Interim / Quarterly Report • Nov 6, 2018
Interim / Quarterly Report
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Group sales increase of 23% to Ŷ786 million. Nearly half of the increase driven by strong organic growth in the market segments Mobility, Chemicals, Industrial Applications and Digitization
Group recurring EBIT increased by approx. 80% from Ŷ33 million in 9M/2017 to Ŷ59 million in 9M/2018 (including IFRS 15 effects of Ŷ15 million)
9M/2018 continues to be impacted by high positive effects particularly relating to the initial adoption of IFRS 15 as well as the full consolidation of the former JVs with BMW Group and Benteler
Successful placement of Ŷ159 million convertible bond in September 2018 extends maturity profile until 2023
Slight increase in guidance for 2018: Improvement in Business Unit GMS more than compensates for weaker development in Business Unit CFM and leads to slightly higher expectations for Group recurring EBIT including additional IFRS 15 impacts
Group sales to now increase by 15% (previously: more than 10%) and thereby to reach the Ŷ1 billion sales revenue mark for the first time as the "new" SGL Carbon
Guidance for net income increased to a mid double digit million Ŷ amount and thus at upper end of previous guidance range (low to mid double digit)
| Nine months | ||||
|---|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change | |
| Sales revenue | ƍƎƌƉ | ƌƊƈƇ | ƈƈƋ | |
| EBITDA before non-recurring items | ƇƐƋƍ | ƍƐƇ | ƋƐƎ | |
| Operating profit (EBIT) before non-recurring items (recurring EBIT) | ƋƏƈ | ƉƉƐ | ƍƏƊ | |
| Return on sales (EBIT-margin) 1) | ƍƋ | ƋƇ | - | |
| 2) Return on capital employed (ROCE EBIT) |
ƌƇ | ƊƎ | - | |
| Operating profit | ƍƏƍ | ƈƎƐ | !ƇƐƐ | |
| Result from discontinued operations, net of income taxes | –ƊƐ | ƈƋƋ | >–ƇƐƐ | |
| Consolidated net result (attributable to shareholders of the parent company) | Ɗƍƍ | ƋƉ | !ƇƐƐ |
| Ŷ million | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Total assets | ƇƌƈƐƐ | ƇƋƊƇƍ | ƋƇ |
| Equity attributable to the shareholders of the parent company | ƋƊƊƌ | ƊƋƍƐ | ƇƏƈ |
| Net financial debt 3) | ƈƈƐƏ | ƇƉƏƐ | ƋƎƏ |
| Gearing 4) | ƐƊƇ | ƐƉƐ | - |
| Equity ratio 5) | ƉƉƌ | ƈƏƌ | - |
1) Ratio of EBIT before non-recurring items to sales revenue
2) EBIT before non-recurring items for the last twelve months to average capital employed - continuing operations (total of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity and working capital)
3) Financial liabilities (nominal amounts) less liquidity
4) Net financial debt divided by equity attributable to the shareholders of the parent company
5) Equity attributable to the shareholders of the parent company divided by total assets
| News from the businesses 4 | |
|---|---|
| Interim Group Management Report 6 | |
| Economic environment 6 | |
| Key events of the business development 6 | |
| Business development 7 | |
| Opportunities and Risks 13 | |
| Outlook 14 | |
| Condensed Consolidated Interim Financial Statements 18 | |
| Consolidated Income Statement 18 | |
| Consolidated Statement of Comprehensive Income 19 | |
| Consolidated Balance Sheet 20 | |
| Consolidated Cash Flow Statement 22 | |
| Condensed Consolidated Statement of Changes in Equity 24 |
| Notes to the Condensed Consolidated Interim Financial Statements 25 |
|
|---|---|
| Responsibility statement 34 | |
| Other information 35 | |
| Financial Calender 2019 37 | |
| Investor Relations Contact 38 |
4
SGL Carbon and Fraunhofer IGCV founded a joint Fiber Placement Center headquartered at the SGL Carbon site in Meitingen (Germany) for increased use in more high-volume applications across industries and for improving costeffectiveness and resource efficiency. Fiber placement is considered a particularly advanced method with its automated, load-path optimized, and material efficient laying and cutting of fibers. As part of the material mix of the future, fiberreinforced plastics are gaining in importance, especially in the automotive and aerospace industries.
With its "Advanced Modulus" 50k carbon fiber, SGL Carbon has developed and started serial production of a high-performance and efficient carbon fiber for the aerospace industry, thus expanding its material portfolio. Due to its high stiffness and strength, the new fiber meets the special mechanical requirements for aerospace as well as various industrial applications. The high Young's modulus based on a 50k fiber (50,000 individual filaments) is unique to the market.
At the JEC World in Paris, the worldwide largest composites trade fair, SGL Carbon presented a prototype of the "Carbon Carrier," which is ready for large-scale production for new automotive body concepts. The above-mentioned "advanced modulus" 50k carbon fiber was also introduced and generated great interest. Additionally, SGL Carbon together with other partners received the JEC Innovation Award for the "MAI Sandwich" project for the development of innovative sandwich structures for aerospace and automotive components.
At the Austrian SGL Composite sites, we are currently manufacturing the trunk lid module for the Porsche GT3 which we developed together with Porsche. We are also serially producing, among others, the leaf springs for Volvo – with a targeted volume of 550,000 per annum.
SGL Carbon receives an order from a large American aerospace customer for the refurbishment of their thrust reverser cowling blankets for a complete model series. The order comprises 350 blankets made of SGL Carbon's high-performance insulation blankets and will be completed by November 2018.
The Fiber Placement Center is officially opened with 150 guests from politics, industry and science. With various high-tech systems and a space of over 500 m², the FPC offers customers the opportunity to develop new production concepts and demonstrate them in prototype production. In addition, SGL Carbon can begin with high-volume production of fiberreinforced components. The center's work is closely linked with SGL Carbon's Lightweight and Application Center (LAC), a facility measuring another approximately 1,500 m2 , which is also located at the Meitingen site. Here the company collaborates with its customers to continually develop innovative lightweight structures, processes and prototypes.
SGL Carbon receives a major order from our customer Rheinmetall Automotive – Pierburg where we will supply the centerpiece, rotors and vanes, for generating a vacuum in the EVP 40 brake booster. The annual order volume is in the low double-digit million Euro range. Due to this project and a general increase in demand from the automotive industry, SGL Carbon is investing approximately Ŷ25 million over four years in expanding its production capacities at the Bonn site. The capacity expansion set to be complete by 2020.
We informed about an order which we received at the end of last year for a hydrochloric acid (HCl) recovery system from a leading Chinese producer of isocyanate. The system was developed by SGL Carbon for the specific requirements of the customer and will significantly support an economic and environmental friendly production process in the MDI/TDI production (precursors for polyurethane production).
Strong global growth in the semiconductor and LED industry is driving worldwide demand for susceptors and wafer carriers. The expansion of a new, state-of-the-art SiC coating production line which began last year in St. Mary's, Pennsylvania (USA), has already been completed. Due to the further increasing global demand, we have decided on a second expansion stage, not only to increase the production volumes but also to ensure highest quality standards. A total of approximately Ŷ25 million will be invested over a period of three years for this expansion.
At the trade fair ACHEMA, the world's leading trade fair for the chemical industry, process technology, and biotechnology in Frankfurt am Main (Germany), SGL Carbon presented, among others, its newly developed silicon carbide (SiC) tube sheet for heat exchangers as one example for our solution competence. Together with technology group GEA, SGL Carbon has developed a new steam jet vacuum pump made of DIABON® graphite, which was also shown at the fair. Compared with pumps made of porcelain, the main material used to date, the new vacuum pumps feature many advantages, such as energy savings of up to 30 percent, a greater degree of design freedom and faster delivery times.
We also demonstrated carbon 3D printing at the ACHEMA. After the market launch of CARBOPRINT®, which stands for printed carbon and graphite components, SGL Carbon has now expanded its 3D printing expertise to silicon carbide under the brand name SICAPRINT. Silicon carbide (SiC) features extremely high hardness, stiffness and strength, as well as high thermal conductivity.
SGL Carbon introduces full size bipolar plates (BPP) made of a graphite/fluoropolymer composite material which we developed and successfully tested in-house. In terms of good electrical conductivity, high chemical resistance, and light weight, the performance of the new large size plates is in line with their smaller size versions at the same thickness. These new larger size SIGRACELL BPP enable many different applications in various industries including flow battery, wastewater treatment system manufacturing, and other electrochemical applications. Furthermore, they enable construction of larger electrochemical cells and increase product efficiency.
We have substantially increased our capacities for the production of synthetic graphite anode materials for lithium-ion batteries. The current expansion phase is due to be completed until 2019. In addition to upgrading and optimizing the efficiency of existing plants, we are also investing in a battery application laboratory. The capex budget for the sites in Morganton (USA), Raciborz and Nowy Sacz (both Poland) and Meitingen (Germany) amounts to a low double digit million Euro amount in total.
Together with ExOne, a leading provider of 3D printing technology, we present our project in the area of 3D printing with carbon components. 3D printing describes the building of individual layers of material into three-dimensional parts based on a digital file, without tooling or machining. SGL Carbon is bringing carbon and graphite components created using 3D printing technology provided by ExOne to the market under the brand name CARBOPRINT®.
We are extending our long-standing collaboration for fuel cell components with HYUNDAI MOTOR GROUP. SGL Carbon will deliver gas diffusion layers for the fuel cell car NEXO. To continue playing a key role in the research and development of fuel cells, SGL Carbon is also an active development partner in the EU-funded "INSPIRE" project.
For the first time in ten years SGL Carbon hosted a Capital Markets Day for analysts and investors with focus on market trends and material solutions. Approximately 35 participants from London, Frankfurt and other financial centers travelled to the all-day event in Meitingen (Germany).
Following an update on the strategic realignment by Jürgen Köhler, the two Business Unit Heads Andreas Wüllner and Burkhard Straube took the participants on a journey through the markets of SGL Carbon in almost two-hour sessions each, explaining the market drivers and technology trends as well as the details of our material solutions. Customers also gave testimonial in quotations and video messages. A real highlight was offered between the two sessions: an extensive tour of the LAC as well as a unique exhibition of carbon and graphite applications in a vacated factory hall. In his final presentation, Michael Majerus gave an overview of the measures taken by SGL Carbon to secure long term profitable growth, such as improved marketing activities with focus on higher margin "megatrend" markets, or the new investment processes aligned to strategic objectives and key financial figures.
You will find all presentations from the Capital Markets Day on our website www.sglcarbon.de/investor-relations/presentations.
(unaudited)
In October, the international monetary fund revised downwards its forecast for global economic growth by 0.2%-points both for this and for next year due to unexpected weak activity in some industrialized nations at the beginning of the year 2018, adverse effects from the implemented and resolved trade barriers, weaker outlook for some developing countries, higher interest rates, geopolitical tensions, and higher prices for oil imports. In total, risks for the global growth outlook have increased also in the context of worldwide political uncertainties, while the potential for positive surprises declined.
According to the IMF, global gross domestic product (GDP) will increase by 3.7% in 2018 and 2019 and thus 0.2%-points below the July forecast. For the USA, the IMF kept its growth assumptions unchanged for 2018 at 2.9% and reduced it for 2019 to 2.5 (2.7)%. A reduced growth rate of 2.0 (2.2)% is forecasted for the Eurozone for 2018 and a constant one of 1.9 (1.9)% for 2019, for Germany 1.9 (2.2) and 1.9 (2.1)%.
Despite slightly reduced growth perspectives and the increased global economic risks, the statements made in our annual report 2017 remain essentially valid.
On September 20, 2018, SGL Carbon SE issued a convertible bond with a principal amount of Ŷ159.3 million. The bond has a term of five years and matures in September 2023. The convertible bond is based on a volume of 12.2 million shares and carries a coupon of 3.0% p. a. The initial conversion price is Ŷ13.022, which corresponds to a premium of 30% above the volume weighted average price of the SGL Carbon SE share during the placement. The convertible bond is unsubordinated and unsecured and can be converted to shares. Upon issuance of the bond, the fair value of the conversion rights in the amount of Ŷ13.7 million was transferred to capital reserves and concurrently deducted from the bond liability.
After the acquisition of the former joint venture Benteler-SGL in December 2017, the acquisition of the remaining 49% shares in SGL Automotive Carbon Fibers GmbH & Co. KG (SGL ACF) in Wackersdorf (Germany) was concluded in January 2018. SGL Carbon is now the sole owner of the former joint operation, whose legal entity name is SGL Composites GmbH & Co. KG after its entry in the company's register. As reported, in the next step, the US legal entity will be transferred to SGL Carbon by the end of 2020 at the latest; in this context, SGL Carbon already exercises full control so that the US company is fully consolidated since January 11, 2018.
