From the Sector

Lower volumes due to geopolitical developments and the sharp rise in inflation impacted the result in the first half of 2022. In a slightly declining market, Autoneum increased revenue in local currencies by 0.5%. At CHF 888.7 million, revenue in Swiss francs reached the previous year's level. Despite the challenging environment, Autoneum achieved a positive operating result of CHF 6.4 million (EBIT margin: 0.7%). The net result decreased to CHF –12.8 million. On the other hand, Autoneum was able to generate a solid free cash flow of CHF 45.2 million. A high demand for sustainable products for electric vehicles confirms that Autoneum is well positioned for this growing market of the future.

Current geopolitical developments substantially affected business performance in the first half of 2022. They are accompanied by accelerating inflation and significant price increases in the commodities markets, which the war in Ukraine has further exacerbated. These developments are also delaying market recovery in the automotive industry. Autoneum does everything it can to minimize the impact on the Group. Despite the present challenges, we will continue to implement our strategy, focusing on innovative and sustainable technologies for growing markets of the future.

• Revenue development influenced by the war in Ukraine and supply chain bottlenecks*
• Low production volumes and high inflation impact profitability*
• Solid free cash flow enables further reduction in net debt*
• Business Groups*
• Well positioned for e-mobility and sustainability*
• Expanding the product portfolio for electric vehicles*
• Autoneum joins the Science Based Targets initiative*

Outlook
According to global market forecasts¹, automobile production will pick up again in the second half of the year with growth of 8.8% compared with the first half-year 2022. For full-year 2022, global automobile production is projected to reach 80.8 million vehicles, which is equivalent to a 4.7% increase on 2021. Based on the market forecasts, Autoneum expects to improve the operating result for the second half of the year. This will be supported by ongoing customer negotiations with a view to fair sharing of costs, the accompanying contribution of vehicle manufacturers to shouldering the sharp increases in material, energy and transport costs and the foreseeable normalization of production after the easing of lockdown measures in China. On this basis, Autoneum expects substantially enhanced results for full-year 2022, as well as an improvement in the EBIT margin to 2.0% to 3.0%. Free cash flow is expected to be in the mid to high double-digit million range for the full year 2022.

*For more information see attached document

¹Source: IHS “Light Vehicle Production Forecasts” – July 15, 2022

Stahl, a proponent of responsible chemistry, is submitting a greenhouse gas (GHG) emissions reduction target that is aligned with the most recent guidance provided by the Science Based Targets initiative (SBTi). The new target marks a key milestone on the company’s journey toward carbon neutrality.

Stahl’s SBTi submission includes a specific commitment regarding the company’s Scope 3 upstream emissions, which Stahl aims to reduce by at least 25% over the next 10 years, compared with the base year (2021). This reduction would primarily be achieved by Stahl replacing its fossil-based raw materials with lower-carbon alternatives. The target is a major step towards the objective of limiting global warming temperature increase to 1.5°C above pre-industrial levels by 2050, as agreed at the 2015 Paris Climate Accords.
 
Stahl’s extended commitment builds on the company’s existing targets to reduce its emission for Scopes 1 and 2, which were set shortly after the Paris Agreement in 2015. Stahl has since reduced its Scope 1 and 2 (direct) GHG emissions by more than 30%, thanks to operational efficiency gains and by decarbonizing its energy supply.

Scope 3 GHG emissions cover all the additional indirect emissions that can occur in the value chain, including those associated with purchased raw materials, packaging, business travel, and transportation. Stahl’s Scope 3 emissions currently represent over 90% of its carbon footprint.

The automotive industry currently faces a complex set of market dynamics: rising material and transport costs, reduced budgets, changing consumer expectations, increasing challenges related to CSR, etc. In this context, improving efficiency across the whole value chain has become a strategic priority for vehicle and equipment manufacturers. Lectra supports its customers by designing and developing cutting-edge solutions that combine software, equipment, data and services to make its offer the gateway to Industry 4.0.
 
