Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of: April 2008
SGL CARBON Aktiengesellschaft
(Name of registrant)
Rheingaustrasse 182
65203 Wiesbaden
Germany
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
-----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the SEC
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
---- -----
If "Yes" is marked, indicate the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Exhibit Index
-------------
1. April 10, 2008 German Press Release - SGL Group: Board of management
and Senior Management buy SGL shares worth Euro 4.4 million
2. April 22, 2008 German Press Release - SGL Group's HITCO subsidiary
receives "Supplier of the Year Award 2007" in Structures Commodity
Category from Boeing
3. April 23, 2008 German Press Release - SGL Group: Successful Start to
2008
4. Interim Report First Quarter 2008
SGL Group: Board of Management and Senior Management buy
SGL shares (euro)4.4 million
Wiesbaden, April 10, 2008. In the past few days, the Board of Management and
Senior Management of the SGL Group - The Carbon Company - acquired at the
relevant current market price a total of 114,997 shares of the Company worth
(euro)4.4 million.
The Board of Management bought 14,487 shares while Senior Management bought
55,752 shares through individual investments. An additional investment of a
total of 44,758 shares worth (euro)1.8 million resulted from SGL Group's stock
option plans. The Board of Management gained 27,630 shares and the management
17,128 shares.
The Board of Management and the Senior Management of the Company consist of
approximately 150 people. The SGL Group grants its Management the option of
having all or part of their annual bonus invested in Company shares or paid out
in cash.
About SGL Group - The Carbon Company
------------------------------------
The SGL Group is one of the world's leading manufacturers of carbon-based
products. It has a comprehensive portfolio ranging from carbon and graphite
products to carbon fibers and composites. SGL Group's core competencies are its
expertise in high-temperature technology as well as its applications and
engineering know-how gained over many years. These competencies enable the
Company to make full use of its broad material base. SGL Group's carbon-based
materials combine several unique properties such as electrical and thermal
conductivity, heat and corrosion resistance as well as high mechanical strength
combined with low weight. Due to the paradigm shift in the use of materials as a
result of the worldwide shortage of energy and raw materials, there is a growing
demand for SGL Group's high-performance materials and products from an
increasing number of industries. Carbon and graphite products are used whenever
other materials such as steel, aluminum, copper, plastics, wood etc. fail due to
their limited properties. Products from the SGL Group are used predominantly in
the steel, aluminum, automotive, chemical and glass/ceramics industries.
However, manufacturers in the semiconductor, battery, solar/wind energy,
environmental protection, aerospace and defense industries as well as in the
nuclear energy industry also figure among the Company's customers.
With 38 production sites in Europe, North America and Asia as well as a service
network covering more than 100 countries, the SGL Group is a company with a
global presence. In 2007, the Company's workforce of around 5,900 generated
sales of (euro) 1.4 billion. The Company's head office is located in
Wiesbaden/Germany.
Important note:
This press release contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not to be understood as guarantees.
The future developments and events are dependent on a number of factors, they
include various risks and unanticipated circumstances and are based on
SGL Group - The Carbon Company
Corporate Communications, Media Relations
Rheingaustrasse 182, 65203 Wiesbaden, Germany
Tel.: +49 (0)611 602 9105, fax: +49 (0)611 602 9101
Email: cpc@sglcarbon.de, internet: www.sglcarbon.de
assumptions that may not be correct. These risks and uncertainties include, for
example, unforeseeable changes in political, economic and business conditions,
particularly in the area of electrosteel production, the competitive situation,
interest rate and currency developments, technological developments and other
risks and unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies and in
the ongoing cost optimization programs. SGL Group does not intend to update
these forward-looking statements.
Press Contact:
--------------
Corporate Communications / Press Office / Tino Fritsch
Tel.: +49 (0)611 60 29-105 / Fax: +49 (0)611 60 29-101
Mobile: +49 (0)170 540 2667
E-mail: tino.fritsch@sglcarbon.de / Website: www.sglcarbon.de
SGL Group's HITCO subsidiary receives "Supplier of the Year
Award 2007" in Structures Commodity Category from Boeing
Wiesbaden (Germany)/Los Angeles (USA), April 22, 2008. SGL Group - The Carbon
Company - announced today that its U.S. based HITCO Carbon Composites subsidiary
has received the "Supplier of the Year Award 2007" in the Structures Commodity
Category from The Boeing Company. Boeing formally presented its 2007 Supplier of
The Year Awards at the annual ceremony held in San Diego last Friday.
