From the Sector

Indorama Ventures Public Company Limited (IVL), a global sustainable chemical producer, posted a marked improvement in quarterly performance as the chemical industry struggles to recover from a prolonged downturn and the company’s management executes their 3 year IVL 2.0 strategy to enhance competitiveness and drive efficiencies.

Indorama Ventures reported Adjusted EBITDA  of $427 million in 3Q24, a gain of 32% YoY, supported by steady volumes, improving industry spreads, and the company’s unstinting focus on optimizing assets and reducing fixed costs. The quarter marks Indorama Ventures’ first YOY improvement for the year, with all three business segments recording earnings growth, following a prolonged industry downcycle marked by customer destocking and suppressed margins. Volumes remained steady for the Combined PET and Fibers segments, while Indovinya posted a robust performance amid a peak season in the Crop Solutions market.

Fibers reported Adjusted EBITDA of $48 million, a gain of 44% YoY, driven by improved industry spreads in Lifestyle and higher volumes in Mobility and Hygiene. Management is focused on reducing fixed costs and improving profitability across the entire portfolio and taking firm action to restore market share in key verticals.

Looking ahead, the global economic outlook remains uncertain amid continued inflation, geopolitical tension, and supply chain disruptions. However, throughout the downcycle, Indorama Ventures’ experienced management team has worked hard to optimize and deleverage the business under their IVL 2.0 evolved strategy to emerge stronger and drive enhanced earnings quality in a new era of sustainable profit growth. In 3Q24, this unrelenting focus delivered fixed-cost savings of $19 million, which will sequentially increase into next year as the benefits are fully realized. Operating rates for the group increased to 82% in the quarter—from 69% previously—as the company completed its planned optimization program for CPET and Indovinya, with Fibers under implementation.

The company’s digital transformation program is accelerating according to schedule following the implementation of the SAP S/4HANA ERP platform as a digital core. North America is already benefiting from an AI-based procurement solution, while the Connected Worker Platform is driving manufacturing excellence. The first sales and supply chain solutions are expected to go-live early next year.

Weak demand in some of their customer markets is increasingly hindering SGL Carbon's sales growth. After nine months in 2024, SGL Carbon generated sales of €781.9 million, which was slightly below the prior-year level at minus 4.8% (9M 2023: €821.7 million). Adjusted for currency and structural effects, Group sales decreased by 3.6%. Adjusted EBITDA, an important key figure for the Group, remained at a comparable level of €127.6 million in the reporting period (9M 2023: €130.0 million). Despite the slight decrease in sales, the adjusted EBITDA margin improved from 15.4% in Q1 and 16.7% in Q2 to 16.9% in Q3 and amounted to 16.3% after nine months (9M 2023: 15.8%). The reasons for the improved adjusted EBITDA margin are, in particular, product mix effects in the Graphite Solutions and Process Technology business units. By contrast, the ongoing weakness in demand and the associated price pressure for carbon and textile fiber products in the Carbon Fibers business unit continued to weigh on the Group's sales and earnings development.

“Even with our diversified product portfolio, we can no longer completely withdraw from the generally weak economic environment. In addition, there was a decline in demand for specialty graphite products for the semiconductor industry in the third quarter. In particular, our products for the manufacture of silicon carbide-based semiconductors are suffering from the restrained demand for electric vehicles on the customer side,” explains CEO Dr. Torsten Derr. “While the last 18 months were characterized by enormous demand for silicon carbide semiconductors and insufficient production capacities, the market has cooled down significantly. Due to a lack of demand from the automotive industry, our semiconductor customers have significantly reduced order volumes. We do not expect to see a significant upturn in demand for our specialty graphite products until the sales figures for electric vehicles pick up again.”

Based on the adjusted EBITDA of €127.6 million and taking into account depreciation and amortization of €41.0 million (9M 2023: €43.3 million) and one-off effects as well as non-recurring items of minus €18.3 million (9M 2023: minus €47.2 million), EBIT after nine months of 2024 will be €68.3 million (9M 2023: €39.5 million). The one-off effects and non-recurring items result, among other things, from the restructuring measures at Carbon Fibers and the Battery Solutions business line as well as from expenses for a strategy project. When comparing with the previous year, it should be noted that the first nine months of 2023 were disproportionately affected by an impairment loss on the assets of Carbon Fibers (€44.7 million).

