Ladies and gentlemen, welcome to the Lenzing AG Results 1st Quarter 2026 conference call and live webcast. I'm Sergen, the Chorus Call operator. I would like to remind you that all participants will be in a listen-only mode and the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star one on your telephone. For operator assistance, please press star two. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mathias Breuer, CFO. Please go ahead, sir. Yeah, perfect. Good afternoon, everyone, and thank you for handing over to me. Thanks to everyone for joining our call today. Today we're gonna walk together through Lenzing's result for the first quarter of 2026. Just a brief look into the agenda. I will start with the key highlights, followed by an update on the market environment as always, and then I will take you through the financials in more detail, including the EBITDA, the cash flow, the working capital, and our balance sheet position. Finally, we will end with our current view and the outlook before we move to the Q&A session. Let me start with the key highlights of the first quarter 2026. As we also discussed in March this year, the year began in a very challenging geopolitically and macroeconomic environment, in particular the escalation in the Middle East, which has increased the uncertainty across energy, chemicals, logistics, and finally also consumer markets. Against this backdrop, we delivered a revenue of EUR 616 million, which is an 11% decline year-on-year and slightly below the fourth quarter of 2025, reflecting the still challenging market environment and lower pulp volumes. Please keep in mind that especially the first quarter of 2025 was particularly strong with a worsening economic situation over the following quarter 2025 following the tariff announcements in April. Our EBITDA increased significantly compared to the fourth quarter 2025 to EUR 116 million, corresponding to a solid EBITDA margin of 19%. This underlines the continued impact of our pricing and cost excellence initiatives and the measures that we have taken, supported by some one-off effects that we will also discuss in today's meeting. The cash generation was particularly strong. The unlevered free cash flow reached EUR 66 million, supported by, again, disciplined CapEx control and continued working capital management. Overall, Q1 confirms that we are making progress on what we can control, cost discipline, cash generation, and commercial steering. With that, we were able to deliver a net profit of EUR 24 million after three consecutive quarters in a loss position. Now, let's step a bit closer to the current market environment. The global apparel market in the textile industry showed stable growth in the first quarter, but the consumer sentiment remained cautious. We saw first signals of an easing situation after the tariff announcement last year, the backdrop with the conflict in the Middle East. However, demand was supported by stronger trends in the U.S. and China. Lower income consumers continued to reduce discretionary spending. The nonwoven markets, in contrary, remained more resilient, particularly in Europe and North America. We continue to see some structural support from the conversion towards more sustainable and plastic reduced materials. In our dissolving wood pulp division, the demand remained closely linked to the production of regenerated cellulosic fibers. We experienced high downstream operating rates together with some supply disruptions with some of our competitors, supported an improvement in our price level. Overall, the market prices for both fiber and dissolving wood pulp improved during the quarter. Just as a reference, the CCF China Index for viscose increased by 1.4%. The CCF for lyocell increased by 3.4% over the quarter. There is also a bit of a market recovery that we could see over the first quarter. Overall, the broader market environment remains volatile and visibility, especially over the entire year, is still limited. Let me now address the impact of the war in Iran on our business and the mitigation measures that we have defined. As we discussed also last time, we do not have direct business with Iran. Our sales exposure to the Middle East is limited. However, we are seeing some indirect effects across our value chains. These include some higher logistic costs, increase in chemical prices, wood and energy costs from the second quarter onwards, and risks around the chemical supply security. We are closely monitoring the price and the cost developments, and we have defined clear mitigation actions. These include a pass-through of higher costs where possible, a much more tense pricing policy that we are currently doing and also pricing process, where even on a daily and weekly basis we adopt and adjust minimum prices. We've got our own focus on value accretive allocation of volumes across customers and regions, and we strive to establish alternate supply routes for key chemicals. In addition, we continue to prepare further cost saving initiatives. Our focus is to limit negative effects as much as possible. Turning now to the fiber business first. The fiber sales volumes remained broadly stable compared with the fourth quarter of 2025. It's 220,000 tons, so it's a +1% compared to the last quarter. This still reflects our measures that we have taken during 2025 to adjust our capacities, especially in our Indonesian asset. The demand stabilized, and we see a strong push through the supply chain at the moment with a strong order book development. The average fiber sales