From the Sector

The Board of Management of SGL Carbon SE decided, with the approval of the Supervisory Board, to restructure the loss-making Carbon Fibers business unit. SGL Carbon will significantly reduce the business activities of Carbon Fibers and focus on a profitable core. Individual solutions are being developed for all Carbon Fibers sites, including the closure of unprofitable sites. On February 23, 2024, SGL Carbon had already announced that it was reviewing all strategic options for the Carbon Fibers business unit. The joint venture Brembo SGL Carbon Ceramic Brakes S.p.A. (BSCCB), which is allocated to the Carbon Fibers business unit for accounting purposes, is not affected by the restructuring.

A complete sale of the Business Unit Carbon Fibers was intensively evaluated, but is no longer considered feasible. Dr. Stephan Bühler, the responsible member of the Board of Management of SGL Carbon, explains: “We are in the initial phase of restructuring the Business Unit Carbon Fibers. We therefore ask for your understanding that we are currently unable to provide any specific details regarding individual site closures and the exact restructuring period. Our goal is to quickly begin the implementation in order to create clarity for our employees. We will begin the implementation of the restructuring as quickly as possible in order to contain the operating losses of CF and the associated impact on the entire SGL Carbon in the short term.”

The company is expecting one-time cash effects in the amount of approximately €50 million over the next two years due to the extensive restructuring.

Carbon Fibers produces textile, acrylic and carbon fibers at seven sites in Europe and North America, with around 870 employees. After a slump in demand for carbon fibers for the wind industry, the business unit's sales and earnings fell significantly in the course of fiscal years 2023 and 2024.

“The earlier expectations for carbon fibers as a future material for the automotive industry have not been fulfilled. The wind energy industry was also unable to compensate the shortfall in demand. In combination with increasing global over-capacities, high operating losses were incurred over the last two years, which weighed on the entire SGL Carbon,” said Andreas Klein, CEO of SGL Carbon, explaining the decision to restructure the Carbon Fiber business.

Preliminary sales and adjusted EBITDA 2024
Based on preliminary figures, Carbon Fibers generated sales of around €210 million in fiscal year 2024 (previous year: €224.9 million). According to preliminary figures, the negatively adjusted EBITDA of Carbon Fibers, excluding the share of the earnings of the joint venture BSCCB, amounted to around minus €27 million in fiscal year 2024 (previous year: minus €10.9 million), as expected.

The continued weak business development of Carbon Fibers also impacts the group. Based on preliminary figures, group sales of SGL Carbon amounted to approximately €1,026 million (previous year: €1,089.1 million) in fiscal year 2024. Preliminary adjusted EBITDA for the group of approximately €163 million was slightly below the prior-year level (2023: €168.4 million), but in line with the given guidance for 2024. Based on the current economic conditions and forecasts for some of our markets, such as the automotive and semiconductor industries, SGL Carbon expects the market environment to remain challenging in 2025.

Further information on the business development in 2024 and the final financial figures can be found in the SGL Carbon Annual Report, which will be published together with the outlook for the current fiscal year on March 20, 2025.

The ZEBRA (Zero wastE Blade ReseArch) project marks a significant leap forward in the recycling and circular economy for wind turbine blades. This collaborative effort demonstrates a breakthrough in the complete recycling of thermoplastic blades achieving significant environmental and economic benefits.

The ZEBRA project is a unique partnership led by the French Institute for Technological Research, IRT Jules Verne. Joining forces are industry leaders Arkema (resin supplier), Owens Corning (glass fiber supplier), LM Wind Power (blade manufacturer), SUEZ (dismantling and waste processing), CANOE R&D center (recycling technology), and ENGIE (life cycle analysis).

