Sgl Group Ord

Ladies and gentlemen, welcome to the SGL carbon conference call first half results 2024 conference call. I am Maria, the course call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Claudia Kellert. Please go ahead.

Yes, thank you. A very warm welcome to our conference call about the first half 2024. As always, our board members, Dr. Thorsten Daer and Thomas Dippelt, will give you more details about the business development and our expectations for the upcoming months. Now I hand over to Mr. De Pold, our CFO.

Thank you, Claudia. Hi, this is Thomas. Thomas De Pold. It's a pleasure talking to you. I'm pleasure to introduce our H1 figures and share this with you. What you can see here is a summary and how we phrase our H1 figures, which we are about to present to you. Our development in the first six months of the year is very much in line with what we guided when we presented the full year figures 2023 with you when we shared this. So we are very happy with the development we saw in the first six months of the year. And overall, it looks like this on a group level. Our sales went down by 4%, last year 560 million and now reaching 538 million. This is a decline of 21.5 million or 4%. If you adjusted for currency and also for some portfolio measures, you remember that we sold Gardena in the United States and also Pune, the two businesses or legal entities in previous times, and we had some remaining sales which we put into corporate at the beginning of the year 2023. So if you took this out like for like, and also took out the currency adjustment, our sales dropped by 2.2%. However, our EBITDA-3 went down by 1.7% or 1.5 million, now reaching 86.5 million Euro, compared to 88 the year before. That shows that our margin went up. So when the result declines lesser than the sales, that helps that we increase the margin. We now have a very healthy 16.1% EVDA per sales margin, and we're very happy with that development. And what contributed to that are two things. It's mainly the product mix change that we continuously see in our graphite solution business, which has a positive effect on the EVDA pre-margin. but also the decline of the loss-making entities that also help very much that our portfolio gets more and more profitable. When we come to the business units, what you can see here on the next slide, slide number five, for those who can follow the presentation online but have it on paper on their laptops. Graphite solution has significantly improved the profitability, and this is mainly because the main driver is semiconductor and the LED business, as it used to be also in the quarters before. However, the increase on a year-on-year level slowed down to 30%. You probably remember in Q1, the year-on-year comparison was 34% increase, and this has significantly declined. in H1 or with Q1 and Q2, but we are still up 13% compared to last year, and we have a separate chapter on that, and Torsten will present a little bit our assumption and our view on silicon carbide development in particular. In total, graphite solution went up by 1.3%, reaching now 284.2 million euro in sales in H1 2024 compared to 280 million last year. The other businesses besides semiconductor, be it fuel cell components, be it industrial businesses, but also graphite and load material and other businesses that are here, they are really burdened with the economic development that we see. So there we saw even in some of the business a slight decline. So in total, the sales went up by 1.3%. The profitability, which we measure in EBITDA pre on a business unit level, however, went up in double digits, now reaching 10.9% up, and the total is €72.2 million, what we achieved in the first six months of the year, compared to €65 million the year before. Where does it come from? Again, mainly because of the growth that we see in silicon carbide, but also the product mix and the higher volumes that we see, and also the shift from solar business and the conventional or classic semiconductor business into silicon carbide, we reach a very healthy 25.4% EBTA pre-margin there. However, Q1 was 25.9. The next business unit, which you can see on slide number six, is process tech. And in process tech, I think this is really a fantastic achievement, what you can see here from the management. Sales went up to almost 70 million, reaching 69.9, and this is an increase of 8.5% compared to last year. And where does it come from? We still see a very, very good order book in our project pipeline. We still see a lot of demand from parts and service business. And we are standing on three legs on a regional perspective with the United States, with Europe, but also with our Asian sites. And they all contribute in the project business, in the equipment business, and also in the parts and service business. And if one of the businesses is a little bit weaker or one project is delayed or pushed out, then we just continue pushing for sales and services. This is a very balanced portfolio that they have. This is a very balanced development, and we see a lot of success in being awarded with this new project. When we look at the profitability, I know exactly that we always told you that 18% might be the top of the pops and that the margin can't be increased any further. 