SGL Group: Significant sales and EBIT increase in Q1/2011

Transcription

1 SGL Group: Significant sales and EBIT increase in Q1/2011 Sales increased by 20% compared to Q1/2010 EBIT 40% above Q1/2010 resulting in ROS of 10% Net income up 60% to 14.9 million Earnings per share plus 64% to 0.23 Outlook 2011 confirmed: Sales growth to exceed 10% and EBIT between 150 and 165 million expected Wiesbaden, April 28, SGL Group The Carbon Company announced today its results for the first quarter of Supported by all Business Areas, sales in the first quarter of 2011 increased by 20% to million (Q1/2010: 303.6). This strong growth was driven by the improved market environment in nearly all customer industries. The Business Area Graphite Materials & Systems (GMS) reported the highest sales increase with a sales growth of 37%, mainly due to positive trends in the customer industries solar, semiconductor and LED. Group EBIT improved by 40% to 36.3 million (Q1/2010: 26.0 million). This corresponds to 10% return on sales (Q1/2010: 9%). Robert Koehler, CEO of SGL Group: The results of the first quarter 2011 reflect a strong start into the year Particularly driven by increasing demand from solar, semiconductors and LED, our GMS Business delivered the strongest sales growth in this quarter. We confirm our outlook for this year with sales growth to exceed 10% and an EBIT between 150 and 165 million. Net income significantly up 60% to 14.9 million Net financing result (excluding result from investments accounted for at-equity) amounted to minus 10.9 million in the first quarter 2011 and thus slightly deteriorated from the minus 9.1 million reported in the first quarter Profit before taxes reached 21.8 million in the first quarter 2011, an increase of 48% over the prior year period ( 14.7 million). Net profit of 14.9 million in the first quarter 2011 represents an increase of 60% above last year s first quarter result (Q1/2010: 9.3 million). Based on an average number of 65.6 million shares, basic earnings per share increased to 0.23 (Q1/2010: 0.14). Total assets at the same level as at December 31, 2010 results in an almost unchanged equity ratio of 40.8% compared to 40.9% at the year end Operating activities provided net cash of 1.5 million in the first quarter 2011 (Q1/2010: 52.6 million). This decrease is mainly attributable to the working capital build-up required for the continued recovery of the businesses. Investing activities used cash of 19.5 million (Q1/2010: 26.5 million) resulting in a free cash flow of minus 18.0 million (Q1/2010: plus 26.1 million). SGL Group The Carbon Company Corporate Communications, Media Relations Rheingaustrasse 182, Wiesbaden/Germany Phone , Fax press@sglcarbon.de /

2 Despite the slight increase in net debt to million (December 31, million), SGL Group achieved a gearing ratio of 0.49, within the target level of approximately 0.5. Segment reporting Performance Products (PP) Sales in the Business Area Performance Products increased by 16% to million in the first quarter 2011 due to the continued improvement in graphite electrode volumes resulting from the ongoing global growth in electric steel production. As expected, cathodes sales in the first quarter 2011 remained on the relatively low level of the previous year due to the investment pause and destocking in the aluminum industry seen throughout EBIT in the first quarter 2011 amounted to 30.5 million compared to 34.2 million in Q1/2010 primarily due to product mix as well as lower graphite electrode prices. SGL Excellence savings were 2 million in the quarter under review. Start-up costs for the commissioning of the new Malaysian production facility continued to weigh on earnings in the reported quarter but are expected to fade out in the course of the year with production ramp-up of the fully integrated plant scheduled for the fourth quarter Accordingly, return on sales at 15.4% prevailed on the level seen already in the fourth quarter Graphite Materials & Systems (GMS) Sales in the first quarter 2011 increased by 37% to million. The strong sales growth was on one hand the result of booming business conditions across most customer industries, in particular from solar, semiconductor and LED. On the other hand, it needs to be considered that sales and earnings in the first quarter 2010 were still on a low level following the crisis year 2009 with much lower order entries. This also partly explains why EBIT in the first quarter 2011 almost quadrupled to 19.3 million (Q1/ million). This corresponds to 16.8% ROS (Q1/2010: 6.2%). In light of the strong order intake in the second half of 2010, SGL Group built up its inventory pipeline in preparation for higher sales in One-time effects such as gains from the release of currency hedging contracts, but above all a better fixed cost absorption from higher than expected production levels as well as SGL Excellence savings of 2 million also supported the earnings development in the first quarter Carbon Fibers & Composites (CFC) In the first quarter 2011, sales in the Business Area Carbon Fibers & Composites increased by only 1% to 50.0 million. This stagnation is entirely due to the sales development of the rotor blade activities (SGL Rotec) which reflects the difficult wind energy market environment expected for Excluding SGL Rotec, CFC grew by 22%. Due to the situation in the rotor blade business, EBIT in the Business Area CFC improved to only minus 2.1 million compared to minus 3.8 million in the first quarter 2

