Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SGL Carbon SE (SGLFF, Financial) maintained a stable EBITA pre of EUR127.6 million, only a 1.8% drop from the previous year, despite a decline in sales.
- The Process Technology segment showed remarkable growth, with sales up by 11% and EBITA pre increasing by 46.3%, reaching a margin of 24.1%.
- Graphite Solutions, the largest business unit, maintained a healthy margin of 25.3%, with a slight sales decline of only 1.4%.
- The company has a positive free cash flow of EUR15.5 million, despite a decrease from the previous year.
- SGL Carbon SE (SGLFF) confirmed its guidance for 2024, expecting to meet the lower end of its EBITA range of EUR161 to EUR170 million.
Negative Points
- Overall sales for the first nine months of 2024 were down by 4.8% compared to the previous year, with a like-for-like sales drop of 3.6%.
- The Carbon Fiber business unit experienced a significant decline, with sales down by 12.5% and an EBITA pre loss of EUR7.9 million.
- Composite Solutions saw a 16% drop in sales due to a terminated contract, impacting its EBITA pre by 35%.
- The semiconductor and silicon carbide markets are experiencing a slowdown, with no expected growth in silicon carbide for 2025.
- The company anticipates a non-cash impairment of EUR60 to EUR80 million by year-end, affecting net results and equity.
Q & A Highlights
Q: Can you provide an update on the negotiations regarding the cancellation fee with your customer in the composite solutions segment?
A: These talks are still ongoing. It's a tough negotiation, but we are confident that we will secure a certain compensation. We aim to maintain a good relationship with the OEM while negotiating.
Q: Regarding the carbon fiber division, have you set an internal deadline for reaching a conclusion on its future?
A: Yes, we have an internal deadline, but we won't disclose it. We are aware of the challenges in selling a loss-making unit and are actively working on it. The division's dual-use nature adds complexity to the process.
Q: Have you calculated the impact of potential US tariffs on your business?
A: We haven't done a detailed calculation, but qualitatively, we feel comfortable due to our well-distributed asset footprint and significant US investments. We expect the impact to be neutral.
Q: Could you update us on the order book and visibility for the process technology segment?
A: We have a 6 to 9-month lead time for process tech projects, ensuring stability for this year and early 2025. While there's a slight decline in order intake, we are intensifying acquisition efforts to capture market opportunities.
Q: Has there been any change in the pipeline for the composite solutions segment since Q2?
A: The pipeline remains healthy, but projects related to electromobility are delayed by 6 to 18 months. Customer down payments have become harder to secure, affecting the timing of returns on investments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
