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SGL Group restructures its portfolio and raises cost savings target

SGL Group will systematically restructure its production facilities and portfolio, closing graphite electrode sites in Lachute and Narni.

3rd October 2014

Innovation in Textiles
 |  Wiesbaden

Industrial, Transport/​Aerospace, Sustainable

The Board of Management of SGL Group has defined the cornerstones of the Group’s future strategic realignment. In this context, the Board of Management will restructure or stop loss-making business activities, focus resources in all business areas on value-creating activities and increase SGL Group’s profitability on a sustainable basis.

“The future strategic alignment of SGL Group is based on the consistent restructuring or disposal of loss-making business activities, improving the profitability of our business operations and exploiting new market opportunities in growth fields, thereby creating value for all shareholders,” said Dr Jürgen Köhler, CEO of SGL Group.

“We will continue to systematically optimise and develop our portfolio according to these criteria. In this process, we will manage our business activities according to clearly defined financial targets much more stringently than we did in the past, both in terms of new investments and in the ongoing portfolio analysis, paying particular attention to capital returns.”

Value-adding activities

In light of the current weak earnings situation, which is due primarily to the price decline in graphite electrodes as well as the insufficient capacity utilisation and high costs in the carbon fibre activities (excluding the joint venture with BMW), SGL Group will systematically restructure its production facilities and portfolio.

In this context, the closure of the graphite electrode sites in Lachute (Canada) and Narni (Italy) has already been announced and partially implemented. The production network in the graphite specialties segment will also be focused and streamlined.

SGL Group already sold its rotor blade business (Rotec) at the end of 2013 and initiated the disposal process for Hitco in June 2014.

Cost savings target for SGL2015

As anticipated in the middle of 2014, the initially expected savings volume of EUR 150 million of the SGL2015 cost savings programme will be raised to more than EUR 200 million.

Already in the 2013 fiscal year, the initial savings target of EUR 50 million was far exceeded at EUR 69 million. This is not only due to the SGL Excellence Initiative established in 2002. Major cost savings are also being achieved from the largely implemented restructuring of the organisation, which includes staff cutbacks as well as the reduction in indirect expenses.

Consolidation of production sites will further lead to cost reductions, particularly resulting from the closure of the two facilities in Canada and Italy, the company expects. Additional savings will also be realised from the announced disposal of certain parts of the business portfolio.

www.sglgroup.com

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