prices improved in the first quarter. In Euro terms, the prices increased by 3% to EUR 2.01 per kilogram, while in USD terms, they increased by 2.7% to $2.35 per kilogram. The increase was supported by a favorable FX development and an improvement in our price premium versus the generic market prices. We just talked about the CCF viscose index that increased by 1.4%. You can see that in the mix, we were still able to outperform the overall market. The development is consistent with our strategy, the focus on disciplined pricing and value-generating volume allocation rather than volume growth at any price. The premiumization strategy is paying off. Let me now turn page to the pulp business. The dissolving wood pulp production volumes decreased by 5% compared with the fourth quarter to 292,000 tons. The third-party sales volumes were down by 18% to 166,000 tons. The lower external sales volumes were driven by an increased internal supply demand as well as the seasonal impact of the Chinese New Year. At the same time, the dissolving wood prices stabilized in the first quarter. The average sales prices remained flat at around EUR 0.69 per kilogram. We all remember the downward rally that the dissolving wood pulp price had to face in 2025, where we hit rock bottom in quarter four. At the moment, we do see a positive ASP development. We cannot see the in-quarter development here, but let me report on that. The ASP moved from approximately $799 per ton in January to more than $820 per ton in March. We currently see further positive signals into quarter two. Let me briefly comment on input costs. Energy market prices increased again in the first quarter of 2026. This is also a clear outcome of the Middle East conflict. Electricity prices in Austria, natural gas prices in Europe both remain significantly above the historical levels. If we look on caustic soda as a reference material for our chemicals, we saw some easing in the first quarter, but the price levels still remain elevated compared with the historical base year 2020. Here, please keep in mind that this development in the chemical cost sector does not contain any impact from the Iran conflict yet. We anticipate the NaOH prices to increase by more than 10, even 20% in the second quarter compared to the price level prior to the conflict. This means that input costs continue to be a material burden for the industry and also for Lenzing. The situation might further increase the volatility, particularly for energy and chemical markets, which we are very diligently currently look at. We continue to be disciplined in cost to increase operational efficiency and also to be very stringent in our pricing measures with regards to our top line. A main pillar remains our performance program, and a main pillar of our strategy is also excellence. In line with this, we've already shown a strong performance over the years 2023 to 2025, with the EUR 200 million of cost savings delivered. Building on this, we have defined additional measures out of the EUR 45 million in personal expenses that we announced already, September last year in 2025. The first EUR 25 million are delivered, so we can tick box that. Will be followed by additional cost saving measures, which are currently under preparation at the moment. Our clear and continuous commitment to deliver on our cost structure. Now let's shift gears and turn into the financial section. First, the overview, and you can see always the comparison to first quarter in the prior year and the last quarter in 2025 so that we can better reflect on the U-turn that we are currently in. Quarter one 2026 was characterized by lower revenues year-on-year, but a strong sequential improvement in EBITDA and continued progress on cash flow and the balance sheet. The revenues at EUR 660 million as reported, down 11% year-on-year and 2% compared with the fourth quarter 2025. EBITDA at EUR 116 million, down year-on-year but up 60% compared with quarter four. This corresponds to an EBITDA margin of 19%. Very important, unlevered free cash flow amounted to EUR 66 million, which is an up of 66% year-on-year. Slight decrease 24% compared to a strong quarter four that we also steered towards the year end. The trade working capital we continued to reduce by 29% year-on-year, down to a level of EUR 425 million now by end of the first quarter. On the balance sheet, the net financial debt declined by 9% year-on-year to EUR 1.36 billion, while the liquidity cushion increased to a bit more than EUR 900 million. On the next page, let's move through the developments in revenue and EBITDA in more detail. Please note that this page now is compared against quarter one of the prior year, whereby in some passages of this presentation we correspond or we compare to quarter four in order to give a better understanding on the current development and the situation. Year on year, in quarter one, the group revenue declined down to EUR 616 million. We talked already about that. Main driver, lower fiber production and sales volumes compared to the very strong first quarter and exceptionally strong quarter one in 2025, and also dissolving wood pulp price developments. The EBITDA decreased year on year to EUR 116 million. The EBITDA and the EBITDA margin were supported by continued cost excellence and pricing measures that we have taken. Some one-off effects, especially, and to walk through them, the sale of surplus CO2 certificates in the amount of EUR 14 million. This is not compared to prior year. This is the absolute amount. The positive valuation