SGL Group: Dividend Unchanged despite Write-offs

03-14-2013 SGL Group: Dividend Unchanged despite Write-offs - Sales revenue up 11% year-on-year to 1,709 million

- EBIT (before write-offs) at 154.2 million down slightly on prior year

- Solid balance sheet ratios: equity ratio at approx. 42%, gearing at 0.43 within target of approx. 0.5

- Proposed dividend unchanged at 0.20

- Positive net profit of 7.2 million generated for the fiscal year (despite non-cash write-offs of 54.2 million on Boeing 787 projects)

- Outlook for 2013: Slight increase in revenue with weaker EBITDA, positive free cash flow anticipated

Wiesbaden, March 14, 2013. In fiscal 2012, performance varied in the Business Areas of SGL Group The Carbon Company. The established Business Areas of Performance Products (PP) and Graphite Materials & Systems (GMS) maintained their strong market positions and performed well in fiscal 2012 within the framework of expectations. By contrast, the Business Area Carbon Fibers & Composites (CFC) had to absorb project and development postponements, which resulted in, among other things, non-cash project write-offs in the amount of 54.2 million. Group sales revenue rose by 11% over the prior-year figure to 1,709.1 million (2011: 1,540.2 million), thanks in particular to the robust trends at PP and GMS. In addition, the Portuguese acrylic fiber company Fisipe, which was acquired in fiscal 2012, contributed approximately 81 million to the rise in revenue. EBIT before write-offs decreased slightly by 4% year-on-year to 154.2 million (2011: 160.4 million). The return on ales (ROS) declined accordingly to 9.0% (2011: 10.4%).

The Board of Management and the Supervisory Board will propose to the Annual General Meeting on April 30, 2013 to distribute an unchanged dividend of 0.20 to each dividend entitled share for fiscal 2012.

Robert Koehler, CEO of SGL Group: Our performance was mixed in fiscal year 2012. On the positive side, we maintained our market leadership in the Business Area PP and achieved the second-best results in the Company's history in the Business Area GMS. However, the trend at CFC was disappointing. Postponements in the aviation and wind energy industries overshadowed the progress made in other areas of CFC and led to notable one-time charges. We do not anticipate this trend reversing until after 2013 due to the uncertain economic situation. This does not alter the prospects for carbon, a material that is being discovered by more and more industries. The year 2013 will be a crucial year in this respect with the launch of the BMW i-series and the ramp-up of the Boeing 787.

Profit before tax declined to 9.7 million (2011: 83.7 million) and net income fell to 7.2 million (2011: 73.2 million), primarily due to write-offs in the Business Area CFC. Based on an average number of shares of 70.4 million, basic earnings per share amounted to 0.10 (2011: 1.09).

Balance sheet figures remain solid: Gearing at 0.43 within target of approx. 0.5 Total assets increased by 13% to 2,560.0 million as of December 31, 2012 (December 31, 2011: 2,271.3 million), primarily due to the convertible bond issued in April 2012 and the initial consolidation of Fisipe. By contrast, equity attributable to the shareholders of the parent company rose by only 2.4% to 1,066.1 million (December 31, 2011: 1,041.1 million). The equity ratio decreased accordingly from 45.8% to 41.6%. While SGL Group succeeded in reducing net debt by 80 million in the fourth quarter of 2012 to 459.3 million, it was still above the prior-year level of 343.3 million. The main reasons were the acquisition of Fisipe and continued financing of the At-equity accounted investments as well as an increase in working capital based on higher inventories. Gearing therefore rose from 0.33 to 0.43 but remains within our target of approximately 0.5. Free cash flow performed better than anticipated. Thanks to consistent working capital management and lower capital expenditure, free cash flow before acquisitions was limited at -49.3 million (2011: -33.1 million). Taking the acquisition of Fisipe into account, free cash flow amounted to -80 million and was therefore well below the forecasted -115 million.

Segment Reporting Performance Products (PP): Double-digit increase in sales revenue and earnings Sales revenue in the Business Area PP rose by 11% to 940.7 million in the past fiscal year (2011: 845.7 million). As expected, PP benefited from higher graphite electrodes shipments in the second half of the year versus the first half of 2012 as well as higher prices compared with the prior year. The slight recovery in cathode sales volumes continued, albeit at the anticipated lower sales prices. The final settlement of a long-term supply contract in the low double-digit million range contributed to the rise in sales revenue. EBIT increased by 27% to 181.7 million (2011: 143.3 million). Start-up costs for the plant in Malaysia again weighed on earnings. Nonetheless, the return on sales improved from 16.9% to 19.3% in 2012. Cost savings from the SGL Excellence initiative amounted to approximately 10 million.

Graphite Materials & Systems (GMS): Second-best year ever Sales revenue in the Business Area GMS rose by 4% to 486.2 million in the reporting year (2011: 468.7 million). The growth was based on the positive trend in the Business Units Process Technology (PT) and New Markets (NM), while the Business Unit Graphite Specialties (GS) saw a slight decline. The upward trend at GMS underlines SGL Groups broad materials base that compensates for the cyclical downturn in the solar, semiconductor and LED industries. As expected, EBIT did not reach the record level of the previous year and amounted to 69.3 million (2011: 84.0 million). The return on sales decreased accordingly to 14.3% (2011: 17.9%). The anticipated deterioration in return on sales was pri

LINK:	http://www.sglgroup.com/cms/international/press-lounge/news/2013/03/03...
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