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SGL CARBON SE
Quarterly Report • Nov 7, 2024
389_10-q_2024-11-07_6c04bb34-e0ea-4d2a-8a62-d30c42420ad9.pdf
Quarterly Report
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Statement on the first nine months 2024
Highlights 9M 2024
Sales in the first nine months of the 2024 fiscal year down by $4.8 \%$ to $€ 781.9$ million compared to the same period of the previous year (adjusted to currency and portfolio effects: minus $3.6 \%$ ) due to a decline in demand in the Carbon Fibers business unit and the termination of a project in Composite Solutions.
Adjusted EBITDA in the reporting period almost unchanged at $€ 127.6$ million. Weaker business development in Carbon Fibers and Composite Solutions was offset by positive price effects in the Graphite Solutions business unit and the very good business development in Process Technology, despite a weakening of demand from the semiconductor industry. Adjusted EBITDA margin increases by 0.5 percentage points to $16.3 \%$.
Equity ratio increased from $41.1 \%$ to $43.3 \%$ compared to the end of the last financial year; net debt rose slightly by $6.9 \%$ to $€ 123.8$ million. The leverage ratio remained unchanged at 0.7 .
Preliminary mid-term planning for the Carbon Fibers business unit results in a non-cash impairment of $€ 60-80$ million on property, plant and equipment in Q4 2024.
Confirmation of sales and earnings (adjusted EBITDA) guidance for 2024.
Financial Highlights 9M 2024
| Nine months | |||
|---|---|---|---|
| € million | 2024 | 2023 | Change |
| Sales revenue | 781.9 | 821.7 | $-4.8 \%$ |
| EBITDA pre ${ }^{1)}$ | 127.6 | 130.0 | $-1.8 \%$ |
| EBITDA pre-margin | $16.3 \%$ | $15.8 \%$ | $+0.5 \%$-points |
| EBIT | 68.3 | 39.5 | $72.9 \%$ |
| Consolidated net result (attributable to shareholders of the parent company) | 32.8 | 5.3 | $>100 \%$ |
| Free cash flow | 15.5 | 35.0 | $-55.7 \%$ |
| € million | Sep 30, 24 | Dec 31, 23 | Change |
| Total assets | $1,469.8$ | $1,472.6$ | $-0.2 \%$ |
| Equity (attributable to the shareholders of the parent company) | 636.1 | 605.3 | $5.1 \%$ |
| Net financial debt | 123.8 | 115.8 | $6.9 \%$ |
| Return on capital employed (ROCE) ${ }^{2)}$ | 11.1\% | 11.3\% | $-0.2 \%$-points |
| Leverage ratio ${ }^{3)}$ | 0.7 | 0.7 | |
| Equity ratio | 43.3\% | 41.1\% | $+2.2 \%$-points |
| Nine Months | |||
|---|---|---|---|
| Share price in $€$ | 2024 | Financial Year | |
| High | 7.53 | 9.36 | -19.6\% |
| Low | 5.05 | 5.72 | -11.7\% |
| Closing price at end of period | 5.38 | 6.51 | -17.4\% |
[^0]
[^0]: ${ }^{1)}$ Adjusted for one-off effects and non-recurring items. For more details, please refer to the business development section
${ }^{2)}$ EBIT pre 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)
${ }^{3)}$ Net financial debt divided by EBITDA pre of the last 12 months
Content
Highlights 9M 2024 ..... 2
Financial Highlights 9M 2024 ..... 3
Business Review ..... 5
Key Events of the Business Development ..... 5
Business Development ..... 6
Group Business Development ..... 6
Balance Sheet Structure ..... 10
Employees ..... 12
Segment Reporting ..... 12
Opportunities and Risks ..... 15
Outlook ..... 16
Selected Financial Information ..... 17
Other Information ..... 24
Business Review
Key Events of the Business Development
SGL Carbon evaluates strategic options for the business unit Carbon Fibers
The Board of Management of SGL Carbon SE decided on February 23, 2024 to evaluate various strategic options for the second largest business unit Carbon Fibers. These also include a possible partial or complete divestment of the business unit. A structured transaction process has been initiated. The Carbon Fibers sales share in 9M 2024 corresponded to $20.1 \%$ of SGL Carbon's consolidated sales (9M 2023: 21.9\%). EBITDA pre for the business unit (excluding the proportionate At-Equity result of Brembo SGL Carbon Ceramic Brakes, BSCCB) amounted to minus $€ 19.6$ million in the reporting period (9M 2023: minus €10.5 million). Due to the persistently unsatisfactory demand from wind industry customers and the associated deterioration in the earnings situation at Carbon Fibers, the Board of Management initiated a restructuring program in this business unit to achieve material and personnel savings in order to improve earnings. In the first nine months of 2024, a total of $€ 2.2$ million was recognized as restructuring expenses in the consolidated income statement.
As part of the review of the preliminary mid-term planning that took place after the balance-sheet date, an impairment test was carried out in the Carbon Fibers business unit, which led to a non-cash impairment of property, plant and equipment in the amount of $€ 60-80$ million. This impairment will be recognized in the fourth quarter of 2024. Further details can be found under "Subsequent events".
Discontinuation of R\&D activities and closure of laboratory of Battery Solutions (Meitingen) - Reporting segment Graphite Solutions
In July 2024, SGL Carbon decided to discontinue the development activities of the Battery Solutions business line of the Graphite Solutions reporting segment and to close the laboratory in Meitingen due to a lack of prospects for commercial success of the development project. Battery Solutions were involved in the development and industrialization of graphite anode materials (GAM) made of synthetic graphite for use in lithium-ion batteries. The discontinuation of R\&D activities and the closure of the Battery Solutions laboratory led to an impairment of fixed assets and inventories totaling $€ 2.7$ million as well as expenses for personnel measures of $€ 1.7$ million in the first nine months of the year.
Business Development
Group Business Development
Condensed consolidated income statement
| Nine months | |||
|---|---|---|---|
| € million | 2024 | 2023 | Change |
| Sales revenue | 781.9 | 821.7 | -4.8\% |
| Cost of sales | -594.8 | -637.6 | -6.7\% |
| Gross profit | 187.1 | 184.1 | 1.6\% |
| Selling, administrative and R\&D expenses | -117.0 | -124.3 | -5.9\% |
| Other operating income/expenses | 4.9 | 12.8 | -61.7\% |
| Result from investments accounted for At-Equity | 11.6 | 14.1 | -17.7\% |
| EBIT pre | 86.6 | 86.7 | -0.1\% |
| Impairment loss | -44.7 | - | |
| One-off effects/Non-recurring items | -18.3 | -2.5 | $>100 \%$ |
| EBIT | 68.3 | 39.5 | 72.9\% |
Weak demand at Carbon Fibers and a project termination at Composite Solutions lead to a slight decline in sales
SGL Carbon generated Group sales revenue of $€ 781.9$ million after nine months of fiscal year 2024 (9M 2023: €821.7 million). This corresponds to a slight decrease of $€ 39.8$ million or $4.8 \%$ compared to the same period of the previous year. Adjusted for the activities in Gardena (USA) and Pune (India) sold in 2023, as well as currency effects, the decline in sales was slightly lower at $€ 29.2$ million or $3.6 \%$.
The largest business unit, Graphite Solutions, increased its share of consolidated sales from $50.9 \%$ in the first nine months of the previous year to $52.8 \%$. By contrast, the share of sales generated by Carbon Fibers fell to $20.1 \%$ (previous year: $21.9 \%$ ). This is mainly due to the continued weak demand from the wind industry and increased price pressure for our commodity products. The Process Technology and Composite Solutions business units also developed differently, contributing $13.5 \%$ (previous year: $11.6 \%$ ) and $12.3 \%$ (previous year: $13.9 \%$ ) to Group sales respectively.