effect from biological assets in Brazil in the amount of EUR 13 million and the first time consolidation of TreeToTextile. You remember that in February, we took over the majority stake in TreeToTextile and had to account for the first consolidation in the first quarter. There is a badwill that we could account and that was EBITDA accretive to us, but of EUR 12 million, while at the same time, we now fully consolidate also the cost of this joint venture, which amount approximately EUR 1 million a month. EUR 2 million is the cost impact. EUR 12 million is the positive EBITDA impact. The key message here is that we were able to defend solid profitability level despite the challenging volatility in the market. Let us now walk through the EBITDA bridge and now again, against the previous quarter, so quarter four, 2025, to better discuss the evolution of the market and of the company. Again, EBITDA increased by 60% from EUR 73 million on a weak quarterly EBITDA in quarter four, 2025, up to EUR 116 million now in quarter one. We can see that the improvement is mainly stemming from positive margin effects in the fiber division with a EUR 6 million quarter-on-quarter effect, as well as additional cost savings of EUR 16 million. Higher sale of CO2 certificates with EUR 5 million quarter-over-quarter effect. Some positive effects impact EUR 6 million quarter-over-quarter. The already discussed positive one-timers with regard to TreeToTextile, EUR 10 million in that regard. These positive drivers were more than offset the ongoing burn from inflation and weaker market related effects in the pulp division. The pulp division quarter-over-quarter is down by EUR 6 million, driven by the lower sales. This bridge, again, clearly shows that the internal measures are keeping traction and are helping to stabilize the earnings situation even without sustainable market recovery until now. Looking at the quarterly trends, I think this reconfirms the picture that I just have drawn. Revenues have slightly decreased over the last years. This reflects the strategic shift from the volume-driven growth towards value generation, including the targeted cut of unprofitable volumes that started in the course of 2025. With the idling of some of our assets in that year. At the same time, now quarter-on-quarter, EBITDA increased to EUR 44 million compared to the fourth quarter of 2025. Yeah, the continuous focus is not on maximizing volume, but on improving the quality of our earnings, on improving the margin resilience and improving further the cash generation. I think the first quarter therefore represents an optimistic step back into the right direction. Turning to cash flow and working capital. Trade working capital decreased significantly year on year, mainly driven by lower inventory levels, just reported on the EUR 425 million as per end of quarter one. CapEx spend remains very disciplined at EUR 28 million. This is a, let's say, a slow start into the year. EUR 66 million for the first quarter, this clearly remains one of the core management priorities for 2026. Taking a step closer to the components of working capital, this is just a detail for your reference. Main driver is on the inventories, where we continue to adjust all levels of wood, of chemicals, of finished good fiber, and also of pulp in our sites. Cash, in terms of cash generation, this clearly pays back. Trades receivable also with a good development year-on-year, a slight increase over the last quarter. Same for the trade payables. I think here we see an okay development. Let's move to the balance sheet. The net financial debt, as we have seen on the overview page, improved to EUR 1.36 billion. Good reduction year-on-year. The improvement mainly driven by free cash flow generation. At the same time, liquidity cushion remains at a very solid level, above EUR 900 million. This is also a level that we discussed in our earnings call two months down the road. This gives a solid financial buffer in a period of high market uncertainty and further supports the ability to continue in executing our strategy. The financing profile or maturity profile and maturity structure remains well-balanced. There is no changes with that regard, and thus I propose that we jump over this page and leave it as it is. We move to the outlook. Let's again start with the broader implication of the escalation in the Middle East. The war, as we just discussed, has multiple effects on the textile, nonwoven, and pulp industries. Disruptions in oil and gas supply through the Strait of Hormuz lead to higher energy costs. This is one important factor. Further secondary effects, availability of chemicals and also on market prices of chemicals, which increase the production cost for pulp and cellulosic fibers from Q2 onwards. Wood prices also remain elevated, so there is a disruption in the construction area, especially in the Middle East, which leads to a slowdown of the sawmills in our region here in Middle Europe. Thus, currently, wood prices are heavily elevated and our pulp costs are impacted with that regard. Container shipping also remains being impacted from the current situation. As an upside, the higher crude oil prices increase the cost of synthetic fibers. When we talk about substitution and our, let's say, competition in terms of fiber types. We have seen a rally in terms of the ASP, average selling price, for synthetic fibers with more than 20% over the last weeks. Cotton on the same token is affected by higher cost for fertilizers also driven by the Iran war. Just as