Lenzing Group Leading Fiber Innovation

The Lenzing Group 2011 Sales: EUR 2,140.0 mn Export share: 91.5% Staff: 6,593 Listed at Vienna Stock Exchange (ATX) Major shareholders: B & C Privatstiftung >50%, Oberbank AG >5%

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The Lenzing Group 2011 Segment Fibers

Business Unit Textile Fibers

Business Unit Plastics

Business Unit Nonwoven Fibers

Business Unit Filaments

Business Unit Pulp Business Unit Energy Sales: EUR 1,927.6 mn EBIT: EUR 360.9 mn EBITDA: EUR 458.6 mn 3

Segment Plastics Products

Sales: EBIT: EBITDA:

EUR 170.6 mn EUR – 3.5 mn EUR 16.5 mn

Segment Engineering

Business Unit Engineering Sales:

EUR 107.0 mn

(ext. sales

EUR 40.4 mn)

EBIT: EBITDA:

EUR 7.5 mn EUR 9.0 mn

Fibers: Our core business

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Fibers: Core markets Asia and Europe

thereof China

21%

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Fiber production sites1) Viscose capacity: 630,000 tons/year Lenzing / AT

Purwakarta / ID

Nanjing / CN

Patalganga / IN

250,000 tons/year

240,000 tons/year

140,000 tons/year

under construction

1) all capacities as at 31/12/2011

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Fiber production sites1) TENCEL® capacity: 140,000 tons/year Mobile / USA

Grimsby / UK

Heiligenkreuz / AT

Lenzing / AT

40,000 tons/year

40,000 tons/year

60,000 tons/year

under construction

1) all capacities as at 31/12/2011

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Pulp production sites1) Lenzing / AT

Paskov / CZ

289,000 tons/year dissolving pulp

60,000 tons/year dissolving pulp 280,000 tons/year paper pulp

1) all capacities as at 31/12/2011; air-dry

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Global network for our customers

1) as at 31/12/2011 9

Growth company Lenzing Megatrends „ Population growth and rising prosperity in emerging markets Per-capita fiber consumption kg/year

2011

USA

38

Europa

24

China

13

Indien

6

„ Renewable resources – beech, eucalyptus, spruce

¨ Advantage over all crude oil based fibers „ Climate change

Soucres: Gherzi, 04/ 2012 10

Growth company Lenzing

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Capacity expansion to 2015 Accelerating the fiber expansion in the future Europe1

China

CAGR 4.7%

CAGR 15.6%

420 420 350 350 370 100 100 110 170 170

250 140 170 170 170

100 100 100 140 140 150 150

160 110 110

2011 2012E 2013E 2014E 2015E

2011 2012E 2013E 2014E 2015E

India USA CAGR 28.8% 80

80

2011 2012E 2013E 2014E 2015E

110 100 40 50

50

50

2011 2012E 2013E 2014E 2015E

50

Total capacity at year end

Indonesia

CAGR 11.4%

CAGR 7.9%

Total pulp capacity CAGR 23.9% 1,185

560

c.240

240 240

240

770 140 100

289 300

300 320

320

530

20 12 E

20 13 E 20 14 E

20 15 E

c. 800

540 339

20 11

50

410 110

1,045 215 915 220 890 160 150 140 100 100

640

655

685

280 140

765

2011 2012E 2013E 2014E 2015E

1) includes Lenzing, Heiligenkreuz and Grimsby 12

Annual capacity in ‘000 metric tons

320

325

325

325

240

Dissolving pulp capacity Paskov dissolving pulp capacity Planned new pulp plant

2011 2012E 2013E 2014E 2015E

Lenzing’s decisive success factors in the global fiber market The only company world-wide with cellulose fibers as its core business

Focus of resources on fibers

Highest R&D quota (EUR 27.2 mn according to Frascati) in the industry. Pulp and fiber production expertise in one company. The only supplier of all three fiber generations: Viscose, Modal and Lyocell (TENCEL®)

Differentiation through technology leadership

Implementing new fiber applications by coordinating and controlling a comprehensive network throughout the whole textile chain for end user benefit

Innovative marketing / ongoing broadening of portfolio

Global technical service for Lenzing customers in production and application

Optimum quality assurance and capacity utilization for Lenzing customers

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Who’s who in fibers

* Lenzing fibers

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Global fiber consumption and world population

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Global fiber market 2011 Global fiber production 2011E1)

Wool 1.5%

Natural Fibers & Natural Polymers Cotton 31.2%

79.1 mn tons Synthetic fibers 61.3% MMC fibers2) 6.0% Source: The Cellulose Gap, Gherzi, February 2011 1) assuming a population of 7.0 bn and a per capita fiber consumption of 10.9 kg 2) man-made cellulose fibers 16

Cellulose Gap MMC fibers benefiting from strong demand and limitations on cotton supply

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Leading Fiber Innovation „ Leader in innovation and technology „ Cellulose fibers as core business „ Pacemaker of technological development for „ „ „ „ „