Sales revenue by reporting segment 9M 2024 (9M 2023)
Group sales were weighed down primarily by the ongoing weakness of demand in nearly all market segments in the Carbon Fibers business unit, where sales fell by $12.5 \%$ or $€ 22.5$ million compared to 9M 2023. In the Composite Solutions business unit, the termination of a larger project-related supply agreement with an automotive customer led to a decline in sales of $€ 18.5$ million or $16.2 \%$ compared to the same period of the previous year. Due to the increasingly weaker demand from semiconductor customers and the associated sales decline in Q3 2024, sales in the Graphite Solutions business unit stagnated compared to the nine-month figures of the previous year at $€ 412.5$ million (9M 2023: $€ 418.4$ million). Sales in the Corporate reporting segment also decreased by $€ 3.4$ million (minus 24.8\%). By contrast, sales in the Process Technology business unit developed very positively ( $+€ 10.5$ million or $11.0 \%$ ) compared to the same period of the previous year due to deliveries for major projects.
The Group's sales decline was mainly due to negative volume effects in the Composite Solutions and Carbon Fibers businesses and to a lower extent in the third quarter also in the Graphite Solutions business. Positive price effects in the Graphite Solutions, Process Technology and Composite Solutions businesses were partly offset by negative product mix effects in the Carbon Fibers business.
Looking at SGL Carbon's individual market segments, sales to customers in the semiconductor industry continued to increase in the nine-month period. However, sales to this
customer group in Q3 2024 (Q3 2024: €54.0 million) were slightly lower compared to Q3 of the previous year (Q3 2023: €63.7 million). After nine months, the Digitization market segment now represents 25.0\% of Group sales (9M 2023: 23.0\%). With 24.1\% (9M 2023: 25.5\%), the Mobility market segment is the second-largest contributor to sales, followed by Industrial Applications with 21.5\% (9M 2023: 22.8\%). Sales generated with customers in the chemical industry developed favorably, with their share of group sales revenues rising from $13.9 \%$ to $15.9 \%$. The other two market segments, energy and textile fibers, were unable to remain unaffected by the weak economic environment and posted significant declines in some areas.
Further details on the sales performance of the business units can be found in the segment reporting in this release.
Group sales development
Earnings situation of the Group
Earnings development - EBITDA pre
Despite the slight decline in sales (-4.8\%), SGL Carbon's adjusted EBITDA for the first nine months of fiscal year 2024 remained almost on prior year's level (9M 2023: €130.0 million, minus $1.8 \%$ ) at $€ 127.6$ million. Accordingly, the adjusted EBITDA margin improved year-onyear from $15.8 \%$ to $16.3 \%$.
The largest share of the adjusted EBITDA of the SGL Carbon Group was attributable to the Graphite Solutions business unit. Adjusted EBITDA amounted to €104.3 million in the reporting period, compared to $€ 99.5$ million in the first nine months of 2023. This represents an increase of $€ 4.8$ million or $4.8 \%$ and is mainly attributable to an improved product mix in connection with lower energy costs. The positive earnings trend also continued in the Process Technology business unit. Process Technology increased its adjusted EBITDA significantly by $€ 8.1$ million to $€ 25.6$ million in the first nine months of
2024, which corresponds to a rise of $46.3 \%$ (9M 2023: €17.5 million). In turn, adjusted EBITDA of Carbon Fibers decreased from $€ 3.2$ million in the first nine months of 2023 to minus $€ 7.9$ million in the reporting period. This is in particular due to lower prices and volumes and the associated lower fixed cost absorption. The termination of a projectrelated delivery contract with an automotive customer at Composite Solutions had a negative impact on both, sales and EBITDA. In the nine-month comparison, adjusted EBITDA decreased by $35.5 \%$ to $€ 10.7$ million (9M 2023: €16.6 million). Further information on the development of adjusted EBITDA of all four operating business units can be found in the segment reporting in this release.
A look at SGL Carbon's income statement reveals the following developments:
- Cost of sales decreased by $6.7 \%$, and thus at a higher rate than the sales decline, to $€ 594.8$ million (9M 2023: €637.6 million), mainly due to lower factor costs (especially energy) in the Carbon Fibers and Graphite Solutions business units. Accordingly, gross margin improved from $22.4 \%$ in the nine months of 2023 to $23.9 \%$ in the reporting period.
- Selling, administrative and R\&D costs decreased by $5.9 \%$ and thus, also disproportionately to the sales trend to $€ 117.0$ million. Selling expenses declined primarily due to the lower delivery volumes in the Carbon Fibers business unit, while R\&D costs decreased due to the discontinuation of development activities for graphite anode material (Meitingen) in the Graphite Solutions business unit.
- The balance of other operating income and expenses has fallen by more than half compared to prior year, from $€ 12.8$ million to $€ 4.9$ million in the first nine months of 2024. This was due to lower government grants of $€ 3.0$ million (9M 2023: $€ 10.0$ million) as a result of the expiration of the electricity price cap in Germany and France, as well as lower subsidies due to the discontinuation of R\&D activities for graphite anode material.
- The result from investments accounted for At-Equity decreased to $€ 11.6$ million (9M 2023: €14.1 million), mainly due to contractually required price reductions and higher factor costs in connection with the expansion of capacities at BSCCB.
The following table shows the reconciliation of adjusted EBITDA to EBIT:
| Nine months | |||
|---|---|---|---|
| $€$ million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| EBITDA pre | $\mathbf{1 2 7 . 6}$ | $\mathbf{1 3 0 . 0}$ | $\mathbf{- 1 . 8 \%}$ |
| Depreciation and amortization | -41.0 | -43.3 | -5.3\% |
| EBIT pre | $\mathbf{8 6 . 6}$ | $\mathbf{8 6 . 7}$ | $\mathbf{- 0 . 1 \%}$ |
| One-off effects/Non-recurring items | -18.3 | -47.2 | -61.2\% |
| EBIT | $\mathbf{6 8 . 3}$ | $\mathbf{3 9 . 5}$ | $\mathbf{7 2 . 9 \%}$ |
One-off effects and non-recurring items not included in adjusted EBITDA or adjusted EBIT amounted to a total of minus $€ 18.3$ million (9M 2023: minus $€ 47.2$ million). The one-off effects and non-recurring items in the first nine months of 2024 resulted, amongst others, from the restructuring measures initiated in the Carbon Fibers business unit of $€ 2.2$ million and from an impairment of assets and personnel measures in the Battery Solutions business line of $€ 4.4$ million due to the discontinuation of development activities for graphite anode material. An offsetting positive effect of $€ 3.1$ million resulted from the partial reversal of the provision for the former Griesheim site, as the planned dismantling costs will be lower than expected. Other significant one-off effects and non-recurring items include impairments of inventories at Carbon Fibers of $€ 6.4$ million and an expected contractual penalty of $€ 2.1$ million against a supplier due to a shortfall in volume purchases. Also in the Carbon Fibers business unit, effects from the amounts capitalized as part of the purchase price allocations of the SGL Composites companies of minus $€ 0.9$ million (9M 2023: minus $€ 0.9$ million), consulting expenses from strategy projects of $€ 2.8$ million and other one-time effects of minus $€ 2.6$ million, including for personnel measures at Graphite Solutions in China. In the same period of the previous year, the impairment of $€ 44.7$ million on the assets of the Carbon Fibers business unit also had a significant impact on the one-off effects/nonrecurring items to be adjusted.
Overall, EBIT improved to $€ 68.3$ million in the reporting period (9M 2023: $€ 39.5$ million), an increase of $72.9 \%$. It should be noted that EBIT in the same period of the previous year was disproportionately impacted by the impairment on the assets of Carbon Fibers.
