SGL Group progresses with realignment

Transcription

1 SGL Group progresses with realignment Business development during the first half year 2014: Further portfolio optimization: Aerostructures (Hitco) reclassified as discontinued operations in Q2/2014 Savings from SGL2015 reach 106 million since beginning of program initial savings target of 150 million to be exceeded Group sales declined by 12% to 655 million due to pricing pressure in graphite electrodes Recurring EBIT at 1.1 million Expansion of carbon fiber activities at SGL ACF in Moses Lake Full year outlook 2014 confirmed Wiesbaden, August 7, SGL Group The Carbon Company has implemented further measures within the framework of the group-wide cost savings program SGL2015 during the first half Group-wide savings from SGL2015 amounted to 37.3 million, of which 11.2 million were attributable to SGL Excellence. Accordingly, total savings from SGL2015 of 106 million have been realized since the beginning of the program; therefore the initial savings target of 150 million will be exceeded. Besides the already initiated or implemented measures for the organizational and asset restructuring, the main focus now also lies on portfolio optimization and the concentration on core competencies. In this context, the Business Unit Aerostructures (Hitco) was reclassified as discontinued operations as of June 30, 2014, as the corresponding disposal process has been started. End of 2013 the rotor blade activities were already sold successfully. The financial figures for the fiscal year 2014 continue to be impacted by the difficult business environment in important segments. Accordingly, Group sales decreased by 12% to million (H1/2013: million) in the first half year mainly due to the sales decline in the reporting segment Performance Products (PP). This decline was partially compensated by the favorable sales developments in the reporting segments Graphite Specialties (GS) and Carbon Fibers & Materials (CFM). Recurring Group EBIT amounted to 1.1 million (H1 2013: 31.3 million). The corresponding EBIT margin decreased to 0.2% (H1/2013: 4.2%). Non-recurring charges in the first half year 2014 amounted to 19.7 million and relate mainly to restructuring expenses in conjunction with SGL2015. Consequently, Group EBIT after non-recurring charges amounted to minus 18.6 million (H1/2013: minus 5.9 million). Dr. Jürgen Köhler, CEO of SGL Group: To bring us back on a profitable growth track, the realization of all savings potentials is of highest priority at the moment. With SGL2015 we have achieved savings of 106 million already. Therefore we will exceed our initial savings target of 150 million until end of Also, portfolio optimization is continuing fast. We have initiated the divestment process for the Aerostructures activities. Step by step we will reposition SGL Group to focus on our core competencies. SGL Group The Carbon Company Corporate Communications, Media Relations Soehnleinstrasse 8, Wiesbaden/Germany Phone , Fax press@sglgroup.com /

2 The net financing result improved in the first half year 2014 to minus 17.5 million (H1/2013: minus 26.5 million). Accordingly, the result from continuing operations before taxes at minus 39.3 million remained virtually on the same level as in the first half year 2013 (minus 39.0 million adjusted for the discontinued rotor blade and aerostructures activities). Subtracting income taxes of 9.3 million (H1/2013: minus 77.9 million) and discontinued operations of minus 12.8 million (H1/2013: minus 33,4 million) the consolidated net result of minus 62.1 million improved compared to minus million in the first half year Cash Outflow for SGL2015 and capital expenditures for SGL ACF affect cash flow Total assets as of June 30, 2014, slightly decreased to 2,037.6 million (December 31, 2013: 2,059.1 million). The balance sheet figures have been adjusted for the reclassification of the assets of the Business Unit Aerostructures to assets held for sale. Shareholders equity reached million (December 31, 2013: million). The decline was mainly due to the negative Group result and the adjustment of discount rates for pension provision calculations. Accordingly the equity ratio declined from 30% to 26%. As of June 30, 2014, net financial debt increased to million (December 31, 2013: million including the retrospective proportional consolidation of SGL ACF). The main reason for this development was the reduction of liquidity from million to million, primarily resulting from the cash outflow in the context of SGL2015 and higher investments for the joint ventures with BMW Group (SGL ACF). Therefore free cash flow stood at minus 85.6 million (H1/2013: minus 28.6 million). Segment Reporting Performance Products (PP): Graphite electrode capacity to be reduced by 60,000 tons p.a. The Chinese export oriented steel overproduction continues to result in reduced demand and lower prices for graphite electrodes. As a result, sales declined to million (H1/2013: million) in the reporting segment PP in the first half year The graphite electrode price level was much higher in the prior-year period. Accordingly, recurring EBIT declined to 6.8 million (H1/2013: 54.1 million) in the reporting period, resulting in an EBIT margin of 2.5% (H1/2013: 12.9%). Savings from SGL2015 amounted to 23.4 million, of which 5.2 million are attributable to the SGL Excellence initiative. After the graphite electrode facility in Lachute, Canada, was closed down in context of the SGL2015 program at the end of the first quarter 2014, the production of graphite electrodes at our facility in Narni, Italy, will be discontinued in the second half of 2014 as announced. In total, SGL Group will reduce its graphite electrode production capacity by 60,000 tons p.a. Expenses related to the closures of Lachute and Narni were for the most part already recorded in the annual financial statements Restructuring expenses of 4.3 million in the reporting period were recorded in the reporting segment PP, relating mainly to the facility closures. Accordingly, EBIT after non-recurring charges amounted to 2.5 million in the first half year 2014 (H1/2013: 54.1 million). Graphite Specialties (GS): Significant earnings improvement EBIT margin at 12.2% Sales within GS increased by 21% to million in the reporting period (H1/2013: million), mainly driven by the big ticket order awarded last year from a customer in the electronics industry as well as by the continued high demand for anode materials from the lithium ion battery industry. Most other customer industries are showing stabilization or even 2

