The mid-term business prospects for SGL Carbon are impacted by the corona pandemic and structural changes in some markets. While the development in the automotive and aerospace sectors is lower than expected in the last 5 year plan, the wind energy business is growing much stronger than previously planned. These changes in the mix and the resulting deviations in earnings prompted the company to conduct an event-driven impairment test in the reporting segment CFM. On the basis of the current status of the preliminary 5 year plan - as announced on October 30, 2020 - this resulted in the need for an impairment charge of 80-100 million, which will be recorded in the fourth quarter of 2020.
In order to sustainably strengthen the profitability and competitiveness of SGL Carbon, the Board of Management has resolved an extensive restructuring program with planned earnings improvement measures totaling more than 100 million until 2023 (compared to the base year 2019). It includes a planned socially compatible reduction in personnel of more than 500 employees as well as substantial reduction in indirect spend. From today's perspective, costs of approx. 40 million are anticipated for the implementation of the program, of which a little more than half is expected to be recognized in profit and loss in the fourth quarter of 2020.
For the full year 2020, SGL Carbon continues to expect Group sales revenues to decline by 15% to 20% and operating recurring Group EBIT to record a slightly positive result. However, outlook for Group net result is reduced to minus 130 to 150 million due to the above-mentioned measures.
Like many other companies, the corona pandemic is also having a significant impact on us. In addition, we also see structural changes in some of our markets, such as in the automotive and aerospace sector. Thanks to decisive countermeasures, we are managing the crisis relatively well operationally. In addition, with our restructuring program, we have laid the foundation for the sustainable transformation of the company towards a leaner, profitable and successful SGL Carbon", explains Dr. Torsten Derr, CEO of SGL Carbon.
Group business development influenced by the Corona pandemic, structural changes in some markets and a positive one-off effectSGL Carbons sales revenues in the third quarter at 227 million were around 10% higher than in the previous quarter. At around 15 million, operating EBIT before non-recurring items was significantly better than in the previous quarter, which was weak due to the pandemic.
In the nine-month period, however, sales fell significantly by almost 18% (no currency effect) to 683.5 million (9M/2019: 832.4 million), primarily due to the weaker business development caused by the pandemic as well as expected declines in Battery & other Energy (GMS) and capacity adjustments in Textile Fibers (CFM). Accordingly, recurring EBIT in the reporting period fell by 38% to 33.9 million (9M/2019: 54.2 million). This includes a positive one-off effect of 8.5 million from the compensation agreement with the buyer of a former business unit (Showa Denko).
The net financial result improved significantly in the nine-month period to minus 23.4 million (previous year: minus 32.6 million). The result from continuing operations before income taxes changed significantly from minus 59.4 million in the prior year period to plus 1.4 million in the reporting period, as the previous year contained an impairment loss of around 75 million. After taxes, the consolidated net result for the reporting period was minus 3.9 million compared to minus 74.5 million in the same period of the previous year.
Free cash flow improved significantly to approx. 44 million in 9M/2020 (9M/2019: minus 9.6 million). As a result, liquidity developed very positively to approx. 167 million as of September 30, 2020, due to strict spend control and non-capital market related funding measures (year-end 2019: 137 million).
Business development by segmentComposites - Fibers & Materials (CFM): Second quarter marked the trough in sales and earnings development - significant recovery in the third quarterWhile the first quarter 2020 in the reporting segment CFM was still relatively unaffected by the Corona crisis, the effects were clearly visible in the second quarter 2020. Fortunately, the negative effects eased again in the third quarter, so that the development - particularly in earnings - was substantially better than expected at the half year mark. Compared to the previous quarter, CFM sales revenue increased by 20% to 97.7 million. Recurring EBIT even increased significantly from minus 1.9 million to 8.8 million. Compared to the third quarter of 2019, however, sales revenue decreased by approx. 11% while recurring EBIT improved significantly from minus 4.6 million in Q3/2019 to 8.8 million in Q3/2020.
In a nine-month comparison, sales revenue declined by approximately 14% (no meaningful currency effect) to 283.4 million. The largest percentage decline was recorded in the loss-making market segment Textile Fibers. This is due to the fact that, as part of the earnings improvement measures, SGL Carbon had at the end of 2019 started to convert one acrylic fiber line to precursor and to idle two acrylic fiber lines. Corona-related declines were recorded in the market segments Automotive and Industrial Applications. In contrast, business with the wind energy sector increased by more than 60% and thus again developed more favorably than initially anticipated. The Aerospace business remained relatively stable on a low level.
Recurring EBIT improved from minus 1.8 million in the prior year period to 10.6 million in the first nine months 2020. The substantially improved results in the wind energy business and the positive effects from the earnings improvement measures implemented at th
More from SGL
08/05/2025
As expected, continued weak demand from key sales markets and declining economic...
05/05/2025
As part of the restructuring of its loss-making Carbon Fibers business unit, SGL Carbon has decided to close its production site in Lavradio (Portugal). Lavradi...
29/04/2025
Participants in the 2025 Research Camp at SGL Carbon and the Technische Hochschu...
25/03/2025
In the period from mid-January to mid-February, five young professionals success...
20/03/2025
Increasingly weaker demand from key sales markets over the course of 2024 is slo...
24/02/2025
Ten school students from Meitingen secondary school had the opportunity to gain ...
21/02/2025
On February 19, 2025, Julia Herting, the Site Manager of SGL Carbon in Bonn, signed a declaration of intent, marking an important step in contributing to climat...
18/02/2025
(05:02 PM) Wiesbaden, February 18, 2025. The Board of Management of SGL Carbon S...
