21. Investments accounted for using the equity method

Investments accounted for using the equity method comprise the following:

The main investments accounted for using the equity method include, in particular, the interest in Lenzing Papier GmbH (LPP), Lenzing, which is allocated to the “Others” segment, and LD Florestal S.A. (LDF), Indianópolis, Brazil, which is allocated to the Pulp Division segment. For the strategic importance of the other investments accounted for using the equity method and their relationship with the Lenzing Group, please see note 38.

Investments accounted for using the equity method developed as follows:

The Lenzing Group recognizes both, measurement effects and the results from investments accounted for using the equity method, together in income from investments accounted for using the equity method.

The Lenzing Group, as at December 31, 2024, held 20 percent of capital and voting rights in Equi-Fibres Beteiligungsgesellschaft mbH (EFB) which is not publicly listed as (December 31, 2023: 20 percent). The core business of EFB is the production and marketing of regenerated cellulosic fibers. The relations between the Lenzing Group and this company are described in note 38.

In October 2024, Kelheim Fibres GmbH (KFG), Kelheim, Germany, a wholly owned subsidiary of EFB, filed for insolvency under provisional self-administration. Insolvency proceedings were opened on January 1, 2025, and self-administration was ordered. Due to a lack of financial information, it is currently not possible to assess further developments. The previous business relationships (pulp deliveries) will continue against advance payment until further notice. As EFB only holds Kelheim as a participating interest, the value of its assets is directly affected by this insolvency application. An impairment loss was recognized for trade receivables (see notes 37, Credit risk and note 38).

An impairment loss of EUR 2,000 thousand was applied to the shares in EFB in the 2023 financial year (see note 12). As a consequence, the carrying amount of the shares in EFB stands at EUR 0 thousand as at December 31, 2024 (December 31, 2023: EUR 0 thousand).

Further, in the 2023 financial year, an impairment loss of EUR 7,564 thousand was recognized on the outstanding purchase price receivables and non-current loans due from the acquirer of EFB (and its subsidiaries) (see note 37, Credit risk). As a consequence, the carrying amounts of the outstanding purchase price receivable and the long-term loan due from the acquirer of EFB (including its subsidiaries) amounted to EUR 0 thousand as of December 31, 2024 (December 31, 2023: EUR 0 thousand). In addition, a long-term performance-related purchase price component exists, which depends on the company’s future profitability. This is discounted to present value in the amount of EUR 0 thousand as at December 31, 2024 (December 31, 2023: EUR 0 thousand).

In summary, the insolvency filing of KFG in the 2024 financial year has no impact on the Lenzing Group’s financial statements, due to impairment losses having already been applied in previous years as well as the impairment loss recognized in 2024.

In the 2024 financial year, losses relating to shares in the associate EFB were not recognized, as the Lenzing Group has no obligation with regard to such losses and no financial information relating to EFB is available for the 2024 financial year.

The Lenzing Group holds a lien on the remaining shares of EFB. This lien can be realized in the event of non-payment on the due date of the outstanding purchase price claim and of the long-term loan. In addition, the buyer was granted a credit line of up to EUR 1,376 thousand (December 31, 2023: EUR 1,376 thousand), which can be utilized in the event of predefined adverse changes in EFB’s general conditions on the sales market until December 31, 2025, at the latest. As of December 31, 2024, and in the previous year as at December 31, 2023 this credit line had not been utilized.

Due to holdup relating to the insolvency proceedings under provisional self-administration of EFB that were opened on January 1, 2025 no financial information was available until the preparation of the IFRS consolidated financial statements of the Lenzing Group. The following table provides summarized financial information on EFB in accordance with IFRS (100 percent) for the 2023 financial year:

The reconciliation of equity to the carrying amount of the investment in EFB is as follows:

The Lenzing Group held 40 percent of capital and voting rights in LPP as at December 31, 2024 (December 31, 2023: 40 percent). The core business of LPP, which is not publicly listed, is the production of cellulose-based products, in particular paper. The relations between the Lenzing Group and this company are described in note 38.

The following table provides summarized financial information on LPP in accordance with IFRS (100 percent):

The reconciliation of equity to the carrying amount of the investment in LPP is as follows:

The Lenzing Group held 50 percent of the capital and voting rights in LDF as at December 31, 2024 (December 31, 2023: 50 percent). The core business of LDF, which is not publicly listed, is granting rights of use. The relations between the Lenzing Group and this company are described in note 38.

The following table provides summarized financial information on LDF in accordance with IFRS (100 percent):

The reconciliation of equity to the carrying amount of the investment in LDF is as follows:

The investments in associates represent shares in companies in which the Lenzing Group can exert significant influence over financial and operating policies. Joint ventures are joint arrangements managed by the Lenzing Group together with one or more partners, whereby the Lenzing Group has rights to the net assets of the arrangement.

In October 2024, the Lenzing Group acquired a minority interest in Swedish cellulose fiber company TreeToTextile AB (TTT). TTT is engaged in the research, production, and distribution of sustainably regenerated celullosic fibers. The transaction is subject to regulatory approvals and is expected to be completed by the first half of 2025. The Lenzing Group cannot exert any significant influence over TTT until official approval has been granted. As a consequence, the purchase price including incidental acquisition costs of EUR 16,015 thousand is reported under other current assets (note 25) as at December 31, 2024.