Lenzing Investor Presentation Annual Result 2016 March 22, 2017 Disclaimer The information contained in this document has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this information or opinions contained herein. Certain statements contained in this document may be statements of future expectations and other forward looking statements that are based on management‘s current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. None of Lenzing AG or any of its affiliates, advisors or representatives shall have any liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its content or otherwise arising in connection with this document. Certain figures in this presentation have been rounded in accordance with commercial principles and practice. Such figures that have been rounded in various tables may not necessarily add up to the exact total given in the respective table. Definition and further details on the calculation of financial key indicators can be derived from the Management Report and the glossary in the Annual Financial Report. This report is also available online on the website of the Lenzing Group www.lenzing.com in the section “Investors”. 2 Highlights 2016 Second best year in the history of Lenzing Group revenue up 8% to EUR 2,13 bn y-o-y Strong EBITDA improvement by 47.6% to EUR 428.3 mn y-o-y ROCE at 15.1% Substantial progress implementing the new corporate strategy sCore TEN > EUR 50 mn EBITDA improvements due to commercial and operational excellence already delivered by end of 2016 EUR 475 mn CAPEX commitments to grow specialty fiber capacities by 125 k tons and to debottleneck pulp sites Decision to open two new application development centers in Asia Successful launch of RefibraTM fiber Proposal1 to increase the dividend to EUR 3.00 per share plus EUR 1.20 per share as a special dividend 1) Proposal to the Annual General Meeting on April 25, 2017 3 Strategy implementation and target achievement ahead of plan 2020 2014 2015 2016 Targets EBITDA growth - 21% 48% 10% p.a. (vs 2014 baseline) ROCE (0.1) 8.1 15.1 ≥10% Net financial debt/EBITDA 1.9 1.1 0.0 <2.5 4 sCore TEN: Strengthen the core Delivered over EUR 50 mn Debottlenecking of pulp EBITDA improvement with Business capacities started commercial and operational Total increase of around excellence already per end Customer 35 k tons p.a. Intimacy 2016 In 2017e own pulp Areas capacity at 575 k tons, Forward Strengthen in 2018e > 600kt Substantial progress in the Core New Solutions improving core processes EUR 100 mn investment such as pricing, S&OP and product launch Specialization Extension of long-term pulp supply contract 5 sCore TEN: Customer intimacy New organization to Two new regional application strenghten regional decision Business development centers making implemented Indonesian application center AMEA Customer (“Fiber to Yarn“) Intimacy North Asia Hong Kong application Areas center (“Yarn to Garment“) Europe and Americas Forward Strengthen the Core New Solutions Investing in getting closer to our Specialization customers – focused on direct selling approach to better support our customers To date three new commercial offices opened 6 sCore TEN: Lenzing further focused on specialties Specialty fiber sales accounted for 42% Share of specialty fibers 2016 after 40.5% in 2015 EUR 375 mn CAPEX committed to grow 11.0% specialty fiber capacities 42.0% 47.0% Speciality fibers1 Standard fibers Other business areas 1) Specialty fibers: TENCEL® fiber, Lenzing Modal® fiber, Lenzing Viscose® fiber specialties 7 sCore TEN: Lenzing further focused on specialties R&D expenditures increased more than R&D expenses (2013-2017e)1 50% y-o-y keeping Lenzing at the EUR mn % 60 2.5 forefront of the industry 2.2 50 2.0 Strong innovation pipeline 1.6 1.5 40 1.5 TM 1.1 Refibra fiber launch 30 46.4 50.0 1.0 Latest lyocell technology to be 20 31.1 29.8 0.5 implemented in Mobile (USA) 10 20.6 0 0.0 2013 2014 2015 2016 2017e R&D expenses R&D as of revenue 1) Pursuant to Frascati; source: Lenzing 8 RefibraTM fiber: New sustainability innovation concept Major breakthrough for the ‘Circular economy’ on a big scale for wood based cellulose fibers RefibraTM fiber: Combination of prize-winning lyocell technology with pioneering use of recycled cotton off-cuts. Upscaling of cotton and significant reduction of cotton scraps in the garment production Business model innovation “Closed loop”: Cooperation with world leading retailer Inditex, first Refibra™ fibers in spring collection 2017 Other brands and retailers will follow New system to identify the fiber in finished garment 9 