With Industry 4.0, a new range of possibilities is opening up to businesses. The concept and its technologies bring in new value creation and cost control models based on synchronized, flexible and fast processes.
 
The Automotive Cutting Room 4.0 offer is a set of solutions connected to one other: Vector, the fabric cutting equipment offering the best performance in the market; Empower, a new generation of digital services to leverage Vector's capabilities; Valia, the heart of the new offer, a software for preparing and scheduling production; and Algopex, an application for exploiting and capitalizing on all the data generated by the cutting room, so you can make the best decisions as quickly as possible.
 
Connecting up all the elements of the Automotive Cutting Room 4.0 offer delivers this unprecedented value and enables an unparalleled level of performance to be achieved. Nicolas Favreau, Lectra’s Automotive Marketing Strategy Director, explains: “When the whole cutting room process is digitalized, the data generated are centralized and accessible in real time, helping our customers to make the best decisions at every step of the production process. The benefits are huge. For example, the key performance indicators from the offer’s first users show productivity gains of around 5% and a reduction in material consumption of nearly 2%. That’s unheard of! These results, combined with the agility that the Automotive Cutting Room 4.0 brings and the complete process control, demonstrate the offer’s maximum relevance.”

Based on the good business development in all four Business Units as well as the mostly successful passing on of increased costs for raw materials, energy and transport to customers, the Board of Management of SGL Carbon SE expects to exceed the given guidance for the fiscal year 2022. Accordingly, SGL Carbon SE is increasing its sales and earnings guidance for fiscal year 2022.

The Company expects to exceed the upper end of the stated range of its Group EBITDApre (earnings before interest, taxes and depreciation adjusted by non-recurring items and one-time effects) guidance for the fiscal year 2022 of EUR 110 - 130 million and is raising its EBITDApre guidance for 2022 to EUR 130 - 150 million. Correspondingly, EBITpre1 (earnings before interest and tax adjusted by non-recurring items and one-time effects) is now forecasted to be between EUR 70 - 90 million (previously: EUR 50 - 70 million). The sales guidance is also raised to around EUR 1.1 billion for the current fiscal year, originally expected to be at the level of the previous year (EUR 1,007.0 million).

In line with the development of earnings, the forecast for return on capital employed (ROCE) of originally 5% - 7% is raised to 7% - 9%. The expectations for free cash flow remain unaffected by the forecast increase. Free cash flow is still expected to be significantly lower in 2022 than in the previous year (previous year: EUR 111.5 million).

The new forecast for fiscal 2022 has been drawn up on the basis of the prevailing market environment and assumes no deterioration in conditions, in particular due to the war in Ukraine and its consequences for the global economy. In particular, it is assumed that sufficient electricity and gas will be available and production lines will remain in operation. The communicated medium-term targets up to 2025 remain unaffected by the forecast adjustment.

SGL Carbon will publish its 2022 half-year figures as planned on August 4, 2022.

With an annual report entitled 'Here.We.Go' and a sustainability report 'Shaping sustainable living, together', B.I.G. is also publishing a strong ambition for a sustainable future.

Offering sustainable flooring and material solutions will be the number one priority for the coming years.

The Group's first sustainability report is built around a self-designed sustainability model - "Route 2030" - which is based on achievable commitments, covers the main priorities and reflects B.I.G.'s vision in a sincere way.

Their vision for the B.I.G. change is to actively build a better future by their our carbon footprint to zero and doing business in a transparent, integer way. In this sense, it is the translation of the Group's purpose defined in 2021: shaping sustainable living, together.

Pol Deturck adds “By 2030, together with a broad group of suppliers, stakeholders and partners, we want to be the leader in sustainable flooring and material solutions. Specifically, our future value proposition is based on products and services that are environmentally & climate friendly, circular and offered by talented, innovative people with an emphasis on integrity and respect for values. This results more in a recurring value proposition for the future.”

