Lenzing reports revenue and earnings growth despite tariff challenges in H1 2025
Lenzing Group, a global leader in regenerated cellulosic fibers for the textile and nonwoven industries, has reported solid revenue and earnings growth for the first half of 2025. However, international tariff measures and increasing uncertainty in global trade have slowed the company’s recovery momentum, particularly in the second quarter. Despite these challenges, Lenzing remains committed to its performance program and long-term growth strategies.
Lenzing’s Financial Performance in the First Half of 2025
For H1 2025, Lenzing generated EUR 1.34 billion in revenue, a year-on-year increase from the previous period. The company’s operating earnings also saw significant growth, driven by the positive impact of its performance program. Lenzing’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) surged by 63.3%, reaching EUR 268.6 million, including exceptional gains from the sale of surplus EU emission allowances (EUR 30.6 million) and biological asset valuation (EUR 12.5 million). As a result, the EBITDA margin improved from 12.5% to 20%.
In terms of profitability, EBIT (Earnings Before Interest and Taxes) reached EUR 109 million, up from EUR 18.9 million in the same period last year. This growth led to an EBIT margin of 8.1%, compared to 1.4% in 2024. Lenzing’s earnings before tax (EBT) improved to EUR 22.1 million from a loss of EUR 22.3 million in H1 2024, and earnings after tax rose to EUR 15.2 million, a substantial recovery from the loss of EUR 65.4 million in the prior year.
Rohit Aggarwal, CEO of Lenzing Group, highlighted the company’s operational progress despite challenges in the second quarter. While the performance program made significant contributions to earnings growth, the ongoing tariff policies introduced uncertainty, negatively impacting earnings and visibility. Aggarwal emphasized Lenzing’s commitment to securing long-term operational success by continuously strengthening margins and implementing recovery measures.
Lenzing’s Ongoing Performance Program and Cost Management
Lenzing’s performance program focuses on enhancing crisis resilience and improving agility in the face of changing market conditions. In 2024, Lenzing achieved over EUR 130 million in cost savings, primarily through product cost reductions and improved product quality. For 2025, the company is targeting an additional EUR 180 million in cost savings, with ongoing efforts to optimize production and overhead functions.
The company has also successfully expanded its customer base and entered new, smaller markets to boost revenue growth. With a focus on operational efficiency, Lenzing continues to review and implement measures to enhance its cost structure and improve its overall profitability.
Lenzing Strengthens Capital Structure and Financing
Lenzing secured its financial future with two key financing moves in 2025. In May, the company concluded a syndicated loan of EUR 545 million, which includes both a EUR 355 million term loan and a EUR 190 million revolving credit line. Additionally, Lenzing placed a EUR 500 million hybrid bond to further strengthen its capital structure. These moves ensure Lenzing’s financing needs are met until 2027, allowing the company to focus on executing its performance program and enhancing margins and free cash flow.
Lenzing’s cash flow from financing activities amounted to EUR 150.1 million, down from EUR 239.6 million in H1 2024. This decline was mainly attributed to a higher level of working capital. However, the company maintained positive free cash flow of EUR 43.1 million, compared to EUR 141.8 million in the previous year. Liquid assets increased by 66.9% to EUR 754 million, primarily due to the new syndicated loan.
| Selected indicators of the Lenzing Group` EUR mn | 01-06/2025 | 01-06/2024 |
|---|---|---|
| Revenue | 1,341.1 | 1,310.7 |
| EBITDA (earnings before interest, tax, depreciation and amortization) | 268.6 | 164.4 |
| EBITDA margin | 20.0 % | 12.5 % |
| Net profit/loss after tax | 15.2 | (65.4) |
| Earnings per share in EUR | (0.90) | (1.84) |
| Cash flow from operating activities | 150.1 | 239.6¹ |
| Free cash flow | 43.1 | 141.8¹ |
| CAPEX | 61.3 | 59.8¹ |
| 30/06/2025 | 31/12/2024 | |
|---|---|---|
| Net financial debt | 1,437.9 | 1,532.5 |
| Adjusted equity ratio | 33.4 % | 34.7 % |
| Employees (full-time equivalents) | 7,712 | 7,816 |
Personnel Changes and Leadership Appointments
In March 2025, Walter Bickel stepped down from his operational tasks, and Georg Kasperkovitz was appointed as Chief Operations Officer (COO) of Lenzing AG. Kasperkovitz will oversee the global fiber production sites and advance Lenzing’s performance program, focusing on operational cost excellence and the company’s transformation.
Global Economic Outlook and Challenges for Lenzing
The IMF forecasts a global growth rate of 3% for 2025, a slowdown from the 3.3% growth rate in 2024. The global economy faces high risks, including trade conflicts, geopolitical tensions, and tightening financing conditions. In this uncertain environment, consumer spending is expected to remain subdued, which could impact demand for textile products in the second half of 2025.
The global cotton market also faces challenges, with forecasts indicating a slight increase in stocks for the 2025/26 harvest season. These market dynamics, combined with rising tariff measures, are contributing to a restrictive earnings environment for companies like Lenzing.
Despite these challenges, Lenzing remains confident in its long-term strategy. The company continues to focus on growing demand for environmentally responsible fibers in industries such as textiles, apparel, hygiene, and medical sectors. Lenzing is well-positioned to capitalize on the increasing trend toward sustainability and is focused on expanding its market leadership in this area. By leveraging its specialty fibers and sustainability initiatives, Lenzing aims to drive profitable growth and maintain its competitive edge in the global market.
