Group sales increases significantly by 12% and consolidated EBIT before non-recurring items almost doubles from 20.7 million to 40.1 millionPositive consolidated net result due to gain on the sale of the business with cathodes, furnace linings, and carbon electrodes (CFL/CE)
Dr. J rgen K hler, CEO of SGL Group: We have largely completed our strategic realignment and, as promised, strengthened our capital structure
Composites Fibers & Materials (CFM): further rise in EBIT before non-recurring items attributable to increased capacity utilization and operational improvements
Graphite Materials & Systems (GMS): double-digit growth rates in nearly all market segments, particularly dynamic growth in lithium-ion battery business
Outlook for 2018: Group sales to increase by approximately 10%, Group EBIT (before non-recurring items) should slightly outpace sales growth, consolidated net result from continuing operations to reach a black zero
Confirmation of Group sales target of 1.1 billion with ROCE of 15% (based on EBITDA) by 2020
New mid-term guidance for 2022: consolidated sales revenue of 1.3 billion and consolidated EBIT margin of at least 10%, with positive net profit and free cash flow
Wiesbaden, March 14, 2018. In 2017, SGL Group increased its sales revenue by around 12% and significantly improved its earnings. The Company therefore more than achieved its financial targets for the fiscal year. Consolidated EBIT from continuing operations before non-recurring items rose sharply to 40.1 million (2016: 20.7 million). This positive development was attributable to both business units, but above all GMS. Moreover, completion of the sale of the former Performance Products (PP) business unit significantly improved the balance sheet structure. With this divestment, the acquisition of all the shares in the joint venture Benteler-SGL, and the gradual takeover of the shares in the joint venture SGL Automotive Carbon Fibers (SGL ACF), the strategic realignment is now almost completed. For 2018, the SDAX company is forecasting a sales growth of approximately 10%. Group EBIT should slightly outpace sales growth and consolidated net result from continuing operations should improve further to reach a black zero.
The new SGL is well positioned for the future, says Dr. J rgen K hler, CEO of SGL Group. We have largely completed our strategic realignment and, as promised, strengthened our capital structure. From now on, we will focus on the growth potentials in our market segments that determine the future: mobility, energy and digitization. We have set ourselves new mid-term targets for 2022 and will benefit from our strong position as a solution provider along the entire value chain in our two business units.
SGL Group's sales from continuing operations in the fiscal year 2017 rose by 11.7% to 860.1 million (2016: 769.8 million). Thus, it was above the expected growth target of around 10%. Consolidated EBIT from continuing operations after non-recurring items improved more than proportionately from 23.7 million to 49.0 million. As a result, return on capital employed (ROCE, based on EBITDA before non-recurring items) increased from 8.4% in 2016 to 10.5%. The financial result was adversely affected by an early redemption fee for the corporate bond repaid on October 30, 2017 and amounted to minus 56.8 million (2016: minus 50.9 million). The result from continuing operations before taxes improved to minus 7.8 million (2016: minus 27.2 million); after taxes and non-controlling interest, it was minus 16.2 million (2016: minus 36.0 million), which was slightly better than forecast.
Composites Fibers & Materials: EBIT before non-recurring items further improved
Sales in the business unit CFM rose by 5% to 331.9 million in fiscal year 2017 (2016: 317.4 million). The increase in sales revenue was mainly driven by the industrial applications market segment, followed by the automotive and textile fibers market segments. EBIT before non-recurring items also increased slightly to reach 22.7 million (2016: 20.1 million). This was due, in particular, to better capacity utilization in the carbon fiber plant in Muir of Ord (Scotland) on the back of stronger demand in the market segment industrial applications, operational improvements at Benteler-SGL, and better earnings in the aerospace segment. The EBIT margin was 6.8% (2016: 6.3%).
Small positive one-off-effects resulted from various transactions. On November 8, 2017, SGL Group announced to acquire the remaining 50% of the shares in the joint venture Benteler-SGL. The shares were fully consolidated as of December 31, 2017 and led to a reversal of an impairment loss. Moreover, SGL Group agreed in December 2017 to sell its 51% stake in the joint venture SGL K mpers to its co-shareholders. The transaction was completed in January 2018, and a reversal of impairment to the disposal price was recognized in 2017. The reversal of impairments slightly more than offset the negative impact on earnings of the cumulative exchange differences arising from the completion of the sale of the Evanston site (USA) in the second quarter of 2017. Overall, EBIT after non-recurring items reached to 23.1 million (2016: 31.8 million). The prior-year figure had been particularly influenced by the reversal of an impairment loss in connection with the signing of the agreement to sell the Evanston site.
Graphite Materials & Systems: dynamic growth of lithium-ion batteries business
In the business unit GMS, sales rose by a substantial 15% to 510.2 million (2017: 444.1 million). Nearly all market segments achieved double-digit growth rates. The business with graphite anode material for the lithium-ion battery industry particularly stood out, with sales climbing by 35%. The market segments solar and chemicals achieved single-digit percentage sales
