DGAP-News: SGL CARBON SE: 9M Results: Business Areas PP and GMS develop positively - CFC impacted by non-cash write-down
(firmenpresse) - DGAP-News: SGL CARBON SE / Key word(s): Quarter Results
SGL CARBON SE: 9M Results: Business Areas PP and GMS develop
positively - CFC impacted by non-cash write-down
08.11.2012 / 07:30
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9M Results: Business Areas PP and GMS develop positively - CFC impacted by
non-cash write-down
- Sales up 12% to EUR1,256 million
- PP and GMS in line with expectations, CFC impacted by delayed projects
and developments leading to a non-cash write-down of long-term PoC
receivables relating to Boeing 787
- Comparable EBIT up 8% to EUR135 million
- Solid equity ratio at 44%, gearing at 0.49 within target of
approximately 0.5
- Outlook 2012: Full year 2012 Group EBIT guidance confirmed at
approximately EUR160 million (before PoC write-down in CFC)
Wiesbaden, November 8, 2012. The operating performance of SGL Group - The
Carbon Company - in the first nine months of 2012 shows a mixed picture:
While the established Business Areas Performance Products (PP) and Graphite
Materials&Systems (GMS) performed in line with expectations, the Business
Area Carbon Fibers&Composites (CFC) was affected by a non-cash write-down
according to IFRS rules due to repeated project delays related to the
Boeing 787 program and markedly reduced production volumes compared to the
original plan. Group sales increased by 12% to EUR1,225.9 million (9M/2011:
EUR1,119.5 million) including a sales contribution of the recently acquired
Portuguese subsidiary, Fisipe, of EUR55.4 million. The current period's
revenue was negatively affected by the write-down of PoC receivables
(percentage of completion method) within CFC in the amount of EUR32.5
million. This impact was partially offset by the final settlement of a
long-term supply contract within PP. Like-for-like EBIT compared to the
prior-year period increased by 8% to EUR 134.9 million (adjusted for
write-down effects). Reported EBIT for the first nine months of 2012 was
EUR80.7 million (9M/2011: EUR128.5 million). For full year 2012, SGL Group
confirms its already communicated guidance: Group sales in 2012 should
increase compared to the previous year and Group EBIT is anticipated to
remain at the 2011 level of approximately EUR160 million (before write-down
of PoC receivables totaling EUR54.2 million).
Robert Koehler, CEO of SGL Group: 'Our established Business Areas PP and
GMS are still developing positively and in the case of PP even slightly
better than expected. This positive development in our traditional
businesses, however, was not able to compensate for the losses from CFC as
this business continues to be significantly impacted by delayed projects
and general weak market conditions particularly in the aviation and wind
industries. Nevertheless, we can confirm our 2012 guidance and continue to
expect an increase in Group sales and a Group EBIT at the 2011 level of
approximately EUR160 million (before write-down of POC receivables).'
The net financing result of minus EUR36.0 million slightly improved
compared to the prior-year period (9M/2011: minus EUR39.4 million). Profit
before tax of EUR32.3 million for the first nine months of 2012 was
negatively impacted by the write-down of PoC receivables in the amount of
EUR54.2 million. Excluding this write-down, profit before tax would have
amounted to EUR86.5 million, an increase of 28% (9M/2011: EUR67.6 million,
net of impairment effects). As a result of the higher nominal tax expense
and the write-down of PoC receivables, net profit for the period decreased
to EUR0.9 million (9M/2011: EUR56.9 million). Based on an average number of
shares of 70.3 million, basic earnings per share amounted to EUR0.01
(9M/2011: EUR0.86).
Solid balance sheet structure - Gearing in line with target of
approximately 0.5
Total assets as of September 30, 2012, increased by 10% to EUR2,502.3
million compared to December 31, 2011 (EUR2,271.3 million) mainly due to
the consolidation of Fisipe and the convertible bond placement in April
2012. Shareholders' equity increased by 5% to EUR1,090.7 million as of
September 30, 2012 (December 31, 2011: EUR1,041.1 million). The equity
ratio consequently decreased from 45.8% to 43.6%. Net financial debt
increased by 57% to EUR539.7 million as of September 30, 2012 (December 31,
2011: EUR 343.3 million) mainly due to the inventory build-up driven
working capital increase as well as the acquisition of Fisipe and further
financing for At-Equity investments. Correspondingly, gearing increased
from 0.33 to 0.49 which is still in line with the Group target of
approximately 0.5. Due to higher working capital requirements for operating
activities and higher cash used for investing activities (mainly driven by
the acquisition of Fisipe), free cash flow decreased to minus EUR159.4
million (9M/2011: minus EUR48.8 million).
