Group sales close to prior year level at 1,323 million eurosRecurring EBIT improves from 2.7 million to 32.6 million euros
Operational turnaround of business unit Carbon Fibers & Materials (CFM)
Results of business unit Performance Products (PP) and the Group impacted by weak graphite electrode market
Outlook for 2016: Group sales and results once again affected by graphite electrode business
Dr. J rgen K hler: We have already initiated the process of examining strategic options for the Performance Products business unit
Wiesbaden, March 23, 2016. Fiscal year 2015 was operationally a largely satisfactory year for SGL Group. The two business units Carbon Fibers & Materials (CFM) and Graphite Materials & Systems (GMS) as well as the cathodes, furnace linings and carbon electrodes business within the business unit Performance Products (PP) generated good results (EBIT) and achieved the set objectives. However, the sharp downward turn in the graphite electrode market at the end of 2015 dragged PPs operating result (recurring EBIT) in the fourth quarter below the prior-year level. The closure of the Frankfurt-Griesheim site and impairment charges on property, plant and equipment had a severe impact on the results for the Group as a whole.
The development in 2015 underscores that our strategic realignment was and is the right decision, says Dr. J rgen K hler, CEO of SGL Group. We have analyzed and defined the growth initiatives for the business units Carbon Fibers & Materials (CFM) and Graphite Materials & Systems (GMS) and have begun their implementation. In both business units we focus on innovations and technologies that benefit from the global megatrends mobility, energy supply and digitization. In the end, our portfolio will be less volatile in the future. The carve-out of Performance Products (PP) is fully on target within the accelerated time schedule and has made immense progress. Also, we have already initiated the process of examining strategic options.
In the reporting year 2015, sales of SGL Group decreased by approximately one percent year on year to 1,323 (previous year: 1,336) million euros. Recurring EBIT increased substantially to 32.6 (previous year: 2.7) million euros, mainly due to the earnings turnaround of the business unit CFM, which improved EBIT from minus 22.5 million to plus 9.3 million euros. Despite the difficult framework and the non-recurrence of a large order from the previous year, GMS delivered a respectable performance. The cathodes, furnace linings and carbon electrodes business within the business unit PP also developed well, whereas the graphite electrodes business suffered on account of the weak steel market. The cost savings program SGL2015 enabled SGL Group to achieve approximately 45 million euros in savings in the year under review. The program was successfully concluded in 2015 and has already substantially exceeded the originally announced savings of 150 million euros by generating savings of 202 million euros until the end of 2015.
Due to non-recurring charges, the consolidated net loss of the SGL Group in 2015 increased to minus 295 (previous year: minus 247) million euros. These non-recurring charges are chiefly attributable to impairments and restructuring expenses in the graphite electrodes business and the sale of the aerostructures business of HITCO. Had it not been for these two effects, Group consolidated net result would have improved to minus 47 million euros.
Operational turnaround for Carbon Fibers & Materials
In the business unit CFM, sales were up by 10 (currency adjusted: plus 4) percent, reaching 327.3 (previous year: 296.4) million euros. Adjusted for HITCO's materials business, CFM sales were up by 3 percent, to 307 million euros. The moderate growth resulted in particular from the automotive and wind energy industries. In contrast, sales in the textile acrylic fiber business declined slightly as selling prices are linked to prices of acrylonitrile, its key raw material. Recurring EBIT rose significantly to 9.3 (previous year: minus 22.5) million euros. The main reasons for the operational turnaround were the completion of the start-up phase as well as the improved productivity of our joint ventures with the BMW Group and the higher capacity utilization of our carbon fiber plants.
Graphite Materials & Systems continues to generate positive earnings contribution
The business unit GMS registered a slight increase in sales revenues of 3 (currency adjusted: minus 4) percent year on year to 453.5 (previous year: 440.4) million euros. The main reason for the currency-adjusted decline in sales was the non-recurrence of a large order in the prior year. Stable to slightly higher sales revenues were achieved in most customer industries, such as in the solar, semiconductor and LED industry as well as in the chemicals sector. Business with customers from the lithium-ion battery industry also remained at a good level. As the non-recurrence of the large order reduced capacity utilization, recurring EBIT of the business unit GMS amounted to 34.1 (previous year: 40.0) million euros.
Performance Products: EBIT heavily impacted in fourth quarter due to renewed decline in market for graphite electrodes
The weak demand for graphite electrodes impacted the PP business unit during the last fiscal year. Higher sales in the cathodes, furnace linings and carbon electrodes business only compensated this development to a minor extent. Sales revenues declined by 9 (currency adjusted: minus 17) percent to 533.4 (previous year: 588.2) million euros. Recurring EBIT decreased by one quarter, to 19.4 (previous year: 26.0) million euros. In the first nine months, recurring EBIT of PP was still above the prior year level as forecasted, due to lower raw material costs and SGL2015 savings, and despite lower volumes and prices of graphite e