Financial result influenced by higher interest rates
| Nine months | |||
|---|---|---|---|
| € million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Interest income | 4.1 | 3.5 | $17.1 \%$ |
| Interest on financial liabilities and other interest expense | -13.7 | -14.8 | $-7.4 \%$ |
| Imputed interest convertible bond | -4.3 | -2.9 | $48.3 \%$ |
| Imputed interest on lease liabilities/contract liabilities | -5.0 | -2.0 | $>100 \%$ |
| Interest component of additions to provisions for pensions | -5.0 | -5.6 | $-10.7 \%$ |
| Interest expense, net | $\mathbf{- 2 3 . 9}$ | $\mathbf{- 2 1 . 8}$ | $\mathbf{9 . 6 \%}$ |
| Amortization of refinancing costs | -1.2 | -2.9 | $-58.6 \%$ |
| Foreign currency valuation of intercompany loans | 0.4 | 0.1 | $>100 \%$ |
| Other operating expense/income | 0.4 | -0.1 | - |
| Other financial result | $\mathbf{- 0 . 4}$ | $\mathbf{- 2 . 9}$ | $\mathbf{- 8 6 . 2 \%}$ |
| Financial result | $\mathbf{- 2 4 . 3}$ | $\mathbf{- 2 4 . 7}$ | $\mathbf{- 1 . 6 \%}$ |
The financial result remained almost unchanged in the first nine months of 2024 at minus €24.3 million (9M 2023: minus €24.7 million). The worse interest result of minus €23.9 million (9M 2023: minus €21.8 million) was due to increased expenses for the imputed interest on customer deposits recognized as contract liabilities and the higher imputed interest component for the convertible bonds. Higher interest income from the investment of cash and cash equivalents could not fully compensate the increased interest expenses for financial liabilities. As a result of the repayment of the corporate bond in 2023, the other financial result improved significantly to minus $€ 0.4$ million (9M 2023: minus €2.9 million) due to lower amortization of refinancing costs.
Condensed consolidated income statement (continued)
| Nine months | |||
|---|---|---|---|
| € million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| EBIT | $\mathbf{6 8 . 3}$ | $\mathbf{3 9 . 5}$ | $\mathbf{7 2 . 9 \%}$ |
| Financial result | -24.3 | -24.7 | $-1.6 \%$ |
| Result before income taxes | $\mathbf{4 4 . 0}$ | $\mathbf{1 4 . 8}$ | $>\mathbf{1 0 0 \%}$ |
| Income tax expense | -10.6 | -9.0 | $17.8 \%$ |
| Net result for the period | $\mathbf{3 3 . 4}$ | $\mathbf{5 . 8}$ | $>\mathbf{1 0 0 \%}$ |
| Attributable to: | |||
| Non-controlling interests | 0.6 | 0.5 | $20.0 \%$ |
| Consolidated net result (attributable to shareholders of | |||
| the parent company) | 32.8 | 5.3 | $>100 \%$ |
| Earnings per share - basic and diluted (in $€$ ) | 0.27 | 0.04 | $>100 \%$ |
Earnings before income taxes and consolidated net result
The significant improvement in EBIT ( $+€ 28.8$ million) in the first nine months of 2024 led to a significant increase in result before income taxes to $€ 44.0$ million (9M 2023: $€ 14.8$ million), while the financial result remained almost constant. Income tax expense amounted to $€ 10.6$ million (9M 2023: $€ 9.0$ million) and resulted from the increased positive operating earnings contributions of some Group companies, particularly in China.
After taxes, the consolidated net result amounted to $€ 32.8$ million in the first nine months of 2024 compared to $€ 5.3$ million in the same period of the previous year. Accordingly, earnings per share were clearly positive at $€ 0.27$ in the first nine months of 2024 (9M 2023: $€ 0.04)$.
Balance Sheet Structure
| ASSETS € million | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Non-current assets | 733.9 | 715.6 | $2.6 \%$ |
| Current assets | 735.9 | 757.0 | $-2.8 \%$ |
| Total assets | 1,469.8 | 1,472.6 | $-0.2 \%$ |
| EQUITY AND LIABILITIES € million | |||
| Equity attributable to the shareholders of the parent company | 636.1 | 605.3 | $5.1 \%$ |
| Non-controlling interests | 9.5 | 9.6 | $-1.0 \%$ |
| Total equity | 645.6 | 614.9 | 5.0\% |
| Non-current liabilities | 553.7 | 583.3 | $-5.1 \%$ |
| Current liabilities | 270.5 | 274.4 | $-1.4 \%$ |
| Total equity and liabilities | 1,469.8 | 1,472.6 | $-0.2 \%$ |
The balance sheet total remained almost unchanged at $€ 1,469.8$ million. The increase in non-current assets is the result of capital expenditure ( $€ 66.5$ million) exceeding the regular depreciation of fixed assets ( $€ 41.9$ million). The reduction in investments accounted for At Equity by $€ 3.5$ million due to the dividend from Brembo SGL Carbon Ceramic Brakes, BSCCB, had an opposite effect. In addition, current assets also decreased, in particular due to lower liquidity. The decrease in liquidity was mainly influenced by a significant reduction in trade payables at Carbon Fibers and by cash outflows in connection with the net balance of borrowings and repayments of financial liabilities of minus $€ 7.8$ million.
Non-current liabilities decreased by $€ 29.6$ million, mainly due to the early partial repayment of $€ 25.0$ million of the Term Loan Facility and the reclassification of $€ 25.0$ million from the remaining Term Loan Facility to current liabilities, as SGL Carbon made a further partial repayment in October 2024. The raising of financial liabilities of $€ 20.0$ million for the construction of production halls in Meitingen, mainly in Q3 2024, had an offsetting effect.
The $€ 3.9$ million decrease in current liabilities resulted from the $€ 29.8$ million reduction in trade payables, mainly due to the decline in production activities at Carbon Fibers; this was offset by the above-mentioned reclassification of the Term Loan Facility.
Working Capital
| € million | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Inventories | 360.7 | 373.6 | $-3.5 \%$ |
| Trade receivables and contract assets | 162.4 | 150.9 | $7.6 \%$ |
| Trade payables and contract liabilities | $-202.0$ | $-218.5$ | $-7.6 \%$ |
| Working Capital | 321.1 | 306.0 | 4.9\% |
Working capital increased as of September 30, 2024, mainly due to lower trade payables, driven by the reduction in production activities at Carbon Fibers, and the increase in trade receivables, particularly at Process Technology and Carbon Fibers. Overall, this increase in trade receivables more than compensated for the decline at Composite Solutions due to the expiry of a project-related supply contract.
This was offset by a decline in inventories, which was also particularly driven by Carbon Fibers, due to inventory reductions and additional impairment losses on inventories of $€ 6.4$ million.
Increase in equity
As of September 30, 2024, the equity attributable to shareholders of the parent company increased by $€ 30.8$ million ( $+5.1 \%$ ) to $€ 636.1$ million (December 31, 2023: $€ 605.3$ million). The increase is due to the positive consolidated net income of $€ 32.8$ million. This was slightly offset by negative other comprehensive income of $€ 2.0$ million, mainly due to currency translation. The equity ratio as of September 30, 2024 increased to $43.3 \%$ (December 31, 2023: 41.1\%).
Net financial debt/Free cash flow
Net financial debt
| $\epsilon$ million | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Carrying amount of current and non-current financial liabilities | |||
| Remaining imputed interest for the convertible bonds | 280.2 | 282.8 | $-0.9 \%$ |
| Accrued refinancing cost | 23.6 | 27.8 | $-15.1 \%$ |
| Total financial debt (nominal amount) | 3.6 | 4.6 | $-21.7 \%$ |
| Time deposits | 307.4 | 315.2 | $-2.5 \%$ |
| Cash and cash equivalents | 15.0 | 65.0 | $-76.9 \%$ |
| Total liquidity | 168.6 | 134.4 | 25.4\% |
| Net financial debt | 183.6 | 199.4 | $-7.9 \%$ |
| 123.8 | 115.8 | 6.9\% |
SGL Carbon's net financial debt increased by $€ 8.0$ million ( $+6.9 \%$ ) to $€ 123.8$ million as of September 30, 2024. This increase is due to a significantly lower free cash flow of $€ 15.5$
million compared to the same period of the previous year, less interest payments of $€ 16.2$ million and lease payments of $€ 6.5$ million. Together with the balance of borrowings and repayments of financial liabilities totaling minus $€ 7.8$ million, this led to a decrease in cash and cash equivalents of $€ 15.8$ million to $€ 183.6$ million.
