Lenzing Ag Ord

Ladies and gentlemen, welcome to the Lansing AG third quarter results 2026 conference call and live webcast. I'm Moritz, the chorus call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mathias Breuer, CFO. Please go ahead, sir.

Perfect. Thank you, Moritz, and good afternoon, everyone from the Lansing office, together with my colleague, Georg Kasperkovitz. I'm very pleased to present today Lansing's results for the third quarter and the first nine months of 2026. following the successful completion of our recent capital increase. I will begin with the key highlights. Erik will then take you through the market environment and discuss the main operational developments before I will provide a more detailed review of the financial results. Looking into the key highlights, the headline for the first nine months of 2026 is the clear improvement of our underlying operational performance. Revenue, as you can see, pretty stable and remained resilient despite the deliberate exit from unprofitable business, validating the strength of our value-focused strategy. Our profitability continued to improve. The EBITDA adjusted for restructuring costs increased to €114 million in Q3, corresponding to a 17% margin, or up 35% compared to Q3 in 2025. This completely reflects the impact of our operational excellence initiatives, our cost discipline, and our pricing measures. Cash flow remained positive, while below the exceptionally strong prior year comparison, which benefited from significant working capital optimization in 2025, but within quarter three, 2026, also here underlying cash generation remained solid. The leverage ratio stood at 3.3 times EBITDA at quarter end, It came down from end of June 2026 as you remember and including the successfully completed capital increase in October the pro forma leverage would be approximately 2.6 times adjusted EBITDA highlighting the significant strengthening of our balance sheet. Following our guidance for the full year further improvement is to be expected for the end of the year. Overall, Q3 confirms that the transformation measures are gaining traction, that we are driving higher profitability, and that we are creating a stronger financial profile for our company. Let me briefly update you on the successful execution of the comprehensive refinancing package. In October, we completed the capital increase of approximately EUR 300 million, issuing around 34.8 million of new shares. The new shares started trading on October 23rd. The transaction was well supported by the shareholder base, with a subscription rate of more than 99%, including full participation from our core shareholders and Oberbank. We are also pleased that Susano Holding S.A., who is the controlling shareholder of Susano, has invested separately. In parallel, we are securing approximately €300 million of additional debt financing, including an upsizing of our syndicated loan and a new promotional financing facility. Around Euro 150 million, this is the syndicated loan, has already been signed and extended. Together these measures significantly strengthen our balance sheet, improve the liquidity and provide the financial flexibility required to further execute our strategy and our transformation. Looking at the shareholder structure following the successful capital increase, not much changed. The core shareholders demonstrated strong support for the transaction, with BNC and Susana Syndicate and Oberbank fully exercising their rights. As a result, the shareholder structure remains highly stable, only minor changes to the ownership split and an additional 0.8% investment by Susana Holding SA, as I mentioned in the prior slide. Susano's option to acquire an additional 15% stake from BNC until 2028 remains unchanged. Together with the agreed six-month lock-up, this underscores the long-term commitment of our anchor shareholders and the stability to the ownership structure also going forward. Alongside the capital increase, we have made significant progress in strengthening the financial profile and the liquidity position. We successfully upsized and extended our core financing facilities, including the Euro 500 million syndicated loan and Euro 200 million revolving credit facility, both now maturing into 2030. In addition, we are progressing the planned Euro 150 million vorratsinvest facility, which will further enhance the liquidity and our funding flexibility. As the pro forma maturity profile on the right illustrates, these measures materially reduced the near-term refinancing needs as the maturity wall in 2028 and provide a significantly stronger financial foundation for the execution of our strategy. Now handing over to Georg for the market update.

