Lenzing Reports Increased Sales

Despite what it called “a difficult
fiber business environment,” Austria-based Lenzing AG reported its group sales for 2005, at 942.6
million euros, were 8.2-percent higher than its prior-year sales of 871.1 million euros, while its
earnings before interest and taxes (EBIT), at 81.8 million euros, were lower than its record EBIT
of 104.3 million euros the year before. Shareholders’ share of net income totaled 56.9 million
euros, compared with 67.7 million euros in 2004. Eighty-one percent of the group’s sales came from
its core fiber and pulp business.

The company attributed 60 percent of its fiber business expansion to systematic growth and
40 percent to consolidation following its 2004 acquisition of the Tencel Group from The
Netherlands-based Corsadi BV. Cellulose fiber production for the year increased by 9.5 percent to
approximately 454,000 tons. Although demand was good, falling fiber prices and increased production
costs, including 35 million euros in additional raw material and energy costs, affected the core
fibers business, Lenzing reported.

“[O]ur successful countersteering strategy produced a satisfactory result for Lenzing in
2005,” said Thomas Fahnemann, chairman of Lenzing’s Management Board. He added that the company
improved its textile market position through the development of new application areas, such as
Tencel®Active for sportswear applications, and global marketing strategies, such as the initiation
of cooperative relationships with brands such as Asics, Adidas and Nike.

The company also noted it increased its nonwovens market share and launched new products for
medical and technical applications.

Looking forward, Lenzing reported it continues to optimize costs to address raw material
issues and the market shift from Europe to Asia. It also expects to complete construction of a
viscose fiber plant in China around the end of 2006.

April 4, 2006