Clear growth ambitions
As a 100% family-owned international Group with a clear long-term vision, B.I.G. stayed true to their plans and kept on investing in all areas of their business.
“The ambition for 2021 was to invest over 100 mio euro. But we were held back by external, unforeseen factors: from delays on quotes and execution to the lack of availability and resources due to the pandemic. If all goes as planned, we’ll make up for it in 2022 with an investment budget well over 100 million euro. The main areas of interest will be sustainability, innovation and Industry 4.0.” says Pieter-Jan Sonck, CFO of B.I.G.

Adding to the gradual top-line growth of recent years, the Group can look back on an unprecedented financial boom. The driving forces: favorable market conditions, a revitalized growth strategy and a team of nearly 5.000 first-class employees.

B.I.G. reported a turnover of EUR 2,5 billion, an increase of 45 % compared to 2020. The Group ebitda amounted to EUR 451 million, an increase of 120 % compared to 2020 and a net result of EUR 274 million, a growth of 215% compared to 2020.

Fruitful year for all Business Units
It was a fruitful year for all 3 business units, but the Group's business unit Polymers stood out. Exceptionally strong demand in Europe and North America, combined with raw material shortages and unplanned shutdowns of competitors, pushed prices and margins up to highs. The Polymers facilities ran at full capacity to meet the customers’ needs and hit all-time profit records during several months.

The Group's business unit Flooring Solutions also fared well. Most divisions and regions outperformed amid surging energy prices, disrupted supply chains, cost volatility in transport and raw materials, and other challenges. Their sustained focus on innovation, design and product differentiation led to an improved operating result at the end of 2021.

The achievements by Engineered Solutions echo those of the other two business units, from volume increases to budget increases. B.I.G. took big leaps forward in all its key markets, including the automotive sector, geotextiles and filtration.

The DiloGroup informs at Techtextil in Frankfurt (June 21 – 24, 2022) about new developments aimed at improving production technologies with a focus on needlefelts.

It becomes more evident that the textile industry comes into the focus of regulatory authorities who push respecting sustainability principles and who initiate a new body of laws. Hence all industrial sectors are requested to achieve savings in material and energy. The textile machine building, of course, plays an important role by seizing this initiative and offering solutions for fibre pulp recycling and reduction of energy, water and ancillaries. DiloGroup has made big efforts to meet these challenges together with a circle of partner companies. In this regard focal points of the development work are:

1. Intense Needling
   Needling per se is a mechanical production method with a high energy efficiency. For this reason, the development efforts of DiloGroup aim at producing nonwovens by “intense needling” instead of water entangling, even for light nonwovens made of fine fibres for the medical and hygiene sector with an area weight of 30 – 100 g/m². This would result in a reduction of the environmentally relevant production costs; per annum to about 1/3 to 1/5 of current.
   Despite the prospective advantages of the mechanical intense needling method over the hydrodynamical, water entanglement is at the moment the most important production method for low area weights and highest production capacity and is also offered by the DiloGroup as general contractor in cooperation with partner companies.
2. “Fibre Pulp Recycling”
   Fibrous material in nonwovens and particularly used clothes can be successfully recycled, if staple length can be conserved in the tearing process. In the classical tearing process, staple lengths are dramatically reduced and therefore these fibres can only be used as base material for inferior uses in thermal or acoustic insulation or in protective textiles, transportation or protective covers etc.
   When recycling textile waste in the context of the collection of used clothes, the so called “filament-saving” tearing using special tearing machines and methods must be used to produce fibres with longer staple lengths which can be fed to a nonwoven installation. Hence product characteristics can be better specified and controlled.
3. Additive nonwoven production
   The additive production method of the “3D-Lofter” is especially suited for automotive parts with differently distributed masses; but there may also be potential for increasing uses in the sector of apparel and shoe production.
4. “IsoFeed”-card feeding
   In the field of card feeding, the “IsoFeed” method offers great potential for a more homogeneous card feeding at the same time reducing the variation in cross-machine fibre mass distribution and thus the fibre consumption while conserving the end product quality.

