SGL Carbon (SGL) Q2 2024 earnings summary

Executive summary

• Group sales declined by 4.0% year-over-year to €538.0 million in H1 2024, mainly due to weak demand in Carbon Fibers and project termination in Composite Solutions, but performance is in line with guidance.

• Adjusted for currency and portfolio effects, sales dropped by 2.2%.

• EBITDA pre decreased by 1.7% to €86.5 million, with the EBITDA margin improving to 16.1%.

• Net result turned positive at €29.4 million (H1 2023: -€10.0 million), with EPS at €0.24 and improved equity ratio.

• Positive product mix in Graphite Solutions and reduced losses from divested entities supported profitability.

Financial highlights

• Sales revenue: €538.0 million (-4.0% year-over-year); FX-adjusted decline was 2.2%.

• EBITDA pre: €86.5 million (-1.7%), margin 16.1% (+0.4pp).

• EBIT: €55.9 million (H1 2023: €12.0 million), mainly due to lower one-off charges.

• Free cash flow: €12.4 million (H1 2023: €20.1 million).

• Net financial debt: €119.4 million (+3.1% from Dec 2023), leverage ratio at 0.7.

Outlook and guidance

• Full-year sales expected to be on par with prior year; adjusted EBITDA guidance confirmed at €160–170 million, but at the lower end of the range.

• Growth in semiconductor and silicon carbide segments expected to slow for 6–12 months due to inventory adjustments and moderated demand.

• Compensation payment from a terminated automotive contract in Composite Solutions is anticipated in H2, supporting segment EBITDA.

• CapEx will be managed flexibly to ensure positive free cash flow for the full year.

• Graphite Solutions and Process Technology expected to see slight improvements; Carbon Fibers and Composite Solutions to remain weak.