Lenzing unveils new group strategy “sCore TEN“
Austria’s Lenzing Group has announced that its business strategy for the coming years will be called “sCore TEN”.
Accordingly, Lenzing’s main priorities will be strengthening the company’s core business, intensifying cooperation with customers along the value chain, increasing the share of specialty fibres to 50 per cent of total revenue by 2020, expanding its quality and technological leadership for man-made cellulose fibres and opening up new attractive business areas, it said in a press release.
“Our objective is to safeguard and expand Lenzing’s leadership role on the dynamic growth market for man-made cellulose fibers“, said Lenzing’s Chief Executive Officer Stefan Doboczky. “To achieve this, we will focus more intensively on the most attractive segments in the specialty fibre business. Lenzing will put value before volume in the future. We aim at achieving volume growth.”
Lenzing expects demand for man-made cellulose fibres to increase by 5 to 6 per cent annually until 2020, which is nearly twice as fast as the global fibre market. The primary factors driving demand are the continuing growth of the world’s population and rising prosperity in the emerging markets. Forecasts call for a rise in per capita textile consumption in the emerging markets by all in all 50 pe rcent in the period 2010 to 2020. In the industrialized countries the nonwovens industry, an important sales market for Lenzing, will profit from the increased demand for hygiene products. The nonwovens segment is expected to expand twice as fast as the textile market.
The new Lenzing strategy entitled “sCore TEN” was designed to take account of the major megatrends. On the one hand, the name stands for a resolute performance orientation (scoring) and for a strengthening of Lenzing’s core business operations (core) and on the other hand, the new strategy reflects the objective of generating sustainable growth with specialty fibers such as Lenzing Modal or TENCEL (TEN).
“Compared to the previous year, we want to continually increase EBITDA by 10% annually and aim to increase the return on capital employed (ROCE) to more than 10 per cent by 2020. At the same time, our objective is to keep net financial debt at a level which is less than 2.5 times EBITDA”, Doboczky explained in reference to the financial performance targets of sCore TEN.
Lenzing plans to finance all necessary investments required to implement this strategy from its own capital resources and simultaneously strive for a dividend payout of up to 50 per cent of the Group net profit. (SH)