Lenzing : Notes on the Financial Performance Indicators - Interim Report 01-03/2024

Notes on the Financial Performance Indicators of the Lenzing Group

Interim Report 01-03/2024

The key financial indicators for the Lenzing Group are described in detail in the following section. These indicators are derived primarily from the condensed consolidated interim financial statements and the consolidated financial statements of the previous year of the Lenzing Group. The Management Board believes these financial indicators provide useful information on the financial position of the Lenzing Group because they are used internally and are also considered important by external stakeholders (in particular investors, banks and analysts).

EBITDA, EBITDA margin, EBIT and EBIT margin

EBITDA and EBIT are viewed by the Lenzing Group as the benchmarks for the strength of operating earnings and profitability (performance) before and after depreciation and amortization. Due to their significance - also for external stakeholders - the EBIT is presented on the consolidated income statement and EBITDA is presented in the Financial Performance Indicators and, in order to provide a comparison of margins, in relation to group revenue (as the EBITDA margin and EBIT margin).

EUR mn	01-03/2024	01-03/2023
Earnings before interest and tax (EBIT)	1.5	(41.4)

Amortization of intangible assets,

• depreciation of property, plant and equipment and right-of-use assets and

depletion of	biological assets	70.4		71.6
Income from	the release of investment
- grants		(0.5)		(0.5)
Earnings before interest, tax, depreciation	71.4		29.7
and amortization (EBITDA)
EUR mn			01-03/2024	01-03/2023
Earnings before interest, tax, depreciation and
amortization (EBITDA)		71.4	29.7
/	Revenue			658.4	623.1
EBITDA margin		10.8%	4.8%
EUR mn			01-03/2024	01-03/2023
Earnings before interest and tax (EBIT)		1.5	(41.4)
/	Revenue			658.4	623.1
EBIT margin			0.2%	(6.6)%

EBT

EBT measures the pre-tax earnings strength of the Lenzing Group and is shown on the consolidated income statement.

Gross cash flow

In the Lenzing Group, gross cash flow serves as the benchmark for the company's ability to convert gains/losses from operating activities (before changes in working capital) into cash and cash equivalents.

EUR mn	01-03/2024	01-03/2023
Net profit/loss after tax	(26.9)	(64.9)

Amortization of intangible assets,

• depreciation of property, plant and equipment and right-of-use assets and

	depletion of biological assets	70.4	71.6
+/-	Change in the fair value of biological
assets		(7.1)	(17.6)
-	Income from the release of investment
grants		(0.5)	(0.5)
+/- Change in non-current provisions	(3.2)	(1.1)
-/+ Income / expense from	deferred taxes	2.1	(13.9)
+/-	Change in current tax assets and
liabilities		(11.0)	(6.9)
	Non-cash profit/loss from investments
+/- accounted for using the equity method	1.7	3.3
-/+ Other non-cash income	/ expenses	(31.4)	(25.8)
	Other non-cash income	/ expenses	(49.4)	(62.5)

Gross cash flow	(6.0)	(55.8)

Free cash flow

The free cash flow generated by the Lenzing Group shows the cash flow generated by operating activities - after the deduction of investments - which is available to service the providers of debt and equity. This indicator is also important for external stakeholders.

EUR mn				01-03/2024	01-03/2023
Cash flow from operating activities		120.7	(47.7)
-	Cash	flow from investing	activities		(32.8)	(84.2)
	Acquisition/disbursement	of financial
+	assets	and investments accounted	for	5.6	0.3
	using	the equity method
	Proceeds from the sale/repayment of
-	financial assets and the sale of
investments accounted for using the
	(6.1)	(0.8)
	equity	method
Free cash flow			87.3	(132.3)

1 Interim Report 01-03/2024Lenzing Group

CAPEX

CAPEX is used in the Lenzing Group as a measure for the volume of investments in intangible assets, property, plant and equipment, and biological assets. This indicator is presented in the consolidated statement of cash flows.

Liquid assets

Liquid assets show the Lenzing Group's ability to meet due payment obligations immediately with available funds. This indicator is also used to calculate other financial ratios (e.g. net financial debt; see below).

EUR mn		31/03/2024	31/12/2023
Cash and cash equivalents		827.7	725.6
+	Liquid bills of exchange	(in trade
receivables)		15.9	5.4
Liquid assets		843.6	731.0

Trading working capital and trading working capital to annualized group revenue

Trading working capital in the Lenzing Group is a measure for potential liquidity and capital efficiency. It is used to compare capital turnover by relating it to group revenue.

EUR mn		31/03/2024	31/12/2023
Inventories		540.7	552.9
+	Trade	receivables	315.8	294.5
-	Trade	payables	(339.2)	(296.3)
Trading working capital	517.3	551.1
EUR mn		2024	2023
Latest reported quarterly group revenue	658.4	655.4
x 4 (= annualized group revenue)	2,633.5	2,621.6
Trading working capital to annualized
group revenue	19.6%	21.0%

Adjusted equity and adjusted equity ratio

Adjusted equity shows the Lenzing Group's independence from the providers of debt and its ability to raise new capital (financial strength). This figure includes equity as defined by IFRS as well as government grants less the proportional share of deferred taxes. Adjusted equity is used to compare equity and debt with total assets. This (and/or a similar indicator) is occasionally used as a financial covenant by lenders.

