Sgl Group Ord

Ladies and gentlemen, thank you for standing by. Welcome to the SGL Carbon Conference call on the Q1 results 2023. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Claudia Kellert. Please go ahead.

Thank you. A very warm welcome to our conference call about SGL business development and results in the first three months, 2023. On behalf of SGL Carbon, our CEO, Thorsten Daer, and our CFO, Thomas Deppert, will present financials and our expectations for the upcoming months. Later, we will answer your questions after the presentation. Now I hand over to Dr. Trosten there.

Thank you very much, Claudia. Good afternoon to everyone. We are very proud to present solid financials in our first quarter. And we again made positive progress in almost all KPIs. Our group sales are up by 4.7% and we realized 283 million turnover in the first quarter our epda3 our most important financial kpi grew by 9 to 40 million thomas our cfo did great progress equity rate was again boosted to almost 40 percent How are the businesses running? We have, again, increased demand in semiconductors, especially in the field of silicon carbide semiconductors, and this boosted our sales in our business unit GS graphite solutions. Also, the two small business units which we run, process technology and composite solutions, developed very well, and order entry was very satisfactory. Our business unit, Carbon Fibers, was burdened by the expiry of the BMW i3. We lost Carbon Fiber business by the discontinuation of this business. We moved into wind energy and saw a temporary dip. We will explain this later on in our presentation. We want to inform you that we increased our capex a little bit by one-third. And all the additional CAPEX is running into our business unit graphite solutions for the expansion of graphite components for the silicon carbide industry. For the outlook, we confirm the guidance we gave you last time. Our sales in 2023, we expect on prior year level, EBITDA will be in the range of 160 to 180%.