a remark, and you might look it up, as of yesterday, cotton price was beyond $2 per kilogram after an increase by 4% to $1.70 from December to March. There is also certainly some tailwind with regard to substitutional products that support us in our pricing efforts and in passing through our costs to our customers. We stay exposed to the indirect effects of costs on logistics, on chemicals, on wood, on energy, and on potential weaker consumer sentiment, which we try to mitigate as discussed in one of our earlier slides. If we summarize the outlook, Q1 2026 was constructive despite a challenging geopolitical and macroeconomic environment, including the uncertainty given still with the tariffs, the escalation in the Middle East. We saw improved price trends in both pulp and fiber compared with the 4th quarter of 2025, with further positive indications for 2026. Energy and raw material costs are expected to remain elevated, depending on duration, and if the conflict intensifies, this will continue to weigh on the earnings situation starting Q2 onwards. We are closely monitoring the developments and will continue to mitigate negative effects through pricing, cost discipline, alternative supply routes, and value accretive or value-oriented volume allocation. Due to low visibility and the high level of uncertainty, we decided to further not provide any guidance for 2026. However, the key priorities remain unchanged: pricing, cost excellence, working capital management, and thus the focus on cash. With that, I will end my presentation and will hand back over to the operator for the Q&A. Thank you. Thank you very much, Mr. Breuer. Ladies and gentlemen, we'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to stay in the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone with a question may press star and one at this time. The first question comes from Christian Faitz from Kepler Cheuvreux. Please go ahead. Yes, good afternoon, everyone, and congrats on the results in these very challenging times. Couple of questions on demand, please. First of all, do you have a feel how much customer restocking is happening because some of your clients might fear significant supply disruptions going forward or have feared already starting in March, actually? In that context, indeed, how has demand improved in March versus January and February levels? The second pocket of questions would be, do you fear any supply issues for your own plants, particularly in Asia? You mentioning the pulp prices, higher pulp prices in Europe, when do you see wood prices to go down? Thanks very much. Hello, Christian. Thanks for the questions. First question was on the restocking effect with regard to the demand. I agree that when the Iran conflict broke out, the first impulse of our customers that we could see was kind of a bit panic buying and trying to fill up the supply chain. We are very careful that we outbalance that and understand the demand metrics going forward in order not to run into a situation where demand is dropping and we see a bullwhip effect into our sites and thus also in the working capital. This was clearly also on our agenda as the management board. The first reaction and the impulse reaction of the customers that we have seen and perceived in March compared to January, February, which was a bit, "Okay, let's now place orders. We need to fill up the supply chain," is now getting a more moving into a more consistent pattern. I just talked about also the rally on synthetic fibers and cotton price or cotton fiber prices. This gives us currently some tailwind that we expect also, we are carefully optimistic that in the second half year of 2026, we continue on a healthy demand and that does not fully, let's say, wipe us back. Here I would say we are carefully optimistic that we can keep that level. The visibility still is not very strong. You understand the nature of our business, especially in the textile business. It's a very short-term business that can move very quickly. On the second question with regard to the supply issues for our own plants, We had already some issues on our Indonesian assets. We are, with regards to caustic soda, we are supplied with two local suppliers. One of them declared force majeure due to the Iran conflict. We managed to open up alternative supply routes with that regard and are fully supplied also in SPV. Just to conclude on that. The supply disruption was lasting not even a week. Yeah. We managed it very well. For the other sites, especially in Europe, but also in Thailand or China, at the moment, we don't foresee any supply disruptions. We don't have concrete indications that there is something in line of sight. The big question is again a matter of visibility into the second half year. The question was on wood. The wood price rally started in February already. When you talk about wood procurement and wood supply, you always have to follow defined radius. It doesn't make sense to cover long distances with regards to wood supply because it simply elevates costs. We don't have a concrete answer on when we expect the cost to go down because the saw needs to ramp up again. Construction needs to ramp up again. The utilization of the sawmill is here key because when looking at, let's say, typology of a forest, typically the very, let's say the nice linear wood goes into the sawmill and the lower priced wood goes into the pulp industry. It's highly dependent, but we hope that we find some improvement here in the second half year. Thanks very much. Very helpful. The next