3 a small recovery in the order intake based on a low level at year-end Due to the significantly higher utilization of the production capacities, recurring EBIT quadrupled to 22.3 million (H1/2013: 5.2 million), resulting in a significantly higher EBIT margin of 12.2% compared to the first half year 2013 (3.4%). Cost savings from SGL2015 amounted to 6.9 million, of which 3.6 million were attributable to SGL Excellence. Carbon Fibers & Materials (CFM): Expansion of carbon fiber capacity at Moses Lake Sales of CFM increased by 25% to million (H1/2013: million) mainly due to significantly higher sales of the proportionally consolidated joint ventures with BMW Group, which benefited from the market introduction of the new BMW i3 electric vehicle in November The Business Unit Carbon Fibers & Composite Materials (CF/CM) also recorded a strong sales increase in the reporting period due to increased demand primarily from the wind energy industry. Recurring EBIT improved slightly to minus 12.5 million compared to minus 14.7 million in the prior-year period, resulting in an EBIT margin of minus 8.8% (H1/2013: minus 12.9%). The continued operational loss is attributable to the ongoing unsatisfactory price level and the insufficient capacity utilization in carbon fibers within the Business Unit CF/CM. However, the operating loss in this business unit has halved due to the improved volume demand. This development was partially offset by the expected higher start-up losses in our joint venture with BMW as a result of the accelerated expansion. Cost savings from SGL2015 amounted to 1.5 million, of which 1.2 million were attributable to SGL Excellence. EBIT after non-recurring charges including restructuring expenses of 0.3 million reached minus 12.8 million (H1/2013: minus 49.4 million). Due to the high demand for automotive carbon fiber, production capacity will be increased from the current 3,000 tons p.a. to 9,000 tons p.a. in the joint venture with BMW Group in Moses Lake, USA. This will result in the Moses Lake facility becoming the largest carbon fiber production site globally. Sales of all equity accounted investments increased by 59% to million (H1/2013: 63.3 million, 100% values for companies) and are not included in the consolidated Group sales figures. This improvement is mainly due to Brembo SGL and Benteler SGL, which both benefited from a substantially increased demand. Corporate & Others: Aerostructures (Hitco) reclassified as discontinued operations As a further measure of SGL2015 to optimize the portfolio and focus on core competencies, the Business Unit Aerostructures (Hitco) was reclassified as discontinued operations as of June 30, Accordingly, the figures for Corporate & Others have been adjusted. At 56.1 million, sales of the adjusted segment in the first half year 2014 decreased by 9% (H1/2013: 61.9 million) driven by a lower sales contribution from the Business Unit Process Technology (PT). PT had benefited from the execution of a Chinese big ticket order in the prior-year period. Accordingly, recurring EBIT declined to minus 15.5 million (H1/2013: minus 13.3 million). Savings from SGL2015 amounted to 5.5 million including savings of 1.2 million from SGL Excellence. Non-recurring charges totaled 14.8 million, amongst others relating to expenses in connection with personnel changes in the Board of Management. Therefore, EBIT after non- 3

