04-29-2014 Realignment is taking further shape at the beginning of the year - Outlook for full year 2014 confirmed Business development during the first quarter of 2014: - New reporting structure follows streamlining of the organization
- Group sales at 336.3 million
- EBIT before restructuring expenses: minus 2.3 million
- 2.3 million restructuring expenses
- Consolidated Net result: minus 22.8 million
- 14 million savings from SGL2015
- Outlook for full year 2014 confirmed
Wiesbaden, April 29, 2014. SGL Group - The Carbon Company - implemented major measures within the framework of the Group-wide cost savings program SGL2015 during the first quarter 2014. Group-wide savings from SGL2015 amounted to approximately 14 million, of which approximately 6 million were attributable to the SGL Excellence Initiative. The reporting structure has been aligned with the streamlined organizational structure.
During the first quarter 2014, Group sales decreased by 15% to 336.3 million (Q1/2013: 396.7 million) mainly due to the sales decline in the reporting segment Performance Products (PP). This decline was partially compensated by the favorable sales developments in the reporting segments Graphite Specialties (GS) and Carbon Fibers & Materials (CFM). Adjusted for the sales contribution from the joint venture SGL ACF, which has been proportionally consolidated since January 1, 2014, Group sales was 17.4% lower. Group EBIT before restructuring expenses decreased to minus 2.3 million (Q1 2013: 13.6 million), corresponding to an EBIT margin of minus 0.7% during the first quarter 2014 (Q1 2013: 3.4%). Within the framework of the global realignment of the Group, restructuring expenses in the first quarter 2014 totaled 2.3 million. Accordingly, Group EBIT after restructuring expenses amounted to minus 4.6 million (Q1/2013: 13.6 million).
Dr. J rgen K hler, CEO of SGL Group: We are fully on track regarding the implementation of SGL2015. We have streamlined the structures and optimized many processes. Thus, we achieved further cost savings of 14 million in the first quarter of 2014. Operationally, our Graphite Specialties business got off to a good start into the year and we benefited from a big ticket order from a customer in the electronics industry. The carbon fibers and composites business has particularly benefited from our automotive joint ventures. However, we are continuously struggling with low prices particularly in our core business with graphite electrodes. The successes in other areas are overshadowed by this development.
Result before taxes amounted to minus 18.6 million (Q1/2013: minus 2.8 million). Subtracting income taxes leads to a consolidated net result of minus 22.8 million (Q1/2013: 9.4 million). Based on an average number of 71.0 million shares, basic earnings per share for continuing operations amounted to minus 0.32 (Q1/2013: minus 0.11).
As of March 31, 2014, total assets remaine virtually unchanged at 2,066.4 million (December 31, 2013: 2,072.4 million). The moderate increase in the non-current assets is mainly due to higher assets resulting from the expansion of carbon fiber capacities at SGL ACF. Equity slightly declined to 646.3 million (December 31, 2013: 667.0 million) mainly due to the negative Group result. Compared to December 31, 2013, the equity ratio remained unchanged at 31%. As of March 31, 2014, net financial debt of the SGL Group increased by 10% to 540.6 million (December 31, 2013: 491.1 million after the retrospective proportional consolidation of SGL ACF). The main reason for this was the lower liquidity since the end of the previous year, primarily resulting from the cash outflow in the context of SGL2015 and higher investments for the expansion of carbon fiber production facilities at SGL ACF. Free cash flow stood at minus 48.7 million (Q1/2013: minus 15.8 million).
Segment Reporting Performance Products (PP) Particularly the overproduction of export oriented Chinese blast furnace steel led to lower electric steel production and therefore to weak demand for graphite electrodes. The corresponding price pressure led to a sales decline of 39% to 132.6 million (Q1/2013: 218.7 million) in the first quarter 2014. Accordingly, EBIT before restructuring expenses declined by 87% to 4.1 million (Q1/2013: 32.4 million) and the ROS to 3.1% (Q1/2013: 14.8%). Savings from SGL2015 amounted to 6.9 million, of which 2.9 million were attributable to the SGL Excellence Initiative.
On February 13, 2014 the closure of the Italian graphite electrode facility in Narni (Umbria) including the associated administration in Lainate was publicly announced as the second large measure within the framework of the cost savings program SGL2015. The closure of the 30,000 ton graphite electrode facility is a further step in the Group-wide capacity reduction measures to further improve the cost position of SGL Group. Together with the closure of the Canadian graphite electrode facility in Lachute, which was already announced in October 2013, SGL Group has reduced its graphite electrode production capacity by approximately 60,000 tons p.a.
Graphite Specialties (GS) Sales in the reporting segment GS increased by 18% to 90.5 million (Q1/2013: 76.7 million), mainly driven by the big order from a customer in the electronics industry. The significantly higher utilization of the production capacities resulted in a quadrupled EBIT of 9.9 million (Q1/2013: 2.4 million), and an increased ROS of 10.9% (Q1/2013: 3.1%). Savings from SGL2015 amounted to 3.6 million, of which 1.8 million were attributable to the SGL Excellence Initiative.
Carbon Fibers & Materials (CFM) Sales in the reporting segment CFM increased by 26% to 69.2 million (Q1/2013: 54.9 million) mainly due to markedly higher sales in the proportionally consolidated joint venture SGL ACF
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04-29-2014 Realignment is taking further shape at the beginning of the year - Outlook for full year 2014 confirmed Business development during the first quarter of 2014: - New reporting structure follows streamlining of the organization
