accounted for approximately 3 million Euro, and positive valuation of the bioasset of approximately 10 million. The operational EBITDA is clearly above the 100 million Euro run rate. So this is a very important message that we wanted to provide you. The takeaway, the operational initiatives continue to deliver tangible improvements, successful execution, coming through here in the numbers. In working capital, capex and free cash flow, we see, and I think the overarching message for this slide is disciplined financial management and continued execution. This is what we also have proven in last year and we continue on that path. Working capital remains a key focus area for us. Trading working capital is down to around 17.6% of revenue. The main driver versus June 2025 was inventory optimization. So the inventories came down materially year on year. Versus quarter one, 2026, the small sequential uptick simply reflects higher trade receivables in line with stronger quarter two revenue. So underlying discipline is intact. Working capital optimization for sure remains an active ongoing focus for us. On CapEx, it is elevated compared to quarter two, 2025. but remains within our budget and plans and it was a deliberate step up to support the execution of the new strategy like the investment in the tampon business. On unlevered pre-cash flow, the year-on-year comparison needs some context. Quarter two 2025 was flattered by one-off effects and a lower level of capex as we can see. So this year's quarter two looks lower largely for those two reasons. If we look on a half-year level, we see an improving trend. If we take a step into working capital development, and here I think this reiterates the point that I've made on the last slide, trade working capital overall improved. One of the key drivers you can see here was the optimization of the inventory level both in fibers and dissolving wood pulp. This is certainly the standout contributor to that development. Trade receivables, trade payables have remained relatively stable over the recent quarters and this again underlines the broader point. We continue to actively identify and realize optimization opportunities on the way. With regard to Net debt and cash position. The net debt position remains very stable. Net debt has come down slightly year on year, which demonstrates the disciplined balance sheet management that we have. Leverage is by end of second quarter at 3.6 times EBITDA, net financial debt to EBITDA, up from 3.3 times by end of 2025. Reason behind is the last 12 months view which includes now the weaker performance of Q3, Q4 2025 while eliminating the strong Q1 2025. Liquidity remains very strong, provides a solid cushion. The slight decline reflects the repayment of outstanding maturities rather than any deterioration. The theme throughout is prudent financial management. and continued progress toward the lower leverage we are targeting over the mid-term. On the maturities, I need to state out that this maturity profile shown here is a snapshot as of today. It does not include any announced or potential capital structure initiatives. Proactive and disciplined management of the maturities remains key priorities as I said in order to support the implementation of the new strategy with ample financial headroom and over time the intention is to further smoothen and balance the profile by proactively addressing maturities and improving the debt structure. With the financial picture covered let me now hand back to Georg for the outlook.