million euro with this brief summary i would like to hand over to my colleague thomas depaul thank you torsten also a warm welcome from my side thomas default it's my pleasure and my honor to guide you through the figures for the first three months of the year 2023 on slide number five you can see um the group top line and also our most important kpi evda pre our development as Torsten was already mentioning in his brief introduction. Almost 284 million top line, which is almost 5% up compared to the first three months of last year. This is an increase of 12.8 million. Three out of four business units contributed. The biggest one, Graphite Solutions, is plus 21 million euro growth in their top line. Process technology, also given the size of the business unit, a very remarkable 6.6 million euro increase. And composite solution, a net increase of 4 million. Why net? I show you later on when we come to composite solution. There were a couple of one-off effects that have to be taken into consideration. And yes, those three business units overcompensate the shortfall in our carbon fiber businesses. Again, we tell a little bit more about that when we come to the specific business units. The top line growth is maybe even more remarkable, as Torsten was already pointing out. This is 2023. It's the first year without any effect of the so-called take-or-pay contract, this BMW on the I3 contract, two years ago. We had a full year with this very profitable contract. Last year we had six months and there was this first six months for comparison. And now in 2023, we don't have that anymore and we have to compensate that in a certain way. Secondly, you've probably read our press statement that we gave out, that we published during the first three months of the year that we sold our business in Gardena. This is also something worth mentioning. This is an effect that we don't have in the first three months of 2023 anymore, but it was there for the whole time last year. This is an effect we see in our business unit composite solution. So those two effects were somehow overcompensated and still we have a decent growth of roughly 5% in our top line. and we are very satisfied with that and SGL is really on track. When we come to the bottom line, we even see a further increase of 9%. So again, we were able to increase our operative margin and we like the development we see so far, especially as the first quarter tends to be a little bit weaker one compared to the other three quarters. However, when you look to the right side, the sales split of SGL Carbon graphite solutions stand for roughly 50% of the group sales. And therefore it's only maybe as a consequence to take this in an increasing focus of the group. This is also where we tell you a little bit more during this presentation. On slide number six, you see the development of the aforementioned graphite solutions. The growth expectations that we gave you are really on track. Our top line grew by almost 18% from roughly 120 million last year to a little bit more than 140 million this year, an increase of over 20 million. And why that? Mainly or solely because of the strong rise in the semiconductor top line. Those businesses grew by more than 50%. Yes, because we also neglected a little bit the solar business. We moved or shifted a lot of production from solar to semiconductors where the margin is higher. And this is why our top line grew also price-wise. Automotive and industrial applications are also contributing and are on track. And despite the already double-digit or 20-plus percent margin, we still were able to increase our profitability in a higher percentage than our top line. Our EBITDA pre grew by almost 20% or €5 million from €25.9 million to €30.9 million in the first quarter of 2023. This stands for a margin of almost 22%. And there's more to come because as Torsten pointed out, in the first three months of the year, we invested 19 million euros. This is far higher than the same amount last year. At the same time of the year, the first three months of the year, last year we invested seven. So you see a big increase in our capex figures. And this is thanks to the high customer down payment that we received from our many silicon carbide semiconductor customers. who gave us some down payments and we take the down payments and invest the monies in expansion of our capacity. On the next slide, you see the development of our process technology business, PT. As we pointed out in our last presentations, they were very good in acquiring new projects on a global scale. So we really have a worldwide very balanced demand Our sites in the US are doing well, our sites in Asia are doing well, and especially our sites in Europe are doing very well. So we have a very good order situation. Our top line of process technology grew by more than 26%, coming from 25.3 million in the first quarter of 22 to now reaching 31.9 million euro in the first three months of 2023, which is an increase of 6.6 million. This is really a remarkable increase that we see there. This is a project business, and apparently our colleagues are doing a great job in really penetrating the market and simply delivering on the good order situation that they have. And there's also more to come. The order book stands for at least some six to nine months, what we have there normally. So we can say also until end of the year, it looks quite promising, the development and process technology. And this also is very beneficial for our bottom line when you look to our profitability in our guiding KPI, EBDA pre. This increases more than levels from 2.0 in the first three months of last year to now 4.9. This is really a great achievement. We almost reached 15% EBDA pre margin compared to sales. Some two, three years ago, we were around break even. And this is really a nice development that we see there. What is boosting the high margin and the profitability increase? We have a high utilization. We have a strict cost management. And we also make very sure you remember our margin over volume strategy. And I think process technology is really a role model in there. Really, if the margin is not sufficient, we simply don't take the project. And we also make sure that we only have a very good product mix, which is boosting the profitability. Our kind of problem child in the first three months of the year is carbon fibers. And to a certain extent, we knew that it's going to be a difficult year 2023, because