From the Sector

The 14th in-store asia will be held in Mumbai from 1 June to 3 June 2023. The trade exhibition for retail resources and investment in store design, VM and in-store marketing gathers decision-makers from more than 7,500 retail companies, consultants, service providers, and manufacturers, bringing together over 100 exhibitors.

Since 2018, in-store asia has been a member of the international trade fair family of EuroShop in Düsseldorf. It assembles all leading retail solutions providers from India and other countries under one roof. Here decision-makers from retail, including branded product producers, retail consultants as well as providers of services and solutions for retail, store designers, architects and VM experts come together.

The 3-day event includes not only the Expo area but also a wide range of side events comprising a Convention with over 30 speakers, the presentation of the coveted VM & RD Retail Design Awards as well as the VM Challenge, a live shop window challenge for top-notch visual merchandisers that is unique for India. Furthermore, the Retail Technology Pavilion will present new tools, for instance for retail management and customer tracking as well as solutions revolving around AI & virtual reality, NFTs, smart checkout all the way down to store management, retail security and payment. Celebrating a premiere here will be the Start-up Hub, which will provide emerging, innovative companies with a stage to present themselves to the industry.

The Indian retail industry has changed drastically; being one of the fastest growing retail markets it has proven a key driver for the Indian economy. The Indian retail sector is forecast to continue posting enormous growth rates due to such factors as growing urbanisation, rising household incomes, better connected rural consumers and rising consumer spending.

Indorama Ventures Public Company Limited (IVL) has joined “Together for Sustainability” (TfS), a global initiative for sustainable supply chains. Indorama Ventures joins a network of 47 TfS member companies representing the global chemical industry, reinforcing its commitment to driving sustainable solutions in its supply chain management.

By joining TfS, Indorama Ventures is encouraging suppliers to meet high sustainability standards, reduce the risk of supply chain disruptions, and improve overall climate maturity. The collaboration will help foster an expansion of the company’s sustainable supply chain program. The company will contribute to the TfS Scope 3 Greenhouse Gas (GHG) workstream that developed and finetunes the Guideline for calculating Product Carbon Footprints (PCFs) in the chemical industry and beyond and, will develop an IT solution that will enable companies to share PCFs efficiently. This membership allows Indorama Ventures to further align with the UN Global Compact Principles.
 
Through this initiative, Indorama Ventures will also be partnering with EcoVadis to assess their suppliers to identify risks and opportunities along the value chain, improve sustainability practices, and encourage collaboration among members.

The acquisition of the automotive business of Borgers, announced in January 2023, has been completed with effect from April 1, 2023, following receipt of all antitrust approvals. As a result, Autoneum now operates 67 production facilities worldwide and employs around 16 100 people in 24 countries. With the acquisition of the long-established German company, Autoneum is further expanding its global market leadership in sustainable acoustic and thermal management of vehicles. For the planned capital increase of around CHF 100 million for the long-term financing of the acquisition, the shareholders approved the creation of a capital band.

The purchase agreement signed on January 6, 2023, to acquire the assets of the insolvent Borgers companies by Autoneum could be completed. As a result, Autoneum will take over the assets of the Borgers companies in Germany and the shares in the subsidiaries in France, Poland, Sweden, Spain, the Czech Republic, the United Kingdom and the USA as well as in the company in Shanghai, China, with effect from April 1, 2023. As already communicated, the enterprise value paid amounts to EUR 117 million.

The product and customer range of Borgers Automotive, the specialist for textile acoustics protection, insulation and trim for vehicles, ideally complements Autoneum’s sustainable product portfolio. Particularly with the wheel arch liner and trunk lining product lines as well as the truck business, Autoneum’s global presence offers further potential for profitable growth also outside Europe. In addition, Borgers has more than 150 years of experience in recycling textile materials. In the 2022 financial year, the Borgers Group – excluding the mechanical engineering division which was already sold in the summer of 2022 – generated expected annual revenue of around EUR 700 million and employed around 4 500 employees worldwide. Autoneum has agreed new pricing and delivery terms with Borgers’ customers, which will ensure both sustainable profitability and the further development of technologies and processes.

From April 1, the former Borgers sites in Germany will be part of Autoneum Germany GmbH, which has been in existence for many years. The other subsidiaries worldwide will gradually be renamed Autoneum.

