From the Sector

On February 10, 2020, the Supervisory Board of SGL Carbon SE appointed Dr. Torsten Derr as Chief Executive Officer of SGL Carbon SE for the duration of five years effective July 1, 2020. In agreement with his current employer, Dr. Derr will now take up his position as CEO of SGL Carbon one month earlier on June 1, 2020. The Supervisory Board very much welcomes this development in view of the challenges that these extraordinary times pose.  

Since 2016, Dr. Torsten Derr is holding the position of Managing Director of SALTIGO GmbH, a subsidiary of LANXESS AG. Following his master degree and attainment of his PhD in chemistry at the University of Bremen, Dr. Derr began his professional career 1997 at Bayer AG, and since 2003 at LANXESS AG, where he was Vice President for Plastic Intermediates, Head of the Business Units Material Protection Products and EPDM-Elastomers, as well as holding various other management functions, amongst others as Head of Commercial & Supply Chain Excellence & Chief Commercial Officer of LANXESS AG.

The previously communicated targets for 2020 are unlikely to be achieved due to the COVID-19 pandemic

The Board of Management of SGL Carbon SE determined today, that the forecasted results for the fiscal year 2020 are unlikely to be achieved due to the global COVID-19 pandemic. In light of the substantial uncertainty regarding the duration and the consequences of the COVID-19 pandemic, the Board of Management is currently unable to provide a reliable sales revenue and earnings forecast for the current year. Consequently, the guidance for 2020 is suspended. 

The previous expectation, which guided for a slightly lower sales revenue und a recurring EBIT1 approximately 10-15% below the prior year (sales revenue 2019: €1,087m; recurring EBIT 2019: €48m), was already made conditional by the Board of Management in the management report published on March 12, 2020, that negative effects from the coronavirus were not included, as the outbreak at that time was mainly restricted to China and Italy. In the meantime, numerous other governments have introduced far-reaching measures with substantial limitations on the public and economic sectors and leading economists now forecast significant reductions in economic output in key economies. 

The Board of Management of SGL Carbon has introduced and partially already implemented comprehensive measures to reduce the cost base and to secure liquidity. These measures include the introduction of short-time work, reduction of material and indirect spend, as well as further reduction resp. postponement of capital expenditures. In addition, we are exploring further financing options independent of the capital markets, some of which are already in preparation. The Company is intensively working on identifying and mitigating potential risks. 

Diverging development in the two business units impact fiscal year 2019 of SGL Carbon – Group guidance for 2020 confirmed

• Consolidated sales revenues in fiscal year 2019 up by 4 percent to around 1.1 billion euros
• Consolidated recurring EBIT down by 25 percent to 48 million euros; record results of graphite specialities business did not fully compensate for the weak development in the carbon fiber business
• Composites – Fibers & Materials (CFM): Cyclical und structural weaknesses impact the result of the market segments Wind Energy, Textile Fibers and Industrial Applications, which have limited strategic significance in the medium term
• Graphite Materials & Systems (GMS): Sales and earnings on record level due to strong growth in the market segments Semiconductors and Automotive
• Non-cash impairment charge of around 75 million euros was recorded at CFM in the third quarter of 2019
• Free cash flow significantly improved
• Issue of a new corporate bond and early redemption of the 2015/2020 convertible bond has significantly improved the maturity profile
• SGL Carbon confirms guidance for fiscal year 2020: sales expected slightly below previous year; recurring EBIT approximately 10 to 15 percent below previous year level
• Dr. Michael Majerus, Spokesman of the Board of Management of SGL Carbon: “The financial development of the fiscal year 2019 conceals the fact that our strategic orientation is correct. This is evident from our growth and the increasing number of contracts and projects we acquired in our strategic core markets. Main drivers are the topics of sustainable mobility and energy as well as digitization. Therefore, we expect that we can grow our consolidated revenue by a mid to high single-digit percentage per year on average between 2020 and 2024.“

The fiscal year 2019 developed very differently in the two business units of SGL Carbon. The record results in the graphite specialities business could not fully compensate for the weak development in the market segments Wind Energy, Textile Fibers and Industrial Applications in the carbon fiber business. Group sales grew by 4 percent to 1.1 billion euros. Recurring Group EBIT declined by 25 percent to 48 million euros. Due to the ongoing weakness in the market segments Textile Fibers and Industrial Applications the business unit CFM recorded a non-cash impairment loss of 75 million euros in the third quarter of 2019. With minus 90 (prior year: plus 41) million euros, consolidated Group result declined significantly compared to last year’s good results. The Group confirms its guidance for 2020 published in October 2019.

Group sales are expected to decline slightly compared to the prior-year level, whereas Group recurring EBIT is expected to reach a result around 10 to 15 percent below the prior-year level. Consolidated net result of the Group in 2020 should strongly improve compared to prior-year level to a low double-digit loss.

Hexcel’s Leading Position in Aerospace and Automotive Makes Hexcel a Trusted Partner for Urban Air Mobility

At this year’s JEC World in Paris on March 3-5, Hexcel will highlight the growing need for innovations in composite materials to support the emerging Urban Air Mobility (UAM) market.