3 2010. The earnings improvement resulted mainly from higher volumes and initial price increases in the materials business (Business Unit Carbon Fibers & Composite Materials) as well as SGL Excellence savings of approximately 1 million. Without SGL Rotec the EBIT in CFC was slightly positive. The return on sales recovered to minus 4.2% compared to minus 7.7% in the comparable quarter of the previous year. Outlook Business Area Performance Products In the graphite electrode business our 2011 order book translates into high capacity utilization. As a result SGL Group expects shipments to continuously increase in the course of the year. As already stated in earlier publications, the cathode business should begin its double-digit volume recovery in the second half of 2011 based on rising relining demand and initial new smelter projects. Accordingly the following quarters are expected to show better sales and earnings compared to the first quarter 2011, leading to an ROS of just under 20% in the full year 2011, as previously guided. As outlined in the year end press conference on March 17, 2011, the ROS in the Business Area Performance Products is anticipated to return to minimum 20% in the course of Business Area Graphite Materials & Systems The first quarter 2011 showed an exceptionally strong performance. This should not be extrapolated for the remainder of the year, as it was influenced by the necessary buildup of the inventory pipeline following the high order intake in the second half 2010, one-time effects and, above all, a better fixed cost absorption from higher than expected production levels. Therefore the ROS is expected to have peaked in the first quarter 2011 but will clearly remain above the minimum 10% benchmark throughout the year. In 2010, sales started recovering from crisis levels from the second quarter onwards, therefore sales growth in the further course of 2011 is expected to slow down in an annual comparison relative to the first quarter growth rate but stay comfortably in line with the mid-term target of more than 10% growth p.a. Business Area Carbon Fiber & Composites Despite the current weakness in the wind industry affecting the rotor blade business throughout 2011, SGL Group expects sales growth to accelerate in the course of the year. This double-digit growth in comparison to 2010 will in particular be driven by the other two businesses (materials and HITCO), leading to earnings improvements in the following quarters. Consequently SGL Group reiterates its expectations for a positive EBIT in the full year Group Following the described developments in the individual business areas, SGL Group reiterates its 2011 guidance which was initially published early SGL Group expects sales growth to exceed 10% and EBIT to reach between 150 and 165 million in the fiscal year 2011, resulting in a Group ROS of between 10% and 11%. The company expects to again reach its Group mid-term ROS target of minimum 12% from 2012 onwards. 3

4 The gearing target of approximately 0.5 remains the top priority. It will continue to be the governing indicator defining our investment program. The largest projects in this investment program are scheduled to be completed over the next two years. Accordingly SGL Group forecasts capital expenditure in plant, property and equipment and intangible assets to be up to 150 million per annum in 2011 and 2012 while being funded largely from operational cash flow. As a result SGL Group anticipates free cash flow to be in the range of minus 30 to 35 million in With capital expenditure forecasted to decline after 2012, the company seeks to be free cash flow positive again from 2013 on. The full report on the first quarter 2011 can be found online at: 4

5 Financial Highlights of SGL Group (in million) First Quarter Change Sales revenue % Gross profit % EBIT before depreciation and amortization (EBITDA) % Operating Profit (EBIT) % Return on sales (ROS) 1) 10.0% 8.6% - Net profit attributable to equity holders % Earnings per share, basic (in ) % March 31, Dec. 31, Change Total assets 2, , % Shareholders equity % Net financial debt % Gearing 2) Equity ratio 3) 40.8% 40.9% - 1) Ratio of operating profit to sales revenue 2) Net financial debt divided by shareholders equity 3) Shareholders equity divided by total assets 5

6 About SGL Group The Carbon Company SGL Group is one of the world s leading manufacturers of carbon-based products. 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 electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Due to the paradigm shift in the use of materials, there is a growing demand for SGL Group s high-performance materials and products from an increasing number of industries. Carbon and graphite products are used whenever other materials such as steel, aluminum, copper, plastics, wood etc. fail due to their limited properties. Products from SGL Group are used predominantly in the steel, aluminum, automotive, chemical and glass/ceramics industries. However, manufacturers in the semiconductor, battery, solar/wind energy, environmental protection, aerospace and defense industries as well as in the nuclear energy industry also figure among the Company s customers. With 45 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 2010, the Company s workforce of around 6,300 generated sales of 1,382 million. The Company s head office is located in Wiesbaden/Germany. 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 forwardlooking statements. Forward-looking 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. Press Contact: Corporate Communications / Tino Fritsch Phone / Fax / Mobile tino.fritsch@sglcarbon.de / 6