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the cellulose fiber industry Production sites in all major global regions Producer of all three fiber generations Number one expert in pulp production (Lenzing site: largest integrated cellulose fiber production world-wide) Global provider with local customer service Successful niche provider of special polymer products

Leading Fiber Innovation High quality growth Innovation and R&D Branding & Positioning

Cooperation with customers Sustainable and environmentally friendly

Global marketing & merchandising All three fiber generations Core business fibers

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Production sites in all global regions

Cost leadership

Innovation Industry leading R&D spend R&D expenses (2000-2011) EUR mn 30

3

25

2,5

20

2

15

1,5

10

1

0,5

5

0

0

Source: LAG

2000

2001

2002

2003

2004

2005

R&D expenses

20

2006

2007

2008

R&D as % of sales

2009

2010

2011

Intellectual Property „ As of December 2011, Lenzing owned approx. 1,300 patent applications and patents in 57 countries belonging to 218 patent families „ All significant patents are filed and maintained in Asia, the European Union and the Americas „ The majority of the patent portfolio focuses on lyocell technology (TENCEL®) „ As of December 2011, Lenzing owned approx. 1,400 trademark applications and trademarks in 95 countries belonging to 112 trademark families

Innovation Center at Lenzing R & D competence and service center – technologies for wood, cellulose & fiber chemistry „ 150 researchers and laboratory assistants „ Analytics „ Pilot plants „ In-house fabric development (fiber to fabric) „ In-house dye house (pilot plant scale) Services „ More than 1,300 technical inquiries per year from the textile chain „ About 1,000 fiber and fabric investigations per year „ About 2,500 fabric certifications per year

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Innovation R&D organization and unique innovation model „ R&D integrated into Business Units „ Close collaboration with

Breakthrough innovation „ Focus: Leap technologies (e.g. Lenzing Modal®, TENCEL®, Meltblown)

marketing and sales „ Process innovation optimizing

quality and cost position „ Global Technical Service along the entire textile chain

Product innovation „ Focus: customizing

Process innovation „ Focus: quality, productivity

„ Quality Management System „ Integrated Fiber Processing Units

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Application innovation „ Broaden application base

3 Fiber Generations Viscose, Modal, TENCEL® 3 development steps of man-made cellulose fibers

Viscose

100 years (Lenzing has produced it for more than 70 years.)

50 years

*)

1910

1940

1960

*) TENCEL® is the Lenzing brand name for the generic fiber lyocell

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20 years

1990

2011

Global market leader Technology leadership secures leading market shares

Innovation drives specialties

Market position and market share in FY 20111

Unique Selling Proposition

# 1 – Quantum leap ...the new age fiber „ High-end consumer technology „ Environmentally friendly process applications „ Breathable, next to skin characteristics „ Special „ Can be blended with cotton technical applications 99% „ Strength (wash ability, denim process) ...makes the world a softer place

#1

„ „

Sets Industry standard

80%

„

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Natural softener for fabrics Next to skin characteristics Can be blended with cotton

„ Consumer applications „ High performance

apparel

...sets industry standard

#2 15%

„ „ „

Source: Lenzing 1) by production capacity

Key end markets

Superior quality allows for use of high-end textile machinery Consistent in dyeing and finishing Global service package

„ Consumer applications „ Technical applications

Textile Fibers Product overview Key products

Key applications „ Clothes in woven and

knitwear „ Home textiles

„ Terry products (towels) „ Underwear, lingerie „ Socks „ Blankets, beddings and

mattresses „ Shirts, blouses, outerwear,

home wear, underwear „ Sportswear

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Other high-tech specialty fibers TENCEL® special applications

„ Separators for high-performance

batteries „ Application hybrid power systems

TENCEL® powder applications

„ High quality mattress „ Functional additive for a wide range of

applications

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Other high-tech specialty fibers From automobiles to construction „ Fibers for electronic

components for hybrid drives „ TENCEL® powder for mattress foams „ Added to construction materials for improved indoor climate „ Fiber-reinforced plastics

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Other high-tech specialty fibers „ TENCEL® in car seat cover fabrics „ TENCEL® as a blending partner with polyester

enhances seating comfort based on the outstanding moisture management of the fiber „ Technical challenge has been mastered: specifications on hot light and wet rub fastness „ TENCEL® gel „ Gel from submicroscopic TENCEL® fibrids, form

clear, closed films in drying „ Potential applications: coatings for paper or the nonwovens, paint or lacquer industry

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Other high-tech specialty fibers Lenzing FR® flame-resistant fiber

„ Protective wear for industry, fire

fighting and the military „ Flame resistant fabrics for public

transport (airplanes, trains) „ Flame resistant fabrics for furniture „ Thermal insulation systems for

protective jackets

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Lenzing fibers fields of application Textile industry Fashion, home textiles, technical applications

Nonwovens industry Medical applications, hygiene, cosmetics, technology

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Lenzing’s core business: Man-made cellulosic fibers Textile Fibers

Advantages High strength Softness Comfort through breathability Ideal blending partner for cotton & polyester

Fashion

Home textiles

Technical applications

Functional applications

Nonwoven Fibers High strength Absorbency Purity Softness Biodegradability Hygiene