The transition to full consolidation required an adjustment to the fair value of the net assets of the previously proportionally consolidated joint operation with the BMW Group. This resulted in a positive non-cash impact of Ŷ28.4 million on EBIT after nonrecurring items in the first nine months 2018. On the other hand, the preliminary purchase price allocation (PPA) results in an increase in depreciation and amortization expense of around Ŷ10 million per year until 2021. In the first nine months 2018, the additional depreciation/amortization resulting from the PPA on identified assets and liabilities of the acquired companies in the US, Austria and Germany amount to minus Ŷ8.7 million. The sale of the 51% shareholding in SGL Kümpers GmbH & Co KG, Rheine (Germany) was completed on January 10, 2018. The related disposal of the assets of SGL Kümpers did not result in any effect on profit or loss in fiscal 2018, as this was already recognized in fiscal year 2017.
The first-time adoption of IFRS 15 resulted in an increase in sales revenue of Ŷ27.1 million and an increase in recurring EBIT of Ŷ15.3 million in the first nine months year 2018, mainly related to the reporting segment GMS. For details on this and the impacts on the opening balance resulting from the transition please refer to the segment reporting and the notes.
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Sales revenue | ƉƈƉƏ | ƈƋƉƏ | ƈƍƌ |
| EBITDA before non-recurring items 1) | ƊƋƎ | ƉƈƎ | ƉƏƌ |
| EBIT before non-recurring items | |||
| (recurring EBIT) 1) | ƈƐƏ | Ƈƍƈ | ƈƇƋ |
| Return on sales (EBIT-margin) 1) | ƌƋ | ƌƎ | - |
| Return on capital employed | |||
| (ROCE EBIT) 2) |
Ɗƌ% | Ƌƈ | - |
| Operating profit (EBIT) | ƉƏƐ | ƇƇƈ | !ƇƐƐ |
1) Non-recurring items of Ŷ18.1 million and minus Ŷ6.0 million in the first nine months 2018 and 2017, respectively
2) EBIT before non-recurring items for the last twelve months to average capital employed (total of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity and working capital)
In total, sales in the first nine months 2018 increased by 28% (currency adjusted by 30%) to Ŷ323.9 million compared to the prior year period (9M/2017: Ŷ253.9 million) primarily due to structural effects resulting from the initial consolidation of the former At-Equity accounted joint venture Benteler SGL as well as the complete acquisition of the former partially consolidated SGL ACF, which more than compensated for the sale of the former fully consolidated joint venture SGL Kümpers. Operationally, sales growth was mainly driven by the market segments Aerospace and Automotive. In the market segment Textile Fibers, sales remained on the prior year level, while sales with the wind energy industry decreased substantially due to the sale of our participation in SGL Kümpers, as well as the declining sales of carbon fibers to the wind energy industry. As anticipated, sales in the reporting segment CFM in the third quarter 2018 was below the level of the first two quarters, especially following the phase out of two particular projects at the half year stage.
Following the complete acquisition of Benteler SGL at the end of 2017, Ceramic Brake Discs (Brembo SGL: development and production of carbon ceramic brake discs) remains as the only major investment accounted for At-Equity and is allocated to the market segment Automotive. Sales of all investments accounted for At-Equity increased by 13% in the first nine months 2018 to Ŷ181.6 million (9M/2017: Ŷ161.1 million, 100% values for companies) and is not included in our Group sales revenue. Compared to the first half 2018, sales growth of the At-Equity accounted investments in the third quarter 2018 slightly slowed down due to seasonal factors.
Recurring EBIT in the first nine months 2018 increased by 22% to Ŷ20.9 million compared to the prior year period (Ŷ17.2 million) and lead to an EBIT margin of 6.5% (9M/2017: 6.8%). The highest earnings growth was recorded in the market segment Automotive, particularly due to the full consolidation of SGL Composites (former SGL ACF). Earnings were almost stable on the prior year level in the market segments Aerospace and Textile Fibers, while Wind Energy and Industrial Applications recorded a substantial decrease in earnings. In line with the sales development, recurring EBIT in the reporting segment CFM in the third quarter 2018 was also below the level of the two prior quarters due to the lower capacity utilization.
After consideration of non-recurring items amounting to Ŷ18.1 million, EBIT in the first nine months 2018 increased to Ŷ39.0 million (9M/2017: Ŷ11.2 million). These non-recurring items include a positive effect from the full consolidation of the former joint venture with BMW Group (SGL ACF) resulting from the adjustment to the fair value of the proportionate shareholding as of the date of acquisition of Ŷ28.4 million. Restructuring expenses at Textile Fibers amounting to Ŷ1.6 million and increased depreciation in the amount of Ŷ8.8 million from the preliminary purchase price allocation (PPA) had an opposite effect on non-recurring items. The release of a provision at SGL Composites (Austria) led to a positive effect in the amount of Ŷ3.2 million. In addition, the expert report on the purchase price allocation relating to the acquisition of the remaining shares in SGL ACF in September 2018 led to a negative effect from the subsequent valuation of inventories at market values as of the date of acquisition in January 2018 in the amount of Ŷ3.1 million.
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Sales revenue | ƊƉƌƎ | ƉƎƇƋ | ƇƊƋ |
| EBITDA before non-recurring items 1) | ƍƌƋ | ƋƊƊ | ƊƐƌ |
| EBIT before non-recurring items | |||
| (recurring EBIT) 1) | ƋƏƋ | ƉƍƋ | ƋƎƍ |
| Return on sales (EBIT-margin) | ƇƉƌ | ƏƎ | - |
| Return on capital employed | |||
| (ROCE EBIT) 2) |
ƇƌƐ | ƇƇƎ | - |
| Operating profit (EBIT) | ƌƐƇ | ƉƎƋ | ƋƌƇ |
Reporting segment Graphite Materials &
Systems (GMS)
1) Non-recurring items of Ŷ0,6 million and Ŷ1.0 million in the first nine months 2018 and 2017, respectively
2) EBIT before non-recurring items for the last twelve months to average capital employed (total of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity and working capital)
Sales in the reporting segment Graphite Materials & Systems in the third quarter 2018 remained on the level of the prior quarter and thus slight above our expectations, as particularly the market segments LED and Semiconductors were able to compensate for the seasonal weakness in Industrial Applications. Recurring EBIT in the third quarter 2018 was below the level of the strong second quarter due only to higher bonus provisions resulting from the substantially better business development compared to the budget.
In the first nine months 2018, sales in the market segments Battery & other Energy, LED, Semiconductors, Automotive & Transport as well as Chemicals posted double digit growth rates. Business with the Industrial Applications segment remained slightly above the prior year level. We limited our sales with the market segment Solar to below the prior year level, as we increased our deliveries to customers from the LED and Semiconductor segments, who also posted a high demand for solutions based on isostatic graphite. In total, sales increased substantially by 15% (currency adjusted by 17%) to Ŷ436.8 million (9M/2017: Ŷ381.5 million) in the reporting period. The initial adoption of IFRS 15 increased sales by approximately Ŷ24 million. Adjusted for this and the currency effect, sales in GMS grew by approximately 11%.
In total, recurring EBIT in the reporting period increased substantially more than proportionately by 59% to Ŷ59.5 million (9M/2017: Ŷ37.5 million), leading to a significant improvement in the EBIT margin to 13.6% (9M/2017: 9.8%) mainly due to improvements in nearly all market segments. Based on increased raw material costs, we had initiated negotiations with our customers already at the beginning of the year and have partially already implemented price increases. Particularly in the market segment Battery & other Energy we were thus able to stabilize earnings on the prior year level. Included in recurring EBIT is an impact from the initial adoption of IFRS 15 in the amount of Ŷ14.7 million, which relates mainly to the price increases described above. Adjusted for this effect, recurring EBIT increased by 19%.
Non-recurring items of Ŷ0.6 million were recorded in the period under review in the reporting segment GMS (9M/2017: Ŷ1.0 Mio. Ŷ). Accordingly, EBIT after non-recurring items increased to Ŷ60.1 million (9M/2017: Ŷ38.5 million).
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Sales revenue | ƈƋƌ | ƌƍ | !ƇƐƐ |
| EBITDA before non-recurring items 1) | –Ƈƌƌ | –ƇƍƇ | ƈƏ |
| EBIT before non-recurring items | |||
| (recurring EBIT) 1) | –ƈƇƈ | –ƈƇƍ | ƈƉ |
| thereof Central Innovation | –ƌƇ | –ƌƉ | Ɖƈ |
| Operating profit/loss (EBIT) | –ƇƏƊ | –ƈƇƍ | ƇƐƌ |
1) Non-recurring items of Ŷ1.8 million in the first nine months 2018
Sales revenue in the reporting segment Corporate increased strongly once again in the third quarter 2018 compared to the prior year quarter relating mainly to the sale of the former business unit Performance Products (PP), as services provided to PP are recorded as external sales now that PP has been sold.
Recurring EBIT at minus Ŷ21.2 million remained on a similar level as in the prior year period (9M/2017: minus Ŷ21.7 million) in the reporting segment Corporate and includes a positive effect of Ŷ3.9 million from a land sale in Canada, which more than compensated for the implementation costs for the Operations Management System (OMS) and the termination of cost allocations to the now sold PP. Expenses of our central research and development activities at Ŷ6.1 million were approximately at the prior year level.
The Board of Management together with the heads of the business units have decided to develop and implement the socalled "SGL Operations Management System" (SGL OMS), a uniform and standardized management system for production across the sites and businesses. The goal is to create lean processes, high efficiency, and the best product quality. By 2020, all sites should be managed by uniform standards and key performance indicators. In doing so, we will also rely on best practice procedures. In addition, many of the methods and tools from SGL Excellence and Six Sigma will be integrated into the OMS.
Non-recurring items of Ŷ1.8 million relating mainly to asset sales were recorded in the period under review in the reporting segment Corporate (9M/2017: no non-recurring items).
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Sales revenue | ƍƎƌƉ | ƌƊƈƇ | ƈƈƋ |
| Cost of sales | –ƌƇƋƊ | –ƋƇƐƉ | –ƈƐƌ |
| Gross profit | ƇƍƐƏ | ƇƉƇƎ | ƈƏƍ |
| Selling, administrative and R&D | |||
| expenses | –ƇƉƍƊ | –ƇƈƊƊ | –ƇƐƋ |
| Other operating income/expenses | ƇƉƐ | ƇƍƊ | –ƈƋƉ |
| Result from investments accounted | |||
| for At-Equity | Ƈƈƍ | Ǝƈ | ƋƊƏ |
| Operating profit (EBIT) before non | |||
| recurring items (recurring EBIT) | ƋƏƈ | ƉƉƐ | ƍƏƊ |
| Non-recurring items | ƈƐƋ | –ƋƐ | !ƇƐƐ |
| Operating profit (EBIT) | ƍƏƍ | ƈƎƐ | !ƇƐƐ |
| EBITDA before non-recurring items | ƇƐƋƍ | ƍƐƇ | ƋƐƎ |
Sales revenue rose significantly by 23% (currency adjusted by 25%) to Ŷ786.3 million (9M/2017: Ŷ642.1 million). Slightly more than half of the sales growth related to the changes in the scope of consolidation and the initial adoption of IFRS 15. The gross margin improved to 21.7% in the reporting period (9M/2017: 20.5%) due to higher capacity utilization and the resulting increased fixed cost absorption. Accordingly, gross profit rose significantly to Ŷ170.9 million in the reporting period from Ŷ131.8 million in the prior year period. Selling, administrative, and R&D expenses increased by 10.5% to Ŷ137.4 million (9M/2017: Ŷ124.4 million), at a slower rate than sales revenue.
Recurring EBIT increased by 79% to Ŷ59.2 million in the reporting period after Ŷ33.0 million in the prior year period, due to improved earnings in the business unit GMS (including an impact of Ŷ14.7 million from the initial adoption of IFRS 15) and an income of Ŷ3.9 million from a land sale in the reporting segment Corporate.
Non-recurring items of Ŷ20.5 million include an adjustment to the fair value of the net assets of the previously proportionally consolidated joint operation with the BMW Group amounting to Ŷ28.4 million at the date of acquisition as well as, with an opposite impact, the additional amortization of identified assets and liabilities resulting from purchase price allocation (PPA). Non-recurring items from the amortization of the PPA of the acquired SGL Composites companies in the US, Austria and Germany amounted to minus Ŷ8.7 million in total. In addition, income from restructuring totaling Ŷ0.8 million was reported as non-recurring items, comprising income from the sale of non-current assets in Italy and Germany of Ŷ 3.3 million as well as restructuring expenses of Ŷ1.6 million in Portugal and Ŷ0.9 million in Germany. Accordingly, EBIT after non-recurring items amounted to Ŷ79.7 million (9M/2017: Ŷ28.0 million).