Development of the business units
The Carbon Fibers business unit's sales for the first nine months of 2024 amounted to €157.1 million, significantly below the figure of €179.6 million for the prior-year period. The decline is due in particular to the continued weak demand from the wind industry and to the increasing competitive pressure resulting from global overcapacities for carbon and textile fibers.

Idle production capacities and the associated lack of fixed cost absorption as well as declining margins for commodity products led to a further deterioration in the adjusted EBITDA of the Carbon Fibers. The adjusted EBITDA of the Carbon Fibers business unit fell to minus €7.9 million in the first nine months of 2024 (9M 2023: €3.2 million). It should be noted that the adjusted EBITDA of the Carbon Fibers business unit includes an earnings contribution of €11.6 million from the joint venture BSCCB, which is accounted for At-Equity (9M 2023: €14.1 million). Excluding this contribution from the At-Equity accounted BSCCB, the adjusted EBITDA of Carbon Fibers would have been minus €19.6 million (9M 2023: minus €10.5 million).

SGL Carbon assumes that demand for carbon fibers will not recover in the coming months and that the realizable prices for these products will remain at a low level beyond 2025. Therefore, SGL Carbon anticipates that the expected improvement in sales and earnings for the Carbon Fibers segment will be delayed and is revising its existing mid-term planning for this segment. Due to the expected deviation, an ad hoc impairment test is currently being carried out. This indicates a non-cash impairment charge of €60–80 million, which will be recognized in Q4 2024. The structured transaction process initiated for Carbon Fibers is still ongoing.

Sales in the Composite Solutions business unit amounted to €95.8 million in the first nine months of 2024, down 16.2% (9M 2023: €114.3 million). The decline is due in particular to the early termination of a project-related supply contract with an automotive customer. Furthermore, the lower sales figures for electric vehicles are also having an impact on Composite Solutions.

Adjusted EBITDA in Composite Solutions fell from €16.6 million in the prior-year period to €10.7 million (minus 35.5%), due in particular to lower volumes. The adjusted EBITDA margin weakened accordingly to 11.2% (9M 2023: 14.5%).

Outlook
Macroeconomic conditions, lower than expected sales volumes in some customer groups and price pressure for commodity products are increasingly hindering SGL Carbon's growth ambitions. Thomas Dippold, CFO of SGL Carbon, explains: “Due to the diverse and diversified industrial applications of our products and our strict cost management, we continue to expect to achieve our guidance for 2024 at the lower end of the range of €160–170 million. The coming months will not be easier. We need to prepare for a flat demand development in some of our sales markets.”

For the first time, a piece of clothing is made entirely from textile waste – no bottles, no packaging, no virgin plastic. 100% biorecycled fibers. By developing and industrializing CARBIOS’ enzymatic depolymerization technology to achieve 100% “fiber-to-fiber” recycling, the consortium collectively advances the textile industry's shift towards a circular economy.

CARBIOS, a pioneer in the development and industrialization of biological technologies to reinvent the life cycle of plastic and textiles, and its “fiber-to-fiber” consortium partners On, Patagonia, PUMA, Salomon, and PVH Corp., parent company of Calvin Klein, unveil the world’s first enzymatically recycled polyester garment made from 100% textile waste using CARBIOS’ pioneering biorecycling technology.

This technological feat contributes to advancing textile circularity when, today, the majority of recycled polyester is made from PET bottles, and only 1% of fibers are recycled into new fibers.  The collective achievement marks an important milestone for the consortium’s ultimate aim of demonstrating fiber-to-fiber closed loop using CARBIOS’ biorecycling process at an industrial scale, and marks an important step forward for the textile industry’s shift towards a circular economy.

A plain, white T-shirt was a deliberate choice to showcase the technological achievement that made its production possible from mixed and colored textile waste.  By using CARBIOS’ biorecycling technology, polyester is broken down using enzymes into its fundamental building blocks which are reformed to produce biorecycled polyester whose quality is on par with oil-based virgin polyester.  Petroleum can now be replaced by textile waste as a raw material to produce polyester textiles, that will in turn become raw materials again, thus fueling a circular economy, with the added benefit of a lower carbon footprint and avoidance of landfill or incineration.

