EQS-News: SGL Carbon: Business development in 2024 in line with guidance. Weaker momentum in sales markets expected for 2025

SGL Carbon: Business development in 2024 in line with guidance. Weaker momentum in sales markets expected for 2025
 

• Improvement of adjusted EBITDA margin to 15.9%
• Operating losses of the Carbon Fibers business unit continue to impact Group sales and profitability. Sale of the entire business currently not feasible. Restructuring initiated
• Subdued demand from key market segments such as semiconductor and automotive industries
• Developing new sales opportunities and strict cost management as focus for 2025

Wiesbaden, March 20, 2025. Increasingly weaker demand from key sales markets over the course of 2024 is slowing SGL Carbon's sales and earnings growth. Group sales in 2024 amounted to €1,026.4 million, down slightly by 5.8% on the prior-year level (2023: €1,089.1 million). The group's adjusted EBITDA decreased by 3.3% to €162.9 million (2023: €168.4 million).

Despite the slight decline in sales, the adjusted EBITDA margin improved from 15.5 % in the previous year to 15.9 % in 2024. This is mainly due to positive price and product mix effects.

Declining demand from the key semiconductor and automotive markets, coupled with persistently unsatisfactory demand from the wind industry, led to a decrease in volume and sales in three of four business units. Only Process Technology was able to improve its sales and adjusted EBITDA.

Earnings performance in the past fiscal year was strongly affected by non-recurring items of minus €118.5 million (2006: minus €52.9 million). These mainly included the impairment of assets of the Carbon Fibers business unit totaling €91.2 million (previous year: €44.7 million) and expenses from restructuring measures in the Carbon Fibers and Battery Solutions business lines totaling €19.0 million. After deducting one-off effects and non-recurring items as well as depreciation and amortization of €58.7 million (2023: €58.9 million), EBIT amounted to minus €14.3 million in 2024 (2023: €56.6 million).

Taking into account the financial result of minus €32.6 million (2023: minus €34.2 million) and tax expenses of €32.5 million (2023: €19.3 million), SGL Carbon recorded a net loss of €80.3 million (2023: net profit of €41.0 million) despite the solid overall business performance.

Development of the business units
Graphite Solutions (GS), SGL Carbon’s largest business unit, increased its profitability in 2024 despite a slight decline in sales and earnings. While sales still grew by 1.3% in the first half of 2024, the second half of the year was impacted by the weakening demand in the Semiconductor & LED market segment. Overall, sales for the fiscal year 2024 was 4.7% lower than in the prior year, amounting to €539.0 million (2019: €565.7 million).

Due to the significantly lower demand for electric vehicles compared to the automotive industry's forecasts, demand for specialty graphite components for the production of SiC semiconductors in the second half of 2024 was significantly below expectations. In addition, high customer inventories had a negative impact.

Due to positive effects from changes in the product mix, adjusted EBITDA fell disproportionately less than sales (minus 4.7%) at 2.2%. Accordingly, adjusted EBITDA of €131.0 million in the reporting year was slightly below the previous year's figure (2023: €134.0 million). The adjusted EBITDA margin improved year on year to 24.3% (previous year: 23.7%).

The Process Technology (PT) business unit continued its positive business performance in the 2024 financial year, as in the two previous years, with sales increasing by 8.1% to €138.3 million (2023: €127.9 million). The very positive performance of PT was also reflected in adjusted EBITDA. This improved from €22.4 million in the previous year to €33.0 million. The high capacity utilization and the focus on higher-margin projects, combined with the stable earnings from the service business, were reflected in the profitability of the segment and led to an improvement in the adjusted EBITDA margin from 17.5% in the previous year to 23.9%.

In 2024, the Carbon Fibers (CF) business unit's sales continued to decline, decreasing by 6.7% to €209.8 million (2023: €224.9 million). The decline was due in particularly to the continued low demand from the wind industry and the increasing competitive headwind resulting from global overcapacity for textile and carbon fibers.

