04-26-2013 SGL Group: Economic uncertainties result in weak start to the year - Sales increased by 8.5% to 414 million mainly driven by Fisipe- EBITDA lower due to cyclical low at GMS and continued difficult market environment at CFC
- Significant free cash flow improvement to minus 17 million (Q1/2012: minus 70 million)
- Strong equity ratio at 41.5% gearing at 0.45
Wiesbaden, April 26, 2013. In the first quarter 2013, SGL Group The Carbon Company recorded a weaker than expected start into the business year. While the Business Area Performance Products (PP) was able to hold its ground thanks to higher shipments, the development in the Business Area Graphite Materials & Systems (GMS) was significantly below expectations due to the cyclical low in its end markets. The market environment of the Business Area Carbon Fibers & Composites (CFC) remains difficult because of project and development postponements. In total, Group sales increased by 8.5% to 414.1 million (Q1/2012: 381.6 million) however, this was significantly impacted by the 28.2 million sales contribution of Fisipe which was acquired in 2012. Due to the lower earnings level at GMS and CFC, EBITDA decreased by more than one third to 34.1 million (Q1/2012: 52.7 million). This corresponds to an EBITDA margin of 8.2% (Q1/2012: 13.8%). EBIT declined to only 13.3 million (Q1/2012: 34.7 million).
Robert Koehler, CEO of SGL Group: The first quarter is traditionally the weakest in the course of the year. However, due to economic uncertainties, the first quarter 2013 developed weaker than expected. This mainly affected the specialty graphite business which is currently in a cyclical trough as well as the carbon fiber business that has to battle ongoing price pressure as the end market recovery is further delayed. Accordingly, we had to adjust our outlook for the full year 2013 and now expect Group sales to be approximately on the previous year's level. Group EBITDA is now anticipated 20% to 25% below the comparable EBITDA of 240 million of the previous year.
Profit before tax stood at minus 4.7 million (Q1/2012: 20.6 million) and net income at minus 9.4 million (Q1/2012: 13.8 million). Based on an average number of shares of 70.7 million, basic earnings per share amounted to minus 0.13 (Q1/2012: 0.20).
Equity ratio remains solid - less capital expenditure As of March 31, 2013, total assets of 2,566.1 million remained virtually unchanged compared to the end of 2012 (December 31, 2012: 2,559.7 million). Shareholders' equity at 1,064.4 million also remained on the same level as at end of 2012 ( 1,067.0 million) resulting in a virtually unchanged equity ratio of 41.5% (December 31, 2012: 41.7%). Net financial debt increased slightly by 4% to 479.5 million (December 31, 2012: 459.3 million). Due to the restrictive capital expenditure program during the first quarter, capital expenditure of 15.8 million was 5.0 million below depreciation. Gearing (ratio of net debt to shareholders' equity) at 0.45 as of March 31, 2013, remained within the target area of approximately 0.5. Free cash flow was improved significantly to minus 17.0 million (Q1/2012: minus 69.8 million) due to reduced capital expenditure and lower cash consumption for working capital requirements.
Segment Reporting Performance Products (PP): Stable earnings In the Business Area PP, sales in the reporting period increased by 11% to 218.7 million (Q1/2012: 197.7 million) primarily driven by higher shipments. Despite higher sales, EBITDA at 42.7 million remained almost on the same level as in the comparable period of the previous year (Q1/2012: 42.3 million). The corresponding EBITDA margin amounted to 19.5% (Q1/2012: 21.4%). EBIT decreased by 2% to 32.3 million (Q1/2012: 33.1 million). Accordingly, the EBIT based return on sales stood at 14.8% (Q1/2012: 16.7%). This development was mainly caused by higher factor costs and lower selling prices. Savings from the SGL Excellence initiative amounted to approximately 3 million.
Graphite Materials & Systems (GMS): Production cuts at GS weigh on earnings In the reporting quarter, sales in the Business Area GMS decreased by 20% to 102.9 million (Q1/2012: 128.9 million). However, the first quarter 2012 still benefited from a high order backlog at the end of 2011. The strongest decline in sales was recorded by the Business Unit Graphite Specialties (GS), primarily caused by the cyclical downturn in new orders. While demand from the solar, semiconductor and LED industries had already been declining since the end of 2011, the formerly solid order intake of the industrial applications segment within GS also slowed down. This development left an even bigger mark on earnings as production was deliberately cut back as a result of the low order backlog and in order to decrease inventory levels. Primarily due to the ensuing low fixed cost absorption, EBITDA in the first quarter decreased by 66% to 9.2 million (Q1/2012: 26.7 million). The corresponding EBITDA margin stood at 8.9% (Q1/2012: 20.7%). EBIT decreased by 78% to 5.1 million (Q1/2012: 22.4 million). Therefore, the EBIT based return on sales amounted to only 5.0% (Q1/2012: 17.4%). Savings from the SGL Excellence initiative reached approximately 1 million.
Carbon Fibers & Composites (CFC): Sales increase driven by acquisition Sales in CFC increased by 68% to 91.1 million (Q1/2012: 54.4 million) in the first quarter 2013. However, this figure includes a 28.2 million sales contribution from the Portuguese acrylic fiber producer Fisipe, which was consolidated from the second quarter 2012 on. The like-for-like sales growth of 16% was mainly attributable to higher sales in the Business Unit Rotor Blades. EBITDA in the first quarter 2013 amounted to minus 8.4 million (Q1/2012: minus 4.9 million) and was thus comparable to