Fiber market 2016 Fiber production in mn tons World fiber production 2016e up 3.6% to 97.8 120 mn tons 3.6% nd 97.8 For the 2 consecutive year lower than 100 94.4 consumption (2016e: 99 mn tons ; +1.5%) 2.2% Wood-based cellulose fibers growth rate 80 continues to outgrow the industry 60.7 62.1 60 High overcapacities in synthetics1 8.0% 40 22.8 (1.9%) 0.0% 4.3% 21.1 20 5.2 5.2 6.2 6.5 1.2 1.1 0 Wool Other natural Wood-based Cotton Synthetic fibers Total fibers cellulosics 2015Datenreihen1 2016 Datenreihen2 Sources: CCFG, CIRFS, Cotton Outlook, Fiber Economics Bureau, ICAC, National Statistics, The Fiber Year, Lenzing estimates. Percentage increases based on exact figures 10 Interfiber price development1 Staple fiber prices - Development in China USD/kg (incl. VAT) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 01/2014 05/2014 09/2014 01/2015 05/2015 09/2015 01/2016 05/2016 09/2016 01/2017 Viscose Cotton Polyester Sources: China Cotton Association, China Chemical & Fiber Economic Information Network, China Chemical Fiber Group 1) Until February 28, 2017 11 Cotton market with better supply-demand situation in 2016 Cotton market In 2016 the average Cotlook A-Index was mn tons at USD 74.3 cents/lbs which was +5.5% y-o-y 30 24.13 Chinese cotton prices still higher than world price 25 22.85 24.08 23.39 24.29 21.07 20 19.25 levels 18.02 17.13 Outlook: projected higher consumption 15 10 than production in 2016/2017 5 Steady consumption around 24 mn tons 0 2015/16e 2016/17p 2017/18p Production up 8% Production Consumption Ending Stocks Cotton stocks and China's share Leading to a further reduction of cotton stocks mn tons at 18 mn tons, the lowest level since five years 25 70% 60% 20 50% 15 40% 10 30% 20% 5 10% 0 0% Sources: Cotton Outlook, ICAC, percentage changes based on exact figures 2000 2002 2004 2006 2008 2010 2012 2014e 2016p China World excl. China Chinese Share 12 Very strong viscose pricing reflecting tight supply and increase in raw material prices 1 Continuously good demand for wood-based VSF price trend and inventory of China yuan/MT day cellulose fibers versus scarce supply 18,000 30 17,000 In 2016 inventory level decreased 16,000 20 15,000 from 17 days to 6 days 14,000 13,000 10 In 2016 high operating rates in China 12,000 (around 86%) 11,000 10,000 0 Seasonal Q4 price decline stopped 01/2014 07/2014 01/2015 07/2015 01/2016 07/2016 01/2017 Mid-December 2016 CCF inventory index Medium-grade VSF (incl. VAT) VSF capacity change of China since 20102 Year-end VSF price of RMB 16,700 kt % up 32.5% vs the beginning of 2016 4,500 35 4,000 30 3,500 25 Year-end dissolving wood pulp price of USD 918 3,000 up 4.3% vs the beginning of 2016 2,500 20 2,000 15 1,500 10 1,000 5 500 1) Viscose staple fibers, price development until February 28, 2017; Source: CCFGroup 2) Source: China Chemical Fiber Group - China Viscose Industry Annual / Outlook Report 0 0 2010 2011 2012 2013 2014 2015 2016 2017 Capacity Change 13 Financials 2016 - Group revenue (EUR mn) +7.3% +8.0% 555.7 2,134.1 2,090.4 543.5 1,976.8 522.0 1,908.9 518.0 1,864.2 512.8 2012 2013 2014 2015 2016 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Group revenue Group revenue 14 Financials 2016 – Earnings (EUR mn) EBITDA margin EBIT margin EPS1,2 (EUR) 16.9% 11.8% 12.9% 14.7% 20.1% 11.1% 4.5% 1.2% 7.6% 13.9% 6.61 1.89 (0.92) 4.78 8.48 +47.6% +96.1% +78.9% 428 229 296 352 181 290 232 128 225 240 151 86 50 22 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 (25) EBITDA EBIT Group net profit1 1) Error correction in accordance with IAS 8 (see Consolidated Financial Statements 2016 of the Lenzing Group) 2) Attributable to Lenzing AG shareholders 15 Financials 2016 – Key figures (EUR mn) 1,600 70.0% 900 875 1,390 801 1,400 65.0% 800 730 1,219 1,153 1,110 683 1,200 1,055 60.0% 700 529 577 570 600 505 1,000 55.0% 500 450 800 50.0% 45.5% 44.7% 355 43.8% 53.0% 400 346 296 280 600 50.6% 45.0% 300 400 40.0% 200 328 100 200 35.0% 7 0 0 30.0% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Interest bearing financial debt Liquid assets Net financial debt Adjusted equity 3 Adjusted equity ratio3 5.50 1.5 1,750 1,605 1,596 1,579 1,541 44.0% 1 1.3 1,550 1,409 39.0% 4.50 4.20 1,350 34.0% 1.1 3.50 1.20 1,150 29.0% 0.9 950 24.0% 1.75 15.1% 2.50 2.00 2.00 3.000.7 750 13.7% 19.0% 4.2% 3.7% 550 0.5 8.1% 14.0% 1.50 0.25 1.00 350 3.7% 9.0% 0.3 0.50 2.9% 3.6% 1.50 2.9% 150 (0.1%) 4.0% 1.9% 2.6% 0.1 -50 -1.0% 2012 2013 2014 2015 2016 -0.50 2012 2013 2014 2015 2016 -0.1 3 Average capital employed 3 ROCE (%) Dividend Dividend yield (%) 2 1) Proposal to AGM on April 25, 2017 2) Dividend