Adjusted EBITDA in the Carbon Fibers business unit decreased by €18.2 million year-on-year to minus €11.0 million (2023: €7.2 million). The lack of fixed cost absorption led to high idle capacity costs and combined with declining margins for our fiber products, had a negative impact on adjusted EBITDA. It should be noted that the Carbon Fibers business unit included the result of the equity accounted activities (mainly the joint venture Brembo SGL Carbon Ceramic Brakes, BSCCB) in the amount of €15.8 million (2023: €18.3 million). Excluding the contribution from the equity-accounted BSCCB, the adjusted EBITDA of Carbon Fibers would amount to minus €27.0 million (2023: minus €10.9 million).

In February 2025, as part of the review of all strategic options for the Carbon Fibers, a decision was made to extensively restructure the Carbon Fibers business unit, which also includes the closure of unprofitable business activities. A complete sale of the Carbon Fibers activities was reviewed and is currently not considered feasible. 

In the reporting period, sales in the Composite Solutions (CS) business unit amounted to €124.6 million, down 19.0% (2023: €153.9 million). The decline was due in particular to the premature expiration of a significant project-related supply contract with an automotive customer.

As a result of lower volumes and product mix effects, CS's adjusted EBITDA decreased by €4.0 million or 18.0% year on year to €18.2 million (2023: €22.2 million). It should be noted that the adjusted EBITDA includes a compensation payment of €3.0 million for a prematurely terminated customer contract. The adjusted EBITDA margin remained almost constant at 14.6% compared to the previous year (2023: 14.4%).

Net financial debt, equity and free cash flow
In 2024, net debt could be reduced slightly by 6.6% to €108.2 million compared to the end of the previous year (2023: €115.8 million). The leverage ratio as of December 31, 2024, remained stable at 0.7 (2023: 0.7), as solid as the equity ratio of 41.5 % (2023: 41.1 %). Despite higher capital expenditures of €97.3 million compared to the previous year (€87.1 million) and lower cash flow from operating activities of €120.3 million (2023: €163.8 million), free cash flow remained positive at €38.7 million.

Forecast
For the year 2025, we expect different but overall challenging developments in our key sales markets. For the semiconductor industry and in particular for silicon carbide-based semiconductors, we expect demand to remain moderate. The main reasons are lower than originally forecast growth rates for electric vehicles and continued high inventories at our customers site. At the earliest, we expect demand to pick up in the second half of 2025. We also expect a high degree of uncertainty combined with lower momentum for the automotive market segment.

Our forecast for the current fiscal year 2025 takes into account all four operating business units, as we are still in the early stages of restructuring our Carbon Fibers business. Based on our assumptions regarding the development of the key sales markets, we expect consolidated sales for fiscal year 2025, including all business units, to be slightly below the previous year (2024: €1,026.4 million).

Taking into account all four operating business units, we expect adjusted EBITDA in 2025 to range between €130 million and €150 million. Furthermore, we assume that the free cash flow at the end of the 2025 financial year - excluding payments for the planned restructuring of the CF - will be below the previous year's level but still positive (2024: €38.7 million).

Restructuring Carbon Fibers
On February 18, 2025, the Board of Management of SGL Carbon announced a restructuring of the loss-making CF business unit. This includes a significant reduction of CF's business activities and a focus on a profitable core. SGL Carbon's group sales guidance for 2025 excluding the expected sales contribution from CF would be approximately €200 million lower. On the other hand, the adjusted EBITDA for the remaining businesses excluding the operating adjusted EBITDA of CF would be between 155 – 175 million €.

“In the coming months, our work will focus on restructuring the carbon Fibers business unit and safeguarding our profitability. This includes focusing on new sales opportunities to further utilize our production capacities and strict cost management. The major trends such as digitization, climate-friendly transportation and renewable energy sources remain intact and are the drivers for our key sales markets. SGL Carbon will benefit from these trends and the associated growth opportunities in the medium and long term,” explains Andreas Klein, CEO of SGL Carbon SE.