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Interest income | Ɛƍ | ƐƊ | ƍƋƐ |
| Interest expense | –ƇƐƇ | –ƈƉƐ | ƋƌƇ |
| Imputed interest convertible bonds | |||
| (non-cash) | –ƉƋ | –ƌƈ | ƊƉƋ |
| Imputed interest finance lease (non | |||
| cash) | –ƇƏ | –Ƈƈ | -ƋƎƉ |
| Interest expense on pensions | –ƊƇ | –ƊƏ | ƇƌƉ |
| Interest expense, net | –ƇƎƏ | –ƉƊƏ | ƊƋƎ |
| Amortization of refinancing costs | |||
| (non-cash) | –ƇƉ | –ƋƊ | ƍƋƏ |
| Foreign currency valuation of Group | |||
| loans (non-cash) | –ƐƋ | ƈƈ | >–ƇƐƐ |
| Other financial expense | –Ɛƌ | –ƐƋ | –ƈƐƐ |
| Other financing result | –ƈƊ | –Ɖƍ | ƉƋƇ |
| Net financing result | –ƈƇƉ | –ƉƎƌ | ƊƊƎ |
After the repayment of the corporate bond (interest rate of 4.875%) in October 2017 and the convertible bond 2012/2018 (interest rate of 2.75%) in January 2018, interest expense related particularly to the interest on the convertible bond 2015/2020 (interest rate of 3.5%) and the financial debt of SGL Composites due to BMW Group. The non-cash imputed interest on the convertible bond is recognized in order to adjust the coupon on the convertible bond to comparable interest rates at the time of its issuance. In the prior year period, the accelerated amortization of refinancing costs resulted from the estimated early repayment of the corporate bond, which was redeemed ahead of schedule at the end of October 2017, compared to its original maturity in January 2021.
Due to the repayment of the corporate bond and the convertible bond 2012/2018, net financing result was improved from Ŷ38.6 million in the prior year period to Ŷ21.3 million in the reporting period.
The issue of the new convertible bond 2018/2023 on September 20, 2018 in the amount of Ŷ159.3 million and an interest rate of 3% had no material impact on the financial result in the reporting period due to its proximity to the reporting date.
| Nine months | |||
|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change |
| Operating profit (EBIT) | ƍƏƍ | ƈƎƐ | !ƇƐƐ |
| Net financing result | –ƈƇƉ | –ƉƎƌ | ƊƊƎ |
| Result from continuing operations before | |||
| income taxes | ƋƎƊ | –ƇƐƌ | !ƇƐƐ |
| Income tax expense | –ƌƊ | –ƌƎ | ƋƏ |
| Result from continuing operations | ƋƈƐ | –ƇƍƊ | !ƇƐƐ |
| Result from discontinued operations, | |||
| net of income taxes | –ƊƐ | ƈƋƋ | >–ƇƐƐ |
| Net result for the period | ƊƎƐ | ƎƇ | !ƇƐƐ |
| Attributable to: | |||
| Non-controlling interests | ƐƉ | ƈƎ | –ƎƏƉ |
| Consolidated net result (attributable to shareholders of the parent company) |
Ɗƍƍ | ƋƉ | !ƇƐƐ |
| Earnings per share - basic and diluted (in Ŷ) |
ƐƉƏ | ƐƐƊ | !ƇƐƐ |
| Earnings per share continuing operations, basic and diluted (in Ŷ) |
ƐƊƈ | –ƐƇƍ | !ƇƐƐ |
| Earnings per share - discontinued operations, diluted (in Ŷ) |
–ƐƐƉ | ƐƈƇ | >–ƇƐƐ |
Due to the developments described above, the result from continuing operations before income taxes improved from minus Ŷ10.6 million in the prior year period to Ŷ58.4 million in the reporting period. Income tax expense of Ŷ6.4 million (prior year period: Ŷ6.8 million) was influenced by deferred tax expenses related to temporary differences from IFRS 15 effects as well as the usage of tax loss carryforwards.
The result from discontinued operations includes mainly income and expenses incurred by the business unit Performance Products (PP). The sale of the PP activities was closed in 2017. The expense in the reporting period was impacted by additional tax provisions related to the sale of PP.
Consolidated net result of the period amounted to Ŷ47.7 million compared to Ŷ5.3 million in the prior year period (after deduction of non-controlling interests of Ŷ0.3 million in the reporting period and Ŷ2.8 million in the nine months 2017).
| ASSETS Ŷm | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Non-current assets | ƎƇƌƋ | ƌƊƇƐ | ƈƍƊ |
| Current assets | ƎƐƉƊ | ƎƎƈƎ | –ƏƐ |
| Assets held for sale | ƐƇ | ƇƍƏ | –ƏƏƊ |
| Total assets | ƇƌƈƐƐ | ƇƋƊƇƍ | ƋƇ |
| EQUITY AND LIABILITIES Ŷm | |||
| Equity attributable to the | |||
| shareholders of the parent | |||
| company | ƋƊƊƌ | ƊƋƍƐ | ƇƏƈ |
| Non-controlling interests | ƇƐƋ | ƇƇƉ | –ƍƇ |
| Total equity | ƋƋƋƇ | ƊƌƎƉ | ƇƎƋ |
| Non-current liabilities | ƍƏƍƊ | ƌƇƌƐ | ƈƏƊ |
| Current liabilities | ƈƌƍƋ | ƊƊƌƇ | –ƊƐƐ |
| Liabilities in connection with | |||
| assets held for sale | ƐƐ | ƇƇƉ | - |
| Total equity and liabilities | ƇƌƈƐƐ | ƇƋƊƇƍ | ƋƇ |
Total assets as of September 30, 2018, increased by Ŷ78.3 million or 5.1% to Ŷ1,620.0 million compared to December 31, 2017. Non-current assets increased due to the full consolidation of the two SGL Composites companies in Germany and in the US (former SGL ACF) by a total of Ŷ187.5 million. The decrease in current assets is particularly attributable to the decrease in liquidity of Ŷ131.9 million, as the issue of the Ŷ159.3 million convertible bond in September 2018 was more than consumed by the repayment of the Ŷ239.2 million convertible bond in January 2018 and the Ŷ67.5 million debt of SGL Composites. On the other side, current assets increased by Ŷ35.8 million from the adoption of IFRS 15. Receivables from the sale of PP amounting to Ŷ62.6 million (including interest) at year-end 2017 were completely paid to SGL Carbon in March 2018.
The increase in non-current liabilities is attributable on one hand to the issue of the Ŷ159.3 million convertible bond and on the other hand to the proportional debt assumed by SGL Composites (USA) in the amount of Ŷ92.2 million as well as the Ŷ51 million purchase price liability due in 2020 for the acquisition of the former BMW joint operation. An opposite effect resulted from the decrease in pension provisions of Ŷ15.5 million to Ŷ277.5 million. The main driver for this development was an adjustment of the pension discount rates to the expected long-term interest environment in Germany and in the US by 0.2%-points to 1.9% and by 0.6%-points to 4.2%, respectively, as well as the adjustment of mortality tables in Germany amounting to a total of Ŷ12.9 million. The decrease in current liabilities can be mainly attributed to the repayment of the outstanding amount of the convertible bond 2012/2018 of Ŷ239.2 million in January 2018. In addition, a portion of the current liabilities of SGL Composites in the amount of Ŷ 67.5 million was repaid in the first nine months 2018.
| Ŷ million | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Inventories | ƉƐƊƎ | ƈƎƇƊ | ƎƉ |
| Trade accounts receivable and | |||
| contract assets 1) | ƈƈƐƏ | ƇƈƌƊ | ƍƊƎ |
| Trade payables | –ƏƎƇ | –ƎƏƉ | –ƏƏ |
| Working Capital | Ɗƈƍƌ | ƉƇƎƋ | ƉƊƉ |
1) After adjusting trade accounts receivables for IFRS 15 adoption as well as for consolidation effects, total balance amounts to Ŷ138.4 million, which corresponds to an operating increase of Ŷ11.7 million or 9%
The changes in inventories, trade receivables and contract assets compared to December 31, 2017 is mainly impacted by the adoption of IFRS 15 and the consolidation of SGL ACF (For details see the notes to the interim financial statements). Adjusted for the IFRS 15 adoption and for consolidation effects, inventories increased by Ŷ38.9 million and trade receivables and contract assets increased by Ŷ11.7 million. The increased business volume in the reporting segment GMS resulted in a substantial rise in inventories, trade receivables and contract assets. The increase in trade payables had an opposite effect on the working capital in the first nine months 2018.
As of September 30, 2018, equity attributable to the shareholders of the parent company increased to Ŷ544.6 million (December 31, 2017: Ŷ457.0 million). The increase is mainly attributable to the positive net result of the period amounting to Ŷ47.7 million. The adoption of IFRS 15 and IFRS 9 on transition date January 1, 2018, the fair value of the conversion right of the convertible bond as well as the adjustment of pension interest rates as a result of the higher interest rate environment and the adjustment of mortality tables in Germany resulted in an additional increase in shareholders' equity of Ŷ13.8 million, Ŷ13.7 million and Ŷ12.9 million, respectively. Foreign currency effects had no material impact on the change in shareholders' equity. Overall, the equity ratio as of September 30, 2018, increased to 33.6% compared to 29.6% as of December 31, 2017.
| Ŷ million | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Carrying amount of current and non-current financial liabilities |
ƊƊƐƈ | ƋƐƉƊ | –Ƈƈƌ |
| Carrying amount of financial liabilities held for sale |
- | ƈƎ | - |
| Remaining imputed interest for the convertible bonds |
ƈƈƋ | ƇƈƐ | ƎƍƋ |
| Accrued refinancing cost | Ƌƌ | Ɖƍ | ƋƇƊ |
| Total financial debt (nominal amount) |
ƊƌƎƉ | ƋƈƇƏ | –ƇƐƉ |
| Liquidity - continuing operations | ƈƊƍƊ | ƉƍƏƉ | –ƉƊƎ |
| Liquidity - discontinued operations |
- | Ɖƌ | - |
| Total liquidity (continuing and discontinued) |
ƈƊƍƊ | ƉƎƈƏ | –ƉƋƊ |
| Net financial debt - continuing and discontinued operations |
ƈƈƐƏ | ƇƉƏƐ | ƋƎƏ |
| thereof: SGL Composites (formerly SGL ACF) |
|||
| Current financial liabilities | ƊƉƈ | ƐƐ | - |
| Non-current financial liabilities | ƎƌƊ | ƏƎƇ | –ƇƇƏ |
| Cash and cash equivalents | ƐƉ | Ƈƈ | –ƍƋƐ |
| Net financial debt SGL Composites |
ƇƈƏƉ | ƏƌƏ | ƉƉƊ |
| Net financial debt excluding SGL | |||
| Composites (formerly SGL ACF) | ƏƇƌ | ƊƈƇ | !ƇƐƐ |
The financial debt mainly includes our convertible bonds, the financial debt of SGL Composites (formerly SGL ACF) due to BMW, the netted amounts of the remaining imputed interest component as well as the refinancing costs.
As of September 30, 2018, net financial debt increased by Ŷ81.9 million to Ŷ220.9 million. This development is primarily attributable to the change from proportional consolidation to full consolidation of SGL Composites (USA). As a result, the share of financial liabilities of SGL Composites at SGL Carbon rose to 100%, representing an increase of Ŷ92.2 million. Payments received for the sale of PP had an opposite effect and reduced net debt by Ŷ62.6 million.
| 2018 ƋƎƊ –ƐƎ –ƈƎƊ ƋƋƉ |
2017 –ƇƐƌ –ƇƐ - |
|---|---|
| ƉƍƇ | |
| –ƌƇƎ | |
| –ƉƇƈ | ƏƇ |
| ƍƌ | –ƈƍƈ |
| –ƊƐ | ƈƌƈ |
| –ƇƐ | |
| –ƉƐƉ | |
| ƍƐ | |
| ƐƐ | |
| ƌƐ | |
| ƇƊƋ | |
| –ƋƐ | |
| –ƈƊ | |
| –ƊƍƋ | –ƇƐƈ |
| ƌƈƌ | –ƈƈƇ |
| ƇƋƇ | –ƉƈƉ |
| –ƉƏƏ | –ƉƍƊ |
| ƋƎƌ | ƊƇ |
| –ƊƋƍ Ɖƌ –ƉƎƍ ƊƏ –ƈƉƇ ƌƐ ƉƊ ƐƐ ƐƐ |
1) Defined as cash flow from operating activities minus cash flow from investing activities
Despite the significant increase in working capital, cashflow from operating activities in the nine months 2018 improved significantly by Ŷ34.8 million to Ŷ7.6 million, mainly due to the positive development in the second quarter 2018. This reflects the improvement in the operating result. Cash flow from investing activities decreased from minus Ŷ10.2 million in the prior year period to minus Ŷ47.5 million in the reporting period and includes the net cash outflows for the acquisition of the SGL Composites company in Wackersdorf (Germany) amounting to Ŷ23.1 million, as well as the net proceeds from the sale of SGL Kümpers amounting to Ŷ3.4 million and from a land sale in Lachute (Canada) in the amount of Ŷ3.9 million. Cash flow from investing activities in the prior year period included the cash inflows from the sale of the carbon fiber production site in Evanston as well as the proceeds from a land sale in Banting (Malaysia) of Ŷ21.7 million in total. Capital expenditures in intangible assets and property plant and equipment in the reporting period increased by 28% to Ŷ38.7 million (9M/2017: Ŷ30.3 million).
As a result of the purchase price payment for the acquisition of SGL ACF and the resulting increased cash outflow from investing activities, free cash flow from continuing operations in the reporting period declined to minus Ŷ39.9 million compared to the prior year period (9M/2017: minus Ŷ37.4 million).
