From the Sector

• Sales up 1.9% year-on-year to €560.5 million with stable adjusted EBITDA of €88.0 million
• Strong business performance of the Graphite Solutions, Process Technology and Composite Solutions businesses
• Sales and earnings decline at Carbon Fibers due to weakness of wind market
• Impairment at Carbon Fibers of €44.7 million

Despite the increasingly difficult economic environment, SGL Carbon was able to increase sales in H1 2023 from €549.8 million in the previous year to €560.5 million. Adjusted EBITDA (EBITDApre) remained almost unchanged at €88.0 million (H1 2022: €87.9 million). The expected good business performance of the Graphite Solutions business unit and the better-than-expected sales and earnings development of Process Technology and Composite Solutions compensated the drop in demand in Carbon Fibers.

In particular, the Graphite Solutions (GS) business unit contributed to the stable development of the Company with a 15.3% increase in sales to €280.6 million (H1 2022: €243.4 million) and a 20.6% improvement in adjusted EBITDA to €65.1 million (H1 2022: €54.0 million). GS benefited especially from the high demand of the semiconductor industry. The semiconductor and LED market segment now accounts for around 45% of GS revenue (H1 2022: around 35%).

With a 30.9% increase in sales to €64.4 million (H1 2022: €49.2 million) and a significant rise in adjusted EBITDA from €4.1 million to €11.9 million, the business performance of Process Technology (PT) was significantly above the original planning. Composite Solutions (CS) also reported a higher-than-forecast sales increase of 14.4% to €79.6 million in H1 2023 (H1 2022: €69.6 million) and an improvement in adjusted EBITDA of 26.8% to €12.3 million (H1 2022: €9.7 million). By contrast, the business performance of the Carbon Fibers (CF) unit was not in line with expectations, with a 28.9% decline in sales to €125.1 million (H1 2022: €176.0 million) and a 78.4% drop in earnings to €6.1 million (H1 2022: €28.2 million).

An important market segment for the Carbon Fibers business unit is the wind industry. Demand for carbon fibers for the wind industry has declined sharply since the beginning of the year. According to current estimates, the expected recovery in demand in H2 2023 will not materialize. SGL Carbon expects customer demand from the wind industry to pick up in 2024.

As already announced in the ad hoc release of July 24, 2023, an impairment loss of €44.7 million was recognized on the assets of Carbon Fibers as of June 30, 2023.

Results situation
SGL Carbon's adjusted EBITDA (EBITDApre) remained almost stable in a half-year comparison at €88.0 million (H1 2022: €87.9 million). Due to the lack of demand from wind industry, CF's production capacity utilization decreased and idle capacity costs weighed on adjusted EBITDA. By contrast, higher margins from product mix and volume effects in the other three business units had a positive impact on adjusted EBITDA.

Non-recurring items and one-off effects not included in adjusted EBITDA totaled minus €46.9 million in the first half of 2023, of which €44.7 million resulted from an impairment loss in the CF business unit.

In addition to the above-mentioned effects and nearly unchanged depreciation and amortization of €29.1 million (H1 2022: €28.9 million), the decline in EBIT resulted in particular from the impairment loss already described (€44.7 million). After €69.6 million in H1 2022, EBIT amounted to €12.0 million in the reporting period.

Taking into account the slightly improved financial result of minus €15.8 million (H1 2022: minus €16.6 million), consolidated net income for the first six months of the current financial year amounted to minus €10.0 million, compared to €48.8 million in the first half of the previous year.

Net financial debt and equity
To complete its refinancing, SGL Carbon issued convertible bonds with a volume of €118.7 million in June 2023 and drew an existing term loan facility of €75 million in July 2023, which was used together with cash of the Company on July 28, 2023 to repay the corporate bond (outstanding as of June 30, 2023: €237.4 million). Accordingly, cash and cash equivalents increased to €310.5 million as of June 30, 2023 (€227.3 million as of December 31, 2022) and financial debt temporarily increased to €480.4 million (€398.1 million as of December 31, 2022). Net financial debt remained nearly unchanged at €169.9 million as of June 30, 2023 (Dec. 31, 2022: € 170.8 million).