Further details on the business development in 2024 and the outlook for 2025 can be found in SGL Carbon's annual report.

Key figures 2024
 

(in € million)	FY2024	FY2023	Changes	Changes  in %
Group sales	1,026.4	1,089.1	-62.7	-5.8%
Graphite Solutions	539.0	565.7	-26.7	-4.7%
Process Technology	138.3	127.9	10.4	8.1%
Carbon Fibers	209.8	224.9	-15.1	-6.7%
Composite Solutions	124.6	153.9	-29.3	-19.0%
Corporate	14.7	16.7	-2.0	-12.0%
Adjusted EBITDA*	162.9	168.4	-5.5	-3.3%
Graphite Solutions	131.0	134.0	-3.0	-2.2%
Process Technology	33.0	22.4	10.6	47.3%
Carbon Fibers	-11.0	7.2	-18.2	-
Composite Solutions	18.2	22.2	-4.0	-18.0%
Corporate	-8.3	-17.4	9.1	-52.3%
Net result (attributable to the shareholders of the parent company)	-80.3	41.0	-121.3	--
Free cash flow	38.7	95.6	-56.9	-59.5%
* Adjusted EBITDA: Earnings before interest, taxes, depreciation and amortization, adjusted for one-time effects and non-recurring items.
	Dec. 31, 2024	Dec. 31, 2023	Changes	Changes    in %
Equity ratio (in %)	41.5%	41.1%		0.4%-points
Net financial debt (in € million)	108.2	115.8	-7,6	-6.6%
ROCE (EBIT adjusted) (in %)	11.4%	11.3%		0.1%-points

Outlook 2024

(in € million)	2025 Outlook	Actual 2025
Group sales	slightly below previous year	1,026.4
Adjusted EBITDA	130 - 150	162.9
Return on capital employed (ROCE EBIT adjusted)	9% - 10%	11.4%
Free cash flow	significantly below previous year but still positive	38.7

“Slight“ = a percentage change of up to 10% compared to the previous year
“Significant” = a percentage change of more than 10% compared to the previous year
About SGL Carbon
SGL Carbon is a technology-based company and a world leader in the development and production of carbon-based solutions. Its high-quality materials and products made from specialty graphite, carbon fibers and composites serve many industries that are shaping the trends of the future: climate friendly mobility, aerospace, solar and wind energy, semiconductors, and LEDs as well as the production of fuel cell and other energy storage systems. In addition, SGL Carbon develops solutions for chemical and industrial applications.

In 2024, SGL Carbon SE generated sales of 1.0 billion euros. The company employs approximately 4,700 people at 29 locations in Europe, North America and Asia.

Further information on SGL Carbon can be found at www.sglcarbon.com/press.
Important note:
To the extent that our press release contains forward-looking statements, the latter are based on information that is available at present and on our current forecasts and assumptions. Forward-looking statements, by their very nature, entail known as well as unknown risks and uncertainties that may lead to actual developments and events differing substantially from the forward-looking assessments. Forward-looking statements must not be understood to be guarantees. Instead, future developments and events depend on a large number of factors; they comprise various risks and imponderables and are based on assumptions that may possibly turn out not to be appropriate. These include unforeseeable changes to fundamental political, economic, legal and societal conditions, particularly in the context of our main customers’ industries, the competitive situation, interest and exchange rate trends, technological developments as well as other risks and uncertainties. We perceive additional risks e.g. in pricing developments, unforeseeable events in the environment of companies acquired and Group member companies as well as in current cost savings programs from time to time. The SGL Carbon assumes no obligation and does not intend to adjust or otherwise update these forward-looking statements either.

SGL Carbon SE
Claudia Kellert – Head of Investor Relations,
Communications and Corporate Sustainability
Soehnleinstrasse 8
65201 Wiesbaden/Germany

Telephone +49 611 6029-100
press@sglcarbon.com
www.sglcarbon.com

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