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Fibres/​Yarns/​Fabrics

SGL Group progresses with realignment

The main focus for the company now lies on portfolio optimisation and the concentration on core competencies, SGL Group reports.

11th August 2014

Innovation in Textiles
 |  Wiesbaden

Protective, Industrial, Transport/​Aerospace

SGL Group has implemented further measures within the framework of the group wide cost savings programme SGL2015 during the first half 2014. Savings from the programme amounted to EUR 37.3 million, of which EUR 11.2 million were attributable to SGL Excellence.

The company has also reported financial figures for the first half fiscal year 2014 that, according to the group, continue to be impacted by the difficult business environment in important segments.

Group sales decreased by 12% to EUR 655.2 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 favourable sales developments in the reporting segments Graphite Specialties (GS) and Carbon Fibers and Materials (CFM).

Repositioning SGL Group

Dr Jürgen Köhler, CEO of SGL Group, commented: “To bring us back on a profitable growth track, the realisation of all savings potentials is of highest priority at the moment. With SGL2015 we have achieved savings of EUR 106 million already.”

“Therefore we will exceed our initial savings target of EUR 150 million until end of 2015. Also, portfolio optimisation 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.”

Portfolio optimisation

Besides the already initiated or implemented measures for the organisational and asset restructuring, the main focus for the company now also lies on portfolio optimisation and the concentration on core competencies.

In this context, the Business Unit Aerostructures (Hitco) was reclassified as discontinued operations as of 30 June 2014, as the corresponding disposal process has started.

Segment reporting

 In Performance Products segment the Chinese export oriented steel overproduction continues to result in reduced demand and lower prices for graphite electrodes. As a result, sales declined to EUR 273.9 million in the first half year 2014. After the graphite electrode facility in Lachute, Canada, the production of graphite electrodes at the group’s 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.

Sales within Graphite Specialties increased by 21% to EUR 182.9”¯million in the reporting period, 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.

Sales of Carbon Fibers and Materials increased by 25% to EUR 142.3”¯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 2013.

Outlook

SGL Group has confirmed its guidance for the full year 2014, published in March 2014. Adjusted for the reclassification of the Business Unit Aerostructures as discontinued operations, Group sales are expected to decrease slightly on a comparable basis.

Savings from the cost savings programme SGL2015 of EUR 106 million have been realised until mid-2014 since the beginning of the programme. Savings in a similar magnitude as in 2013 (EUR 69 million) are expected for this year.

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.

www.sglgroup.com

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