Lenzing is accelerating its transformation by prioritising higher-margin nonwovens while reducing exposure to commodity textile fibres.
The strategy includes production consolidation, workforce reductions, €120 million (~$136.8 million) in savings and refinancing to strengthen profitability.
The company targets a 20–25 per cent EBITDA margin over the medium term.
The strategy is designed to improve competitiveness, profitability and return on invested capital, positioning Lenzing for long-term growth in higher-value markets. Against an increasingly challenging market environment for man-made cellulosic fibres and changed market dynamics, Lenzing plans to sharpen its focus on nonwovens applications while reshaping its textiles business. A strong innovation pipeline of proprietary next generation fibre technologies and platforms, including TreeToTextile, LENZING Nonwoven Technology and advanced filament solutions are intended to accelerate growth in both business areas.
The transformation includes optimization of the production footprint, a comprehensive performance program, and disciplined capital allocation to support durable margin expansion and a structurally stronger financial profile.
“With “Grow Nonwovens, Reset Textiles”, Lenzing is taking decisive steps to reposition the company for long-term success in a fundamentally changing market environment. By combining a streamlined premium product portfolio, improved competitiveness and a strong proprietary innovation pipeline, we are creating the foundation for profitable growth and a more focused, resilient Lenzing. At the same time, this transformation will strengthen our main production site in Lenzing, Austria, and support a sustainably profitable and competitive future for the site.,” says Georg Kasperkovitz, CEO of the Lenzing Group.
Grow Nonwovens
Capitalizing on the accelerating shift from fossil-based materials to sustainable cellulosic fibre solutions, Lenzing Group plans substantial organic growth of its nonwovens business by 2030. Supported by robust demand for nonwoven fibres, the company committed investments of EUR 15 mn (~$17.1 million) in November 2025 and an additional EUR 8 mn in June 2026 to increase its nonwovens production capacity at the Lenzing site in Austria. The focus is on expanding the existing portfolio and developing next-generation fibres for nonwovens applications, especially in the attractive hygiene segment, supported by long-term contracts with leading companies in the nonwovens industry. In addition, Lenzing is advancing the commercialization of LENZING Nonwoven Technology in collaboration with strategic partners, providing competitive and sustainable alternatives for the market. Furthermore, Lenzing is strategically upgrading its fibre production site in Mobile, USA into a state-of-the-art specialty nonwovens facility.
Reset Textiles
As the global textile fibre industry continues to quickly evolve, Lenzing aims to further sharpen its focus on differentiated, premium market segments and strategic customer partnerships, to better serve the needs of brands and retailers in Western and Asian markets even better. With advanced fibre technologies such as TreeToTextile, next-generation flame-retardant fibres and specialty solutions, Lenzing aims to reinforce its position as a trusted partner for high-value textile applications where innovation, performance and sustainability are key differentiators.
Lenzing also plans to reduce capital employed by consolidating its production footprint and aligning its asset base with future market requirements, such as investments in additional production capacity for TENCEL Modal fibres, both in China and in Austria. At the same time, Lenzing continues to gradually reduce its exposure to commodity products such as standard viscose fibres for textile applications.
Pulp & Biorefinery Products
Pulp & Biorefinery products remain a core pillar of Lenzing. Capacity debottlenecking in Brazil and Austria, together with operational improvements and energy optimization, are intended to further strengthen this profitable division and its contribution to the Group.
Sharpened performance program
Building on the progress achieved in recent years, Lenzing is sharpening its performance program to aim for EUR 120 mn in savings versus 2025 actuals, including EUR 45 mn of previously communicated personnel cost savings from predominantly administrative functions, corresponding to an approximate reduction of 600 employees. As part of these measures, a headcount reduction of 267 was achieved in the first half of 2026, resulting in annualized savings of EUR 25 mn. The full program is expected to reach full run-rate effect by the end of 2027. The new program focuses on a lean overhead structure and operational savings from improving site competitiveness.
Consolidation of the production footprint
As part of its transformation and product portfolio optimization, Lenzing is consolidating its fibre production footprint alongside the ongoing sale process of the Indonesian viscose site, PT South Pacific Viscose. In addition, Lenzing plans to phase out production at its fibre plants in Heiligenkreuz, Austria by end of 2026 and in Grimsby, UK by end of 2027.
This transformation will enable Lenzing to strengthen its core manufacturing network, including the Lenzing site in Austria, while ensuring a stable and reliable supply for customers.