The t-shirt’s production began with all consortium members (On, Patagonia, PUMA, PVH Corp. and Salomon) supplying rolls and production cutting scraps to CARBIOS in Clermont-Ferrand, France.  This textile waste consisted of some mixed blends with cotton or elastane, as well as various treatments (such as durable water repellent) and dyes which render them complex to recycle using conventional methods. The collected waste was deconstructed into its original monomers, PTA and MEG, using CARBIOS’ biorecycling technology at its pilot facility. The resulting monomers were then repolymerized, spun into yarn and woven into new fabric by external partners, demonstrating the seamless integration into existing manufacturing processes.  The resulting sports t-shirt made from 100% textile waste meets the quality standards and sustainability objectives of the apparel brands present in the “fiber-to-fiber” consortium.

CARBIOS’ demonstration plant in Clermont-Ferrand, France, has been up and running since 2021, and its first commercial plant, the world’s first industrial-scale enzymatic PET recycling plant, is currently under construction in Longlaville, France.  In addition, CARBIOS recently announced several letters of intent with PET producers in Asia and Europe, confirming global interest in its biorecycling technology and advancing the international roll-out of its licensing model.

Girbau, a leader in comprehensive textile care solutions, is set to unveil its latest innovations at Texcare International 2024, the premier event for the global textile care, cleaning, and cleanroom technologies industry. At Booth C50 in Hall 8.0, Girbau will highlight its expertise and showcase its 360º solutions designed to transform the efficiency, productivity, and sustainability of all types of laundries.

Texcare International 2024 will take place in Frankfurt from November 6th to November 9th, bringing together industry experts and leaders from across the globe.

The booth will feature an interactive space where attendees can explore Girbau’s cutting-edge solutions designed to enhance automation, performance, energy efficiency, and sustainability specifically for industrial laundry applications.

Girbau will present its tailored offerings for self-service and commercial laundries, showcasing its commitment to delivering flexible and innovative solutions for diverse laundry needs.

Visitors will have the opportunity to experience live demonstrations of Girbau’s advanced machinery and participate in expert-led talks. These sessions will provide insights into the latest trends and technologies in the textile care industry, demonstrating Girbau’s unwavering focus on sustainability, innovation, and leadership in the laundry sector.

In September, Ontex reached a binding agreement to sell its Brazilian business activities to Softys SA for an enterprise value of approximately €110 million, enabling improved focus on retail brands and healthcare in Europe and North America. Net proceeds of approximately €82 million are due at closing, which is expected during the first half of 2025, subject to customary conditions.

In October, the social negotiations regarding the transformation of the operating footprint in Belgium were successfully concluded. This transformation fits in Ontex’s footprint optimization, allowing to further strengthen Ontex’s competitive position. The total one-time cost is estimated at €(66) million, of which €(37) million was already recorded in the second quarter.

Q3 2024 results

• Revenue was €468 million, up 1.7% like for like. Volumes, including mix effects, were up 4.4%, driven by contract gains and supportive demand in adult care, and by growth in baby care with new retail customers in North America. Sales prices were 2.6% lower, as expected, reflecting raw material index decreases and investments in increased competitiveness. Forex fluctuations were supportive, adding 0.7%, bringing total growth at 2.4%.
• Adjusted EBITDA was €56 million, up 29% year on year, thanks to volume and mix growth and the cost transformation program delivery, contributing €8 million and €14 million respectively. The operational efficiency improved further by 3.7%, driving stronger profitability and competitiveness. Index-driven lower raw material costs more than compensated for lower sales prices, leading to a €4 million positive net impact. The increase of other operating and SG&A costs had a €(12) million effect, mostly due to continued inflation. Forex fluctuations had an adverse effect of €(2) million. The adjusted EBITDA margin thereby rose to 12.0%, up 2.4pp year on year.
• Operating profit was €8 million, compared to €29 million in 2023. The decrease relates to the transformation of the Belgian operating footprint and reflects the additional one-time provisions taken following the recent successful conclusion of the social plan negotiations.
• Discontinued operations generated a €14 million operating profit, compared to €12 million in 2023. While revenue was 3.0% lower like for like and the adjusted EBITDA margin dropped to 7.6%, reflecting more challenging market conditions, this was compensated by a net gain on disposal, that was triggered by the agreement to divest the Brazilian business.
• Net financial debt for the Total Group dropped €9 million to €579 million over the quarter. Combined with the adjusted EBITDA improvement, the leverage ratio thereby fell from 2.5x at the end of June to 2.4x at the end of September.