Free cash flow
| $\epsilon$ million | Nine months | |
|---|---|---|
| 2024 | 2023 | |
| EBIT | 68.3 | 39.5 |
| Depreciation/amortization expense | 41.0 | 43.3 |
| Impairment loss | - | 44.7 |
| Changes in working capital | -28.6 | -19.2 |
| Changes in provisions | -16.9 | -16.8 |
| Miscellaneous items | 3.0 | -15.6 |
| Cash flow from operating activities | 66.8 | 75.9 |
| Payments to purchase intangible assets and property, plant \& equipment | -66.5 | -59.1 |
| Proceeds from the sale of intangible assets and property, plant \& | ||
| equipment | 0.2 | 8.2 |
| Dividend payments from investments accounted for At-Equity | 15.0 | 10.0 |
| Cash flow from investing activities | -51.3 | -40.9 |
| Free cash flow | 15.5 | 35.0 |
Cash flow from operating activities in the first nine months of 2024 decreased by $€ 9.1$ million to $€ 66.8$ million, mainly due to the significant increase in working capital compared to the same period of the previous year.
As expected, capital expenditure for property, plant and equipment increased significantly by $12.5 \%$ to $€ 66.5$ million in the reporting period due to the construction of two new production halls for BSCCB at the Meitingen site. Free cash flow was positive at $€ 15.5$ million (prior-year period: $€ 35.0$ million). The prior-year period also included cash inflows of $€ 8.2$ million from the sale of the operating activities at the Gardena (USA) and Pune (India) sites.
Employees
As of September 30, 2024, the number of employees worldwide was down to 4,583 (December 31, 2023: 4,808). Due to the restructuring measures initiated at Carbon Fibers, the number of employees fell by approx. 70 in the reporting period, particularly at the Muir of Ord site (Scotland). In addition, personnel measures at Graphite Solutions in Shanghai (China) reduced the workforce by approximately 60 people.
| Headcount | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Graphite Solutions | 2,594 | 2,686 | $-3.4 \%$ |
| Process Technology | 498 | 493 | $1.0 \%$ |
| Carbon Fibers | 964 | 1,057 | $-8.8 \%$ |
| Composite Solutions | 408 | 437 | $-6.6 \%$ |
| Corporate | 119 | 135 | $-11.9 \%$ |
| Total SGL Carbon | 4,583 | 4,808 | $-4.7 \%$ |
| Headcount | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Germany | 2,078 | 2,100 | $-1.0 \%$ |
| Europe excluding Germany | 1,251 | 1,388 | $-9.9 \%$ |
| USA | 775 | 762 | $1.7 \%$ |
| Asia | 479 | 558 | $-14.2 \%$ |
| Total SGL Carbon | 4,583 | 4,808 | $-4.7 \%$ |
Segment Reporting
Reporting segment Graphite Solutions
| Nine months | |||
|---|---|---|---|
| $\boldsymbol{\epsilon} \mathbf{1 0 1 1 0}$ | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Sales revenue | 412.5 | 418.4 | $-1.4 \%$ |
| EBITDA pre | 104.3 | 99.5 | $4.8 \%$ |
| EBITDA pre-margin | $25.3 \%$ | $23.8 \%$ | $+1.5 \%$-points |
| EBIT | 75.2 | 79.0 | $-4.8 \%$ |
Sales in the Graphite Solutions business unit stagnated at $€ 412.5$ million almost at the level of the prior-year period (9M 2023: $€ 418.4$ million). While sales in this business unit had still grown by $1.3 \%$ in the first half of 2024, the slowdown in demand in the Semiconductor \& LED market segment had a negative impact on the third quarter of 2024. After $€ 141.3$ million in Q1 and $€ 142.9$ million in Q2, sales from Graphite Solutions in Q3 2024 amounted to $€ 128.2$ million. Looking at the first nine months of 2024 as a whole, slight sales increases in the market segments Semiconductor \& LED and Automotive \& Transport were offset by the decline in demand in the other market segments.
Despite weak demand in Q3 2024, the market segment Semiconductor and LED particularly made a positive contribution to the business unit's sales over the nine-month period, with a year-on-year increase in sales of $€ 6.7$ million or $3.5 \%$ and now accounts for around $47 \%$ of Graphite Solutions' total sales (9M 2023: around 45\%). The largest share of sales continued to be generated by customers in the silicon carbide-based semiconductor segment, which recorded an increase of around $6 \%$ in the first nine months of 2024 and now accounts for more than $60 \%$ of sales in the Semiconductor and LED market segment. Due to the significantly lower than expected demand for electric vehicles by automobile manufacturers at the beginning of the year, we do not expect a return to the demand figures of the first half of the year for silicon carbide semiconductors and thus also for our specialty graphite components for this industry in the coming months.
The reallocation of production capacities and the related change in the product mix led to a corresponding decline in sales with LED customers. The same applies to the market segment Solar, which now accounts for just under 3\% of the business unit's sales. Due to the similarity of the production processes, we have increasingly used production capacities for the increased demand in the semiconductor market segment here as well. In the second largest market segment of Graphite Solutions, Industrial Applications, a wide range of graphite products are supplied to a variety of industries. Due to the current difficult economic situation in many of our sales markets, sales to these customers decreased, so that the share of sales of this market segment fell to 29\% (9M 2023: around 31\%). Within the market segment Battery Materials, sales of graphite anode materials (GAM) were almost unchanged, while sales of components for fuel cells were down by $8 \%$ compared to the same period of the previous year. Overall, Battery Materials now account for almost 7\% of Graphite Solutions sales.
Adjusted EBITDA of Graphite Solutions increased by 4.8\% to $€ 104.3$ million (9M 2023: $€ 99.5$ million) on slightly lower sales in a nine-month comparison. The positive effects of higher prices due to the aforementioned product mix change, combined with lower energy and raw material costs, were partially offset by lower volumes, lower capacity utilization and slightly higher personnel costs. The adjusted EBITDA margin improved year-on-year to 25.3\% (9M 2023: 23.8\%).
Higher energy and production costs compared to international competitors, as well as a shift of battery projects out of Europe, are hindering the successful development and commercialization of European graphite anode materials. In this light and after three years of intensive and costly development work, SGL Carbon is discontinuing the development of graphite anode materials. The discontinuation of R\&D activities and the closure of the battery application laboratory led to an impairment of production facilities and inventories. In connection with the necessary personnel measures, a non-recurring item of minus $€ 4.4$ million was incurred, which was adjusted for, together with further one-off effects of minus $€ 1.5$ million, in particular for personnel adjustments in China.
EBIT after one-off effects/non-recurring items for Graphite Solutions is $€ 75.2$ million and is therefore $4.8 \%$ lower than in the prior-year period (9M 2023: $€ 79.0$ million).
Reporting segment Process Technology
| Nine months | |||
|---|---|---|---|
| $€$ million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Sales revenue | 106.2 | 95.7 | $11.0 \%$ |
| EBITDA pre | 25.6 | 17.5 | $46.3 \%$ |
| EBITDA pre-margin | $24.1 \%$ | $18.3 \%$ | $+5.7 \%$-points |
| EBIT | 24.6 | 16.4 | $50.0 \%$ |
After $€ 33.0$ million in Q1 and $€ 36.9$ million in Q2, Process Technology continued its positive business performance with sales of $€ 36.3$ million in Q3. In the nine-month comparison, sales increased by $11.0 \%$ to $€ 106.2$ million (9M 2023: $€ 95.7$ million). This business unit generates most of its sales from customers in the chemical industry. Process Technology benefits from its global customer base. Overall, the first nine months of 2024 benefited from a still well-filled order book, although a slight weakening of incoming orders was already apparent in the third quarter. Nevertheless, we expect the business unit's good capacity utilization to continue in the coming months. The positive development of Process Technology is also reflected in the adjusted EBITDA. This increased from $€ 17.5$ million in the prior-year period to $€ 25.6$ million. Higher capacity utilization and positive product mix effects led to an improvement in the adjusted EBITDA margin from $18.3 \%$ in the first nine months of 2023 to $24.1 \%$ in the reporting period.
