Interim Financial Report 9M/2015

Transcription

1 Interim Financial Report 9M/2015 Investor & Analyst Conference Call 5 November 2015 Investor Relations

2 Agenda. 1. Financials 9M/ Outlook Page 2 SGL Group Investor Relations 05 November 2015

3 Performance Products. Substantial EBIT improvement despite lack of recovery in graphite electrodes in million 9M/2015 9M/2014 Sales revenue EBITDA before non-recurring charges* EBIT before non-recurring charges* EBIT-Margin before non-recurring charges* (in %) EBIT Sales revenue down 5 %, (currency adjusted -12%) only due to lower volumes and prices in graphite electrodes. Cathodes sales increased YoY Nevertheless, recurring EBIT increased by nearly 50% due to savings related to SGL2015 and raw materials Mainly SGL2015 related restructuring charges amounting to 5.6 million in reporting period SGL2015 savings 17.1 million, thereof 6.3 million from SGL Excellence Page 3 SGL Group Investor Relations 05 November 2015 * Non-recurring charges of 5.6 million in 9M/2015 and 6.5 million in 9M/2014

4 Graphite Materials & Systems. Stable sales, declining earnings resulting mainly from big ticket order in 2014 in million 9M/2015 9M/2014 Sales revenue EBITDA before non-recurring charges* EBIT before non-recurring charges* EBIT-Margin before non-recurring charges* (in %) EBIT Sales revenue up 1% (currency adjusted down 6%) FX-adjusted sales decline mainly driven by big ticket order in 2014 Process Technology showed recovery in Q3 after weaker H1/2015 sales performance based on subdued order intake in 2014 Continued strong demand for anode materials for Li-ion batteries Recurring EBIT declined by approx. 10 million due to Lower capacity utilization resulting mainly from non-recurrence of last year s big ticket order Partially compensated by one-off gains from a land sale and an insurance claim SGL2015 savings 9.4 million, thereof 5.9 million from SGL Excellence Page 4 SGL Group Investor Relations 05 November 2015 * Non-recurring charges of 0.9 million in 9M/2015 and 0.7 million in 9M/2014

5 Carbon Fibers & Materials. Turnaround in profitability achieved in million 9M/2015 9M/2014 Sales revenue EBITDA before non-recurring charges* EBIT before non-recurring charges* EBIT-Margin before non-recurring charges* (in %) EBIT Sales revenue increased by 10% (currency adjusted 4%) Increased sales contributions from our proportionally consolidated joint ventures with BMW Group (SGL ACF, 51% share) CF/CM benefited from improved demand from various customer industries Recurring EBIT turned positive Strong EBIT improvement at CF/CM due to better volumes and thus higher utilization Lower ramp-up costs and improved productivity for carbon fiber capacity expansion in Moses Lake and Wackersdorf (SGL ACF) as expected SGL2015 savings 3.2 million, thereof 1.4 million from SGL Excellence Page 5 SGL Group Investor Relations 05 November 2015 * Non-recurring charges of 0.3 million in 9M/2015 and 0.4 million in 9M/2014

6 T&I and Corporate. SGL2015 savings partially offset by various effects in million 9M/2015 9M/2014 Sales revenue EBITDA before non-recurring charges* EBIT before non-recurring charges* EBIT Recurring EBIT slightly improved - savings from SGL2015 partially offset by higher consulting fees relating to Business Process Excellence initiative currency effects from the translation of USD based administrative expenses SGL2015 savings 4.3 million Page 6 SGL Group Investor Relations 05 November 2015 *Non-recurring charges of 1.1 million in 9M/2015 and 16.8 million in 9M/2014

7 Group. Improved EBIT reflects both operational improvements and lower non-recurring charges in million 9M/2015 9M/2014 Sales revenue EBITDA before non-recurring charges EBIT before non-recurring charges Non-recurring charges EBIT Includes savings of 34 million from SGL2015 in 9M/2015, of which approx. 14 million attributable to SGL Excellence Page 7 SGL Group Investor Relations 05 November 2015

8 Group. Improved result from continuing operations on flat sales demonstrates effectiveness of SGL2015 in million 9M/2015 9M/2014 EBIT Results from investments accounted for At-Equity Net financing result Results from continuing operations before income taxes Income tax expense Results from continuing operations after income taxes Consolidated net result attributable to the shareholders of the parent company EPS, basic and diluted (in ) EPS, basic and diluted (in ) continued operations Result from investments accounted for At-Equity improves to above break even level mainly due to Brembo SGL and lower costs related to SGL Lindner Substantial improvement in results from continuing operations after taxes despite non recurrence of 10 million positive one time effect in net financing result in 9M/2014 (non exercise of investor put of 2009/16 convertible bond) Net result and EPS includes loss from discontinued operations (HITCO) totaling 78 million (of which 53 million impairment charge resulting from sale of aerostructures business; 9M/2014: loss of 25 million) Page 8 SGL Group Investor Relations 05 November 2015

9 Balance sheet. Solid despite slight deterioration in million Total assets 2, ,170.3 Equity ratio (in %) Total liquidity Net financial debt Gearing (net debt/equity) Total assets declined by 6% Equity ratio declined due to net loss of 106 million in the reporting period (including a loss of 78 million from discontinued operations) negative currency translation effects of 41 million due to the devaluation of the Malaysian Ringgit in Q3/2015 partially compensated by 19 million IFRS equity component of the new convertible bond 16 million (after tax) gain on equity resulting from effect of increased discount factors for calculation of pension provisions in Germany (from 2% to 2.25%) and in the US (from 4% to 4.5%) Page 9 SGL Group Investor Relations 05 November 2015

