Sgl Group Ord

Very warm welcome from the SGL side as well. Time is running. First half of 2016 is behind us, and today we want to discuss and present to you our first half figures and give you a short overview about our expectations for the second half of 2026. Even today, Andreas Klein, our CEO, and Thomas Dippold, our CFO, will lead the presentation and will be able to answer your questions. And now I hand over to Thomas. Please, it's your turn.

Thank you, Claudia. Hello from my side. This is Thomas Dippold. It's my privilege and honor to guide you through our results for the first six months of the year. On slide number four, you can see the overall development of the group. Our total turnover dropped by 30%. or roughly 60 million coming from 453 to now 394 million in the first six months of 2026. Where does this come from to a large extent? From the discontinuation of our loss-making carbon fiber business, which we still had in our books in the first six months last year. Last year in June, we closed our site in Labradio. So they were producing same-dismosed slave for the first five respectively six months of the year before the closure took place and therefore a like-for-like sales decline derived from that which is 50 million. The other 10 million which our total turnover deteriorated from an operational level can be attributed to the high-margin business in Grappler Solutions, where we still see a very slavish development, and the demand for this high-margin silicon carbide business didn't catch up until now. And second, also our process tech business unit suffers from a very weak order intake and order book, which, well, maybe turns a little bit better in the second half of the year, but we come to that when we discuss the business unit. What we have on our contrary is the following. We have compensation payments received. We also mentioned that in the first quarter call, you'll probably remember that, that we already collected the first $7.7 billion in the first quarter of 2026, where we renegotiate the take-or-pay contract, the customer down payment contract with our customer. and another one has been renegotiated, which stands for 21 million. And this is also top line, but also profit and cash for the first six months of this year. And this is what's also in our top line. Our EBITDA-3 deteriorates only by 3.7%, coming from 72.5 million. in the first six months last year to now roughly 70 million in 2026 H1. Where does it come from? On the one hand side, of course, we got rid of the loss-making business in carbon fibers. We see, on the other hand, the down payments or the contract renegotiations and the compensation payments in there. And in the end, it also reflects the weak business in the high margin graphite solution business and the process tech business. Our EBDA pre-margin reaches 17.7% which shows a very healthy margin at least if you include the compensation payment. Coming to graphite solution, the biggest business unit and they stand for more than 50% of our overall sales There we see an increase in the sales coming from 221 million to 234. This is an increase by 6%, but it also includes, as I just said, the compensation payments for the adjustment of the supply contracts for the take-or-pay customers, mainly in the silicon carbide business. If we exclude this, and they would see a slight decline in our turnover by minus 6% which represents the weak economy that they are currently dealing in and a rather stable or maybe slightly negative business in all other market segments. Our EBITDA-3 is up 14.2% coming from 14.8 in the first six months last year to now in H1 2026, 46.6, again affected by the compensation payments. Our EBITDA pre-margin in graph absolution reaches some very healthy, almost 20%, again, slightly negative impacted by currency effects. Process tech, again, a weak quarter, same as Q1. We see a huge drop in our overall turnover by almost 30%, 28.2 to be precise. We reached 70.2 million in the first six months last year, and we now dropped to a little bit more than 50 million in our top line. We still see a very weak market situation. Also, the conflict in the Middle East doesn't help because it also... make sure that every investment decision in the chemical business is currently postponed or at least put on hold. So we see large uncertainties and they are really hitting us with the order placement from our chemical industry customers. We see a lot of maintenance postponements because the assets are not fully utilized and none of the effect is really helping us at least top line-wise in the business of process tech. And as a matter of fact, also EBDA3 is heavily impacted on that. The huge demand which we saw over the development over the last three years where we could increase the margin quite a bit and there was really a very strong demand and our capacities were almost fully loaded and fully utilized. This has turned to the negative. and our EVDA Pre reached 7.3 in the first six months of 2026 whereas we had almost 20 million in the same period of time last year. The market situation as everybody on our level of the value chain is underutilized. There's price pressure from the few orders that are out there in the market and the margin decrease then as a matter of fact to 14.5% coming from 28.3% in the same period last year. Last but not least, on slide number seven, we show you the development of our fiber composite business. As a reminder, fiber composite since beginning of the year is a combination of the former business units, carbon fiber, and Composite Solutions. We merged the two businesses as we restructured carbon fiber to a profitable core. And there you see also a sales decline by a little bit more than one third coming from 150 million last year to now roughly 100 million in H1 2026. This is exactly the aforementioned decline coming from the restructuring. This is 50 million. which stands for the continued business that we had in the first six months last year until the closure of Lavradio and then subsequently in Q3 the idling of the capacities in Moses Lake, United States. And this was expected and if you turn it around and you see that all our other business or the continued business with carbon fiber is at least flat and we can keep our sales When you look at the bottom line at our EBITDA-3, there you see a huge improvement in profitability coming from €10.6 million in the first six months last year to now almost €19 million. And I think that clearly shows how successful we were with the restructuring of our carbon fiber business. We also kept our promises. You probably remember that if you follow our calls, we once mentioned that our restructuring cost shall not exceed 50 million Euro over a course of two years. We have accomplished the target. Our overall restructuring cost a little bit more than 40 million and we did it in less than one year, the overall restructuring. So I think we clearly showed that it was a very rigid and consequent restructuring and we made it, so to speak, in time and in budget. In the profitability of our fiber composite business, you see that there's also a contribution from via CCB, our equity consolidated JV with Rambo. It also increased their contribution there, but we don't show any sales. We just show our part of the net result in that. If you take out this margin from the margin, the EBDA pre-margin, then we reach a very healthy 11.5 margin in our fiber composite business, which I think is quite remarkable that after one year of restructuring and the combination of these two business units, we can achieve that. And last but not least, a few more KPIs. on the bottom line of the P&L cash flow and also balance sheet ratios. Our net results improved drastically. It went back into black figures. Last year, it was affected by the restructuring where after six months of the year, we have reached minus 31 negative net results. It turned positive again and improved drastically by more than 40 million euros. We now reach 11.8 million, so it's a very stable black and black development, and without the impairments that we have seen last year, our net results would also have been positive in the same period of time. So SGL continues to show black results, also at the very bottom of the P&L. Same with the free cash flow. The free cash flow, yes, it includes and others who have contributed to the development of the free cash flow. It now reaches a leverage ratio of 0.6. So this is super stable and super healthy. Same with the equity ratio. It increased to almost 40%. The ROC remains stable at roughly 10%. And I think that was a very strong start into 2026. After six months, we're still happy with the way at least the balance sheet and also the bottom line of the P&L develops. and having said that, a hand over to Andreas for his remarks.

