Lenzing 4Q 19 - Weak outlook as expected, ambitious long-term targets
Lenzing's final 4Q 19 results were in line with preliminary headline figures released at the end of January. Sales dropped by 9.7% yoy on the back of falling viscose revenues and net profit after min. fell by almost two thirds as EUR 12.8 mn worth of US-related impairments weighed on EBIT.As expected, management issued guidance for 2020e results below 2019 levels. We expect EBITDA of EUR 272 mn and consensus currently forecasts EUR 288 mn, following viscose price weakness and the muted economic outlook. We note that speciality prices recorded declines in 4Q 19, driven by VSF+ based pricing for some products.
Lenzing is engaged in supplying the global textile and nonwovens industries with man-made cellulose fibers and is a supplier in many business-to-business markets. The portfolio ranges from dissolving pulp, standard and specialty cellulose fibers to high-quality plastic polymer products and engineering services. Co.'s operations are divided into three segments: Fibers, which produces and markets man-made cellulose fibers for the textile and nonwovens industry; Plastics, which produces weaving, labelling films, laminates and woven fabrics; Engineering, which implement projects, supply plant and equipment and provide services arond the world.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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