In parallel, Lenzing is evaluating strategic options for the affected sites, including potential divestment or other value-preserving solutions. Should no viable outcome be achieved, Lenzing plans to implement a structured and orderly wind-down, with a strong focus on safety, supply reliability, and continuity for customers, as well as social and environmental responsibility.
For the affected employees in Heiligenkreuz, an existing social plan applies. For affected employees in Grimsby, Lenzing will engage with employee representatives and relevant stakeholders regarding appropriate support and mitigation measures. In Indonesia, Lenzing plans to implement workforce-related efficiency measures in the third quarter of 2026, in line with local regulatory requirements, to optimize two-line operations. CEO Georg Kasperkovitz: “We are fully aware that phasing out production at plants is a difficult but necessary decision that affects our employees. It is important to me that we act responsibly toward our employees also in this situation. We are currently engaged in constructive discussions with employee representatives regarding the necessary measures under the existing social plans and applicable local frameworks.”
Lenzing’s global workforce is expected to decrease significantly from approximately 8,100 employees (7,700 FTE) at the end of 2025, until the end of 2027. The reduction will primarily affect employees at the aforementioned sites in Heiligenkreuz (Austria), Grimsby (UK), and Purwakarta (Indonesia), as well as the previously announced reduction of 600 SG&A positions within the entire Group.
As part of the production footprint optimization, Lenzing Group expects to recognize impairment losses of the non-current assets, especially property, plant and equipment of up to EUR 150 mn in 2026. This non-cash impairment charge is expected to negatively impact consolidated EBIT and consolidated net income in 2026, while having no impact on EBITDA in 2026. In addition, restructuring provisions related to headcount reductions of up to EUR 40 mn are expected to negatively impact EBITDA in 2026.
Financial targets
The Company’s strategic ambition is to return to revenue growth with an EBITDA uplift of approximately EUR 150 mn achieving an EBITDA margin of 20-25% and reducing leverage to below 2.5x in the medium term.
Reassuring second quarter results
The ongoing disciplined implementation of the performance program and strategic measures, especially consistent pricing measures, start to bear fruit, reflected in solid, preliminary results of the second quarter 2026. Revenue in Q2-2026 was at EUR 652 mn, compared to EUR 651 mn in the year before (Q1-2026: EUR 616 mn). Earnings before interest, tax, depreciation and amortization (EBITDA) increased to EUR 123 mn, after EUR 112 mn in the second quarter of 2025 (Q1-2026: EUR 116 mn). EBITDA margin improved by 2 percentage points to 19 percent in Q2-2026. Unlevered free cash flow amounted to EUR 32 mn in the second quarter of 2026, after EUR 49 mn in the same period in the previous year (Q1-2026: EUR 66 mn). Net financial debt decreased to EUR 1.36 bn compared to EUR 1.44 bn in the previous year.
“The positive preliminary results in the first half year of 2026 confirm that we have initiated the right measures to put Lenzing back on a profitable path. Nevertheless, we have to continue and sharpen our performance program as well as reposition our fibre business to achieve long-term, structural profitability, targeting an EBITDA margin between 20 and 25 percent in the medium-term”, emphasizes Mathias Breuer, CFO of the Lenzing Group.
Comprehensive refinancing
Lenzing’s transformation is supported by its primary shareholders, B&C Group and Suzano, as well as Oberbank AG, and plans for a comprehensive refinancing agreement with its core lenders. The company intends to strengthen its financial structure through a combination of capital increase with subscription rights amounting to up to EUR 300 mn, subject to approval at an Extraordinary General Meeting on or around August 25, 2026, as well as new financing agreements of up to EUR 300 mn and the extension of existing debt’s maturity to 2030. The capital increase is underwritten by BNP Paribas, UniCredit, COMMERZBANK, and Erste Group.
“The multi-stage financing plan enables Lenzing to strengthen its financial structure. The comprehensive plan consists of new equity, which reduces total debt, and an expansion of the syndicated financing. This results in a maturity profile that is well-aligned with the ongoing implementation of our strategy”, says Mathias Breuer, CFO.
The refinancing is designed to provide Lenzing ample headroom to execute its strategic transformation under “Grow Nonwovens, Reset Textiles” while proactively addressing near-term maturities. Through this transformation, Lenzing intends to strengthen resilience and profitability, focus investments on differentiated, value-adding applications, and reshape its portfolio and footprint. This positions the company to deliver long-term value for customers, employees and shareholders, while reinforcing its role as a leading provider of sustainable, cellulose-based fibre solutions.
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Fibre2Fashion News Desk (JP)