Segment reporting
Performance Products (PP) on track despite growing market uncertainties
In the Business Area PP, sales increased by 13% to EUR681.4 million
(9M/2011: EUR601.7 million). The strong increase was primarily driven by
the final settlement of a long-term supply contract. As expected, PP
benefited from rising graphite electrode shipments in the third quarter
compared to the first half of 2012 and continues to be supported by higher
pricing compared to the previous year. The stepwise recovery in cathode
volumes, which began in the middle of 2011, continued - however at
anticipated lower selling prices. EBIT increased by 41% to EUR141.3 million
(9M/2011: EUR100.0 million) mainly due to the above mentioned settlement of
a long-term supply contract, higher graphite electrode prices and increased
cathode sales volumes as well as savings from the SGL Excellence initiative
of approximately EUR7 million. Start-up costs for the commissioning of the
new Malaysian production facility continued to be a burden on earnings.
Return on sales improved to 20.7% (9M/2011: 16.6%).
Graphite Materials&Systems (GMS) with continued high profitability
In the first nine months of 2012, sales in the Business Area GMS grew by 7%
to EUR374.5 million (9M/2011: EUR351.4 million) driven by the Business
Units Process Technology and New Markets. The Business Unit Graphite
Specialties remained on the previous year's level, demonstrating that the
broad materials base of GMS is helping to compensate for the cyclical
downturn in the solar, semiconductor and LED industries. As expected, EBIT
decreased by approximately 16% from EUR68.1 million to EUR57.4 million,
resulting in a return on sales of 15.3% (9M/2011: 19.4%). The predicted
deterioration of the ROS is primarily the result of a lower fixed cost
absorption. Capacity utilization in the first nine months of 2012 was lower
compared to the very high level during 9M/2011, as GMS has adjusted the
production to the lower order intake levels. Savings from the SGL
Excellence initiative amounted to approximately EUR6 million.
Carbon Fibers&Composites (CFC) affected by project delays
Reported sales in the Business Area CFC increased by 22% to EUR197.6
million (9M/2011: EUR161.4 million) in the first nine months of 2012 and
included an initial sales contribution of EUR55.4 million from the newly
acquired Portuguese company Fisipe. The sales increase was partially offset
by the write-down of long-term PoC receivables in the Business Unit
Aerostructures (HITCO) which reduced sales by EUR32.5 million in the third
quarter 2012. The write-down became necessary under IFRS rules primarily
due to the repeated delays in production and shipments of the Boeing 787
(Dreamliner) and, furthermore, substantially reduced production volumes of
the Boeing 787-8 variant and its respective components in favor of the
Boeing 787-9. This development rendered obsolete HITCO's contracts for
Boeing 787-8 components, primarily with one of its customers, a major tier
1 supplier to OEMs in the aerospace industry. In line with the company's
contractual rights and aerospace industry practice, SGL Group has filed a
claim with this customer. Potential future compensation payments would
reduce the losses associated with these contracts, but can only be recorded
if and to the extent these payments are almost certain. Boeing has
announced higher production volumes of the Boeing 787-9 variant to replace
the reduced production of the Boeing 787-8 variant. In this context, CFC
expects to be partially compensated with higher volumes for components for
the Boeing 787-9 variant, which, however, can only be reflected in future
earnings.
The like-for-like (excluding Fisipe and PoC adjustments) sales growth of
approximately 8% was attributable to higher sales in the Business Unit
Rotor Blades compared to the weak previous year reporting period, partially
offset by lower sales in the Business Units Carbon Fibers&Composite
Materials (CF/CM) and Aerostructures (AS). EBIT in the Business Area CFC
(before PoC effect of EUR54.2 million) amounted to minus EUR24.2 million
(9M/2011: minus EUR8.9 million net of reversal of impairments and
impairments). The lower underlying result is due to the continued negative
earnings situation of SGL Group's wind/rotor blade business and the low
capacity utilization in the carbon fiber business due to continued project
shifts resulting in lower material demand from the wind industry.
Furthermore, delays in shipping orders for the Boeing 787 and the Joint
Strike Fighter led to an unsatisfactory utilization level in the Business
Unit AS. Cost savings from the SGL Excellence initiative amounted to
approximately EUR5 million.
Sales of the At-Equity accounted investments within the Business Area
Carbon Fibers&Composites increased by 25% to EUR110.3 million (9M/2011:
EUR88.3 million, 100% values for companies). These sales are not included
in the consolidated Group sales figure.
Outlook: Guidance for 2012 confirmed
Group: Despite growing uncertainties regarding the world economy SGL Group
confirms its guidance for Group sales and EBIT in accordance with the
outlook presented with the half year report in August 2012: Group sales for
the full year 2012 is anticipated to increase compared to the previous
year. Despite the Business Areas PP and GMS performing in line with
expectations, the company continues to expect Group EBIT in the full year
2012 to remain only at the 2011 level of approximately EUR160 million
(before write-down of PoC receivables) due to the higher than initially
planned losses in the Business Area CFC.