The global composites community reunited at JEC WORLD 2022 on May 3rd to 5th for three days of innovation, networking and knowledge sharing. The industry was excited to reconnect in Paris after three years and the show exceeded all expectations in terms of product launches, content, business activity and attendance. Overall, the event welcomed 32,000+ professional visits, in Paris and online, from more than 115 countries and featured 1,201 exhibitors and 26 pavilions, whilst the JEC World Connect platform offered an additional way to explore the show this year.

While fewer Asian participants were able to join the show this year due to travel complexities, the attendance of a high level of decision makers from 117 countries and all key players along the value chain resulted in a dynamic environment for networking and business. As a consequence, companies were keen to confirm their presence next year; by the time the show closed its doors, 50% of JEC World 2023 exhibition space had already been booked.  Exhibitors and attendees have expressed very positive feedback about the quality of the exhibition and such a successful come-back of JEC World as the pinnacle event of the industry.

Innovations at JEC World
With more than 500 product launches during this year’s show, JEC World remains a popular venue to introduce new products to the global market.

The JEC Composites Innovation Awards celebrated 10 collaborative projects, reflecting the dynamism and the resilience of our industry, and two Innovation Planets displayed 80 impressive applications.

Celebrating its five-year anniversary, the JEC Composites Startup Booster competition is now established to discover startups in the advanced composites sector.

JEC World contributing to a more sustainable world
JEC World’s conference program shone a light on this year’s theme and most impactful topic: Composites for a Sustainable World. Sustainability continues to rise as a key growth driver for the composites industry, enabling diverse application sectors to achieve ambitious sustainability goals, from energy and transportation, to building and infrastructure, and so many more. JEC World highlighted how the growing application of composites will open up exciting new horizons for human activities, improving people’s lives and leading to a better, more sustainable world.

International community
Three Country on Stage presentations showcased the structure and strengths of the composites industries of South Korea, the Netherlands and the United States. The program featured keynote presentations and business cases which demonstrate the countries’ composites expertise  in hydrogen, in sustainable excellence, and innovation in building and mobility, respectively.

Ministers, ambassadors and official representatives from 16 countries also visited the show as part of dedicated official delegation tours from the United States, Turkey, Hungary, Taiwan, Portugal, Croatia, the Netherlands, the United Kingdom, North Macedonia, Germany, Slovakia, Luxembourg, Belgium, Sweden and Spain.

Thus, JEC World was the opportunity for government representatives to meet the leading composites actors of their respective regions or markets and show their support. Official inaugurations also took place on the Dutch, American and British pavilions.

Following their merger, Freudenberg Performance Materials, Low & Bonar, Mehler Texnologies® and Filc will be presenting their innovative solutions at a joint stand for the first time at this year’s techtextil exhibition in Frankfurt. The focus is on sustainability. Among the highlights are Evolon® RE, a microfilament textile for a wide variety of applications and markets, FILFLEX, a sustainable padding material for car seat covers, and the truck tarpaulin POLYMAR® 8556 ECO CF. Customers will find the world's leading manufacturer of technical textiles at Stand C51 in Hall 12.1.

Evolon® textiles made from recycled PET
With Evolon® RE, Freudenberg Performance Materials is presenting an even more sustainable version of its high-performance microfilament textiles. Evolon® RE is manufactured from an average of 70% recycled polyester, which the company makes by cycling post-consumer PET bottles in-house. Evolon® RE products are available for various applications such as technical packaging, in weights currently ranging from 80g/sqm to 300g/sqm. For high-tech wiping, lightweight Evolon® RE is now available starting from 30g/sqm. The material meets the needs of cleaning specialists for more sustainable wiping solutions. Evolon® RE offers the same high quality and material performance as all other Evolon® textiles.