question comes from Sebastian Bray from Berenberg. Please go ahead. Hello, good morning or good afternoon, I should say, thank you for taking my question. I'd have have, please. The first one is just on what the underlying EBITDA was in the first quarter of the year. The nominal is EUR 116. Am I right in saying that taking off the CO2 credit sales, which are EUR 13.7 million, the revaluation adjustment of EUR 13.3, the goodwill reversal or value upwards of goodwill is about EUR 12 million. Is that EUR 78 million, let's call it EUR 80 million or so underlying run rate? That's my first question. My second one is on CapEx. This has been another quarter where Lenzing has been able to keep this at quite a low level. Is EUR 30 million a quarter just a reasonable assumption for the remainder of the year? Thank you. Hi, Sebastian. Thanks for the questions. I'll start with the second question because it's faster to answer. The EUR 30 million is clearly not the level that we can contain. This would be even below 2025, which was for us a rock bottom CapEx. We still consider a level above 2025 as reasonable for this year. You remember in our last call, we indicated a level of EUR 160 million-EUR 180 million for 2026, which still holds true. On your second question with regards to the underlying run rate, in principle, your math is correct. Just keep in mind that also in the prior quarters that we compare against, we also had impacts of I said valuation and CO2 certificates. Also for the coming months, there is an excess share of CO2 certificates that we can sell to the market. In principle, your math is correct. Just to check, are the sales of CO2 certificates largely done after the current year? My understanding is that the EU will then start to adjust the free allocation of production allowances downwards if a certain quota is not hit for the minimum production level. It highly depends on the, let's say, political structure and the regime with regard to the CO2 certificates going forward. In principle, we receive more than we consume, so this gives us an excess share that we can sell. In our current planning assumption, even for 2027, we consider a potential for further sales. That's helpful. Thank you for taking my questions. The next question comes from Patrick Steiner from ODDO BHF. Please go ahead. Good afternoon. Thank you for taking the questions, two remaining from my side. First of all, could you give us more details on the refinancing needs in 2026 and the impact on interest costs? Secondly, do you already have, like, a feeling of how these set of effects on prices and input costs will affect your margins over the next two to three quarters? Thank you. I again start with the second question. If I understood it correctly, the increased input cost in quarter two and going forward, how those might affect the margins. As I said, Our key goal is to pass through any cost increases with a very stringent price approach. This is key and if we are consistent with that approach, and if we are successful with that approach, we hope that we can mitigate any increases in the fiber section. In the pulp section, I mean, we also talk about a pulp division. We also talk about cost increases where we try to pass forward or chemical cost and wood price cost for Paskov. It might have an impact if we are not entirely successful with our approach, but the goal is again to fully compensate for that. That's the clear management priority. With regards to refinancing need for end of the year, you're right, there are some maturities, especially on the German Schuldscheindarlehen in quarter four that in our planning, we foresee to cover. First of all, we come from a very good and solid cash position and liquidity cushion. We foresee smaller refinancing instruments with regards to the copier financing in our planning for that year. Discussions are already starting. Okay. Thank you very much. No negative effect on interest costs going forward from this refinancing? This is not a high interest financing, so no, no negative effect. Okay. Thank you very much. Very helpful. Thanks. The next question comes from Gregor Koppensteiner from RBI. Please go ahead. Yeah. Also, good afternoon from my side. Just a quick question here. How do you cope with this higher energy costs? Do you have any hedges in place? If yes, what is secured in terms of exposure, and how long is your hedge time horizon? Are there also some hedges for chemicals in place? Thanks. Hi. Thank you. We do have a hedging policy for energy costs. First of all, please keep in mind that especially in our Austrian site in Lenzing, we are 90% backward integrated with our own energy production. There is a, let's say, minor impact with that regard. We follow a hedging policy of hedging approximately 60% of the open positions, and this holds true for the current year as well as for the following year. In principle, this approach is aligned within the management board and is fully implemented at the moment. The second question was on hedging for chemicals. No. We are in spot markets with that regard. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. There are no more questions at this time. I would now like to turn the conference back over to Mathias Breuer for any closing remarks. Yeah. Let's keep it short. Thanks for attending. Latest in August, we follow up with second half year. I'm looking forward to that and wish you a good time until then. See you soon. Bye-bye. Ladies and gentlemen, the conference is now over, and you may now disconnect your lines. Goodbye.