Each company played a crucial role in the development of the closed-loop recycling process:

• Arkema developed and validated the generation of recycled Elium® monomer through thermolysis, and, together with its subsidiary Bostik, an innovative adhesive for the blade assembly that is recycled together with Elium® paving the way for industrial-scale implementation.
• Owens Corning successfully recovered glass fiber at pilot scale, enabling its reintroduction into the production process for their Sustaina® product line.
• LM Wind Power manufactured two wind turbine blades with Arkema’s Elium® resin and Owens Corning’s Ultrablade® fabrics; one blade including a large structural element made with recycled Elium® resin.
• SUEZ provided cutting and grinding expertise for processing the blades.
• CANOE R&D center optimized recycling for production and carbon blade waste, additionally developing methods for repurposing waste streams through mechanical recycling.
• ENGIE conducted a comprehensive life cycle analysis demonstrating the environmental benefits of closed-loop ZEBRA blades and validated their economic viability.

A Sustainable Future for Wind Energy
The ZEBRA project successfully recycled Elium® resin and Ultrablade® fabrics from wind turbine blades and manufacturing waste, reformulating them back into usable materials. This closed-loop process addresses the growing challenge of end-of-life blade management within the wind energy industry.

• Recycled Elium® Monomer: Arkema achieved a yield of over 75% in the thermolysis process, paving the way for industrial-scale production of recycled resin.
• Recovered Glass Fiber: Owens Corning successfully retrieved glass fiber for remelting and reintegration into their Sustaina® product line.
• Life Cycle and Cost Analysis: ENGIE's study confirmed the significant environmental benefits and economic viability of ZEBRA blades when assuming a closed-loop recycling system from production to end-of-life.

ZEBRA blade using Elium® thermoplastic resin, Bostik’s highly compatible adhesive and Ultrablade® fabrics is bringing the best closed-loop recycling solution compared to traditional thermoset system. The operating cost and investments for recycling facility are significantly lowered. The CO2 emission linked to the recycling operations is reduced as well. All those results are making the closed-loop recycling solution of ZEBRA blades a viable option both on economic and environmental standpoints.

By demonstrating the feasibility of full wind turbine blade recycling, the ZEBRA project paves the way for a more sustainable future in the wind energy sector.

The 17th World-Pultrusion-Conference (WPC) took place in Hamburg from 29 February to 1 March. Pultrusion, also known as the extrusion process, is a highly efficient method for producing fibre-reinforced plastic profiles for various applications in the construction/infrastructure and transport sectors.

A record number of almost 150 participants from all over the world attended the event. An international audience of experts from Europe and the USA, as well as China, India and Japan was represented.

The lecture programme with a total of 25 specialist lectures was strongly characterised by the topic of sustainability. The process development of thermoplastic pultrusion and applications in wind energy, solar panels, bridge construction and the automotive industry were also discussed at length. Despite the difficult market environment, many opportunities and possibilities for the pultrusion industry were presented.

The conference takes place every two years in a European country of importance to the pultrusion industry and is organised by AVK for the European Pultrusion Technology Association (EPTA), in cooperation with the American Composites Manufacturers Association (ACMA).

Felix Pohlkemper and Tim Röding from Institut für Textiltechnik (ITA) of RWTH Aachen University are developing a technology with their start-up CarboScreen GmbH that makes complex carbon fibre production controllable through sensor monitoring. With the help of CarboScreen technology, it should be possible to double the production speed from the current 15 m/min to 30 m/min in the medium term. The doubling of production speed alone could result in an increase in turnover of up to €37.5 million per year and production plant. Felix Pohlkemper and Tim Röding were awarded third place in the AVK Innovation Award 2023 in the Processes and Procedures category for this ground-breaking development. The award ceremony took place during the JEC Roof Forum in Salzburg, Austria.

The production of carbon fibres is highly complex. In the current state of the art, however, the manufacturing process is only monitored manually by semi-skilled workers. However, even minimal fibre damage during production leads to a reduction in the quality of the carbon fibre. In extreme cases, it can also lead to plant fires. To ensure production quality, the production speed is currently limited to a maximum of 15 m/min. In fact, the production speed of the systems could be higher. The sensor-based online monitoring of Carbo-Screen makes it possible to increase the production speed to 30 m/min in the medium term. As a result of the increased production volume per system, the specific production costs of the carbon fibre are reduced, which can result in lower prices.

