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Recurring EBIT leaps at SGL Group in 2015

26 Mar '16

3 min read

Recurring EBIT at German carbon fibres and materials (CFM) producer SGL Group leapt substantially to €32.6 million in 2015 compared to €2.7 million in 2015.

“This was mainly due to the earnings turnaround of the CFM business unit, which improved EBIT from a loss of €22.5 million in the prior year to €9.3 million in 2015,” a SGL Group press release explained.

In the reporting year, sales of SGL Group decreased by approximately one per to €1,323 million as against €1,336 million in the previous year.

The cost savings program 'SGL2015' enabled SGL Group to achieve approximately €45 million in savings in the year under review.

According to SGL, the program was successfully concluded in 2015 and has exceeded the originally announced savings of €150 million by generating savings of €202 million until the end of 2015.

Due to non-recurring charges, the consolidated net loss of the SGL Group increased to €295 million vis-à-vis a loss of €247 million in the earlier year.

“These non-recurring charges are chiefly attributable to impairments and restructuring expenses in the graphite electrodes business and the sale of the aerostructures business of HITCO,” the company said.

“Had it not been for these two effects, the Group's consolidated net result would have improved to a loss of just €47 million,” SGL observed.

In the business unit CFM, sales were up by 10 per cent year on year, reaching €327.3 million, while adjusted for HITCO's materials business, CFM sales were up 3 per cent, to €307 million.

The moderate growth resulted from the automotive and wind energy industries, while sales in the acrylic fibre business declined slightly as selling prices are linked to prices of acrylonitrile, its key raw material.

Recurring EBIT for the CFM division rose significantly to €9.3 million as against loss of €22.5 million in 2014, mainly due to completion of the start-up phase and improved productivity of JV's with the BMW Group.

In 2015, balance sheet ratios underwent substantial changes year on year as equity was affected in particular by the loss from discontinued operations as well as non-recurring charges.

In total, equity ratio at the end of the year amounted to €15.6 per cent versus 26.2 per cent in 2014.

The placement of a €167 million convertible bond maturing in the year 2020 and the repurchase of the convertible bond maturing in 2016 improved the maturity profile of SGL Group.

Free cash flow from continuing activities improved to a negative €74.9 million compared to a negative €121.3 million in the prior year.

For 2016, company expects its SGL2015 cost savings program to yield positive effects, but also expects a net loss, which is however, expected to substantially reduce over 2015. (AR)

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