Thanks and a warm welcome also from my side. First and foremost, I'm happy that on the basis of the first half Thomas explained, we are well on track to deliver on our guidance 2026. At the same time, HGL Growth 2030 is generating a lot of positive momentum and that's only less than half a year after its rollout. And we want to give you a couple of insights on where we stand and the momentum we have generated so far. In the area of semiconductor, next to the already explained talks with our customers on adapting the existing contracts and building the future collaboration, we currently see a positive momentum in the market, especially in China and SIC. And that's mainly volume, but also price stabilization we are seeing there currently. have to wait a little bit. We have to be a little bit patient how sustainable this is, but the momentum clearly is there, and that's a positive sign. On top of that, successful market launch of our novel coating products continues, and it's clearly possible to say that there is outstanding customer feedback on the performance of these products, and this We will hopefully be able to leverage fully in the calendar year 2027. In the field of nuclear, we have announced on Monday that we have reached a new agreement with X-Energy to expand our nuclear graphite production capacities. And that's mainly affecting our production site in Chet in France. And this investment really positions us as a key supplier and also gives us capacities to develop even beyond our SGL Growth 2030 horizon into the future. In space, we are successfully progressing in establishing and also expanding customer relationships. And that's mainly affecting heat resistant materials for rocket nozzle production. So very positive development penetrating the market here. In the area of defense, we are very active at various trade shows in the source path, really expanding our network in the industry, both in the drone, but also beyond applications. And in the field of drone projects, we have developed first prototype parts, and we are currently in initial sampling and bidding processes. and these processes are running well and we expect to see first relevant contributions in 2028, if not earlier. Last but not least, in aero, we managed to double our production volume as a supplier of materials for retrofit floor panels and due to the structure of that industry, this is really supposed to be a lever into further aero applications for SGL and for our lightweight products. So in summary, it is great to see the SGL Growth 2030 progress so far, and we consider it being well on track towards our 1 billion Euro sales target in 2030. At the same time, we can confirm our guidance 2026, and that's irrespective of still challenging macroeconomics Thank you very much for your attention.

