Lenzing Aktie

Ladies and gentlemen, welcome to the Lenzing AG Results First Quarter 2026 Conference Call and Live Webcast. I'm Sergen, the Chorus Call operator. [Operator Instructions] and the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mathias Breuer, CFO. Please go ahead, sir.

Yes, perfect. So good afternoon, everyone, and thank you for handing over to me, and thanks to everyone for joining our call today. Today, we're going to walk together through Lenzing's result for the first quarter of 2026.

Just a brief look into the agenda. I will start with the key highlights, followed by an update on the market environment as always and then I will take you through the financials in more detail, including the EBITDA, the cash flow, the working capital and our balance sheet position. And finally, we will end with our current view on the outlook before we move to the Q&A session.

Let me start with the key highlights of the first quarter 2026. As we also discussed in March this year, the year began in a very challenging geopolitical and macroeconomic environment, in particular the escalation in the Middle East, which has increased the uncertainty across energy, chemicals, logistics and finally also consumer markets.

Against this backdrop, we delivered a revenue of EUR 616 million, which is an 11% decline year-on-year and slightly below the fourth quarter of 2025, reflecting the still challenging market environment and lower pulp volumes. Please keep in mind that especially the first quarter of 2025 was particularly strong with a worsening economic situation over the following quarters 2025 following the tariff announcements in April.

Our EBITDA increased significantly compared to the fourth quarter 2025 to EUR 116 million, corresponding to a solid EBITDA margin of 19%. This underlines the continued impact of our pricing and cost excellence initiatives and the measures that we have taken, supported by some one-off effects that we will also discuss in today's meeting.

The cash generation was particularly strong. The unlevered free cash flow reached EUR 66 million, supported by, again, disciplined CapEx control and continued working capital management. Overall, Q1 confirms that we are making progress on what we can control, cost discipline, cash generation and commercial steering. With that, we were able to deliver a net profit of EUR 24 million after 3 consecutive quarters in a loss position.

Now let's step a bit closer to the current market environment. The global apparel market in the textile industry showed stable growth in the first quarter, but the consumer sentiment remains cautious. We saw first signals of an easing situation after the tariff announcement last year, then the backdrop with the conflict in the Middle East. However, demand was supported by stronger trends in the U.S. and China. Lower income consumers continued to reduce discretionary spending.

The nonwoven markets, in contrary, remained more resilient, particularly in Europe and North America. We continue to see some structural support from the conversion towards more sustainable and plastic reduced materials.

In our dissolving wood pulp division, the demand remained closely linked to the production of regenerated cellulosic fibers. We experienced high downstream operating rates together with some supplier disruptions with some of our competitors, supported an improvement in our price level.

Overall, the market prices for both fiber and dissolving wood pulp improved during the quarter. Just as a reference, the CCF China index for viscose increased by 1.4%. The CCF for lyocell increased by 3.4% over the quarter. So there is also a bit of a market recovery that we could see over the first quarter. But overall, the broader market environment remains volatile and visibility, especially over the entire year, is still limited.

Let me now address the impact of the war in Iran on our business and the mitigation measures that we have defined. As we discussed also last time, we do not have direct business with the Iran. Our sales exposure to the Middle East is limited. However, we are seeing some indirect effects across our value chains. These include some higher logistic costs, increasing chemical prices, wood and energy costs from the second quarter onwards, and risks around the chemical supply security.

We are closely monitoring the price and the cost development, and we have defined clear mitigation actions. This includes a pass-through of higher costs where possible, a much more tense pricing policy that we are currently doing, and also pricing process where even on a daily and weekly basis, we adopt and adjust minimum prices.

We further on focus on value-accretive allocation of volumes across customers and regions, and we strive to establish alternate supply routes for key chemicals. In addition, we continue to prepare further cost-saving initiatives. Our focus is to limit negative effects as much as possible.

Turning now to the fiber business first. The fiber sales volumes remained broadly stable compared with the fourth quarter of 2025 at 220,000 tons. So it's a plus 1% compared to the last quarter. This still reflects our measures that we have taken during 2025 to adjust our capacities, especially in our Indonesian assets.

The demand stabilized and we see a strong push through the supply chain at the moment with a strong order book development. The average fiber sales prices improved in the first quarter. In euro terms, the prices increased by 3% to EUR 2.01 per kilogram, while in U.S. dollar terms, they increased by 2.7% to USD 2.35 per kilogram.

The increase was supported by a favorable FX development and an improvement in our price premium versus the generic market prices. We just talked about the CCS viscose index that increased to 1.4%. So you can see that in the mix, we were still able to outperform the overall market. The development is consistent with our strategy to focus on disciplined pricing and value-generating volume allocation rather than volume growth at any price. So the premiumization strategy is paying off.

Let me now turn the page to the pulp business. The dissolving wood pulp production volumes decreased by 5% compared with the fourth quarter to 292,000 tons. The third-party sales volumes were down by 18% to 166,000 tons. The lower external sales volumes were driven by an increased internal supply/demand as well as the seasonal impact of the Chinese New Year.

At the same time, the dissolving wood prices stabilized in the first quarter. The average sales prices remained flat at around EUR 0.69 per kilogram. We all remember the downward rally that the dissolving wood pulp price had to face in 2025 where we hit rock bottom in quarter 4.

At the moment, we do see a positive ASP development. We cannot see the in-quarter development here, but let me report on that. The ASP moved from approximately USD 799 per ton in January to more than USD 820 per ton in March, and we currently see further positive signals into quarter 2.

Let me briefly comment on input costs. Energy market prices increased again in the first quarter of 2026. This is also a clear outcome of the Middle East conflict. Electricity prices in Austria, natural gas prices in Europe, both remain significantly above the historical levels.

If we look on caustic soda as a reference material for our chemicals, we saw some easing in the first quarter, but the price levels still remain elevated compared with the historical base year 2020. And here, please keep in mind that this development in the chemical cost sector does not contain any impact from the Iran conflict yet.

So we anticipate the NaOH prices to increase by more than 10%, even 20% in the second quarter compared to the price level prior to the conflict. This means that input costs continue to be a material burden for the industry and also for Lenzing. The situation might further increase the volatility, particularly for energy and chemical markets, which we are very diligently currently look at. So we continue to be disciplined in cost to increase operational efficiency and also to be very stringent in our pricing measures with regards to our top line.

A main pillar remains our performance program. And a main pillar of our strategy is also excellence. In line with this, we've already shown a strong performance over the years 2023 to 2025 with the EUR 200 million of cost savings delivered.

Building on this, we have defined additional measures out of the EUR 45 million in personnel expenses that we announced already September last year in 2025. The first EUR 25 million are delivered, so we can tick box that and will be followed by additional cost-saving measures, which are currently under preparation at the moment. So our clear and continuous commitment to deliver on our cost structure.

Now let's shift gears and turn into the financial section. First, the overview, and you can see always the comparison to first quarter in the prior year and the last quarter in 2025 so that you can better reflect on the U turn that we are currently in. Quarter 1 2026 was characterized by lower revenues year-on-year, but a strong sequential improvement in EBITDA and continued progress on cash flow and the balance sheet.

The revenues at EUR 616 million as reported, down 11% year-on-year and 2% compared with the fourth quarter 2025. EBITDA at EUR 116 million, down year-on-year, but up 60% compared with quarter 4. This corresponds to an EBITDA margin of 19%.

Very important unlevered free cash flow amounted to EUR 66 million, which is an up of 66% year-on-year. That decreased 24% compared to a strong quarter 4 that we also steered towards the year-end. The trade working capital, we continued to reduce by 29% year-on-year, down to a level of EUR 425 million now by end of the first quarter. On the balance sheet, the net financial debt declined by 9% year-on-year to EUR 1.36 billion, while the liquidity cushion increased to a bit more than EUR 900 million.

On the next page, let's move through the developments in revenue and EBITDA in more detail. And please note that this page now is compared against quarter 1 of the prior year, whereby in some parts of this presentation, we correspond or we compare to quarter 4 in order to give a better understanding on the current development and the situation.

Year-on-year, in quarter 1, the group revenue declined down to EUR 616 million. We talked already about that. Main driver, lower fiber production and sales volumes compared to the very strong first quarter and exceptionally strong quarter 1 in 2025, and also dissolving wood pulp price developments.

The EBITDA decreased year-on-year to EUR 116 million. The EBITDA and the EBITDA margin were supported by continuous cost excellence and pricing measures that we have taken. Some one-off effects especially and to walk through them, the sale of surplus CO2 certificates in the amount of EUR 14 million. This is not compared to prior year. This is the absolute amount.

The positive valuation effect from biological assets in Brazil in the amount of EUR 13 million and the first-time consolidation of TreeToTextile. You remember that in February, we took over the majority stake in TreeToTextile and thus had to account for the first consolidation in the first quarter.

So there is a best will that we could account and that was EBITDA accretive to us of EUR 12 million, while at the same time we now fully consolidate also the cost of this joint venture, which amounts to approximately EUR 1 million a month. So EUR 2 million is the cost impact, EUR 12 million is the positive EBITDA impact. A key message here is that we were able to defend solid profitability level despite the challenging volatility in the market.

Let us now walk through the EBITDA bridge now against the previous quarter, so quarter 4, 2025, to better discuss the evolution of the market and of the company. Again, EBITDA increased by 60% from EUR 73 million on a weak quarterly EBITDA in quarter 4, 2025, up to EUR 116 million now in quarter 1.

We can see that the improvement is mainly stemming from positive margin effects in the fiber division with a EUR 6 million quarter-on-quarter effect as well as additional cost savings of EUR 16 million, higher sale of CO2 certificates with EUR 5 million quarter-on-quarter effects. Some positive FX impact, EUR 6 million quarter-on-quarter and the already discussed positive one-timers with regard to TreeToTextile, so EUR 10 million in that regard.

These positive drivers were more than offset the ongoing burden from inflation and weaker market-related effects in the Pulp division. So the pulp division quarter-on-quarter is down by EUR 6 million, driven by the lower sales. This bridge again clearly shows that the internal measures are keeping traction and are helping to stabilize the earnings situation even without sustainable market recovery until now.

Looking at the quarterly trends, I think this reconfirms that the picture that I just have drawn. Revenues have slightly decreased over the last years. This reflects the strategic shift from our -- from the volume-driven growth towards value generation, including the targeted cut of unprofitable volumes that started in the course of 2025, also with the idling of some of our assets in that year.

At the same time, our quarter-on-quarter EBITDA increased by EUR 44 million compared to the fourth quarter of 2025. And, yes, the continuous focus is not on maximizing volume, but on improving the quality of our earnings, on improving the margin resilience and improving further the cash generation. I think the first quarter, therefore, represents an optimistic step back into the right direction.

Turning to cash flow. and working capital. Trade working capital decreased significantly year-on-year, mainly driven by lower inventory levels, just reported on the EUR 425 million as per end of quarter 1. CapEx spend remains very disciplined at EUR 28 million. So this is a -- let's say a slow start into the year given the overall CapEx amount that we planned for the year. As a result, unlevered free cash flow increased by EUR 26 million to EUR 66 million for the first quarter, and this clearly remains one of the core management priorities for 2026.

Taking a step closer to the components of working capital, this is just a detail for your reference. So main driver is on the inventories where we continue to adjust all levels of wood, of chemicals of finished good fiber and also of pulp in our sites. So cash in terms of cash generation is clearly pays back. Trade receivables and trade also with a good development year-on-year, a slight increase over the last quarter. Same for the trade payables. I think here, we see an okay development.

Let's move to the balance sheet. The net financial debt, as we have seen on the overview page, improved to EUR 1.36 billion, a good reduction year-on-year. The improvement is mainly driven by free cash flow generation. At the same time, liquidity cushion remains at a very solid level, above EUR 900 million. This is also a level that we discussed in our earnings call 2 months down the road. This gives a solid financial buffer in a period of high market uncertainty and further supports the ability to continue in executing our strategy.

The financing profile or maturity profile and maturity structure remains well balanced. There is no changes with that regard. And thus, I propose that we jump over this page and leave it as it is.

And we move to the outlook. Let's again start with the broader implication of the escalation in the Middle East. The war, as we just discussed, has multiple effects on the textile, nonwoven and pulp industries. So disruptions in oil and gas supply through the Strait of Hormuz performance lead to higher energy costs. This is one important factor. Further secondary effects, availability of chemicals and also on market prices of chemicals, which increased the production cost for pulp and cellulosic fibers from quarter 2 onwards.

Wood prices also remain elevated. So there is a disruption in the construction area, especially in the Middle East, which leads to a slowdown of the sawmills in our region here in Middle Europe. And thus, currently, wood prices are heavily elevated. And our pipe costs are impacted with that regard and container shipping also remains being impacted from the current situation.

