Strong first quarter confirms full year outlook

11/05/2017

Group sales from continuing operations up by 15.4 percent to 216.3 million euros, driven by market segments energy, digitization, industrial applications and textile fibers

Recurring Group EBIT improves to 9.6 million euros

Graphite Materials & Systems (GMS) improves operating result significantly; Composites Fibers & Materials (CFM) as expected stable

Sales agreement for cathodes, furnace linings and carbon electrodes business to be reached this year

Dr. J rgen K hler, CEO of SGL Group: Our realignment is starting to pay off

Wiesbaden, May 11, 2017. SGL Group achieved a good start into the fiscal year. Both business units, Composites Fibers & Materials (CFM) and Graphite Materials & Systems (GMS), substantially increased their sales revenues. At the same time, recurring Group EBIT increased significantly by 50 percent to 9.6 (previous year: 6.4) million euros due to the improved earnings in the business unit GMS and savings in the reporting segment Corporate. The return on capital employed (ROCE) based on recurring EBITDA, at 8.6 (previous year: 8.5) percent, slightly exceeded prior year level. Regarding the disposal process of the former business unit Performance Products (PP), the closing of the sale of the graphite electrode business continues to be anticipated for mid-2017. For the business with cathodes, furnace linings and carbon electrodes (CFL/CE), a sales agreement is to be reached by the end of this year.

Our realignment is starting to pay off. We increased our first quarter sales substantially and improved our profitability significantly, commented Dr. J rgen K hler, CEO of SGL Group. We are continuing our work on the key technologies of the future to serve the growth trends of mobility, energy and digitization. In our Lightweight and Application Center, we are advancing our development projects for the automotive and aerospace industries. In the energy segment, we will expand our production capacities for graphite anode materials used in lithium-ion batteries. For the remaining business activities of the Performance Products business unit, we plan to achieve a sales agreement by the end of this year. This will finally clear the way for the new SGL Group.

Group sales were up by a substantial 15.4 percent in the first quarter of 2017, to reach 216.3 (previous year: 187.5) million euros. The operating result (EBIT) likewise increased considerably, from 6.6 to 9.0 million euros. Pre-tax result from continuing operations improved to minus 5.1 (previous year: minus 8.7) million euros. After taxes and deduction of non-controlling interests, the Group's consolidated net result amounted to minus 0.3 (previous year: minus 26.4) million euros.

Composites Fibers & Materials (CFM): operational improvements offset by investments in the Lightweight and Application Center

Sales in the reporting segment CFM increased by 13.7 percent to 93.6 (previous year: 82.3) million euros in the first quarter of 2017. Main reasons were higher revenues from carbon fibers for composite materials in the market segment industrial applications. Additionally, the higher oil price had a positive impact on the selling prices of textile fibers. While sales in the automotive and wind energy businesses rose slightly, sales in the aerospace segment were below the very good prior year level. As anticipated, EBIT at 7.9 (previous year: 7.8) million euros was at a similar level as in the previous year. The operational improvement was offset by the ramp-up of the Lightweight and Application Center (LAC). The strongest earnings improvement was recorded in the segment industrial applications, resulting from the good capacity utilization in the carbon fibers plants. Earnings in the market segment automotive also showed an increase primarily due to the improved result from the At-Equity accounted investments Ceramic Brake Discs (Brembo SGL) and Automotive Composites (Benteler-SGL).

Graphite Materials & Systems (GMS): growth in nearly all market segments except chemicals

In the reporting segment GMS, sales in the first quarter also significantly increased by 17.9 percent to 121.4 (previous year: 103.0) million euros. This development primarily reflects the higher demand for graphite anode materials for lithium-ion batteries. Sales relating to solar, LED, semiconductor and industrial applications businesses rose as well. The market segment automotive remained at the prior year level. Solely the market segment chemicals recorded a lower sales level due to the ongoing subdued investment activity in the industry. Recurring EBIT increased by 21.4 percent to 8.5 (previous year: 7.0) million euros, primarily due to the improved result of the market segment battery & other energy. This effect was partially offset by the weakness in the chemicals industry.

Savings in Corporate

In the framework of project CORE (COrporate REstructuring), the responsibilities for research and development activities were re-allocated between the central innovation function and the business units CFM and GMS. Activities of a more fundamental or long-term nature will continue to be driven at the corporate level and, as before, will be recorded in the third reporting segment renamed Corporate (previously: T&I and Corporate). Recurring EBIT in the corporate segment improved by 19 percent to minus 6.8 million (previous year: minus 8.4) euros mainly due to savings from the project CORE.

Discontinued operations mainly reflect positive results of cathodes, furnace linings and carbon electrodes business

Discontinued operations of SGL Group comprise the business unit Performance Products (PP) and the remaining properties and buildings of HITCO, while the aerostructures activities were sold at the end of 2015. In the first quarter, income from discontinued operations after taxes amounted to 6.5 (prior period: minus 9.8) million euros.

LINK:	http://www.sglnewsroom.com/en/reports/report-detail-page.20416.php...
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