this is a year without the BMW contract. And this is what we have taken into consideration. And Starting into the second half of the year 2022, we were very happy that we found the wind energy market as a compensation, which took all the quantities that formerly were sold to BMW and we could sell it into the wind market. And this was good for us that we found this alternative market, which was somehow capable of taking all this amount. However, the wind market started a little bit in Q4, but now, especially in Q1 2023, we see completely a stoppage of deliveries that are really burdening our top line development. And we are down by 27.4% compared to the top line in the first three months last year, because the wind energy at the moment, we really see a lack of demand We have very slow permitting processes that we see, and everything came to a kind of a standstill because the project that once were offered and acquired, some have to be recalculated because of higher raw material and energy costs. And at the moment, the parties, the suppliers and the customers are somehow fighting for prices, margin, and when to deliver what. But at the moment, wind energy is very... So you probably have seen that with the other listed wind customers or wind companies that are somehow dealing in this. But Torsten will tell you a little bit more about that in a kind of a special section of this presentation. And with the downturn of our sales development, so goes our EBITDA pre. When we lose 27.4%, in our top line, our EBDA pre also gets hit by 20%. So from formerly 5.4 million euro profitability or EBDA pre in the first three months of 2022, we are now at 4.3 million in Q1 2023. And also to be very honest with you, if you deduct the equity result of BCCB, our carbon cyber business unit would have been slightly loss-making, or let's say a kind of a red zero, if you translate it literally, the German phrase, compared, yeah, we would be loss-making on our EBITDA pre-level in the first three months. We think that this might change in the second half of the year, but again, Torsten will tell you a little bit more about that in a special section. Last but not least, our last operative business unit, which is composite solutions. They are growing here on slide number nine. You can see that by 11.2% in the top line from 35.8 million euro last year to now 39.8 million this year. This is an increase of 4 million euro. This is even more remarkable if you take into consideration the sale of the Gardena business because the business of Gardena is something that we've sold in Q1 this year. And none of the contributions in the top line are in the composite solutions business unit shown. Why that? Because we deal it as an asset head for sale. And you see all the results, I come to that later, in our corporate business unit. So last year, in the first three months of the year, Gardena stands for 5.7 million top line effect. And they were able to overcompensate that and grew by 4% on top. If you add both together, then they are growing with over 20% of a like-for-like basis in the automotive business. And this also shows the strong demand from our customers and the good development the business unit is taking. Same in profitability. Last year, first three months, we reached 6.3 million euro, now 5.9, which is 400,000 less compared to last year. But if you take into consideration that in the first three months last year, we had a one-off kind of a breakup fee from a contract. We've been awarded, but the customer didn't want it anymore. So we received some 2.4 million euros for that as a compensation payment, plus 0.9 million from the contribution of Gardena in the same time frame with the first three months of the year that they had to overcompensate. then you also see the very strong development of our profitability in our remaining automotive business that we see in composite solutions. Last but not least, the development in corporate. There you see an increase in sales, which is kind of unusual, but don't be afraid. The 4.9 million increase from 2.5 to almost 7.5 billion euro can be explained to 100 by two effects one is the sales uh the remaining sales until the the closure of our gardena and the the closing of our gardena sale which is 3.5 million euro and we also sold our site in india in pune and this also stands for 1.3 million euro both effects almost 100 explained the sales increase which is non-recurring. So in Q2, you won't see this effect anymore. It's no use to take this 7.4 million and take it times four for the full year figure. The 2.5 from last year is the more recurring sales that we have for some rental income and some charging of internal services to other parties. Our EBITDA-3 is also affected by the sale of the Gardiner in Brunei business with 0.6. There's also some effects with the so-called Inflationsausgleichsprämie, which is a kind of a one-off payment that the tariff parties negotiated that every employee receives some €3,000 net. And we did that also in our corporate business unit. And this is a kind of a one-time payment. effect that was paid out in Q1. So there were a couple of one-off effects in Q1, and therefore the increase of €3.1 million in our EBITDA there is not a recurring effect. We tend to go back to the level of what we saw also in Q1 2022, which is a kind of a normalized result that we also should see in the later quarters. Last but not least, a look on our other KPIs and you see that our balance sheet tends to stabilize in a certain way. Our net research, we are quite happy with €15.2 million. Why are we happy with €15.2 million, where last year was €21.8 million? In last year, we had a one-off effect with the sale of our Griesheim activity. You know, there was an idle site in Frankfurt, Griesheim, and we were able to sell it, and some of the effects already came in in the first quarter 2022 with €8.5 million. If you take this in account, then this €15.2 million, a decent development that we see there, and we are happy with this figure. Our equity ratio is reached almost 40%, 39.5. Hardly any currency effects, hardly any interest rate effects. This is just the net result, which stands for the increase. And we could achieve that with, let's say, flat net debt figures. Our leverage is still at a very healthy 1.0. Our ROSI reached 11.5% and has slightly improved. I think it's a solid start into the year 2023 that we saw so far. And having said that, I would like to hand over to Thorsten.