Free cash flow from discontinued operations improved significantly to Ŷ58.6 million in the reporting period (9M/2017: Ŷ4.1 million) and mainly includes the proceeds from the remaining purchase price from the sale of the former business unit PP and in the prior year period the operational cash in- and outflows of the PP business.
The following tables provide information on the headcount development according to reporting segments and to geographic regions:
| Headcount | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Composites - Fibers & Materials | ƇƋƉƋ | ƇƊƐƊ | ƏƉ |
| Graphite Materials & Systems | ƈƌƏƋ | ƈƋƋƎ | ƋƊ |
| Corporate | ƈƈƋ | ƈƉƇ | –ƈƌ |
| Total SGL Carbon | ƊƊƋƋ | ƊƇƏƉ | ƌƈ |
| Headcount | 30. Sep. 18 | 31. Dec. 17 | Change |
| Germany | ƇƎƏƐ | ƇƎƇƍ | ƊƐ |
| Europe excluding Germany | ƇƈƍƊ | ƇƈƊƉ | ƈƋ |
| North America | ƎƈƉ | ƍƐƊ | ƇƌƏ |
| Asia | ƊƌƎ | ƊƈƏ | ƏƇ |
| Total SGL Carbon | ƊƊƋƋ | ƊƇƏƉ | ƌƈ |
The number of employees at SGL Carbon amounted to 4,455 as of September 30, 2018 (December 31, 2017: 4,193) and increased both in CFM and GMS and declined as expected in Corporate. Headcount in CFM increased by 184 employees as a result of the full consolidation of the former BMW joint operation SGL Composites and decreased by 115 employees following the sale of SGL Kümpers. At GMS, the increase in the number of employees is due to the continuing good demand situation. Headcount amounted to 4,962 including temporary employees. Also for the final quarter of the year, we expect a further selective increase in employees in the business units to execute the growth strategy.
Employees of shared service functions are allocated to the reporting segments based on performance related keys. Headcount of Corporate still includes employees who provide services to the former business unit PP.
Regarding existing opportunities and risks, we refer to the detailed statements in the annual report for the financial year ended December 31, 2017. Opportunities and risks, which are presented in abbreviated form below, have not materially changed from the statements made in the annual report. The changes in the Group in the first nine months 2018 only lead to a minor change in the opportunity and risk profile: the acquisition of the remaining 49% of the shares in SGL ACF increase the opportunities and risks relating to automotive projects, while the sale of the shares in SGL Kümpers temporarily reduces the relevance of the wind energy market segment in the reporting segment CFM.
The global economy is currently experiencing a broad-based upturn. However, the Brexit and the existing political and economic conflicts could have significantly negative impacts. The form of the trade relationship between the EU and the United Kingdom after the Brexit remains unclear. A possible "hard" Brexit could have a particularly negative impact on the supply chain in the Composites - Fibers & Materials (CFM) reporting segment, as one of our two carbon fiber production sites is located in the United Kingdom. We have therefore established a task force under the leadership of the CFO to internally evaluate possible risks and have already initiated risk mitigation measures. Furthermore, a further escalation of the trade dispute between the US and China and further tariffs could have a negative impact on our business. A further deterioration of the situation in the Near and Middle East could also have a negative impact on the global economy. Should these conflicts ease or be resolved, however, the global economy could gain even more momentum. An escalation of geopolitical conflicts and increasing governmental intervention could lead to further rising trade barriers and have a negative impact on the prices and availability of raw materials.
Significant growth and earnings opportunities may arise from our activities in very dynamic markets (e. g. electric mobility). However, seizing these opportunities could result in higher investment and working capital needs with resulting shortterm negative effects on cash flow. Furthermore, the increasing utilization of our capacities in production entails higher downtime risks. This and delays on the procurement side could lead to supply bottlenecks or quality costs. We try to reduce this risk by investing into new equipment and preventive maintenance measures. Stricter environmental regulations could also require investments or even lead in the medium term to a situation where we are no longer able to operate production sites in the established ways. Furthermore, a stronger global economy may result in raw material and personnel costs significantly exceeding our expectations and having a negative impact on our business performance. On the other hand, the economic recovery could also lead to a further increase in demand for our products and thus result in price increases. In the medium term, exchange rate fluctuations especially in the Yen and the USD - can have an impact on our key financial figures. Changes in tax laws or legal provisions in individual countries in which we operate may lead to higher tax expenses and higher tax payments. Legal disputes also entail risks for the earnings situation.
The reporting segment Composites - Fibers & Materials (CFM) aims to grow in the automotive, aerospace, energy and industrial applications industries. Risks may arise from lower growth as a result of delays in the expected increase in demand and from further capacity expansion by competitors. If customer projects do not materialize as quickly as planned, this will have a negative impact on the earnings situation. Furthermore, in particular the development of volumes and margins in the textile fiber business has to be monitored carefully.
In the reporting segment Graphite Materials & Systems (GMS), we see above average growth potential, especially in the LED and semiconductor industries as well as in the battery market segment with our anode materials for lithium-ion batteries. Exchange rates, oil price and sales price developments bear risks with regard to the impact on earnings of individual products, customer industries and regions. In the medium term, our planning faces a risk of stagnating volumes, especially in the chemicals, solar and industrial applications industries. A drop in prices in the LED, battery and solar industries could also have a medium-term impact on SGL Carbon's sales revenue and earnings potential. In the market segment chemicals, we see intense competition for few major projects.
Based on the information available at the present time, in our opinion there are no material individual risks that could jeopardize sustainably the business as a going concern. In our opinion, even if the individual risks are viewed on an aggregated basis, they do not threaten the going concern of SGL Carbon.
As already outlined in our half year report, we continue to expect a sales increase of approximately 25% compared to the prior year level primarily as a result of acquisitions. Adjusted for currency and structural effects, this corresponds to growth in the mid to high single digit range. The initial adoption of IFRS 15 does not materially impact sales in this segment.
The expected sales development in the individual market segments also corresponds to the expectations outlined in the half year report: Sales with the automotive industry is anticipated to more than double based on the full consolidation of the former joint ventures with Benteler and BMW as well as the strong demand development. Sales should slightly1 increase in the market segment Aerospace, while sales in the market segments Industrial Applications as well as Textile Fibers are anticipated to remain on the prior year level. In contrast, sales with the wind energy industry is adversely impacted not only by the deconsolidation of our former joint venture with Kümpers, but also due to the weak customer demand and is anticipated to decline by more than 50%.
Higher earnings contribution resulting from the full consolidation of our former joint venture SGL ACF as well as increasing volume demand will be offset by negative currency effects, higher development costs and the weaker than initially expected earnings in the market segment Wind Energy, Textile Fibers and Industrial Applications. This confirms our increased caution in the half year report as we now expect recurring EBIT
1
"Slight" indicates a variation of up to 10%; "significant" indicates a variation of more than 10%
approximately on the prior year level. The initial adoption of IFRS 15 has no material impact on EBIT in this segment.
As we had already highlighted in the past two interim reports, the highest quarterly earnings of this fiscal year, as in the past two years, will have been achieved in the first quarter 2018 due to the high capacity utilization as well as high shipments for particular projects.
The full consolidation of the former joint venture with BMW Group (SGL ACF) required an adjustment to the fair value of the proportionate shareholding as of the date of acquisition and led to a positive, non-cash earnings contribution of approximately Ŷ28 million to the EBIT after non-recurring items already in the first quarter 2018. On the other hand, the preliminary purchase price allocation (PPA) will increase depreciation by approximately Ŷ10 million per annum until 2021, which will be recorded as a non-recurring item.
The anticipated sales increase in the reporting segment Graphite Materials & Systems (GMS) is slightly higher than the one outlined in the half year report: though we continue to expect a slight increase in sales, this now translates into growth of approximately 10% when adjusted for currency effects (previously: mid to high single digit currency adjusted growth). In addition, we expect a low double digit million Euro positive impact on sales in this reporting segment from the initial adoption of IFRS 15.
The expected sales trends in the individual market segments are in line with the developments described in the half year report. Significant sales growth is expected in the market segments LED, Automotive & Transport as well as Semiconductors, while a slight increase is anticipated in the market segments Industrial Applications and Chemicals. We are limiting our sales in the market segment Solar to benefit our customers in the LED and Semiconductor segments. Strong volume growth is again expected in the lithium-ion battery business. In combination with successfully implemented price increases we should be able to record a sales increase also in this market segment in the full year 2018.
Following the strong development in the first nine months 2018, we now expect a more pronounced operational improvement in the reporting segment GMS, as the recurring EBIT is anticipated
to continue to increase substantially more than proportionately to the now higher expected sales growth. The positive effect from the initial adoption of IFRS 15 is also anticipated to be higher than previously expected. We now plan a high single to low double digit million Ŷ amount, by which EBIT in this segment will be increased.
All in all, we expect that the reporting segment GMS will once again surpass our target Group ROCE (EBIT in relation to capital employed) of at least 9-10% and record an improvement over the prior year level.
Guidance for the reporting segment Corporate corresponds to the outlook in the half year report: slightly higher expenses are expected to be incurred in the fiscal year 2018 compared to the prior year due to general cost increases, in particular relating to wage increases. One-off income from a land sale in Canada should be offset by one-off expenses for strategic projects. In particular these include the development and implementation of our Operations Management System (OMS) – a companywide, uniform, standardized, cross-locational and crossbusiness unit management system for production. The goal of our new OMS is to streamline processes, increase efficiency, and maximize product quality, thereby maintaining high customer satisfaction.
We increase once again our guidance for sales growth in the fiscal year 2018, which was already adjusted upwards at the half year stage and now anticipate an increase of approximately 15%. Accordingly, we will for the first time as the "new SGL" reach the Ŷ1 billion sales mark. This corresponds to a high single digit growth rate adjusted for structural and currency effects. In addition, we anticipate a low double digit million Euro positive impact on Group sales from the initial adoption of IFRS 15.
We also slightly adjust upwards our expectation for recurring EBIT compared to the guidance at the half year stage, as the slightly weaker than expected earnings from CFM should be more than compensated by the higher than initially anticipated earnings contribution from GMS.
All in all, recurring EBIT should continue to slightly outpace the renewed higher sales growth expectations, driven by positive effects from the significantly higher volume demand, the successful implementation of price increase initiatives in the reporting segment GMS, the additional earnings contribution from the full consolidation of the former joint venture SGL ACF as well as cost savings. In contrast, however, we anticipate slightly lower than expected earnings contribution from the reporting segment CFM, higher personnel and raw material costs as well as less favorable exchange rates compared to the prior year. Congruent to the explanations in the reporting segment GMS, the positive effect on Group sales from the initial adoption of IFRS 15 should also be higher than previously expected. We now expect a high single to low double digit million Euro amount, by which Group recurring EBIT will be increased.
As explained in the reporting segment CFM, the preliminary purchase price allocation (PPA) increases depreciation by approximately Ŷ10 million per annum until 2021. These expenses will be recorded as non-recurring items in the reporting segment CFM.
We also raise our guidance for net income from continued operations to the upper end of the range and now anticipate a mid double digit million Euro amount (previous guidance: low to mid double digit million Euro amount). The improvement compared to the prior year loss of approximately Ŷ16 million is primarily due to the higher operating result as well as the lower interest expense as a result of the early repayment of our corporate bond on October 30, 2017, as well as the repayment of a convertible bond at maturity on January 25, 2018.
Our net financial debt at the end of 2018 should be considerably higher than it was at the end of 2017, in particular due to the full consolidation of our former joint venture SGL ACF. Nevertheless, we expect to remain within our target gearing level of
approximately 0.5, and a leverage ratio based on EBITDA under 2.5. This confirms our previous guidance.
Despite project timing driven low expenditures in the first nine months 2018, our planned capex budget for the full year 2018 amounts to approximately Ŷ80 million, and thus slightly lower than the guidance at the half year stage. The focus of capital expenditure in our reporting segment CFM continues to be primarily on the market segment Automotive, for which we are continuing to strengthen the value chain, particularly for fabrics and components. In our reporting segment GMS, expansion investments are also focusing on the market segment Automotive, as well as on our lithium-ion battery business and our business with the semiconductor and LED industries.