A reduced sales price would make it possible to use carbon fibres and their composite materials even more widely in traditional markets such as aerospace technology and wind energy, as well as for mass production in the automotive industry.

The CarboScreen online monitoring system is currently being developed for industrial use. It is to be validated at an industrial plant in 2024. CarboScreen GmbH was founded as part of EXIST funding and offers AI-supported sensor systems for carbon fibre production. The sensor technology continuously monitors the fibre throughout the entire production process. Deviations are detected automatically.

The winners of the AVK Innovation Award are honoured annually by the AVK Industrievereinigung Verstärkte Kunststoffe. Companies, institutes and their partners are honoured in three categories: products and applications, processes and procedures, and research and science.

• Sales increase of 12.8% to €1,135.9 million
• EBITDApre improves by 23.4% to €172.8 million
• Net financial debt reduced from €206.3 million to €170.8 million
• Fiscal 2023 expected to be investment and stabilization year

SGL Carbon was again able to improve sales and earnings in fiscal year 2022 following 2021. All four business units contributed to this success.
Sales in fiscal 2022 increased by 12.8% year-on-year to €1,135.9 million (previous year: €1,007.0 million). The rise in sales was mainly due to both volume effects and the successful implementation of pricing initiatives to compensate higher raw material, energy and transport prices. At 23.4%, adjusted EBITDA (EBITDApre) improved at a higher rate than sales and amounted to €172.8 million in fiscal 2022 (previous year: €140.0 million). Increased sales and the associated higher capacity utilization also contributed to the improvement in earnings, as well as focusing on market segments with higher margin potential.
 
Earnings development of SGL Carbon
The increase in EBITDApre by €32.8 million to €172.8 million was mainly driven by the Graphite Solutions business unit (+€30.6 million). The Composite Solutions (+€7.9 million) and Process Technology (+€5.2 million) business units also contributed to the improvement in profitability. Although the Carbon Fibers business unit was able to offset the loss of a lucrative supply contract with an automotive customer in terms of sales with new orders from the wind energy sector, but these sales showed a significantly lower margin level. Accordingly, EBITDApre of this business unit decreased by €11.2 million to €43.2 million (previous year: €54.5 million).

Taking into account net one-off effects and non-recurring items of €8.9 million (previous year: €30.7 million) and depreciation and amortization of €60.8 million (previous year: €60.3 million), reported EBIT amounted to €120.9 million (2021: €110.4 million). This corresponds to an increase of 9.5%.
As a result of the pleasing business performance, the successes of the transformation and non-operating one-off effects and non-recurring items (€8.9 million), a positive Group’s net profit of €126.9 million (previous year: €75.4 million) was achieved in 2022. It should be noted that consolidated net income includes tax income of €31.3 million (previous year: minus €6.2 million). This development is mainly due to valuation adjustments on deferred tax assets amounting to €41.8 million, based on the good business development combined with positive earnings prospects in the USA. Current tax expenses amounted to €11.4 million in 2022 (previous year: €11.9 million).
 
Net financial debt and equity
In fiscal 2022, net financial debt was reduced significantly by 17.2% to €170.8 million compared with the end of 2021 (€206.3 million). The main reason for the decrease is the repayment of financial liabilities in the amount of €29.0 million. Free cash flow decreased from €111.5 million to €67.8 million in 2022. In this context, it should be taken into account that in the previous year, free cash flow included cash inflows of €30.6 million from the sale of land not required for operations.
After 2021, the equity ratio increased again to 38.5% at the end of 2022 (previous year: 27.0% I 2020: 17.5%). Due to the significantly improved earnings situation, the return on capital employed (ROCE) also rose from 8.0% in the previous year to 11.3% in 2022.
 
