The restructuring expenses result from parts of the savings programme that was initiated in the third quarter (Q3) due to the deterioration in the market environment and the development of earnings. The goal of the programme is to reduce the cost base by at least €70 million on an annualised basis. Due to the accelerated progress, the restructuring expenses will already be included in the 2022 results, according to a press release by Lenzing.
The Lenzing Group has adjusted its earnings forecast for the 2022 financial year due to one-off effects related to the accelerated savings programme as well as currency effects and a further deterioration of the market environment. Lenzing expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) to be around €250 million.
As part of this cost reduction programme, a social plan for the Lenzing site has been negotiated and resolved together with the works council. Implementation of the social plan will begin in Q1 2023.
Beyond this one-time effect, the operating result in 2022 will be negatively impacted by the devaluation of the US dollar against the euro in Q4. Lenzing, like the entire manufacturing industry, was increasingly affected by the extreme developments on the global energy and raw material markets in 2022. In particular since Q3, the market environment has once again deteriorated significantly, and the deteriorating consumer climate is placing an additional burden on Lenzing’s business development, added the release.
The long-term trend towards sustainable products remains unaffected by short-term economic distortions. Therefore, Lenzing sees itself confirmed in its long-term corporate strategy and will continue to drive growth with sustainably produced fibres and the implementation of its climate and sustainability goals, including the transformation to a circular economy model.
Fibre2Fashion News Desk (NB)