Wiesbaden, November 6, 2018
SGL Carbon SE The Board of Management
(unaudited)
| 3rd Quarter | Nine months | |||||
|---|---|---|---|---|---|---|
| Ŷ million | 2018 | 2017 | Change | 2018 | 2017 | Change |
| Sales revenue | ƈƋƍƐ | ƈƐƌƎ | ƈƊƉ | ƍƎƌƉ | ƌƊƈƇ | ƈƈƋ |
| Cost of sales | –ƈƐƍƏ | –ƇƌƋƇ | –ƈƋƏ | –ƌƈƊƇ | –ƋƇƐƉ | –ƈƈƉ |
| Gross profit | ƊƏƇ | ƊƇƍ | Ƈƍƍ | Ƈƌƈƈ | ƇƉƇƎ | ƈƉƇ |
| Selling expenses | –ƈƋƇ | –ƈƇƋ | –Ƈƌƍ | –ƍƊƏ | –ƌƍƍ | –ƇƐƌ |
| Research and development costs | –ƍƎ | –ƎƋ | Ǝƈ | –ƈƊƇ | –ƈƉƋ | –ƈƌ |
| General and administrative expenses | –ƇƉƈ | –ƇƇƉ | –ƇƌƎ | –ƉƎƊ | –ƉƉƈ | –ƇƋƍ |
| Other operating income | ƉƇ | ƎƎ | –ƌƊƎ | ƊƊƋ | ƈƋƋ | ƍƊƋ |
| Other operating expenses | –ƐƊ | –ƇƎ | ƍƍƎ | –ƉƇ | –ƇƊƇ | ƍƎƐ |
| Result from investments accounted for At-Equity | ƊƇ | ƉƇ | ƉƈƉ | Ƈƈƍ | Ǝƈ | ƋƊƏ |
| Restructuring expenses | –ƇƇ | ƇƎ | >–ƇƐƐ | ƐƎ | ƇƐ | –ƈƐƐ |
| Operating profit | Ǝƍ | ƇƈƉ | –ƈƏƉ | ƍƏƍ | ƈƎƐ | !ƇƐƐ |
| Interest income | Ɛƈ | Ɛƈ | ƐƐ | Ɛƍ | ƐƊ | ƍƋƐ |
| Interest expense | –ƌƉ | –ƇƈƇ | ƊƍƏ | –ƇƏƌ | –ƉƋƉ | ƊƊƋ |
| Other financing result | –ƇƋ | –ƐƋ | >–ƇƐƐ | –ƈƊ | –Ɖƍ | ƉƋƇ |
| Result from continuing operations before income taxes | ƇƇ | –ƐƇ | !ƇƐƐ | ƋƎƊ | –ƇƐƌ | !ƇƐƐ |
| Income tax expense | –Ɛƍ | –ƇƎ | ƌƇƇ | –ƌƊ | –ƌƎ | ƋƏ |
| Result from continuing operations | ƐƊ | –ƇƏ | !ƇƐƐ | ƋƈƐ | –ƇƍƊ | !ƇƐƐ |
| Result from discontinued operations, net of income taxes | ƐƐ | ƇƇƌ | –ƇƐƐƐ | –ƊƐ | ƈƋƋ | >–ƇƐƐ |
| Net result for the period | ƐƊ | Əƍ | –ƏƋƏ | ƊƎƐ | ƎƇ | !ƇƐƐ |
| Thereof attributable to: | ||||||
| Non-controlling interests | ƐƐ | ƐƎ | –ƇƐƐƐ | ƐƉ | ƈƎ | –ƎƏƉ |
| Consolidated net result (attributable to shareholders of the parent | ||||||
| company) | ƐƊ | ƎƏ | –ƏƋƋ | Ɗƍƍ | ƋƉ | !ƇƐƐ |
| Earnings per share, basic and diluted (inŶ) | ƐƐƐ | ƐƐƍ | –ƇƐƐƐ | ƐƉƏ | ƐƐƊ | !ƇƐƐ |
| Earnings per share - continuing operations, basic and diluted (inŶ) | ƐƐƐ | –ƐƐƉ | ƇƐƐƐ | ƐƊƈ | –ƐƇƍ | !ƇƐƐ |
| 3rd Quarter | Nine months | |||
|---|---|---|---|---|
| Ŷ million | 2018 | 2017 | 2018 | 2017 |
| Net result for the period | ƐƊ | Əƍ | ƊƎƐ | ƎƇ |
| Items that may be reclassified subsequently to profit or loss | ||||
| Changes in the fair value of securities available for sale | - | ƐƇ | - | Ɛƈ |
| Cash flow hedges 1) | ƐƇ | –Ɛƌ | –ƇƋ | ƐƐ |
| Currency translation | Ɛƈ | –ƇƐƏ | ƐƏ | –Ƈƌƌ |
| Items that will not be reclassified subsequently to profit or loss | ||||
| Actuarial gains/losses on pensions and similar obligations 2) | ƈƇ | –ƈƐ | ƇƈƏ | ƇƋ |
| Other comprehensive income | ƈƊ | –ƇƉƊ | ƇƈƉ | –ƇƊƏ |
| Comprehensive income | ƈƎ | –Ɖƍ | ƌƐƉ | –ƌƎ |
| Thereof attributable to: | ||||
| Non-controlling interests | –ƐƇ | Ɛƌ | Ɛƈ | ƈƊ |
| Consolidated net result (attributable to shareholders of the parent company) | ƈƏ | –ƊƉ | ƌƐƇ | –Əƈ |
1) Includes tax effects of Ŷ0.4 million (2017: Ŷ0.1 million) in the first nine months
2) Includes tax effects of Ŷ0.1 million (2017: minus Ŷ3.5 million) in the first nine months
| ASSETS Ŷm | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | ƊƇƇ | ƈƇƇ | ƏƊƎ |
| Other intangible assets | ƋƎƋ | ƈƋƊ | !ƇƐƐ |
| Property, plant and equipment | ƌƋƐƐ | ƋƈƊƐ | ƈƊƐ |
| Investments accounted for At-Equity | ƋƇƏ | ƊƋƇ | ƇƋƇ |
| Other non-currents assets | ƊƏ | Ɗƍ | ƊƉ |
| Deferred tax assets | ƇƐƇ | ƈƐƍ | –ƋƇƈ |
| ƎƇƌƋ | ƌƊƇƐ | ƈƍƊ | |
| Current assets | |||
| Inventories | ƉƐƊƎ | ƈƎƇƊ | ƎƉ |
| Trade receivables and contract assets | ƈƈƐƏ | ƇƈƌƊ | ƍƊƎ |
| Other financial assets | ƉƐ | ƌƈƊ | –ƏƋƈ |
| Other receivables and other assets | ƈƍƉ | ƉƉƉ | –ƇƎƐ% |
| Liquidity | ƈƊƍƊ | ƉƍƏƉ | –ƉƊƎ |
| Time deposits | Ƌƍƈ | - | - |
| Cash and cash equivalents | ƇƏƐƈ | ƉƍƏƉ | –ƊƏƏ |
| ƎƐƉƊ | ƎƎƈƎ | –ƏƐ | |
| Assets held for sale | ƐƇ | ƇƍƏ | –ƏƏƊ |
| Total assets | ƇƌƈƐƐ | ƇƋƊƇƍ | ƋƇ |
| EQUITY AND LIABILITIES Ŷm | 30. Sep. 18 | 31. Dec. 17 | Change |
|---|---|---|---|
| Equity | |||
| Issued capital | ƉƇƉƈ | ƉƇƉƈ | ƐƐ |
| Capital reserves | ƇƐƊƌƋ | ƇƐƉƈƏ | ƇƉ |
| Accumulated losses | –ƎƇƋƇ | –ƎƎƏƇ | ƎƉ |
| Equity attributable to the shareholders of the parent company | ƋƊƊƌ | ƊƋƍƐ | ƇƏƈ |
| Non-controlling interests | ƇƐƋ | ƇƇƉ | –ƍƇ |
| Total equity | ƋƋƋƇ | ƊƌƎƉ | ƇƎƋ |
| Non-current liabilities | |||
| Provisions for pensions and similar employee benefits | ƈƍƍƋ | ƈƏƉƐ | –ƋƉ |
| Other provisions | ƉƏƊ | Ɖƍƌ | ƊƎ |
| Interest-bearing loans | ƉƏƊƐ | ƈƌƈƇ | ƋƐƉ |
| Other financial liabilities | ƍƈƌ | ƈƇƈ | !ƇƐƐ |
| Deferred tax liabilities | ƇƉƏ | ƈƇ | !ƇƐƐ |
| ƍƏƍƊ | ƌƇƌƐ | ƈƏƊ | |
| Current liabilities | |||
| Other provisions | ƎƎƍ | ƎƎƎ | –ƐƇ |
| Current portion of interest-bearing loans | Ɗƌƈ | ƈƊƇƉ | –ƎƐƏ |
| Trade payables | ƏƎƇ | ƎƏƉ | ƏƏ |
| Other liabilities | ƉƊƋ | ƈƌƍ | ƈƏƈ |
| ƈƌƍƋ | ƊƊƌƇ | –ƊƐƐ | |
| Liabilities in connection with assets held for sale | - | ƇƇƉ | - |
| Total equity and liabilities | ƇƌƈƐƐ | ƇƋƊƇƍ | ƋƇ |
| Nine months | ||
|---|---|---|
| Ŷ million | 2018 | 2017 |
| Cash flow from operating activities | ||
| Result from continuing operations before income taxes | ƋƎƊ | –ƇƐƌ |
| Adjustments to reconcile the result from continuing operations to cash flow from operating activities: | ||
| Interest expense (net) | ƇƎƏ | ƉƊƏ |
| Result from the disposal of property, plant and equipment | –Ɖƌ | –ƐƊ |
| Depreciation/amortization expense | ƋƋƉ | ƉƍƇ |
| Value adjustments due to step acquisitions | –ƈƎƊ | - |
| Restructuring expenses | –ƐƎ | –ƇƐ |
| Result from investments accounted for At-Equity | –Ƈƈƍ | –Ǝƈ |
| Amortization of refinancing costs | ƇƉ | ƋƊ |
| Interest received | Ɛƍ | ƐƊ |
| Interest paid | –ƇƐƇ | –ƈƋƍ |
| Income taxes paid | –ƈƇ | –ƇƎ |
| Changes in provisions, net | –ƏƊ | –Ƈƈ |
| Changes in working capital | ||
| Inventories | –ƉƎƏ | –ƇƎƎ |
| Trade receivables and contract assets | –ƇƇƍ | –ƈƍƍ |
| Trade payables | ƊƏ | –ƇƋƉ |
| Changes in other operating assets/liabilities | –ƇƊƈ | Ƌƍ |
| Cash flow from operating activities - continuing operations | ƍƌ | –ƈƍƈ |
| Cash flow from operating activities - discontinued operations | –ƊƐ | ƈƌƈ |
| Cash flow from operating activities - continuing and discontinued operations | Ɖƌ | –ƇƐ |
| Nine months | ||
|---|---|---|
| Ŷ million | 2018 | 2017 |
| Cash flow from investing activities | ||
| Payments to purchase intangible assets and property, plant & equipment | –ƉƎƍ | –ƉƐƉ |
| Proceeds from the sale of intangible assets and property, plant & equipment | ƊƏ | ƍƐ |
| Dividend payments from investments accounted for At-Equity | ƌƐ | ƌƐ |
| Payments for the acquisition of subsidiaries, net of cash acquired | –ƈƉƇ | - |
| Payments received for divestitures | ƉƊ | ƇƊƋ |
| Payments for capital contributions concerning investments accounted for At-Equity and investments in other financial assets |
- | –ƋƐ |
| Other investing activities | - | –ƈƊ |
| Cash flow from investing activities - continuing operations | –ƊƍƋ | –ƇƐƈ |
| Changes in time deposits | –Ƌƍƈ | ƐƐ |
| Cash flow from investing and cash management activities - continuing operations | –ƇƐƊƍ | –ƇƐƈ |
| Cash flow from investing activities and cash management activities - discontinued operations | ƌƈƌ | –ƈƈƇ |
| Cash flow from investing activities and cash management activities - continuing and discontinued operations | –ƊƈƇ | –ƉƈƉ |
| Cash flow from financing activities | ||
| Proceeds from issuance of financial liabilities | ƇƋƏƉ | ƌƍ |
| Repayment of financial liabilities | –ƉƐƏƇ | –ƎƐ |
| Payments in connection with financing activities | –ƉƐ | –ƐƊ |
| Other financing activities | –ƇƇ | –ƐƊ |
| Cash flow from financing activities - continuing operations | –ƇƋƉƏ | –ƈƇ |
| Cash flow from financing activities - continuing and discontinued operations | –ƇƋƉƏ | –ƈƇ |
| Effect of foreign exchange rate changes | –ƐƉ | –ƇƋ |
| Net change in cash and cash equivalents | –ƇƏƈƍ | –ƉƌƏ |
| Cash and cash equivalents at beginning of period | ƉƎƈƏ | ƉƈƊƋ |
| Cash and cash equivalents at end of period | ƇƏƐƈ | ƈƎƍƌ |
| Time deposits at end of period | Ƌƍƈ | ƋƐ |
| Total liquidity | ƈƊƍƊ | ƈƏƈƌ |
| Less: Cash and cash equivalents of discontinued operations at end of period | - | ƇƋƈ |
| Liquidity | ƈƊƍƊ | ƈƍƍƊ |
| Nine months 2018 | ||||
|---|---|---|---|---|
| Equity attributable to | ||||
| the shareholders of | Non-controlling | |||
| Ŷ million | the parent company | interests | Total equity | |
| %DODQFH DW'HFHPEHU ƉƇ | ƊƋƍƐ | ƇƇƉ | ƊƌƎƉ | |
| Cumulative adjustment on initial application of IFRS 15 and IFRS 9 (net of | ||||
| income taxes) | ƇƉƎ | - | ƇƉƎ | |
| %DODQFH DW -DQXDU\Ƈ | ƊƍƐƎ | ƇƇƉ | ƊƎƈƇ | |
| Equity component of the convertible bonds | ƇƉƍ | - | ƇƉƍ | |
| Dividends | ƐƐ | –ƇƐ | –ƇƐ | |
| Net result for the period | Ɗƍƍ | ƐƉ | ƊƎƐ | |
| Other comprehensive income | ƇƈƊ | –ƐƇ | ƇƈƉ | |
| Comprehensive income | ƌƐƇ | Ɛƈ | ƌƐƉ | |
| %DODQFH DW6HS ƉƐ | ƋƊƊƌ | ƇƐƋ | ƋƋƋƇ |
| Nine months 17 | ||||
|---|---|---|---|---|
| Ŷ million | Equity attributable to the shareholders of the parent company |
Non-controlling interests |
Total equity | |
| %DODQFH DW -DQXDU\Ƈ | ƉƉƇƎ | ƇƌƇ | ƉƊƍƏ | |
| Net result for the period | ƋƉ | ƈƎ | ƎƇ | |
| Other comprehensive income | –ƇƊƋ | –ƐƊ | –ƇƊƏ | |
| Comprehensive income | –Əƈ | ƈƊ | –ƌƎ | |
| Other changes in equity 1) | ƈƈ | –ƍƐ | –ƊƎ | |
| %DODQFH DW6HS ƉƐ | ƉƈƊƎ | ƇƇƋ | ƉƉƌƉ |
1) In particular in connection with the acquisition of the non-controlling interests or the valuation of non-controlling interests in subsidiary partnerships
SGL Carbon SE, located at Söhnleinstrasse 8, Wiesbaden (Germany), together with its subsidiaries (the Company or SGL Carbon) is a global manufacturer of products and solutions based on carbon fibers and specialty graphites.