18.5 in H1 2023, and we now see 22.9%. Now, if you ask me, can this be ever topped and increased any further? No, I really say this is the end of the story. And beyond that, it's very hard to achieve something. But it's a fantastic development, what we see here. Our EBITDA pre is 16 million flat, what we achieved in the first six months of the year. And when you compare that to last year, where we not even have reached 12 million, I think this shows a strong development on both sides, on growth, but also on working on the profitability. The business unit, which worries us continuously, is carbon fiber. There we don't see any further development, which is good. So obviously sales decreases in nearly all carbon fiber markets, not only the wind market, but also other fiber markets which we serve, and we see a very slow demand in almost all aspects. We also see negative price trends, especially for commodity products, wherever we are competing with others, and we have some overcapacity in the markets. That also is reflected in our sales development, which went down 12% compared to last year, now reaching 110%. compared to 125 last year. And this is also reflected in our profitability in the EBITDA pre. This went down as we expected. I have to point out by 10.5 million Euro now reaching minus 4.4 million Euro compared to 6.1 positives last year in the first six months of 2023. Where does it come from? In this, you also have to bear in mind there's a certain equity contribution from our joint venture, BCCB. Last year, it was roughly 10 million. This year, it's 7.7 million, which is in there. So if we deduct the 7.7, then the real operative performance of our carbon fiber business unit would be minus 12.1 million euros. which is not good, but exactly in line with what we planned for 2024. Why is there a certain decline in the loss-making compared to Q1? Because in Q2, we started some stronger restructuring measures, so we had some major layoffs in our Scottish side, and also some other cost aspect where we idled some other lines, and all this contributed that the losses did not develop as it was in Q1. So we could limit that a little bit. And we also see a little bit of stronger H2. Coming to the last operative business unit, which is composite solutions. Composite solutions. We see a negative impact on both on sales and also on our earnings, thanks to the termination of the automotive contract. We have already told you in our Q1 call that a project was about to be terminated in the United States with US-American OEM, which was very beneficial and very profitable for us. contract has been terminated by the OEM prematurely. We also expect maybe a compensation payment in the second half of the year, but this hit our top line with 16% decline, now reaching 66.9 million Euro compared to 79 million Euro last year. And also the profitability, it took a major hit on that, where we went down by 34.1%, now reaching 8.1 million Euro. There will be a certain recovery in the second half of the year, especially when we talk about this kind of breakup here, which we're about to negotiate because of the premature termination. But this hasn't been decided yet, and we're just discussing on that. Still, we reach a healthy 12.1% EBDA margin on a six-month business level in 2024, which is not too bad. but definitely not reaching the old heights which we've seen last year where this project was still included, where the margin reached over 15%. On the next page here on slide number nine, you see how our other major key figures have developed. Our net result is roughly 40 million better than last year. But if you bear in mind that in our H1 2023 figures, there was a 44.7 million impairment last year on our carbon fiber business unit. So if we exclude it, then the minus 10, which you see here in H1 2023, would have been plus 34 on a like-for-like basis if you take out this one-off impairment. Then it's very much in line what we have achieved in the first half of 2024 with than apparently with the previous year. Also, free cash flow is positive, as in so many other quarters. We are really making money, making profit, and we continuously show that to our shareholders. Last year, our free cash flow was 20.1 million euro after the first six months of the year, and this year it's 12.4. It's a slight decline, but it's a positive quarter one. It's a positive quarter two that we see here, and in that, 17 million customer down payment, which we collected. Last year was quite a bit more that we collected in the same period. However, we also have to see that it invested a little bit more than last year, and we also had to pay back the first customer down payment in the first two quarters already, which also sums up to roughly 10 million euro. And last but not least, you can see here that our net financial debt went up slightly, or you can also say it remains stable. There's just a 4 million difference between the 116 and the 119 million that you see there. It's very much in line with our conservative and also very healthy spending activities. We see now a leverage of 0.7. We see an equity ratio of 44.3%. So our balance sheet is very healthy. And the ROSI reached 11.3%, which is unchanged to the quarter before. And with that, I would like to hand over to my colleague, Thorsten Thorsten-Dehr, who will guide you through the SIG development and also the outlook for the remains of the year.