A prerequisite for the "Supplier of the Year" nomination is the recipient of a
Boeing Performance Excellence Award (BPEA). Only 250 out of more than 10,000
suppliers were selected for BPEA recognition. From this small pool of BPEA
awardees, ten separate categories were formed, from which the respective
"Supplier of the Years" were selected.
Criteria for the "Structures Supplier of the Year Award" include: Quality,
On-time Delivery, Customer Service, and Program Initiatives, such as Lean
Manufacturing or Productivity Improvements. HITCO supplies carbon fiber-based
composite components to Boeing's B 767, C 17, and B 787 programs.
Edward G. Carson, HITCO's Chief Operating Officer (COO): "As supplier of the
year we have a great responsibility to maintain the high standards and quality
expected from Boeing." HITCO continues to support Boeing as a Gold/Gold Supplier
(Boeing's highest level of supplier status) through modernized industrialization
and manufacturing capabilities including state-of-the-art automation, high
quality hand lay-up, and lean manufacturing techniques.
HITCO Carbon Composites, Inc. was founded in 1922 and manufactures advanced
composite materials primarily for aerospace and defense applications. HITCO
continues to be an innovative leader in the advancement of carbon composite
technologies and continues to strategically focus on new projects for
aerospace/aircraft and defense applications within the SGL Group.
About SGL Group - The Carbon Company
------------------------------------
The SGL Group is one of the world's leading manufacturers of carbon-based
products. It has a comprehensive portfolio ranging from carbon and graphite
products to carbon fibers and composites. SGL Group's core competencies are its
expertise in high-temperature technology as well as its applications and
engineering know-how gained over many years. These competencies enable the
Company to make full use of its broad material base. SGL Group's carbon-based
materials combine several unique properties such as electrical and thermal
conductivity, heat and corrosion resistance as well as high mechanical strength
combined with low weight. Due to the paradigm shift in the use of materials as a
result of the worldwide shortage of energy and raw materials, there is a growing
demand for SGL Group's high-performance materials and products from an
increasing number of industries. Carbon and graphite products are used whenever
other materials such as steel, aluminum, copper, plastics, wood etc. fail due to
their limited properties. Products from the SGL Group are used
SGL Group - The Carbon Company
Corporate Communications, Media Relations
Rheingaustrasse 182, D-65203 Wiesbaden, Germany
Tel.: +49 (0)611 6029-100, Fax: +49 (0)611 6029-101
Email: presse@sglcarbon.de, Website: www.sglcarbon.de
predominantly in the steel, aluminum, automotive, chemical and glass/ceramics
industries. However, manufacturers in the semiconductor, battery, solar/wind
energy, environmental protection, aerospace and defense industries as well as in
the nuclear energy industry also figure among the Company's customers.
With 38 production sites in Europe, North America and Asia as well as a service
network covering more than 100 countries, the SGL Group is a company with a
global presence. In 2007, the Company's workforce of around 5,900 generated
sales of (euro) 1.4 billion. The Company's head office is located in
Wiesbaden/Germany.
Important note:
This press release contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not to be understood as guarantees.
The future developments and events are dependent on a number of factors, they
include various risks and unanticipated circumstances and are based on
assumptions that may not be correct. These risks and uncertainties include, for
example, unforeseeable changes in political, economic and business conditions,
particularly in the area of electrosteel production, the competitive situation,
interest rate and currency developments, technological developments and other
risks and unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies and in
the ongoing cost optimization programs. SGL Group does not intend to update
these forward-looking statements.
Press Contact:
--------------
Corporate Communications / Press Office / Tino Fritsch
Tel.: +49 (0)611 60 29-105 / Fax: +49 (0)611 60 29-101
Mobile: +49 (0)170 540 2667
E-mail: tino.fritsch@sglcarbon.de / Website: www.sglcarbon.de
SGL Group: Successful Start to 2008
o Sales in Q1/2008 up by 9% to (euro) 343 million, currency adjusted by 14%
o EBIT growth of 21% to (euro)69 million, leading to return on sales (ROS)
increase to 20% (Q1/2007:18%)
o Equity ratio again improved to 44%
o Net profit increased by 36% to (euro)44.1 million
o Positive outlook for 2008 confirmed: double-digit sales and earnings growth
expected for the fiscal year 2008
Wiesbaden, April 23, 2008. SGL Group - The Carbon Company's results for the
first quarter 2008 were supported by strong demand developments in all three
Business Units. Sales increased by 9% to (euro)343.2 million (Q1/2007:
(euro)314.6 million). Sales growth in the first quarter 2008 was negatively
impacted by currency effects especially due to the weak US dollar. Thus currency
adjusted sales increased more strongly by 14%. EBIT increased by 21% to
(euro)69.4 million compared to 2007 (Q1/2007: (euro)57.3 million). ROS was
further improved to 20.2% (Q1/2007: 18.2%). Further cost savings and efficiency
gains of around (euro)5 million from the group wide SGL Excellence initiative,
robust demand, particularly from the steel and aluminum core markets, as well as
the continuing high level of capacity utilization, all made a significant
contribution to this performance.
