Recurring Group EBIT declined to minus EUR 3.3 million in the reporting period after EUR 5.0 million in the prior-year period. Accordingly, the consolidated net result declined to minus EUR 26.4 million, compared to minus EUR 16.5 million for the same period last year.

At the same time, the company’s reporting segment Composites – Fibers & Materials generated an EBIT of EUR 7.8 million and thus the highest quarterly result since inception of the segment. Return on sales was 9.5% (previous year: minus 0.5%).

Previous year developments

“The first quarter is building on the developments in the previous year. We are seeing good results in our growth areas Composites – Fibers & Materials (CFM) and Graphite Materials & Systems (GMS) as well as partly in Performance Products (PP),” commented Dr Jürgen Köhler, CEO of SGL Group.

“The graphite electrode business was characterized by significant price pressure. First trends of stabilization in the steel markets have not yet provided relief on the tough price situation in graphite electrodes. The legal separation of PP and the process of evaluating our strategic options are making good progress, which is very good news.”

Composites – Fibers & Materials

Sales in the reporting segment CFM increased by 3% to EUR 82.3 million in the first quarter 2016. Sales growth was mainly driven by the structural effect relating to the inclusion of the materials business of HITCO, as well as slightly higher volumes with automotive customers.

As anticipated, prices in the acrylic fibre business developed in the opposite direction due to lower raw material costs. Recurring EBIT in the first quarter 2016 improved significantly to EUR 7.8 million compared to minus EUR 0.4 million in the comparable period of the prior year. With this result, the business unit generated the highest quarterly earnings since its inception.

Graphite Materials & Systems

Sales in the reporting segment GMS at EUR 103.0 million decreased slightly from the prior year period, when they constituted EUR 104.1 million. The business in Europe and volume-wise also in Asia developed favourably, particularly with customers from the solar, LED, and semiconductor industries.

In contrast, the North American business was negatively impacted by reduced demand from energy related industries. Demand for anode materials for the lithium-ion battery developed at anticipated stable levels. Recurring EBIT declined by 21% to EUR 7.0 million.

Performance Products

Sales in the business with cathodes, furnace linings and carbon electrodes increased in the first quarter 2016. Even graphite electrode volumes were slightly above the prior year level. Nevertheless, sales at EUR 107.2 million remained below the previous year’s level, which was EUR 128.3 million. Recurring EBIT in the reporting period deteriorated substantially to minus EUR 8.8 million due to the graphite electrode price development.

The legal separation of the business unit PP progresses according to the accelerated schedule. The process is expected to be completed by the middle of the year. The same applies for the legal separation of the business with cathodes, furnace linings and carbon electrodes within PP. The company’s intention is to maximize SGL Group’s options in both areas.

Outlook for 2016

SGL Group confirms the Group outlook, which was published in March 2016. For the current fiscal year, the company anticipates a slightly declining level of Group sales, mainly due to the anticipated continued price pressure in the graphite electrode business. For this reason, the company expects a marked decline in recurring Group EBIT.

In contrast, the results of the business units GMS and CFM are expected to improve. Moreover, the company expects its SGL2015 cost savings programьу to yield positive effects. Nevertheless, a further Group loss is anticipated, which is however expected to substantially improve over 2015.

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