Reporting segment Carbon Fibers
| Nine months | |||
|---|---|---|---|
| $€$ million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Sales revenue | 157.1 | 179.6 | $-12.5 \%$ |
| EBITDA pre | -7.9 | 3.2 | - |
| EBITDA pre-margin | -5.0\% | $1.8 \%$ | $-6.8 \%$-points |
| EBIT | -26.6 | -53.7 | -50.5\% |
Sales in the Carbon Fibers business unit amounted to $€ 157.1$ million in the first nine months of the current year, down from $€ 179.6$ million in the same period of the previous
year. The decline is in particular due to the continued restrained demand from the wind industry and the increasing competitive pressure due to global overcapacities. We have responded to the weak demand with ongoing capacity adjustments in the carbon fiber business. In the reporting period 2024, the market segments Automotive and Industrial Applications also saw a low double-digit percentage decline in sales, while the smallest segment, Aerospace, was able to grow slightly.
In the first nine months of 2024, Wind Energy still accounted for around 18\% of carbon fiber sales. Due to the variety of applications, Industrial Applications are the largest market segment for carbon fibers, accounting for around $28 \%$ of sales, followed by automotive customers with around $25 \%$. However, we also recorded a downward trend in these market segments in the course of the quarter, due to the weak economic conditions. Overcapacities in almost all product areas, combined with high price pressure for these commodity products, continue to weigh on the Carbon Fibers business unit.
We have responded to the ongoing weakening of demand for carbon fibers for the wind industry and adjusted our production capacities from the second half of 2023 onwards. The shutdown of production lines and the associated lack of fixed cost absorption is particularly evident in the earnings development of Carbon Fibers.
The adjusted EBITDA of the Carbon Fibers business unit fell by $€ 11.1$ million year-on-year to minus $€ 7.9$ million (9M 2023: $€ 3.2$ million). The lack of fixed cost absorption due to the temporary shutdown of production lines led to high idle capacity costs and, in conjunction with falling margins for commodity products, had a corresponding negative impact on adjusted EBITDA. Activities accounted for At-Equity (mainly the joint venture with Brembo for the production of carbon-ceramic brake discs, Brembo SGL Carbon Ceramic Brakes, BSCCB) contributed an amount of $€ 11.6$ million to the adjusted EBITDA of the Carbon Fibers reporting segment in the first nine months of 2024 (9M 2023: €14.1 million). Excluding the contribution from BSCCB, which is accounted for At-Equity, the adjusted EBITDA of Carbon Fibers would have been minus $€ 19.6$ million (9M 2023: minus $€ 10.5$ million).
Since demand from the wind industry is not expected to recover in the coming months either, we have not only reduced production capacities, but also launched a restructuring program for Carbon Fibers. The restructuring measures initiated led to expenses of $€ 11.6$ million in the reporting period 2024, which were classified as a one-off effect/nonrecurring item. Considering the one-off effects/non-recurring items, EBIT for the first nine
months of 2024 amounted to minus $€ 26.6$ million (9M 2023: minus $€ 53.7$ million, of which $€ 44.7$ million was impairment).
Developments in the markets in which Carbon Fibers operates led to the decision at the end of February 2024 to evaluate various strategic options for the business unit. These also include a potential partial or full sale of the business unit. The initiated structured transaction process is ongoing.
Reporting segment Composite Solutions
| Nine months | |||
|---|---|---|---|
| $€$ million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Sales revenue | 95.8 | 114.3 | $-16.2 \%$ |
| EBITDA pre | 10.7 | 16.6 | $-35.5 \%$ |
| EBITDA pre-margin | $11.2 \%$ | $14.5 \%$ | $-3.3 \%$-points |
| EBIT | 5.3 | 11.3 | $-53.1 \%$ |
Sales in the Composite Solutions business unit amounted to $€ 95.8$ million in the reporting period, a decline of $16.2 \%$ (9M 2023: $€ 114.3$ million). The decrease is, in particular, due to, the termination of a project-related supply agreement with an automotive customer. Among others, the business unit develops and produces customized vehicle components made of various composite materials for customers in Europe and North America. Lower sales figures for electric vehicles are now also reflected in the demand.
With a revenue share of $93 \%$ in the first nine months of 2024, the Automotive market segment is the dominant customer segment of Composite Solutions.
As a result of lower volumes and product mix effects, adjusted EBITDA of Composite Solutions declined by $€ 5.9$ million or $35.5 \%$ year-on-year to $€ 10.7$ million (9M 2023: $€ 16.6$ million). Accordingly, the adjusted EBITDA margin went down from $14.5 \%$ in 9M 2023 to $11.2 \%$ in the reporting period. Taking into account the continuous purchase price amortization of $€ 0.7$ million (9M 2023: $€ 0.7$ million), EBIT in the reporting period amounted to $€ 5.3$ million (9M 2023: $€ 11.3$ million).
Reporting segment Corporate
| Nine months | |||
|---|---|---|---|
| € million | $\mathbf{2 0 2 4}$ | $\mathbf{2 0 2 3}$ | Change |
| Sales revenue | 10.3 | 13.7 | $-24.8 \%$ |
| EBITDA pre | -5.1 | -6.8 | $-25.0 \%$ |
| EBIT | -10.2 | -13.5 | $-24.4 \%$ |
Sales in the Corporate reporting segment decreased by $24.8 \%$ year-on-year to $€ 10.3$ million in the reporting period (9M 2023: $€ 13.7$ million). This decline is mainly due to the sale of the Gardena (USA) and Pune (India) locations, which affected the same period of the previous year (2023). The sales of the two locations were no longer presented in the respective business units in the comparative figures for 2023 but were allocated to the Corporate reporting segment. The operating activities of the Gardena (USA) location were sold on February 16, 2023. The Pune (India) location was sold on April 28, 2023.
Adjusted EBITDA for the Corporate segment improved from minus $€ 6.8$ million in the prioryear period to minus $€ 5.1$ million. This improvement of $€ 1.7$ million in the nine-month comparison is in particular due to the absence of the negative operating earnings contributions from the divested activities in Gardena and Pune.
EBIT includes a positive one-off effect from the partial reversal of a provision for dismantling and disposal costs of the former Frankfurt/Griesheim site. In contrast, one-off effects resulting from the review of strategic options for the Carbon Fibers business unit had a negative impact on EBIT. The balance of these one-off effects and non-recurring items totaling minus $€ 0.1$ million is included in the EBIT for the first nine months of minus $€ 10.2$ million (9M 2023: minus $€ 13.5$ million).
Opportunities and Risks
Regarding the existing opportunities and risks, we generally refer to the detailed statements made in the 2023 Annual Report, which we supplement as follows.
Based on the preliminary mid-term planning prepared subsequent to the balance sheet date, we adjusted our expectations, especially as we see a weaker environment in the wind as well as the automotive industries. This indicates a non-cash impairment charge of $€ 60-80$ million in the Carbon Fibers business unit, which will be recognized in the fourth quarter of 2024. With this, the respective risk materialized in the fourth quarter.
A potential partial or full sale of the Carbon Fibers business unit may, depending on the transaction price achieved, have a significant impact on the valuation of assets and on the amount of net income and cash flow.
In addition, delayed growth in demand for electric vehicles and the associated impact on our focus market of semiconductors could continue to adversely affect our expectations for the Graphite Solutions business unit in terms of price and volume development for the remaining months of 2024 and 2025.
We are currently continuing to evaluate options for the graphite anode materials business. The impairment losses recognized in the nine-month period have partially reduced the risks in this market segment. A high level of risk remains, with no change in the opportunity and risk categories.
Based on the information currently available, we do not believe that there are any significant individual risks that could jeopardize the company as a going concern, either now or in the foreseeable future. Even the cumulative consideration of the current individual risks does not jeopardize the continued existence of SGL Carbon.
Outlook
Various developments in our sales markets influence the expected sales and earnings development of the business units. Due to our diversified business model, declines in demand for certain products can be largely offset by above-plan sales in other areas, so that we expect to achieve our guidance for the SGL Carbon Group given in March at the lower end of the given range. For fiscal year 2024, we expect Group sales to be at the prior-year level (2023: $€ 1,089.1$ million) and adjusted EBITDA at the Group level to reach $€ 160-170$ million. After adjusting our expectations for the individual business units on August 8, 2024, we currently expect to meet our forecast for sales and adjusted EBITDA at the lower end of the target range, based on the business unit developments in the ninemonth period of 2024 and the expected trends for our key sales markets.