Thomas, thanks a lot. Next slide, please. I would like to explain to you what happened in our carbon fiber division. And for those of you who followed SGL longer, you know that SGL stepped into carbon fibers. to serve BMW with carbon fibers to build special car models like the BMW i3. And exactly this model, which was supplied by SGL Carbon, was discontinued by mid of last year. And the carbon fiber which we are producing is a so-called heavy tow fiber. And this fiber only goes into cars or into wind energy. And we are working with our R&D departments on special types of this heavy tow fiber to bring it into hydrogen pressure vessels and also to aerospace industry. But for the time being, we only can serve the wind energy or the car industry. And as you know, BMW will not return and no other car manufacturer copied the way to produce automotive chassis by carbon fiber. So we went into wind energy and compensated it with our carbon fibers. And on this slide, an illustrative value chain is depicted. And you see on the left-hand side our carbon fibers. This is heavy-toe carbon fiber delivered on spools and blades of wind turbines, which are longer than 100 meter need exactly our heavy tow carbon fiber. But we don't sell it to the OEMs, to the wind turbine manufacturers. We sell it to converters and they produce something which is on the second picture, which we call a belt. And the belt consists of a lot of carbon fibers with some resin which glues it together. And those belts have the same length as the wind turbine blade. And you can see in this sectional view or in this cut view of a blade that there are two belts in which gives the blade stability, that the wind pressure cannot destroy such a belt. And above 100 meters, you cannot construct a blade without carbon fiber. So the converters and the companies which are active in this conversion business are Chinese companies like PG Techs or Aocheng and also European companies like Fiberline. They sell the carbon fiber belts to the wind turbine manufacturers. And you know some of these companies, for example, Vesta, Siemens, Gamesa, Nordex or GE. And they produce the wind turbines. and sell the wind turbines to their customers, which are the wind park operators. And on this fourth value step, it came to a standstill. The investment in new wind parks was in 2022 on a 10 years low. And this is really a paradox. If you look into the European Green Deal, there should be a much higher investment. And exactly this is depicted here. The European Union sets itself a target of additional 31 gigawatts every year. And you can see in this diagram on the left side the reality. In 2020, the European Union invested half, 15.1 instead of 31 gigawatt hours. 19 in 2021 and last year was only 10 million investment in new wind parks. And also for 2023, for the first half year, we see no improvement of this situation. So we need wind energy. We have a target of additionally 31 hours every year, but the wind park owners are not investing in wind energy. What is the reason for this? You know about inflation and increase of raw materials and the raw material cost. for wind turbine increased in 2022 by almost 40%. And if you look into the P&L statements of the OEMs of Vesta, Siemens, Gamesa, they either make losses or were close to zero. So very, very bad profitability of those OEMs. And they increased the prices for wind turbines heavily. So an average price increase is between 20 and 30%. Additionally, we have long-term permitting processes and European Union promised to speed this up. The biggest obstacle were, and we call it here on this slide, uncoordinated government intervention measures into the energy markets. And you know in Portugal and Spain and Germany and Austria, everywhere governments tried to find a cap for the gas and the electricity price. In such situations when you don't know what the long-term energy price will be, it's very difficult to do a long-term investment in a wind park because you cannot judge if the investment will be profitable or not. And this is, again, negatively fueled by rising interest rates. And this together brought the investment in wind energy to a 10 years low. So are we worried about this? Short-term, yes, the situation is not nice for us, but long-term, all signals are on grow. And you have read, for example, about the Ostende Conference, which was two weeks ago, and the state has decided to double the increase of offshore wind energy. which means that the European target of additionally 31 gigawatt hours maybe will be boosted to 40 gigawatt hours or above. So midterm, we expect double digit growth in carbon fibers for wind energy for offshore and onshore wind energy. And this is only the European part. There's also the Inflation Reduction Act and in USA, lines to transfer the electricity from offshore wind energy, which will be supported heavily by tax cuts. The lines to transport the energy are supported with a grant of 1 billion US dollar. And US also stuffed their admin departments to speed up the permitting process. So we expect a strong growth in wind energy in Europe, in China, and via the Inflation Reduction Act also in US. So short-term, bad messages, mid-term, we will come back to double-digit growth. Okay, this was our explanation for our carbon, business unit carbon fibers, and I would like to conclude With our summary, what you have seen, stable sales growth with plus 4.7%. EBITDA has grown over proportionally with 9%. And we confirmed our guidance sales on prior year level and EBITDA between 160 and 180 million euro. Our business is pretty stable for three business units. GS is really benefiting from the semiconductor industry. Our business unit PT and CS are running very, very well with a large order backlog. We benefited from a product mix effect and shifted some of our graphite business into the semi-con industry, which has higher margins. And we invested one third more CAPEX than in the prior year. to fuel the rising demands in graphite business. The market, silicon carbide is growing and we will participate with our graphite products in the silicon carbide markets and I would like to use this occasion to invite you to a talk which we give on May 24th. Claudia will send you an invitation where we talk one or two hours about our our role in the silicon carbide industry. The title is The Future is Silicon Carbide, and you are all invited to this call. The call-offs, especially from automotive industry, are very solid, and we have explained to you the temporary dip in wind industry. With this, I would like to hand back to Claudia.