Development of the business units
As the largest business unit with a share of Group sales of around 45%, Graphite Solutions contributed €512.2 million to Group sales in 2022 (previous year: €443.6 million). The 15.5% increase in sales is based in particular on the positive development of the important market segments Semiconductor & LED and Industrial Applications. Compared to the previous year, sales to customers in the semiconductor & LED industry increased by 49.6%, driven in particular by increasing demand of materials and components for the production of silicon carbide-based high-performance semiconductors. Combined with the increase in sales, GS EBITDApre improved by 34.8% to €118.5 million (previous year: €87.9 million). Accordingly, the EBITDApre margin increased from 19.8% to 23.1%. Volume effects due to higher sales as well as margin effects from the product and customer mix had a positive impact.  Especially the higher sales with customers from the semiconductor industry should be taken into account.

In fiscal 2022, the Process Technology (PT) business unit benefited from the good order situation in recent months and increased its sales by 21.9% to €106.3 million. The main clients of the PT business unit are customers from the chemical industry. The positive development of PT is also reflected in EBITDApre which rose from €4.7 million in the same period of the previous year to €9.9 million. Higher capacity utilization and the successful passing on of increased raw material costs led to an improvement in the EBITDApre margin from 5.4%  to 9.3% in 2022. Energy costs play only a minor role at PT.

In the reporting year, sales of the Carbon Fibers (CF) business unit increased by 3.0% to €347.2 million (previous year: €337.2 million). It should be noted that CF had to absorb the scheduled expiry of a supply contract with an automotive customer at the end of June 2022. These sales were offset by orders from the wind industry and Industrial Applications. However, EBITDApre in the CF division decreased by 20.7% year-on-year to €43.2 million (previous year: €54.5 million). This earnings development is mainly attributable to the expiry of the high-margin automotive contract. In addition, a special effect from energy derivatives in the amount of minus €9.2 million impacted CF earnings in the 1st quarter of 2022. However, the implemented energy price hedges enabled the business unit to maintain its production capability throughout the entire fiscal year, that the weakening of earnings was mitigated.
The Composite Solutions (CS) business unit confirmed its upward trend in fiscal 2022 with a 25.0% increase in sales to €153.1 million (previous year: €122.5 million). The most important market segment for the CS business unit is the automotive industry. In line with the highly positive business performance, EBITDApre of CS increased by 65.3% to €20.0 million (previous year: €12.1 million). This figure also includes non-recurring positive effects of €3.7 million from compensation payments received from automotive customers for premature project terminations.

The non-operating Corporate segment contributed €17.1 million to Group sales (previous year: €16.5 million). In line with continued strict cost management as part of the transformation, EBITDApre improved slightly to minus €18.8 million (previous year: minus €19.2 million).

Outlook
"If we summarize our expectations for the 2023 financial year, it can be summed up under the guiding principle: -invest and stabilize," CFO Thomas Dippold comments on the forecast for 2023.
For the fiscal year 2023 we continue to expect solid demand for our materials and products. In particular, we expect that the demand for special graphite products for high-temperature processes, e.g. in the semiconductor, solar and LED industries, will continue to increase. On the other hand, the first-time full-year effect from the expiry of a supply contract with an automotive customer in the carbon fiber segment and the sale of our business in Gardena (USA) will burden sales development.

"The increasing demand for high-performance semiconductors for electromobility or renewable forms of energy will also boost the demand of components made of graphite for the production of these semiconductors. To benefit from the related opportunities, we will expand our production capacities in this segment and invest a double-digit million amount in 2023 . Based on existing supply relationships, we will implement this investments partly together with our customers," explains CEO Dr. Torsten Derr.
On the cost side, we expect energy and raw material prices to remain at a high level in 2023, along with significant wage increases. Our forecast implies that higher factor costs can be partially passed on to customers through price initiatives.
Based on the assumptions described, we expect Group sales to be at prior-year level and EBITDApre to be between €160 million and €180 million in the financial year 2023.
In the medium term (until 2027), we anticipate a further improvement in our EBITDApre margin between 18% and 19%.

The European Pultrusion Technology Association (EPTA) has published a report from its latest conference, which focuses on advances in sustainability and recycling.

More than 130 professionals from the global pultrusion community gathered at the 16th World Pultrusion Conference in Paris on 5-6 May 2022. Organised by EPTA in collaboration with the American Composites Manufacturers Association (ACMA), the event featured 25 international speakers sharing insight on market trends, developments in materials, processing and simulation technologies, and innovative pultruded applications in key markets such as building and infrastructure, transportation and wind energy.

