13 Aug 2014
SGL Group progresses with realignment
Business development during the first half year 2014:
• Further portfolio optimization: Aerostructures (Hitco) reclassified as discontinued operations in Q2/2014
• Savings from SGL2015 reach €106 million since beginning of program – initial savings target of €150 million to be exceeded
• Group sales declined by 12% to €655 million due to pricing pressure in graphite electrodes
• Recurring EBIT at €1.1 million
• Expansion of carbon fiber activities at SGL ACF in Moses Lake
• Full year outlook 2014 confirmed
Wiesbaden, Aug 11, 2014. SGL Group – The Carbon Company – has implemented further measures within the framework of the group‐wide cost savings program SGL2015 during the first half 2014. Group‐wide savings from SGL2015 amounted to €37.3 million, of which €11.2 million were attributable to SGL Excellence. Accordingly, total savings from SGL2015 of €106 million have been realized since the beginning of the program; therefore the initial savings target of €150 million will be exceeded. Besides the already initiated or implemented measures for the organizational and asset restructuring, the main focus now also lies on portfolio optimization and the concentration on core competencies. In this context, the Business Unit Aerostructures (Hitco) was reclassified as discontinued operations as of June 30, 2014, as the corresponding disposal process has been started. End of 2013 the rotor blade activities were already sold successfully.
The financial figures for the fiscal year 2014 continue to be impacted by the difficult business environment in important segments. Accordingly, Group sales decreased by 12% to €655.2 million (H1/2013: €747.8 million) in the first half year mainly due to the sales decline in the reporting segment Performance Products (PP). This decline was partially compensated by the favorable sales developments in the reporting segments Graphite Specialties (GS) and Carbon Fibers & Materials (CFM). Recurring Group EBIT amounted to €1.1 million (H1 2013: €31.3 million). Non-recurring charges in the first half year 2014 amounted to €19.7 million and relate mainly to restructuring expenses in conjunction with SGL2015. Consequently, Group EBIT after non-recurring charges amounted to minus €18.6 million (H1/2013: minus €5.9 million).
Dr. Jürgen Köhler, CEO of SGL Group: “To bring us back on a profitable growth track, the realization of all savings potentials is of highest priority at the moment. With SGL2015 we have achieved savings of €106 million already. Therefore we will exceed our initial savings target of €150 million until end of 2015. Also, portfolio optimization is continuing fast. We have initiated the divestment process for the Aerostructures activities. Step by step we will reposition SGL Group to focus on our core competencies.”
Outlook for full year 2014 confirmed
SGL Group confirms its guidance for the full year 2014, published in March 2014. Adjusted for the reclassification of the Business Unit Aerostructures as discontinued operations, Group sales is expected to decrease slightly on a comparable basis. Mainly due to the graphite electrode price development, the comparable recurring Group EBIT is expected to be down significantly compared to 2013.
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About SGL Group – The Carbon Company
SGL Group is one of the world’s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Group’s core competencies are its expertise in high-temperature technology as well as its applications and engineering know-how gained over many years. These competencies enable the Company to make full use of its broad material base. SGL Group’s carbon-based materials combine several unique properties such as very good electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Due to industrialization in the growth regions of Asia and Latin America and increased substitution of traditional with innovative materials, there is a growing demand for SGL Group’s high-performance materials and products. Products from SGL Group are used predominantly in the steel, aluminum, automotive and chemical industries as well as in the semiconductor, solar and LED sectors and in lithium-ion batteries. Carbon-based materials and products are also being used increasingly in the wind power, aerospace and defense industries.
With 43 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group is a company with a global presence. In 2013, the Company’s workforce of around 6,300 employees generated sales of €1,477 million. The Company’s head office is located in Wiesbaden.
Further information on the SGL Group can be found online at: www.sglgroup.com
Important note:
This press release may contain forward-looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward-looking statements involve known and unknown risks and uncertainties, as a consequence of which actual developments and results can deviate significantly from these forward-looking statements. Forward-looking statements are not to be understood as guarantees. Rather, future developments and results depend on a number of factors; they entail various risks and unanticipated circumstances and are based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable changes in political, economic, legal, and business conditions, particularly relating to our main customer industries, such as electric steel production, to the competitive environment, to interest rate and exchange rate fluctuations, to technological developments, and to other risks and unanticipated circumstances. Other risks that in our opinion may arise include price developments, unexpected developments connected with acquisitions and subsidiaries, and unforeseen risks associated with ongoing cost savings programs. SGL Group does not intend or assume any responsibility to revise or otherwise update these forward-looking statements.