Yes, thank you. Now you have got the ability to ask questions, and then you can get back to the operator to explain the technical details.

Ladies and gentlemen, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to move yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the headset before making your selections. Anyone who has a question may press star or float by one at this time. One moment for the first question, please. The first question is from the line of Andreas Heine with Stiefel.

Yes, thanks for the opportunity to ask questions. I have several I would like to ask them one by one. Starting with the carbon fiber, you have elucidated on the wind energy part. Could you spend some words on how the textile market, which is also quite volatile, developing, and how you see that going forward in 2023? That's the first question.

Thank you, Andreas, very much for this question. So with textile, you mean the textile industry, for example, for clothes and garments. This is what you call textiles, right?

Well, basically, how you are in the radio business.

Okay, for all who are not so deep in this, we run a factory in Lavradio where we operate eight lines. And two of the eight lines produce precursor molecules or precursor fibers for the carbon fiber business. The remaining six lines go into the textile industry. And we are... Yeah, we are positively surprised. This business is running pretty well or stable compared to the first quarter of last year. But we tried to shift this textile business to higher margin business. And we did some interesting investments into pigmented fibers. And pigmented fibers are special textiles. It's a niche market, a high margin niche market, where we go, for example, into sales for sailboats or sun protection products. And there you need chemically bound dyes, which we call pigmented fibers. And we already converted the first line of the six remaining textile lines to this pigmented fiber business to lift up the margin again. But to your question, textile business in La Varadio is running stable currently.

Thanks for that. And then on your site screening, so you have done Two disposits, one in India and the other one, Gardena, in the US. Is there more to come? So are you in the midst of the screening process or more at the end?

Yeah, this question can be answered easily, Andreas. I think we are, for the time being, at the end. I think we've done our homework and with all the requirements that come to us with minimum taxation, with ESG and everything. plus the profitability and the investment needs. Those two sites were the one who we would like to get rid of also business-wise. And with that, I think we are more or less done for the time being with our site screening. We've seen some inefficiencies which we would love to overcome. However, we all know that SGL has formally been built up in a buy and build strategy. And the cost, because we are very fixed cost, a burned company, to shift production or to move something is very costly and the paybacks are simply not there. And therefore, yeah, we see some other potential, but not in a profitable way that where we can, you know, where the synergies and the cost savings would overcome the one-off cost. Therefore, this is not in a good... Yeah, that's not a good ratio. For the time being, we're done.

Okay. Okay. Thanks. Next question is on the graphite solutions. Could you outline a little bit more in detail what your CapEx projects are and how you de-bottleneck and expand capacities in an efficient way for the growth in silicon carbide specifically?

Sure. Yes, Andreas, I give the same answer which I gave last time. We invest into the whole value chain. We are not opening another new site. And this is low-cost de-bottlenecking on several steps in the value chain affecting most of our GS sites. And I invite you to our presentation on the 24th, and there we will go more into detail.