Tarpaulins made from recycled raw materials presented by Mehler Texnologies®
When it comes to tarpaulins on trucks, both protection of the transport cargo and advertising for the transport company place high demands on the material. Mehler Texnologies® tarpaulin material ranks among the premium products for truck tarpaulins. The company is a pioneer in sustainable development and is showcasing POLYMAR® 8556 ECO CF. This unique material has a 25% share of recycled raw materials in the coating mass. In addition, the material is made with 100% R-PES yarns. The input materials undergo a complex separation and filtering process.

Sustainable padding material for automotive and furniture seat covers presented by FILC
FILFLEX is a soft and flexible padding layer made from nonwovens for automotive and furniture seat covers. It prevents leather from creasing and improves the dimensional stability of the seat covers. In terms of sustainability, its benefit is its 100% PET composition, making FILFLEX easy to recycle. FILFLEX offers customers easier handling during sewing and the seat covering process. End users benefit from the high seating comfort.

• Innovation packages from STOLL - a company of the KARL MAYER Group

Optimizations, further developments and innovations are an integral part of STOLL's activities. The industry leader in flat knitting technology has recently launched a new offering in the form of defined innovation packages. The aim here is to make STOLL's high innovative strength even clearer and enable customers to benefit from it more quickly. "The demands made on flat knitting technology are changing all the time, whether in the case of technical textiles for transportation and furniture fabrics or medical solutions well as in the fashion sector, where new yarns - such as recycled yarns or innovative technologies, such as smart textiles - have to be taken into account all the time," knows Erhard Vöhringer, Sales Manager of the STOLL Business Unit in the KARL MAYER Group "Our customers always have to keep abreast of the latest developments. We are therefore continuously developing appropriate improvements, and with our innovation packages we are now offering even more detailed demand-oriented solutions."

Detail optimisations for more overall performance
The innovation packages have the benefits for customers in focus and were tailored to the respective target groups. Every optimization contained therein leads to a decisive improvement in production. All of the solutions developed can be easily integrated into existing STOLL machines.  

Innovation package Number One
Innovation package Number One will be launched on the market in a few weeks' time and is aimed explicitly at knitters who focus on technical textiles. The focus is on convenience and process acceleration. Simple network configuration, expansion of the number of NP values, extended functionality when loading and saving the pattern and also improvement of handling in connection with Production Management from PPS are just some of the features of the package. "The corresponding updates for the machine control system are available to our customers for download free of charge on Customer_Net. In the future, there will also be a cloud-based offering," explains Erhard Vöhringer.

Innovation package Number Two
Still in the pipeline, included in the Number Two innovation package, are improvements for the maintenance area – regarding the use of lubricants and the maintenance intervals (predictive maintenance) – as well as optimizations in terms of sustainability, for example when it comes to reducing consumption of oil and increasing reliability. These solutions will be suitable for all machine types and applications.
The focus here is on improvements in belt take-down, the import and export of data and support for additional storage feeders.
A physical improvement in handling is promised by the new lighting including mirror directly on the machine.
In addition, the development teams are currently working on optimizing various knitting qualities and increasing user-friendliness. So you can already be curious!

Concentrated innovative power
The STOLL development team, with several hundred engineers and technicians in the fields of electronics, software, patterning, and design, never runs out of topics. Questions like "What is the market looking for? What do customers want?  Which changes do the machines have to meet and which ones do the software control and design program have to meet?" are first discussed, evaluated and debated together as a team and then go into the development phase. "Our customers can be absolutely sure that all our innovations are meticulously tested before we go to market with them" emphasizes Erhard Vöhringer. This also applies to the solutions in the innovation packages.

Small solutions, big impact
STOLL flat knitting machines impress with their great application and production potential. Almost 150 years of extensive practical experience in flat knitting technology - the STOLL company was founded in 1873 - is unique in the industry. As a Business Unit of the KARL MAYER Group, STOLL continues to do everything in its power to inspire its customers with innovative strength. Productive, flexible and reliable - simply STOLL! This slogan has not lost any of its meaning today. Quite the contrary: With the new innovation packages, customers benefit not only from the latest high-tech flat knitting machines, but also from an always up-to-date performance upgrade of their existing machine park.
With its innovation packages, STOLL has found a flexible and very fast way directly to the customer. Anyone who wants to know more about this is cordially invited to this year's trade fairs. STOLL looks forward to seeing you at the KARL MAYER Group stand at ITM (Istanbul), Techtextil (Frankfurt), Techtextil India (Mumbai) and ITMA ASIA. (Shanghai).