18/02/2025
The Board of Management of SGL Carbon SE today decided, with the approval of the...
04/02/2025
As a technology-based company and one of the worlds leading companies in the development and production of carbon-based solutions, SGL Carbon opts for innovativ...
30/01/2025
The supply capability of SGL Carbon, a leading international supplier of carbon-...
13/12/2024
SGL CARBON SE
Wiesbaden
- ISIN DE00723501 -
Disclosure of material transactio...
19/11/2024
(11:18 AM) Wiesbaden, November 19, 2024. The Supervisory Board of SGL Carbon SE decided in its meeting today to appoint Andreas Klein as Chief Executive Officer...
19/11/2024
The Supervisory Board of SGL Carbon SE decided in its meeting today to appoint A...
07/11/2024
Weak demand in some of our customer markets is increasingly hindering SGL Carbons sales growth. After nine months in 2024, SGL Carbon generated sales of 781.9 ...
08/10/2024
In March 2024, SGL Carbon informed the public that CEO, Dr. Torsten Derr, will n...
12/09/2024
SGL Carbon is committed to training its own junior staff. At the Meitingen, Bonn and Willich sites, a total of 34 apprentices have started their careers in rece...
08/08/2024
Q2 2024 confirms SGL Carbons solid business development in an increasingly volatile market environment. After 272.6 million in Q1 and 265.4 million in Q2, SGL...
26/07/2024
Nine talented young professionals completed their vocational training at SGL Carbon in Meitingen from the beginning of June to mid-July, achieving an overall gr...
26/06/2024
In the voting rights notification published today, Dr. Susanne Klatten informed ...
11/06/2024
On June 8, we celebrated the 90th anniversary of Dr. Schnabel GmbH at our Limbur...
27/05/2024
It will soon be that time again: ACHEMA, the worlds most important trade show fo...
15/05/2024
On May 15th, we celebrate the 80th anniversary of the SGL Carbon site in Morganton, North Carolina. The entire SGL Morganton family came together to celebrate t...
08/05/2024
SGL Carbon had a solid start to the first quarter of 2024. Despite the slight decline in sales of 3.9% to 272.6 million (Q1 2023: 283.7 million), adjusted EBI...
26/04/2024
Once again this year, SGL Carbon opened its doors to interested children and young people. On the occasion of the German Girls and Boys Day, which took place on...
22/03/2024
In fiscal year 2023, SGL Carbon achieved the sales and earnings targets set at the beginning of the year despite the drop in demand from the important wind mark...
21/03/2024
(10:15 AM) Wiesbaden, March 21, 2024. The CEO of SGL Carbon SE, Dr. Torsten Derr...
21/03/2024
The CEO of SGL Carbon SE, Dr. Torsten Derr, informed the Chairman of the Supervisory Board today that he will not extend his contract, which expires on May 31, ...
18/03/2024
Seven young professionals completed their vocational training at SGL Carbon in M...
06/03/2024
The sale of the so-called angel curls once again proved to be a big seller at th...
28/02/2024
As of March 1, 2024, Dr. Denis Hinz will become new Head of SGL Carbons Carbon F...
23/02/2024
(06:11 PM) Wiesbaden, February 23, 2024. The Board of Management of SGL Carbon S...
23/02/2024
SGL Carbon SE is currently evaluating various strategic options for the Business Unit Carbon Fibers (CF). These include a possible partial or complete divestmen...
06/02/2024
In cooperation with the Bavarian leading-edge cluster MAI Carbon of Composites U...
31/01/2024
The supply capability of SGL Carbon, a leading international supplier of carbon-...
18/01/2024
The Munich-based company E-Works Mobility, which specializes in the development ...
04/01/2024
SGL Carbon relies on climate-friendly manufacturing processes in the production of its own carbon fibers. By using renewable energy, the carbon footprint of SGL...
22/11/2023
This years prestigious G nter Schwank Prize goes to our former apprentice Janine Kretzschmar. She completed her training at the Meitingen site as a process mech...
20/11/2023
SGL Carbon took second place in the Products and Applications category at the AV...
02/11/2023
Due to the better-than-expected sales and earnings development of the business u...
25/10/2023
The expansion of production capacities is a significant milestone for the Brembo...
12/09/2023
SGL Carbon and Brembo agreed to expand production capacities for the joint ventu...
07/09/2023
SGL Carbon continues to focus on training its own junior staff and welcomes 32 n...
05/09/2023
As the health of employees is a top priority at SGL Carbon, the second global Safety Day was held at all sites at the end of August. To raise awareness of safet...
10/08/2023
With an overall grade point average of 2.0, ten apprentices completed their vocational training at SGL Carbon in Meitingen this summer. The young skilled worker...
03/08/2023
Despite the increasingly difficult economic environment, SGL Carbon was able to ...
27/07/2023
On July 21, 2023, a 500 m logistics hall was inaugurated at SGL Carbons Austrian site in Ort im Innkreis, including an adjoining hall of approximately 150 m f...
24/07/2023
(04:40 PM) Wiesbaden, July 24, 2023. According to preliminary figures for H1 202...
The mid-term business prospects for SGL Carbon are impacted by the corona pandemic and structural changes in some markets. While the development in the automotive and aerospace sectors is lower than expected in the last 5 year plan, the wind energy business is growing much stronger than previously planned. These changes in the mix and the resulting deviations in earnings prompted the company to conduct an event-driven impairment test in the reporting segment CFM. On the basis of the current status of the preliminary 5 year plan - as announced on October 30, 2020 - this resulted in the need for an impairment charge of 80-100 million, which will be recorded in the fourth quarter of 2020.