As an upside, the higher crude oil prices increased the cost of synthetic fibers. So when we talk about substitution and our, let's say, competition in terms of fiber types. So we have seen a rally in terms of the ASP, average selling price, for synthetic fibers with more than 20% over the last weeks.

Cotton on the same token is affected by higher cost of fertilizers also driven by the Iran war. And just as a remark and you might look it up, as of yesterday cotton price was beyond USD 2 per kilogram after an increase by 4% to $1.70 from December to March.

So there is also certainly some tailwind with regard to substitutional products that support us in our pricing efforts and in passing through our costs to our customers. But we stay exposed to the indirect effects of costs on logistics, on chemicals, on wood, on energy and on potential weaker consumer sentiment, which we try to mitigate as discussed in one of our earlier slides.

If we summarize the outlook, Q1 2026 was constructive despite a challenging geopolitical and macroeconomic environment, including the uncertainty given still with the tariffs, the escalation in the Middle East. We saw improved price trends in both pulp and fiber compared with the fourth quarter of 2025 with further positive indications for 2026.

However, energy and raw material costs are expected to remain elevated, depending on duration. And if the conflict intensifies, this will continue to weigh on the earnings situation starting quarter 2 onwards. Again, we are closely monitoring the development and we'll continue to mitigate negative effects through pricing, cost discipline, alternative supply routes and value accretive or value-oriented volume allocation.

Still, due to low visibility and the high level of uncertainty, we decided to further not provide any guidance for 2026. However, the key priorities remain unchanged: pricing, cost excellence, working capital management and thus the focus on cash.

With that, I will end my presentation and will hand back over to the operator for the Q&A. Thank you.

[Operator Instructions] And the first question comes from Christian Faitz from Kepler Cheuvreux.

Congrats on the results in these very challenging times. A couple of questions on demand, please. First of all, do you have a feel how much customer restocking is happening because some of your clients might fear significant supply disruptions going forward or have feared already starting in March actually? And in that context, indeed, how has demand improved in March versus January and February levels?

And the second pocket of questions would be, do you fear any supply issues for your own plants, particularly in Asia? And you were mentioning the pulp prices -- higher pulp prices in Europe. When would you see wood prices to go down?

Christian, thanks for the questions. So first question was on the restocking effect with regard to the demand. So I agree that when the Iran conflict broke out, the first impulse of our customers that we could see was kind of a bit panic buying and trying to fill up the supply chain. And we are very careful that we outbalance that and understand the demand metrics going forward in order not to run into a situation where demand is dropping and we see a pull effect into our sites and thus also in the working capital.

So this is -- this was clearly also on our agenda as the Management Board. The first reaction and impulse reaction of the customers that we have seen and perceived in March compared to January, February, which was a bit, okay, let's now place orders, we need to fill up the supply chain, is now getting more -- moving into a more consistent pattern. I just talked about also the rally on synthetic fibers and cotton price -- cotton fiber prices.

So this gives us currently some tailwind that we expect also. We are carefully optimistic that in the second half year of 2026, we continue on a healthy demand and that does not fully, let's say, wipe us back. So here, I would say we are carefully optimistic that we can keep that level. However, the visibility still is not very strong. You understand the nature of our business, especially in the textile business, it's a very short-term business that can move very quickly.

On your second question with regard to the supply issues for our own plants. We had already some issues on our Indonesian assets. So we are -- with regards to caustic soda, we are supplied with 2 local suppliers, one of them declared force majeure due to the Iran conflict. We managed to open up alternative supply routes with that regard and are fully supplied also in the SPV.

At the moment, we don't foresee any further -- just to conclude on that. So the supply disruption was lasting not even a week. So we managed it very, very well. For the other side, especially in Europe, but also in Thailand or China, at the moment we don't foresee any supply disruptions. We don't have concrete indications that there is something in line of sight. The big question is, again, a matter of visibility into the second half year.

And the question was on wood. So the wood price really started in February already. And when you talk about wood procurement and wood supply, you always have to follow a defined radius. It doesn't make sense to cover long distances with regards to wood supply because it still elevates -- it simply elevates cost.

So we don't have a concrete answer on when we expect the cost to go down because this all needs to ramp up again. Construction needs to ramp up again, so the utilization of the sawmill is here key. Because when looking at, let's say, typology of a forest, typically the very -- let's say, the nice and linear wood goes into the sawmill and the lower-priced wood goes into the pulp industry. So it's highly dependent, but we hope that we'll find some improvement here in the second half year.

The next question comes from Sebastian Bray from Berenberg.

I have 2, please. The first one is just on what the underlying EBITDA was in the first quarter of the year. So the nominal is EUR 116 million. Am I right in saying that taking off the CO2 credit sales, which are EUR 13.7 million, the revaluation adjustment of EUR 13.3 million and then the goodwill reversal of value upwards of goodwill is as of about EUR 12 million. Is that EUR 78 million, let's call it, EUR 80 million or so underlying run rate? And that's my first question.

And my second one is on CapEx. There's been another quarter where Lenzing has been able to keep this at quite a low level. Is EUR 30 million a quarter just a reasonable assumption for the remainder of the year?

Thanks for the questions. I'll start with the second question because it's faster to answer. So the EUR 30 million is clearly not the level that we can contain. This would be even below 2025, which was for us a rock bottom CapEx. So we still consider a level above 2025 is reasonable for this year. You remember in our last call, we indicated a level of EUR 160 million to EUR 180 million for 2026, which still holds true.

On your second question with regards to the underlying run rate, in principle your math is correct. Keep in -- just keep in mind that also in the prior quarters that we compare against, we also had impact of asset valuation and CO2 certificates. So -- and also for the coming months, there is an excess share of CO2 certificates that we can sell to the market. Yes. But in principle, your math is correct.

And just to check, are the sales of CO2 certificates largely done after the current year? Because my understanding is that the EU will then start to adjust the reallocation of production allowances downwards if a certain quota is not hit for the minimum production level.

It highly depends on the, let's say, political structure and the regime with regard to the CO2 certificates going forward. In principle, we receive more than we consume. So this gives us an excess share that we can sell. And in our current planning assumption, even for 2027, we consider a potential for further sales.

The next question comes from Patrick Steiner from ODDO BHF.

Two remaining from my side. First of all, could you give us more details on the refinancing needs in 2026 and the impact on the interest costs? And secondly, do you already have like a feeling of how these set of effects on prices and input costs will affect your margins over the next 2 to 3 quarters?

Yes. I again start with the second question. So if I understood it correctly, so the increased input costs in quarter 2 and going forward, how those might affect the margins. So as I said, we -- our key goal is to pass through any cost increases with a very stringent price approach. This is key. And if we are consistent with that approach and if we are successful with that approach, we hope that we can mitigate any increases in the fiber section. In the pulp section, I mean, we also talk about our pulp division, we also talk about cost increases where we try to pass forward chemical cost and wood price cost for Paskov. It might have an impact if we are not entirely successful with our approach, but the goal is, again, to fully compensate for that. So that's the clear management priority.

With regards to refinancing needs for end of the year, you're right, there are some maturities, especially on the German Schuldscheindarlehen in quarter 4 that in our planning, we foresee to cover -- first of all, we come from a very -- from a good and solid cash position and liquidity cushion. Second, we foresee smaller refinancing instruments with regards to the refinancing in our planning for that year. Discussions are already starting.

Okay. So no negative effects on interest costs going forward from this refinancing?

This is not a high interest financing, so no negative effect.

The next question comes from Gregor Koppensteiner from RBI.

Just a quick question here. How do you cope with this higher energy costs? Do you have any hedges in place? And if yes, what is cured in terms of exposure? And how long is your time horizon? And are there also some hedges for chemicals in place?

Thank you. So we do have a hedging policy for energy costs. First of all, please keep in mind that in -- especially in our Austrian site in Lenzing, we are 90% backward integrated with our own energy production. So there is a, let's say, minor impact with that regard. But we follow a hedging policy of hedging approximately 60% of the open positions, and this holds true for the current year as well as for the following year. So in principle, this approach is aligned within the Management Board and is fully implemented at the moment.

The second question was on hedging for chemicals. No. So we don't do. We are in spot markets with that regard.

[Operator Instructions] There are no more questions at this time. I would now like to turn the conference back over to Mathias Breuer for any closing remarks.

Yes. Let's keep it short. Thanks for attending. And latest in August, I will follow up with second half year. I'm looking forward to that and wish you a good time until then. See you soon. Bye-bye.

Ladies and gentlemen, the conference is now over, and you may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Lenzing AG Financial Results 2025 Conference Call and Live Webcast. I'm Mara the Chorus call operator.[Operator Instructions]

And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mathias Breuer, CFO. Please go ahead.

Thank you, Mara, and good afternoon, everyone, and thank you for joining today's call. For those of you I have not yet met this is my first results call as Lenzing's CFO, and I'm happy to guide you through our results for 2025. As you might know, I have joined Lenzing in 2023 to develop and implement the more than EUR 200 million performance program. My focus as CFO will stay on disciplined financial management, operational performance improvements, supporting profitable growth and further strengthening the cash generation and the balance sheet of our group.

With that, let me walk you through the agenda for today. I will start with a summary of the key developments followed by the market updates as well as our refined strategy. I will then guide you through the financials, and I will talk about the outlook as well as our investment highlights. We will then end the call with the Q&A session, as always. You might have seen that we have put some emphasizes on further transparency and further data in order to give you a better understanding on our business. And yes, I hope that you appreciate that in the presentation going forward, and I'm happy to discuss on that. Stepping to the key highlights.

Let me focus on the first slide. Despite continued challenging market conditions, our performance reflects disciplined execution and the impact of our performance initiatives. We saw a modest revenue decline driven by volume adjustments during the year, while our EBITDA margin benefited from our ongoing performance program, supported by the extraordinary one-off sale of CO2 certificates. Looking ahead, our ambitions go well beyond current levels. We have updated our strategy last September with a clear focus on value generating growth by continuing to reduce overhead costs. And importantly, our stronger focus on cash flow generation is clearly paying off with an unlevered free cash flow improving to almost EUR 280 million, driven by disciplined CapEx control and rigorous working capital management.

Liquidity is clearly one of our key priorities, and we made great progress here as well. After last year's refinancing, our liquidity cushion reached a very solid level of over EUR 900 million by year-end. What remains unchanged are our core strength, innovation and sustainability, where we just recently confirmed our worldwide leadership. Looking ahead, our priorities remain clear. Profitability, strict cost discipline and continuous focus on cash generation.

Before we move into the details of 2025, let me briefly touch on our leadership team, which brings deep industry expertise and full focus on operational excellence. As you know, I recently joined as CFO and I'm very pleased to be part of this team. Together with Georg and Christian, we act as a team, the CEO tasks have been assigned to us. We fully remain aligned behind our strategy and focused on disciplined execution, maximization of profitability and strong cash generation.

Before moving into the details of our performance, let me briefly comment on the market environment. Overall, markets have not been providing any meaningful tailwinds in 2025. Especially, conditions in the textile fiber markets remain challenging, particularly in the last 3 quarters of 2025 after the announcement of the tariffs by U.S. President Trump. Consumer sentiment remained low, driven by those tariff uncertainties, which led to a shift in less advanced fiber applications and the less willingness to pay for sustainability in the textile sector. At the same time, nonwoven markets continued to develop much more stable, particularly in Europe and North America. This stability is largely driven by the ongoing conversion towards more eco-friendly fibers, which continues to support the demand. The demand for dissolving wood pulp remains solid, supported by higher downstream operating rates for generic fibers.

Looking at the market prices for both fiber and dissolving wood pulp, they were down compared to 2024, generic viscose and lyocell prices by approximately 2% and dissolving wood pulp prices by around 10%, both in U.S. dollars. Alongside continued weak consumer sentiment in textile markets pricing pressure for fibers was further driven by increasing supply in the market. In response, we continued to actively manage our product mix. We reduced the production in defined lower-margin products and market segments, which led to a reduction of total fiber sales volumes by 6% compared to 2024.

At the same time, we further increased our focus on premium products with higher margins which led to higher average selling prices in U.S. dollars. This clearly reflects and confirms the direction we have set with our new strategy, despite the trend of declining generic fiber prices by approximately 2% we were able to increase our average selling price in our Fiber division in U.S. dollar by 2.8%. In euro terms, however, our selling prices were slightly lower, reflecting foreign exchange movements.

