
Recurring EBIT increases to 12.8 million euros
Recurring EBIT of Composites Fibers & Materials (CFM) improved
Recurring EBIT of Graphite Materials & Systems (GMS) decreased mainly due to positive one-time effects in the prior year and lower profit contribution from the process technology business
Close to break-even cash flow in Q3/2016 results in stable net debt as of September 30, 2016, compared to June 30, 2016
Dr. J rgen K hler, CEO of SGL Group: With the expected proceeds of the sales of the Performance Products businesses, we expect to see a significant reduction of our net debt position. This will contribute to create a solid foundation for our growth businesses.
Wiesbaden, November 10, 2016. In the first nine months of 2016, SGL Group increased recurring EBIT from continuing operations to 12.8 (previous year: 8.6) million euros. The reporting segment Composites Fibers & Materials (CFM) contributed with recurring EBIT rising to 16.8 (previous year: 12.9) million euros. Recurring EBIT of Graphite Materials & Systems (GMS) decreased to 18.8 (previous year: 27.2) million euros mainly due to positive one-time effects in the prior year and lower profit contribution from the process technology business. Recurring EBIT in the reporting segment Corporate and T&I improved by 28 percent to minus 22.8 (previous year: minus 31.5) million euros as a result of further cost savings.
Over the last months, we made significant progress in our strategic realignment and transformation, says Dr. J rgen K hler, CEO of SGL Group. With the proceeds of the sale of the graphite electrode business to the Japanese company Showa Denko and the expected proceeds of the remaining Performance Products business, we expect to see a significant reduction of our net debt position and thereby improve the balance sheet ratios. This will contribute to create a solid foundation for our growth businesses CFM and GMS.
SGL Group sales from continuing operations declined by 6 percent to 562.1 (previous year: 598.8) million euros in the first nine months of 2016. Reported Group EBIT increased from 6.6 to 12.2 million euros due to improved earnings in the business unit CFM and lower expenses in the reporting segment T&I and Corporate. Return on Capital Employed (ROCE) based on EBITDA before non-recurring charges improved from 5.6 to 7.8 percent. The Group's net financing result saw a slight improvement from minus 39.7 million to minus 38.7 million euros. The result from continuing operations before taxes improved to minus 26.5 (previous year: minus 33.1) million euros; after taxes to minus 28.3 (previous year: minus 36.5) million euros.
Composites Fibers & Materials' EBIT improved
Sales in the reporting segment CFM decreased by 7 percent in the first nine months 2016 to 234.5 (previous year: 252.2) million euros, mainly due to the acrylic fiber business, which despite higher volumes posted substantial lower sales based on lower raw material (acrylonitrile) prices, resulting from the lower oil price. Recurring EBIT in the first nine months of the year improved to 16.8 (previous year: 12.9) million euros. The highest earnings increase was posted by the joint ventures with BMW Group, i.e. SGL Automotive Carbon Fibers, primarily because they are no longer incurring start up costs. As a result, the EBIT margin increased to 7.2 (previous year: 5.1) percent. EBIT after non-recurring charges amounted to 16.8 (previous year: 12.6) million euros.
Graphite Materials & Systems' solutions for solar, LED and semiconductors industries developed well overall result impacted by energy related industries in North America and positive one-time effects in the prior year
GMS sales declined by 6 percent to 321.4 (previous year: 340.1) million euros. From a regional perspective, isostatic graphite and fiber materials based business developed well in Europe and volume-wise also in Asia, particularly with customers from the solar, LED, and semiconductor industries. In contrast, the North American business was negatively impacted by the reduced demand from energy related industries due to the low crude oil price, burdening particularly the process technology business and products based on extruded graphite. Demand for the anode materials for the lithium-ion battery industry developed at anticipated levels. Recurring EBIT decreased by 31 percent to 18.8 (previous year: 27.2) million euros mainly due to positive one-time effects in the prior year and lower earnings contributions from the process technology business. The EBIT margin amounted to 5.8 percent (previous year: 8.0 percent). EBIT after non-recurring charges amounted to 18.3 (previous year: 26.3) million euros.
Segment T&I and Corporate improves earnings due to cost savings
Recurring EBIT in the reporting segment T&I and Corporate improved by 27.6 percent to minus 22.8 (previous year: minus 31.5) million euros as a result of further cost savings and the changed management incentive structure. EBIT after non-recurring charges amounted to minus 22.9 (previous year: minus 32.3) million euros.
Discontinued operations impacted in particular by the graphite electrode business
Discontinued operations primarily relate to the business unit Performance Products (PP). Its results continue to be characterized by a significant price decline for graphite electrodes, while the delivery volumes increased slightly. Business with cathodes, furnace linings and carbon electrodes (CFL/CE) developed well within expectations. In addition, the result of the discontinued operations is burdened by impairment losses of 42.9 million euros triggered by the sales agreement with Showa Denko. The impairment loss is due solely to the continuation of the business until closing as well as estimated transaction costs. The result of the discontinued operations of PP also includes a one-time
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