SGL Carbon SE Presents 2020 Outlook Based on Q2, 2020 Preliminary Results

August 03 2020

In light of the uncertainties surrounding further development, the duration as well as the impacts of the Covid-19 pandemic, on April 1, 2020, the Board of Management of SGL Carbon SE decided to suspend the guidance for the fiscal year 2020 as published in the Annual Report 2019. Based on preliminary Group results for the second quarter 2020, the Board of Management has assessed the outlook for the second half of the year.

At the beginning of the second quarter 2020, business development particularly in the business unit Composites – Fibers & Materials (CFM) was still dominated by the pandemic protection measures in place in Europe and North America as well as a sharp initial decline in volumes. In the further course of the second quarter, own measures to adapt to the effects of the pandemic were accompanied by a beginning volume recovery. As a consequence, the preliminary results for the second quarter 2020 do not look as weak as anticipated at the presentation of the quarterly statement as of March 31, 2020 (Group sales to decline substantially double-digit compared to the prior year level, negative recurring EBIT1). In fact, while Group sales has likely declined by approx. 25% compared to the prior year level of approx. 273 million Euros, recurring EBIT is likely to have remained at break-even level in the second quarter 2020. The liquidity position at approx. 150 million Euros at the end of the second quarter 2020 has remained stable compared to the end of the prior quarter and thus continues to be above the level at year-end 2019 (approx. 137 million Euros).

SGL Carbon expects Group sales to decline year-over-year by 15% to 20% (Group sales 2019: 1,087 million Euros) and a slightly positive operating recurring EBIT for the full year 2020.

As already communicated since the beginning of this year, SGL Carbon has been working on various additional funding options independent from the capital markets. Some of these measures have been successfully completed or substantially advanced in the past weeks. These will increase Group recurring EBIT in a low double-digit million Euros amount in the form of one-time effects, presumably mainly in the third quarter.

Consequently, Group net result from continuing operations for fiscal year 2020 is expected in a similar magnitude as before the Covid-19 pandemic outbreak (negative low double-digit million Euros amount) despite a lower operating Group recurring EBIT.

To take into account the reduced operating earnings expectations and in the context of a conservative free cash flow management, capital expenditures will be further reduced in the current year to approx. 60 million Euros (Guidance in March 2020: 70-80 million Euros) and thus below the level of depreciation.

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