Expected weak market dynamics weigh on business development in the first three months 2025

08/05/2025

As expected, continued weak demand from key sales markets and declining economic expectations are weighing on SGL Carbons sales and earnings performance in the first quarter 2025. After three months of fiscal 2025, SGL Carbon generated sales of 234.3 million. This was 14.0% below the previous year (Q1 2024: 272.6 million). Consolidated sales were mainly impacted by weak demand in the Semiconductor & LED market segment, which contributed the majority of the 38.3 million decline in consolidated sales with a 30.0 million drop in sales compared to the same quarter of the previous year.

Based on the significantly lower sales, particularly of higher-margin products for the semiconductor industry, SGL Carbons adjusted EBITDA decreased by 20.4% to 33.5 million compared to the first quarter of the previous year (Q1 2024: 42.1 million). Accordingly, the adjusted EBITDA margin declined from 15.4% to 14.3%.

Sales figures for electric vehicles have risen slightly again in recent weeks. This is basically a good sign for our graphite business. However, weak demand from our semiconductor customers confirms our assumption that demand for specialty graphite products for the manufacture of silicon carbide-based semiconductors will not pick up again until the high inventories in the entire semiconductor value chain have been reduced, explains Andreas Klein, CEO of SGL Carbon.

With depreciation and amortization remaining almost unchanged at 12.8 million (Q1 2024: 13.0 million), EBIT for the first quarter of 2025 was primarily impacted by one-time effects and special items of 17.3 million. This was due to the restructuring of the Carbon Fibers business unit (Q1 2024: 2.5 million). EBIT decreased accordingly from 26.6 million in the same quarter of the previous year to 3.4 million.

Development of the business unitsThe Graphite Solutions (GS) business unit reported sales of 116.7 million in the first quarter of 2025, down 17.4% on the same quarter of the previous year (Q1 2024: 141.3 million). The majority of the decline in sales is attributable to weaker demand in the Semiconductor & LED market segment, which recorded a significant drop in sales of 41.4% ( 30.0 million). The most important customer group here are customers from the silicon carbide-based semiconductors segment, who, as in the second half of 2024, demanded significantly less products in the first quarter of 2025 than in the same periods of the previous year. This is mainly due to electromobility, where growth expectations have declined compared to earlier forecasts, leading to temporarily high inventories at our customers.

The decline in sales had a negative impact on Graphite Solutions adjusted EBITDA. Compared to the previous quarter, adjusted EBITDA fell by 41.0% to 21.6 million (Q1 2024: 36.6 million). This was mainly due to the decline in volume of high-margin products for the semiconductor industry and lower capacity utilization in our production facilities. The adjusted EBITDA margin decreased significantly quarter-on-quarter to 18.5% (Q1 2024: 25.9%).

The Process Technology (PT) business unit confirmed the positive development of the previous year with a 10.6% increase in sales to 36.5 million (Q1 2024: 33.0 million). This encouraging increase was driven in particular by major projects for international customers and a good order situation in the service business. Based on higher capacity utilization and an attractive product mix, adjusted EBITDA for Process Technology improved from 6.9 million in the same quarter of the previous year to 11.0 million. Correspondingly, the adjusted EBITDA margin developed positively, rising from 20.9% to 30.1% in the first quarter of 2025.

Sales in the Carbon Fibers (CF) business unit amounted to 46.7 million in the first quarter of 2025, down from 57.6 million in the same quarter of the previous year. The decline of 10.9 million (-18.9%) is primarily attributable to the further decline in demand from the wind industry and the associated capacity adjustment in the carbon fiber business.

The reduction in logistics, personnel, and energy costs as part of the capacity adjustments had an initial positive impact, leading to an improvement in adjusted EBITDA for the CF business unit of 4.0 million to minus 1.2 million (Q1 2024: minus 5.2 million). It should be noted that the activities accounted for at equity, in particular the joint venture Brembo SGL Carbon Ceramic Brakes (BSCCB), made a positive contribution of 1.7 million to the adjusted EBITDA of the CF reporting segment.

Sales in the Composite Solutions (CS) business unit declined by 19.4% to 29.9 million in the first quarter of 2025 (Q1 2024: 37.1 million). The decline is primarily due to the expiry of a project-related contract with an automotive customer, whose sales were still included in the first quarter of the previous year. As a result of lower volumes and the associated lower capacity utilization, adjusted EBITDA for CS decreased by 2.8 million to 2.7 million compared to the previous quarter (Q1 2024: 5.5 million). Based on the loss of the high-margin customer contract and increasing price pressure from the automotive industry, the adjusted EBITDA margin decreased from 14.8% in the same period of the previous year to 9.0% in Q1 2025.

Restructuring Carbon Fibers business unit About three months ago, we informed about the upcoming restructuring of the Carbon Fibers business unit, which also includes the closure of unprofitable business activities and sites. The first measures already implemented included further global capacity reductions and associated personnel and cost adjustments. On May 5, 2025, we informed the workforce at our Lavradio site about the phased closure of production, reports Dr. Stephan B hler, member of the SGL Carbon Board of Management responsible for this business unit. Lavra

LINK:	https://www.sglcarbon.com/en/newsroom/news/press-report/expected-weak-...
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