The condensed consolidated interim financial statements of SGL Carbon have been prepared in accordance with International Financial Reporting Standards (IFRS) applicable to interim financial reporting (IAS 34) as issued by the International Accounting Standards Board and as adopted by the European Union (EU) and should be read in conjunction with the SGL Carbon Consolidated Financial Statements as of December 31, 2017. The condensed consolidated interim financial statements as of September 30, 2018, apply the same accounting principles and practices as well as the same estimates and assumptions as those used in the 2017 annual financial statements, except for the adoption of the new standards IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments effective as of January 1, 2018.
These condensed consolidated interim financial statements contain all of the information that is required for a fair presentation of the results of operations and the financial position of the Group.
The condensed consolidated interim financial statements were authorized by the Board of Management on November 6, 2018. The condensed consolidated interim financial statements and interim group management report have not been audited, neither have they been subject to an auditor's review.
The acquisition of SGL Automotive Carbon Fibers GmbH & Co KG, Munich (Germany) was completed on January 11, 2018. This transaction makes SGL Carbon the sole owner of the former joint operation with the BMW Group (renamed SGL Composites GmbH & Co. KG). The U.S. company of SGL ACF will, in a next step, be transferred to SGL Carbon no later than by the end of 2020 after payment of the purchase price and the redemption of the BMW financing; in this context, SGL Carbon exercises full control over the U.S. company based on the voting majority of 51% already upon the acquisition of the German shares. By acquiring SGL ACF, SGL Carbon is forging ahead with its strategy to consolidate all key activities in the value chain – from carbon fibers and materials to components – within SGL Carbon, giving it overall responsibility. Both companies will be integrated into the business unit CFM. Prior to obtaining control, the companies were consolidated on a proportional basis as joint operations within the meaning of IFRS 11. In a business combination achieved in stages, obtaining a controlling majority is recognized under the assumption of a cash payment (for the new 49% share) and an exchange (of the previously held 51% share at fair value). The difference between the carrying amount and the fair value of the previously held shares of Ŷ48.3 million and Ŷ76.2 million, respectively, led to an increase in other operating income in the income statement in the amount of Ŷ28.4 million (net of positive cumulative currency translation differences of Ŷ0.5 million). Based on the preliminary purchase price allocation, the breakdown of the fair value of identifiable assets and liabilities in SGL ACF on the date of acquisition on 100% basis is as follows. The corresponding proportional (51%) carrying amounts taken from the Group's financial statements immediately prior to the acquisition are shown for information purposes in column "Carrying amounts according to IFRS 11":
| Carrying amounts | ||
|---|---|---|
| Fair Values at | according to IFRS 11 | |
| Ŷ million | acquisition date (100%) | (51%)1) |
| Assets | ||
| Other intangible assets | ƊƇƏ | ƐƇ |
| Property, plant and equipment | ƈƊƎƇ | ƇƈƇƏ |
| Deferred tax assets | ƐƐ | ƈƋ |
| Inventories | ƊƌƉ | ƈƉƌ |
| Trade receivables and contract assets | ƇƈƊ | ƌƍ |
| Other receivables and other assets | ƈƋ | ƇƉ |
| Cash and cash equivalents | ƈƊ | Ƈƈ |
| Liabilities | ||
| Non-current liabilities | ||
| Provisions for pensions and similar employee benefits | ƐƇ | ƐƇ |
| Interest-bearing loans | ƇƏƈƊ | ƏƎƇ |
| Deferred tax liabilities | ƇƇƐ | ƐƐ |
| Current liabilities | ||
| Other provisions | Ɗƍ | ƈƊ |
| Trade payables | ƍƎ | ƊƊ |
| Other liabilities | ƎƐ | ƊƐ |
| Net assets | ƇƈƏƌ | ƊƎƉ |
| Goodwill from business combination | ƇƏƋ | |
| Purchase price | ƇƊƏƇ |
1) Values immediately prior to the acquisition date
The other intangible assets are comprised of customer relationships with an estimated useful life of 51 months. Of the total consideration given for the acquisition, an amount of USD 62.2 million is due at the end of 2020 and Ŷ24.3 million (less acquired cash of Ŷ1.2 million) were paid at closing on January 11, 2018. The goodwill mainly includes intangible assets that could not be valued separately like the labor work force know how and positive business development expectations.
As of the acquisition date January 11, 2018 until September 30, 2018, the newly acquired companies contributed Ŷ94.5 million to the Group sales revenue and Ŷ6.9 million to Group operating profit (incl. additional depreciation and amortization expense on assets identified as part of the purchase price allocation, in each case based on 100%).
The sale of the 51% shareholding in SGL Kümpers GmbH & Co KG, Rheine (Germany) was completed on January 10, 2018. The related disposal of the assets of Kümpers did not result in any effect on profit or loss in fiscal 2018.
This standard provides a single, principles-based five-step model for the determination and recognition of revenue to be applied to all contracts with customers. It replaces in particular IAS 18 and IAS 11 "Construction Contracts" and has a material effect on the presentation of SGL Carbon's results of operations and financial position. SGL Carbon utilized the option for simplified initial application, i.e., contracts that are not completed by January 1, 2018 are accounted for as if they had been recognized in accordance with IFRS 15 from the very beginning.
The standard changes the accounting requirements for classifying and measuring financial assets, for impairment of financial assets and for hedge accounting.
Financial assets are classified and measured on the basis of the entity's business model and the character of the financial asset's cash flow. A financial asset is initially measured either "at amortized cost", "at fair value through other comprehensive income", or "at fair value through profit or loss". The classification and measurement of financial liabilities under IFRS 9 are unchanged compared with the current accounting requirements of IAS 39. IFRS 9 replaces the existing incurred loss model for financial assets with an expected credit loss model. IFRS 9 did not lead to any changes in regards to hedge accounting compared to IAS 39.
The cumulative effect arising from the transition of IFRS 15 and IFRS 9 was recognized as an adjustment to the opening balance of equity as of January 1, 2018. Prior-year comparatives are not adjusted; instead, they are presented based on the previous rules.
The tables below show the effects of the new accounting rules.
| IFRS 15 | IFRS 9 | ||||
|---|---|---|---|---|---|
| adjust | adjust | ||||
| Ŷ million | 31. Dec. 17 | ments | ments | Netting | 1. Jan. 18 |
| Assets | |||||
| Inventories | ƈƎƇƊ | –ƈƏƉ | ƈƋƈƇ | ||
| Trade receivables and contract assets | ƇƈƌƊ | ƊƏƎ | –Ƈƌ | ƇƍƊƌ | |
| thereof: trade receivables | ƇƈƌƊ | ƐƐ | –ƇƉ | ƇƈƋƇ | |
| thereof: contract assets | ƐƐ | ƊƏƎ | –ƐƉ | ƊƏƋ | |
| Other financial assets | ƌƈƊ | –Ɛƈ | ƌƈƈ | ||
| Deferred tax assets | ƈƐƍ | ƐƋ | –Ɗƌ | Ƈƌƌ | |
| Liabilities | |||||
| Deferred tax liabilities | ƈƇ | ƋƊ | –Ɗƌ | ƈƏ | |
| Equity | |||||
| Accumulated losses | –ƎƎƏƇ | ƇƋƇ | –ƇƉ | –ƎƍƋƉ | |
In accordance with the previous revenue recognition rules under IAS 18, sales revenues were recorded only upon the delivery of the goods to the customers' site, i.e. at the date on which the customer accepts the goods and the related risks and rewards incidental to the transfer of title. The transition effects are attributable to the first-time recognition of contract assets that, under IFRS 15, lead to an earlier recognition of revenue from the sale of goods.
Pursuant to IFRS 15, revenue shall be recognized if the company's performance does create a customized asset with no alternative use to the company and the company has an enforceable right for payment for performance completed to date. Assessing whether an asset created by the company's performance is highly customized for a particular customer so that it has no alternative use to the company requires accounting estimates that involve subjective judgements and the use of assumptions, some of which may be for matters that are inherently uncertain and susceptible to change.
The effects of the adoption of IFRS 9 result from the implementation of simplified impairment model based on expected credit losses particularly related to trade receivables as well as to contract assets recorded upon adoption of IFRS 15.
The following tables summarize the impacts of adopting IFRS 15 and IFRS 9 on the Group's interim balance sheet and its interim income statement and OCI as of September 30, 2018. There was no impact on the Group's interim statement of cash flows.
| First nine months 2018 | ||||
|---|---|---|---|---|
| Amounts without adoption of IFRS 15 and |
||||
| Ŷ million | IFRS 9 | IFRS 15 adjustments | IFRS 9 adjustments | As reported |
| Sales revenue | ƍƋƏƈ | ƈƍƇ | ƍƎƌƉ | |
| Cost of sales | –ƌƇƈƉ | –ƇƇƎ | –ƌƈƊƇ | |
| Gross profit | ƇƊƌƏ | ƇƋƉ | Ƈƌƈƈ | |
| Impairment loss on trade receivables, other financial assets and contract assets |
–Ɛƈ | –Ɛƈ | ||
| Operating profit | ƌƊƌ | ƇƋƉ | –Ɛƈ | ƍƏƍ |
| Credit value adjustment term deposits | –ƐƊ | –ƐƊ | ||
| Result before income taxes | ƊƉƍ | ƇƋƉ | –Ɛƌ | ƋƎƊ |
| Income tax expense | –ƈƇ | –ƊƊ | ƐƇ | –ƌƊ |
| Net result for the period | Ɖƍƌ | ƇƐƏ | –ƐƋ | ƊƎƐ |
| Other comprehensive income | ƇƏ | ƇƐƏ | –ƐƋ | ƇƈƉ |
| 30. Sep. 18 | |||||
|---|---|---|---|---|---|
| Ŷ million | Amounts without adoption of IFRS 15 and IFRS 9 |
IFRS 15 adjustments | IFRS 9 adjustments | Netting | As reported |
| Inventories | ƉƊƌƉ | –ƊƇƋ | ƉƐƊƎ | ||
| Trade receivables and | |||||
| contract assets | ƇƊƋƌ | ƍƍƉ | –ƈƐ | ƈƈƐƏ | |
| thereof: trade receivables |
ƇƊƋƌ | ƐƐ | –Ƈƌ | ƇƊƊƐ | |
| thereof: contract assets | ƍƍƉ | –ƐƊ | ƍƌƏ | ||
| Time deposits | Ƌƍƌ | –ƐƊ | Ƌƍƈ | ||
| Deferred tax assets | ƇƍƉ | Ɛƌ | –ƍƎ | ƇƐƇ | |
| Deferred tax liabilities | 11.9 | 9.8 | – 7.8 | 13.9 | |
| Accumulated losses | –ƎƉƏƉ | ƈƌƐ | –ƇƎ | –ƎƇƋƇ |
Income and expenses incurred by the business unit PP (former business activities GE and CFL/CE) are reported separately under discontinued operations in the prior period income statement. The disposal of PP was completed at the end of 2017. Discontinued operations of the current period mainly include tax risks related to the former business unit PP.
