Time to act! - UNECE

13.11.2018 - 1www.lenzing.com

Robert van de Kerkhof, Lenzing AG, Chief Commercial Officer

November 6th, 2018

Time to act!


Fibers form a fundamental basis of everyday life

Providing solutions

to technical

challenges…

…and

saving

lives

Pictures: Lenzing; Shutterstock


Impossible

to imagine

a world

without

textiles…

…comfort

and

protection

they

provide

Fibers form a fundamental basis of everyday life

Pictures: Lenzing

www.lenzing.com 4/11/2018- 4

Why is it time to act – NOW?

Picture: Changing Markets


Global fiber marketGlobal fiber consumption 2017

Source: ICAC, CIRFS, TFY, FEB, Lenzing estimations


Fiber demand growing at 3-4 % p.a.

60

0

10

20

30

40

50

70

80

90

100

110

120

2000 2005 2010 2015 2020

Million

metric tons

Expected growth of global fiber demand until 2020

Synthetics

Wood-based fibers

Cotton

Other natural

Sources: ICAC, The Fiber Year 2018, Lenzing data

5-6% p.a.

1-2% p.a.

Synthetic fibers

(64%)

Cotton (25%)

Wood-based

fibers1 (6%)

3-4% p.a.

CAGR

(2015e – 2020p2)

3-4% p.a.

1 Wood-based and cotton linter-based cellulose fibers - Viscose, Modal, Lyocell and other (acetate, cupro) both staple fiber and filament2 Projected

Total fiber market

106 m tons


Population growth and higher purchasing power in the emerging markets will continue to drive overall Textile growth

GDP growth,

In USD ths per capita

Population,

In bn

Textile fiber

consumption,

In kg per capita

Industrial world Developing world

1,221,161,08

+0,6% 6,485,715,02

+1,3%

+3%

50.0342.0728.33

+8%

6.213.771.24

+1%

2020

31.53

2010

30.21

2000

27.46+6%

2020

16.60

2010

8.52

2000

5.60

Overall fiber market growth drivers

Sources: World Bank, IMF, ICAC, Gherzi


… as well as the increasing the pressure on the environment

Less than 1% of global water

resources is available as fresh

water for people

Arable land is decreasing due to

erosion and urbanization

Oil is a finite resource causing

negative externalities

• Sooner or later “peak oil” will be

reached

• New sources can only be tapped

by taking high ecological risks

• But water consumption is rising

due to population growth and

changing consumption habits

• With a growing global population,

this intensifies the competition for

farm land


Source: Changing Markets Foundation

The textile industry is the second most polluting industry after

the petrochemicals

www.lenzing.com 4/11/2018- 10

Picture: Shutterstock

Source: *1 National Geographic

9 million tons of plastic waste ends up in the ocean every year*1



Source: *1 “The price of fast

fashion”, Nature Climate

Change, Vol 8, Jan 2018

Textile industry producing 1.2 billion tons of CO2 equivalents every year*1



Source *1 Global Fashion Agenda

& BCG Inc. – Pulse of the

Fashion Industry

The anticipated total fashion waste in 2030 anticipated to reach148 million tons*1


BUT…We have options

We, the textiles value

chain, have the

opportunity to avoid

fashion being positioned

as “wasteful, frivolous

consumption”,

while meeting the

expectations of the

consumers!


As pollution and environmental crisis are forcing us to re-think our economy

• Effective use of resources and with a move to alternative,

renewable materials

• Transform the way we use & consume resources and

creating waste

• Innovate:

• Business models: Radically improve recycling and

move to a circular economy

• Technology: i.e. carbon capture & utilization; a move

to renewable energy

• Focus & speed


The Lenzing Group 2017

● Lenzing with best financial year in history

● Group revenue up 5.9 percent to EUR 2.26 bn

● EBITDA up 17.3 percent to EUR 502 mn

● ROCE at 18.6 percent

● Strong balance sheet

● Retail bond redeemed (EUR 120 mn) on

September 27, 2017


Our vision

● Our passion is to make sustainable fibers

available to the growing world.

● This creates more positive impacts and

benefits for people and the planet.

● It also ensures our economic success.

Sustainability is the key foundation to our corporate values


Where does Lenzing fit in?

Cellulose, Casein, Silk

Cotton

PBS, PVA,

PGA

http://www.google.at/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwieuNGOpNbWAhWCxxoKHRyfAugQjRwIBw&url=http://www.plastics.org.nz/environment/educational-resources/environmental-resources/bioplastics-degradables&psig=AOvVaw1cX9X3tQk9vhg75eNjQUC5&ust=1507182936037844


LENZING™ fibers produced from the raw material wood


● Natural and renewable origin: Cellulose from wood is our bio-based and renewable raw material

● Responsible sourcing: Guaranteed by exclusively certified & controlled wood and pulp sources

● Clean technologies: Due to high resource efficiency and closed loops

● Sustainable innovations: Providing specialties and forward solutions that are better than market alternatives

● Stakeholder engagement and collaboration: provides benefits to our customers

● End of life solutions: Our biodegradable and compostable fibers avoid waste problems in society

● Holistic thinking and evidence: Sustainability of fibers is confirmed by LCA, certifications and awards

Lenzing‘s cellulose cycle


LENZING™ Lyocell production process


Dissolving wood pulp consumes only about 0,5 % of the global wood harvest

Certification status of the total wood & pulp consumed by Lenzing


Lenzing‘s Biorefinery Concept


Lenzing™ EcoVero™ - The new standard in eco-responsible viscose!

● Lenzing™ EcoVero™ fibers are the innovative and

unique answer to the increasing demand

for sustainable products along the textile

value chain

● Worldwide highest environmental standards

in the viscose production relying on three major

pillars

● Use of certified and controlled wood

(FSC®, PEFCTM)

● Sustainable production process proven by third

parties (Higg index, EU Eco label)

● Innovative identification system allows everyone

in the supply chain transparency in all

processing steps (yarn, fabric, ready made

garment)

● Lenzing™ EcoVero™ fibers are positioned as

specialty fibers in the viscose segment

Note: “These Results were calculated using the Higg Material Sustainability Index (Higg

MSI) tools provided by the Sustainable Apparel Coalition. The Higg MSI tools assess

impacts of materials from cradle-to-gate for a finished material (e.g. to the point at which the

materials are ready to be assembled into a product). However, this figure only shows

impacts from cradle to fiber production gate. Lenzing™ EcoVero™ branded viscose fibers’

Higg MSI score was calculated based on Lenzing fibers which are already in the Higg MSI.”

0

5

10

15

20

25

30

EcoVeroTM Viscose generic

MS

I sco

re,

po

ints

/kg

fib

er

Fossil resource depletion

Water Scarcity

Eutrophication

Global warming

LenzingTM EcoVeroTM Viscose generic


Networking & Partnering for systemic change

Textile value chain

Brands & Retailers

Consumer

Investors

Multi-governmental initiatives Governments

Raters Multi-stakeholder initiatives

NGO’s


As leaders we must not be tarnished by the bad players, but rather

leave them behind and show a different way forward…making the fiber

industry a highly functional, emotional, exciting and responsible

industry

What are you prepared to commit to?

● We, as an industry, need to close the

loop to actively and collectively

engage on these challenges

● Set high standards, carve out a

space for the best companies to be

recognized as the leaders

● Show consumers that responsible

fashion is possible

● Change starts with you!

● We can change and determine the

way and amount of goods and

services we consume

● Know what your clothes are made

from, be a conscious buyer,

As Industry? As Individuals?


for yourattention!

Time to act! - UNECE

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