Let me now turn into our Pulp division. The production increased by 4% in 2025, especially driven by an outstanding performance of our dissolving wood pulp plant in Brazil. We produce approximately 20% above nameplate capacity in this asset, which is a very -- which is very satisfying to us. At the same time, lower internal demand for our own fiber production allowed us to sell a larger share externally, resulting in a 27% increase in dissolving wood pulp sales volumes. Average dissolving wood pulp prices declined in 2025 reflecting lower market prices and negative foreign exchange movements, with a decline of 7.2% in U.S. dollar compared to 11.6% decline in euro.

Let me now turn to the development of key costs in our cost structure. Energy and chemical costs remained significantly above historical levels, particularly energy prices in Europe, although we saw some easing in prices during the fourth quarter. On the other hand, coal prices in Indonesia increased by 8% in the fourth quarter. Prices for caustic soda, our main chemical also remained elevated across regions and were broadly stable in the fourth quarter. Despite this partially slight improvements towards the end of the year, both energy and chemical prices remain a challenging cost factor to us. Looking ahead, ongoing geopolitical developments particularly the war in Iran are likely to increase volatility in energy markets with regards to prices and potentially even supply.

Let me now briefly reflect and recap on the strategy that we announced -- our revised strategy that we announced last year in September. It is built around 4 strategic priorities that together unlock value and prepare Lenzing for the future. This means when looking at the first 2 pillars, we focus on premiumization and excellence. Premiumization means that we will concentrate more strongly on our branded and innovative fibers like TENCEL, VEOCEL and ECOVERO and gradually step back from less profitable commodity segments. By doing so, we improved margins and position Lenzing in areas where we can truly differentiate. Looking back into 2025, this is also an impact that we have seen in terms of increasing the margin to the generic fiber segments in terms of prices, as we have seen on the last page.

The second pillar is excellence. We, as a board and as a company are embedding a culture of efficiency and discipline across the group, not just through one-off savings, but by institutionalizing cost control, we're optimizing our footprint and the streamlining structure. This makes us leaner, more agile and more resilient. On top of our performance program that started in 2023, we are implementing a comprehensive cost optimization program which includes a reduction of around 600 positions in Austria. Annual savings of approximately EUR 45 million are expected to take full effect by the end of 2027.

The third pillar is innovation. Here we will focus resources on fewer but higher impact projects, accelerating time to market and ensuring that our pipeline continues to provide the next generation of premium fibers whether in textiles or nonwovens. And finally, sustainability. This always has been part of Lenzing's DNA, but going forward, it will be leveraged even more as a value driver. With growing regulation and customer demand for sustainable products, our leadership in this area shall become a true competitive advantage. Overall, our strategy is designed to deliver profitable growth, improve margins further and strengthen our cash flow generation over the coming years.

Premiumization is at the core of our refined strategy. Today, around 1/4 of our volumes are still in generic commodity fibers, about 60% are in our branded classic products and 15% are in innovative premium fibers. Our goal is clear. Over time, we will exit the generic segments and shift resources into branded and premium products. This means that competitors can continue to play in commoditized viscose but Lenzing focuses on areas with higher margins and stronger differentiation. In that sense, we also have taken the decision to assess options for our plant in Indonesia, as you know, last September, I will later on elaborate on that. Premiumization for us is more than just a portfolio shift. It makes the business structurally more resilient, less exposed to cyclic swings and better positioned for sustainable growth.

We illustrate how we are implementing our refined strategy, let me highlight 3 concrete examples. First, we are further improving our profitability and resilience. As part of this, we are evaluating the potential sale of our viscose production site in Indonesia. The site did not develop as planned and has been clearly margin dilutive in recent years. The M&A process has been initiated and is ongoing according to plan. Second, we further drive the improvement of our margins. A good example is the expansion of the premium nonwoven capacity in Lenzing. An investment of EUR 15 million will increase the focus on sustainable and high-quality non-woven solutions. Third, we increased differentiation with new fiber technologies. A major step in this direction is the acquisition of the controlling majority in TreeToTextile. TreeToTextile represents the next technological leap in cellulosic fiber. H&M, IKEA and Stora Enso will continue to support our joint scale-up, commercialization as minority shareholders. Together, these 3 initiatives demonstrate how we are already implementing our strategy towards value growth.

The second pillar of our refined strategy is excellence. In line with this, we have implemented our comprehensive performance program. The focus was and continues to be on improving efficiency across all our production sites, optimizing procurement processes and costs and reducing personnel costs. The program has now been successfully completed and delivered full recurring savings of more than EUR 200 million, which is EUR 100 million above the original target, which was set in 2023. Building on this success, we have defined additional measures to further improve operational efficiencies. These measures should be leading to additional annual savings of EUR 45 million latest by 2027. They will continue to support our strategic focus on operational efficiency and cash flow generation. So a clear commitment of Lenzing to deliver.

Let me briefly highlight where some of the savings are seen in our P&L. A significant part can be seen in SG&A costs, which reduced EUR 40 million, EUR 20 million each in selling and administrative costs, and we were able to reduce personnel costs by EUR 55 million compared to 2024 or 10% of our total personnel costs. Some of these cost savings are already reflected in the SG&A savings on the left chart. So the right chart also includes savings in the production area.

Innovation and sustainability remain the foundation of Lenzing's long-term strategy. They are what sets us apart from the competition. Even as we streamline, we will not compromise in these areas. On the innovation side, our pipeline continues to create real opportunities. One example, our new TENCEL HV100 fibers, the fiber features variable cut length designed to mirror the irregularities of natural fibers and brings undefined rawness of nature into the TENCEL Lyocell portfolio for woven products such as denim, the clear commitment and clear milestone into our premiumization approach.

On the sustainability side, our leadership is recognized worldwide. We have been rated AAA by CDP as one of only 23 companies worldwide with an A score for climate now 6 years in a row. With Ecovadis Platinum, Lenzing is in the top 1% of companies worldwide in sustainability performance. These achievements are not just certificates. They are an asset that strengthens our brand, enhances customer partnership and increasingly drives premium pricing, especially in the nonwoven segment.

In summary, we continue to operate in a tough market environment, driven by weak customer sentiment in textiles and additional capacities in the Asian fiber market. We control the control level. We have successfully responded with our performance program, and we delivered tangible benefits in terms of improved margins and strong cash generation. At the same time, our revised strategy sets clear priorities, including the strong focus on value generating growth, the shift towards higher-margin products as well as the strategic review of some of our plants. This positions us well to further strengthen our financial performance and create sustainable value going forward. In short, we are managing the challenges of today while we build the foundation for stronger performance tomorrow with our revised strategy.

With that, let me now turn to the financials. And let me start with a brief overview of the key financial indicators for 2025. Revenue was slightly down year-over-year, while adjusted EBITDA increased by 8%, reflecting the impact of our cost initiatives as well as positive one-off effects from the sale of surplus EU emission certificates. Cash flow also improved, supported by very disciplined CapEx control and rigorous working capital management. On the balance sheet, net financial debt and leverage significantly decreased, and we increased the liquidity cushion to EUR 910 million.

Let me now take you through the developments in revenue and EBITDA in more detail. Both revenue and EBITDA were affected particularly in the second half of the year by external factors such as international tariff measures, subdued demand and declining market prices. Despite the tough market, revenues decreased by only 2% compared to 2024 with a clearly weaker second half of the year. Revenues, however, went down by 11% in the fourth quarter compared to the same period in 2024. Thanks to our comprehensive performance program, we were able to improve the operating performance, adjusted EBITDA increased by 8% to EUR 426 million. Here as well, we saw a much better first half of the year, and EBITDA in the fourth quarter decreased EUR 73 million.

Let me now take you through the development of EBITDA in more detail. Looking at this EBITDA bridge and starting from last year's EBITDA of EUR 395 million, we see a positive impact from cost savings as well as the sale of CO2 certificates. So of topics that we internally can control, we contributed with EUR 130 million of recurring and one-off effects to the profitability of 2025 with another EUR 45 million with the surplus sale of CO2 certificates in total, EUR 175 million. Those were, however, we could not fully compensate market headwinds that we clearly had to face.

Foreign exchange developments as well as inflation had a negative impact of combined around EUR 100 million. The impact of U.S. tariffs of EUR 10 million and the valuation of our biological assets in Brazil increased by EUR 8 million less than in 2024. If you look at our divisions, we can see a positive margin contribution through additional volume in our Pulp division of EUR 27 million. However, with negative price development accounting for EUR 43 million as dissolving wood pulp prices decreased during 2025.

In the Fiber division, we see an adverse picture. While volume was short compared to 2024, with an impact of EUR 31 million, we were in a position to increase our prices in U.S. dollar with an impact of EUR 25 million in 2025. With all that, you can see we continue to control what we can control and to manage what can be managed internally. However, the market had some headwinds for us.

Looking at the development. Since 2022, revenues have remained largely stable at EUR 2.6 billion due to the challenging market environment. At the same time, EBITDA increased by EUR 184 million to an adjusted EBITDA of EUR 226 million, driven primarily by our cost-saving initiatives and operational improvements. Our refined strategy also addresses reviewing selected sites, including the Indonesian plant where the M&A process where a potential sale is ongoing. In this context, noncash impairment losses on noncurrent assets, in particular, property, plant and equipment of EUR 82 million were carried out last year. The impairment losses have a negative impact on EBIT but no effect on EBITDA. EBIT, excluding the impact of the impairment, would have been at EUR 100 million approximately, which compares to EUR 18 million reported.

Let me now turn to cash flow. Trade working capital decreased as a result of rigorous and actively managed working capital management of $125 million or 22% in 2025. At the same time, we maintained a very disciplined CapEx control with CapEx spend of EUR 141 million. This led to a significant increase in unlevered free cash flow and an improvement in the cash conversion to 66%. If you take a step closer to the development of net working capital, we can see that the optimization of inventory management and improved supply chain management in both fibers and pulp led to a decrease of inventories by EUR 115 million since the end of 2024.

We also consistently reduced trade receivables. Trade receivables were down EUR 73 million compared to the end of 2024, reflecting disciplined receivables management. While trade payables have decreased in the first 3 quarters, they increased again in the fourth quarter, ending at EUR 324 million. Overall, this development reflects our disciplined approach to working capital management and our continued focus on cash generation.

Turning to the balance sheet and to highlight the key developments in 2025, we do see that net financial debt decreased by 12%, mainly driven by strong free cash flow generation. This resulted in an improvement in our leverage ratio to 3.3x EBITDA. At the same time, we significantly increased our liquidity cushion. This is cash on hand, including not drawn financing lines to EUR 910 million.

Let's have a short recap on the refinancing measures we have successfully taken in the last years. We started with the capital increase in 2023 to bolster our liquidity buffer, at the same time, we did a maturity extension of EUR 250 million. In October 2024, we have converted the project financing of our Brazilian joint venture of USD 1 billion into a stand-alone corporate finance structure with further shift of debt maturities. The successful placement of the new hybrid bond in the amount of EUR 500 million in July 2025, followed the EUR 545 million syndicated loan secured in May 2025. Those measures marked further milestones in the professional and forward-looking management of our capital structure and brings an adequate amortization profile to the company.

With that, let me now turn to our outlook. Let me start with some of the key challenges that we currently see in the market environment. First, the political uncertainty remains elevated, particularly due to the escalation in Middle East. Even though we have no direct business in Iran, we expect indirect impact through continued volatility in energy markets, global supply chain disruptions as well as a negative impact on consumer confidence. Already after 2 to 3 years, at 3 weeks now since the Iran war started we have to experience a steep increase in domestic growth transportation in sea freight surcharges and first request for increased prices in terms of our key chemicals. If the situation continues as such, we expect potential supply shortages in specific markets, be it in Southeast Asia or in Europe.

Second, what we see here on this slide, we continue to see a high degree of uncertainty around global trade policies and tariffs with limited tariff impact, but indirectly also affecting fiber demand and prices, particularly in the textile business. And finally, with new capacity coming on stream, particularly in generic lyocell and those are expected to continue to weigh on pricing and margins. Based on these assumptions, our outlook for the year reflects the following expectations.

Looking back, 2025 was a solid year despite the continuously tough market environment. For the reasons just mentioned, we expect generic fiber market prices to remain under pressure in 2026. However, we have seen improved pricing developments in pipe and fiber in the first quarter compared to the weak end of 2025 with further positive indications for the remaining months of the first half year. Fiber demand is expected to continue to be impacted by subdued consumer sentiment However, also here, we expect some market improvements in half year 1 with a constructive start in Q1 2026 compared to the last month of 2025.

