Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SGL Carbon SE (SGLFF, Financial) managed to keep its EBITDA margin stable at 15.9% despite a challenging business environment.
- The Process Tech business unit showed remarkable growth, with an 8% increase in sales and a nearly 50% jump in profitability.
- The company successfully reduced its net financial debt by 6%, achieving a healthy leverage ratio of 0.7.
- SGL Carbon SE (SGLFF) maintained a positive free cash flow of approximately EUR 40 million.
- The company demonstrated strong cost management, reducing indirect spending and optimizing headcount and structures.
Negative Points
- Overall sales declined by 5.8% compared to the previous year, with a significant impact from currency effects and portfolio changes.
- The Carbon Fiber business unit faced a 7% decline in sales and a substantial operational loss, leading to restructuring plans.
- The Composite Solutions unit experienced a 19% drop in sales due to the termination of a profitable automotive contract.
- The semiconductor and LED market segment, crucial for the Graphite Solutions unit, saw a slowdown, impacting sales and profitability.
- The company reported a negative net result of EUR 80.3 million, primarily due to restructuring costs and impairments.
Q & A Highlights
Q: Last year's CapEx was EUR97 million. Can you provide a specific figure for this year's CapEx, especially given the muted silicon carbide outlook?
A: Thomas Dippold, CFO: We haven't provided a specific CapEx figure for this year. However, we expect our cash flow to remain positive. There will be some major CapEx, but likely not at last year's level. We also have some one-off restructuring costs for carbon fiber, totaling EUR50 million over the next two years.
Q: Given the competitive landscape, particularly with Asian competitors catching up, how do you maintain your advantage in the silicon carbide market?
A: Andreas Klein, CEO: Our advantage lies in providing a comprehensive portfolio and maintaining strong partnerships with customers. We focus on delivering consistent quality and growing with our customers' evolving requirements, leveraging our established footprint and experience.
Q: With the current challenges in the electric vehicle market, how do you plan to safeguard sales and profitability in 2025?
A: Andreas Klein, CEO: We are focusing on broadening our market reach beyond silicon carbide and electric vehicles, scouting for new applications to fill capacities. Additionally, we are implementing strict cost and cash management measures, optimizing headcount, and adjusting CapEx based on new forecasts.
Q: What are the expected cash effects of the restructuring activities in the carbon fiber business?
A: Andreas Klein, CEO: The restructuring activities will have a one-time cash effect of EUR50 million spread over 2025 and 2026. This includes site-specific measures and the closure of unprofitable assets.
Q: How do you view the long-term outlook for the silicon carbide market despite the current slowdown?
A: Andreas Klein, CEO: The long-term importance of silicon carbide remains unchanged due to its performance benefits for electric vehicles. While the mid-term growth outlook has been adjusted, we expect silicon carbide penetration to increase in other markets, presenting new opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