Business Areas: Regarding the development in the individual Business Areas,
SGL Group still anticipates an increase in PP sales at comparable margins.
Due to the reasons outlined in the segment reporting, GMS will not repeat
the 2011 record return on sales of 18%. However, the return on sales in the
full year 2012 should still be significantly above the mid-term target of
at least 10%, resulting most likely in the second-best year ever of GMS.
In the Business Area CFC, losses in the full year 2012 will be higher than
in 2011. Since the wind energy market still shows no signs of a sustained
recovery in the immediate future, which will impact the Business Unit Rotor
Blades and the materials business of the Business Unit Carbon Fibers&Composite Materials again in Q4. However, thanks to the acquisition of new
customers and further optimization measures, SGL Group expects to be able
to reduce losses in the Business Unit Rotor Blades. The Business Unit
Aerostructures is affected by further delays in projects relating to civil
and military aerospace.
Generally, the Business Area CFC continues to be characterized by a strong
R&D driven substitution trend, which can lead to delays and to
start-up/development expenses, which may partially not be projectable until
a certain commercial maturity is reached. However, there is no change to
the long-term considerable growth potential in this material segment.
The mid-term gearing target of approximately 0.5 remains of top priority.
It will continue to be the governing indicator defining the investment
program. The largest projects in this investment program are scheduled to
be completed this year. Accordingly, SGL Group forecasts capital
expenditure in plant, property and equipment and intangible assets to be up
to EUR150 million in 2012 (including Fisipe) which will largely be funded
from operational cash flow. The company also continues to anticipate free
cash flow to be up to minus EUR60 million in fiscal 2012 (before
acquisitions). Including payments relating to the acquisition of Fisipe,
free cash flow in the full year 2012 will amount to approximately minus
EUR115 million. With capital expenditure forecasted to decline in the
future, the company seeks to again be free cash flow positive in 2013
(before potential acquisitions).
Additional information about SGL Group and the report of the first nine
months 2012 can be found at: www.sglgroup.com.
Key figures of SGL Group
(in EURm)
Nine Months
2012 2011 Change
Sales revenue 1,255.9 1,119.5 12.2%
Gross profit 294.5 310.5 -5.2%
EBITDA 1 193.3 176.1 9.8%
Operating profit (EBIT) 1 134.9 124.4 8.4%
Operating profit (EBIT) 80.7 128.5 -37.2%
Return on sales (ROS) 2 10.7% 11.1% -
Profit before tax 32.3 71.7 -55.0%
Net profit attributable to shareholders of 0.9 56.9 -98.4%
the parent company
Earnings per share, basic (in EUR) 0.01 0.86 -98.8%
Capital expenditure on property, plant and 78.4 79.4 -1.3%
equipment and intangible assets
Free Cash Flow -159.4 -48.8 -
Sep. 30, Dec. 31,1- Before write-down of PoC receivables in 2012 of -EUR54.2 million and
2012 2011 Change
Total assets 2,502.3 2,271.3 10.2%
Shareholders' equity 1,090.7 1,041.1 4.8%
Net financial debt 539.7 343.3 57.2%
Gearing 3 0.49 0.33 -
Equity ratio 4 43.6% 45.8% -
Employees 6,664 6,447 3.4%
before impairment losses and reversal of impairment losses of +EUR4.1
million in 2011
2- Ratio of EBIT to sales revenue (before write-down of PoC receivables in
2012 and before impairment losses and reversal of impairment losses in
2011)
3- Ratio of net financial debt to shareholders' equity
4- Ratio of shareholders' equity to total assets
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.
Carbon-based materials and products are also being used increasingly in the
wind power, aerospace and defense
industries.
With 47 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 2011, the Company's workforce of around 6,500
employees generated sales of EUR1,540 million. The Company's head office is
located in Wiesbaden.
Further information on the SGL Group can be found online at:
www.sglgroup.com
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. 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.
Your contact:
Corporate Communications /
Tino Fritsch
Telephone +49 611 6029 105 /
Fax +49 611 6029 101 /
Cell +49 170 540 2667
E-mail: tino.fritsch(at)sglcarbon.de /
www.sglgroup.com
End of Corporate News
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Language: English
Company: SGL CARBON SE
Söhnleinstraße 8
65201 Wiesbaden
Germany
Phone: +49 (0)611 6029 - 0
Fax: +49 (0)611 6029 - 101
E-mail: investor-relations(at)sglcarbon.de
Internet: www.sglgroup.de
ISIN: DE0007235301
WKN: 723530
Indices: MDAX
Listed: RegulierterMarkt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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