At the same time, we expect demand in pulp to remain relatively stable. Energy and raw material costs are expected to remain volatile and on elevated levels impacted by the geopolitical developments. Despite these challenges, we remain focused on what we can control, particularly disciplined pricing, cost efficiency and strong cash generation, and we expect operational results to continue to be positively impacted by further cost reductions. The start into Q1 was above expectations and very constructive. However, going forward, visibility is very limited due to the ongoing high uncertainties in global tariffs and geopolitical developments. We therefore at the moment give no guidance for 2026. We will review the outlook in the next month and may provide guidance alongside the results of the first quarter. However, this is subject to improved market visibility.

Before going into Q&A, let me summarize now why Lenzing represents a compelling investment case today. We control what we have under control and we deliver. First, we are recalibrating our asset base. That means moving away from a volume-driven model towards one that prioritizes economic value creation. We are reviewing underperforming assets, including the Indonesia site and focusing investment where returns are highest. Second, we are refocusing the organization with leaner structures, institutionalized cost discipline, we are aligning resources with future growth opportunities. Third, we are resharpening our market focus. We are withdrawing from commoditized fibers and concentrating on premium branded products and resilient nonwoven applications. This makes our business less cyclical and more predictable. Finally, we are positioned to regain valuation. We combine a proven ability to execute savings, refinancing, EBITDA growth with unique differentiation through innovation and sustainability. This is how we will restore confidence and create long-term value.

With this, I will hand back over to the operator for the Q&A.

[Operator Instructions] The first question comes from the line of Christian Faitz from Kepler Cheuvreux.

Two questions, please. First of all, Mathias, you mentioned the sequential improvement in Q1 '26, at least in terms of demand trends. I'm fully aware that the already strange geopolitical situation can change from day-to-day at this point. Yet if one was to admittedly naively assume that all of the tensions were over by May or so, how would you see demand in textile and also for nonwovens, i.e., I guess you're talking about a pre-Iran scenario?

And the second question is, having a sound production footprint in Europe, would you, at this point, see a relative "advantage" in terms of raw material sourcing versus your Asian peers, obviously, also including your own setup in Asia?

Thanks, Christian, for the question and hello to you. So First, let me answer your first question. So if I briefly recap it, so you were asking regarding textile and nonwoven demand under normal pre-Iran circumstances. So what we have seen when we stepped into 2026 was that prior to the Iran conflict, demand both in nonwoven and textile was very good and very high and we could exceed our expectation in the first 2 months and now also in March with regard to demand. We have also seen a structural price increase pre-Iran both in fiber and in dissolving wood pulp that will certainly support our, let's say, our improved profitability going forward. So without the Iran scenario, I would have expected a clear trend reverse coming from quarter 3, quarter 4, what we've seen in 2025.

Okay. I guess, yes, I mean it's all speculated, but I just wanted to get a feel for the underlying ex-Iran demand.

Okay. And your second question was on the advantage of being based also in Europe versus Asia. So certainly...

In terms of raw material sourcing and given the Iranian and Strait of Hormuz situation, yes.

Certainly, a global footprint can help. What we currently see is that our Chinese competitors don't suffer from any supply constraints at the moment. So this is what we feel. And also our Chinese plant at the moment is securing the supply. We also have safe supply at the moment in Europe. So compared with the Chinese, I don't see too much disadvantage, but things can change pretty fast, I guess. With our other plants, especially in Southeast Asia, we see the one other potential supply constraint where we currently try to shift around. So here, I think it could be a faster supply constraint in those markets that we have to -- that needs to be seen, yes.

The next question comes from the line of Sebastian Bray from Berenberg.

Can you hear me?

Yes.

I have 3, please. The first is on if there is anything unique going on in Q4 that meant the EBITDA in this quarter was especially weak. My gut feeling is that the company may have wanted to clear out some inventory and underproduced even relative to Q3, but it does look like quite a big drop. Any color? Was the hedging becoming less favorable on the FX side? Was Heiligenhaus causing particular issues? That's my first question.

My second question is on the debt structure and covenants. If I take EUR 75 million as a run rate, I appreciate it might not be the right one, but it's close to what the company reported for Q4 EBITDA including the hybrid, the net debt-to-EBITDA close to 6x of the company. Are there any explicit net debt-to-EBITDA covenants attached to any of the existing or more recently raised debt of the last 12 to 18 months.

And finally, I appreciate the company doesn't provide guidance, and I'm not going to ask for an EBITDA figure for '26. But can you give an idea of the magnitude at current hedges of both the FX, the energy and the sulfur costs for '26.

Thank you, Sebastian, and hi to you. So let me answer and start with the first question. So you asked regarding Q4 performance as it was perceived as very weak and if there were any external impact. So first, we had explicitly low level of dissolving wood pulp prices, so the quarter 4 clearly marked the low with regards to our external pulp prices for 2025. Secondly, and you're right, we tried to clear out some of our inventories which also burdened our average sales price in quarter 4 compared to the prior year. I think that was the main issues that had to be seen in quarter 4 compared to the prior quarters.

With regards to your second question, EUR 75 million run rate. I mean, I understand the logic and understand that the mathematics and 4x multiplier to this weak quarterly run rate would bring us to the leverage that you have just mentioned. I mean there is covenants that we're carrying in the syndicated loan. This is an EBITDA net debt inclusive financial leasing covenant where we're currently are working with a comfortable headroom still in quarter 1.

And your third question was the current hedge impact of FX, energy and chemicals. So we have approximately 80% of net exposure in U.S. dollar hedged for 2026 already. We have approximately 60% of our energy hedged of our open position. However, keep in mind that especially in the pulp side, where we are nicely integrated. And this is mainly attributable for Heiligenhaus, Grimsby and our site in Mobile, while we don't perceive large energy fluctuations in all sites in Asia. On the chemical side, there is no hedging that we can apply. So here we are on the market rates.

That's helpful. Can you remind me what is the actual number covenant on the syndicated debt? Is that disclosed as a multiple of EBITDA?

We don't disclose them.

The next question comes from the line of Patrick Steiner from ODDO BHF.

Three remaining from my side. Firstly, could you give us please an indication of the CapEx levels for 2026? And also maybe some kind of indication what -- how this compares to like a normalized maintenance CapEx level? And secondly, the level of trade working capital, is this sustainable? Should we see an increase in 2026? And thirdly, you mentioned new generic lyocell capacities coming on stream, which are expected to burden margins and prices going forward. Can you give us more information on that?

So first indication on CapEx level 2026. So the CapEx level of EUR 140 million in 2025 was clearly a stretch to us. I mean this is only focused on maintenance CapEx and license to operate CapEx. This is a level that we in principle plan to maintain for the next years to come. However, we need to plan some additional CapEx on top with regard to enhancing our factories. We also announced a EUR 15 million announcement for the tampon business in Lenzing, we announced in total an investment package of EUR 100 million of strategic CapEx into the next year. So if you would add up, add certain surplus to the EUR 140 million base line, then I think you are pretty right.

With regards to net working capital level and your question is this remains sustainable. We certainly made the big step in 2025. And there is still room for improvement. There's still areas that I would like to touch and take it with my operational colleagues. We plan to further decrease the DIO, DSO, DPO ratios by a few days within that year, but a large step is not to be expected. And when we look on your question with regards to new generic lyocell on stream, so especially the -- our largest competitor in China has recently brought on stream some additional generic lyocell capacity, and we expect another capacity coming into the market in 2026. This is potentially an approximately 100-kiloton plant that will hit the market in 2026. We see it mainly for the domestic Chinese textile market. But it clearly brings, let's say, additional capacity into that generic lyocell market, which could further dilute the margin.

[Operator Instructions] Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mathias Breuer for any closing remarks.

Yes. Thanks, everyone, for joining in and listening to my first earnings release call, very much looking forward to close interaction in the weeks and months going forward. And let's meet one or other at conferences and Investor Relations roadshows. Other than that, we see us in our quarter 1 announcement May 7. Thank you, and goodbye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Lenzing AG Analyst Conference Call and Live Webcast. I am Matilda, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Rohit Aggarwal, CEO. Please go ahead.

Thank you very much. Ladies and gentlemen, welcome to the presentation of Lenzing's results for the first 9 months 2025. With us today is also Nico Reiner, our CFO.

Let's go through our agenda for today. I'll start with a summary of the key developments, followed by the market update as well as our refined strategy. Nico will then guide you through the financials, and I will talk about our investment highlights as well as the outlook. And as usual, at the end, we are looking forward to your questions in our Q&A session.

Let's start with the overview of the key highlights for the first 3 quarters. The market continued to remain challenging, and it's even more important that we have refined our strategy with a clear focus on premiumization and excellence.

Revenue and EBITDA continued to improve in the first 9 months, supported by a strong first quarter. However, market headwinds impacted us continuously in quarter 3. The market environment is marked by geopolitical uncertainty and especially the aggressive customs policy. EBITDA was additionally negatively impacted by restructuring one-offs.

Operational excellence continues to be key for us, and we are further raising the bar on our agility and flexibility. Liquidity is one of our key priorities, and we made great progress. After this year's refinancing, our liquidity cushion reached a very solid level of EUR 1 billion.

What remains unchanged are our core strengths, innovation and sustainability, where we were just confirmed as worldwide leader. This leads us to a confirmed EBITDA outlook by year-end. However, it needs to be said that visibility remains quite limited.

International tariff measures have very much characterized the last couple of months globally. In Q1, markets were impacted only in a very limited way by tariff developments and Lenzing achieved a strong result. However, the escalation from reciprocal tariffs followed in early April. This has led to both supply and demand shocks impacting global value chains.

Ongoing and repeatedly changing international tariff measures and the resulting uncertainty led to tangible stress along the textile value chain and impacting consumer confidence negatively. The direct impact for Lenzing is limited, however, leads to indirect effects on both demand and prices.

On a more positive side, I can say that the nonwoven markets were less affected by these tariff developments. To mitigate the tariff impact, Lenzing took actions in 4 ways. Number one, we maintain very close contact to our customers and regional value chains to handle the situation in the best possible way and to strengthen demand visibility.

Number two, we believe that we are better positioned than other fiber manufacturers given our global footprint, which allows us to shift fiber volumes between our production sites in order to manage cost and trade impact.

Number three, we further strengthened our operational efficiency, which includes the target to reduce around 600 jobs in Austria, mainly in administration.

Number four, we decided to start a review of strategic options, including a potential sale for the Indonesian production site, which supports our strategic focus on branded, high-performance fibers with higher margins.

Let's look now in more detail how the markets have developed. The relevant markets for Lenzing are textiles, nonwovens on the fiber side as well as dissolved wood pulp. When adjusted for inflation, demand for apparel worldwide was up 2% in the first 9 months of 2025 versus a year ago. Consumer sentiment remains low, which is negatively impacting discretionary spending with elevated saving rate and a wait-and-see attitude.

Growth driver was the U.S., which was driven by consumers pulling forward purchases in quarter 2 and quarter 3 in response to tariffs, while Europe and China were mostly flat in a challenging macro and cost of living environment.

Let's turn our attention to nonwovens. Here, end markets show higher resiliency with a relatively stable consumer demand. Compared to previous years, the seasonality period with weaker demand lasted a bit longer into September. However, I can say that the development in October was promising given also a more positive sentiment towards 2026.

The trend towards less plastics is ongoing, and the carbon footprint and other sustainability credentials are increasingly becoming a differentiator for nonwoven manufacturers and brands driven by consumer awareness and retail commitment, especially the U.S. and regulatory pressure in Europe.

DWP demand is mostly driven by the production of regenerated cellulosic fibers. The production cuts we have seen in the viscose industry in quarter 2 were negatively impacting DWP demand and prices accordingly. As operating rates in viscose plants increased in quarter 3 and paper pulp prices stabilize, DWP prices saw some support, at least in U.S. dollar terms.

Let's have now a look at the fiber prices on the Chinese market. Please keep in mind that prices shown on this slide are generic market prices. Generic viscose prices in China increased gradually in the third quarter in U.S. dollar terms. In July and August, demand improved and inventories fell as peak season was on the horizon. However, the pace of price increases remained cautious.

At the end of September, the price of medium-grade generic viscose fiber stood just 2% higher compared to the end of second quarter at RMB 13,050 per ton. However, due to the weakened U.S. dollar, prices have decreased in euro terms, which is impacting Lenzing negatively.

The situation on the cotton market did not change much in the third quarter, and international cotton prices fluctuated on a low level within the range. Dissolving pulp prices stopped falling in the third quarter with support from improved demand from viscose plants and some temporary supply constraints. In the third quarter, imported hardwood DWP prices went up by 2% to USD 818 per ton. Here again, prices in euro terms have decreased due to the weakened U.S. dollar.