| Nine months | ||
|---|---|---|
| Ŷ million | 2018 | 2017 |
| Sales revenue from discontinued operations | - | ƉƊƎƎ |
| Total expenses from discontinued operations | –ƊƐ | –ƉƈƉƍ |
| Result from operating activities of discontinued | ||
| operations before income taxes | –ƊƐ | ƈƋƇ |
| Attributable tax expense | - | –ƌƈ |
| Reversal of impairment losses arising on the remeasurement of assets included in disposal groups at fair value less costs to |
||
| sell | - | ƌƌ |
| Result from discontinued operations Ƈ | –ƊƐ | ƈƋƋ |
| Earnings per share - discontinued operations, | ||
| basic and diluted (in Ŷ) | –ƐƐƉ | ƐƈƇ |
1) Attributable to the shareholders of the parent company
The main joint venture accounted for At-Equity is Brembo SGL Carbon Ceramic Brakes S.p.A (Ceramic Brake Discs), Stezzano, Italy, which is operated together with Brembo and produces and further develops carbon ceramic brake discs. The table below provides the financial position of Brembo SGL, as reported in its financial statements. The summarized result of operations of the prior period also includes the amounts of the former joint venture Benteler GmbH & Co KG, Paderborn, Germany. The remaining 50% shares in Benteler SGL were acquired by SGL Carbon at the end of 2017.
| Nine months | ||
|---|---|---|
| Ŷ million | 2018 | 2017 |
| Ownership interest | ƋƐ | ƋƐ |
| Income statement | ||
| Sales revenue (100%) | ƇƉƌƌ | ƇƋƇƊ |
| Operating profit | ƉƎƎ | ƈƊƏ |
| Net financing result | ƐƇ | –Ɛƍ |
| Net result for the period (100%) | ƈƊƏ | ƇƊƈ |
| Share of SGL Carbon in the net result for the period (50%) |
ƇƈƋ | ƍƇ |
| Balance Sheet | 30. Sep. 18 | 31. Dec. 17 |
| Non-current assets | ƊƉƉ | ƊƇƈ |
| Current assets | ƍƎƈ | ƌƊƏ |
| Thereof cash and cash equivalents | ƈƋƐ | ƉƇƈ |
| Non-current liabilities | ƏƇ | ƌƋ |
| Thereof financial liabilities | ƐƐ | ƐƐ |
| Current liabilities | ƉƉƉ | ƉƉƈ |
| Thereof financial liabilities | ƐƐ | ƐƐ |
| 1HWDVVHWV ƇƐƐ | ƍƏƇ | ƌƌƊ |
| Share of SGL Carbon in the net assets (50%) | ƉƏƌ | ƉƉƈ |
| Goodwill/customer base | Ɖƍ | ƉƎ |
| Carrying amount of material joint ventures | ƊƉƉ | ƉƍƐ |
The carrying amount of remaining investments accounted for At- Equity was Ŷ8.6 million (Dec. 31, 2017: Ŷ8.1 million) and their contribution to the result from investments accounted for At-Equity during the first nine months 2018 was Ŷ0.3 million (9M/2017: Ŷ1.1 million).
The following table assigns the individual balance sheet items for the financial instruments to classes and measurement categories:
| Measure | |||
|---|---|---|---|
| ment | |||
| category | Carrying | Carrying | |
| under | amount at | amount at | |
| Ŷ million | IFRS9 | Sep. 30, 18 | Dec. 31, 17 |
| Financial assets | |||
| Cash and cash equivalents | Ƈ | ƇƏƐƈ | ƉƍƏƉ |
| Time deposits | Ƈ | Ƌƍƈ | ƐƐ |
| Trade receivables and contract assets | Ƈ | ƈƈƐƏ | ƇƈƌƊ |
| Marketable securities and similar investments (31.12: Available-for-sale financial assets) | ƈ | Ɗƌ | ƊƊ |
| Other financial assets | Ƈ | ƉƐ | ƌƈƊ |
| Derivative financial assets: Derivatives without a hedging relationship | Ɖ | - | ƐƎ |
| Derivative financial assets: Derivatives with a hedging relationship | n.a. | ƐƊ | ƈƐ |
| Financial liabilities | |||
| Convertible bonds | Ɗ | ƉƐƉƎ | ƉƏƊƈ |
| Bank loans, overdrafts and other financial liabilities | Ɗ | ƇƊƈƐ | ƇƇƈƏ |
| Refinancing costs | Ɗ | –Ƌƌ | –Ɖƍ |
| Finance lease liabilities | n.a. | ƈƈƊ | ƈƈƊ |
| Trade payables | Ɗ | ƏƎƇ | ƎƏƉ |
| Miscellaneous other financial liabilities | Ɗ | ƌƇƈ | ƊƊ |
| Derivative financial liabilities: Derivatives without a hedging relationship | Ƌ | - | ƐƐ |
| Derivative financial liabilities: Derivatives with hedging relationship | n.a. | Ɛƈ | ƐƐ |
| Thereof aggregated by measurement category in accordance with IFRS 9 (31. Dec. 2017: measurement category in accordance with IAS 39) |
|||
| 1) Financial assets measured at amortized costs | |||
| (31. Dec. 2017: IAS 39 measurement category: Loans and receivables) | ƊƍƇƉ | ƋƌƎƇ | |
| 2) Financial assets measured at fair value through profit and loss | |||
| (31. Dec. 2017: IAS 39 measurement category: Available-for-sale financial assets) | Ɗƌ | ƊƊ | |
| 3) Financial assets measured at fair value through profit and loss (31. Dec. 2017: IAS 39 measurement category: Financial assets held for trading) |
- | ƐƎ | |
| 4) Financial liabilities measured at amortized costs | |||
| (31. Dec. 17: IAS 39 measurement category: Financial liabilities measured at amortized cost) | ƋƏƏƋ | ƋƏƍƇ | |
| 5) Financial liabilities measured at fair value through profit and loss | |||
| (31. Dec. 2017: IAS 39 measurement category: Financial liabilities held for trading) | - | ƐƐ |
The following table shows the breakdown of the assets and liabilities measured at fair value into the three levels of fair value hierarchy in accordance with IFRS 13:
| 30. Sep. 18 | ||||
|---|---|---|---|---|
| Ŷ million | Level1 | Level2 | Level3 | Total |
| Marketable securities and similar |
||||
| investments | Ɗƌ | - | - | Ɗƌ |
| Derivative financial | ||||
| assets | - | ƐƊ | - | ƐƊ |
| Derivative financial liabilities |
- | Ɛƈ | - | Ɛƈ |
| 31. Dec. 17 | ||||
|---|---|---|---|---|
| Ŷ million | Level1 | Level2 | Level3 | Total |
| Available for sale financial assets |
ƊƊ | - | - | ƊƊ |
| Derivative financial assets |
- | ƈƎ | - | ƈƎ |
| Derivative financial liabilities |
- | ƐƐ | - | ƐƐ |
In September 2018, SGL Carbon SE issued an unsubordinated and unsecured convertible bond with a principal amount of Ŷ159.3 million (convertible bond 2018/2023). The bond has a term of five years and matures on September 20, 2023. It will be repaid at 100% of the nominal amount. The initial conversion price is Ŷ13.022, which corresponds to a premium of 30% above the reference price of the SGL Carbon SE share of Ŷ10.0169 during the placement. The convertible bond carries a coupon of 3.0% p.a., payable semi-annually in arrears on March 20 and September 20 beginning on March 20, 2019. Based on the current conversion price the complete volume of 12.2 million shares would be converted. The proceeds from the placement of the convertible bond will be used to refinance existing debt, extend the maturity profile, increase financial flexibility for further growth and for general business purposes. SKion GmbH holds a nominal amount of Ŷ30 million of the convertible bond 2018/2023. Upon issuance of the bond, the fair value of the conversion rights in the amount of Ŷ13.7 million was transferred to capital reserves and concurrently deducted from the bond liability. The fair market value of the convertible bond 2015/2020 as of September 30, 2018, was Ŷ171.4 million (December 31, 2017: Ŷ176.3 million) and for the convertible bond 2018/2023 Ŷ157.5 million. As the fair value is derived from quoted prices in active markets, these financial instruments are allocated to Level 1. On January 25, 2018, the outstanding amount of the convertible bond 2012/2018 with a nominal value of Ŷ240.0 million was fully repaid in the amount of Ŷ239.2 million.
Customer order patterns within the segments CFM and GMS primarily follow overall global trends (e. g. for lightweight materials) and depend on the availability in connection with the pricing of such materials. The overall economic environment is usually a first indicator for any developments in the customers' demand. In addition, individual large projects can significantly impact the business development and overlap regular seasonality.
Issued capital remained unchanged to December 31, 2017 at Ŷ313.2 million as of September 30, 2018, and is divided into 122,341,478 no-par value ordinary bearer shares at Ŷ2.56 per share. During the first nine months 2018, no new shares were issued from the authorized capital. As of September 30, 2018, there were 2,020,470 SARs outstanding. SGL Carbon SE held a total of 70,501 of its own shares (treasury shares) as of September 30, 2018. Based on an average number of 122.3 million shares, basic earnings per share amounted to Ŷ0.39 (9M/2017: Ŷ0.04).
The calculation of diluted earnings per share assumes the conversion of outstanding debt securities (convertible bonds) to shares or exercise of other contracts for the issue of common shares such as stock appreciation rights. The abovementioned financial instruments are included in the calculation of diluted earnings per share only if there is a mathematical dilutive effect during the reporting period concerned. Accordingly, EPS diluted amounts to Ŷ0.39 (9M/2017: Ŷ0.04). EPS diluted (continuing operations) amounts to Ŷ0.42 (9M/2017: minus Ŷ0.17).
| Consoli dation |
|||||
|---|---|---|---|---|---|
| adjust | SGL | ||||
| Ŷ million | CFM | GMS | Corporate | ments | Carbon |
| Nine months 2018 - continuing operations | |||||
| External sales revenue | ƉƈƉƏ | ƊƉƌƎ | ƈƋƌ | ƐƐ | ƍƎƌƉ |
| Intersegment sales revenue | ƉƉ | Ɛƈ | ƈƈƊ | –ƈƋƏ | ƐƐ |
| Total sales revenue | Ɖƈƍƈ | ƊƉƍƐ | ƊƎƐ | –ƈƋƏ | ƍƎƌƉ |
| Timing of revenue recognition | |||||
| Products transferred at point in time | ƉƈƐƏ | ƊƇƈƍ | ƈƋƌ | ƐƐ | ƍƋƏƈ |
| Products and services transferred over time | ƉƐ | ƈƊƇ | ƈƍƇ | ||
| Total sales revenue | 323.9 | 436.8 | 25.6 | 0.0 | 786.3 |
| Sales revenue by customer industry | |||||
| Mobility | ƇƎƌƈ | ƉƈƎ | ƍƎ | ƐƐ | ƈƈƌƎ |
| Energy | ƌƇ | ƇƇƏƌ | ƇƋ | ƐƐ | Ƈƈƍƈ |
| Industrial Applications | ƋƎƐ | ƇƉƍƐ | ƇƌƉ | ƐƐ | ƈƇƇƉ |
| Chemicals | ƐƐ | ƇƐƐƋ | ƐƐ | ƐƐ | ƇƐƐƋ |
| Digitalization | ƐƐ | ƊƌƏ | ƐƐ | ƐƐ | ƊƌƏ |
| Textile Fibers | ƍƉƌ | ƐƐ | ƐƐ | ƐƐ | ƍƉƌ |
| Total sales revenue | 323.9 | 436.8 | 25.6 | 0.0 | 786.3 |
| Operating profit (EBIT) before non-recurring items (recurring EBIT) | ƈƐƏ | ƋƏƋ | –ƈƇƈ | ƐƐ | ƋƏƈ |
| Non-recurring items 1) | ƇƎƇ | Ɛƌ | ƇƎ | ƐƐ | ƈƐƋ |
| Operating profit/loss (EBIT) | ƉƏƐ | ƌƐƇ | –ƇƏƊ | ƐƐ | ƍƏƍ |
| Capital expenditures 2) | ƎƉ | ƈƊƏ | ƋƋ | ƐƐ | ƉƎƍ |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) before non | |||||
| recurring items | ƊƋƎ | ƍƌƋ | –Ƈƌƌ | ƐƐ | ƇƐƋƍ |
| Amortization/depreciation on intangible assets and property, plant and equipment | |||||
| before non-recurring items | ƈƊƏ | ƇƍƐ | Ɗƌ | ƐƐ | ƊƌƋ |
| Working Capital 3) | Ƈƌƍƍ | ƈƌƇƐ | –ƇƇ | ƐƐ | Ɗƈƍƌ |
| Capital employed 4) | ƌƋƋƊ | ƊƍƏƐ | ƏƊƎ | ƐƐ | ƇƈƈƏƈ |
Sales revenue with one customer of the reporting segment CFM amount to approx. Ŷ89 million of total Group sales revenues.
