From the Sector

• Sales increase of 10.7% to €549.8 million in the first half of 2022
• EBITDApre improves by 22.6%, higher than the increase in sales, to €87.9 million
• Positive business development, price increases and strict cost management led to forecast increase on June 7, 2022

Despite uncertain general conditions in the first six months 2022, SGL Carbon's business model is proving its resilience. After €270.9 million in Q1 2022, SGL Carbon was able to increase sales to €278.9 million in Q2. Accordingly, sales for the first half of 2022 amount to €549.8 million, which corresponds to a sales plus of €53.1 million or 10.7% compared to the same period of the previous year.

The increase in sales was driven in particular by customers in the semiconductor industry and growth in the industrial applications market segment. Demand from the automotive and chemical industries was also encouraging.

EBITDApre, as one of the Group's key performance indicators, improved by €16.2 million (+22.6%) to €87.9 million (H1 2021: €71.7 million). Consequently, the EBITDApre margin increased from 14.4% to 16.0%. In addition to the higher utilization of production capacities due to higher sales, the improvement in earnings was also driven by the largely successful passing-on of higher raw material and energy costs to customers as well as savings from the transformation program.

EBITDApre does not include positive one-off effects and non-recurring items totaling €10.6 million (H1 2021: minus €5.2 million). As a result, EBIT in H1 2022 increased significantly from €38.3 million to €69.6 million. Taking into account the financial result of minus €16.6 million (H1 2021: minus €14.0 million), consolidated net income for the first six months of the current fiscal year amounted to €48.8 million, compared to €17.9 million in the prior-year period.

Business Units
With an increase in sales of €22.2 million (+10.0%) to €243.4 million, the Graphite Solutions (GS) business unit made a major contribution to SGL Carbon’s sales growth. In particular, continued high demand from customers in the semiconductor sector, which represents approximately one third of the segment's sales, led to the positive business development in GS. As a result of the predominantly high-margin business, EBITDApre at GS improved by 22.7% to €54.0 million.

The Process Technology (PT) business unit benefited from the good order situation in the chemical industry in H1 2022 and consequently increased sales to €49.2 million (H1 2021: € 40.8 million). EBITDApre also improved from €0.1 million in the prior year’s first half to €4.1 million in H1 2022.

The Carbon Fibers (CF) business unit benefited in the 1st half 2022 from final deliveries to a major automotive manufacturer whose contract expired as scheduled on June 30, 2022. Segment sales increased by 5.8% year-on-year to €176.0 million. In contrast, EBITDApre at CF decreased by €4.2 million to €28.2 million despite the good order situation and successful price increases. It should be noted that CF was impacted by a special effect from energy derivatives for price hedging in the amount of €9.2 million in the first quarter of 2022.

With an increase in sales of 15.6% to €69.6 million, the Composite Solutions (CS) business unit continued its upward trend. The specialist for customized component solutions for the automotive industry improved its EBITDApre from €5.7 million in the first half of 2021 to the current €9.7 million, based in particular on price and volume effects.

Balance sheet figures
Working capital rose by 11.7% to €381.1 million as of June 30, 2022. This was mainly due to higher inventories (€ +73.9 million) and an offsetting increase in trade payables (€ +29.0 million). A targeted build-up of inventories in critical raw materials due to disruptions in transport routes and the recent Covid lockdown in Shanghai were some of the reasons for the higher inventory levels.

SGL Carbon's net financial debt slightly increased by €6.6 million to €212.9 million as of June 30, 2022 (Dec. 31, 2021: €206.3 million), which was due to a lower free cash flow of €7.5 million for H1 2022 (H1 2021: €56.6 million).

Guidance increase
On June 7, 2022, SGL Carbon raised its sales and earnings guidance for fiscal year 2022. The company now expects sales of €1.1 billion (previously: around €1.0 billion) and EBITDApre of €130 - 150 million (previously: €110 - 130 million). Based on the pleasing business development, realized price increases, a stringent cost management, and taking into account the currently known risks, SGL’s management expects to achieve the earnings forecast for 2022 at the upper end of the stated range.

• CEO Stefan Doboczky will not extend contract and will step down at end of third quarter 2021

The Supervisory Board of Lenzing AG, a world’s leading producer of wood-based cellulosic fibers, has come to a mutual agreement with its longstanding Chief Executive Officer Stefan Doboczky to end his contract. Doboczky has informed the Supervisory Board that he will not be available for another extension of his contract. With great regret the Supervisory Board of Lenzing AG accepts his resignation and the parties mutually agreed to end the contract effective September 30, 2021.

“My sincere thanks go to Stefan Doboczky for his exceptional achievements at Lenzing. The design and implementation of the transformation of Lenzing AG into a global specialty fiber leader and the positioning of the company as a recognized sustainability champion have been major accomplishments of Stefan Doboczky over the last years”, said Chairman of the Supervisory Board, Peter Edelmann. “Thanks to his leadership, Lenzing AG finds itself today on a stable and profitable growth track with a clear commitment to become climate-neutral by 2050. And all of that in spite of the challenging environment of the COVID-19 pandemic”, said Edelmann.

Stefan Doboczky: “Developing and consistently implementing the Lenzing strategy has been the cornerstone of my work in recent years. After extensive consideration, I have decided that this is the right time for a personal change. The strategy is in place, the company is well on track – now is the ideal moment to pass on the baton. And one thing is certain: Lenzing will always have a very special place in my heart.”

Lenzing AG remains on track with its guidance for the full year 2021 as announced with the half-year results. Cord Prinzhorn has been appointed interim CEO. Prinzhorn is Member of the Supervisory Board of Lenzing AG and will be available until a successor is found. The Supervisory Board will immediately start the search process.