4 recurring charges was minus 30.3 million (H1/2013: minus 15.7 million) Outlook for full year 2014 confirmed SGL Group confirms its guidance for the full year 2014, published in March Adjusted for the reclassification of the Business Unit Aerostructures as discontinued operations, Group sales is expected to decrease slightly on a comparable basis. Mainly due to the graphite electrode price development, the comparable recurring Group EBIT is expected to be down significantly compared to The major portion of restructuring expenses relating to the cost savings program SGL2015 was recorded in the annual financial statements Therefore restructuring expenses in 2014 will amount to only a low double-digit million- figure. Initially expected savings target of 150 million will be exceeded Savings from SGL2015 of 106 million have been realized until mid-2014 since the beginning of the program. Savings in a similar magnitude as in 2013 ( 69 million) are expected for this year. Therefore the Management Board is anticipating to generate sustainable annual savings of more than the initially targeted 150 million by end of 2015 from this cost savings program (based on 2012 actual costs). After a considerable positive free cash flow in 2013, a significantly negative free cash flow in 2014 is anticipated, mainly due to the cash outflow following implemented restructuring measures as well as higher investments in the joint ventures with BMW. Compared to last year, capital expenditure requirements for our established businesses will be significantly lower in Remark: Regarding the results of the review of the consolidated financial statements by the Federal Financial Supervisory Authority (BaFin) for financial year 2011 the Company refers to the report for the first half year All impacts of this review have been included in the financial figures on the first half year The half-year report and further information about SGL Group can be found at: as well as in the newsroom of SGL Group at: 4

5 Key figures of SGL Group (in m) 1st half st half 2013 Change Sales revenue % EBITDA before non-recurring charges % Operating profit (EBIT) before non-recurring charges % Return on sales (EBIT margin) 1) 0.2 % 4.2 % - EBIT Consolidated net result attributable to the shareholders of the parent company % Earnings per share, basic and diluted (in ) for continuing operations 2) % Capital expenditures in intangible assets and property, plant and equipment % Free cash flow > -100 % June 30, 2014 Dec 31, 2013 Change Total assets 2, , % Shareholders equity % Net financial debt % Debt ratio (Gearing) 3) Equity ratio 4) 26.4 % 29.5 % - Employees 5) 6,382 6, % 1) Ratio of EBIT before non-recurring charges to sales revenue 2) Based on average number of shares of 71.1 million 3) Net financial debt divided by shareholders equity 4) Shareholders equity divided by total assets 5) Compared to the year end 2012 (6,686 employees) the number of SGL Group employees (excluding SGL ACF) decreased by 488, of which 339 relate to the sale of SGL Rotec and the remainder to the organizational and asset restructuring measures. 5

6 About SGL Group The Carbon Company SGL Group is one of the world s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Group s core competencies are its expertise in high-temperature technology as well as its applications and engineering know-how gained over many years. These competencies enable the Company to make full use of its broad material base. SGL Group s carbon-based materials combine several unique properties such as very good electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Due to industrialization in the growth regions of Asia and Latin America and increased substitution of traditional with innovative materials, there is a growing demand for SGL Group s high-performance materials and products. Products from SGL Group are used predominantly in the steel, aluminum, automotive and chemical industries as well as in the semiconductor, solar and LED sectors and in lithium-ion batteries. Carbonbased materials and products are also being used increasingly in the wind power, aerospace and defense industries. With 43 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group is a company with a global presence. In 2013, the Company s workforce of around 6,300 employees generated sales of 1,477 million. The Company s head office is located in Wiesbaden. Further information on the SGL Group can be found online at: Important note: This press release may contain forward-looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward-looking statements involve known and unknown risks and uncertainties, as a consequence of which actual developments and results can deviate significantly from these forward-looking statements. Forwardlooking statements are not to be understood as guarantees. Rather, future developments and results depend on a number of factors; they entail various risks and unanticipated circumstances and are based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable changes in political, economic, legal, and business conditions, particularly relating to our main customer industries, such as electric steel production, to the competitive environment, to interest rate and exchange rate fluctuations, to technological developments, and to other risks and unanticipated circumstances. Other risks that in our opinion may arise include price developments, unexpected developments connected with acquisitions and subsidiaries, and unforeseen risks associated with ongoing cost savings programs. SGL Group does not intend or assume any responsibility to revise or otherwise update these forward-looking statements. Contact: Corporate Communications Telephone / Fax presse@sglgroup.com / 6