Oh, that sounds good. Then I have to be patient. It's not my strength, but I will try. The very last question is on composite solutions. You have really strong growth there. The last capacity addition, I think, was in Adelphia for not much more than 4.5 million U.S. dollars. I wonder whether you get close to your capacities again and whether you might look for also not capex intense capacity additions for this nice small segment.

Andreas, you are right. We invested into Akadelfia, but Akadelfia I would call more an assembly plant. The main production which we have in composite solutions is in Austria. There we have two production sites in the cities Ort and Ried. And both run pretty well. The one is for large-scale solutions where we produce, for example, leaf springs or the battery cases for big American automotive supplies, which are later on assembled in Arcadelfia. The second one, our small-scale solution business, there we produce, for example, carbon fiber parts for Porsche. And especially the very expensive cars, they run at capacity, and the call-offs from the expensive car makers are... are boosted by 50% or more. And we also run there at capacity. And so it is a very, very positive development. And currently we see no end of this development. And you are right. If another big project would drop into the business unit CS, we have to think about a bigger capacity expansion.

You rightly said that Academia was an assembly unit. If you expand READ, which I guess would be... No, no.

READ is a lot of manual work, and we do, for example, for Porsche, the Aero Kit, which is the wing or different parts which are made of carbon fiber and glass fiber. There we still have some room to expand. Okay. Our bottleneck is more in the arts plant, which is highly automized. And there we are limited by the building and also by machinery. We had to invest in both. And these are large-scale projects, which are not yet on the horizon that we can talk about. But if this comes, we talk about a significant investment.

Understood. Thanks. Then I go back to the line. That's not my question. Okay. Thanks. Bye. Thank you.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one on your telephone. The next question is from the line of Lukasz Spang with Tegel's Capital. Your question, please.

Yes. Hi. Good afternoon. Maybe coming back to the last question of Mr. Heineck. So first of all, thanks for the good expectation management in terms of the ball speed contract. I think that was very helpful. But did I get it right? In the short term, we should not expect similar contracts, but going forward, you do not rule out further or similar contracts like with ball speed, is this right? Yeah.

Yeah, I think you are right. I'm not 100% sure if I understood your question, because at the beginning you were saying you are trying to go back to the last question of Andreas Heine. The last question was on composite solution. Your question... Oh, okay, sorry.

Never mind.

You're talking about Dreyfus solution. If you're talking about Dreyfus solution, you are right. And this is exactly what we said. We invest more. than maybe the years before, but only because of the fact that we get customer down payments. And you are right, world speed was definitely a significant one that we received, but it's also true that we received some customer down payments also from other parties and there's more to come.

More to come in short term or more in the midterm?

And you are also invited on the 24th of May to listen to our silicon carbide presentation. But to show you our double cushion, which I see. First is we are doing this kind of deals with quite a lot of customers. So we are not relying on the performance of a single customer like Wolfspeed. If Wolfspeed has a weakness, we can compensate with other customers where we have similar agreements. Second caution is we don't deliver silicon carbide. So if the silicon carbide business is in a weakness, we are a graphite supplier. And my sentence is graphite is graphite. If silicon carbide is not buying the graphite, we can shift back to LED industry, to solar industry or whatever. So we are double secured in this business and I feel pretty relaxed.

Okay. And then on Prefab Solutions as well, in your full year outlook, you have this significant, slightly higher revenue outlook, which is up to 10%, but Q1 was above this level. So do you see any reasons in the coming quarters that demand or revenue growth or growth momentum will go down that we will see a single digit growth number for the full year?

The problem we see here a little bit, I wouldn't say problem, but there are some overlaying and compensating effects. You know that sales is always quantity times price, and we already increased the prices in the second half of the year, which boosted also the profitability, especially in the last six months of 2022 already. And the closer we get to the relevant timeframe there as well, Then additional price increases in 2023 were very hard to implement. And then you don't have the price effect anymore. In Q1, the price effect was definitely there because we also shifted, again, a lot of capacity out of solar into semiconductor in general and silicon carbide in particular. but one day it's very difficult that you can't shift more than 100%. And therefore, this will sooner or later come to a kind of a flattening, also margin-wise. And therefore, maybe we might be a little bit higher, but we didn't adjust our guidance for the individual business units on Q1 now, because I think there's still a lot of months to go in the year 2023. So far in our overall guidance, we stick to what we've said. But this might vary in the course of the year for the individual business units.

