SGL Carbon: continues dynamic commercial development in Q1 2022

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SGL Carbon achieved consolidated revenue of €270.9 million in the first quarter of 2022 (Q1 2021: €241.5 million). This corresponds to an increase of 29.4 million euros or 12.2% compared to the same period of the previous year. All four business units contributed to the pleasing increase in sales. At the same time, adjusted EBITDA improved by 11.5% to 36.8 million euros during the reference period.

Sales development

During the first three months of the 2022 financial year, the increase in revenue of €29.4 million was driven by the four operating business units: Graphite Solutions (+€11.3 million), Carbon fibers (+6.6 million euros), Composite Solutions (+7.2 million euros). ) and Process Technology (+€6.0 million).

In particular, sales to automotive and semiconductor industry customers and a significant recovery in the industrial applications segment were key factors driving the sales increase. Sales of the Process Technology business unit to customers in the chemical industry also developed satisfactorily. The effects of the war in Ukraine, which has been going on since the end of February 2022, had little impact on SGL Carbon’s commercial performance in the 1st quarter.

Evolution of results

Despite the increasingly challenging market environment during the first quarter of 2022, coupled with temporary supply and production bottlenecks at our customers, temporarily disrupted transportation routes and lower prices for significantly higher energy, SGL Carbon was able to maintain the adjusted EBITDA margin almost stable year-on-year. -year at 13.6%.

Adjusted EBITDA increased by 11.5% to EUR 36.8 million during the reporting period. Increased capacity utilization across business units and product mix effects contributed to the profit improvement, as well as cost savings from transformation. On the other hand, the increase in the costs of raw materials, energy and logistics at the end of February 2022 had a negative impact on the results. The Carbon Fiber business unit was particularly affected by the rise in energy prices. One-off expenses of 9.2 million euros related to energy transactions weighed on the Carbon Fibers business unit in the 1st quarter of 2022.

To secure our production and delivery capacities, approximately 85% of the energy needs of all of SGL Carbon for 2022 are covered by the prices.

Adjusted EBITDA and EBIT do not include positive non-recurring effects and exceptional items of 8.5 million euros, including the termination of a right to build heritage on a site that does not is no longer used. Taking into account non-recurring effects and special items presented as well as amortizations of €14.1 million, reported EBIT increased by 83.5% to €31.2 million (Q1 2021: 17 .0 million euros). The net profit for the period evolved accordingly and more than tripled, rising from 6.1 million euros to 21.4 million euros in quarterly comparison.

Outlook

First-quarter 2022 revenue and results confirm the stability of demand from our market segments. Price increases and volatility in the availability of raw materials, transportation services and energy were more than offset by savings achieved through the transformation program and pricing initiatives at our customers.

For 2022, we continue to expect volatile commodity and energy prices, which were included in our 2022 forecast at the time of planning. However, there are uncertainties about the extent and duration to which we and our customers will be affected by the impact of the war in Ukraine or temporary supply chain disruptions due to lockdowns in China. Consequently, our outlook for the 2022 financial year does not include supply and/or production interruptions at our customers or the impact of a possible energy embargo, which cannot be estimated at this time.

Our forecast also implies that increases in factor costs can be at least partially passed on to our customers through pricing initiatives. We have also included the revenue and earnings impact of the expiration of a supply contract with a major automaker at the end of June 2022 in our forecast.

“Thanks to the success of our transformation with leaner structures, clear accountability for business unit sales and profits, increased customer and market focus, and the sustainable cost savings achieved, we are now much more resilient and better prepared to master current challenges,” says Dr. Torsten Derr, CEO of SGL Carbon SE.

In line with the comments above, we confirm the sales and profit forecast. For the 2022 financial year, consolidated sales should be at the level of the previous year and adjusted EBITDA between 110 and 130 million euros. Taking into account the depreciations, the adjusted EBIT should be between 50 and 70 million euros. In addition, free cash flow at the end of fiscal 2022 is expected to be significantly lower than the level of the previous year and the return on capital employed (ROCE) between 5% and 7%.

Further details on the company’s performance in the 1st quarter of 2022 are available in the quarterly statement.

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