2. Changes in accounting policies

The accounting policies applied by the Lenzing Group in 2025 remained unchanged in comparison with the previous financial year, with the exception of the changes described in this section.

Mandatory changes in accounting policies

The following new and amended standards and interpretations were adopted into EU law and required mandatory application by the Lenzing Group beginning with the 2025 financial year:

The amended standard, which is to be applied from January 1, 2025, does not lead to any material changes to the Lenzing Group’s financial statements.

The following new or amended standards and interpretations had been published by the IASB prior to the preparation of these consolidated financial statements, but did not require mandatory application by the Lenzing Group for financial years beginning on or before January 1, 2025:

The other aforementioned new or amended standards and interpretations were not adopted early by the Lenzing Group.

The Lenzing Group is currently evaluating the potential impact of the new standard IFRS 18 (Presentation and Disclosure in Financial Statements), particularly in relation to the structure of the consolidated income statement and the additional disclosure requirements for management-defined performance measures (MPMs). The Lenzing Group expects changes in the allocation of income and expenses between the operating result (currently presented as “earnings before interest and tax” and, under IFRS 18, to be presented as “operating profit or loss”) and the financial result, which will in future be allocated to the investing and financing categories. The most significant impact identified to date relates to the reclassification of foreign exchange differences arising from cash and cash equivalents from the operating category to the investing category. The presentation of the consolidated statement of cash flows has been adjusted since the second quarter of the 2025 financial year and already complies with the requirements of IFRS 18; accordingly, no further impacts are expected in this respect. Furthermore, the impact on the way information is grouped in the financial statements, including items currently referred to as “other”, are reviewed.

The amendments to IFRS 9 and IFRS 7 supplement the existing disclosures in the notes by requiring additional explanations relating to contractual clauses that give rise to volume risk, relating to off-balance-sheet commitments, as well as relating to qualitative and quantitative information on the resultant effects on profit or loss.

The other new or amended standards and interpretations mentioned above are either not relevant for the Group or have no material impact on the Lenzing Group’s results, assets, liabilities, or statement of cash flows.

The application of these standards and interpretations is generally planned following their endorsement by the EU.

Voluntary changes in accounting policies

For the presentation of the consolidated statement of cash flows, the accounting options available under IAS 7 were utilized anew in order to enhance the transparency of the information on the Lenzing Group’s financial position. From the second quarter of the 2025 financial year onwards, the consolidated statement of cash flows is presented starting with earnings before tax (EBT).

Until the 2024 financial year, payments for interest received and paid (excluding the portion for leases in accordance with IFRS 16, and capitalized borrowing costs in accordance with IAS 23) as well as dividends received were allocated to cash flow from operating activities. Since the second quarter of the 2025 financial year, interest and dividends received (distributions received from investments accounted for using the equity method) are reported in cash flow from investing activities, while interest paid is reported in cash flow from financing activities.

Starting with the second quarter of the 2025 financial year, the capitalized borrowing costs in accordance with IAS 23, which were previously included in cash flow from investing activities under the item “acquisition of intangible assets, property, plant and equipment, and biological assets”, are allocated to the item “interest paid” and are therefore presented in the cash flow from financing activities. As a result, the “CAPEX” figure for the comparative period was adjusted retroactively by EUR 2,574 thousand to EUR 153,761 thousand.

Furthermore, investment grants previously reported in cash flow from financing activities have been allocated to cash flow from investing activities since the second quarter of the 2025 financial year. As a result, the “free cash flow” figure for the comparative period was adjusted retroactively by EUR 2,408 thousand to EUR 169,379 thousand.

The change in presentation is made retroactively by adjusting all comparative information presented and has the following effect:

As part of the change in presentation, the allocation of individual items to income taxes paid, interest received, and interest paid was also re-evaluated. This results in a retroactive adjustment of the comparative period for income taxes paid of minus EUR 2,255 thousand, interest received of EUR 394 thousand, and interest paid of EUR 12,044 thousand.