Despite the impairment loss of €44.7 million in Carbon Fibers, shareholders' equity amounted to €565.2 million as of June 30, 2023, only slightly lower than at the end of 2022 (Dec. 31, 2022: €569.3 million). This corresponds to an equity ratio of 36.1% (Dec. 31, 2022: 38.5%).

On the occasion of the 2023 UCI Cycling World Championships, the Union Cycliste Internationale chose Santini to make the bibs from recyclable materials. The UCI's partner brought together a pool of companies, all in the Bergamo area (Italy): RadiciGroup, Sitip, EFI Reggiani and Acerbis.

In 2022, the Union Cycliste Internationale released the UCI Climate Action Charter, which lays out an action plan to advance the environmental sustainability of the sport with a specific principle to reduce waste and accelerate the transition to a circular economy. This year, the UCI Cycling World Championships, which will be held from 3 to 13 August, are bringing together most of the cycling disciplines in a single location: Glasgow and across Scotland.

To mark the occasion, the UCI turned to its Official Partner, Santini, to make the bibs that the staff (judges, volunteers, commissaires etc.) and accredited photographers wear throughout the event. The bibs are "eco-designed", which means they are specifically created to have a second life after use. Once the event is over, the bibs could be collected and sent to RadiciGroup and transformed into new material, to be then processed by Acerbis to create X-Elite handguards for mountain bikes. This project is a concrete example of the circular economy at work, allowing 100% of the materials used to be recovered.

To optimise the production cycle of the bibs for the 2023 UCI Cycling World Championships, the products must be eco-friendly from the very first phase. The fabrics were therefore made from Italian nylon yarn produced by RadiciGroup. The choice of nylon – an infinitely recyclable thermoplastic material – is intertwined with UCI's sustainability goals for "limited-use" garments: RadiciGroup was able to channel its know-how and expertise in the field of chemistry to create "circular" bibs, working alongside the other partners. As the innovative yarn selected by RadiciGroup allows for easy and high-quality printing, the fabric is also customisable. The yarn is then provided to Sitip to create the "ARAS NG" warp-knitted fabric (95 g/100 m2): a recyclable single-fibre material made from 100% polyamide. The resulting fabric is the first nylon of its kind, designed to meet the transfer printing needs of the third project partner, EFI Reggiani, as well as the recyclability standards requested by RadiciGroup. The choice of fabric was born from extensive applied research, in which EFI Reggiani tested a wide range of fabrics to find the best colour results and the best resistance to rubbing and perspiration, which is vital for the bibs' intended use. In addition to using the new GOTS-certified EFI Reggiani IRIS Plus water-based inks, EFI Reggiani opted for a printing solution on transfer paper that does not consume water and requires a minimal amount of energy per square metre. Finally, the white fabric from Sitip and the transfer paper printed by EFI Reggiani arrived at Santini, who were responsible for transferring all the graphics for the 2023 UCI Cycling World Championships bibs from the paper onto the fabric. Santini also took care to assemble the garments using only thread and components made from nylon or chemically similar materials, allowing the bibs to enter the recycling process at the end of their lives without any further processing.                   

Archroma is bringing the entire portfolio of 5,760 Archroma Color Atlas colors to swatchbook, a platform for material digitalization and sourcing.

The new partnership provides fashion, apparel and textile designers and manufacturers with an elevated standard for color accuracy that meets the needs of today’s increasingly technology-driven and integrated supply chain. This will help the textile and fashion community to improve sustainability, whilst lowering costs and shortening turnaround times.

The Color Atlas by Archroma® was launched in 2016 to provide fashion designers and stylists with off-the-shelf color inspiration that can be implemented in production with just a few clicks.

