Group sales from continuing operations increased by 14 percent to 642 million euros after nine months Recurring Group EBIT rises more than proportionately to 33 million euros
Graphite Materials & Systems doubles operating profit; operating profit of Composites Fibers & Materials at previous year's level, as expected
Sale of former business unit Performance Products and early redemption of corporate bond completed
Full-year guidance increased: sales growth of approximately 10 percent with more than proportional improvement in EBIT anticipated
Dr. J rgen K hler, CEO of SGL Group: The takeover of the BENTELER-SGL joint venture shows that our focus remains forward-looking. We will further strengthen our value chain and expand our technical capabilities.
Wiesbaden, November 9, 2017. In the third quarter SGL Group continued its good performance achieved so far in fiscal year 2017. In the nine months to the end of September, sales from continuing operations increased to 642.1 (prior year period: 562.1) million euros, up by 14 percent year-on-year. The market segments energy, digitization, industrial applications, mobility and textile fibers were the main growth drivers. Business unit Graphite Materials & Systems (GMS) posted double-digit growth. The business unit Composites Fibers & Materials (CFM) achieved substantial growth as well. Due to the good performance of GMS as well as savings in the reporting segment Corporate, recurring EBIT rose significantly more than proportional in relation to sales to reach 33,0 (prior year period: 12.8) million euros. The return on capital employed (ROCE) based on recurring EBITDA amounted to 10.7 (prior year period: 7.8) percent. As a result, SGL Group slightly increases its guidance for 2017 and expects sales growth of approximately 10 percent with a more than proportional improvement in EBIT.
The operating performance in the current financial year, which so far has been better than originally expected, as well as the complete and successful sale of the former business unit Performance Products confirm the progress we have made in our strategic realignment, says Dr. J rgen K hler, CEO of SGL Group. The complete takeover of the BENTELER-SGL joint venture shows that our focus remains forward-looking. We will continually strengthen our value chain and expand our technical capabilities in the strategic growth areas.
Group EBIT after non-recurring charges improved substantially in the first nine months of the year, from 12.2 million to 28.0 million euros. The non-recurring charges mainly include a cumulative currency translation difference resulting from the sale of the carbon fiber production site in Evanston (USA). With minus 38.6 (prior year period: minus 38.7) million euros, net financing result remained on the prior year level. Result from continuing operations before taxes improved from minus 26.5 million to minus 10.6 million euros. Including discontinued operations, the Group's consolidated net result after taxes amounted to 5.3 (prior year period: minus 124.1) million euros.
Composites Fibers & Materials: Sales improved, earnings at previous year's level, as announced
Sales in the business unit CFM increased by 8 percent in the first nine months 2017 to 253.9 (prior year period: 234.5) million euros. Main drivers were the market segments industrial applications, automotive, aerospace and textile fibers. In the market segment wind energy, sales decreased compared to the previous year's level. Recurring EBIT at 17.2 (prior year period: 16.8) million euros remained on a similar level, leading to a slight decrease in the EBIT margin to 6.8 (prior year period: 7.2) percent. The ramp up of the Lightweight and Application Center, which is designated to develop future business with the automotive and aerospace industries, offset the operational improvements in nearly all market segments, as anticipated. The strongest earnings improvement was recorded in the market segment industrial applications, resulting from the good capacity utilization in the carbon fiber plant in Scotland. Return on capital employed (ROCE) based on recurring EBITDA increased from 9.4 percent to 10.6 percent. EBIT after non-recurring charges declined to 11.2 million euros compared to 16.8 million euros. The decrease is solely attributable to the disposal of the production site in Evanston, leading to a negative earnings effect from attributable cumulative currency translation differences amounting to approximately 6 million euros. The recent adverse exchange rate developments have not yet had an impact on earnings as the business unit is still benefiting from favorable currency hedging contracts.
Graphite Materials & Systems: Recurring EBIT doubled due to high demand
Sales in the business unit GMS significantly increased by 18.7 percent to 381.5 (previous year period: 321.4) million euros in the first nine months 2017. This development primarily reflects the higher demand for anode materials in the market segment battery & other energy. The market segments LED, solar, semiconductor, automotive, and industrial applications were also able to increase their respective sales revenues. After the markets segment chemicals showed a weak first half 2017, the third quarter reported a strong increase in sales compared to the prior year period, resulting in nearly flat sales revenues in the first nine months 2017. Recurring EBIT doubled to 37.5 (prior year period: 18.8) million euros mainly due to improved results in the market segments battery & other energy as well as industrial applications. The EBIT margin improved significantly to 9.8 (previous year period: 5.8) percent. Return on capital employed (ROCE) based on recurring EBITDA increased from 12.0 percent to 17.4 percent. EBIT after non-recurring charges grew to 38.5 million euros after 18.3 million euros
