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SGL Carbon Exceeds Sales Revenue and Earning Targets for 2018

In 2018, SGL Carbon surpassed its sales revenue and earnings targets. Sales slightly exceeded the threshold of EUR 1 billion and thus surpassed the increased guidance. At the same time, the company’s earnings grew substantially above the prior-year level.

Around half of the sales increase of 22 % was due to strong organic growth. In add­ition, the SDAX-listed company recorded positive effects in sales and earnings mainly related to the full consolidation of the former joint ventures with BMW Group and Benteler and the initial adoption of IFRS 15. Recurring Group EBIT rose by 61 % to EUR 65 million, mainly relating to the good operating performance of the business unit Graphite Materials & Systems (GMS). Due to the increased operating profit, a significantly improved net financing result and fair value adjustments, the net result from continuing operations increased strongly to reach EUR 50,3 million. Thereby, for the first time as the new SGL Carbon, the company reached a positive result from continuing operations.
Sales revenues in the business unit Composites – Fibres & Materials (CFM) significantly increased by 27,3 % to EUR 422,5 million (2017: EUR 331,9 million) in the year 2018. The sales growth was primarily due to structural effects as a result of the first-time consolidation of the Benteler SGL joint venture, which was previously accounted for At-Equity, as well as the full consolidation of the SGL Automotive Carbon Fibres (SGL ACF) joint venture, which was previously proportionally consolidated. These effects more than compensated for the sale of the interests in the formerly fully consolidated SGL Kümpers joint venture. Operationally, the increase in revenues was mostly driven by the automotive and aerospace market segments. In the industrial applications and textile fibres market segments, revenues were roughly on the prior year level, while revenues with the wind industry were substantially lower than in the previous year.
In fiscal year 2018, nearly all market segments of the business unit Graphite Ma­ter­ials & Systems (GMS) grew by a double-digit rate. Sales revenues of GMS therefore increased by 15,6 % to EUR 589,9 million (previous year: EUR 510,2 million). The market segments battery and other energy, LED, semiconductors, automotive and transport as well as chemicals and industrial applications contributed to the sales increase. As already announced at the end of 2018, capital expenditures will be increased due to higher customer demand. SGL Carbon therefore currently anticipates its capital expenditure budget for fiscal year 2019 to be in the range of approximately EUR 100 million, up from EUR 78 million in the past year. Capital expenditure in the GMS business unit will focus on the automotive and transport, LED, semiconductors, as well as battery and other energy market segments. The focus of capital expenditure in the reporting segment CFM, which should make up less than one third of SGL’s cap­ital expenditure, will mainly continue to be the auto­motive segment. In this area, SGL Carbon will continue to strengthen the value chain, particularly for fabrics and components, and will convert an acrylic textile fibre line to PAN precursor to supply our carbon fibre production.
In fiscal year 2019, the company expects Group sales to increase by a mid-single-digit percentage range. After the significant increase in 2018, the Group EBIT is expected to stabilise on the prior-year level. SGL Carbon’s consolidated net result should break even in 2019. The previous year bene­fited from a high positive one-time effect, and SGL Carbon is expecting higher interest costs in net financing results in 2019 mainly from the planned issue of a corporate bond. At the same time, the company confirms its new mid-term sales target of nearly EUR 1,4 billion on an unchanged EBIT margin target of at least 10 % in the year 2022. This should result in an additional EBIT contribution in the low double-digit million ­EUR range for the year 2022.

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