SGL Carbon: Business development in 2024 in line with guidance. Weaker momentum in sales markets expected for 2025

Increasingly weaker demand from key sales markets over the course of 2024 is slowing SGL Carbons sales and earnings growth. Group sales in 2024 amounted to 1,026.4 million, down slightly by 5.8% on the prior-year level (2023: 1,089.1 million). The groups adjusted EBITDA decreased by 3.3% to 162.9 million (2023: 168.4 million).

Despite the slight decline in sales, the adjusted EBITDA margin improved from 15.5% in the previous year to 15.9% in 2024. This is mainly due to positive price and product mix effects.

Declining demand from the key semiconductor and automotive markets, coupled with persistently unsatisfactory demand from the wind industry, led to a decrease in volume and sales in three of four business units. Only Process Technology was able to improve its sales and adjusted EBITDA.

Earnings performance in the past fiscal year was strongly affected by non-recurring items of minus 118.5 million (2006: minus 52.9 million). These mainly included the impairment of assets of the Carbon Fibers business unit totaling 91.2 million (previous year: 44.7 million) and expenses from restructuring measures in the Carbon Fibers and Battery Solutions business lines totaling 19.0 million. After deducting one-off effects and non-recurring items as well as depreciation and amortization of 58.7 million (2023: 58.9 million), EBIT amounted to minus 14.3 million in 2024 (2023: 56.6 million).

Taking into account the financial result of minus 32.6 million (2023: minus 34.2 million) and tax expenses of 32.5 million (2023: 19.3 million), SGL Carbon recorded a net loss of 80.3 million (2023: net profit of 41.0 million) despite the solid overall business performance.

Development of the business unitsGraphite Solutions (GS), SGL Carbon's largest business unit, increased its profitability in 2024 despite a slight decline in sales and earnings. While sales still grew by 1.3% in the first half of 2024, the second half of the year was impacted by the weakening demand in the Semi-conductor & LED market segment. Overall, sales for the fiscal year 2024 was 4.7% lower than in the prior year, amounting to 539.0 million (2019: 565.7 million).

Due to the significantly lower demand for electric vehicles compared to the automotive industrys forecasts, demand for specialty graphite components for the production of SiC semiconductors in the second half of 2024 was significantly below expectations. In addition, high customer inventories had a negative impact.

Due to positive effects from changes in the product mix, adjusted EBITDA fell disproportionately less than sales (minus 4.7%) at 2.2%. Accordingly, adjusted EBITDA of 131.0 million in the reporting year was slightly below the previous years figure (2023: 134.0 million). The adjusted EBITDA margin improved year on year to 24.3% (previous year: 23.7%).

The Process Technology (PT) business unit continued its positive business performance in the 2024 financial year, as in the two previous years, with sales increasing by 8.1% to 138.3 million (2023: 127.9 million). The very positive performance of PT was also reflected in adjusted EBITDA. This improved from 22.4 million in the previous year to 33.0 million. The high capacity utilization and the focus on higher-margin projects, combined with the stable earnings from the service business, were reflected in the profitability of the segment and led to an improvement in the adjusted EBITDA margin from 17.5% in the previous year to 23.9%.

In 2024, the Carbon Fibers (CF) business units sales continued to decline, decreasing by 6.7% to 209.8 million (2023: 224.9 million). The decline was due in particularly to the continued low demand from the wind industry and the increasing competitive headwind resulting from global overcapacity for textile and carbon fibers.

Adjusted EBITDA in the Carbon Fibers business unit decreased by 18.2 million year-on-year to minus 11.0 million (2023: 7.2 million). The lack of fixed cost absorption led to high idle capacity costs and combined with declining margins for our fiber products, had a negative impact on adjusted EBITDA. It should be noted that the Carbon Fibers business unit included the result of the equity accounted activities (mainly the joint venture Brembo SGL Carbon Ceramic Brakes, BSCCB) in the amount of 15.8 million (2023: 18.3 million). Excluding the contribution from the equity-accounted BSCCB, the adjusted EBITDA of Carbon Fibers would amount to minus 27.0 million (2023: minus 10.9 million).

In February 2025, as part of the review of all strategic options for the Carbon Fibers, a decision was made to extensively restructure the Carbon Fibers business unit, which also includes the closure of unprofitable business activities. A complete sale of the Carbon Fibers activities was reviewed and is currently not considered feasible.

In the reporting period, sales in the Composite Solutions (CS) business unit amounted to 124.6 million, down 19.0% (2023: 153.9 million). The decline was due in particular to the premature expiration of a significant project-related supply contract with an automotive customer.

As a result of lower volumes and product mix effects, CSs adjusted EBITDA decreased by 4.0 million or 18.0% year on year to 18.2 million (2023: 22.2 million). It should be noted that the adjusted EBITDA includes a compensation payment of 3.0 million for a prematurely terminated customer contract. The adjusted EBITDA margin remained almost constant at 14.6% compared to the previous year (2023: 14.4%).

Net financial debt, equity and free cash flowIn 2024, net debt could be reduced slightly by 6.6% to 108.2 million compared to the end of the previous year (2023: 115.8 million). The leverage ratio as of December 31, 2024, remained stable at 0.7 (2023: 0.7), as solid as the equity ratio of 41.5% (2023: 41.1 %). Despite higher capital expe

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