SGL Carbon had a solid start to the first quarter of 2024. Despite the slight decline in sales of 3.9% to €272.6 million (Q1 2023: €283.7 million), adjusted EBITDA improved by 5.0% to € 42.1 million (Q1 2023: € 40.1 million). Weak demand in the Carbon Fibers business unit in particular have a negative impact on the Group's sales and earnings performance. By contrast, slightly higher sales and, especially, the increase in adjusted EBITDA in the Graphite Solutions and Process Technology business units had a positive effect on the Group's performance.
"Our Graphite Solutions and Process Technology business units performed well in the first three months 2024. Composite Solutions has maintained considerable profitability even after the expiry of a contract with an automotive customer. We are only concerned about the Carbon Fibers division. In addition to weak demand from the wind industry, the increasing price pressure for textile and acrylic fibers is weighing on the business unit," explains CEO Dr. Torsten Derr.
Development of the business units
SGL Carbon's largest business unit, Graphite Solutions, generated sales of €141.3 million in Q1 2024 and was thus at the previous year's level (Q1 2023: €140.9 million). The continued positive sales development in the semiconductor and LED market segment was almost completely offset by the cyclical decline in demand in the other market segments. Sales with customers from the semiconductor industry increased by €9.8 million or 15.6% to €72.4 million in a three-month comparison. This includes sales with silicon carbide semiconductor customers, whose sales growth amounted to around 35% and now accounts for around two thirds of total semiconductor and LED sales. Based on the changed product mix, the adjusted EBITDA of Graphite Solutions improved by 18.4% to €36.6 million (Q1 2023: € 30.9 million). The adjusted EBITDA margin also increased accordingly from 21.9% to 25.9% quarter-on-quarter.
The Process Technology business unit confirmed the positive development of the previous year with an increase in sales of 3.4% to €33.0 million (Q1 2023: €31.9 million). Major projects for international customers and a good order situation in the service business in particular led to this pleasing increase. Based on higher capacity utilization and an attractive product mix, Process Technology's adjusted EBITDA improved by 40.8% to €6.9 million (Q1 2023: €4.9 million). The adjusted EBITDA margin developed correspondingly positively from 15.4% in the same quarter of the previous year to 20.9% in Q1 2024.
Sales in the Carbon Fibers business unit amounted to €57.6 million in Q1 2024, which was below the prior-year quarter's figure of € 63.7 million. The decline is due in particular to the continued weak demand from the wind industry and the associated capacity adjustment in the carbon fiber business. In addition, there was increasing price pressure in the textile and acrylic fiber market segments in the first three months of 2024 due to a global capacity overhang for these products. Accordingly, the adjusted EBITDA of Carbon Fibers fell by €9.5 million quarter-on-quarter to minus €5.2 million (Q1 2023: €4.3 million). It should be noted that the adjusted EBITDA includes an earnings contribution of around € 4.4 million from companies accounted for At-Equity.
Revenue in the Composite Solutions business unit declined slightly to €37.1 million in Q1 2024 (Q1 2023: €39.8 million or -6.8%). The decline is due to the expiry of a project-related supply contract with an automotive customer. The division develops and produces customized vehicle components made from various composite materials for automotive customers in Europe and North America. As a result of the slightly lower volumes, the adjusted EBITDA of Composite Solutions decreased by €0.4 million or 6.8% year-on-year to €5.5 million (Q1 2023: €5.9 million), but maintained its adjusted EBITDA margin of 14.8%, unchanged from the same quarter of the previous year.
Debt, equity and capitel expenditure
At €117.2 million as at March 31, 2024, net financial debt remained at the same level as at the end of previous year (December 31, 2023: €115.8 million). The leverage factor remained unchanged at 0.7. Due to the positive Group result, the equity ratio increased slightly compared to the end of the 2023 financial year to 42.0% (31.12.2023: 41.1%).
The investment volume in the first quarter of 2024 amounted to €23.9 million and was therefore significantly higher than the depreciation and amortization of €13.3 million.
"Around two thirds of our investment volume in the first three months of 2024 was invested in expanding our production capacities for graphite components for the semiconductor industry. The local expansion of our machinery is therefore progressing steadily. In addition, we have invested around €6 million in the construction of a new production hall for our joint venture BSCCB to create additional production capacity for this highly profitable business," explains Thomas Dippold, CFO of SGL Carbon.
Outlook
In line with the course of business in the first three months of 2024, we confirm our sales and earnings outlook for the 2024 financial year. Consolidated sales for the 2024 financial year are expected to be at the previous year's level and adjusted EBITDA between €160 million and €170 million.
Further details on business development in Q1 2024 can be found in the Quarterly Statement.
