38. Related party disclosures

Overview

Related parties of the Lenzing Group include, in particular, the member companies of the B&C Group together with its subsidiaries, joint ventures and associates and its corporate bodies (executive board/management and supervisory board, where applicable) as well as close relatives of the members of the corporate bodies and companies under their influence (see note 1, section “Description of the company and its business activities” and note 39). The amounts and transactions between Lenzing AG and its consolidated subsidiaries are eliminated through consolidation and are not discussed further in this section

B&C Privatstiftung is managed by a board of trustees. No member of the Managing Board of Lenzing AG is a member of this board of trustees or the management/Managing Board of a subsidiary of B&C Privatstiftung, with the exception of subsidiaries of the Lenzing Group. The Lenzing Group has no influence over the business activities of B&C Privatstiftung.

The members of the corporate bodies of Lenzing AG (in particular, the Supervisory Board) and the above-mentioned entities are, in some cases, also members of the corporate bodies or shareholders of other companies with which Lenzing AG maintains ordinary business relationships. The Lenzing Group maintains ordinary business relationships with banks that involve financing, investing and derivatives.

Relationship with related companies

Lenzing AG dropped out of the tax group with the B&C Group in the 2024 financial year (see note 29). This led to subsequent taxation of the recognized losses of foreign group members in Austria, and a valuation allowance on the previously capitalized loss carryforwards.

In the 2024 financial year, the tax allocation led to the recognition of a tax expense of EUR 23,019 thousand (2023: EUR 4,501 thousand) for the B&C Group. A deferred tax asset on tax losses in the amount of EUR 0 thousand (2023: EUR 48,020 thousand) was recognized, as Lenzing AG dropped out of the B&C tax group retroactively as at the end of 2022. From the tax allocation, the Lenzing Group recognized a liability to the B&C Group of EUR 0 thousand as at December 31, 2024 (December 31, 2023: EUR 4,759 thousand).

As part of the termination of the tax group, the Lenzing Group was required to pay a tax allocation for the 2022 financial year to the group parent in accordance with the group tax allocation agreement. The termination agreement negotiated on the occasion of the withdrawal of Lenzing AG from the tax group of B&C Holding Österreich GmbH was signed on September 10, 2024. Lenzing AG paid a tax allocation of EUR 22,209 thousand plus interest of EUR 1,280 thousand to B&C Holding Österreich GmbH for losses of the foreign group members of the tax group of Lenzing AG that have not yet been taxed. In addition, a tax allocation of EUR 810 thousand plus interest of EUR 65 thousand was paid to B&C Holding Österreich GmbH for the 2021 financial year due to an external audit that had been completed.

Relationships with companies accounted for using the equity method and their material subsidiaries

Transactions with companies accounted for using the equity method and their material subsidiaries relate primarily to:

The scope of material transactions and the outstanding balances with companies accounted for using the equity method and their major subsidiaries are as follows:

LD Florestal S.A. received a long-term, unsecured loan of EUR 29,871 thousand (December 31, 2023: EUR 13,679 thousand) from the fully consolidated subsidiary LD Celulose S.A. The interest reflects standard bank rates. Interest income of EUR 2,500 thousand was recognized in the financial year under review (2023: EUR 542 thousand).

Kelheim Fibers GmbH, Kelheim, Germany, a subsidiary of the equity-accounted investee EQUI-Fibres Beteiligungsgesellschaft mbH, Kelheim, Germany, received a long-term, unsecured loan of EUR 5,000 thousand from Lenzing AG in 2017. The interest reflects standard bank rates. This loan, including unpaid interest, was written down in its entirety (see notes 21 and 37).

In relation to trade receivables due from companies accounted for at-equity, an expense of EUR 939 thousand (2023: income of EUR 1,720 thousand) was recognized from impairment losses (expense) and reversals of impairment losses (income). EUR 0 thousand (2023: expense of EUR 3,583 thousand) were recognized on loans to companies accounted for at- equity, and their subsidiaries.

There were no major transactions with the other non-consolidated subsidiaries in 2023 and 2024.

Relationships with members of the Managing Board and Supervisory Board of Lenzing AG

The remuneration expensed for key management personnel, which comprises the active members of the Managing Board and Supervisory Board of Lenzing AG, in line with their functions is summarized below (including changes in provisions):

The benchmark for the long-term bonus component of the members of the Managing Board (long-term incentive/LTI) consists of selected key indicators of the Lenzing Group, each over a three-year calculation period. In addition, the company’s capital market performance is assessed in comparison with a group of selected listed companies during these periods.

The employee representatives on the Supervisory Board who were delegated by the Works Council are entitled to regular compensation (wage or salary plus severance and jubilee benefits) under their employment contracts in addition to the compensation for their activity on the Supervisory Board (in particular attendance fees). This compensation represents appropriate remuneration for their role/activities performed in the company.

Walter Bickel is Managing Director of Bickel Austria GmbH, Vienna, and has been a member of the Managing Board of Lenzing AG since April 15, 2024. In the 2024 financial year, an amount of EUR 4,399 thousand (2023: EUR 0 thousand) was paid to Bickel Austria GmbH for consulting services rendered. No liabilities are outstanding as at December 31, 2024. For this company’s other performance-based remuneration claims, provisions amounting to EUR 1,680 thousand were made as of December 31, 2024. These benefits were drawn on standard market terms.

Mr. Rohit Aggarwal has been Chairman of the Managing Board (CEO) of Lenzing AG since September 1, 2024. Before taking up his position, payments were made to Mr. Rohit Aggarwal in the 2024 financial year for consulting services rendered in the amount of EUR 149 thousand (2023: EUR 0 thousand), as well as payments for cost reimbursements in the amount of EUR 35 thousand (2023: EUR 0 thousand). No liabilities are outstanding as at December 31, 2024. These benefits were drawn on standard market terms.

In line with customary market and corporate practice, Lenzing AG also grants additional benefits, which are considered non-cash benefits, to the members of the Managing Board, selected senior executives and Supervisory Board members. One example of such benefits is insurance coverage (D&O, accident, legal protection etc.), whereby the costs are carried by the Lenzing Group. The insurers receive total premium payments, i.e. there is no specific allocation to the Managing Board and the Supervisory Board. In addition, the members of the Managing Board and selected senior executives are provided with company vehicles. The members of the Managing Board and the Supervisory Board are also reimbursed for certain costs incurred, above all travel expenses. The principles of the remuneration system for the Managing Board and the Supervisory Board are described in detail and disclosed in the 2024 remuneration report of the Lenzing Group.

The members of the Managing Board and Supervisory Board received no advances, loans or guarantees. The Lenzing Group has not entered into any contingencies on behalf of the Managing Board or Supervisory Board.

Expenses of EUR 308 thousand in total (2023: EUR 1,469 thousand) were recognized through profit or loss or as revaluation through other comprehensive income with relation to post-employment benefits for former members of the Managing Board of Lenzing AG. The present value of the pension provision recognized in this context, after deduction of the fair value of plan assets (net obligation), amounted to EUR 5,090 thousand as at December 31, 2024 (December 31, 2023: EUR 5,548 thousand).