Lenzing Group: Preliminary Results 2002
Best Year in the Company´s History

"These results became possible because the Lenzing Group took up its strategic position - as quality supplier with consistent customer orientation - and dynamically expanded its program of special fibers," comments the Board of Management on the business year under review. "Another reason was that the sectors engineering and systems-construction, as well as paper and plastics provided such good contributions to the result. With its sustainable improvements in productivity, Lenzing has demonstrated that it is possible to generate very good results, even in difficult cyclical periods."

Further Improvements in Liquidity and the Balance Sheet Structure

The good earnings situation and the high free cash flow were also the basis for a further major improvement of the balance sheet structure. It was possible, for example, to reduce the Group's net indebtedness from approximately EUR 110.4 mill. to the current low of EUR 33.3 mill. by year-end 2002. As to Lenzing AG liquid funds actually exceed credits and liabilities.

"Our Net Gearing value of under 10% is excellent and outstanding in industry," comments Peter Untersperger, Managing Board Member for Finances.

Success in a Difficult Economic Environment

"The Lenzing Group's result is all the more remarkable, as it was achieved in a slack market environment. Setting the course in the direction of special fibers is paying off," emphasizes Franz Raninger, Managing Board Member for Fibers Operations. After the consumption of viscose fibers in Europe had gone down by about 15% in 2001, the market stagnated throughout 2002. More demand was only seen in the fields of nonwovens and special fibers, where Lenzing has built up a strong position.

In Asia, especially in China, the demand for fibers was on the increase. By specific action to develop the market, Lenzing was able to profit from this development. In the USA, business activities continued to be difficult.

Altogether, the Lenzing Group succeeded in further expanding its market position in the course of fiscal 2002. The total production of all Lenzing sites rose by 10% and amounted to approximately 366,000 tons. The additional production quantities were mainly generated by the sites at Lenzing and Heiligenkreuz. At Lenzing, the share of special fibers experienced a further considerable increase.

The Lyocell site at Heiligenkreuz also developed very positively during the past year. Intensive marketing efforts led to a significant expansion of sales. With the additional production quantities, this site achieved a clearly improved result.

Positive Developments at Lenzing Technik, the Paper and Plastics Sectors

The sectors engineering and systems-construction, as well as paper and plastics all contributed to the very good development during the year under review. "When considering the slack business activities in industry, Lenzing Technik, our subsidiary, performed very well," says Christian Reisinger, Managing Board Member for Engineering and Environment. Here, too, intensive marketing efforts led to success, especially in Asia.

Lenzing Plastics, a subsidiary, also achieved a very positive result, in particular with its high-quality niche products. Lenzing's paper sector succeeded in obtaining a satisfactory result, in spite of slack demand and higher raw-materials prices.

Outlook for 2003

In view of the current situation in world politics and the slack business activities worldwide, no major revival of markets can be expected. Rather, it could be noticed in recent months that demand is slowing down.

"2003 will be a more difficult year for fibers. Demand for Lenzing special fibers continues to be lively, so that we expect to once again achieve a fairly decent result," says Franz Raninger.

With the expansion of the fiber capacities at Lenzing from the current 180,000 tons per year to 200,000 tons per year, as well as at Heiligenkreuz from the current 20,000 tons per year to 40,000 tons per year, Lenzing will achieve a further improvement in the cost structure of its two sites by the end of the year 2003.

New Chairman for the Board of Management

Thomas M. Fahnemann assumed his new function as Chairman of the Board of Management on 1 March 2003.

"I consider it to be a mark of distinction to be called in to lead one of the most successful Austrian industrial enterprises. My task will be to contribute my experience in the international fiber business and, together with my fellow Board members, to reinforce and further expand the outstanding position of the Lenzing Group," said Thomas M. Fahnemann upon assuming his position. In the weeks to come, the Board of Management will determine in detail how the different responsibilities will be distributed among Board members.

acc. to US-GAAP*, on a Group basis (in EUR mill)

	2002	2001	Change in % 1)
Sales	626	623	+0.5
EBITDA	121	102	+18.9
Income from operations (EBIT)	78	65	+21.2
EBIT margin in %	12.5	10.4	+20.7
Net cash from operating activities	127	82	+56
ROCE in %	13.1	11.7	+12
Net indebtedness	33	110	-70
Earnings per share	13.37	12.39	+7.9

* for continued operations
1) Percentages may differ due to rounded figures

Important Dates:

1. The final results for 2002 will be announced in May.
2. The 59th Regular Shareholders' Meeting of Lenzing AG will be held in Vienna on 21 May 2002.

Please also visit our web site www.lenzing.com for information on important dates.