• Electromagnetically heatable nanomodified stent for the treatment of hollow organ tumours wins second place at the RWTH Innovation Award

Almost every fourth person who dies of cancer has a hollow organ tumour, for example in the bile duct or in the oesophagus. Such a tumour cannot usually be removed surgically. It is only possible to open the hollow organ for a short time using a stent, i.e. a tubeshaped prosthesis. However, the tumour grows back and penetrates the hollow organ through the stent. Ioana Slabu from the Institute of Applied Medical Technology and Benedict Bauer from the Institut für Textiltechnik of RWTH Aachen University have now developed a novel technology for the therapy of hollow organ tumours, which was awarded second place in the RWTH Innovation Award. This involves a polymerstent that contains magnetic nanoparticles. When electromagnetic fields are applied, these nanoparticles lead to a controlled heating of the stent material and thus of the tumour. Because the tumour reacts much more sensitively to heat than healthy tissue, it is destroyed and the hollow organ remains open. Thus, the stent develops a self-cleaning effect.  

Ioana Slabu of the AME explains: "Not only can we drastically reduce treatment costs, but above all we can provide relief for millions of patients worldwide.
 
A manufacturing process and proof of concept for magnetic hyperthermia are already in place. This novel technology has a very high development potential because it can also be used for tumours in other parts of the body such as the prostate, stomach, intestine or urinary bladder or for cardiovascular diseases.  

The AiF/IGF project started under the project title "ProNano" funded by BMWK. Now the approval for the follow-up project "ProNano2" has also been received. The approved project is called: "Validation of the innovation potential of heatable stents for heat-induced treatment of cavity tumours" and is funded by BMBF in course of the VIP+ program. With the Clinic for General, Visceral and Transplantation Surgery of the University Hospital Aachen and the Institute for Technology and Innovation Management at RWTH Aachen University, the consortium is enriched by clinical and economic expertise. Every year, RWTH Aachen University honours particularly innovative university projects with the Innovation Award. Professor Malte Brettel, Prorector for Business and Industry, presented the certificates to four outstanding projects as part of RWTHtransparent.

Autoneum erzielte 2022 weitere messbare Fortschritte in den Bereichen Umwelt, Soziales, Governance und Compliance. Das Unternehmen verpflichtete sich zu wissenschaftlich fundierten Zielen, die im Januar 2023 von der «Science Based Targets»- Initiative (SBTi) validiert wurden. Die Ziele stehen im Einklang mit denen des Pariser Abkommens, die globale Erwärmung auf deutlich unter 2°C zu begrenzen, und unterstützen die bereits in der «Advance Sustainability»-Strategy verankerten Umweltziele von Autoneum. Im Berichtsjahr wurden die Treibhausgasemissionen weiter reduziert und die Recyclingkapazitäten global ausgebaut.

Trotz der zahlreichen Herausforderungen, mit denen die Automobilindustrie auch im vergangenen Jahr konfrontiert war, konnte das Unternehmen, seine gesamten Treibhausgasemissionen im Vergleich zum Basisjahr 2019 relativ um 14.8% und absolut um 33% zu senken. In 37 Autoneum-Werken weltweit wurden 214 Ökoeffizienz-Projekte zur Reduzierung von Abfällen sowie des Energie- und Wasserverbrauchs durchgeführt, womit sich die Anzahl solcher Projekte im Vergleich zu den Vorjahren fast verdreifachte.

Das Unternehmen konnte mit der Einführung seiner vollständig rezyklierbaren Teppichsysteme aus 100% Polyester, die auf bestehenden und besonders umweltfreundlichen Pure-Technologien aufbauen, seine Position als Markt- und Technologieführer im nachhaltigen Akustik- und Wärmemanagement für Fahrzeuge weiter ausbauen. Für die innovativen Tuftingteppichsysteme hat Autoneum erste Kundenaufträge erhalten. Auch für E-Motor-Kapselungen auf Basis seiner patentierten, lärmreduzierenden Pure-Technologie Hybrid-Acoustics PET wurden weitere Aufträge gewonnen.

Autoneum hat 2022 das erste unternehmensweite Frauennetzwerk ins Leben gerufen. Ziel des Netzwerks ist es, die Gleichstellung der Geschlechter und eine Kultur der Vielfalt und Inklusion bei Autoneum zu fördern und Mitarbeitenden einen regionen- und funktionsübergreifenden Austausch zu Themen wie Karriereentwicklung, Führung und Vereinbarkeit von Beruf und Familie zu ermöglichen. Darüber hinaus haben Mitarbeitende von Autoneum 2022 weltweit 67 Projekte zur Förderung des gesellschaftlichen Engagements durchgeführt.

