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SGL Group sets strategic milestones for profitable growth

14 Jul '15

2 min read

The Board of Management and the Supervisory Board of SGL Group has defined strategic milestones to secure long-term profitable growth.

An extensive growth initiative has been decided for the business units Graphite Materials & Systems (GMS) and Carbon Fibers & Materials (CFM) targeted to organically increase sales by approximately 50 per cent until 2020 compared with 2014. In addition, selective accretive bolt-on acquisitions are planned to complement SGL Group’s portfolio in terms of technology and market positions. Also, the business unit Performance Products (PP) will become a separate legal entity within SGL Group. This measure will enable the unit to optimally adapt its business model to the changed market fundamentals especially in graphite electrodes, according to a SGL press release.

In 2014, GMS and CFM posted combined sales of €737 million and an EBIT before non-recurring charges of €17 million. While GMS has historically already reached the profitability targets, CFM is set to complete the turnaround this year. Through accelerated organic growth, the market position of both business units will be enhanced along the value chain, while simultaneously processes and cost will be further optimized. Combined sales are targeted to grow organically by roughly 50 per cent until 2020, while meeting the minimum ROCE target of 15 per cent. In addition, selective accretive bolt-on acquisitions are planned to complement SGL Group’s portfolio in terms of technology and market positions.

Along with the enhancement of the Group strategy and the Company’s portfolio, the strategic realignment of SGL Group also includes the cost savings program SGL2015 and a general review of its business processes. Savings of more than €240 million are targeted through SGL2015, of which €172 million had already been achieved by the end of the first quarter of 2015. SGL2015 is expected to be largely completed this year. For further optimization of business processes, an additional Group-wide program entitled “Business Process Excellence (BPX)” was launched at the beginning of this year, aiming at further simplifying and standardizing central processes and thus generating additional long-term improvements. In the first step, the program is currently focusing on purchasing, supply chain management, and sales.

SGL Group is one of the world’s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibres and composites. (GK)

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