Designers will use the 5,760 Archroma Color Atlas colors on swatchbook to rapidly develop accurate digital colorways and visualize their final product. They can then share these digital swatches with their manufacturing partners, providing access to the swatchbook metadata, which can include information such as the materials’ composition, weight and color.

This will streamline the overall design and production process for color-critical fashion and textile products, allowing for faster turnaround. Digital materials supported by trusted coloration technology also reduce the need for samples and eliminate physical swatchbooks, bringing environmental benefits and lower costs to brands and suppliers.

All 5,760 Color Atlas by Archroma® colors are now available free of charge to subscribers on the swatchbook platform.

Dibella supports organic Fairtrade cotton farmers in sourcing non-GMO seeds for the next harvest.

Together with the Chetna Organic cooperative, Dibella has long supported Indian smallholder farmers, on whose fields the organic Fairtrade cotton for the company's sustainable contract textiles grows. To secure the livelihoods of the smallholders, Dibella is taking action this year with a special measure: at the beginning of the new growing season, the company pre-finances the procurement of the genetically unmodified (GMO-free) seeds.

The beginning of the monsoon season (June to September) marks the start of the cotton year in India. The small family farms where the organic Fairtrade cotton for the sustainable Dibella range is grown prepare their fields for sowing. The seeds needed this year come directly from their buyer Dibella. The company organised and co-financed the procurement of the seeds together with the Chetna Organic cooperative.

Ending the debt trap
"At the beginning of the cotton season, smallholder farmers are often forced to take out a loan to finance the seeds they need. For this, very high double-digit interest rates are charged in India, which can lead to excessive debt for families, especially when there are crop failures due to pest infestations or unfavourable weather conditions, for example," reports Simon Bartholomes, Purchasing Manager at Dibella. "We decided years ago to break this vicious circle by pre-financing the genetically unmodified seed. It is procured by our partner Chetna Organic and distributed free of charge to the farming families whose organic cotton is processed into our organic Fairtrade textiles after the harvest. This year we have allocated a sum of USD 50,000 for this purpose.

Win-win situation
This measure offers advantages for all parties involved: Through direct access to the seeds, Dibella enables the farmer families to have a more adequate livelihood. At the same time, the farmers benefit from the expertise of Chetna Organic staff, who support them in organic farming. Dibella, in turn, covers its annual demand for organic Fairtrade cotton with a right of first refusal. This gives the company full control over its entire supply chain, which starts at the cotton field.

On the side-lines of the three-day fair, Techtextil India’s 2023 edition scheduled from 12th –14th September, will be hosting SITRA’s Expo on Medical Textiles called MEDITEX^TM2023 - an exclusive pavilion that focuses on medical textiles with live demonstrations and high-growth application areas offering a global platform for business opportunities.

Medical textiles are fabrics that are used in the healthcare industry for a variety of purposes ranging from maintenance of hygiene, prevention/control of infection to saving the life of critically ill patients. In recent years, the demand for medical textiles has been growing in India due to rise in geriatric population, accidents and life style diseases. Besides, various initiatives of Governments, increased awareness about hygiene, medical tourism and advancements in textile technology are driving the growth of medical textile industry in India. According to a report published by Ministry of Textiles on the Indian Technical Textiles market, the market potential of medical textiles market at 5% is valued approximately at USD 1.125 billion in the year 2021-22.
 
SITRA is a Textile Research Association, sponsored by the industry and supported by the Ministry of Textiles (MoT), with the contribution to the textile industry for more than 65 years. Its Centre of Excellence for Medical Textiles, established by MoT in 2008, has been organising MEDITEX - an International Medical Textile Expo cum Conference in 2014 and 2018 respectively. This exclusive fair for medical textiles has been offering a global platform for business opportunities in the varied application of medical textiles which has witnessed a good participation from the industry. For 2023, the expo will be held as a part of Messe Frankfurt India’s Techtextil India 2023.

Target topics based seminars, supported by Ministry of Textiles, Government of India would also be held concurrently along with the exhibition wherein the speakers would be discussing about current and evolving technologies in medical textiles. Stakeholders and visitors to the conference as well as the exhibition would get to witness and benefit from world class, state-of-the-art medical textiles products/machineries and technologies.