Our first question comes from Lars von Kleff, Deutsche Bank. Please go ahead. Yes, thank you very much. Good afternoon. A couple of smaller questions, if I may. Following the 29 million already received in H1, should we expect further compensation payments from the semiconductor customer for the remainder of 26? And if so, what amount should we build into our models in this case?

Hello, Lance. This is Thomas. Yeah, we are currently in negotiation. As I just said, we have reached agreement with two of the contracts. We are, of course, in discussions with others. Some tend to just expand the contract. Then, of course, it doesn't have an effect with a compensation payment. There might be something coming up in the next quarters, but let's put it this way, the big chunk of it has been renegotiated already.

That's already helpful. Thank you very much. And then looking at the divisions and your guidance, I mean, process technology sales declined 28% in the first half, divisional EBITDA pre more than half. Unless I'm mistaken, you are still guiding for only a slight decline in both metrics for the full year. So my question would be, does this guidance remain valid?

What we see in process is that we see a little bit of stabilization in the order situation right now, but on the low level. We always said that the lead time for at least projects, maybe not in maintenance, that there still might be the need for maintenance and some parts and service business also in the second half of the year if it catches up. This could improve the situation on a short-term basis. But when we talk about the projects, all projects that we get awarded right now will be will be turned into sales maybe beginning of 2027. So we see the development of process tech in the remaining six months of the year on the level where we are right now, maybe a little bit better, but not magic turnaround stories.

That's helpful. Thank you. And then maybe a similar question on fiber composites. Here we saw EBITDA pre-rising almost 80% in H1, yet you are guiding for only a slight improvement for the full year. To me, that looks rather conservative after six months.

This is true, but you also have to see that in a lot of the EBIT improvement, can be attributed to the loss-making business in the first six months of last year, which we just stopped and turned around. And you can't duplicate that in the second half of the year after the business has been closed. Then, of course, it doesn't make any losses anymore. And this positive effect you can have only once. And, of course, then subsequently for Moses Lake, it also goes until August last year. but the big loss making unit was of course Labradio and this is what we closed towards the end of Q2 last year and this is the kind of compensation in there and you also have to bear in mind that our BCCB contribution is also 3 million higher than it was last year so we have to a little bit compare it like for like then maybe what we guided there can be better reconciled.

Understood and much appreciated. And then maybe a quick last one, more or less rather housekeeping on the corporate division, most difficult division to forecast. You expect a significant year-on-year decline after a 3.4 million loss last year. Modeling 26, can we simply extrapolate the 3 million H1 loss and arrive at a Full year 26 estimate of roughly negative 6 to 7 million or would that be too easy?

It's not too easy. It can be seen in this way. You have to see in corporate. I understand a little bit why it's difficult for you to predict that or to model that because we have a little bit of sales in there. and the sales more or less result plus cash because we collect a lot of rental income in there. So what you see as sales are some services which we do for BCCB and our site in Meitingen, but the big chunk of it are rental income. And we have increased a little bit of rent because we rented out some unused buildings to external parties which moved in there and now produce on our site which is of course helping there but you can expect that we keep our corporate costs and our overhead costs on a very strict review and you won't see major increases there. Okay, perfect.

That's really helpful. I'll go back into the line.

Thank you.

As a reminder, if you wish to register for a question, please press star followed by one on your telephone. Ladies and gentlemen, there are no further questions. I would now like to turn the conference back over to Claudia Kellert for any closing remarks.

Thank you. Yeah, no further questions. Then I think all our reporting papers answer all the questions. Thanks for your participation. You will find the presentation and our reporting on our webpage and maybe if additional questions will arise, so please call the investor relations team. Thank you and have a nice afternoon. Bye-bye.