Group sales and earnings in the first quarter of 2018 impacted by high positive one-time effects particularly relating to the full acquisition of former joint ventures with BMW Group and Benteler and the initial adoption of IFRS 15Slightly more than half of Group sales increase of 22 percent to 263 million euros is attributable to structural effects as well as the initial adoption of IFRS 15; organic growth mainly driven by the market segments automotive, semiconductors and LED, chemicals and industrial applications
Recurring EBIT doubled to reach 21 million euros
Solid first quarter and positive one-time effects allow slight increase in guidance for net income 2018
Dr. J rgen K hler, CEO of SGL Group: We remain on a growth track
Wiesbaden, May 8, 2018.SGL Group completed the first quarter of 2018 better than expected. Due to positive one-time effects and a good operational development sales revenues and earnings rose substantially. Group sales were at 263 million euros, and therefore up by about 22 percent year-on-year. Slightly more than half of the sales growth related to structural effects and the initial adoption of IFRS 15. Key drivers of the operational sales increase were the improved performance of the market segments automotive, semiconductors and LED, chemicals as well as industrial applications. Recurring Group EBIT doubled to reach about 21 million euros. Due to one-time effects occasioned by fair value adjustments of 26.7 million euros, the consolidated net result significantly increased to 32.2 million euros. As indicated in the ad hoc notification of April 24, 2018, SGL Group now expects a consolidated net result in the lower double-digit million euro range for full year 2018.
Following the good financial year 2017, we are continuing our positive development this year. The new SGL remains on a growth track, said Dr. J rgen K hler, CEO of SGL Group. As a technology-based company, we develop smart solutions based on specialty graphite and composites for future topics in mobility, energy and digitization. Therefore, we benefit from the sustainable growth opportunities in these economically attractive markets.
In the first quarter 2018, SGL Group increased its sales revenues by a substantial 21.8 percent, to 263.4 (previous year: 216.3) million euros. Slightly more than half of the sales increase was related to the effects of the full consolidation of the former joint ventures with BMW (SGL ACF) and Benteler (Benteler-SGL) and the initial adoption of IFRS 15. Recurring Group EBIT doubled to 20.5 (previous year: 9.6) million euros due to improved earnings in both business units, a partially temporary effect from the initial adoption of IFRS 15 amounting to 5.6 million euros, as well as the proceeds of 3.9 million euros from a land sale. Without these two effects, recurring EBIT would have amounted to approximately 11 million euros, i.e. in line with expectations. The return on capital employed (ROCE) based on recurring EBIT improved from 2.8 percent in the previous year to 5.2 percent. Non-recurring items totaled 26.7 (previous year: minus 0.6) million euros. These include especially the adjustment to the fair value of the previously proportionally consolidated joint operation with the BMW Group amounting to 28.1 million euros at the date of acquisition. EBIT after non-recurring items amounted to 47.2 (previous year: 9.0) million euros. Due to the repayment of the corporate bond and the convertible bond, net financing result was halved from 14.1 million euros in the previous year period to 7.0 million euros. Consequently, pre-tax result from continuing operations rose to 40.2 (previous year: minus 5.1) million euros. After taxes and deduction of non-controlling interests, the Group's consolidated net result came to 32.2 (previous year: minus 0.3) million euros.
Composites Fibers & Materials (CFM): Sales revenues and earnings driven by structural effects
Reporting segment CFM increased its sales revenues by 22.9 percent (currency adjusted by 26 percent), to reach 115.0 (previous year: 93.6) million euros. Above all, main drivers were structural effects such as the full consolidation of the former joint ventures Benteler-SGL and SGL ACF. In contrast, the sale of the share in the former joint venture SGL K mpers reduced sales revenues. Operationally, the sales growth was driven mainly by the market segments industrial applications, automotive and aerospace. Sales in the textile fibers and wind segments declined compared to prior year level. Recurring EBIT increased by 17.7 percent to 9.3 (previous year: 7.9) million euros. The highest earnings improvement was recorded in the market segment automotive, primarily resulting from the full consolidation of SGL Composites (previously SGL ACF). While earnings in aerospace and textile fibers segment were at a similar level as in the previous year, the segments wind and industrial applications posted slightly lower EBIT.
Graphite Materials & Systems (GMS): Market segment chemicals recovered; semiconductors, LED and industrial applications with good results
Sales revenues in the reporting segment GMS significantly increased by 15.4 percent (currency adjusted by 19 percent) to reach 140.1 (previous year: 121.4) million euros. The initial adoption of IFRS 15 led to a partially temporary sales increase of approximately 12 million euros. Adjusted by this effect, sales increased by around 9 percent. Operationally, growth was driven by the recovery of the chemical business and the double-digit growth in the segments LED, semiconductors as well as automotive & transport. Business development in the market segment battery & other energy benefited from higher demand, which was offset by price and currency effects. The continued high demand from the market segment solar could not be fully met, as deliveries to customers fro
