1. Basic information
Description of the company and its business activities
Lenzing Aktiengesellschaft (Lenzing AG), which maintains its registered headquarters in 4860 Lenzing, Werkstrasse 2, Austria, is the parent company of the Lenzing Group (the “Group”). The shares of Lenzing AG are listed in the Prime Market Segment (since April 18, 2011) and in the ATX benchmark index (since September 19, 2011) of the Vienna Stock Exchange in Vienna, Austria.
As at December 31, 2025, Lenzing AG is controlled by the B&C Group, which directly and indirectly holds an interest of around 37.25 percent (December 31, 2024: around 37.25 percent) in the share capital of Lenzing AG. B&C KB Holding GmbH, Vienna, B&C Privatstiftung, Vienna and B&C Ares Holding GmbH, Vienna hold direct interests in Lenzing AG. The next-higher parent company which prepares and publishes consolidated financial statements that include the Lenzing Group is B&C Holding Österreich GmbH, Vienna, Austria. The ultimate parent company of the B&C Group, and therefore also of Lenzing AG, is B&C Privatstiftung, Vienna.
On June 12, 2024, Suzano S.A. acquired a 15 percent interest in Lenzing AG from the B&C Group subject to a condition precedent. The transaction was closed on August 30, 2024. According to the syndicate agreement between the B&C Group and Suzano S.A., which also became effective on August 30, 2024, the B&C Group retains sole control of Lenzing AG.
The core business of the Lenzing Group is the production and marketing of regenerated cellulosic fibers. The pulp required for production is manufactured for the most part in the Group’s own plants and is supplemented by external purchases.
Basis of Reporting
The consolidated financial statements for the period from January 1 to December 31, 2025 were prepared in accordance with the IFRS accounting standards and interpretations which were endorsed in the EU and required mandatory application as of the reporting date. The additional requirements of Section 245a Para. 1 of the Austrian Commercial Code (“Unternehmensgesetzbuch”) were also met.
The reporting currency is the euro (EUR), which is also the functional currency of Lenzing AG. The functional currency of the majority of the subsidiaries is the euro (EUR) or US-Dollar (USD). The figures shown in these consolidated financial statements and notes were rounded to the next thousand, unless indicated otherwise (“EUR ‘000”). The use of automatic data processing tools can lead to rounding differences in the addition of rounded amounts and percentage rates.
Measurement
Assets and liabilities are principally measured at amortized or depreciated cost. In contrast, other measurement methods are used for the following material positions:
Biological assets are measured at their fair value.
Provisions are measured at the present value of the expected settlement amount.
Deferred tax assets and deferred tax liabilities are recognized at their nominal value. They are measured on the basis of the temporary differences existing as at the reporting date and the effective tax rate expected when the differences are realized.
Derivative financial instruments and financial assets measured through profit or loss and through other comprehensive income are measured at their fair value.
Puttable non-controlling interests are measured at fair value directly through retained earnings.
Estimation uncertainty and judgments
The Managing Board of Lenzing AG uses estimates, assumptions and judgments in preparing the IFRS consolidated financial statements. These estimates, assumptions and judgments are based on the circumstances as at the reporting date and have to some extent a significant effect on the presentation of the Group’s financial position and financial performance. They involve the recognition and measurement of assets and liabilities, contingent receivables and liabilities, the reporting of cash flows and income and expenses (including other comprehensive income) as well as the presentation of disclosures in the notes.
Assumptions and estimates
The following forward-looking assumptions and other major sources of estimation uncertainty as of the reporting date have a significant effect on these consolidated financial statements of the Lenzing Group:
Intangible assets, property, plant and equipment and right-of-use assets (see note 10): determination of the recoverable amount in impairment tests in accordance with IAS 36 (impairment), in particular assumptions regarding the development of sales prices and achievable premiums, a potential change in product mix and achievable markups, and the possibility of realizing these planned changes.
Biological assets (see note 19): determination of fair value less costs to sell.
Financial instruments (see note 35 and note 37): determination of fair values and expected credit losses.
Provisions (see note 30): determination of the expected settlement amount and the net liability of the defined benefit pension and severance payment plans.
Puttable non-controlling interests (see note 35): determination of fair value.
Deferred taxes and receivables from current taxes (see note 29): assessment of the extent to which deferred tax assets (in particular, from loss carryforwards) can be utilized and assessment of the recoverability of receivables from current taxes.
Assumptions and estimates are based on experience and other factors that are considered relevant by the Managing Board. However, the amounts ultimately realized may deviate from these assumptions and estimates if general conditions develop in a different way than the expectations at the reporting date.