How does a future-proof, circular and sustainable plastics economy look like? The answer is a balance ranging from plastics reduction to a sustainable use of recyclable plastics. After all, the increasing demand for plastics in high-value applications such as food packaging, car parts or synthetic textiles requires a holistic change. With four strategic approaches, researchers from the German institute Fraunhofer UMSICHT and the Dutch institute TNO now provide insights into how this future scenario could look like in their recently published white paper "From #plasticfree to future-proof plastics". Both organizations also start a hands-on platform for plastics in a circular economy: European Circular Plastics Platform – CPP aimed at removing existing barriers and sharing of promising solutions.

Versatile and inexpensive materials with low weight and very good barrier properties: That's what plastics are. In addition to their practical benefits, however, the materials are also associated with a significant share of mankind's greenhouse gas emissions. The production and use of plastics cause environmental pollution and microplastics, deplete fossil resources and lead to import dependencies. At the same time, alternatives - such as glass packaging - could cause even more environmental burden or have poorer product properties.

Researchers from TNO and Fraunhofer UMSICHT have elaborated a white paper that provides a basis for the transformation of plastics production and use. They consider the integration of the perspectives of all stakeholders and their values and the potential of current and future technologies. In addition, the functional properties of the target product, the comparison with alternative products without plastics, and their impact in a variety of environmental, social and economic categories over the entire life cycle are crucial. In this way, a systematic assessment and ultimately a systematic decision as to where we can use, reject or replace plastics can be realized.

Strategies for the Circular Economy
As a result, the researchers describe four strategic approaches for transforming today's largely linear plastics economy into a fully circular future: Narrowing the Loop, Operating the Loop, Slowing the Loop, and Closing the Loop. By Narrowing the Loop, the researchers recommend, as a first step, to reduce the amount of materials mobilized in a circular economy. Operating the Loop refers to using renewable energy, minimizing material losses, and sourcing raw materials sustainably. For Slowing the Loop, measures are needed to extend the useful lifetime of materials and products. Finally, for Closing the Loop, plastics must be collected, sorted and recycled to high standards.

Individual strategies fall under each of the four approaches. While the ones under Operating the Loop (O strategies) should be applied in parallel and as completely as possible. According to the researchers, the decision for the strategies in the other fields (R strategies) requires a complex process: “Usually, more than one R-strategy can be considered for a given product or service. These must be carefully compared in terms of their feasibility and impact in the context of the status quo and expected changes”, explains Jürgen Bertling from Fraunhofer UMSICHT. The project partners have therefore developed a guiding principle for prioritization based on the idea of the waste hierarchy.

A holistic change, as we envision it, can only succeed if science, industry, politics and citizens work together across sectors. “This implies several, partly quite drastic changes at 4 levels: legislation and policy, circular chain collaboration, design and development, and education and information. For instance, innovations in design and development include redesign of polymers to more oxygen rich ones based on biomass and CO2 utilisation. Current recycling technologies have to be improved for high quantity and quality recycling,” explains Jan Harm Urbanus from TNO.

Hands-on platform for cross-sector collaboration
“Therefore, in a next step, TNO and Fraunhofer UMSICHT are building a hands-on platform for plastics in a circular economy: European Circular Plastics Platform – CPP," explains Esther van den Beuken, Principal Consultant from TNO. It will give companies, associations and non-governmental organizations the opportunity to work together on existing barriers and promising solutions for a Circular Plastics Economy. The platform will also offer its members regular hands-on workshops on plastics topics, roundtable discussions on current issues, and participation in multi-client studies on pressing technical challenges. Regular meetings will be held in the cross-border region of Germany and the Netherlands as well as online. The goal is to bring change to the public and industry.