Due to the lower than previously planned capital expenditures in the first nine months of 2024 (9M 2024: $€ 66.5$ million), we expect to fall well below the previous target of up to $€ 150$ million in fiscal year 2024.
On October 24, 2024, the company issued an ad hoc announcement informing the financial market of a non-cash impairment of $€ 60-80$ million in the Carbon Fibers business unit, which will be recognized in the fourth quarter of 2024. This was based on the preliminary new mid-term planning prepared after the balance sheet date, which indicates lower cash flows for Carbon Fibers in the wind and automotive industries.
Group financial targets
| $€$ million | Actual 2023 | Outlook 2024 |
|---|---|---|
| Sales revenue | 1,089.1 | at prior year level |
| EBITDA pre | 168.4 | $160-170$ |
| Return of capital employed (ROCE ${ }_{\text {DRT }}$ ) | $11.3 \%$ | $10 \%-11 \%$ |
| Free cash flow | 95.6 | significantly below prior year level |
Wiesbaden, November 7, 2024
SGL Carbon SE
The Board of Management of SGL Carbon SE
Dr. Torsten Derr
Thomas Dippold
Selected Financial Information
Consolidated Income Statement
| Srd Quarter | |||||
| $€$ million | 2024 | 2023 | Change | 2024 | 2023 |
| Sales revenue | 243.9 | 261.2 | $-6.6 \%$ | 781.9 | 821.7 |
| Cost of sales | -197.3 | -201.5 | $-2.1 \%$ | -605.3 | -638.5 |
| Gross profit | 46.6 | 59.7 | $-21.9 \%$ | 176.6 | 183.2 |
| Selling expenses | -22.4 | -23.2 | $-3.4 \%$ | -69.7 | -74.3 |
| Research and development costs | -5.9 | -8.3 | $-28.9 \%$ | -20.5 | -23.9 |
| General and administrative expenses | -6.9 | -8.0 | $-13.8 \%$ | -26.8 | -26.1 |
| Other operating income | 1.1 | 4.2 | $-73.8 \%$ | 6.9 | 17.0 |
| Other operating expenses | -2.2 | 0.0 | - | -6.2 | -5.8 |
| Result from investments accounted for At-Equity | 3.9 | 3.1 | $25.8 \%$ | 11.6 | 14.1 |
| Restructuring expenses | -1.8 | 0.0 | - | -3.6 | 0.0 |
| Impairment loss | - | -44.7 | |||
| Operating profit/loss | 12.4 | 27.5 | $-54.9 \%$ | 68.3 | 39.5 |
| Interest income | 1.4 | 1.6 | $-12.5 \%$ | 4.1 | 3.5 |
| Interest expense | -8.7 | -9.6 | $-9.4 \%$ | -28.0 | -25.3 |
| Other financial result | 0.3 | -0.9 | - | -0.4 | -2.9 |
| Result before income taxes | 5.4 | 18.6 | $-71.0 \%$ | 44.0 | 14.8 |
| Income tax expense | -1.8 | -3.1 | $-41.9 \%$ | -10.6 | -9.0 |
| Net result for the period | 3.6 | 15.5 | $-76.8 \%$ | 33.4 | 5.8 |
| Thereof attributable to: | |||||
| Non-controlling interests | 0.2 | 0.2 | $0.0 \%$ | 0.6 | 0.5 |
| Consolidated net result (attributable to shareholders of the parent company) | 3.4 | 15.3 | $-77.8 \%$ | 32.8 | 5.3 |
| Earnings per share, basic and diluted (in $€$ ) | 0.03 | 0.12 | $-75.0 \%$ | 0.27 | 0.04 |
Consolidated Statement of Comprehensive Income
| 3rd Quarter | Nine months | |||
|---|---|---|---|---|
| € million | 2024 | 2023 | 2024 | 2023 |
| Net result for the period | 3.6 | 15.5 | 33.4 | 5.8 |
| Items that may be reclassified subsequently to profit or loss | ||||
| Share of investments accounted for At-Equity in other comprehensive income | 1.1 | 0.1 | ||
| Cash flow hedges ${ }^{1)}$ | 0.2 | $-1.0$ | $-1.2$ | $-0.5$ |
| Currency translation ${ }^{1)}$ | $-13.6$ | 7.6 | $-2.2$ | 1.5 |
| Items that will not be reclassified to profit or loss | ||||
| Actuarial gains/losses on pensions and similar obligations ${ }^{1)}$ | $-9.3$ | 11.1 | 1.4 | 8.8 |
| Other comprehensive income | $-22.7$ | 18.8 | $-2.0$ | 9.9 |
| Comprehensive income | $-19.1$ | 34.3 | 31.4 | 15.7 |
| Thereof attributable to: | ||||
| Non-controlling interests | 0.2 | 0.4 | 0.6 | 0.6 |
| Consolidated net result (attributable to shareholders of the parent company) | $-19.3$ | 33.9 | 30.8 | 15.1 |
${ }^{1)}$ Includes tax effects of $€ 0.0$ million in the first nine months of 2024 (9M 2023: $€ 0.0$ million)
Consolidated Balance Sheet
| ASSETS € million | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Goodwill | 22.3 | 22.4 | $-0.4 \%$ |
| Other intangible assets | 11.5 | 13.0 | $-11.5 \%$ |
| Property, plant and equipment | 556.7 | 532.2 | $4.6 \%$ |
| Investments accounted for At-Equity | 64.7 | 68.2 | $-5.1 \%$ |
| Other non-current assets | 6.5 | 6.6 | $-1.5 \%$ |
| Deferred tax assets | 72.2 | 73.2 | $-1.4 \%$ |
| Total non-current assets | 733.9 | 715.6 | 2.6\% |
| Inventories | 360.7 | 373.6 | $-3.5 \%$ |
| Trade receivables and contract assets | 162.4 | 150.9 | $7.6 \%$ |
| Other receivables and other assets | 29.2 | 33.1 | $-11.8 \%$ |
| Liquidity | 183.6 | 199.4 | $-7.9 \%$ |
| Time deposits | 15.0 | 65.0 | $-76.9 \%$ |
| Cash and cash equivalents | 168.6 | 134.4 | 25.4\% |
| Total current assets | 735.9 | 757.0 | $-2.8 \%$ |
| Total assets | 1,469.8 | 1,472.6 | $-0.2 \%$ |
| EQUITY AND LIABILITIES $€$ million | Sep 30, 24 | Dec 31, 23 | Change |
|---|---|---|---|
| Issued capital | 313.2 | 313.2 | $0.0 \%$ |
| Capital reserves | 1,067.8 | 1,067.8 | $0.0 \%$ |
| Accumulated losses | $-744.9$ | $-775.7$ | $-4.0 \%$ |
| Equity attributable to the shareholders of the parent company | 636.1 | 605.3 | 5.1\% |
| Non-controlling interests | 9.5 | 9.6 | $-1.0 \%$ |
| Total equity | 645.6 | 614.9 | 5.0\% |
| Provisions for pensions and similar employee benefits | 201.7 | 206.1 | $-2.1 \%$ |
| Other provisions | 6.0 | 12.5 | $-52.0 \%$ |
| Interest-bearing loans | 250.0 | 279.8 | $-10.7 \%$ |
| Contract liabilities | 77.5 | 64.2 | 20.7\% |
| Other financial liabilities | 16.7 | 18.8 | $-11.2 \%$ |
| Deferred tax liabilities | 1.8 | 1.9 | $-5.3 \%$ |
| Total non-current liabilities | 553.7 | 583.3 | $-5.1 \%$ |
| Other provisions | 77.4 | 79.1 | $-2.1 \%$ |
| Current portion of interest-bearing loans | 30.2 | 3.0 | $>100 \%$ |
| Trade payables and contract liabilities | 124.5 | 154.3 | $-19.3 \%$ |
| Other financial liabilities | 9.4 | 11.7 | $-19.7 \%$ |
| Other liabilities | 29.0 | 26.3 | 10.3\% |
| Total current liabilities | 270.5 | 274.4 | $-1.4 \%$ |
| Total equity and liabilities | 1,469.8 | 1,472.6 | $-0.2 \%$ |
Consolidated Cash Flow Statement
| Nine months | ||
|---|---|---|
| € million | 2024 | 2023 |
| Result before income taxes | 44.0 | 14.8 |
| Adjustments to reconcile the result before taxes for the period to cash flow from operating activities: | ||
| Interest expense (net) | 23.9 | 21.8 |
| Changes in the value of contract assets (IFRS 15) | 3.8 | $-6.4$ |
| Result from the disposal of property, plant and equipment | 0.2 | 0.0 |
| Depreciation/amortization expense | 41.9 | 44.2 |