Urban air mobility – urban transportation systems that move people by air or enable cargo deliveries – is the next big transportation innovation. Similar to taxis or ride sharing today, UAM will help remove congestion from our streets and provide a convenient, rapid method for travel in urban centers as well as in remote areas.

Advanced composite materials will be at the heart of UAM vehicles by providing lightweight, efficient, reliable, and cost-competitive options for manufacturing. “Materials have been a key driver of efficiency for aircraft today, and they will be even more important for the emerging UAM marketplace,” said Imad Atallah, Director of Strategic Marketing for Aerospace and Urban Air Mobility at Hexcel.

Already, Hexcel is a leader in advanced composite materials for the aerospace market and is a key supplier of composite materials to the automotive industry. So, the company is well positioned to offer solutions to meet the critical needs of high-rate and quick-part manufacturing cycles, in addition to low-cost needs for this space. Hexcel’s materials solutions approach for UAM is to make it greener and more sustainable, safer, more comfortable, and more affordable.

Hexcel’s broad range of carbon fiber and HexPly® prepreg solutions, including snap cure thermosets and thermoplastics, coupled with the most qualified positions on aerospace programs in the industry make the company a trusted partner for UAM. In addition to offering composite materials from carbon fibers, prepregs, honeycomb and reinforcements, Hexcel’s best-performing market solution in noise absorption on aircraft jet engines, Acousti-Cap®, provides a strong position of innovation to solve one of the most critical problems in the UAM space – community noise. “We are applying our technologies to the unique needs of urban air mobility vehicles,” Atallah said.

Hexcel’s ability to bring materials technology from the aerospace and automotive industries represents a unique strength in solving the critical challenges of UAM, especially around high-rate manufacturing, low-cost materials, light weighting, and noise. “Both thermoplastics and quick-cure thermoset materials are expected to have applications on UAM vehicles,” Atallah said. Furthermore, Hexcel’s broad product portfolio including unsized carbon fiber has proven to be the most compatible with thermoplastic resins from a consolidation perspective.

Der Aufsichtsrat der SGL Carbon SE hat heute Herrn Dr. Torsten Derr mit Wirkung zum 1. Juli 2020 für die Dauer von fünf Jahren zum Vorsitzenden des Vorstands der SGL Carbon SE bestellt. Damit tritt Herr Dr. Derr die Nachfolge von Herrn Dr. Jürgen Köhler an, der zum 31. August 2019 von seinem Amt als Vorstandsvorsitzender des Unternehmens zurückgetreten war. 

Herr Dr. Derr ist seit 2016 Geschäftsführer der SALTIGO GmbH, Leverkusen, einem Tochterunternehmen der LANXESS AG. Nach seinem Studium der Chemie und seiner Promotion an der Universität Bremen begann er seine berufliche Laufbahn 1997 bei der Bayer AG, ab 2003 bei der LANXESS AG. Hier war er als Vizepräsident für Kunststoffzwischenprodukte, Leiter der Geschäftsbereiche Materialschutz und EPDM-Elastomere und in verschiedenen anderen leitenden Funktionen tätig, unter anderem als Leiter Commercial & Supply Chain Excellence & Chief Commercial Officer der LANXESS AG.

At this year’s JEC World, the largest trade fair for composites held from March 3-5, 2020 in Paris, SGL Carbon will focus on the topic of serial production for the automotive, aerospace and industrial sectors. The key is customized solutions with individual component designs combined with tailored materials and production processes ready for large scale production. Under the motto “The Solution Provider,” the company will present selective innovative component solutions from all three areas in Hall 6, Booth D25. Furthermore, as an example for industrial applications, SGL Carbon will showcase at the JEC world a crossbeam made of carbon fiber reinforced plastics (CFRP) used in automated Schuler press lines.

•    Composite battery enclosures for e-mobility
•    Flexible new leaf spring generation for rear axles
•    Innovative component designs for passenger airplanes, helicopters and air taxis
•    Extremely lightweight and stable transfer beam for mechanical engineering

Selective applications with focus on serial production
In the field of automotive applications, SGL Carbon will present at the JEC World composite battery enclosures as a promising new application driven by increasing demand for electric vehicles and the resulting new flexible chassis platforms. The company demonstrates a prototype of a battery enclosure based on carbon fibers. However, hybrid composites with a mixture of glass and carbon fibers are also possible.

In the aerospace sector, SGL Carbon is also expanding its portfolio of realized projects and expertise relying on the trend to use more efficient materials and processes in this industry too.
In the area of primary structure components, the company will present a demo exhibit for the door frame of a passenger airplane realized in collaboration with external partners and based on 50k carbon fiber from the SGL Carbon, which is suitable for serial production.

Live simulations and intense exchange at the booth
Visitors can experience live how their ideas can be implemented both sustainably and cost-effectively in composites thanks to simulations. Experts from the company’s own Lightweight and Application Center demonstrate the path from the concept to virtual prototypes using simulation software, with the result visible either to the entire audience or just individual visitors. To prepare, interested parties can contact the team now at the following link: https://www.sglcarbon.com/anmeldung-jec.