So could you give us a rough indication how much of the 17% for price increase?

The most is product mix effects. This is what we can clearly say. I would say less than a single-digit effect of the growth is a price. Most of it is product mix, and the rest is expansion because this doesn't, as Thorsten was saying, we are investing heavily, but these investments take some time that we get it. It's all specialty machinery. It takes a lot of infrastructure. And again, until you really have a start of production and then it comes to the next bottleneck, This is really a lot of balancing the relevant CAPEX project that we have there. And there are many sides of our graphite solutions there, but this would be roughly the split. So a single digit percentage, I would say is price. A large extent is product mix. And yeah, maybe the same level as price is also expansion. Okay.

And then to CAPEX, is Q1... a good run rate for the coming quarters?

We are running on full steam, Mr. Schwang, absolutely. And you can, the way we get the down payments, it's the way we scheduled it. And again, maybe you call it expectation management. I think it's a good run rate, yeah. Okay, thanks.

The next question is from the line of Sven Zauer with Kepler Shriver. Your question, please.

Hello, gentlemen, or ladies and gentlemen, hello. Thanks for taking my questions. I have three, two of them regarding the graphite solution segment. I will start with the third question. You bought back some convertible bonds in Q1, if I'm not mistaken. I was just wondering what your plan is for the remaining year in this topic.

Yeah, that's an easy one. You are right, we are sitting on a lot of cash and you know that we took first part of our refinancing was last year in September to issue a new convert in the same moment we bought back a large portion of our existing convert which would have expired September this year and some for whatever reason some 30 million nobody wants to offer us at that point of time, despite we issued a new convert with a far more attractive coupon, but nevermind. We said 31.2 million that were still outstanding. We were able to force it and squeeze it out. And this is exactly what we did on the 31st of March. At that point of time, we kind of called the remaining quantities of the convert and it's now fully, fully paid back at a hundred. So the convert, which was due to expire in September 23, is fully refinanced and fully paid back by us. And therefore, there's also nothing more to come in the course of the year because this is over. Our new convert runs for, I think we have a good maturity profile. for another couple of years, so there's no need to already touch that. Our next challenge after we already set up and kind of, yeah, not refinance, but prolonged or extended or amended, increased our RCF, which is good. The next big thing we have to refinance is our corporate bond, which expires September 2024. But we've still got some time to make up our mind on how to tackle that one.

Okay, that's clear. Okay, then maybe moving on to the graphite solution segment. So it's now roughly 50% of group sales and, of course, will become even bigger because you're investing in the segment. I mean, is there some kind of number that you have in your heads what you are targeting as percentage of group sales in the next, say, five, five years and on top of this, I mean, this has probably been asked over the past quarters, but have you, I mean, would this be a consideration selling one of the other business units to even expand more in the graphite solution segment?

Yes, Sven, we have currently no plans to sell any of our businesses. We are pretty satisfied and we are sure that we can turn carbon fibers around. And we have no sales target because we expect growth also in the small business units, but especially the silicon carbide business, we want to grow significantly and we give you more details on the 24th. Sorry to give you the same answer.

You fully understand. Great, thanks. I'm looking forward to it.

And I hope at least you three will show up during the conference.

No, I will definitely tune in. And the last question on the GS, I mean, if you can answer it, then yes, maybe then in two weeks. So, I mean, you don't speak about your clients, right, in the semiconductor business, which I understand, but I think it's fair to assume that you probably serve all of the major semiconductor suppliers in the world. And, I mean, apparently there are some of these semiconductor suppliers that are able to produce or actually have the entire supply chain for the production of silicon carbide chips in-house. And I was wondering, do you see this as a risk, even a slight risk for other players also pursuing this vertical integration or are the entry barriers just too high?