| Impairment loss | 44.7 | |
| Restructuring expenses | 3.6 | 0.0 |
| Result from investments accounted for At-Equity | $-11.6$ | $-14.1$ |
| Other financial result | 0.4 | 2.9 |
| Interest received | 3.7 | 3.4 |
| Income taxes paid | $-10.7$ | $-9.2$ |
| Changes in provisions, net | $-16.9$ | $-16.8$ |
| Changes in net working capital | ||
| Inventories | 6.7 | $-66.5$ |
| Trade receivables | $-15.4$ | 29.8 |
| Trade payables and contract liabilities | $-19.9$ | 17.5 |
| Changes in other operating assets/liabilities | 13.1 | 9.8 |
| Cash flow from operating activities | 66.8 | 75.9 |
| Nine months | ||
|---|---|---|
| € million | 2024 | 2023 |
| Payments to purchase intangible assets and property, plant \& equipment | $-66.5$ | $-59.1$ |
| Proceeds from the sale of intangible assets and property, plant \& equipment | 0.2 | 8.2 |
| Dividend payments from investments accounted for At-Equity | 15.0 | 10.0 |
| Cash flow from investing activities before time deposits | $-51.3$ | $-40.9$ |
| Changes in time deposits | 50.0 | - |
| Cash flow from investing activities | $-1.3$ | $-40.9$ |
| Proceeds from issuance of financial liabilities | 20.0 | 193.7 |
| Repayment of financial liabilities | $-27.8$ | $-275.8$ |
| Payments in connection with financing activities | 0.0 | $-4.8$ |
| Redemption payments for lease liabilities | $-6.5$ | $-6.2$ |
| Interest paid | $-16.2$ | $-18.3$ |
| Other financing activities | $-0.7$ | $-0.4$ |
| Cash flow from financing activities | $-31.2$ | $-111.8$ |
| Effect of foreign exchange rate changes | $-0.1$ | $-1.1$ |
| Net change in cash and cash equivalents | 34.2 | $-77.9$ |
| Cash and cash equivalents at beginning of period | 134.4 | 227.3 |
| Cash and cash equivalents at end of period | 168.6 | 149.4 |
| Time deposits at end of period | 15.0 | - |
| Liquidity | 183.6 | 149.4 |
Consolidated Statement of Changes in Equity
[^0]
[^0]: ${ }^{1)}$ Effects in connection with the issuance of the convertible bond 2023/2028 in the amount of $€ 14.9$ million (after transaction costs) and the repurchase of the convertible bond 2018/2023 of minus $€ 0.2$ million
Segment information
| Graphite Solutions |
Process Technology |
Carbon Fibers | Composite Solutions |
Corporate | Consolidation | SGL Carbon | |
|---|---|---|---|---|---|---|---|
| Nine Months 2024 | |||||||
| Sales revenue by customer industry | |||||||
| Mobility | 40.0 | - | 47.3 | 92.1 | 9.1 | 0.0 | 188.5 |
| Energy | 38.5 | - | 28.9 | - | - | 0.0 | 67.4 |
| Industrial Applications | 120.1 | - | 43.2 | 3.7 | 1.2 | 0.0 | 168.2 |
| Chemicals | 18.2 | 106.2 | - | - | - | 0.0 | 124.4 |
| Digitization | 195.7 | - | - | - | - | 0.0 | 195.7 |
| Textile Fibers | - | - | 37.7 | - | - | 0.0 | 37.7 |
| Total sales revenue | 412.5 | 106.2 | 157.1 | 95.8 | 10.3 | 0.0 | 781.9 |
| EBITDA pre ${ }^{1)}$ | 104.3 | 25.6 | $-7.9$ | 10.7 | $-5.1$ | 0.0 | 127.6 |
| Amortization/depreciation on intangible assets and property, plant and equipment | 23.2 | 1.0 | 7.1 | 4.7 | 5.0 | 0.0 | 41.0 |
| EBIT pre | 81.1 | 24.6 | $-15.0$ | 6.0 | $-10.1$ | 0.0 | 86.6 |
| One-off effects/Non-recurring items | $-5.9$ | 0.0 | $-11.6$ | $-0.7$ | $-0.1$ | 0.0 | $-18.3$ |
| EBIT | 75.2 | 24.6 | $-26.6$ | 5.3 | $-10.2$ | 0.0 | 68.3 |
| Capital expenditure ${ }^{2)}$ | 42.2 | 1.4 | 2.1 | 4.2 | 16.6 | 0.0 | 66.5 |
| Working Capital ${ }^{3)}$ | 191.1 | 32.0 | 124.0 | 36.5 | $-62.5$ | 0.0 | 321.1 |
| Result from investments accounted for At-Equity | - | - | 11.6 | - | - | - | 11.6 |
The main one-off effects/non-recurring items include impairment losses on property, plant and equipment and personnel measures in the GS reporting segment totaling $€ 4.4$ million due to the discontinuation of development activities in the Battery Solutions business line, personnel measures of $€ 2.2$ million in the CF reporting segment, as well as positive one-off effects from the reversal of provisions for dismantling and disposal costs of a site that was shut down in previous years of $€ 3.1$ million in the Corporate reporting segment (each
reported as restructuring expenses in the consolidated income statement), as well as impairments of inventories to the net realizable value of $€ 6.4$ million in the CF reporting segment, an expected penalty of $€ 2.1$ million due to a supplier's shortfall in volume purchases at CF, consulting costs totaling $€ 2.8$ million, particularly in connection with the review of strategic options for the CF reporting segment, and further personnel measures at GS in China of $€ 0.9$ million.
| Graphite Solutions |
Process Technology |
Carbon Fibers ${ }^{4)}$ | Composite Solutions |
Corporate | Consolidation | SGL Carbon | |
|---|---|---|---|---|---|---|---|
| Nine months 2023 | |||||||
| Sales revenue by customer industry | |||||||
| Mobility | 38.6 | - | 53.5 | 109.9 | 7.3 | 0.0 | 209.3 |
| Energy | 44.1 | - | 35.8 | - | - | 0.0 | 79.9 |
| Industrial Applications | 128.0 | - | 48.7 | 4.4 | 6.4 | 0.0 | 187.5 |
| Chemicals | 18.7 | 95.7 | - | - | - | 0.0 | 114.4 |
| Digitization | 189.0 | - | - | - | - | 0.0 | 189.0 |
| Textile Fibers | - | - | 41.6 | - | - | 0.0 | 41.6 |
| Total sales revenue | 418.4 | 95.7 | 179.6 | 114.3 | 13.7 | 0.0 | 821.7 |
| EBITDA pre ${ }^{1)}$ | 99.5 | 17.5 | 3.2 | 16.6 | $-6.8$ | 0.0 | 130.0 |
| Amortization/depreciation on intangible assets and property, plant and equipment | 20.6 | 1.1 | 12.0 | 4.6 | 5.0 | 0.0 | 43.3 |
| EBIT pre | 78.9 | 16.4 | $-8.8$ | 12.0 | $-11.8$ | 0.0 | 86.7 |
| One-off effects/Non-recurring items | 0.1 | 0.0 | $-44.9$ | $-0.7$ | $-1.7$ | 0.0 | $-47.2$ |
| EBIT | 79.0 | 16.4 | $-53.7$ | 11.3 | $-13.5$ | 0.0 | 39.5 |
| Capital expenditure ${ }^{2)}$ | 39.2 | 0.7 | 9.7 | 3.3 | 6.2 | 0.0 | 59.1 |
| Working Capital (31.12.) ${ }^{3)}$ | 181.6 | 21.8 | 127.5 | 44.0 | $-68.9$ | 0.0 | 306.0 |
| Result from investments accounted for At-Equity | - | - | 14.1 | - | - | - | 14.1 |
${ }^{1)}$ EBITDA adjusted by one-off effects and non-recurring items
${ }^{2)}$ 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 and contract liabilities
${ }^{4)}$ In the business unit Carbon Fibers, the allocation of sales to the market segments Energy and Industrial Applications was adjusted at the end of 2023. The previous product group allocation was replaced by a customer allocation. As a result, sales in the two market segments for the period 2023 have been adjusted for reasons of comparability.
