Sgl Group Ord

Yeah, a very warm welcome from our side as well to our nine-month figures. As always, our CEO, Thorsten Derr, and our CFO, Thomas Dippold, will present our financials and give you a little bit more insight about the business development. After the presentation, you will have enough time to answer your questions. I hand over to Thorsten Derr.

Yes, Claudia, thank you very much. Good afternoon, everyone. We are very happy to report that both parameters, our group sales and our EBITDA pre are in the expected range. Our group sales are at 821.7 million euro. Our EBITDA pre is on 130 million euro. And this, despite a significant decline, in the wind market, which is heavily affecting our business unit carbon fiber. The business unit carbon fiber we had to impair some months ago by 44.7 million. All our other BU's are on record level, especially our biggest business unit graphite solution driven by a strong semiconductor market is on record high, and this is driven by customers out of the silicon carbide segment. In this segment, we are running with two graphite types, porous graphite and isostatic graphite at capacity. This is why we expanded our capex by one-third to expand the capacities and meet the strong demand. Our guidance was Sales on previous year EBITDA between 160 and 180 million euro, and we confirm both the sales and the EBITDA guidance, but EBITDA on the lower end of the corridor. Having this said, I hand over to my colleague, our CFO, Thomas DePolt.

Hello, everybody. This is Thomas DePolt, and I have the pleasure to explain a little bit more in-depth how our business unit and our overall business is developing. On this slide, number five, you can see how sales and also EVDA perform. Torsten already mentioned that we confirm our stabilization year, as we have always called it, the year 2023. Why that? Because we knew going into 2023 that we no longer have the first six months of the year with a BMW take-or-pay contract in our carbon fiber business unit and in our composite solutions business unit. We've sold our business in Gardena beginning of the year, and therefore also the top line and also EBDA contribution will no longer be in these relevant business units. And this is something that we have to compensate. And in fact, we did on a group level, our turnover went down 3.8%. If you take into consideration some FX effects with the currencies, it's less than 2%. So we are perfectly in line to what we've said and what we guided to you. Our EBITDA pre is, however, 4.5% lower. But after nine months, I think this is also a tiny deviation that we see there. In fact, we confirmed a stabilization year. I think it's worth mentioning that our graphite solutions business unit, as Thorsten called it, the most important pillar of our portfolio. now stands for more than 50% after nine months of the year 2023. So the importance of this business unit, which is developing very nicely, is gaining more and more importance. And carbon fiber, in the meantime, is coming down from 30% to a little bit more than 20%. So the importance and contribution of this business unit is decreasing by far. The smaller ones are catching up. and now stand for 11 or 40% respectively, and corporate remains just a remainder for all other businesses that we have in the group. On slide number six, you see the development of graphite solution, and this is an ongoing success story. Coming from 382.5 million after nine months last year, we now reach 418.4, which is up almost 10%, 9.4 to be precise, and this is mainly attributable to a very strong increase in semiconductor business. We went up by 38.5% in this respective business, and this is mainly driven by silicon carbide sales, as Thorsten already pointed out. This is also where we focus to increase our capacity, and this is really going very much up and contributing to our growth. We are running on full steam In our capacities, the capacity almost fully utilized for graphic components. Automotive and industrial applications, the business that we conventionally have in older existing businesses, so to speak, so-so, we call it stable. But there are also some products which are even deteriorating. But this is all overcome by the very strong semiconductor industry and also solar, battery materials, and chemicals industry. are decreasing even. But again, in fact, everything can be fully compensated and 10% on top with mainly strong semiconductor sales. As we always promised, our profitability grows twice as much as our top line. EBITDA went up by 18.5%, now reaching 99.5% after nine months of the year 2023. Where does it come from? Mainly the very strong silicon carbide sales that contribute with a high margin to this development. We are fully loaded. We are diluting, so to speak, the fixed cost on the product. And if you neglect businesses like solar and maybe also even conventional semiconductor business for the sake of higher silicon carbide products, then this result can be achieved. In fact, we have now reached a 23.8% margin EVDA per sales. This is a record high. Some three years ago, we were at 15 point something, and now we are reaching almost 24%. A good development, as promised. Slide number seven, you see process technology. Another very strong development, and as Torsten already pointed out, another business unit reaching all-time highs after nine months of a year. So process technology went up in the sales by almost 25%, reaching 24.3% increase, and now standing at 95.7 billion euro after nine months of this year. Where does it come from? As we always said, we have a very strong order book as we went into the year 2023. And we are continuing in acquiring good, good, good and profitable orders. So also for the next couple of months, normally you have an order book that lasts for six to nine months. We are not worried about the top line of process technology. That really looks promising. And we are standing also regional-wise on three legs. We have growth in all three regions where we are active, in the United States, in Europe, but also in Asia and there mainly China. Our profitability... was unexpectedly high. That's also something that we like very much how process tech is contributing, coming from 7.5 after nine months of last year to now reaching 17.5. So it's an increase of more than 100%. Where does it come from? A very strong parts and service business. We know exactly that chemical industry is partially down and deteriorating in Europe And what do the process tech guys do? They approach our chemical customers. They say, this is now the time for maintenance and refurbishment. And they overhaul and they do some service business to make sure that the heat exchanges and the synthesis plants are working properly. And in fact, they're making some good money with the service business. I think we are fully loaded. We have very positive mixed effects