The Lenzing Group Achieves an Excellent Result for the First Semester 2002

"In spite of the difficult cyclical situation, the Lenzing Group was able to improve all of its revenue key data, thanks to structural improvements and a higher-quality product mix," is the comment on the first semester 2002 by Franz Raninger, Managing Board Member responsible for the fiber sector as well as research and development.

The EBITDA improved by 24%, from EUR 48.5 mill. to EUR 60.2 mill., the operating result (EBIT) grew by 34% to EUR 39.5 mill. The result before taxes and minority interest (EBT) stood at EUR 35.0 mill. for the first semester 2002, after EUR 28.8 mill. for the same period last year. This corresponds to an increase of 21%. During the first six months of fiscal 2002, it was actually possible to increase the surplus for the period by 63%, to amount to EUR 23.1 mill.

The fiber business of the Lenzing Group was characterized by a continuing upward trend. In Europe the demand rose in the nonwovens segment, in particular. In Asia, too, the textile business has recovered slightly and the USA, as well, recorded a slight upward trend. Cotton, which is an important fiber price indicator, began to move up, starting from a deep low.

Vigorous Demand for Special Fibers

The positive development of the Lenzing Group's fiber activities is mainly due to the broad product portfolio and the high quality standards.

"Specialization and capacity expansion are now bearing fruit, especially with regard to Modal," explains Franz Raninger, the Managing Board Member responsible for fibers.

We succeeded in significantly expanding the sale of Lyocell, as compared to last year's figures. The plant at Heiligenkreuz is working to full capacity. This development has surpassed all planned targets, which made it possible to clearly improve the result. The sale of Lenzing Modal, a fiber specialty, was 43% above the comparable value for the previous year. The development regarding nonwovens fibers also took a very positive course.

The engineering and systems-construction sector, as well as the paper and plastics sectors, all showed a positive development regarding sales and earnings. Lenzing Technik, the engineering and systems-construction company, has been operating to full capacity, which is reflected in higher profit contributions and a good result. The slack activities of the construction industry in Germany have had a negative impact on the market environment of Lenzing Plastics. The development of the PTFE (polytetrafluoroethylene) segment, however, was a positive one, especially for the hot-gas filtration segment. Lenzing Paper succeeded in achieving a satisfactory result, although the market situation continues to be difficult.

Capacities to be Expanded to Strengthen World-Market Position

During the first semester, the Lenzing Group embarked on a comprehensive investment program, in order to be able to satisfy - in an optimum fashion - the increased demand of customers for fibers, as well as to exploit the growth potential. Until the end of 2003, a total of EUR 125 mill. will be invested into expanding the capacities at the Lenzing and Heiligenkreuz sites. The fiber production capacities at Lenzing will grow by 20,000 tonnes to 200,000 tonnes per year. Parallel to that, pulp production will be expanded by 35,000 tonnes to 210,000 tonnes per year, in order to secure our own pulp supplies for the Lenzing site. A second production line at the Heiligenkreuz site will double the production capacity to 40,000 tonnes per year. It can be expected that the additional capacities will go into operation at the end of 2003.

Positive Outlook for 2002

For the months to come, it can be expected that the market environment will remain unchanged and that the stable demand for Lenzing fibers will continue. However, uncertain cyclical signals, as well as the turbulences on financial and capital markets make it difficult to offer any longer-term forecasts. "We anticipate, however, a continuation of the positive development regarding the fiber business of the Lenzing Group during the second semester, as well as a good result for fiscal 2002 as a whole. We also expect a satisfactory to positive development for the engineering and systems- construction sector, as well as for the plastics and paper sectors," Peter Untersperger, Managing Board Member responsible for finances, substantiates the positive outlook of the Group.

Important key data for the first semester 2002

acc. to US-GAAP, on a Group basis (in EUR mill.)	1. Semester 2002	1. Semester 2001*	Changes in %
Sales	311.0	301.2	+ 3.3
EBITDA	60.2	48.5	+ 24.1
EBIT	39.5	29.4	+ 34.4
Result before taxes and minority interest (EBT)	35.0	28.8	+ 21.5
Surplus for the period after minority interest	23.1	14.2	+ 62.7

*) adjusted according to US-GAAP