Im Berichtsjahr legte Autoneum zudem einen besonderen Fokus auf den Ausbau der Corporate-Responsibility-Organisation im gesamten Unternehmen. Darüber hinaus wurde der Verwaltungsrat stärker in die entsprechenden Prozesse eingebunden. Mit der Aufnahme von Zielkriterien aus den Bereichen Umwelt, Soziales und Governance («Environmental, Social, Governance» – ESG) in den Executive Bonus Plan der Gruppe ab dem Geschäftsjahr 2022 wird das Thema Nachhaltigkeit für Autoneum in Zukunft noch mehr an Bedeutung gewinnen.

• 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%.

• Precious water for villages that are running on dry land

The GoodTextiles Foundation has worked to improve drinking water supplies in sub-Saharan Africa in another joint project with Cotton made in Africa (CmiA). In three villages in Togo particularly affected by climate change, the partners built wells and trained people in the use of water. The curriculum included the topics of disease prevention, hygiene and health care.

In 2016, the textile company Dibella (Bocholt) established the GoodTextiles Foundation with the aim of making textile value chains more sustainable. It raises funds and implements its own support projects to benefit people at all stages of the textile industry. Now the foundation has once again supported a project in sub-Saharan Africa initiated by Cotton made in Africa (Hamburg). Funding is being provided for three villages in Togo that, according to a needs assessment by CmiA's local partner, the cotton company Nouvelle Société Cotonnière du Togo (NSCT), have no direct access to drinking water.

Difficult water procurement
The areas where CmiA's drought-resistant cotton is grown include the north and interior of Togo, where cotton farmers are particularly affected by the effects of climate change due to prolonged periods of drought. Many village communities lack access to clean drinking water, and people draw contaminated water from more distant rivers or waterholes and carry the heavy load back with difficulty.

Guide to clean water
As part of a joint project between the GoodTextiles Foundation, Aid by Trade Foundation (holder of the CmiA standard) and NSCT, three drought-affected villages - Namare/Puob-n-kpaad, Tchokoroko and Aloba - will now receive their own water supply.

The funds - 11,756 euros will be provided by the GoodTextiles Foundation, and 4,419 euros will come from the Cotton Society - will be used to construct a well operated by hand pumps in each village. The construction work is to be completed by March 2023 and the 2,300 inhabitants will be taught the basics of water handling, disease prevention and hygiene measures in so-called WASH training courses.

Driving force: UN SDGs
For years, we have aligned our company with the UN's 17 Sustainable Development Goals (Global Goals for Sustainable Development). Through the sponsorship project, we are not only contributing to SDG 6 "Clean water and sanitation", but also to gender equality (SDG 5). In the African countries from which we source CmiA cotton, the physically strenuous task of procuring water is still the responsibility of women. The construction of the wells now leads to a significant improvement of their living situation," reports Ralf Hellmann, managing director of Dibella and chairman of the foundation.

Continued under their own responsibility
Once the wells have been handed over to the village communities, "water committees" will take over their management and maintenance, as well as responsibility for further hygiene training for the residents. The operation of the wells will be financed on the basis of a fund made up of small contributions from the beneficiary communities.

The Global Organic Textile Standard is pleased to announce the release of GOTS Version 7.0, which features an expanded scope of environmental and social criteria while maintaining a standard that is practicable for industrial production and appropriate for a wide range of products. During the regular year-long revision process, international stakeholders with expertise in organic production, textile processing, textile chemistry, human rights and social criteria, as well as representatives from industry, NGOs and civil society organisations, contributed to the new Version 7.0 through multiple consultation rounds. Final decisions were made by the multistakeholder GOTS Standard Revision Committee.

GOTS Version 7.0 provides a comprehensive solution for companies who want to produce organic textiles ensuring compliance with environmental and human rights due diligence along the entire supply chain, from field to finished product. With full traceability from origin to destination, GOTS certification provides an efficient means of verifying genuine sustainability efforts. GOTS 7.0 introduces new requirements to conduct risk-based due diligence of Certified Entities’ own operations and their supply chains based on the UN Guiding Principles for Business and Human Rights and the OECD guidelines. The Social Criteria section was substantially revised to include a broader human rights-focused approach. GOTS 7.0 now allows recycled organic fibres as additional materials. Key requirements, such as certified organic fibre content, a general ban on toxic and harmful chemicals such as PFAS, conventional cotton and virgin polyester restrictions, and social compliance management, are maintained in GOTS Version 7.0.

