#Composites

2021-11-18

SGL Carbon – Q3 2021 also confirms the encouraging upward trend

Following consolidated sales of €241.5 million in Q1 2021 and €255.2 million in Q2 2021, Q3 2021 confirms SGL Carbon's encouraging sales performance with €246.8 million. Due to increasing demand from almost all market segments, Group sales increased to a total of €743.5 million in the first nine months of the fiscal year (9M 2020: €683.5 million). This corresponds to an increase of 8.8% compared to the same period of the previous year.

• Sales increase 8.8% to €743.5 million compared to the same period of the previous year

• EBITDApre improves by 59.1% to €108.5 million

• Despite burdens from higher raw material and energy prices, stable revenue and earnings expected for Q4 2021

Almost all business units contributed to the positive sales development. As largest business unit with a 44.7% share of Group sales, Graphite Solutions (GS) contributed €332.7 million to Group sales in the first nine months of 2021 (9M 2020: €308.0 million). The sales increase of 8.0% is based in particular on the positive development of the important market segments Semiconductor & LED as well as Automotive & Transportation. The business units Carbon Fibers and Composite Solutions contributed €244.7 million (9M 2020: €223.4 million) and €92.1 million (9M 2020: €60.7 million), respectively, to Group sales and benefited primarily from increased demand from the automotive industry. Compared to the previous year, sales increased by 9.5% in Carbon Fibers and by 51.7% in Composite Solutions. Only the Process Technology business unit, with sales down 4.9% to €62.1 million, was not yet able to participate in the general economic upward trend.

Results situation:

SGL Carbon's EBITDApre improved by 59.1% year-on-year to €108.5 million in the first nine months (9M 2020: €68.2 million). Increased sales in almost all business units, the associated higher capacity utilization and new high-margin orders from the automotive industry in the Composite Solutions business unit contributed to the improvement in earnings. The cost savings achieved as a result of the transformation initiated at the end of 2020 also had a positive earnings impact. However, negative effects from significantly higher raw material and energy prices weighed on EBITDApre, especially in the isolated third quarter of 2021.

EBITDApre does not include non-recurring effects and special items totaling €6.2 million. These consist of non-recurring effects of €21.7 million, mainly from the proceeds generated by the sale of two properties not required for operations, netted against negative special items totaling €15.5 million.

EBIT also increased significantly to €71.8 million in the first nine months of 2021 compared to €24.8 million in the same period of the previous year. In addition to the positive effects mentioned above, the EBIT increase also results from the €9.2 million decrease in depreciation and amortization to €42.9 million (9M 2020: €52.1 million) due to the impairment carried out at the end of 2020.

Based on the positive business development, the successes of the transformation as well as one-off effects of € 21.7 million, thereof € 19.5 million from the sale of two properties, the consolidated net income after nine months in 2021 amounts to €42.6 million (9M 2020: minus €3.9 million).

Net financial debt and equity:

SGL Carbon's net financial debt decreased by 33.1% to €191.6 million as of September 30, 2021 compared to year-end 2020. This development was mainly due to the increase in cash and cash equivalents by €95.0 million to €236.8 million (December 31, 2020: €141.8 million). This is primarily based on a positive free cash flow, which increased significantly by €60.1 million to €122.5 million (9M 2020: €62.4 million) as a result of the positive business performance and the mentioned one-off effects (€30.6 million).

Equity attributable to equity holders of the parent company amounted to €308.4 million as at September 30, 2021, up 39.7% compared with the end of the last financial year (December 31, 2020: €220.7 million). Accordingly, the equity ratio increased to 22.7% (December 31, 2020: 17.5%).

Transformation program:

The restructuring and transformation process initiated at SGL Carbon at the end of 2020 has made a significant contribution to the Company's positive sales and earnings performance. In the third quarter of the current fiscal year, increased prices for raw materials, energy, and transport and logistics reduced the savings achieved, as these could only be passed on to customers in part and/or with time lags.

