27 Mar 2015
SGL Group strengthens foundation for returning to sustainable profitable growth
Business year 2014:
• Group sales at €1,336 million 6 % below prior year due to price pressure in graphite electrodes
• Recurring EBIT at €2.7 million
• SGL2015 savings reached €88 million in reporting period – savings target further increased to €240 million
• Balance sheet strengthened significantly with successful capital increase in October 2014
• Outlook business year 2015: stable Group sales and significant earnings improvement expected
Wiesbaden, March 27, 2015. The realignment of SGL Group – The Carbon Company – which was further accelerated in 2014 will increasingly bear fruit in 2015. Accordingly, earnings will improve significantly compared to last year based on roughly stable Group sales. The improvement is mainly due to positive effects from the cost savings program SGL2015. In this context, the overall savings target, which was already increased from the original €150 million to more than €200 million in September 2014, has been raised yet again to €240 million. In 2014 alone, cost savings totaled €88 million and savings of €157 million were realized since the start of the program of SGL2015. With the capital increase successfully completed in October 2014, the balance sheet was strengthened and the foundations laid for an accelerated strategic realignment.
Despite a stabilization, or even a slight improvement in some businesses in the second half of the year, 2014 was impacted by the difficult business environment, mainly in the field of graphite electrodes. The sales decline in the Performance Products segment, which was only partially offset by the positive sales development in Graphite Specialties and Carbon Fibers & Materials, resulted in a decline in Group sales by 6% to €1,335.6 million (2013: €1,422.6 million). Recurring Group EBIT amounted to €2.7 million (2013: €22.8 million). The EBIT margin decreased from 1.6% to 0.2%. Non-recurring charges in 2014 decreased significantly to €51.2 million (2013: €122.8 million) and related predominantly to restructuring expenses in conjunction with SGL2015. Due to these significantly lower one-offs, Group EBIT after non-recurring charges improved by more than 50% to minus €48.5 million (2013: minus €100.0 million).
Dr. Jürgen Köhler, CEO of SGL Group: “In 2014, SGL Group made major organizational changes and took important strategic decisions. We have defined the cornerstones of the Group realignment, strengthened our balance sheet with a capital increase and have been so successful with our cost savings program SGL2015 that we can further increase the overall savings target to €240 million. Thus we created a solid foundation for the planned return to sustainable profitable growth. Despite continued subdued general conditions especially in the field of graphite electrodes we see first results in 2015 from our comprehensive realignment measures resulting in significantly improved earnings, for example.”
Outlook 2015: Stable sales and significant earnings improvement – Overall savings target for SGL2015 further increased to €240 million
The SGL Group expects sales – adjusted for currency and possible portfolio effects – to remain roughly stable in 2015 in comparison to the prior year. Group EBITDA and EBIT (both before non-recurring effects) should significantly improve year over year. The SGL2015 cost savings program is further pursued with highest priority. Accordingly, SGL Group further increased the total savings target to €240 million, which was already increased from initially €150 million to more than €200 million in September 2014. In 2015, savings in a mid-sized double-digit million euro amount are expected. In connection with this, restructuring expenses in a high single-digit million euro amount will be incurred and thus at a much lower level than in the year before.
The annual report for the business year 2014 and further information about SGL Group can be found at: www.sglgroup.com as well as in the newsroom of SGL Group at: www.sglnewsroom.com/en/ .
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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 42 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 2014, the Company’s workforce of around 6,300 employees generated sales of €1,336 million. The Company’s head office is located in Wiesbaden.
Further information on SGL Group can be found in SGL Group’s newsroom at www.sglgroup.com/press or 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.