Thank you, Mathias, and good afternoon from my side as well. Looking at the market, the key message of this slide remains that increasing prices of oil-based fibres and cotton continue to be supportive for wood-based fibres. Back in August, viscose prices were up around 15% year-to-date, supported by price increases of polyester by roughly 20% and by cotton by roughly 17%. Since then, this trend has accelerated. Polyester prices are now up 43% year-to-date and cotton prices 23%, while viscose prices have increased by 21%. As cotton markets remain constrained and polyester continues to face structurally higher feedstock and energy costs, We expect elevated competing fiber prices to persist, providing continued support for both demand and pricing interlosing fibers over the medium term. Let me also briefly address the impact of the Middle East conflict on our cost base. As expected, the conflict has led to higher inputs and energy prices, particularly for our caustic soda procurement in Austria and sulfur and carbon diesel price in January, as well as high electricity and natural gas prices. As you can see, Salfa experienced the most significant increase. However, it accounts for less than 20% of our total chemical costs. So, the message here is that despite the headwinds, the overall impact on Lansing has remained manageable. This reflects our strong energy efficiency, particularly at the Lansing site, as well as our active cost management and hedging activities. In addition, we have been able to pass a large part of the cost inflation on to customers in the fiber division. Turning to fiber sales, volumes were, as expected, slightly lower at 211 kilotons, reflecting our continued focus on value over volume. At the same time, pricing continued to improve, with average selling prices reaching USD 2.6 per kilo and Euro 2.3 per kilo, up both quarter on quarter and year on year. This positive pricing and mixed effects more than offset the lower volumes. This demonstrates the strength of our commercial strategy and contributed to improve profitability in the quarter. Concerning pulp, production volumes remained stable at 306,000 tons, both compared to Q2 and the prior year. External dissolving wood pulp sales volumes were also stable quarter on quarter, while lower year on year due to greater share of internal consumption. Pricing continued to improve, with average DWP prices reaching Euro 0.76 per kilogram, up 3% versus Q2, and up 7% versus Q3 2025. This reflects the continuous tightness in dissolving wood pulp markets and provides additional support to our earnings development. Let us now turn to our Grown on Bowen's Reset Textiles Initiative. Let me briefly reiterate the strategy we communicated end of July, because everything we do from here serves it. We remain firmly focused on executing growing non-woven and resetting textiles, reducing costs, and optimizing capital employed. Together with innovation and collaboration with customers, this is what creates a more focused, more profitable, and more resilient business, moving forward towards a balanced portfolio, a leaner cost base, and fewer stronger sites. This slide highlights the strong progress we are making in executing our grown-on woven reset textile strategy. On the commercial side, incentives are now fully aligned with our value-over-volume approach. We continue to see strong growth in strategic segments, particularly hygiene applications, while further converting textile viscous capacity to higher-value products. Tencel-branded LyoCell has now reached 100% of capacity and continues to operate at full utilization. We have also strengthened our commercial organization with new leadership in both the textiles and the nonwovens business. These actions are reflected in the improved fiber adjusted EVDA contribution, which increased by almost 100 million from Euro 17 million in the first nine months of 2025 to 160 million this year. At the same time, we continue to make good progress on our Euro 120 million performance program. Personal measures representing annual savings of Euro 27 million have already been contractually agreed, covering more than 260 full-time equivalents. In addition, we have implemented Euro 31 million of energy and operational cost savings, representing almost 90% of our target in this area, and initiated 32 million of non-personal SG&A savings. Looking ahead, we've identified a further Euro 21 million of personal cost reductions to be implemented through 2027, in line with the planned consolidation of our production network. Let me also update you on the implementation of our production footprint optimization, which is a key pillar of our grown non-woven reset textile strategy. Our current footprint reflects years of expansion, but profitability across sites is not uniform. We are therefore focusing our resources on our strongest assets while simplifying the portfolio elsewhere. This includes the divestment of our Indonesian Disco site, where we are currently in exclusive negotiations with a strategic bidder. A decision is expected before year-end. In addition, we have progress with the preparations of the wind-down of our Heiligenkreuz site by the end of Q1 2027 and Grimsby by the end of 2027. Customer communication and product transfers are progressing according to plan, with no disruptions to operations. For Highlink, the production phase-out remains on track, with final production scheduled for March 31, 2027. We have agreed the social plan with the Works Council and notified the National Employment Service . At the same time, we are assessing a potential value-accretive divestment. Due diligence is ongoing. and subjects to a satisfactory binding offer, we aim to reach a decision before year-end. These actions will strengthen the competitiveness of our production network and support the next step of profitability improvement from 2027 onwards. As disclosed, the decisions result in restructuring expenses of €36 million in Q3 and additional non-cash impairment of €136 million related to the affected sites. While these are significant one-time charges, they are necessary steps to improve returns and create a stronger, more focused Lansing going forward. To complete the picture, let me briefly touch on the fourth pillar of our growth-involved reset strategy, innovation. Here we are sharpening our focus on the most attractive growth opportunities. We continue to strengthen our innovation pipeline. This includes a recently signed trans-development agreement for biodegradable cigarette filters with a global industry leader, and the recent acquisition of Hygiene Fiber Patients from Kelheim Fibers. At the same time, we are seeing growing market traction for our specialty products with Tencel Modal Micro Air, now nominated by several leading apparel brands and retailers. Together with the industry recognition we have received, including the ITMS Award and inclusion in Time's Best Innovations of 2026, This reinforces our confidence in the long-term growth outlook. With this, let me now hand back to Mathias in the financials.