The Lenzing Group Continues its Successful Course in Spite of a Difficult Market Environment

The Board of Management will propose to the regular shareholders' meeting the distribution of a dividend of EUR 1.46 per share for fiscal 2001.

"Despite the worldwide cyclical low, the Lenzing Group achieved the second-best result in the company's history in fiscal 2001," Peter Untersperger, responsible Board member for finances, comments on the business year under review.

The environment developed extremely difficult for the fibers business. "Given the worldwide decrease in fiber production, the cyclical low in the textile industry, the very high raw-material costs, and the decline in prices recorded by competing fibers, we are extremely satisfied with the result we achieved," underlines Franz Raninger, the Board member responsible for the fibers sector, as well as research and development. Caustic soda, for example, one of the most important raw materials for viscose-fiber production, was twice as expensive as during fiscal 2000. As regards sales, the low prices for competing fibers - cotton had not been at such a low price in 30 years - exerted a pressure on viscose fiber manufacturers.

Nevertheless, the Lenzing Group achieved its stated objective in 2001, which is to increase results with sustainability, namely to earn attractive- above-average profit margins at times of a cyclical high, as well as to obtain satisfactory proceeds levels at times of less favorable market conditions. For the first time, this target was also reached in a cyclically slack year. "We will continue along this success course," says Raninger.

Total production of the Lenzing sites amounted to 332,000 tonnes of fibers in 2001. Over the past few years, the Lenzing Group succeeded in expanding its market share to 21% and in strengthening its position as world-market leader.

All business sectors (fibers, engineering and systems construction, plastics, paper) contributed to the positive development, with the fibers sector, however, taking the most significant share, on account of its size. "The business sectors engineering and systems construction, plastics and paper further clearly improved their performance in 2001. By building the new viscose fiber production line, Lenzing Technik once more gave proof of its innovation leadership," sums up Christian Reisinger, the Board member responsible for technology and environment, the development of the other business sectors.

First Quarter: Surplus for the period +56%

During the first quarter 2002 the Lenzing Group substantially improved all economic key data: the EBITDA was increased by 23.9%, to EUR 29.5 million, as compared to the same period last year. The EBIT went up by 34.8%, to EUR 19.0 million, the EBT by 38 per cent, to EUR 18.9 million, and the surplus for the period by 55.6%, to EUR 11.2 million. The consolidated proceeds from sales went up by 2.8% , to EUR 150.8 million, although the pulp trade for Bacell SA, Brazil, which had contributed EUR 10.2 million to sales last year, was discontinued. On a restated basis for last year's value, sales would have gone up by 10.5%. Since the beginning of the year, it has been possible to decrease net indebtedness by 43%, bringing it down from EUR 110.4 million to EUR 63.2 million.

All business sectors ended the first quarter 2002 with a positive result. Especially the fibers sector currently benefits from the very strong demand for specialty fibers, particularly Modal fibers. As production facilities for competing fibers were closed down, Lenzing succeeded in increasing its sales volume in this area significantly. Altogether, the segments textile fibers and nonwovens recorded a clear upswing in demand. It was possible to more than compensate individual price decreases for fibers by an improved product mix.

Positive Outlook

We can expect a further recovery of the fiber market in the months to come. The vigorous demand for Lenzing specialty fibers, especially Modal, is expected to continue. Appropriate investments are being planned to eliminate production bottlenecks and to satisfy the continuously strong demand. It is expected that, once more, the level of raw-material prices will not change during the second quarter.

Lenzing Technik can boast a good order situation. Says Reisinger: "New product developments will lead to an expansion of our market shares and will provide a satisfactory development." In spite of persisting difficult market conditions, Lenzing Plastics expects a consistent positive development. Lenzing Paper anticipates that more sold quantities will help achieve a positive result in 2002.

Important Key Data for Fiscal 2001, acc. to US-GAAP, on a Group basis 2001 (in EUR mill.)

	2001	2000 *	Changes in %
Sales	622.7	599.4	+ 3.9
EBITDA	102.0	107.6	- 5.2
EBIT (operating result)	64.6	69.8	- 7.3
Result before taxes and minority interests (EBT)	65.5	69.3	- 5.5
Result per share (simple) in EUR for continued operations	12.4	12.7

* Key data for 2000 restated according to US-GAAP

Important Key Data for the First Quarter 2002, acc. to US-GAAP, on a Group basis (in EUR mill.)

	Q1/2002	Q1/2001 *	Changesin %
Sales	150.8	146.7	+ 2.8
EBITDA	29.5	23.8	+ 23.9
EBIT (operating results)	19.0	14.1	+ 34.8
EBT (Result before taxes and minority interests)	18.9	13.7	+ 38.0
Surplus for the period after minority interests	11.2	7.2	+ 55.6
Result per share (simple) in EUR for continued operations	3.52	2.57

Schedule

The 58th Regular Shareholders' Meeting of Lenzing will be held at the Group's headquarters at Lenzing on 27 June 2001 at 11.00 hrs. You will find detailed information about the regular shareholders' meeting at www.lenzing.com.