Some of the changes in Version 7.0 include:

• GOTS and the Manual for the Implementation of GOTS were restructured, and sections were grouped to reflect the standard’s scope.
• New due diligence criteria ensures that Certified Entities address their actual and potential negative impacts on human rights and the environment.
• GOTS Environmental Criteria, Product Stewardship, and Environmental Health and Safety (EHS) requirements will also apply to the subcontractors of chemical formulators.
• Criteria for the incoming organic material have been made stricter.
• Quinoline is included among the prohibited substances and some existing restrictions have been made tighter such as of “aniline, free”, residue limit is decreased to 20 mg/kg from 100 mk/kg.
• GOTS 7.0 reduces the permissible quantity of recycled synthetic (polymer) fibres in its certified products, taking into account the disadvantages associated with recycled synthetics, such as microplastics and poor quality.
• In the pursuit of circularity, GOTS will allow use of recycled GOTS Goods waste as an additional fibre in its certified products.
• GOTS Human Rights and Social Criteria will now require Certified Entities to respect internationally recognised human rights protocols, including the International Bill of Human Rights and other international human rights treaties.
• Criteria concerning Discrimination, Violence and Harassment were revised to make them more comprehensive and include the International Labour Organisation (ILO) Violence and Harassment Convention (C190).
• Certified Entities are now required to develop a plan to cover the living wage gap.
• GOTS Occupational Health and Safety criteria were revised to consider best international practices and recommendations from the ILO.

For more information, see the following documents:

• GOTS Version 7.0
• Change Log GOTS 7.0
• Change Log Manual for the Implementation of GOTS 7.0
• Guideline for the new structure of GOTS 7.0

Indorama Ventures Public Company Limited (IVL) reported a record FY22 financial performance from the company’s global manufacturing footprint serving end-consumers’ resilient need for daily necessities. The unusually high level of customer destocking that weighed on the fourth quarter result is expected to have leveled out and business should return to normal operating conditions, with China’s reopening to further spur demand.

Full-year Core EBITDA climbed 31% YoY to $2.3 billion as revenue rose 28% to a record $18.8 billion. The company recorded strong cash flows of $2.2 billion, up 111% YoY. Indorama Ventures’ geographically diversified, integrated platform, backed by management’s agility, withstood unprecedented global events to generate earnings through the business cycle. During the year, the company continued to focus on its growth plan, successfully integrating its strategic surfactants business in Latin America and Vietnamese packaging acquisition. A dedicated senior team is working tirelessly and is committed to the company’s ‘Vision 2030’ sustainability goals including recycling technologies and introducing biomass feedstock to the company’s product portfolio. The ongoing ‘Project Olympus’ cost transformation program delivered an annual run rate of $449 million in efficiencies.

The annual result was impacted by an unusually challenging final quarter as fears of a recession and reduced transit times led to widespread destocking by customers. 4Q22 Core EBITDA declined 43% YoY to $264 million on a 1% drop in revenue to $3.9 billion. The pandemic lockdown in China also continued into the final quarter, reducing factory demand across Indorama Ventures’ portfolio and resulting in narrower margins from lower prices and higher costs. Higher energy and utility costs impacted European operations as the war in Ukraine continued into the winter.

To improve competitiveness and build resilience, Indorama Ventures rationalized underperforming assets in the Fibers business in Europe and a PTA site in Asia, resulting in a $7 million cash impairment in 4Q22 and a $253 million non-cash impact. As a result, the company looks forward to a $38 million uplift in EBITDA in 2023, reaching up to $65 million by 2025.

• Oerlikon takes leadership position in luxury metalware

Oerlikon has successfully closed the acquisition of Riri, following the signing of the agreement announced on December 16, 2022.

Riri is a provider of coated metal accessories for the luxury fashion industry. This deal is the strategic next step to complement Oerlikon’s acquisition of Coeurdor in 2021. It expands Oerlikon’s foothold in the luxury market and together creates a leading platform in luxury metalware. As the demand for PVD coatings grows, Oerlikon’s PVD technologies that provide environmentally friendly solutions will accelerate the shift of the luxury goods industry to greener PVD technology.

Renato Usoni, CEO of Riri, will lead the newly formed luxury business unit of Oerlikon as President Oerlikon Luxury. Riri will operate as a separate business within the Surface Solutions division. Its zippers and buttons will continue to use the Riri and Cobrax brands on individual products. Oerlikon will consolidate Riri as of March 1, 2023.