Subsequent events
On the basis of the preliminary status of the new mid-term planning, significant deviations became apparent compared to the last mid-term planning, particularly due to the persisting weakness in the wind and automotive industries of the Carbon Fibers reporting segment. This triggered an impairment test relating to property, plant \& equipment for Carbon Fibers. As a result of the updated preliminary analyses, a non-cash impairment was assessed for property, plant \& equipment in the amount of $€ 60-80$ million, which will be recognized in profit and loss during the fourth quarter of 2024.
Wiesbaden, November 7, 2024
SGL Carbon SE
The Board of Management of SGL Carbon SE
Dr. Torsten Derr
Thomas Dippold
Other Information
Quarterly Sales Revenue and EBITDA pre by Reporting Segment
| 2023 | 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| € million | Q1 | Q2 | Q3 | Q4 | Full Year | Q1 | Q2 | Q3 | Q1-Q3 |
| Sales revenue | |||||||||
| Graphite Solutions | 140.9 | 139.7 | 137.8 | 147.3 | 565.7 | 141.3 | 142.9 | 128.3 | 412.5 |
| Process Technology | 31.9 | 32.5 | 31.3 | 32.2 | 127.9 | 33.0 | 36.9 | 36.3 | 106.2 |
| Carbon Fibers | 63.7 | 61.4 | 54.5 | 45.3 | 224.9 | 57.6 | 52.5 | 47.0 | 157.1 |
| Composite Solutions | 39.8 | 39.8 | 34.7 | 39.6 | 153.9 | 37.1 | 29.8 | 28.9 | 95.8 |
| Corporate | 7.4 | 3.4 | 2.9 | 3.0 | 16.7 | 3.6 | 3.3 | 3.4 | 10.3 |
| SGL Carbon | 283.7 | 276.8 | 261.2 | 267.4 | 1,089.1 | 272.6 | 265.4 | 243.9 | 781.9 |
| 2023 | 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| € million | Q1 | Q2 | Q3 | Q4 | Full Year | Q1 | Q2 | Q3 | Q1-Q3 |
| EBITDA pre | |||||||||
| Graphite Solutions | 30.9 | 34.2 | 34.4 | 34.5 | 134.0 | 36.6 | 35.6 | 32.1 | 104.3 |
| Process Technology | 4.9 | 7.0 | 5.6 | 4.9 | 22.4 | 6.9 | 9.1 | 9.6 | 25.6 |
| Carbon Fibers | 4.3 | 1.8 | $-2.9$ | 4.0 | 7.2 | $-5.2$ | 0.8 | $-3.5$ | $-7.9$ |
| Composite Solutions | 5.9 | 6.4 | 4.3 | 5.6 | 22.2 | 5.5 | 2.6 | 2.6 | 10.7 |
| Corporate | $-5.9$ | $-1.5$ | 0.6 | $-10.6$ | $-17.4$ | $-1.7$ | $-3.7$ | 0.3 | $-5.1$ |
| SGL Carbon | 40.1 | 47.9 | 42.0 | 38.4 | 168.4 | 42.1 | 44.4 | 41.1 | 127.6 |
Quarterly Consolidated Income Statement
| € million | Q1 | Q2 | Q3 | Q4 | 2023 Full Year | Q1 | Q2 | Q3 | 2024 Q1-Q3 |
|---|---|---|---|---|---|---|---|---|---|
| Sales revenue | 283.7 | 276.8 | 261.2 | 267.4 | 1,089.1 | 272.6 | 265.4 | 243.9 | 781.9 |
| Cost of sales | $-224.8$ | $-211.6$ | $-201.2$ | $-214.7$ | $-852.3$ | $-209.6$ | $-197.8$ | $-187.4$ | $-594.8$ |
| Gross profit | 58.9 | 65.2 | 60.0 | 52.7 | 236.8 | 63.0 | 67.6 | 56.5 | 187.1 |
| Selling, administrative, R\&D and other operating income/expense | $-38.3$ | $-37.9$ | $-35.3$ | $-34.1$ | $-145.6$ | $-38.3$ | $-40.5$ | $-33.3$ | $-112.1$ |
| Result from investments accounted for At-Equity | 5.2 | 5.8 | 3.1 | 4.2 | 18.3 | 4.4 | 3.3 | 3.9 | 11.6 |
| EBIT pre | 25.8 | 33.1 | 27.8 | 22.8 | 109.5 | 29.1 | 30.4 | 27.1 | 86.6 |
| One-off effects/Purchase price allocation effects | $-0.1$ | $-2.1$ | $-0.3$ | $-0.9$ | $-3.4$ | $-0.7$ | $-1.1$ | $-12.9$ | $-14.7$ |
| Restructuring income/expenses/impairment losses | 0.0 | $-44.7$ | 0.0 | $-4.8$ | $-49.5$ | $-1.8$ | 0.0 | $-1.8$ | $-3.6$ |
| EBIT | 25.7 | $-13.7$ | 27.5 | 17.1 | 56.6 | 26.6 | 29.3 | 12.4 | 68.3 |
| Financial result | $-7.8$ | $-8.0$ | $-8.9$ | $-9.5$ | $-34.2$ | $-9.1$ | $-8.2$ | $-7.0$ | $-24.3$ |
| Result before income taxes | 17.9 | $-21.7$ | 18.6 | 7.6 | 22.4 | 17.5 | 21.1 | 5.4 | 44.0 |
| Income tax expense | $-2.6$ | $-3.3$ | $-3.1$ | 28.3 | 19.3 | $-4.6$ | $-4.2$ | $-1.8$ | $-10.6$ |
| Net result for the period | 15.3 | $-25.0$ | 15.5 | 35.9 | 41.7 | 12.9 | 16.9 | 3.6 | 33.4 |
| Thereof attributable to: | |||||||||
| Non-controlling interests | 0.1 | 0.2 | 0.2 | 0.2 | 0.7 | 0.3 | 0.1 | 0.2 | 0.6 |
| Consolidated net result (attributable to shareholders of the parent company) | 15.2 | $-25.2$ | 15.3 | 35.7 | 41.0 | 12.6 | 16.8 | 3.4 | 32.8 |
Financial Calendar
March 20, 2025
- Publication of Annual Report 2024
- Annual Press Conference
- Investor and analyst meeting (including conference call)
May 8, 2025
- Statement on the First Quarter 2025
- Conference call for investors and analysts
May 21, 2025
- Annual General Meeting (virtual)
August 7, 2025
- Report on the First Half Year 2025
- Conference call for investors and analysts
November 6, 2025
- Statement on the First Nine Months 2025
- Conference call for investors and analysts
Investor Relations Contact
SGL Carbon SE
Investor Relations
Söhnleinstrasse 8
65201 Wiesbaden/Germany
Phone: +49 611 6029-103
Email: [email protected]
www.sglcarbon.com
Inhouse produced with firesys
Important Note
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 Graphite Solutions (GS), Process Technology (PT), Carbon Fibers (CF) and Composite Solutions (CS) 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 Graphite Solutions (GS), Process Technology (PT), Carbon Fibers (CF) and Composite Solutions (CS) businesses, the impact of any manufacturing efficiencies and capacity constraints, widespread adoption of carbon fiber products and components in key end-markets of SGL Carbon, including the automotive and aerospace 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 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 forwardlooking 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
Söhnleinstraße 8
65201 Wiesbaden/Germany
Phone +496116029 -0
www.sglcarbon.com