Lenzing prices are mainly traded at a premium compared to generic prices as the current share of specialties is at around 90%, and we are gradually withdrawing from the lower-margin commodity segments.

Let us now turn to the development of costs. Energy and chemical costs remain significantly higher than historical levels, especially energy prices in Europe, but at least they decreased somewhat in quarter 3 compared to the second quarter.

Geopolitical conflicts such as Russia, Ukraine and the Middle East continue to fuel the volatility of European gas prices. Lower demand due to warmer weather led to somewhat reduced gas prices in summer.

Caustic soda prices remain high across regions, but reduced in general compared to Q2 due to weaker seasonal demand. Even with a slight improvement in the second quarter, both energy and chemical costs remain a major challenge for fiber production.

As the relevant markets for us still show no signs of a sustainable recovery, it is even more important that we continue to keep our full focus on cost excellence, which remains a key pillar of our performance program. In 2024, we already realized over EUR 130 million in cost savings, and we do expect cost savings to further increase to annual cost savings of more than EUR 180 million for this year. We are clearly well on track to meet this target as well.

To make it clear, we're talking about our recurring targets with an ongoing impact beyond this year as well. We can certainly be satisfied with our success so far, but there are still improvement areas ahead of us in order to maximize our full potential.

As communicated about a month back, we are refining Lenzing strategy. Our refined strategy is built around 4 strategic priorities that together unlock value and prepare Lenzing for the future. Unlocking value happens in the first 2 pillars, premiumization and excellence. Premiumization means that we will concentrate more strongly on our branded and innovative fibers like TENCEL, VEOCEL and ECOVERO and gradually step back from less profitable commodity segments. By doing so, we improve margins and position Lenzing in areas where we can truly differentiate.

The second is excellence. We are embedding a culture of efficiency and discipline across the group, not just through one-off savings, but by institutionalizing cost control, optimizing our footprint and streamlining structures. This makes us leaner, more agile and more resilient. We are implementing tough but necessary measures.

By the end of 2025, around 300 positions will be reduced in Austria, mainly in overhead, supported by a social plan and with full assistance for those affected. This is expected to result in annual savings of over EUR 25 million from 2026 onwards. By 2027, another 300 positions will be reduced through internationalization as we strengthen our footprint in Asia and North America. Both measures will lead to total annual savings of more than EUR 45 million, latest fully effective before end of 2027.

The third pillar is innovation. Now here, we will focus resources on fewer but higher impact projects, accelerating time to market and ensuring that our pipeline continues to provide the next generation of premium fibers, whether in textiles or nonwovens.

And finally, sustainability. This has always been part of Lenzing's DNA, but going forward, it will be leveraged even more as a value driver. With growing regulation and customer demand for sustainable products, our leadership in this area is a true competitive advantage.

Taken together, these 4 priorities, premiumization, excellence, innovation and sustainability ensure that we just don't react to changes in the market, but actively shape them, creating long-term value for customers, employees and shareholders.

Innovation and sustainability remain the foundation of Lenzing's long-term strategy that they are what sets us apart from our competition. Even as we streamline, we will not compromise in these areas. On the innovation side, our pipeline continues to create real opportunities. One example is our new TENCEL HV100 fibers. The fiber features variable cut lengths designed to mirror the irregularities of natural fibers and brings undefined rawness of nature into TENCEL Lyocell portfolio for woven products such as denim.

On the sustainability side, our leadership is recognized worldwide. We have just been reaffirmed our EcoVadis platinum status. And with this, Lenzing is now in the top 1% of companies in sustainability performance. We've also just been confirmed as a global leader in the Canopy sustainability ranking as we have taken once again first place in this year's Hot Button Report  published by the Canadian nonprofit organization, Canopy. These achievements are not just certificates, they are an asset that strengthens our brand, enhances customer partnerships and increasingly drives premium pricing.

And with this, I hand over now to Nico for an update on financials.

Thank you, Rohit, and a warm welcome from my side as well. The third quarter was negatively impacted by weakened fiber demand in continuously challenging markets with revenues decreasing by 3% year-on-year. EBITDA decreased by EUR 27 million to EUR 72 million. This was partially driven by the decrease in revenue just to mention. In addition, one-off restructuring costs for the headcount reduction program to mitigate market impact in the amount of EUR 13 million have also negatively impacted EBITDA. Additionally to that is to mention that we had the annual maintenance shutdown of LDC in the third quarter.

Looking at the first 9 months in total, both our revenues and our margins increased, thanks to the measures that we have actively taken. Revenue increased by EUR 14 million in the first 9 months compared to the 9 months of 2024 and reached EUR 1.97 billion. EBITDA increased by EUR 77 million to EUR 340 million as the number of CO2 certificates held continued to increase, we decided to sell some of them in the amount of EUR 37 million in the first 9 months of this year, which positively impacted the EBITDA.

Depreciation was at EUR 320 million, including an impairment of EUR 82 million, which I will talk about on the next slide. This led to an EBIT of EUR 21 million, which compares to EUR 38 million in the first 9 months of '24.

Income taxes amounted to EUR 6 million compared to EUR 78 million in the first 9 months of '24, and the financial result was minus EUR 119 million compared to minus EUR 72 million in the first 9 months of '24. As a result, there was a loss of EUR 169 million for Lenzing shareholders, which compares to a loss of EUR 135 million in the first 3 quarters of 2024.

Let's make it clear. Even though Q3 was negatively impacted by one-offs such as the restructuring costs, we are not satisfied with the result. However, on a positive note, we saw some stability in fiber demand in September compared to July and August. And October looks also more promising with a currently quite stable order book situation.

Let's move to the next slide. As communicated, our refined strategy also addresses reviewing selected sites, including the Indonesian plant where potential sale is under consideration. In this context, noncash impairment losses on noncurrent assets, in particular, property, plant and equipment of EUR 82.1 million were carried out. The impairment losses have a negative impact on EBIT, but not effect on EBITDA. EBIT, excluding the impact of the impairment, would have been slightly negative at minus EUR 6 million, which compares to minus EUR 88 million reported EBIT. Please note that this impairment amount is not audited for Q3 closing and therefore, subject to change.

Looking now at cash flow. Trading working capital further decreased and was down by 6% compared to the end of the second quarter due to lower inventory levels. With regards to CapEx, Lenzing continues to put a clear focus on maintenance and license to operate projects as part of its performance program and CapEx remained on low levels of EUR 32 million in Q3. As you can see, we continue to have a very disciplined approach to capital allocation. As a result, unlevered free cash flow more than doubled to EUR 103 million in Q3, and we clearly continue to have a very clear focus on free cash flow generation.

Let's move to the balance sheet. On the left side of the slide, we show the development of net financial debt. Even though the markets were challenging in the third quarter, net financial debt continues to move into the right direction and came further down by EUR 35 million to about EUR 1.4 billion by the end of September. On the right side, you see the development of our liquidity cushion, it increased by EUR 23 million compared to the end of last quarter and reached a very solid level of EUR 993 million.

Let us look at our debt maturities on the next slide. Let's have a short recap on the refinancing measures we have taken recently. In October last year, we have converted the project financing of our Brazilian joint venture of USD 1 billion into a stand-alone corporate finance structure with a further shift of debt maturities. The successful placement of the new hybrid bond in the amount of EUR 500 million in July this year followed the EUR 545 million syndicated loan secured in May. Those measures marked further milestones in the professional and forward-looking management of our capital structure. With this, we have proven to have access to capital markets despite challenging times, and we have essentially secured our financing through 2027. We can now continue to fully focus on executing our successful performance program aimed at improving margins and free cash flow as well as implementing the refi strategy.

With this, I hand over back to you, Rohit.

Thank you, Nico. Let me summarize now why Lenzing represents a compelling investment case today. First, we are recalibrating our asset base. That means moving away from a volume-driven model towards one that prioritizes economic value creation. We are reviewing underperforming assets, including the Indonesian side and focusing investment where returns are highest.

Second, we are refocusing the organization. With leaner structures, institutionalized cost discipline and a stronger international footprint, particularly in North America and Asia, we are aligning resources with future growth opportunities.

Third, we are resharpening our market focus. We are withdrawing from commoditized fibers and concentrating on premium branded products and resilient nonwoven applications. This makes our business less cyclical and more predictable.

Finally, we are positioned to regain valuation. We combine a proven ability to execute, whether it's savings, refinancing, EBITDA growth with unique differentiation through innovation and sustainability. This is how we will restore investor competition and create long-term value.

We now come to the outlook. I can clearly say that thanks to our performance program, the operational performance in the first 9 months 2025 was solid despite the still challenging market environment in the third quarter.

In terms of fiber demand, I expect that we have already passed the low point with a positive development in September compared to July and August. As Nico also mentioned, we have seen continued promising developments in October and the order book situation looks currently quite stable.

We assume relatively stable demand in pulp and have a cautious outlook on the generic fiber market development in the fourth quarter of 2025. We expect energy and raw material costs to remain on elevated levels. However, market visibility remains still on relatively low levels.

While the market has not helped us so far, we continue to take the future in our own hands. We expect operational results to continue to be positively impacted by the performance program, and we keep the expectation for EBITDA for 2025 financial year to be higher than in the previous year. By 2027, we target approximately EUR 550 million EBITDA, assuming stable market conditions.

With this, I will hand over back to the operator for Q&A.

[Operator Instructions] The first question comes from the line of Christian Faitz from Kepler Cheuvreux.

Two questions, please. First of all, your free cash flow continues to be on a nice good trajectory. Congrats on that. Would you be able to provide us a free cash flow guidance for the few months remaining in the year?

And then second of all, can you tell us a bit about the capacity utilization? I note, obviously, your statements that things in terms of order income have improved, I guess, from September also into October. But where are your capacity utilizations at this point in time versus historical trends?

Thank you, Christian. First question with regard to potential outlook on the fourth quarter for the free cash flow, Nico, please?

Yes. Thank you. So overall, as we have communicated now since, I think, meanwhile, 7 or 8 quarters, we are very much focused on generating free cash flow. And we are continuing this journey. So we overall will still work heavily to improve our free cash flow generation, and we are also clearly positive to have a positive further continuation of that story. But nevertheless, don't forget in the fourth quarter, there are always some one-timers, especially in regards to interest payments and so on. But overall, I think we will clearly continue the journey with a positive free cash flow for 2025.

The second question with regards to the utilization, capacity utilization, can you give us some indication there?

Yes. Thanks, Christian, for that question. What I can say is the year has been a bit of a roller coaster given what we spoke about from a tariff leading to a lot of uncertainty in the value chain. So we've seen movements through the year, which were pretty strong starting quarter 1. We did see the books getting a bit slowdown in quarter 2, quarter 3, and then we are seeing now a recovery.

At this point in time, I can say that we are running fairly back to normal capacity utilization. Of course, based on plants and products, it could vary slightly. But by and large, I would say we are recovering almost back to a full normalized state.

[Operator Instructions] The next question comes from the line of Patrick Steiner from ODDO BHF.

Patrick Steiner speaking. Two questions from my side. Firstly, on your annual expected cost savings of EUR 45 million due to the personnel reduction of the roughly 600 jobs in Austria. You said it will take full effect by the end of 2027. What can we expect for 2026 and '27 in absolute terms? That's the first one.

And the second one, in your Q3 report, you wrote that you expect that the passing of higher costs related to tariffs will lead to falling demand in the U.S. by next year at the latest. Could you please elaborate further on this and how this might hit you in terms of timing and so on? This would be nice.

Thank you, Patrick. So the first question with regards to the [ wave ] or how does EUR 45 million personnel cost reduction savings will be reflected in 2026 and 2027. This one for you, Nico, please.

Yes, Patrick. So we do have our program here separated in 2 waves. So there is wave #1. Wave #1 would mean the first 300. And as already mentioned and commented during the presentation, there will be a EUR 25 million ticket jumping in 2026 and then as a continued improvement also going forward. And for the second phase of cosmos, here, we see further improvement starting already in 2027 and then fully being embedded in 2028. So in 2028, we see the additional EUR 20 million. So if you would sum it up EUR 25 million plus the EUR 20 million, that's the EUR 45 million ticket we have been talking. I think that gives a relatively clear picture.

Then the second question from Patrick is with regards to the expected falling demand that we expect in the U.S. in terms of overall apparel demand. Rohit, please.

Yes. Sure, Patrick, thank you for that question. We've seen a bit of consumer behavior in Americas, which has been largely trying to circumvent or delay. And therefore, they have been doing -- putting forward their purchases in terms of apparel. So there have been a lot of pre-purchasing that has happened, and therefore, that we saw impact on the value chain kind of playing out through quarter 3.