On March 4, 2020, the SGL Carbon stand will host its traditional get-together for customers and friends starting at 4 p.m. – no registration necessary.
 

Hexcel is collaborating with NaCa Systems, a Tier 1 supplier of natural fiber composite automotive interior parts, on the development of a lightweight carbon fiber prepreg and wood fiber composite sportscar seat back using a rapid press molding process. This innovation validates a short cycle time production process for CFRP and wood fiber composite parts and offers a host of benefits to automotive manufacturers.

Hexcel supplies NaCa Systems with an optimized version of its HexPly® M77CS epoxy prepreg material. HexPly® M77CS is a fast curing hotmelt, thermosetting epoxy matrix, specifically designed for prepreg applications for which short cure cycles and clear surfaces with perfect aesthetics are required.

The lightweight seat back demonstrates a 40% weight saving compared to a typical injection molded plastic component whilst also featuring a significantly improved CO2 footprint vs a full carbon part. The prepreg and wood fiber structure doesn’t produce sharp edged pieces when damaged. In addition, wood fiber composites also increase sound absorption, contributing to improved NVH damping within the vehicle interior.

The NaCa Systems seat back will be on display on the Hexcel stand at JEC World 2020.

Sateri has scored ‘A-‘ in CDP (formerly Carbon Disclosure Project) for Climate Change in 2019, placing it at Leadership band and the top 27% of companies in its sector, for implementing current best practices. And making Sateri World’s First Viscose Producer to Reach Leadership Band

This is the first time Sateri has participated in this annual voluntary reporting. It is also the first time that a viscose producer has reached Leadership band. Sateri attained an ‘A’ for more than half of the 11 categories that it was assessed for, including value chain engagement, Scope 1,2,3 emissions, and governance. Its ‘A-‘ overall score is higher than the ‘C’ average globally, in Asia, and in the Textiles and Fabric Goods sector; no companies in the same sector scored ‘A’.

Allen Zhang, President of Sateri, said, “We are very pleased to achieve such a commendable score on our first attempt at CDP reporting. It is a validation of our efforts and actions to combat climate change and our contribution towards decarbonising the textile industry. The CDP platform not only helps us measure and benchmark our sustainability performance against more than 8,400 companies globally, but also serves as a management tool for continuous improvement.”

Sateri has made great strides in the last year on emission reduction work. In June 2019, Sateri and the China National Textile and Apparel Council (CNTAC) jointly launched the EcoCosy® Climate Leadership Programme. The programme invites Sateri’s value chain partners to participate in the Climate Stewardship 2030 Initiative to set a decarbonisation pathway for the fashion industry to reduce the industry’s GHG emissions by 30% by 2030. Results of the first phase of the programme were published in the EcoCosy® Climate Leadership Whitepaper 2020, which was shared at COP25 in Madrid last year.

Hexcel is collaborating with Madshus, innovator in the world of cross-country skiing, on the engineering of a range ofdry carbon fiber tapes for Madshus’ acclaimed cross-country racing skies. Hexcel’s new HiTape® Dry Carbon Tapes improve the performance, manufacturing efficiency and surface finish of Madshus Skis.

“HiTape® gives us exactly what we need for our automated production processes - consistency and quality. In particular the exceptionally clean edges of the tapes, really makes a difference in our molding process and enhances the surface finish of the finished ski. We always aim for the highest levels of quality and Hexcel HiTape® helps us to deliver that.” concludes Bjørn Ivar Austrem, Technical Director, Madshus.

Hexcel’s new HiTape® Dry Carbon Tapes for Madshus Skis will be on display at ISPO Munich 2020, from 26 to 29 January.

SGL Carbon and Solvay collaborate to develop highly-competitive advanced carbon fiber composites for aerospace primary structures

SGL Carbon and Solvay have entered into a joint development agreement (JDA) to bring to market the first composite materials based on large-tow intermediate modulus (IM) carbon fiber. These materials, which address the need to reduce costs and CO2 emissions, and improve the production process and fuel efficiency of next-generation commercial aircraft, will be based on SGL Carbon’s large-tow IM carbon fiber and Solvay’s primary structure resin systems.

The agreement encompasses both thermoset and thermoplastic composite technologies. It builds on Solvay’s leadership in supplying advanced materials to the aerospace industry and SGL Carbon’s expertise in high-volume carbon fiber manufacturing.

“For Solvay, this is an opportunity to lead the aerospace adoption of a composite material based on 50K IM carbon fiber. This is a highly competitive value proposition that brings more affordable high-performance solutions to our customers. We see this as the first step in a long-term partnership,” said Augusto Di Donfrancesco, member of Solvay’s executive committee.

“By combining SGL’s carbon fiber expertise in our newly developed, unique 50K IM fiber with Solvay’s resin formulation and aerospace market expertise, both partners are aiming to develop an advanced aerospace material system. This alliance supports our strategic direction and accelerates our growth in the attractive aerospace market,” said Dr. Michael Majerus, spokesman of the management board of SGL Carbon.

Composite materials for aerospace applications represent a multi-billion-dollar market that is expected to grow strongly in the coming decade. Solvay and SGL Carbon are uniquely positioned to develop solutions to address the needs of this market.