For the fiscal year 2008, SGL Group confidently confirms its guidance, as stated
at the Annual Results Press Conference on March 12, 2008, that Group sales is
expected to grow by 10-15% and EBIT to improve more than proportionately by
15-20%.
Robert J. Koehler, CEO of the SGL Group: "In the first quarter of 2008, the SGL
Group has succeeded in continuing its favorable performance from the last year.
Through our international company orientation, we are not only benefiting from
the renaissance of the manufacturing industries driven by the industrialization
of the Eastern world but also from megatrends in alternative raw materials,
basic materials and energies. As a result, we expect 2008 to be another record
year for the SGL Group, despite the deteriorating economic environment.
Further improvement in net financing costs and earnings per share
Net financing costs for the first quarter 2008 decreased by (euro)3.3 million to
-(euro)8.6 million (Q1/2007: (euro)-11.9 million). The new financing of 2007 has
substantially reduced interest expenses on loans by 37% to (euro)5.1 million
(Q1/2007: (euro)8.1 million). Profit before taxes increased more than
proportionately by 34 % to (euro)60.8 million (Q1/2007: (euro)45.4 million). The
tax ratio improved to 27.3% from 27.9% in Q1 2007, resulting in a net profit of
(euro)44.1 million (Q1/2007: (euro)32.5 million). Earnings per share rose to
(euro)0.69 from (euro)0.52 in the first quarter of 2007.
SGL Group - The Carbon Company
Corporate Communications, Media Relations
Rheingaustrasse 182, 65203 Wiesbaden, Germany
Tel.: +49 (0)611 602 9105, fax: +49 (0)611 602 9101
Email: cpc@sglcarbon.de, internet: www.sglcarbon.de
Free Cash flow significantly increased
Due to the operating cash flow of (euro)57.0 million and the disproportionately
low capital expenditure in the first quarter 2008, net debt decreased by
(euro)22.1 million to (euro)263.1 million (December 31, 2007: (euro)285.2
million). The balance sheet structure was further improved: the equity ratio
rose from 42.9% at the end of 2007 to 44.1%, resulting in gearing (net
debt/equity) of 0.39 compared to 0.44 at the end of 2007. Despite increased
capital expenditure in property, plant, equipment and intangible assets as well
as other investing activities amounting to (euro)34.5 million in the first
quarter of 2008 (Q1/2007: (euro)19.1 million), free cash flow increased by 83%
to (euro)22.5 million compared to (euro)12.3 million in Q1 2007. This increase
in cash used in investing activities is primarily attributable to investments
for the new plant in Malaysia as well as to SGL Group's carbon fiber capacity
expansion.
Margins significantly improved in all Business Units
Performance Products (PP): Further Sales & EBIT Growth
The Business Unit Performance Products continues to benefit from ongoing strong
demand from the steel industry and the aluminum industry, as well as the
economic upturn in the emerging markets of Asia, South America and Eastern
Europe. As a consequence, sales in the first quarter 2008 increased by 11% to
(euro)205.2 million (Q1/2007: (euro)185.0 million). This corresponds to a
currency adjusted sales increase of 17%. EBIT in the reporting period rose by
23% to (euro)64.9 million despite higher raw material and electricity prices.
This increase was achievable due to positive price and volume effects as well as
cost savings of (euro)3 million. ROS reached a record level of 31.6% (Q1/2007:
28.5%). This increase was partially the result of raw material inventory from
the previous year as a result of which the cost of goods sold in Q1 2008 did not
fully reflect full year raw material price increases. Capacity utilization
remained very high across all business lines.