The prices are going to be looking to move up in the U.S. market. We expect that most of the retail would be affected. And we are continuously monitoring that very, very closely. Now if you look at and compare that to overall other supply chains outside textiles, we have seen that, by and large, those demands have stayed pretty flat in terms of -- and consumer behavior has not been impacted that significantly. But again, it's too early at this stage to make any prediction on how that will play out because it will be the scale of what level of price increases the retailers are able to put on the shelves and also how much of efficiency gains will happen in the supply chain through managing the cost mitigation around the tariffs.

So -- but on our side, we are looking to continue to move our product into nonwovens and then we are able to find ways to offset our tariffs and then pass price increases where the contracts allow.

[Operator Instructions] Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rohit Aggarwal for any closing remarks.

Well, thank you very much for joining us today, and we appreciate the questions. We hope to be able to see you again on March 19 when we will disclose our full year results for 2025. So look forward to interacting that time. Thank you very much for joining us again.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Lenzing AG Update Call and Live Webcast. I am Atell, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Rohit Aggarwal, CEO. Please go ahead.

Welcome, and thank you for joining today's capital markets update. With me is also Nico Reiner, our CFO. Over the next 30 minutes, we'll present how Lenzing has refined its strategy to navigate a challenging market while continuing to build on our leadership in innovation and sustainability. We'll review performance progress, market dynamics and outline the strategic priorities, including the financial guidance that underpin our path to long-term value creation.

On Slide 2, you see the big picture and flow of the contents and the presentation. Since 2023, we have been working hard to secure the future of Lenzing in an environment that has become increasingly challenging. Global textile and nonwoven markets remain under pressure and shifting geopolitical dynamics affect the entire industry. Against this backdrop, we have refined our strategy to ensure Lenzing remains competitive and resilient in the long run. The idea is straightforward. We want to unlock the full potential of Lenzing by focusing on what we do best: premium fibers and innovation, while at the same time, making our structures leaner and the processes more efficient.

The refined strategy rests on premiumization, including customer proximity and operational excellence. Premiumization means concentrating on our high-margin branded fibers, such as TENCEL and Lyocell and gradually withdrawing from low-margin commodity segments. Customer proximity means expanding our presence in North America and Asia, staying closer to our partners and intensifying innovation through joint developments in our application centers.

Operational excellence means strengthening our efficiency, embedding cost discipline, reviewing our asset footprint and ensuring that savings are sustainable. What remains unchanged are our core strengths, innovation and sustainability. In short, this refined strategy, sharpens our focus makes us more resilient and positions Lenzing to capture growth in those areas where we truly add value. We are also backing our strategy with a targeted investment program, upgrading our Austrian sites. This leads us to confirmed EBITDA outlook by year-end and a positive outlook for 2027.

With this, I hand over time to Nico Reiner as to report progress versus last year.

Thank you, Rohit, and also a very warm welcome from my side. Let me take a moment to look back at our progress since last year. In 2024, we managed to significantly increase EBITDA, improving our margins to 15% while at the same time reducing leverage. In the first half of 2025 that momentum continued. Revenues grew, EBITDA increased by more than 60% year-on-year and we further strengthened our balance sheet. Our performance program is delivering tangible results. By 2024, we had already secured EUR 130 million in annual savings, and we are firmly on track to reach EUR 180 million plus by the end of this year. On top of this, we successfully refinanced our debt, eliminated near-term maturities and improved working capital efficiency. The bottom line is, we set ambitious targets and we met them. This track record proves that Lenzing can deliver what it promises. And it gives us the credibility and confidence to now take the next step with our refined strategy.

Handing back to you, Rohit.

Thank you, Nico. Let's move to Slide 4. What we see on Slide 4 is that the environment for our industry has changed considerably since the second half of 2022. And many of these conditions are still with us today. Global textile and nonwoven markets remain under pressure. Trade conflicts, new tariff barriers and geopolitical uncertainty continues to weigh on demand flows across regions. Consumer sentiment is subdued and that translates directly into lower textile consumption.

On the cost side, Europe continues to face elevated energy and caustic soda prices, putting pressure on margins. In China, the Lyocell market has become commoditized, intensifying price competition and demand for ECOVERO viscose is developing more slowly than we had anticipated. At the same time, there are steady dynamics that support our strategy. Regenerated cellulosic fibers continue to grow by 5% to 6% annually, clearly outpacing the global fiber market, which grows at only 2% to 3%. Modal remains a healthy niche, and the premium fiber segment still has limited competition. So the message is clear. The generic segments of the fiber market remain highly exposed and pressured while specialty and premium fibers continue to offer growth, differentiation and resilience. This is exactly where we are positioning Lenzing for the future.

Moving over to the next slide. What you can see on Slide 5 is that our refined strategy is built around 4 strategic priorities that together unlock value and prepare Lenzing for the future. But unlocking value happens mostly in the first 2 pillars, premiumization and excellence. Premiumization means that we will concentrate more strongly on our branded and innovative fibers like TENCEL, VEOCEL and ECOVERO and gradually step back from less profitable commodity segments. By doing so, we improved margins and position Lenzing in areas where we can truly differentiate.

The second is excellence. We are embedding a culture of efficiency and discipline across the group, not just through one-off savings, but by institutionalizing cost control, optimizing our footprint and streamlining structures. This makes us leaner, more agile and more resilient.

The third pillar is innovation. Here, we will focus resources on fewer but higher impact projects, accelerating time to market and ensuring that our pipeline continues to provide the next generation of premium fibers, whether in textiles or nonwovens.

And finally, sustainability. This has always been part of Lenzing's DNA. But going forward, it will be leveraged even more as a value driver. With growing regulation and customer demand for sustainable products, our leadership in this area is truly a competitive advantage. Taken together, these 4 priorities premiumization, excellence, innovation and sustainability, ensure that we don't just react to changes in the market but actively shape them, creating long-term value for customers, employees and shareholders.

Let's look a little bit closer to our premiumization strategy. It is at the core of our refined strategy. Together, around 1/4 of our volumes are still in generic commodity fibers. About 60% are in our branded classic products and 15% are in innovative premium fibers. Our goal is clear. Over time, we will exit the generic segments and shift resources into branded and premium products. This means that competitors can continue to play in commoditized viscose while Lenzing focuses on areas with higher margins and stronger differentiation. Flagship brands like TENCEL, VEOCEL and ECOVERO are central to this journey. They not only provide better profitability but also embody sustainability, performance and innovation, qualities that customers and consumers increasingly demand.

Premiumization is more than just a portfolio shift. It makes our business structurally more resilient, less exposed to cyclical swings and better positioned for sustainable growth. It is how we unlock more value for our customers and shareholders by building on what we do best.

Let's move to slide and talk a little bit about our refined target markets and applications. To capture profitable growth, we are refining our geographic and application focus. In the Americas, our goal is expansion. Here, our strong local footprint and increasing regulatory focus on sustainability creates real tailwinds. In Europe, the Middle East and Africa, we will strengthen our position, aligning closely with new sustainability legislation and optimizing our customer mix.

In Asia, which remains highly competitive, our objective is stabilization, concentrating on segments where Lenzing can truly differentiate such as hygiene, filtration and technical applications. Just as important is where our fibers are used beyond traditional textiles, we see strong opportunities in hygiene, medical, packaging, filtration and industrial nonwovens. These applications have more resilient demand patterns and often command higher margins. By selectively shifting production capacity from textiles into nonwovens, we aim to achieve a more balanced revenue distribution between the 2 business areas. This also reinforces our pulp integration, securing competitiveness and long-term profitability.

So the story of this slide is not just about regions, but about using our assets in the right markets and the right application areas. Markets that are structurally growing, are less cyclical and where Lenzing can lead.

Let's talk a little bit about excellence. Excellence is about making Lenzing structurally leaner, more efficient and more resilient. It goes well beyond temporary savings and touches every part of the organization. On the commercial side, we are embedding value-based selling practices and improving pricing discipline. This includes better use of data on products, customers and margins as well as building transparent sales and business development pipelines. We are also strengthening key account management, giving sales teams clearer responsibilities and a more proactive hunter mindset.

On the cost side, we are implementing tough but necessary measures. By the end of 2025, around 300 positions will be reduced in Austria, mainly in overhead, supported by our social plan with full assistance for those affected. This is expected to result in annual savings of over EUR 25 million from 2026 onwards. By 2027, another 300 positions will be reduced through internationalization as we strengthen our footprint in Asia and North America. Both measures will lead to a total annual savings of more than EUR 45 million, latest fully effective before end of 2027.

To support competitiveness and lastly profitability, we have prepared an investment package of more than EUR 100 million for Lenzing and Heiligenkreuz sites until 2027. Heiligenkreuz will reinforce its position as the most environmentally friendly specialty fiber facility worldwide and has an innovation hub through targeted technology investments. At the Lenzing site, further investments with strategic partners are in preparation to support our premiumization strategy.

Additional efficiency measures include a systematic energy optimization in all plants to reduce energy consumption by more than 5%, bringing both cost and sustainability benefits. A systemic optimization program will be rolled out with site-specific road maps in place by 2026. Our goal is to cut reliance on purchase energy, reduce exposure to volatile input costs and secure additional subsidies and cofinancing where possible.

Finally, production footprint optimization. We are reviewing selected sites, including the Indonesian plant where a potential sale is under consideration. We expect to recognize impairment losses of the noncurrent assets, especially property, plant and equipment of up to EUR 100 million in 2025. This noncash charge impairment has a negative impact on a consolidated EBIT and consolidated net income but no impact on Lenzing's EBITDA. Taken together, these initiatives move Lenzing from a patchwork of cost measures to a culture of institutionalized excellence, one that improves profitability, strengthens resilience and secures our long-term competitiveness.

Let's talk about the unchanged core strengths. And innovation and sustainability remain the foundation of Lenzing's long-term strategy. They are what sets us apart from the competition. Even as we streamline, we will not compromise in these areas. On the innovation side, our pipeline continues to create real opportunities. One example is Lyocell Filament technology, which delivers unique properties for high-performance fabrics.

Another is our LNT technology, our lensing nonwoven technology which enables Lyocell-based nonwoven rolled goods designed to replace plastics. These projects not only expand our product range, but also open up new markets in textiles and nonwovens with higher margins and better resilience.

On the sustainability side, our leadership is recognized worldwide. We have been rated A by CDP for Climate 5 years in a row, putting us among the top 2% of companies globally. And with Ecovadis Platinum, Lenzing is in the top 1% of companies worldwide in sustainability performance. These achievements are not just certificates. They are an asset that strengthens our brand, enhances customer partnerships and increasingly drive premium pricing.

Looking forward, we will intensify customer-driven innovations through stronger collaboration with partners and by expanding our application centers. This ensures that R&D is directly linked to real customer needs and market demand while maintaining our position as the industry's technology leader.

Now with this, I hand over time to Nico to talk about financial guidance.

Thank you, Rohit. Despite the impairment and restructuring charges announced today, our EBITDA outlook is confirmed. For 2025, we expect EBITDA to be higher than in 2024. By 2027, we target approximately EUR 550 million of EBITDA, assuming stable market conditions. The main drivers are clear. Cost savings of around EUR 45 million from headcount measures and internationalization, a stronger premium product mix, targeted growth in textile and growth in resilient nonwoven applications such as hygiene, filtration and medical uses.

We will also continue to exercise strict investment discipline. CapEx will be focused on license to operate on strengthening the competitiveness of our Austrian site and on innovation projects that directly support premiumization. This balance of discipline and selective investments gives us confidence that we can achieve our financial targets while strengthening resilience.

Back to you, Rohit.

Thank you, Nico. Let's move to the slide and talk a little bit about investment highlights. And let me summarize why Lenzing presents a compelling investment case today. First, we are recalibrating our asset base. That means moving away from a volume-driven model towards one that prioritizes economic value creation. We are reviewing underperforming assets, including the Indonesian side and focusing investments where returns are highest.

Second, we are refocusing the organization with leaner structures, institutionalized cost discipline and a stronger international footprint, particularly in North America and Asia, we are aligning resources with future growth opportunities.

Third, we are resharpening our market focus. We are withdrawing from commoditized fibers and concentrating on premium branded products and resilient nonwoven applications. This makes our business less cyclical and more predictable.

Finally, we are positioned to regain valuation. We combined a proven ability to execute, savings, refinancing, EBITDA growth with unique differentiation through innovation and sustainability. This is how we will restore investor confidence and create long-term value.