Lenzing Group, a global producer of wood-based specialty fibers, is celebrating the 40th anniversary of its biorefinery and co-product brand LENZING™ Acetic Acid Biobased. The brand was first introduced on May 4, 1983, and has since become one of the leading and most trusted biobased acetic acid providers.

Over the past 40 years, LENZING™ Acetic Acid Biobased, which has a reduced carbon footprint that is 85% lower than that of fossil-based acetic acid, has continued to gain trust and support from customers. Specialty chemical company Evonik, and food production company Speyer & Grund Group, have been incorporating LENZING™ Acetic Acid Biobased in the production of their products since 1983. LENZING™ Acetic Acid Biobased has also been in high demand from the hygiene industry during the COVID-19 pandemic as an all-purpose cleaning agent in conventional and green products.

Pioneering a carbon neutral future in the biorefinery segment with a new offering
To mark the important occasion, Lenzing will introduce its first carbon neutral LENZING™ Acetic Acid Biobased to meet the growing sustainability needs of industries which predominately rely on fossil-based materials. Similar to the standard LENZING™ Acetic Acid Biobased, the carbon neutral LENZING™ Acetic Acid Biobased is produced using sustainably sourced beech wood as a universal replacement for non-renewable raw materials such as crude oil. By calculating, reducing and offsetting emissions during production processes, this expansion will create a more sustainable supply chain with highly functional products across various industries. From now on, Lenzing customers across the food, pharmaceutical, cosmetics, chemical and textile industries will be able to choose between carbon neutral and reduced carbon footprint acetic acid products.

Advancing circularity and carbon neutrality through efficient use of valuable resources
Lenzing’s biorefinery concept ensures that 100% of wood components are used to produce pulp for Lenzing’s botanic fibers, biorefinery products, as well as bioenergy, which is used to power Lenzing’s facilities. This makes Lenzing’s biorefinery sites almost fully energy self-sufficient to remain as carbon neutral as possible. To ensure a low carbon footprint, rail transportation is the preferred means for transporting LENZING™ biorefinery products, with trucks being leveraged in regions where rail transportation is not available.

Together with ClimatePartner, a recognized global leader in the design, development, and delivery of corporate climate action programs, Lenzing strives to reduce carbon emissions to net-zero through a mix of higher production efficiencies, use of renewable energy sources, low-carbon materials, and the dedicated support of an external nature-based carbon removal project. For instance, to offset remaining carbon emissions that cannot be reduced, Lenzing works with ClimatePartner to support and finance the switch to biomass as an energy source at a ceramic factory in Kitambar in northeastern Brazil. Using natural waste materials, like coconut shells, as renewable biomass for its energy production, the factory is able to produce roof tiles in a more climate-friendly way while saving on carbon emissions. Besides contributing to the fuel switch, the project also helps to reduce the deforestation rate in Brazil and avoid methane emissions that could result from the uncontrolled rotting of biomass.

A total of 20 European fashion and design schools took part in the 2nd “Fashioning Sustainability” competition organized by Freudenberg Performance Materials together with Macpi and Bemberg™ by Asahi Kasei, two co-branding partners in the textile industry.

Freudenberg invited talented young designers to create and submit their ideas for sustainable clothing. The initiative aims to show that sustainability is a key factor in the fashion industry.

Two of the most innovative outfits from each school were selected for the final round and presented to an international jury at the “Bagni Misteriosi” event location in Milan in May. Fashion design experts and opinion leaders as well as journalists were invited to select the most sustainable designs in the categories of “Technology” and “Design”.

The winners
First place in the “Technology” category went to Judith Marquant while the second to Jagoda Sokolowska, both students of the fashion school Esmod in Paris. Ilaria De Martino, from the fashion institute Modartech, Italy, and Xiaodan Liao from Polimoda, Italy, were awarded first and second place in the “Design” category. The first-place winners received €2,000, while the second places won €1,000.

All participants benefited from the platform to network with leading players in the garment industry and learn more about concrete steps for embracing sustainability. Creating true sustainability in the fashion industry means reducing the material flow of clothing, addressing both sustainable production and consumption.