| Consoli | |||||
|---|---|---|---|---|---|
| dation adjust |
SGL | ||||
| Ŷ million | CFM | GMS | Corporate | ments | Carbon |
| Nine months 2017 - continuing operations | |||||
| External sales revenue | ƈƋƉƏ | ƉƎƇƋ | ƌƍ | ƐƐ | ƌƊƈƇ |
| Intersegment sales revenue | ƉƏ | ƐƐ | ƈƐƊ | –ƈƊƉ | ƐƐ |
| Total sales revenue | ƈƋƍƎ | ƉƎƇƋ | ƈƍƇ | –ƈƊƉ | ƌƊƈƇ |
| Operating profit (EBIT) before non-recurring items (recurring EBIT) | Ƈƍƈ | ƉƍƋ | –ƈƇƍ | ƐƐ | ƉƉƐ |
| Non-recurring items 1) | –ƌƐ | ƇƐ | ƐƐ | ƐƐ | –ƋƐ |
| Operating profit/loss (EBIT) after non-recurring items | ƇƇƈ | ƉƎƋ | –ƈƇƍ | ƐƐ | ƈƎƐ |
| Capital expenditures 2) | ƋƎ | ƇƋƇ | ƏƊ | ƐƐ | ƉƐƉ |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) before non | |||||
| recurring items | ƉƈƎ | ƋƊƊ | –ƇƍƇ | ƐƐ | ƍƐƇ |
| Amortization/depreciation on intangible assets and property, plant and equipment | ƇƋƌ | ƇƌƏ | Ɗƌ | ƐƐ | ƉƍƇ |
| Working Capital (31.12.) 3) | ƇƈƉƍ | ƇƏƏƇ | –ƊƉ | ƐƐ | ƉƇƎƋ |
| Capital employed (31.12.) 4) | ƊƉƋƉ | ƊƐƇƏ | ƏƌƏ | ƐƐ | ƏƉƊƇ |
1) Non-recurring items comprise the full-consolidation effect of the former joint operations with the BMW Group (SGL ACF), the carryforward of hidden reserves realized as part of the purchase price allocation of the SGL Composite companies as well as restructuring expenses and, in 2017, restructuring expenses/others
2) Defined as total of capital expenditure in other intangible assets and property, plant and equipment
3) Defined as sum of inventories, trade receivables and contract assets less trade payables
4) Defined as the sum of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity, and working capital
None.
Wiesbaden, November 6, 2018
SGL Carbon SE The Board of Management
Dr. Jürgen Köhler Dr. Michael Majerus
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Wiesbaden, November 6, 2018
SGL Carbon SE
The Board of Management
| Ŷ million | 2018 | 2017 | Change |
|---|---|---|---|
| Sales revenue | |||
| Composites - Fibers & Materials | ƉƈƉƏ | ƈƋƉƏ | ƈƍƌ |
| Graphite Materials & Systems | ƊƉƌƎ | ƉƎƇƋ | ƇƊƋ |
| Corporate | ƈƋƌ | ƌƍ | !ƇƐƐ |
| SGL Carbon - continuing operations | ƍƎƌƉ | ƌƊƈƇ | ƈƈƋ |
| Ŷ million | 2018 | 2017 | Change |
|---|---|---|---|
| EBIT before non-recurring items (recurring EBIT) 1) |
|||
| Composites - Fibers & Materials | ƈƐƏ | Ƈƍƈ | ƈƇƋ |
| Graphite Materials & Systems | ƋƏƋ | ƉƍƋ | ƋƎƍ |
| Corporate | –ƈƇƈ | –ƈƇƍ | ƈƉ |
| SGL Carbon - continuing operations | ƋƏƈ | ƉƉƐ | ƍƏƊ |
| 2017 | 2018 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | |||||||||||
| Ŷ million | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q1-Q3 | ||
| Sales revenue | |||||||||||
| Composites - Fibers & Materials | ƏƉƌ | Ǝƈƌ | ƍƍƍ | ƍƎƐ | ƉƉƇƏ | ƇƇƋƐ | ƇƐƎƍ | ƇƐƐƈ | ƉƈƉƏ | ||
| Graphite Materials & Systems | ƇƈƇƊ | ƇƉƉƍ | ƇƈƌƊ | ƇƈƎƍ | ƋƇƐƈ | ƇƊƐƇ | ƇƊƍƏ | ƇƊƎƎ | ƊƉƌƎ | ||
| Corporate | ƇƉ | ƈƍ | ƈƍ | ƇƇƉ | ƇƎƐ | ƎƉ | ƏƉ | ƎƐ | ƈƋƌ | ||
| SGL Carbon - continuing operations | ƈƇƌƉ | ƈƇƏƐ | ƈƐƌƎ | ƈƇƎƐ | ƎƌƐƇ | ƈƌƉƊ | ƈƌƋƏ | ƈƋƍƐ | ƍƎƌƉ | ||
| SGL Carbon -discontinued operations (PP) | ƇƐƉƊ | ƇƇƊƐ | ƇƉƇƊ | ƇƌƎ | ƉƌƋƌ | - | - | - | - |
| 2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ŷ million | Q1 | Q2 | Q3 | Q4 | Full Year | Q1 | Q2 | Q3 | Q1-Q3 |
| EBIT before non-recurring items (recurring EBIT) 1) | |||||||||
| Composites - Fibers & Materials | ƍƏ | ƊƋ | ƊƎ | ƋƋ | ƈƈƍ | ƏƉ | ƎƐ | Ɖƌ | ƈƐƏ |
| Graphite Materials & Systems | ƎƋ | ƇƋƊ | ƇƉƌ | ƇƐƉ | ƊƍƎ | ƇƌƎ | ƈƉƈ | ƇƏƋ | ƋƏƋ |
| Corporate | –ƌƎ | –ƍƐ | –ƍƏ | –Ǝƍ | –ƉƐƊ | –Ƌƌ | –ƍƋ | –ƎƇ | –ƈƇƈ |
| SGL Carbon - continuing operations | Əƌ | ƇƈƏ | ƇƐƋ | ƍƇ | ƊƐƇ | ƈƐƋ | ƈƉƍ | ƇƋƐ | ƋƏƈ |
| SGL Carbon -discontinued operations (PP) | ƉƏ | ƉƐ | ƇƊƋ | ƉƐ | ƈƊƊ | - | - | - | - |
| 2017 | 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Full | |||||||||
| in % | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q1-Q3 |
| Return on sales (EBIT-margin) before non-recurring items 1) | |||||||||
| Composites - Fibers & Materials | ƎƊ | ƋƊ | ƌƈ | ƍƇ | ƌƎ | ƎƇ | ƍƊ | Ɖƌ | ƌƋ |
| Graphite Materials & Systems | ƍƐ | ƇƇƋ | ƇƐƎ | ƎƐ | ƏƊ | ƇƈƐ | ƇƋƍ | ƇƉƇ | ƇƉƌ |
| SGL Carbon - continuing operations | ƊƊ | ƋƏ | ƋƇ | ƉƉ | Ɗƍ | ƍƎ | ƎƏ | ƋƎ | ƍƋ |
| SGL Carbon -discontinued operations (PP) | ƉƎ | ƈƌ | ƇƇƐ | - | ƌƍ | - | - | - | - |
1) Non-recurring items of Ŷ8.9 million in 2017 and Ŷ20.5 million in the first nine months 2018
| 2017 | 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ŷ million | Q1 | Q2 | Q3 | Q4 | Full Year | Q1 | Q2 | Q3 | Q1-Q3 |
| Sales revenue | ƈƇƌƉ | ƈƇƏƐ | ƈƐƌƎ | ƈƇƎƐ | ƎƌƐƇ | ƈƌƉƊ | ƈƌƋƏ | ƈƋƍƐ | ƍƎƌƉ |
| Cost of sales | –ƇƍƉƌ | –ƇƍƇƌ | –ƇƌƋƇ | –ƇƍƉƍ | –ƌƎƊƐ | –ƈƇƐƐ | –ƈƐƉƐ | –ƈƐƈƊ | –ƌƇƋƊ |
| Gross profit | Ɗƈƍ | ƊƍƊ | ƊƇƍ | ƊƊƉ | ƇƍƌƇ | ƋƉƊ | ƌƈƏ | ƋƊƌ | ƇƍƐƏ |
| Selling, administrative, R&D and other | |||||||||
| operating income/expense | –ƉƋƌ | –ƉƍƇ | –ƉƊƉ | –ƊƇƎ | –ƇƊƎƎ | –ƉƍƐ | –ƊƉƍ | –ƊƉƍ | –ƇƈƊƊ |
| Result from investments accounted for | |||||||||
| At-Equity | ƈƋ | ƈƌ | ƉƇ | Ɗƌ | ƇƈƎ | ƊƇ | ƊƋ | ƊƇ | Ƈƈƍ |
| Operating profit (EBIT) before non-recurring | |||||||||
| items (recurring EBIT) | Əƌ | ƇƈƏ | ƇƐƋ | ƍƇ | ƊƐƇ | ƈƐƋ | ƈƉƍ | ƇƋƐ | ƋƏƈ |
| Restructuring expenses | –Ɛƌ | –ƌƈ | ƇƎ | ƏƏ | ƊƏ | ƐƐ | ƇƏ | –ƇƇ | ƐƎ |
| Reversal of impairment losses/Others | ƊƐ | ƊƐ | ƈƌƍ | -ƇƎ | -Ƌƈ | ƇƏƍ | |||
| Operating profit/loss (EBIT) | ƏƐ | ƌƍ | ƇƈƉ | ƈƇƐ | ƊƏƐ | Ɗƍƈ | ƈƉƎ | Ǝƍ | ƍƏƍ |
| Net financing result | –ƇƊƇ | –Ƈ2.1 | –ƇƈƊ | –ƇƎƈ | –ƋƌƎ | –ƍƐ | –ƌƍ | –ƍƌ | –ƈƇƉ |
| Result from continuing operations before | |||||||||
| income taxes | –ƋƇ | –ƋƊ | –ƐƇ | ƈƎ | –ƍƎ | ƊƐƈ | ƇƍƇ | ƇƇ | ƋƎƊ |
| Income tax expense | –ƐƏ | –ƊƇ | –ƇƎ | ƇƐ | –ƋƎ | –ƉƎ | –ƇƏ | –Ɛƍ | –ƌƊ |
| Result from continuing operations | –ƌƐ | –ƏƋ | –ƇƏ | ƉƎ | –ƇƉƌ | ƉƌƊ | ƇƋƈ | ƐƊ | ƋƈƐ |
| Result from discontinued operations, net | |||||||||
| of income taxes | ƌƋ | ƍƊ | ƇƇƌ | ƇƈƏƌ | ƇƋƋƇ | –Ɗƈ | Ɛƈ | ƐƐ | –ƊƐ |
| Net result for the period | ƐƋ | –ƈƇ | Əƍ | ƇƉƉƊ | ƇƊƇƋ | Ɖƈƈ | ƇƋƊ | ƐƊ | ƊƎƐ |
| Thereof attributable to: | |||||||||
| Non-controlling interests | ƐƎ | Ƈƈ | ƐƎ | –Ɛƈ | ƈƌ | ƐƐ | ƐƉ | ƐƐ | ƐƉ |
| Consolidated net result (attributable to | |||||||||
| shareholders of the parent company) | –ƐƉ | –ƉƉ | ƎƏ | ƇƉƉƌ | ƇƉƎƏ | Ɖƈƈ | ƇƋƇ | ƐƊ | Ɗƍƍ |
Annual General Meeting
SGL CARBON SE Head Office | Investor Relations Söhnleinstraße 8 65201 Wiesbaden Telephone: +49 611 6029-103 Telefax: +49 611 6029-101 E-Mail: [email protected] www.sglcarbon.com Produced inhouse with firesys
This interim report contains statements relating to certain projections and business trends that are forward-looking, including statements with respect to SGL Carbon's outlook and business development, including developments in SGL Carbon's Composites - Fibers & Materials and Graphite Materials & Systems businesses, expected customer demand, expected industry trends and expected trends in the business environment, statements related to SGL Carbon's cost savings programs. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue" and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about SGL Carbon's businesses and future financial results, and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance and involve risks and uncertainties. These risks and uncertainties include, without limitation, changes in political, economic, legal and business conditions, particularly relating to SGL Carbon's main customer industries, competitive products and pricing, the ability to achieve sustained growth and profitability in SGL Carbon's Composites - Fibers & Materials and Graphite Materials & Systems businesses, the impact of any manufacturing efficiencies and capacity constraints, widespread adoption of carbon fiber products and components in key end-markets of the SGL Carbon, including the automotive and aviation industries, the inability to execute additional cost savings or restructuring measures, availability of raw materials and critical manufacturing equipment, trade environment, changes in interest rates, exchange rates, tax rates, and regulation, available cash and liquidity, SGL Carbon's ability to refinance its indebtedness, development of the SGL Carbon's pension obligations, share price fluctuation may have on SGL Carbon's financial condition and results of operations and other risks identified in SGL Carbon's financial reports. These forward-looking statements are made only as of the date of this document. SGL Carbon does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
SGL Carbon SE Head Office | Investor Relations Söhnleinstrasse 8 65201 Wiesbaden/Germany Phone +49 611 6029-103 Fax +49 611 6029-101 [email protected] www.sglcarbon.com
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