Judgments when applying accounting policies
The application of accounting policies by the Lenzing Group included the following major judgments that have a material effect on these consolidated financial statements:
Receivables under factoring agreements (see note 35, section “Transfer of financial assets (sale of receivables/factoring)”): assessment whether the derecognition criteria as defined in IFRS 9 have been met.
Liabilities under reverse factoring agreements (see note 31 and note 32): assessment of whether the derecognition criteria as defined in IFRS 9 (financial instruments) have been met and presentation in the statement of financial position and in the cash flow statement.
Full consolidation and equity method (see note 3, note 35 and note 41): assessment of the existence of control over subsidiaries and assessment of the existence of joint control or significant influence. Application of the present access method to puttable non-controlling interests.
Indications of impairment (see note 10): assessment of the existence of indications of impairment or, in the case of impaired cash-generating units, assessment of whether there have been any material changes compared with the previous year.
Effects of country-specific US tariff policy on the results for the year and on estimation uncertainties and discretionary decisions
The country-specific US tariff policy announced at the beginning of April 2025 had a significant impact on the global economy in the 2025 financial year. Since then, management has been analyzing various scenarios and implementing appropriate countermeasures, particularly with regard to the cost structure. In addition, the effects of possible recessions on markets of importance to the Lenzing Group are being analyzed and measures are being identified to mitigate potential risks arising from the uncertainty arising from the current global economic situation.
The country-specific US tariff policy has an impact on the IFRS consolidated financial statements, in particular on assumptions, estimates and discretionary decisions. When preparing the consolidated financial statements, the Managing Board took developments in connection with the country-specific US tariff policy into consideration. Economic uncertainties on global markets and associated sharp fluctuations in commodity prices, changes in demand on sales markets, disruptions to supply chains and changes in both interest rates and exchange rates have the following effects on the consolidated financial statements in particular:
The measurement of assets and liabilities measured at fair value, in particular biological assets (see note 19), financial instruments and puttable non-controlling interests (see note 35).
The calculation and recognition of currency translation effects in the income statement and in equity (see note 36). This mainly relates to receivables and liabilities denominated in USD.
The impairment testing of cash-generating units (see note 10, section “Impairment of intangible assets, property, plant and equipment, right-of-use assets and cash-generating units (CGUs)”).
In addition, current developments in procurement and sales prices were taken into consideration in estimates and discretionary decisions (e.g. as part of corporate planning, which is used to determine recoverable amounts).
Additional information on the effects of the country-specific US tariff policy and the measures taken by the Lenzing Group can be found in the Group Management Report.
Impact of climate change on estimation uncertainties and judgments
The Lenzing Group is committed to the ecologically responsible production of fibers from the renewable raw material wood. Innovation, sustainability and the circular economy lie at the core of Lenzing’s corporate strategy. The implementation of climate targets in line with the corporate strategy was one of the focus areas of the Lenzing Group’s investment activities in the 2025 financial year. In this context, the Lenzing Group is continuously working on utilizing raw materials more efficiently, improving production processes and making recycled used textiles usable for fiber production. Current developments and measures relating to climate change and sustainability do not lead to fundamental changes to assumptions and estimates in terms of financial accounting. The Managing Board estimates the potential impact of climate-related opportunities and risks on the IFRS consolidated financial statements as follows:
Useful lives of assets (see note 18): The Lenzing Group has evaluated the extent to which the useful lives of property, plant and equipment could be affected by climate-related risks. In particular, an assessment was made as to whether, on the basis of existing and announced legal and regulatory requirements, the potential pollution from individual industrial plants (for example, by exceeding emission limits) poses a risk for the granting of operating permits. No influence of external or internal obligations on useful lives was derived.
Impairment of assets (see note 10, section “Impairment tests of intangible assets, property, plant and equipment, right-of-use assets and cash-generating units (CGUs)”): The short- and medium-term financial planning and consequently the impairment tests are based on the Lenzing Group’s sustainable strategy and the sustainable business model. The short- and medium-term financial plans of the individual CGUs take appropriate account of assumptions regarding climate-related factors such as wood shortages and stricter environmental requirements for capital expenditure programs (CAPEX), technologies and production processes for achieving the Group’s internal climate targets, and the ecologically sustainable product mix based upon these.
Provisions and contingent liabilities (see note 30 and note 40): In the 2025 financial year, no new obligations arising from climate protection laws and/or climate regulations arose in the Lenzing Group that would have required the recognition of a provision or the disclosure of a contingent liability. No obligations exist to recultivate existing properties.
Biological assets (see note 19): The measurement of the biological asset requires assumptions relating to the growth rates of mature timber. The growth rates are in turn dependent on the climatic conditions in the Minas Gerais region of Brazil. Climate change may lead to changes in the growth behavior of mature timber (e.g. accelerated or slowed growth), and thereby to the adjustment of growth assumptions in the valuation of the biological asset.