Outlook:

For the remaining months of fiscal year 2021, we see only limited market risks, also due to the order intake already received. We also consider the negative impact on the communicated sales and earnings forecast for 2021 due to increased raw material, energy and transport costs to be limited from today’s perspective. We do not anticipate any renewed deterioration in the general conditions due to the Corona pandemic.

According to the explanations given above, we confirm the revenue and earnings guidance for fiscal 2021 provided on July 13, 2021.

Further details on business development and outlook can be found in the quarterly statement on the first nine months of 2021.

SGL Carbon decides to restructure its Carbon Fibers business unit

The Board of Management of SGL Carbon SE today decided, with the approval of the Supervisory Board, to restructure the loss-making Carbon Fibers business unit. SGL Carbon will significantly reduce the business activities of Carbon Fibers and focus on a profitable core. Individual solutions are being developed for all Carbon Fibers sites, including the closure of unprofitable sites.

SGL Carbon evaluates strategic options for the carbon fibers and appoints Dr. Denis Hinz as new head of the business unit

SGL Carbon SE is currently evaluating various strategic options for the Business Unit Carbon Fibers (CF). These include a possible partial or complete divestment of the Business Unit. In a first step, potential interested parties shall be approached promptly with the general data of the Business Unit to determine their interest in an acquisition. If there is sufficient interest, a structured transaction process will be carried out in a second step.

Two new logistics halls at the SGL sites in Innkreis, Austria

On July 21, 2023, a 500 m² logistics hall was inaugurated at SGL Carbon's Austrian site in Ort im Innkreis, including an adjoining hall of approximately 150 m² for the storage of tools. Prior to this, a similarly sized logistics hall had already been completed at the Ried im Innkreis site in the spring of last year.

SGL Carbon with solid business performance

Despite the increasingly difficult economic environment, SGL Carbon was able to increase sales in H1 2023 from €549.8 million in the previous year to €560.5 million. Adjusted EBITDA (EBITDApre) remained almost unchanged at €88.0 million (H1 2022: €87.9 million). The expected good business performance of the Graphite Solutions business unit and the better-than-expected sales and earnings development of Process Technology and Composite Solutions compensated the drop in demand in Carbon Fibers.

MEL Composites and Carrocerías Ayats collaborate on lightweight composite window frames

MEL Composites is proud to announce its ongoing collaboration with Spanish bus and coach manufacturer Carrocerías Ayats, showcasing the benefits of advanced composite technologies and scalable manufacturing processes originally developed for the sporting goods sector. The joint development of lightweight composite window frame covers demonstrates how MEL’s process innovation can be successfully transferred to the transportation industry to meet new regulatory and performance goals.

The Address of innovation and investment in textile technologies: ITM 2026

Sales for ITM 2026, one of the world’s most comprehensive and prestigious exhibitions in textile technologies, are continuing at full steam. The record number of exhibitors and visitors achieved at ITM 2024 once again proved the industry’s confidence and the commercial success of the exhibition; meanwhile, the strong interest shown in ITM 2026, to be held on 9-13 June 2026, has far exceeded expectations.

STOLL in focus:

At the beginning of this year, KARL MAYER announced that it would be shifting its focus back to its core areas of warp knitting, warp preparation and technical textiles. As part of this strategic realignment, the flat knitting machine business under the STOLL brand will be discontinued. The Reutlingen plant will close down on 31 October 2025. Production in China will end in December 2025. This was an extremely difficult decision for KARL MAYER.

Heimtextil 2026 strengthens the global home textile industry with trends, designs and AI technologies

With an optimised hall layout, progressive design collaborations, inspiring trends and AI-driven innovations, Heimtextil 2026 reacts to the current market situation – and offers the industry a reliable constant in challenging times. Under the motto ‘Lead the Change’, the leading trade fair for home and contract textiles and textile design shows how challenges can be turned into opportunities. From 13 to 16 January, more than 3,100 exhibitors from 65 countries will provide a comprehensive market overview with new collections and textile solutions. As a knowledge hub, Heimtextil delivers new strategies and concrete solutions for future business success.