EUR mn				31/03/2024	31/12/2023
Equity				1,688.4	1,742.2
+	Non-current	government grants1		13.7	14.1
+	Current government	grants1		55.1	72.1
-	Proportional	share of	deferred taxes	on
government	grants			(15.3)	(19.3)
Adjusted equity				1,741.9	1,809.1
/	Total assets				5,323.7	5,214.6
Adjusted equity ratio			32.7%	34.7%

1. This amount is included in the condensed consolidated statement of financial position in "other liabilties" (non-current, resp. current liabilities).

Net financial debt, net gearing and net debt

Net financial debt is used by the Lenzing Group as the benchmark for its financial indebtedness and capital structure. It is also an important indicator for external stakeholders. The ratio of net financial debt to adjusted equity (net gearing) illustrates the relation of net debt to adjusted equity. This (and/or a similar indicator) is occasionally used as a financial covenant by lenders. Net debt in the Lenzing Group measures the level of financial indebtedness, including the provisions for severance payments and pensions.

EUR mn		31/03/2024	31/12/2023
Current financial liabilities	545.3	529.0
+	Non-current financial liabilities	1,917.3	1,906.7
-	Liquid assets	(843.6)	(731.0)
Net financial	debt incl. lease liabilities	1,618.9	1,704.7
-	Current	lease liabilities1	(9.8)	(9.8)
-	Non-current lease liabilities1	(132.1)	(132.3)
Net financial	debt	1,477.1	1,562.6
EUR mn		31/03/2024	31/12/2023
Net financial debt	1,477.1	1,562.6
/	Adjusted equity	1,741.9	1,809.1
Net gearing		84.8%	86.4%
EUR mn		31/03/2024	31/12/2023
Net financial debt	1,477.1	1,562.6
+	Current	lease liabilities1	9.8	9.8
+	Non-current lease liabilities1	132.1	132.3
+	Provisions for severance payments and	72.9	74.8
pensions2
Net debt		1,691.9	1,779.5

1. This amount is included in the condensed consolidated statement of financial position in "financial liabilities" (non-curre nt liabilities, resp. current liabilities).
2. This amount is included in the condensed consolidated statement of financial position in "provisions" (non-current liabilities, resp. current liabilities).

2 Interim Report 01-03/2024Lenzing Group

Financial Glossary

Adjusted equity

Equity including non-current and current government grants less the proportional share of deferred taxes on these government grants.

Adjusted equity ratio

Ratio of adjusted equity to total assets in percent.

CAPEX

Capital expenditures; i.e. acquisition of intangible assets, property, plant and equipment and biological assets and acquisition of corporate units as per consolidated statement of cash flows.

FTE

Abbreviation for Full-Time Equivalents.

Gross cash flow

Gross cash flow equals cash flow from operating activities before change in working capital; the precise derivation can be found in the consolidated statement of cash flows.

IAS

Abbreviation for International Accounting Standard(s), which are internationally recognized accounting rules.

Earnings per share

The share of net profit/loss after tax attributable to the shareholders of Lenzing AG divided by the weighted average number of issued shares, calculated according to IFRS (IAS 33 earnings per share).

EBIT (earnings before interest and tax)

Earnings before interest and tax, or operating result; the precise derivation can be found in the consolidated income statement.

EBIT margin

EBIT as a percent of revenue; represents the return on sales (ROS).

EBITDA (earnings before interest, tax, depreciation and amortization)

Operating result before interest, tax, amortization of intangible as- sets, depreciation on property, plant and equipment and right-of-use assets and depletion of biological assets and before income from the release of investment grants.

EBITDA margin

EBITDA as a percent of revenue.

EBT (earnings before tax)

Profit/loss for the year (/the period) before income tax expense. The precise derivation can be found in the consolidated income state- ment.

Equity

The equity item aggregates the equity instruments as defined by IFRS. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. This represents the funds provided to the entity by its owners.

Free cash flow

Cash flow from operating activities less cash flow from investing activities less net cash inflow from the sale and disposal of subsidiaries and other business areas plus acquisition of financial assets and investments accounted for using the equity method plus disbursement of loans to joint ventures less proceeds from the sale/repayment of financial assets and the sale of investments accounted for using the equity method. Free cash flow corresponds to the readily available cash flow.

IFRS

Abbreviation for International Financial Reporting Standard(s), which are internationally recognized accounting rules.

Liquid assets

Cash and cash equivalents plus liquid securities and liquid bills of exchange.

Liquid funds

Cash and cash equivalents plus current securities.

Market capitalization

Weighted average number of shares multiplied by the share price as at the reporting date.

Net debt

Interest-bearing financial liabilities (= current and non-current financial liabilities) less liquid assets plus provisions for pensions and severance payments.

Net financial debt

Interest-bearing financial liabilitie s (= non-current and current financial liabilities) less lease liabilities less liquid assets.

Net gearing

Net financial debt as a percent of adjusted equity.

Net profit/loss after tax

Net profit/loss for the year (/the period). The precise derivation can be found in the consolidated income statement.

Post-employment benefits

Provisions for pensions and severance payments.

Total assets

Total of non-current and current assets or the total of equity and non- current and current liabilities. The precise derivation can be found in the consolidated statement of financial position.

Trading working capital

Inventories plus trade receivables less trade payables.

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Trading working capital to annualized group revenue

Trading working capital as a percent of the latest reported quarterly group revenue x 4.

Working capital

Net current assets. Inventories plus trade receivables and other non- current and current assets less current provisions, trade payables and other non-current and current liabilities

4 Interim Report 01-03/2024Lenzing Group