‘Bio-pultrusion’:  
Composites based on natural fibres offer a number of benefits, including low density and high specific strength, vibration damping, and heat insulation. The German Institutes for Textile and Fiber Research Denkendorf (DITF) are developing pultrusion processes using bio-based resins and natural fibres. Projects include the BioMat Pavilion at the University of Stuttgart, a lightweight structure which combines ‘bamboo-like’ natural fibre-based pultruded profiles with a tensile membrane.

Applications for recycled carbon fibre (rCF):
The use of rCF in composite components has the potential to reduce their cost and carbon footprint. However, it is currently used to a limited extent since manufacturers are uncertain about the technical performance of available rCF products, how to process them, and the actual benefits achievable. Fraunhofer IGCV is partnering with the Institute for Textile Technology (ITA) in the MAI ÖkoCaP project to investigate the technical, ecological and economic benefits of using rCF in different industrial applications. The results will be made available in a web-based app.

Circularity and recycling:
The European Composites Industry Association (EuCIA) is drafting a circularity roadmap for the composites industry. It has collaborated with the European Cement Association (CEMBUREAU) on a position paper for the EU Commission’s Joint Research Centre (JRC) which outlines the benefits of co-processing end-of-life composites in cement manufacturing, a recycling solution that is compliant with the EU’s Waste Framework Directive and in commercial operation in Germany. Initial studies have indicated that co-processing with composites has the potential to reduce the global warming impact of cement manufacture by up to 16%. Technologies to allow recovery of fibre and/or resin from composites are in development but a better understanding of the life cycle assessment (LCA) impact of these processes is essential. EuCIA’s ‘circularity waterfall,’ a proposed priority system for composites circularity, highlights the continued need for co-processing.

Sustainability along the value chain:
Sustainability is essential for the long-term viability of businesses. Resin manufacturer AOC’s actions to improve sustainability include programmes to reduce energy, waste and greenhouse gas emissions from operations, the development of ‘greener’ and low VOC emission resins, ensuring compliance with chemicals legislation such as REACH, and involvement in EuCIA’s waste management initiatives. Its sustainable resins portfolio includes styrene-free and low-styrene formulations and products manufactured using bio-based raw materials and recycled PET.

• Natural fibers combined with bio-derived epoxy resins provide sustainable options for Industrial markets

Hexcel has developed a new product range that combines Hexcel resin systems made with bio-derived resin content with natural fiber reinforcements to create material solutions for Automotive, Winter Sports, Marine and Wind Energy applications.

HexPly Nature Range includes proven resins such as HexPly M49, M78.1-LT and M79 but with bio-derived epoxy resin content. The excellent resin characteristics remain unchanged in the new Nature Range products, maintaining high mechanical performance and consistent processing properties.
In addition, the HexPly Nature Range provides prepreg options with natural fiber reinforcements that can be seamlessly integrated into existing production processes.

Hexcel worked with TÜV Austria to provide independent, high-quality measurement and assessment of the bio-content of HexPly Nature Range products. TÜV Austria’s OK biobased certification uses a standardized measurement of the biobased carbon content enabling transparency and easy like-for-like comparison between products.

At JEC World in Paris on May 3-5, Hexcel presented an alpine ski produced by the Tecnica Group Ski Excellence Center which produces skis for Blizzard and for Nordica using HexPly Nature Range M78.1-LT UD flax fiber prepreg. In addition to providing a bio-based material solution, the natural fiber-reinforced prepreg also offers the potential to improve impact performance and vibration damping in the ski.

Claude Despierres, VP of Sales and Marketing – Industrial at Hexcel, said, “Our new HexPly Nature Range forms an important part of providing customers with biobased, TÜV-certified material options based on our established prepreg resin systems. Marine, winter sports, wind energy and automotive manufacturers can now have the choice to switch from petroleum-based material solutions to Hexcel HexPly Nature Range with no compromise in performance or process efficiency.”

