From the Sector

The CEO of SGL Carbon SE, Dr. Torsten Derr, informed the Chairman of the Supervisory Board today that he will not extend his contract, which expires on May 31, 2025. Dr. Derr will continue his duties until the new CEO is appointed, at the latest until May 31, 2025.

“SGL Carbon is once again a strong and stable company whose profitable development I will continue to work on with all my strength until the last day. But even without me, my colleague on the Board of Management, Thomas Dippold, and the team will continue to develop the company successfully. The last almost four years have always been the achievement of the entire SGL team. SGL Carbon is now sailing in stable waters and my transformation work will therefore be completed shortly,” explains Dr. Torsten Derr.

“We are grateful to Dr. Derr for talking to us early on and in a spirit of trust. This will allow us to take our time in arranging his succession. SGL Carbon can look back on three successful financial years, is financially strong and relies on a broad-based management team that continues to drive forward the expansion of the business in strong growth markets. In our appreciative discussions, Dr. Derr has promised to complete all important projects with his usual commitment until the handover of the CEO position,” says Prof. Dr. Frank Richter.

The Supervisory Board will immediately begin the search for a successor to Dr. Torsten Derr.

Klaus Steger (64), CEO of ERWO Holding AG (“ERWO Holding”) and Hoftex Group AG (“Hoftex Group”), will step down from the Management Board of both companies at the beginning of 2024 in accordance with internal policies of the family and the company regarding the retirement age. Already on June 30, 2023, ERWO Holding Management Board member Hans-Georg von Schuh will retire as planned. ERWO Holding Management Board member Manfred Heinrich will also leave the Board as planned at this time and will continue to hold his mandate as one of the managing directors in the Südwolle Group together with Stéphane Thouvay and Johannes Rauch.

Steger’s designated successor as CEO of both companies is Manuela Spörl (50), currently CFO of ERWO Holding and also CFO of Hoftex Group. Hoftex Group is a group of medium-sized companies in the textile industry, in which ERWO Holding holds a significant stake. In addition, ERWO Holding acts as the parent company of the Südwolle Group, in which the Group’s worsted yarn activities are bundled.

Spörl has a degree in business administration and has been working for Hoftex Group since 2000. Her professional career began in the Corporate Controlling department, and in 2012 she was appointed as an advisor to the Board of Management. She was granted power of attorney in 2015, followed by appointments as CFO of the Hoftex Group in 2020 and CFO of the ERWO Group in 2022. A search for a successor for Spörl in the position of CFO of the Hoftex Group and, subsequently, of ERWO Holding is currently underway. Until the new CFO takes office, the two members of the Management Board, together with the Supervisory Board, will ensure an orderly transition.

The announced change in the Management Board of ERWO Holding, which acts as the parent company of the Südwolle Group, also ensures continuity at the leading manufacturer of worsted yarns for weaving, circular and flat knitting products in pure wool and wool blends. In the future, the management of Südwolle Group will continue to consist of the longstanding members Manfred Heinrich (Technology, Production & Planning), Johannes Rauch (Finance & Controlling) and Stéphane Thouvay (Sales & Marketing and Product Management & Innovation). Together with the designated board member of the parent company ERWO Holding, they will continue the successful development of the Südwolle Group from a mere supplier to a strategic partner of its customers as well as the growth trend of recent years.

The founding family Steger remains involved in the various supervisory bodies of the group of companies and will continue to work closely with them as the sole shareholder of ERWO Holding.

AkzoNobel has announced that Gregoire Poux-Guillaume will become the company’s new Chief Executive Officer (CEO) as of November 1, 2022.

He will succeed Thierry Vanlancker, who has been CEO and member of the Board of Management since 2017, and whose term of office is coming to an end.

Gregoire (52), a French national, is an international business leader with 25 years of experience. He has a distinguished track record of building successful, profitable businesses in challenging environments, accelerating business growth and improving margins.

Previous roles include CEO of Sulzer, CEO of GE Grid Solutions (previously Alstom Grid) and Senior Managing Director of CVC Capital Partners.

An impairment charge has become necessary based on the current status of the new 5 year plan.