Graphite Materials & Systems (GMS): Enhanced Profitability
Sales in Graphite Materials & Systems amounted to (euro)90.7 million in the
reporting period and were slightly above the first quarter 2007 level of
(euro)89.9 million, which was characterized by a high level of invoicing in the
business line Process Technology. Adjusted for currency effects, sales in Q1
2008 increased by 5%, mainly driven by demand from the semiconductor, solar, LED
and lithium ion battery markets. EBIT increased by 10% to (euro)14.0 million
(Q1/2007: (euro)12.7 million) due to positive volume developments, continued
high capacity utilization as well as cost savings of (euro)1 million, leading to
ROS of 15.4% compared to 14.1% in Q1 2007. This record margin level was also
partially the result of raw material inventory from the previous year as a
result of which the cost of goods sold in Q1 2008 did not fully reflect full
year raw material price increases. In addition to this, the high production
levels in the first quarter 2008, which will be shipped in the second quarter
and only then recognized as sales, had a positive effect on EBIT margins due to
economies of scale. This effect cannot be assumed to benefit further quarters in
this magnitude.
Carbon Fibers & Composites (CFC): Rising Earnings Growth
Sales in the first quarter 2008 increased by 18% (currency adjusted by 21%) to
(euro)45.7 million (Q1/2007: (euro) 38.7 million), mainly due to higher sales of
carbon fibers and composites in connection with the consolidation of SGL
Kuempers GmbH & Co. KG and SGL epo GmbH. High sales growth and capacity
utilization as well as cost savings of (euro)1 million through the SGL
Excellence initiative lead to a significant increase in EBIT from (euro)0.3
million in the first quarter of the previous year to (euro)2.1 million in the
reporting period, corresponding to ROS of 4.6% (Q1/2007: 0.8%). As expected,
past and current investments and acquisitions have not yet had an impact on
sales, earnings and EBIT margin in Q1 2008.
As the year progresses, SGL Group expects the ramp up of new capacities among
all business lines to significantly accelerate sales growth, leading to a sales
increase of 30% for the full year 2008, thus markedly surpassing the mid-term
target of more than 15% sales growth p.a. This strong surge in sales will have a
corresponding effect on earnings, reflecting SGL Group's 2008 target of a mid to
high single digit ROS in 2008. Surpassing the 10% EBIT margin threshold remains
the goal for 2009.
2008 outlook: New Records for Sales and Earnings
Based on the favorable performance in the first quarter 2008 and positive
signals from customer industries, SGL Group remains very confident for 2008 and
confirms the Group's guidance, as stated at the Annual Press Conference on March
12, 2008, that Group sales is expected to grow by 10-15% and EBIT to improve by
15-20%. Due to the new financing structure of 2007, net financing costs on the
basis of our existing business portfolio excluding mark-to-market valuations of
hedging instruments will amount to around -(euro)40 million. Consequently, SGL
Group expects profit before tax, net profit and earnings per share to rise more
than proportionately to EBIT growth.
Thanks to the global production network SGL Group has no material transactional
impact on earnings as a result of the significant strengthening of the euro
against other currencies. As seen in the Q1 2008 report, there is some
translational impact on sales which however has no influence on the Groups sales
and earnings guidance for the full year 2008.
Due to SGL Group's growth strategy, especially in the Business Area Advanced
Materials and in cathodes, capital expenditure for property, plant and equipment
is expected to amount to around (euro)200 million (2007: (euro)130 million).
The complete Q1 Report can be found on the company website at
http://www.sglcarbon.de.
Financial Highlights of SGL Group
((euro) million)
1st quarter
2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 343.2 314.6 +9.1%
--------------------------------------------------------------------------------
Gross profit 124.8 109.5 +14.0%
--------------------------------------------------------------------------------
EBITDA 81.6 68.9 +18.4%
--------------------------------------------------------------------------------
Operating profit (EBIT) 69.4 57.3 +21.1%
--------------------------------------------------------------------------------
Return on sales (ROS) 1) 20.2% 18.2% +200 BP 2)
--------------------------------------------------------------------------------
Net profit attributable to equity holders 44.1 32.5 +35.7%
--------------------------------------------------------------------------------
Earnings per share, basic (in (euro)) 3) 0.69 0.52 +32.7%
--------------------------------------------------------------------------------
Cash flows from operating activities 57.0 31.4 +81.5%
--------------------------------------------------------------------------------
Mar. 31, Dec. 31,
2008 2007 Change
--------------------------------------------------------------------------------
Total assets 1,530.5 1,505.5 +1.7%
--------------------------------------------------------------------------------
Shareholders' equity 674.7 646.6 +4.3%
--------------------------------------------------------------------------------
Net debt 263.1 285.2 -7.7%
--------------------------------------------------------------------------------
Gearing 4) 0.39 0.44
--------------------------------------------------------------------------------
Equity ratio 5) 44.1% 42.9%
--------------------------------------------------------------------------------
1) EBIT to sales revenue
2) Basis points
3) Based on 63.9 million shares as at March 31, 2008 and 63.0 million shares
as at March 31, 2007
4) Net debt divided by shareholders' equity
5) Shareholders' equity divided by total assets
About SGL Group - The Carbon Company
------------------------------------
The SGL Group is one of the world's leading manufacturers of carbon-based
products. It has a comprehensive portfolio ranging from carbon and graphite
products to carbon fibers and composites. SGL Group's core competencies are its
expertise in high-temperature technology as well as its applications and
engineering know-how gained over many years. These competencies enable the
Company to make full use of its broad material base. SGL Group's carbon-based
materials combine several unique properties such as electrical and thermal
conductivity, heat and corrosion resistance as well as high mechanical strength
combined with low weight. Due to the paradigm shift in the use of materials as a
result of the worldwide shortage of energy and raw materials, there is a growing
demand for SGL Group's high-performance materials and products from an
increasing number of industries. Carbon and graphite products are used whenever
other materials such as steel, aluminum, copper, plastics, wood etc. fail due to
their limited properties. Products from the SGL Group are used predominantly in
the steel, aluminum, automotive, chemical and glass/ceramics industries.