10 Free cash flow. Small positive free cash flow from continuing operations in Q3/2015 as anticipated Continuing operations in million 9M/2015 9M/2014 Cash flow from operating activities Capital expenditures in property, plant and equipment and intangible assets thereof SGL ACF thereof SGL Group excluding SGL ACF Cash flow provided by other investing activities* Free cash flow Operating cash flow in 9M/2015 declined due to working capital buildup (mainly relating to lower trade payables due to reduced raw material costs as well as the declining investment spend and higher inventories) non-recurring cash out for USD hedges in Q1/2015 (relating to HITCO) Free cash flow from continued operations improved slightly in 9M/2015 achieved positive free cash flow from continuing operations in Q3/2015 as projected Page 10 SGL Group Investor Relations 05 November 2015 *Payments for capital contributions in investments accounted for At-Equity, proceeds from dividend payments and sale of intangible assets and property, plant and equipment

11 Agenda. 1. Financials 9M/ Outlook Page 11 SGL Group Investor Relations 05 November 2015

12 Business unit outlook Performance Products: PP sales expected slightly below prior year level only due to lower graphite electrode volumes and prices. Partially compensated by higher cathode sales. Deteriorating GE business conditions in Q4 (GE order postponements/cancellations) will lead to an FY15 EBIT slightly below last year, despite strong SGL2015 savings, raw material cost reductions and earnings improvement in 9M/15. Graphite Materials & Systems: GMS to report nearly stable sales, and mid to high single digit million lower EBIT as a result of non-recurrence of big ticket order and weaker order intake in H1/2015. Carbon Fibers & Materials: CFM to post slightly higher sales and significant improvement in EBIT. Better volumes in both CF/CM and SGL ACF, partially offset by crude oil based pricing of Fisipe acrylic fibers. EBIT improvement based on overall improved demand and lower ramp up costs at SGL ACF Corporate: Slightly lower costs as a result of SGL2015 savings and gains from disposal of nonoperating assets Page 12 SGL Group Investor Relations 05 November 2015

13 Group outlook Full year Group sales expected stable - lower sales in PP compensated by better turnover in CFM Group recurring EBITDA and EBIT: substantial percentage increase despite expected weakness in GE in Q4/2015 due to in line or better performance in other businesses. ROCE to improve in line Restructuring : SGL2015: mid double digit million savings. Mid double digit million restructuring cash- out Total restructuring expenses will from H2/2015 onward include one-time expenses associated with transformation of business models as announced on July 7, 2015 and amount to a low double digit million amount in FY 2015 (including SGL2015 related restructuring costs) Renewed deterioration of GE market conditions requires review of additional measures and leads to possible additional restructuring charges in mid to high double digit million magnitude Net result: If possible additional restructuring charges reach a high double digit million magnitude, net result (cont. operations) would remain approx. on prior year loss level Capex for the first time in many years to decrease below D&A level of approx. 90 million Free cash flow (cont. operations): improvement impeded due to various one-off effects however operational free cash flow (before tax settlement of 35 million) slightly positive again in Q4/2015 Page 13 SGL Group Investor Relations 05 November 2015

14 Renewed deterioration in GE market conditions. Chinese steel exports at record high level Overall steel market situation today is comparable to the peak of the financial crisis 2008/09 with crude steel utilization on historic low levels Chinese steel exports continue to rise, depressing steel production in most remaining regions of the world in million t Net Export Export FC Page 14 SGL Group Investor Relations 05 November 2015 China compensating lack of domestic (steel) demand by increasing exports Source: Worldsteel.org, SGL Group estimates

15 Renewed deterioration in GE market conditions. Iron ore prices continue to favor BOF production route Iron ore/scrap price development continues to be unsupportive for EAF steel production as iron ore prices are expected to reach new lows Against this backdrop, graphite electrodes remain oversupplied, resulting in renewed pricing pressure 200 Iron ore China price in USD/t Further decline to below USD50/t anticipated 0 Jan 12 May 12 Sep 12 Jan 13 May 13 Sep 13 Jan 14 May 14 Sep 14 Jan 15 May 15 Sep 15 Page 15 SGL Group Investor Relations 05 November 2015

16 Initial outlook on 2016 significantly impacted by renewed deterioration in GE market conditions. Planning for 2016 still at an early stage From today s point of view, Business Units GMS and CFM as well as cathodes business within Business Unit PP to develop in line with SGL Group s expectations However, anticipated renewed price erosion in graphite electrodes to prevent further EBIT improvement in the Business Unit PP. In fact, graphite electrode business anticipated to be EBIT negative in 2016, resulting in significant deterioration of the EBIT of the Business Unit PP Planning process for 2016 still in early stages and countermeasures yet to be finalized, implemented and their impact evaluated, thus impact of operational and structural developments on Group EBIT 2016 not yet fully clear From today s point of view, a significant decline in EBIT (before non-recurring effects) is anticipated Page 16 SGL Group Investor Relations 05 November 2015

17 Consequences of renewed deterioration in GE market conditions. Renewed downturn in graphite electrode business confirms SGL Group s strategy to legally separate the Business Unit PP, as announced on July 7, 2015 Accelerated implementation and thorough execution of the required measures As a result, SGL Group is confident that the technical carve out process within the SGL Group can be completed well ahead of schedule, i.e. approximately in mid 2016 In addition, SGL Group will also speed up the process of defining and executing on strategic options for PP Simultaneously, SGL Group is reviewing further site optimization and capacity reduction measures including potential site closures as well as further reductions in personnel from adapting its business model Page 17 SGL Group Investor Relations 05 November 2015

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