• Low impact of Ukraine war on business performance in 1st quarter
• 12.2% increase in sales to €270.9 million based on growth in all four business units
• Adjusted EBITDA improves by 11.5% to €36.8 million

SGL Carbon generated consolidated sales of €270.9 million in Q1 2022 (Q1 2021: €241.5 million). This corresponds to an increase of €29.4 million or 12.2% compared to the same period of the prior year. All four business units contributed to the pleasing increase in sales. In parallel, adjusted EBITDA improved by 11.5% to €36.8 million in the reporting period.

Sales development
In the first three months of fiscal 2022, the sales increase of €29.4 million was driven by all four operating business units: Graphite Solutions (+€11.3 million), Carbon Fibers (+€6.6 million), Composite Solutions (+€7.2 million) and Process Technology (+€6.0 million).
In particular, sales to customers in the automotive and semiconductor industries and a significant recovery in the industrial applications segment were key factors in the increase in sales. Sales of the Process Technology business unit to customers in the chemical industry also developed pleasingly. The effects of the war in Ukraine, which has been ongoing since the end of February 2022, had only a little impact on SGL Carbon's sales performance in the 1st quarter.

Earnings development
Despite the increasingly difficult market environment in the course of Q1 2022, associated with temporary supply and production bottlenecks at their customers, temporarily interrupted transport routes, and significantly higher energy prices, SGL Carbon was able to keep the adjusted EBITDA margin almost stable year-on-year at 13.6%.  
Adjusted EBITDA increased by 11.5% to €36.8 million in the reporting period. Higher capacity utilization in the business units and product mix effects contributed to the improvement in earnings, together with the cost savings achieved as a result of the transformation. By contrast, higher raw material, energy and logistics costs as of end of February 2022 had a negative impact on earnings. The Carbon Fibers business unit was particularly affected by the energy price increases. One-time expenses of €9.2 million in conjunction with energy transactions burdened the Carbon Fibers business unit in the 1st quarter of 2022.  
To secure our production and delivery capabilities, around 85% of the energy requirements of the entire SGL Carbon for 2022 are price-hedged.
Adjusted EBITDA and EBIT do not include in total positive one-time effects and special items of €8.5 million, among other things from the termination of a heritable building right to a site no longer in use. Taking into account the one-time effects and special items presented as well as depreciation and amortization of €14.1 million, reported EBIT increased by 83.5% to €31.2 million (Q1 2021: €17.0 million). The net profit for the period developed correspondingly and more than tripled from €6.1 million to €21.4 million in a quarter-on-quarter comparison.

Outlook
The sales and earnings figures for the 1st quarter 2022 confirm the stable demand from different market segments. Price increases and volatility in the availability of raw materials, transportation services and energy were largely offset by savings from the transformation program and pricing initiatives at the customers.
For 2022, SGL Carbon continues to expect volatile raw material and energy prices, which were included in their forecast for 2022 at the time of planning. However, there are uncertainties about the extent and duration to which SGL Carbon and the customers will be affected by the impact of the war in Ukraine or temporary supply chain disruptions due to the lockdowns in China. Therefore, SGL Carbon's outlook for fiscal 2022 does not include supply and/or production interruptions at customers or the impact of a possible energy embargo that cannot be estimated at this time.  
SGL Carbon's forecast also implies that factor cost increases can be at least partially passed on to the customers through pricing initiatives. SGL Carbon has also included the revenue and earnings impact from the expiry of a supply contract with a major automobile manufacturer at the end of June 2022 in our forecast.