To conclude, the environment remains challenging, but Lenzing has shown that it can deliver results even in difficult times. The steps we announced today, the site review, the headcount measures and the targeted investments in Austria are tough, but necessary to secure our future. They will make us leaner, more efficient and more resilient. At the same time, we continue to build on our unique strengths, premium fiber, sustainable innovation and strong partnerships with our customers. This is how we will create long-term profitable growth while leading the industry towards a more sustainable future.

Thank you for your attention. We'll be glad to open the floor for questions.

[Operator Instructions] First question comes from the line of Sebastian Growe from BNP Paribas.

It would be around capacity and to start then with the Austrian EUR 100 million investment that you have put into the press release. So my question is if you could help us to square the investment between what is related to the energy cost reduction that you have labeled there versus the mentioned investment to new technologies? And could you also shed then more light what is behind the investments with the strategic partners at your Lenzing site in particular?

And the second question that I would have is around Indonesia. So you have been contemplating a potential sale of that production site given that the capacity is by far the largest of all your plans. Can you comment on the utilization in that plant at this point? So I'm clearly getting or trying to get my head around sort of to what extent it's eating potentially if you give it up into the revenue development going forward? And subsequently here by when would you take a final decision in regards to that potential sale?

Thank you, Sebastian. Your first question with regards to a more granularity of the investments. I will hand over to Nico Reiner.

Yes. Thank you, Sebastian. Look, at this point of time, we have a clear plan what we want to do, a key element of it to strengthen competitiveness and resilience of our Austrian sites. And this is the major focus of these investments, which we are doing here. But we do not give any details on the different types of investments. But we, as management, see that this is a real positive addition to our Austrian site. That's why we are convinced why we want to do these investments, giving us this resilience and the strength in the competition to be successful in the future.

And the second question with regards to the potential sale of the Indonesian site. This one is for you, Rohit.

Yes. Sebastian, thanks for the question. I mean, first of all, we don't hand out specific utilization data for specific sites. But what I would like to characterize is SPV has been a site that has done well for period of time, but we see over the last 3, 4 years where conditions in the markets have been continuing to deteriorate as you kind of described, and then that has been challenging for a site like SPV to be continue to be able to compete with the Asian situation as it has evolved over the last couple of years. So we have, at this stage, look for evaluation of options, including a potential sale. And that's where we are. So we'll give more details as we progress the discussions on SPV.

And on the partners, can you be, to the extent possible, any more specific around who might be in scope than for really teaming up with you guys in Austria for that especially technology-related investments?

Sure. Sebastian. So look, I mean, one of the things that we are pivoting towards is how do we kind of find ways to take our innovation and fast track both in terms of scaling the technology as well as accessing the markets and developing the market. And one way of doing that is through working closely with our customers and partners and to be able to allow for the technology to ramp up and commercialize at a faster rate than we would do ourselves. So that's the concept behind. It's about risk management on one hand, but also in terms of our scaling and market buildup, and speed to market as the other dimension to it.

So we are in different technology areas, identified working already without giving names here, but working very closely for them to be able to work with us to get those technologies commercialized. Now having said that, I would like to point out that, for example, technology that is public knowledge that we have invested in TreeToTextile, which is where we have other shareholders and there are strict technologies that we could bring to the market eventually is a good example of where there are more than 1 parties involved in trying to build a new platform which we think is very exciting for the future. So concepts like that is what we are focused on in Lenzing in the future.

[Operator Instructions] Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to Rohit Aggarwal, CEO, for any closing remarks.

Well, I just want to thank everyone for joining us today and appreciate your interest in Lenzing and Lenzing's future. We look forward to seeing you again on November 6 for the earnings call for quarter 3. And thank you very much again for taking the time today. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Good afternoon, ladies and gentlemen, and welcome to the Lenzing AG Analyst Conference Call and Live Webcast. My name is Youssef, the Chorus Call operator. [Operator Instructions] This conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rohit Agrawal, CEO. Please go ahead sir.

Thank you, and good afternoon to everyone. Ladies and gentlemen, welcome to the presentation of Lenzing's results of first half 2025. With us today is also Nico Reiner, our CFO, whom you know well. But let's start with an overview of the key developments. Our revenue and EBITDA continued to improve also in first half of this year in a market environment that remains challenging and is marked by the rise in geopolitical uncertainty, especially the aggressive customer policy that we are observing.

Our revenue reached EUR 1.34 billion, an increase of 2% compared to first half of 2024. EBITDA increased by 63% and reached EUR 269 million in the first 6 months, and the EBITDA margin increased from 13% to 20%. Unlevered free cash flow was at EUR 89 million in the first half of 2025 with an increase in the second quarter compared to the first quarter this year. Overall, our performance continues to show positive developments. However, international tariff measures and the resultant uncertainty led to tangible stress along the textile value chain and slowed our recovery.

Now let us address a topic that has been very much characterized the last couple of months globally, international tariff measures and the resulting uncertainty. While in Q1, the key focus was mainly on the dispute between the U.S. and its neighbors Mexico and Canada as well as the 10% and later 20% on all imports from China, we saw only limited impact on our Q1 results. However, the actual escalation from reciprocal tariffs followed in early April, this led to both supply and demand shocks. A collapse of China-U.S. trade and to an impact of global value chains.

Ongoing and repeatedly changing international tariff measures and the resulting uncertainty led to tangible stress, especially along the textile value chain impacting also Lenzing in quarter 2, 2025. The second half of July and early August have brought some updates in U.S. tariff policy, impacting key countries in the value chains differently. However, the high uncertainty remains. All in all, everybody in the industry is scrambling to deal with the situation and planning scenarios given the high uncertainty. Still, we believe Lenzing is better positioned than other fiber manufacturers given our global footprint.

And needless to say, we are working on a set of mitigation measures, which include switching supply rules for input materials such as dissolving pulp and chemicals and also shifting fiber volumes between our production site to optimize for existing and possible tariffs to support our customers. In general, we maintain very close contact to our customers and regional value chains to handle the situation in the best possible way with our partners and pass on additional costs where possible.

Let's look now in more detail how markets have developed. Let's start with a brief overview on demand, prices as well as input costs. On the demand side, the global apparel markets saw a slight increase, while nonwoven markets continue to remain more robust. With regards to market prices, we saw a slight decrease of selected generic fiber prices in the second quarter. On the cost side, energy and caustic soda market prices remained elevated versus pre-crisis levels.

Now let's look at the relevant markets for Lenzing, textiles and nonwovens. When adjusted for inflation, demand for apparel worldwide was up by 2% in the first half of 2025 versus a year ago based on the developments in the second quarter where the U.S. stood out. Sales spiked in April and May due to consumers in the U.S. preponing purchases since they feel higher clothing prices once tariffs kick in. Also, the changes to de minimis tariff exemptions helped fuel regular retail sales. Sales in Europe were flat compared to last year. The cost of living environment remains challenging and consumer confidence is subdued. Chinese demand remains surprisingly resilient against the backdrop of overall cautious discretionary spend.

Now let's turn our attention to nonwovens. Also in nonwovens, tariffs play a major role, where particularly Chinese sellers are looking for alternative outlets for volumes so far going into the U.S. End markets show high resiliency with a relatively stable consumer demand. The trend towards less plastics is ongoing and the carbon footprint and other sustainability credentials are increasing, becoming a differentiator for nonwoven manufacturers in France and also driving interest for more sustainable fibers.

Now let's have a look at the fiber prices on the Chinese market. Again, a reminder, the prices shown on this slide are generic market prices. Lenzing prices are mainly traded at a premium and the current share of specialties is at over 90%. However, the generic market prices shown here do give an indication of the price development in the fiber market. Let's start with viscose. Generic viscose prices in China performed relatively stable in the first quarter. However, over the course of the full first half year, prices softened by about minus 7% in local currency or minus 6% in dollar terms as geopolitical uncertainties and protectionist measures, particularly regarding the U.S. trade policy affected export prospects for the Chinese textile and apparel industry.

The situation on the cotton market was also challenging in the first half of 2025. For the ongoing '24-'25 season, the worldwide harvest is expected somewhat above consumption, leading to a moderate increase in stocks. While prices were less volatile than last year, they remain under pressure due to macro effects. The pressure on dissolving pulp prices increased and imported hardwood DWP prices declined by minus 18% in dollar terms. However, to note, we don't see this as a structural development, but more of a short-term reaction in the current environment. In the beginning of the third quarter, we already saw a reversal of the downward trend with DWP prices increasing back to above USD 800 per tonne, mainly based on increase in viscose operating rates in China.

Let's move to the cost side. Energy and chemical costs remained much higher than historical levels, but at least cost pressures for some input materials somewhat decreased in quarter 2 compared to first quarter. Geopolitical developments around Russia and Ukraine as well as colder-than-expected weather in the beginning of the year drove European gas prices higher before the situation eased in the second quarter and reduced demand weighed on Southeast Asian coal prices. Caustic soda prices remained high across regions and even increased in Europe, but weakened somewhat in Asia. Even with a slight improvement in the second quarter, both energy and chemical costs remain on high levels.

Let's talk about our performance program, which you are quite familiar with. The relevant markets for us still show no signs of a sustainable recovery with specially generic fiber prices continuing to remain under pressure. It is, therefore, even more important that we continue to focus on this holistic performance program. The program initiatives are primarily aimed at generating free cash flow and improving EBITDA through strengthened sales and margin growth as well as sustainable cost excellence. A reminder, it consists of 3 pillars: profitable top line growth with full focus on margin improvement, cost excellence in all we do and free cash flow generation. The overall impact of the program should result in significant positive free cash flow going forward.

And let's look at the second point of our program, cost excellence, which remains a key pillar of our performance program. In 2024, we already realized over EUR 130 million in cost savings, and we expect cost savings to further increase to annual cost savings of more than EUR 180 million for this year. We are clearly well on track to meet this target as well. To make it clear, we're talking about our recurring targets with an ongoing impact beyond this year as well. Progress continues to be good in the areas of product costs and quality through intelligent efficiency improvement measures. Successes have also been achieved in purchasing through operational and strategic measures.

And looking ahead, the holistic performance program is expected to continue to improve manufacturing costs and to leverage further cost potential, particularly in the area of overhead functions. At the same time, the structural and process improvements addressed will lead to positive effects on sales and margin generation. We can certainly be satisfied with our success so far, but there are still improvement areas ahead of us in order to maximize our full potential.

A new colleague, Georg Kasperkovitz, took over the management of the company while fiber production sites and Lenzing. He will also advance the ongoing performance program and as a consequence, operational cost excellence and the transformation of the company as a whole. And with this, I hand over now to Nico Reiner for an update on financials.

Thank you, Rohit, and a warm welcome from my side as well. Despite continuously challenging markets, we were able to increase both our revenues and our margins in the first half of 2025, thanks to the measures that we have taken actively. Revenue increased by EUR 30 million in the first 6 months compared to the first half of 2024 and reached EUR 1.34 billion. EBITDA increased by EUR 104 million to EUR 269 million as the number of CO2 certificates helped continued to increase in 2024, we decided to sell some of them in the amount of EUR 30.6 million in the first 6 months of this year, which positively impacted the EBITDA.

Depreciation was at EUR 160 million, leading to an EBIT of EUR 109 million, which compares to EUR 19 million in the first half of 2024. Income taxes amounted to EUR 7 million compared to EUR 43 million in the first half of 2024, and the financial result was minus EUR 87 million compared to minus EUR 41 million in the first half of 2024. As a result, there was a loss of EUR 35 million for Lenzing shareholders, which compares to a loss of EUR 71 million in the first half of 2024.

Let's move to the next slide. Looking now at cash flow. Trading working capital decreased by 2% compared to the end of the first quarter. Our objective is to have the right balance. I would say that levels at the end of June were a bit on the high side, and we aim to further reduce it. With regards to CapEx, Lenzing continues to put a clear focus on maintenance and license to operate projects as part of its performance program and CapEx remained on low levels of EUR 29 million in Q2, 11% down compared to Q1. As a result, unlevered free cash flow increased by 24% to EUR 49 million. That was not as high as in the second quarter 2024, particularly impacted on one-offs. We clearly continue to have a very clear focus on cash flow.

Let's move to the balance sheet. On the left side of the slide, we show the development of net financial debt. It came down by 4% to about EUR 1.4 billion. On the right side, you see the development of our liquidity cushion. It increased by EUR 335 million compared to the end of last quarter due to the successful refinancing with the syndicated loan. However, this does not include the impact of the new hybrid as the successful placement took place at the beginning of the third quarter.

Let us look at the impact of the new hybrid on the next slide. The successful placement of the new hybrid bond marks another milestone in the professional and forward-looking management of our capital structure following the EUR 545 million syndicated loan secured in May this year. As you can see here, on a pro forma basis, the liquidity cushion, including the new hybrid increased to over EUR 1.1 billion. With this step, we have essentially secured our financing through 2027 and can continue to fully focus on executing and successful performance program aimed at improving margins and free cash flow.