Members of the Jury:
Cristiano Zanetti, Sales Director Italy, Freudenberg Performance Materials
Maurizio Cazzin, Male Modeller, Maison Giorgio Armani
Riccardo Bullio, Apparel Industrial Division Director, Dolce & Gabbana
Caterina Cuoghi, Industrial Director, Area NYC
Simone Bigi, Style and Product Office Manager FAY line, Gruppo TOD’S
Roberto Cibin, Model and Pattern Development Manager, Caruso
Bruno Landi, Sales Director, Vitale Barberis Canonico
Luisella Allegretti, Pattern Designer Boss MW Business Specialist, Hugo Boss
Eugenio Balordi, Product Manager, Maison Margiela
Ettore Pellegrini, Sales and Marketing Manager, Asahi Kasei Fibers Italia

The international association that will manage the Single-Entry-Point (SEP) of the BIONANOPOLYS project has been formally constituted and will be able to support companies across the European Union in the market introduction of bionanomaterials through technical, legal, regulatory, safety, economic and financial support services.

The SEP was established as an AISBL (non-profit entity) on 17 February 2023 in the framework of the European project BIONANOPOLYS, funded by the Horizon 2020 programme. The technical director of ITENE and coordinator of this project, Carmen Sánchez, is the president of this association in which representatives of other project partners also act as directors. Specifically, the CTP (Centre Technique du Papier) from France; CIDAUT (Fundación para la Investigación y Desarrollo en Transporte y Energía), from Spain; CENTI (Centre for Nanotechnology and Smart Materials), from Portugal, and the law firm Gil & Robles - San Bartolome & Associés, from Luxembourg.

The BIONANOPOLYS SEP will reduce the risks and barriers to the commercial exploitation of bio-based materials and polymeric bionanocomposites with nanotechnology and accelerate market penetration and innovation processes. SMEs, large companies, and potential customers who are users of the BIONANOPOLYS OITB (Open Innovation Test Bed) will be able to access the services offered by the project partners through this entity, which will act as a one-stop shop, at affordable costs and conditions.

The test bed consists of 14 enhanced pilot plants and complementary services to support technological and commercial breakthroughs. Collaboration between all the partners that make up BIONANOPOLYS and access through the SEP allows joint access to all the services offered by the partners and helps to drive collaborative open innovation.

Call for access to the BIONANOPOLYS OITB
The SEP and the project partners will be in charge of evaluating the projects submitted to the BIONANOPOLYS platform once the open call launched last February to select five projects from different European countries that will be able to access its services free of charge to develop, test or scale-up bionanomaterials in the BIONANOPOLYS OITB closes.

Companies wishing to access the services to develop or test nanomaterials can submit their applications until 30 April.

The BIONANOPOLYS test bed could benefit companies involved in the production of biopolymers, cellulose paper, nonwovens, foams, or coatings, as well as the packaging, agriculture, food, cosmetics, pharmaceuticals, hygiene, textiles and 3D printing sectors.

The first set of coloured carbon fibre bike wheels made a debut public appearance at The Cycle Show at Alexandra Palace.

Developed in partnership with leading wheel brand Parcours, the Chrono carbon fibre wheels feature a gold finish made of Hypetex’s Zlatan uni-directional material and offer a lighter and higher-performance product than the traditional painted alternative.

Hypetex is a sustainable colouring technology for advanced materials, such as carbon fibre. Born out of Formula 1 racing, its patented paint-replacing process is a key step in advancing the lightweight revolution. Combining water-based eco-resins with a sustainable curing process, Hypetex materials are made with bold, colourful aesthetics as well as technical and cost-saving benefits.

Parcours is a leading wheel brand that offers high-performance, premium wheelsets that employs the latest advancements in aerodynamic technology. The Parcours X Hypetex gold wheels were featured at The Cycle Show in London on a bespoke Handsling A1R0evo, which was nominated for the Jaw Droppers trophy - a competition for the industry’s most striking designs.