• New technology for marine composites proven to reduce time and cost in manufacturing through out-of-autoclave processing

Hexcel Corporation (NYSE: HXL) has developed a new technology for out-of-autoclave (OoA) processing that delivers a game-changing reduction in process time and cost for marine manufacturers without compromising mechanical performance. Hexcel has leveraged its experience in aerospace and wind energy to develop its new G-Vent technology for OoA processing of highly loaded, thick section marine structures such as masts, foils, and wind-assisted ship propulsion (WASP) components. Hexcel’s full range of marine prepregs are now available with integrated G-Vent technology, reducing the requirement for debulking steps and ensuring extremely low porosity (<1%) irrespective of the laminate thickness.

To evaluate the new technology, Hexcel completed a test program with Q.I. Composites, a world leader in non-destructive testing in performance marine applications. The program evaluated HexPlyÒ 40- layer prepreg samples prepared with G-Vent technology. Carbon fiber panels made with no debulking revealed approximately three times less porosity than those using a typical 10-minute debulk with every second ply. Ultrasonic and CT scan analysis by Q.I. Composites confirmed the void content results with porosity levels in line with state-of-the-art autoclaved carbon prepreg foils. Key tensile, compressive and interlaminar shear strength results were also higher for the G-Vent panels.

“We evaluated the quality of thick laminates produced with G-Vent and found that they are comparable to laminates made in an autoclave as per best practice in the market,” said Stefano Beltrando, CEO, Q.I. Composites. “Even more impressive, they were achieved with no debulking.” Tom James, Business Development Manager at Hexcel, said, “We are absolutely delighted with the feedback from Q.I. that confirms our own test data and positions G-Vent technology as a leading OoA process enabler for high-performance thick laminate structures. G-Vent provides a faster and more cost-effective manufacturing route for large marine structures with absolutely no compromise in mechanical performance.”

Hexcel Corporation (NYSE: HXL) is collaborating with METYX to manufacture high-performance carbon pultruded profiles made from polyurethane (PU) resin and unidirectional carbon fiber for the wind energy market.

The two companies have joined forces to develop technology that builds on Hexcel expertise in polyurethanes for the ski industry combined with its strength in providing high-performance composites to wind energy customers and expanding to other markets for composite applications. METYX is a manufacturer of high-performance NCF and woven glass and carbon, consumables, core and fabric kitting, molds, prototypes, and components for industries including wind energy, marine, automotive, rail and construction.

Notus Composites (UAE), the award-winning producer of epoxy prepreg materials, announces the latest addition to its high-performance epoxy range with the launch of its new NE7 low temperature curing prepreg system. The Notus NE7 formulation allows composite manufacturers to cure components at temperatures as low as 70˚C, reducing energy consumption and enabling more cost-effective tooling options.

Notus Composites has developed the new NE7 prepreg systems for applications across the Marine, Architecture, Industrial and Wind Energy sectors, with the novel low temperature curing chemistry delivery significant cost benefits. Existing prepreg manufacturers can now use more cost-effective composite tooling, with new prepreg users able to switch easily from existing infusion or wet laminating processes without creating expensive new high temperature tooling.

NE7 prepregs can be cured at temperatures as low as 70˚C, with the standard cure cycle being 12 hours at 70˚C, matching the typical cycle time for an infused part with a component Tg of 85˚C. NE7 materials have a good outlife of 30 days at 20˚C and are available in all prepreg and Notus single sided N1-Preg formats with unidirectional, multiaxial, and woven reinforcements. NE7 can also be supplied as a resin film.

Notus has recently supplied NE7 low temperature prepregs to Dubai based Aeolos Composites for the production of their new Aeolos P30 racing yacht. The P30 is a futuristic new craft created by top German sailor and designer, Hans Genthe, with a super light carbon fibre construction and large sail area that promises spectacular on the water performance for a thirty foot yacht. Notus delivered a range NE7 prepregs for the build, including woven, multiaxial, and unidirectional carbon fibre reinforcements as well as adhesive films for core bonding.