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1. Company Snapshot

1.a. Company Description

Lenzing Aktiengesellschaft produces and markets wood-based cellulosic fibers for the textile and nonwoven sectors in Austria, rest of Europe, Asia, the Americas, and internationally.The company operates through Division Fiber, Division Pulp, and Others segments.It offers lyocell fibers for applications in sportswear, home textiles, and mattresses, as well as hygiene articles such as wet wipes and baby wipes; modal fibers; viscose fibers for use in clothing fabrics, wipes, tampons, and wound dressings; and filament yarns under the LENZING, TENCEL, VEOCEL, and LENZING ECOVERO brand names.


The company also provides biorefinery products comprising acetic acid biobased, furfural biobased, magnesium lignosulphonate biobased, soda ash, sodium sulphate, and xylose.It also operates in the field of mechanical and plant engineering; engages in the training and personnel development activities; and provides engineering services.The company was formerly known as Chemiefaser Lenzing AG and changed its name to Lenzing Aktiengesellschaft in 1984.


Lenzing Aktiengesellschaft was founded in 1892 and is headquartered in Lenzing, Austria.

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1.b. Last Insights on LNZ

Lenzing Aktiengesellschaft faces challenges due to a complex business environment. The company's recent performance has been impacted by a lack of significant catalysts, leading to choppy trading. Although there have been no major headlines, investors are watching for potential changes in growth prospects. Lenzing's valuation appears to reflect ongoing concerns, with some investors questioning whether the discount presents an opportunity. The company's financial fundamentals and growth trajectory are being closely monitored, particularly in light of recent earnings releases.

1.c. Company Highlights

2. Lenzing's Resilience Amidst Challenges

Lenzing AG reported a mixed financial performance for the first 9 months of 2025, with revenue and EBITDA showing improvement despite a challenging market environment. The company's EBITDA was impacted by restructuring one-offs, but it continued to improve, supported by a strong first quarter. The actual EPS came out at -0.83619, missing estimates at -0.54. Revenue for the period was not explicitly stated, but the company expects EBITDA for 2025 to be higher than in the previous year, with an anticipated EBITDA of approximately EUR 550 million, assuming stable market conditions.

Publication Date: Nov -21

📋 Highlights
  • Liquidity: Company's liquidity cushion reached EUR 1 billion after refinancing, with unlevered free cash flow doubling to EUR 103 million in Q3.
  • EBITDA Guidance: Maintains 2025 EBITDA target above EUR 550 million despite geopolitical and tariff challenges.
  • Cost Savings: Achieved EUR 130 million in 2024 savings and aims for EUR 180 million annually in 2025 through efficiency measures.
  • Restructuring: Plans to cut ~600 jobs in Austria and 300 via internationalization, with EUR 45 million in savings by 2028.
  • Market Demand: Apparel demand rose 2% YoY in first 9M 2025, driven by U.S. growth, while nonwovens showed stable consumer demand.

Operational Efficiency and Cost Savings

Lenzing has been focusing on strengthening operational efficiency and realizing cost savings. The company has implemented measures to mitigate the impact of tariffs, including maintaining close contact with customers, shifting fiber volumes between production sites, and reviewing strategic options. Lenzing has realized over EUR 130 million in cost savings in 2024 and targets annual cost savings of more than EUR 180 million for 2025. As Rohit Aggarwal, CEO, mentioned, "the company is recovering to normal capacity utilization, with slight variations based on plants and products."

Market Developments and Outlook

Key market developments include a 2% increase in demand for apparel worldwide in the first 9 months of 2025, driven by the U.S. market. Nonwovens showed higher resilience, with relatively stable consumer demand. However, costs remain a major challenge, with energy and chemical costs remaining higher than historical levels. Analysts estimate next year's revenue growth at 2.9%. Lenzing's liquidity cushion reached a solid level of EUR 1 billion after refinancing, and the company's debt maturities have been secured through 2027.

Valuation and Metrics

With a P/E Ratio of -7.85, P/B Ratio of 0.66, and EV/EBITDA of 5.58, Lenzing's valuation metrics indicate a challenging financial situation. The company's ROE (%) is -8.32, and ROIC (%) is -92.63, suggesting significant operational challenges. However, the Free Cash Flow Yield (%) is 13.67, indicating potential for future growth. These metrics suggest that the market is pricing in significant challenges for the company, but also potential for recovery.

3. NewsRoom

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Is Lenzing's Widening Quarterly Loss Changing the Investment Case for WBAG:LNZ?

Nov -13

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Lenzing Invests EUR 15 mn to Strengthen Position in the Hygiene Market

Nov -12

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Lenzing Reaffirms Platinum Status in the EcoVadis ESG Rating

Oct -15

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Lenzing (WBAG:LNZ): Assessing Valuation as Shares Track Broader Market Trends

Oct -06

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Shuffle Board: Ex-Athleta CEO Joins Unspun Board, Debenhams Creative Director Departs

Oct -03

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Textile Recycling Market - Global Forecast Report to 2030 | Pre-Consumer Waste Gains Traction in Textile Recycling Market

Oct -02

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Lenzing Escalates Energy Transition with Photovoltaic Plant

Sep -10

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LVMH: Share transactions disclosure

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.47%)

6. Segments

Fiber

Expected Growth: 12.3%

Growing demand for sustainable textiles, increasing consumer awareness of eco-friendly products, and rising adoption in the fashion industry drive the growth of Lenzing's wood-pulp based fiber market.

Pulp

Expected Growth: 5.5%

Growing demand for sustainable textiles, increasing adoption of eco-friendly products, and rising consumer awareness about environmental issues drive the growth of Lenzing's sustainable wood pulp market.

Others

Expected Growth: 5.5%

The Others segment, comprising beauty and biorefinery, is expected to grow driven by increasing demand for sustainable and eco-friendly products, as well as the company's focus on innovation and R&D investments.

7. Detailed Products

TENCEL™ Lyocell

A sustainable form of lyocell fiber, produced from wood pulp cellulose using a closed-loop system.

TENCEL™ Modal

A soft, wood-pulp-based fiber with a smooth, silky texture, produced using an environmentally responsible process.

LENZING™ ECOVERO™

A sustainable viscose fiber, produced from wood pulp using an environmentally responsible process, with a lower environmental impact.

LENZING™ Viscose

A versatile, wood-pulp-based fiber, produced using a sustainable process, with a wide range of applications.

Nonwoven Fibers

A range of fibers, including lyocell, modal, and viscose, designed for nonwoven applications.

8. Lenzing Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lenzing Aktiengesellschaft is medium due to the availability of alternative fibers such as cotton, polyester, and wool. However, Lenzing's focus on sustainable and eco-friendly products may reduce the threat of substitutes.

Bargaining Power Of Customers

The bargaining power of customers for Lenzing Aktiengesellschaft is low due to the company's strong brand reputation and the lack of switching costs for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Lenzing Aktiengesellschaft is medium due to the company's dependence on wood pulp suppliers. However, Lenzing's long-term contracts with suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants for Lenzing Aktiengesellschaft is low due to the high barriers to entry in the wood pulp and fiber production industry, including high capital costs and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Lenzing Aktiengesellschaft is high due to the competitive nature of the wood pulp and fiber production industry, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 74.90%
Debt Cost 4.44%
Equity Weight 25.10%
Equity Cost 9.36%
WACC 5.68%
Leverage 298.42%

11. Quality Control: Lenzing Aktiengesellschaft passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 2.6/10

Value: 8.7

Growth: 1.6

Quality: 1.6

Yield: 0.6

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Volatility: 1.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.0$

Current Price

24$

Potential

-0.00%

Expected Cash-Flows