and we continue in our margin over volume strategy. And in fact, this is the outcome what we see here. We reach an 18.3% margin in this business unit. This is something we've never seen. And this is good business and we like it very much. Our problem child, as Thorsten already pointed out, in this year is carbon fiber. We knew that we might have some deviation because last year, for comparison, in the first six months of the year, we still had the profitable take-or-pay contract on the BMW i3. We knew that this can't be repeated after this model expired at half-year. And we went into the wind industry for that, and it went extremely well in the second half of last year. However, especially since beginning of the year, the wind market came to a, especially offshore, came to a complete standstill. And you see that our top line went down by 33%, which is 90 million less sales than last year. And we still confirm our sales and profit guidance. That also shows how strong, on the other hand, all other businesses are. And you see that our EBITDA pre is hardly positive with 3.2 million. And we say it very clearly. This includes the contribution of that equity result of our joint venture that we have with Spremba, our so-called BSCCB, which contribute with 14.1 million euro into this result. So if you deduct it, we would be at roughly minus 10, minus 11 million euro. and this business unit, respectively, from our operative performance. Why did it deteriorate compared to half-year, especially in Q3, so much? Because we idle capacity. We don't want to ramp up or build up our working capital and inventories in that respect, and we really adjusted our production levels to the sales that we can make on this very low level, And there will be idle and, most of all, quite a bit of production. And we have to cope with fixed costs that arise from that. But, I mean, if you have a technical problem, you can solve it. If you have a cost problem, you have to restructure. But if your market simply is missing, there's hardly anything you can do against except idling capacity. And this is what we do. You can be very sure that we try to optimize the cost position as much as we can and also try to work on solutions. But you also... have seen that at half year that we had to do an impairment of 44.7 million Euro based on the triggering event that we had with rising capital costs and the poor performance that we had in the wind market at half year. Another very good business unit that we have in our portfolio, and this is three to one as it stands now, is Composite Solutions. And you see the development on slide number nine. Sales went up by 3%, and this is overcompensating the sales that we had last year in our Gardena site. So despite losing the Gardena business, they overcompensate the sales growth, and they go up from 111 to 140 million in the top line, which is fantastic. And when we go to the bottom line, their development is even more remarkable. we almost go up by €2 million and now reaching an overall margin of 13.3%. However, you have to bear in mind, last year Gardena was in, plus a one-off effect from a cancelled project, which is to be dealt in an operative result of 3.7%. So this is non-recurring. If you deduct it and take out Gardena, I know it's a little bit complicated and I have to make all this bridge calculation and transitions. But I just want to highlight that the €16.6 million EVDA in the first nine months of this year is very remarkable when you compare it to last year's performance. Who is the driver behind? Mainly the large series business. We know exactly that we are dependent on certain projects in automotive industry. We are in the meantime a pure play automotive industry. And we have good projects in our portfolio. But there also will be some variances. These projects change every year. But at the moment, we are very happy with the development that we have. Last but not least, and also for comparison, just to make it complete, our business unit, which is non-operative corporate, they stand for roughly 14 million in sales. And however, half of it is coming from... the Gardena sales and also Pune sales for the first couple of weeks of this respective fiscal year. We had a technical effect last year where we had a one-time effect of 6.6 million. In fact, you see that the sales in corporate is not really, really relevant for us. Our EBITDA pre, however, has improved or has been cut to half, so to speak, as it is negative figures as this is the remaining cost position. This is positive for the overall performance of the business unit. So where does it come from? Overall, or generally speaking, a very good cost and cash management that we have. The other thing, we have lower provisions with our results that we currently have, which is at the lower end of the guidance. So the variable compensation and the provisions we make through the course of the year for that is significantly lower. than the variable compensation provision we had last year. And this is mainly driving these results. So having said that, maybe a small look at our bottom line and also the balance sheet. You see that our net result is very tiny if you compare it to the nine-month figure of 2022. Why is that? Because of the impairment that we had at half-year. if you put the 45 million roughly on top of the 5 million that we have in the first nine months of 2023, then there would be roughly 50 million euro, and 50 compared to 70, and also last year we had some one-off effects in there, then we are on a very good way. However, there was an impairment, and our net result is very tiny at the moment, and we don't have a net result pre, so in fact this is really at the bottom line, and the bottom line is the bottom line. However, another positive quarter in SGL with a positive net result. And this is also just the case for the last three years. In the years before, the situation looked far, far, far different. Our equity ratio, despite the impairment that we just mentioned, rose by a full four percentage points and are a super healthy 42.5%. and our net financial debt, despite the heavy CapEx that Thorsten already mentioned, could be kept stable, so to speak, or even lowered a little bit. CapEx is worthwhile mentioning. CapEx has reached 60, almost 60 million in the first nine months of the year. This is more, almost 20% more than what we have invested in the last year, 2022, And this shows very clearly that we follow our path, which we always mention to you guys, that we invest into this very profitable graphite solutions business, and there especially the expansion of our silicon carbide capacities. And this will contribute to the sales growth and also profitability of SGL in the next months and years. And with that, I hand over to Torsten, who will explain a little bit more our silicon carbide business and what it means for us.