2024 outlook

Ontex’s management confirms its guidance for adjusted EBITDA margin, free cash flow and leverage for the full year. While new customers are on-boarded in North America, the ramp-up is phased more gradually over the third quarter and the coming months, leading management to review its revenue growth guidance, now expecting:

• Revenue [1] to grow between 2% and 3% like for like;
• Adjusted EBITDA margin [1] of 12%;
• Free cash flow higher than €20 million;
• Leverage ratio below 2.5x at year end.

• Organic sales up 1% driven by volume growth; revenue down 3%
• Operating income €259 million (2023: €354 million)
• Adjusted EBITDA €394 million (2023: €414 million); Adjusted EBITDA margin 14.8% (2023: 15.1%)
• Net cash from operating activities positive €294 million (2023: positive €297 million)

Based on current market conditions and constant currencies, AkzoNobel expects to deliver 2024
adjusted EBITDA of around €1.5 billion. The company aims to lower its leverage to around 2.7 times net debt/EBITDA by the end of 2024 and around 2 times in the mid-term, while remaining committed to retaining a strong investment grade credit rating.

AkzoNobel CEO Greg Poux-Guillaume commented:
“We continued to demonstrate our ability to grow in flat markets, achieving a fourth consecutive quarter of volume growth. Although operating costs were higher year on year, they’re down sequentially, while gross margin expansion continues. We’ve launched further cost and portfolio initiatives to ensure delivery of our mid-term ambitions. For 2024, we expect to achieve around €1.5 billion adjusted EBITDA.”

Denis Albert is to become the new Head of Business Group North America and member of the Group Executive Board of Autoneum Holding Ltd as of January 1, 2025. The French-American dual citizen has many years of experience as a general manager in the international automotive supply industry in North America. He will succeed Greg Sibley, who will retire at the end of January 2025.

The Board of Directors of Autoneum Holding Ltd has appointed Denis Albert as the new Head of Business Group North America and member of the Group Executive Board as of January 1, 2025. Denis Albert has been Head of Sales Development & Strategic Project Manager for Post Merger Integration (PMI) at Autoneum since January 2024. In addition to his new position, he will continue to assume the role of Head of Sales Development.

Before joining Autoneum, Denis Albert worked for the French automotive supplier Forvia (Faurecia) for over 25 years, where he held various management positions, most recently as President of the Faurecia Interior Division North America. Over the course of his career, he has acquired profound knowledge of the North American automotive market and extensive experience in sales, business management, implementation of regional strategies, purchasing and technology. Denis Albert holds a Master’s degree in Mechanical and Industrial Engineering from the Institut Catholique d’Arts et Métiers in Nantes, France, and an Executive Master of Business Administration from the Mannheim Business School, Germany.

Following a one-month transition period, Denis Albert will take over as Head of Business Group North America from Greg Sibley, who will retire on January 31, 2025. Greg Sibley has steered Business Group North America through turbulent times since May 2019 and has made a decisive contribution to the turnaround in this region. The Board of Directors and the Group Executive Board would like to thank Greg for his significant and tireless commitment to Autoneum over the past five years and wish him all the best for his personal future.

DyStar, a specialty chemical company with a heritage of more than a century in product development and innovation, announced that they won the Champion Award for outstanding contribution and performance at the Adidas adiFormulator Award, an annual program launched in 2023.

Mrs. Fanny Vermandel, Vice President of Global Marketing Coloration at DyStar Group said, “DyStar is very pleased to receive the newly minted accolades from Adidas, as it further demonstrates our unwavering commitment to supporting the success of our customers, including brands and retailers, in their sustainability journey towards achieving their 2030 goal of 100% ZDHC MRSL Conformance.”

As a responsible leader in dyestuff and chemical manufacturer, DyStar offers over 2,100 products listed on the ZDHC Gateway that meet the ZDHC MRSL V3.1 specifications. Brands and Retailers and other stakeholders can leverage DyStar’s expertise to support their journey towards ZDHC MRSL conformance. To date, 99.7% of DyStar’s products listed on ZDHC have achieved the highest accreditation level of 3.