With this, I hand back to you, Rohit. Thank you.

Thank you, Nico. We now come to the outlook. I can clearly say that thanks to our performance program, the operational performance in the first half 2025 was solid despite the still challenging market environment in the second quarter. We assume relatively stable demand in pulp and have a cautious outlook on the generic fiber market development in the second half of 2025, and we expect energy and raw material costs to remain on elevated levels. However, market visibility remains very low, and this has further intensified due to the ongoing high uncertainties in global tariff situation.

While the market has not helped so far, we are not waiting on tailwinds from it. We continue to take the future in our own hands, and we expect operational results to continue to be positively impacted by the performance program. And therefore, we keep the expectation for EBITDA in the 2025 financial year to be higher than in the previous year.

With this, I will hand over back to the operator for the Q&A.

[Operator Instructions] Our first question comes from Christian Faitz, Kepler Cheuvreux.

Two questions, please, if I may. First, your free cash flow is on a pretty good trajectory. Congrats on that. Would you be able to provide us a free cash flow guidance for the remainder of the year? And then my second question is, can you tell us a bit about the current capacity utilization in your plants?

Thank you, Christian. So with regards to free cash flow, I will hand this to Nico, please.

Yes. Hi, Christian. So on free cash flow, look, as you have rightly mentioned, we are on a very good trajectory when it comes to free cash flow development over the last quarters. And our key topic is that we want to continue quarter-on-quarter delivering positive free cash flows. And so therefore, this is the only comment what I can give to you. As you also know that we are not guiding on free cash flow development, but the ambition and the clear target, as I mentioned, is there.

Then the next question is regards to capacity utilization. This one is for you, Rohit.

Yes. Thank you, Christian. I think the -- as you know, I will not be able to give you any specific answer on percentage terms. But the way I would kind of give you a bit of color to it is that quarter 1, we were running pretty much at capacity. Starting April through the tariff situation, we did see a dip in April on demand, and we have been adjusting our supply and capacity utilization to reflect the demand in quarter 2. We did see May and June recovering to better levels. And therefore, we continue to monitor the situation very closely and adjusting our demand and supply very closely to reflect the current market situation.

We -- what we have done, which I can share with you is that our ability to now make decisions is on a weekly basis than what would be a normal monthly basis cycle. So we are tracking and we've seen also -- if I look at the industry capacity situation in China, we have seen that it dipped again in April, but we've seen a bit of recovery since then again. So I think, hopefully, if the market uncertainty would settle, we should start to see a further recovery in that sense.

Our next question comes from Patrick Steiner, ODDO BHF.

Two from my side. Firstly, can you give us more information on current fiber volume demand development? Do you see meaningful recovery from the tariff shock in April or volume level is still below Q1 at the moment? And the second one would be, I mean, we've seen dissolving wood pulp prices decline quite significantly. Do you see this as some kind of leading indicator for further price declines in standard [ viscosive ] fibers?

Thank you, Patrick, for your questions. So the first one with regards to the development of the fiber -- fiber sales, how we are there. Rohit, please?

Yes, Patrick, thank you for the question. And again, the way I would describe it is that the quarter 1 for us was pretty strong, and we were ahead of our plans for quarter 1 in terms of volumetric sales. As we kind of discussed, the big change in quarter 2 because of tariff situation and uncertainty led April to be a bit of -- a kind of a drop significantly. The industry went into a bit of a pause mode. But then since then, May and June, we have started to see markets recover, and we have seen our volumes starting to get back up again.

We still kind of -- if you look at our change overall in the first half, if you look at quarter 1 being normal and strong, most of the impact has been in quarter 2, so which is reflected around about a 5% deviation overall compared to last year. So -- but I hope that would mean that we have seen the bottom of the cycle. And if no further uncertainties happen, then that's sort of the level we hope to see improve going forward as well.

As far as the prices are concerned, now we did see the dissolving wood pulp prices fall sharply in line with the demand and supply situation, particularly in China. But what we are seeing now is that the market has reached what we think is the bottom. We think the prices are stable at around $800. And therefore, that bottom has been reached, which will start to then hopefully go further north from there as the demand situation starts to get better. So that would be the characterization. Do we think the corresponding prices would then be reflected in the fiber prices? We're certainly hoping so.

The next question comes from Sebastian Bray, Berenberg.

Congratulations on good results in trying circumstances. I had 2, please. The first is on the longer-term tax rate for the group. From memory, the Thai lyocell plant received quite favorable tax treatment for about 10, 12 years or so. I can't remember the exact rate, but it's been a while since the group was consistently printing profit before tax high enough to have a normalized tax rate. What would you think if things go well, would be a figure for tax as we move into '26, '27? Are we talking mid- to low 20s percent or a little bit higher than that?

And my second question is on the valuation adjustments on Brazilian forestry assets. These have started to ease now. They're not as significant as they have been in previous years. Is there any publicly available index of forestry or other assets that we can look to, to see how this adjustment may develop in future? My thinking being it might not always remain positive, particularly if Brazilian exports come under some tariff pressure in coming years.

Thank you, Sebastian. So first question with regards to our assumption with regards to a normalized tax rate for the upcoming years. Nico, this one is for you.

Yes. Thank you, Sebastian. Yes, you are totally right. As I mentioned already in our last call, there have been quite some impacts in our tax rate, especially with the year ending 2024, which was, let's say, caused by strong FX impacts and also coming from the situation of our Brazilian joint venture. The topic you are mentioning here on the situation in Thailand is not so much impacting us. But overall, the topic coming from Brazil had a higher influence in our tax rate, especially by the end of 2024. But when it comes to the picture, how it would look like the tax rate going forward into the future, your assumption that you have taken low 20s to mid-20s is probably going into the right direction.

Valuation of the biological assets in Brazil, if there's any kind of publicly available information that could help as a kind of a guideline for these valuations. Can you give us any input?

Yes. Thank you. Also this question. What we see from a structural change in markets in Brazil, yes, you are right that there is some impact coming from the tariff situation, especially when it comes to export from pulp and so on. But overall, structurally, even which is deeper in the market is the overall situation when it comes to the demand for wood. And the demand for wood in Brazil itself is still relatively high. Especially if you think about the projects that are going on. So therefore, we are more than satisfied on the price structure of the forestry. But nevertheless, it is also very difficult for us to give you an index, which you have been requesting for on the price development of forestry and wood in Brazil.

This is something what is very difficult to project. So therefore, we cannot comment on this topic. But from a structural point of view, we still see a relatively high demand on wood. Yes, on a short-term basis, there's the impact from the tariffs, maybe, but also in regards to this topic, I think or we think the last word is not spoken as Mr. Trump is changing his mind on a daily basis.

Our next question comes from Sebastian Growe, BNP Paribas.

I was only able to join the call some months ago. So I apologize if my questions have already been answered. So I have 2 questions.

Can you come a little bit closer to the micro, please, Sebastian, that would be helpful.

I'm trying hard. I'm speaking up. I'm speaking more slowly. Is it any better now?

Thank you. Yes. I appreciate it.

So I was just saying that I joined the call a little later. So apologies in advance should my questions have already been answered. The 2 questions I have are around the net financial result to start with. I do understand that you don't guide on financing costs, but considering really the material fluctuations between quarters that we have seen and now it's almost EUR 50 million in the second quarter. I guess investors would really appreciate if you could provide a certain update on that front, what to expect, what to model basically in the second half or then also going to '26?

And the other question I have is on the market outlook vis-a-vis the countermeasures or the performance program. So we have seen apparently the uncertainty for fiber end markets remaining high, the tariffs and whatever. But against the backdrop and the holistic performance program still being ongoing, I was a bit surprised to see [ staff ] levels going up a bit on the quarter-on-quarter comparison. So my question ultimately is, how are you thinking about the need for further cost measures at this point?

So thank you, Sebastian. First question was with regards to the financial results, if we can give any kind of indication what to expect for the second half of this year and maybe also 2026. Nico, please?

Yes. Sebastian, in regards to the financing cost, if you look into it, the trajectory is relatively clear. You have seen in 2024 high impacts coming from [ FD ] side, also impacts coming from the full refinancing of LDC. What you also see now in 2025 is still FX topics impacting the financing structure. But also what you can see the financing of our syndicated loan and also of the hybrid impacted that. So overall financing costs should go into normalized situation over the next quarter as we are not doing on a quarterly or even yearly basis, such heavy refinancing activities. And so therefore, it should normalize going forward.

And normalized -- sorry for asking that question so straightforwardly, but normalized would mean anywhere around EUR 30 million-ish on a quarterly basis or above -- slightly above EUR 100 million on an annualized basis, just to get it right.

As you also rightly said, we are not guiding on financing costs. But look, your calculations might be in the right direction. So that would be the comment I could give to you.

On the other part of the question?

So the second question was with regards to the performance program, if there's more to come or what our plan is with this regards, looking also at the development of staff levels.

Yes. So Sebastian, thanks for the question. Clearly, our performance program is an ongoing program to look at various levers that allow us to continue to expand our margins and create improving free cash flows. Now we continue to assess and we continue to evaluate our delivery of the performance program as it's been running so far. And there's a constant process of looking at various other initiatives that we can bring on and add to the performance program as we go forward.

Now what is uncertain is how the world will shape up in the next 6 months to 18 months. And therefore, to bring enough resilience in Lenzing's performance, our financial stability is to ensure that we are not excluding any further developments on the cost side and further enhancing our efforts on the market side. So at this stage, what I would say is nothing is done and nothing is excluded and all options are currently being evaluated.

The next question comes from Lars Vom-Cleff, Deutsche Bank.

Two, if I may. The first one is, I mean, I understand the demand fluctuations for textile markets, but are you seeing any difference in demand for viscose fibers versus other fiber types? What I'm trying to find out is whether our hope that oil-based fibers could markedly be replaced by environmentally friendly fibers rather shorter than later is currently endangered by the still muted demand and that customers rather take the cheaper fibers for the time being.

So the line was not very clear, Lars, if I understood correctly, what we expect in terms of demand or if we see a difference in demand development between viscose fibers and the more premium kind of fiber types that we have in our portfolio.

Yes. So, thank you for that question. And what we are seeing is, obviously, our specialty in premium fibers is where our focus is, where our expertise is, and that's where we are looking to continuing to focus to develop the market and grow the market. Now if you look at the development in quarter 1 and quarter 2, we see that all fiber types have had a very similar trajectory from our portfolio standpoint.

And therefore, in terms of the market changes in response to the tariff situation has been pretty much universal and across the board. However, the self-help efforts that we have and our focus on our commercial strategy is still very much on allowing us to grow our premium fibers. So I would say that it would be very difficult to differentiate if there's any deviation of demand between fiber types. And therefore, that's not something that we're seeing in a material way.

Yes, that is a helpful answer as well, but maybe let me rephrase it. Not so much standard fibers versus your specialties, but rather your wood-based fibers versus oil-based fibers. What I'm hearing is that customers are trading down at the expense of slightly more expensive environmentally friendly fibers and that ESG rather is not playing such an important role anymore when it comes to new fashion.

Lars, I mean, there are always these short-term technical situations that emerge. And I can say that there would be some reactions in the market, particular -- in a particular segment of the market, which is maybe a market where the price points are much different. And maybe that market has got a different drive right now to ensure that consumers don't feel the price pinch. But we would say that overall, the strategic and broad directional structural change in the industry, that is not seem to be changing. The sustainability-driven efforts by the brands across the chain remains pretty much intact. They may have been definitely shifted in focus the last couple of weeks, but we're not seeing any significant discussion on whether it's a change of direction overall.

That is helpful. Then maybe a question on dissolving wood pulp prices and your production capacity. I mean, Brazilian plant, state-of-the-art, low production costs. With wood pulp prices coming down, have you thought about closing some of your less productive plants and rather buy dissolving wood pulp from third parties? Would that help on the cost front?

Lars, we feel that we have a fairly good and a strong cost position as far as our DWP sites are concerned. And therefore, we do not see any reason for any slowdown or stopping of the lines. In fact, we are -- we've been running pretty full, and therefore, we do not expect any change in that strategy going forward.

Ladies and gentlemen, that was our last question, and this concludes today's Q&A session. I would now like to turn the conference back over to CEO, Rohit Agrawal, for closing remarks.

Well, thank you very much again to everybody for joining us today, and we appreciate you having interest in Lenzing's progression. Next time we're going to meet is for our quarter 3 results on November 6. So look forward to seeing you all then. Thank you.