In the third quarter 2019, the business units of SGL Carbon developed very differently. While Graphite Materials & Systems (GMS) showed better than expected results, Composites - Fibers & Materials (CFM) deteriorated compared to the two previous quarters. This is attributable to the weaker development in the market segments Textile Fibers and Industrial Applications. In total, sales revenue in the first nine months 2019 grew by approximately 6 percent to reach 832 million euros. Recurring Group EBIT after nine months reached approximately 54 million euros. Adjusted for a positive one-time effect in the prior year, this was comparable to the prior year level. In its ad-hoc notification of October 25, 2019, the company revised its guidance for recurring EBIT of CFM downwards to a negative mid to high single digit million euro amount. On the Group level the company now expects a recurring EBIT at 45 to 50 million euros. Due to the lower starting point in 2019 as well as the ongoing weakness in the market segments Textile Fibers and Industrial Applications in the business unit CFM a non-cash impairment charge in the amount of approximately 75 million euros was recorded in the third quarter 2019. In recent years acquired assets of the former joint ventures with BMW and Benteler were not affected by this impairment. In addition, the impairment charge of CFM led to a valuation allowance on deferred tax assets in the amount of 7.4 million euros. Against this background, SGL Carbon now expects a net result of approximately minus 100 million euros for fiscal year 2019.
In order to improve the results of CFM, SGL Carbon initiated comprehensive countermeasures. Amongst others, it includes a targeted staff reduction of around 3 percent in the business unit CFM and an accelerated conversion of textile fiber production lines into precursor production lines for carbon fiber production. Additionally, product mix improvements in the Industrial Applications and Textile Fibers market segments as well as selective price increases are planned. Furthermore, the company's growth in the aerospace business is to be accelerated.
The growth in our core markets shows that our overall strategic direction is right, says Dr. Michael Majerus, Spokesman of the Board of Management of SGL Carbon. In the specialty graphite business, we have been able to increase our revenue and earnings beyond our expectations. In the CFM business unit, the structural growth drivers remain intact in our strategically relevant markets. In the automotive segment, we have seen a growing number of composite material projects driven by electromobility. We will also accelerate growth in the higher-margin aerospace business. The countermeasures to improve earnings of the CFM business unit will be implemented consistently.
In the first nine months 2019, sales revenue of SGL Carbon increased by 5.9 percent to 832.4 (previous year: 786.3) million euros. The increase is primarily attributable to higher deliveries and price increases in the business unit GMS. Although recurring EBIT decreased by 8.4 percent to 54.2 (previous year: 59.2) million euros, the prior-year period included an income of 3.9 million euros from a land sale. Adjusted for this effect, recurring EBIT remained on the prior year level. This is attributable to the fact that the significant decline in earnings in the business unit CFM could almost completely be offset by the improvements in operating earnings in the business unit GMS and in Corporate. The return on capital employed (ROCE) based on recurring EBIT was 4.7 (previous year: 6.1) percent. Non-recurring items of minus 81.0 million euros mainly include the impairment charge in the reporting segment CFM in the amount of 74.7 million euros. In the first nine months of the prior year, an adjustment to the fair value of the net assets of the previously proportionally consolidated joint operation with the BMW Group (SGL ACF) was required. This resulted in a positive impact on non-recurring earnings amounting to 28.4 million euros in the last year. As a result, EBIT after non-recurring charges decreased from 79.7 million euros to minus 26.8 million euros in the reporting period. The result from continuing operations before income taxes also decreased significantly from 58.4 million euros to minus 59.4 million euros. Consolidated net result of the period amounted to minus 74.5 (previous year: 47.7) million euros.
Composites - Fibers & Materials (CFM): Sales approximately on prior year level; significant results decline primarily due to weakness in the market segments Textile Fibers and Industrial ApplicationsSales revenue in the business unit CFM at 328.6 million euros remained, as expected, approximately on the prior year level in the first nine months 2019 (currency adjusted: plus 1 percent). Strong growth in the market segment Wind Energy compared to the weak prior year was already recorded in the first half of this year. This growth even accelerated in the third quarter. Sales in the market segment Automotive remained close to the prior year level, while the market segments Textile Fibers and Industrial Applications declined due to the weakening global economy as well as due to structural issues. The market segment Aerospace also remained below the prior year level due to different timings of project billings.
Recurring EBIT in the business unit CFM declined significantly in the third quarter 2019 compared to the first two quarters of the year. The main reason for this development was the deterioration in the market segments Textile Fibers, Wind Energy und Industrial Applications. The earnings decline in the market segment Wind Energy was due to the unfavorable product mix. Despite the temporary stabilization in the second quarter, earnings in the market segment Textile Fibers declined substantially in the reporting p