Yeah. For this, you have to understand the value chain. And for us, of biggest interest are the so-called bull manufacturers. They make the crystal which you use for cutting the wafers and then in the next step producing the ships. And we deliver graphite parts to the first step of the value chain. And the more players are active there, the better for us. The more scarcity we see in graphite, and I can tell you the producer of those spools of the single crystals, they are pretty nervous to get enough graphite to fuse their production plants. So the more players in the market, the better for us. And we are not in contact with everyone, but I would say 80% of the industry is buying from us.

Perfect. Very clear. Thank you very much.

The next question is from the line of Andreas Heine with Stiefel.

Yeah, one follow-up, please. I asked this already a quarter ago, but now we are more of 2023 has passed. Maybe you can update us where you stand in a year-on-year comparison on energy costs and what you see from the raw material cost trends.

Yes, Andreas, I'm sorry, I don't know the figures by heart, but you know, we have to secure energy at a certain point of time. We cannot go with our Semicon downstream business in a situation where we purely rely on spot business. And this is why we did some hedges by end of last year as the first downturn of energy prices was visible. So we are only benefiting for 20-30% from the very low spot prices. So maybe we hedged too early and the decrease of energy cost is for us not as big as you might think. The raw material cost in general, they stay on the same level as end of last year, but now a decrease is starting, and we knock on the door of every of our suppliers to decrease the cost. We see a very low utilization, especially of the chemical industry, and they are in a process to negotiate with us some price decreases. We expect something for the second half of the year, but currently raw materials are a little bit below the level of last year.

But on energy, I do understand that hedging is complicated. You never will be always on the bright side by doing so. But from what you said, I can assume that the energy cost 2023 will be lower. Maybe not by much, but They will not be higher. They will be lower than last year.

I think in the total effect, our energy costs are higher than last year. This is what I think was an average. But again, there's another eight months to go from last year. There's another eight months to come for this. But I think in total, if you look at the mix and the level that we hatched, it's higher. You have to bear in mind we are securing, we are hatching in order to secure our production capabilities because it's so cost-intensive and so capital cost-intensive. We have to make sure that we can produce by all means. This is the utmost prerequisite that we have. And therefore, we have a schedule which we follow. And as I said, sometimes you win, sometimes you lose. And I can't give you the exact number, but energy cost being electricity and gas is a little bit higher than last year.

Andrea, thanks. Andrea, okay. The next question.

The next question is from the line of Thomas Junghans with Berenberg. Your question, please.

Good afternoon also from my side. I didn't want to interrupt you. So if you would like to keep on with your explanations for Mr. Heine, please go ahead.

No, Thomas, everything is fine.

Okay, okay, okay. I have two questions. The first question is a really short one with respect to process technology. What is the book-to-bill ratio?

Book-to-bill ratio is above one. It's currently 1.1.

Perfect. Thanks. And the second question is with respect to the customer concentration in the Graphite Solutions business unit. Maybe you can elaborate on this a little bit. What percentage of sales in the semiconductor business do, for example, the three largest customers account for? Could you provide us a little bit more color on the customer concentration here?

I'm not 100% sure if patience is also your biggest strength, but this time I take the answer from Thorsten, but If you have a little bit more patience and wait until the 24th of May, then we can work on that a little bit more together. I think we give you a comprehensive overview of what we have in our silicon carbide business and where we try to develop that into. Thanks for your understanding. Great.

Yes, sure. Bye-bye.

There are no further questions, and I hand back to Claudia Kellert.

Yes, thanks, everyone, for your participation. You will find today's presentation on our webpage as well as our Q1 statement. And if you have further questions, please call the Investor Relations Department, Jürgen Reck or myself. Thanks a lot, and have a fantastic weekend. Bye-bye.

Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.