Smart Closet is an innovative event dedicated to new generation fashion where C.L.A.S.S and Equipe International, through the InsideOut approach by C.L.A.S.S., come together to represent a smart wardrobe - beautiful, innovative, responsible - together with a new language of values with the aim to share the fully transparent journey behind each product and company, to show their outer and inner values. All values and concepts that are part of Bemberg™ identity.

Bemberg™ is the brand name of the regenerated cellulose fiber cupro, produced only by Asahi Kasei in Japan. It is a special fiber with a circular economy footprint thanks to the fact that it is made from a regenerated cellulose obtained from the manufacturing process of cottonseed oil with a closed-loop process. It guarantees certified sustainability credentials through its transparent and traceable approach. It delivers high quality and versatile applications, comfortable whatever the season: its blissful sensation glides on linings, outerwear, underwear, sportswear and even couture pieces. All perfect characteristics that fit in Smart Closet initiative.

The project chosen to participate with is the incredible capsule collection A Dress For Venice designed by eco-designer Tiziano Guardini, illustrated by artist Jacopo Ascari, and produced by Martina Vidal Venezia, a Venetian brand that has enriched the garments with some elements in Burano lace, an ancient art candidate to enter the UNESCO list of Intangible Cultural Heritage of Humanity!
 
Inspired by the city of water, it’s made with Bemberg™ fabrics created by Infinity Srl with the textile printing done by Creazioni Digitali, which with the CreŌ | project  printed on Bemberg™ fabrics with low-water pigment inks technology . This collection truly represents and includes all the values of beauty, innovation and supply chain partnerships, all elements.

Utilizing renewable materials* and formaldehyde-free chemistries, the industry-first Archroma NTR Printing System combines newly created pigment black and customized auxiliaries for enhanced sustainability, comfort and durability
 
Archroma, a company in specialty chemicals towards sustainable solutions, introduced the NTR Printing System to make bio-based pigment printing commercially possible for the first time. Based on renewable raw materials and designed for safer chemistry, it helps apparel and textile brands reduce their environmental footprint while producing brilliant black shades on garments that deliver both comfort and durability.

Bio-based pigment printing is an emerging technology that is attracting major interest from brands that want to use pigments derived from natural sources, such as plants, in the production of environmentally conscious textiles. Until now, however, bio-based pigments have not delivered color fastness that is comparable to synthetic pigments, and color quality and production performance have not been sufficient to support commercial-scale production.

Archroma’s NTR Printing System is the first to utilize renewable feedstock across pigment dispersion, binder and fixing agent. Crucially, it ensures good wet-rubbing and dry-rubbing fastness, with outstanding softness on all kinds of fabrics. Furthermore, it is suitable for most popular application technologies, including printing, coating and continuous pigment dyeing, with outstanding runnability for production efficiency.

“These properties make the new NTR Printing System ideal for the highly competitive denim market, where sustainability, comfort and durability are important; for knits, where very soft handfeel is essential; and on babywear, where both exceptional softness and safety are required,” Joaquin Femat, Market Segment Director for Printing, Archroma, said.

The result of more than two years of research and development, the innovative new NTR Printing System required Archroma to create customized binding and fixing agents to ensure fastness for the pigment black dispersion comparable to current petroleum-based printing systems. All three printing elements are partially based on renewable feedstock to reduce reliance on non-renewable petrochemicals. Archroma also developed the new system to avoid toxic input streams and impurities, including formaldehyde. Two successful bulk trials were conducted with Textprint S. A. and Jeanologia.

The NTR printing system comprises the following highly efficient and robust printing elements:

• PRINTOFIX® BLACK NTR-TF: A non-gelling pigment black with 79% renewable carbon content*, designed for use in textile applications with no impact on fastness levels.
• HELIZARIN® NTR-SS: A formaldehyde-free super-soft binder with 40% renewable carbon content, designed to ensure very good overall fastness levels.
• LUPRINTOL® FIXING AGENT NTR-HF: A formaldehyde-free fixing agent with 40% renewable carbon content**, designed for high wet fastness in rubbing and laundry.

All three elements are currently being evaluated for compliance with globally accepted standards like bluesign®, the Global Organic Textile Standard (GOTS) and Zero Discharge of Hazardous Chemicals (ZDHC). The system also supports major industry restricted substances list (RSL) requirements.