(Market Abuse Regulation N° 596/2014)
•    Impairment loss amounting to €80-100 million in the fourth quarter 2020 in the business unit CFM
•    Restructuring program resolved with savings target of more than €100 million until 2023
•    Guidance 2020 for Group sales and operating recurring Group EBIT confirmed
•    Guidance 2020 for net result reduced to minus €130-150 million

In the current status of the 5 year plan, which is at present under preparation, significant deviations have already become apparent today, particularly in the market segments Automotive, Aerospace and Wind Energy in the business unit Composites – Fibers & Materials (CFM). Partially also due to the pandemic, Automotive and Aerospace is developing slower than anticipated in the last 5 year plan. In contrast, business with Wind Energy is growing much stronger than previously planned. These changes in the product mix lead to lower mid-term earnings at CFM compared to the prior 5 year plan. Following these deviations from the last 5 year plan, an event-driven impairment test was undertaken. This results in a non-cash impairment charge amounting to €80-100 million, which will be recorded in the fourth quarter 2020.

The Board of Management of SGL Carbon SE today also resolved the implementation of a restructuring program, with which the Company is targeting savings of more than €100 million until 2023 (compared to the base year 2019). These savings consist of a planned socially compatible reduction in personnel of more than 500 employees and substantial reduction in indirect spend, particularly in the areas of travel, consulting and external services. Costs of approximately €40 million are anticipated for the implementation of this restructuring program. A little more than half of this is expected to be recorded as expenses in the fourth quarter 2020, while the associated cash outflows are mainly forecasted for 2021.

This requires a partial adjustment of the guidance for 2020. The solid operational development in the third quarter 2020 with Group sales between €220 and €230 million and operating recurring EBIT1 between €13 and €15 million (plus approximately €9 million positive one-time effects) is within the framework of our expectations for the full year 2020. However, the Group net result is likely to develop below the prior year level of minus €90 million and reach approximately between minus €130 and €150 million due to the restructuring provisions as well as the impairment charge (prior guidance: improvement to a negative low double-digit million € amount).

With liquidity of €167 million as of September 30, 2020 (compared to €137 million at year-end 2019) and further cash inflows in the fourth quarter 2020 from successfully implemented additional funding measures, the Company’s position is solid. This liquidity is more than sufficient for the payment of the purchase price for SGL Composites USA in the amount of USD 62 million at the end of 2020 as well as the restructuring-related cash outflows expected mainly in 2021. The Company continues to have access to the revolving credit facility (RCF) in the amount of €175 million, which remains undrawn.

The quarterly statement as of September 30, 2020 will be published on November 12, 2020 as scheduled. Further details on the new 5 year plan as well as the guidance on the fiscal year 2021 will be presented with the publication of the Annual Report 2020 on March 25, 2021.

*The use of KPIs in this notification is aligned to the annual report 2019 and the interim report for the first half year 2020. There were no changes to the scope of consolidation or to valuation methods compared to the previous guidance.

• Thomas Dippold succeeding Dr. Michael Majerus as CFO

During its meeting on August 17, 2020, the Supervisory Board of SGL Carbon SE decided to appoint Thomas Dippold (48) as CFO and member of the Board of Management of SGL Carbon SE effective December 1, 2020 with a tenure of five years. Thomas Dippold will succeed the long-standing CFO Dr. Michael Majerus, who will resign from his office as of November 30, 2020 by mutual amicable consent.

Thomas Dippold (German Diploma in Business Administration, MBA in USA) began his career at HSBC Bank in London and Düsseldorf. Further appointments led him to Schott AG amongst others in Singapore, followed by commercial management jobs and CFO positions in internationally active industrial companies headquartered in Germany. Mr. Dippold is currently CFO of the stock listed transportation technology company Schaltbau Holding AG.

The Chairwoman of the Supervisory Board of SGL Carbon SE, Mrs. Susanne Klatten, welcomes Mr. Dippold: “With the appointment of Mr. Dippold, we are pleased to have gained a convincing and highly respected personality in his field. We are convinced that Mr. Dippold possesses key qualifications to sustainably support SGL Carbon SE in its upcoming tasks given his comprehensive and long-standing experience as CFO.“

The Supervisory Board thanks Dr. Majerus very much for his great achievements in the interest of SGL Carbon. In the past six years, Dr. Majerus has stabilized the Company even in difficult times with several major capital market transactions and has meaningfully contributed to the strategic realignment of the Company with the successful divestment of the graphite electrode and cathode businesses. For nine months up to and including May 2020, Dr. Majerus additionally assumed nearly all responsibilities from the recently departed CEO and provided leadership to the Company as the Speaker of the Board of Management. In this position, he safely steered the Company through the immediate impacts of the Corona pandemic. In addition, he developed substantial future growth perspectives with, amongst others, the conclusion of a large supply agreement for fuel cell components. The Supervisory Board wishes him all the best and further success in his future endeavors.