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Technical applications

Medical applications

Wipes

Sales and marketing Only global branded supplier to top customer base „ „

„

Lenzing is a trusted, long-term partner for global consumer brands Company acts as a branded supplier with involvement in the value chain decision process of customers „ Push: Lenzing as market maker for lyocell and modal fibers develops technology in the textile chain „ Pull: Marketing through brands unique to Lenzing – retail and brands specify Lenzing fibers ¨ joint organization of supply chain „ Supplier with in-depth customer understanding: ability to mirror the entire supply chain Supply chain management is a strong differentiator for Lenzing

Yarn

Push

Fabric

Finishing

Textile Product

Retailer

Consumer

MicroModal AIR

Pull

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Lenzing stands out in the textile value chain

Yarn

33

Fabric

Finishing

Textile Product

Retailer

Consumer

TENCEL® Production Process „ Tried and tested technology „ Lenzing boasts 20 years of production experience with lyocell fibers „ TENCEL® pilot plant in Lenzing since 1990 The production process is characterized by the almost entirely closed loop for the solvent.

*) N-Methylmorpholine oxide – solvent soluble in water 34

Sustainability in the Lenzing Group

Sustainable development is … “…development that meets the needs of the present generation without jeopardizing the potential of future generations to meet theirs.”*

* Brundtland Report 1987

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Lenzing sustainability concept Sustainable economic success „ Growth, innovation, productivity, technology leadership, quality leadership Responsibility for the environment „ Lenzing sets environmental standards „ Closed loops and integration „ Renewable raw material wood Responsibility for the people „ Attractive jobs „ High safety and health standards „ Regional support of social, sports and cultural activities

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Wood – The raw material for Lenzing Fibers „ The renewable raw material wood is the raw material used to produce Lenzing fibers „ Cellulose ist nature‘s most important construction material „ 40 billion tons of cellulose grow again each year „ 0.3% of the entire cellulose found in the biological cycle is used for the pulp industry „ Viscose pulp (“dissolving pulp“) has specific requirements compared to paper pulp „ Lenzing uses pulp from beech, spruce and eucalyptus trees and several other wood types „ The strategic objective is to provide two-thirds of required pulp from the company‘ as own

pulp production

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Cellulose From wood to fiber The renewable resource wood is the starting material for all Lenzing fibers.

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Pulp production sites1) Lenzing / AT

Paskov / CZ

289,000 tons/p.a. dissolving pulp

60,000 tons/p.a. dissolving pulp 280,000 tons/p.a. paper pulp

1) all capacities as at 31/12/2011; air-dry

The fiber production at the non-integrated sites is ensured via „ Long-term supply contracts and „ Additional purchases on the market. Lenzing produces pulp in line with the magnesium-bisulfite process.

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Life cycle analysis of fibers „ Comprehensive evaluation of fibers „ Utrecht University, The Netherlands (Prof. M. Patel, Li Shen) „ Assessment of sustainability of Lenzing fibers

in comparison to cotton, polyester and polypropylene. „ 11 environmentally relevant factors studied Result: Environmental load of Lenzing fibers is significantly lower than that of cotton!

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Sustainability Green footprint: significantly more environmentally friendly than cotton „ More than 50% of Lenzing’s fuel consumption sourced from renewable resource

Water consumption

Required acreage for production of one metric ton of fiber

Environmental impact of production1

m3 per metric ton of fiber

Hectares per metric ton and year

Relative to cotton

5,730

100%

0.82

0.24 263 TENCEL® Austria Process water

5.7% Cotton USA and China Cooling water

TENCEL® Austria Groundwater irrigation

Surface water irrigation

Source: “Life Cycle Assessment of man-made Cellulose fibers”; Li Shen, Martin Patel; 2007 1) including freshwater ecotoxicity, terrestrial ecotoxicity and others

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Cotton USA and China

Lenzing Group Avg.

Cotton USA and China

Green footprint Natural from cradle to factory gate

CO2 +

Cellulose

Photosynthesis

Tree

Textile

Earth

O2

Fiber

Biodegradability

Water

„ Wood as raw material and fuel for integrated fiber production „ Wood is a sustainable resource, naturally absorbent, fully biodegradable „ More than 50% of wood utilized with superior recovery of energy and by-products1) 1) Lenzing site only 43

Comparison of energy sources*)

* incl. RVL

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Certificates, Eco-Labels and Awards „ „ „ „ „ „ „ „ „ „ „ „ „ 45

VÖNIX (Austrian Sustainability Index) CSR ranking Austria 2008 The European Eco-Label (European Flower) Responsible Care Panda - WWF Austria (2003) Compostable (DIN CERTO) Oeko-Tex Standard 100 European Award for the environment Nordic Swan ECO Responsibility Award by TENCEL® SUN (2011) PEFC (Chain of Custody) FSC (Chain of Custody) bioBased (BioPreferred program)

Water Treatment Association Lenzing Lenzing AG Sewage treatment plant – benchmark technology

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Development of emission and odor levels/Production development Lenzing site

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