However, manufacturers in the semiconductor, battery, solar/wind energy,
environmental protection, aerospace and defense industries as well as in the
nuclear energy industry also figure among the Company's customers.
With 38 production sites in Europe, North America and Asia as well as a service
network covering more than 100 countries, the SGL Group is a company with a
global presence. In 2007, the Company's workforce of around 5,900 generated
sales of (euro) 1.4 billion. The Company's head office is located in
Wiesbaden/Germany.
Important note:
This press release contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not to be understood as guarantees.
The future developments and events are dependent on a number of factors, they
include various risks and unanticipated circumstances and are based on
assumptions that may not be correct. These risks and uncertainties include, for
example, unforeseeable changes in political, economic and business conditions,
particularly in the area of electrosteel production, the competitive situation,
interest rate and currency developments, technological developments and other
risks and unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies and in
the ongoing cost optimization programs. SGL Group does not intend to update
these forward-looking statements.
Press Contact:
--------------
Corporate Communications / Press Office / Tino Fritsch
Tel.: +49 (0)611 60 29-105 / Fax: +49 (0)611 60 29-101
Mobile: +49 (0)170 540 2667
E-mail: tino.fritsch@sglcarbon.de / Website: www.sglcarbon.de
Report on the first quarter 2008
--------------------------------
Highlights
o Sales in Q1/2008 up by 9%, currency adjusted by 14% compared to Q1/2007
o EBIT 21% above Q1/2007 leading to return on sales of 20% (Q1/2007: 18%)
o Pre tax profit growth of 34% to (euro)60.8 million
o Earnings per share at (euro)0.69 compared to (euro)0.52 in Q1/2007
o Equity ratio again improved to 44%
o Guidance for 2008 confirms double digit growth expectations
Financial Highlights (unaudited)
1st Quarter
-----------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 343.2 314.6 9.1%
--------------------------------------------------------------------------------
Gross profit 124.8 109.5 14.0%
--------------------------------------------------------------------------------
EBITDA 81.6 68.9 18.4%
--------------------------------------------------------------------------------
Operating profit/EBIT 69.4 57.3 21.1%
--------------------------------------------------------------------------------
Return on sales 1) 20.2% 18.2% -
--------------------------------------------------------------------------------
Net profit attributable to equity holders 44.1 32.5 35.7%
--------------------------------------------------------------------------------
Earnings per share, basic (in (euro)) 0.69 0.52 32.7%
--------------------------------------------------------------------------------
Cash flows from operating activities 57.0 31.4 2) 81.5%
--------------------------------------------------------------------------------
March 31, Dec. 31,
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Total assets 1,530.5 1,505.5 1.7%
--------------------------------------------------------------------------------
Shareholders' equity 674.7 646.6 3) 4.3%
--------------------------------------------------------------------------------
Net debt 263.1 285.2 -7.7%
--------------------------------------------------------------------------------
Debt ratio (gearing)4) 0.39 0.44 -
--------------------------------------------------------------------------------
Equity ratio 5) 44.1% 42.9% -
--------------------------------------------------------------------------------
1) Ratio of operating profit to sales revenue
2) Before expenses for EU antitrust proceedings of (euro) 22.5 million
3) Adjusted for IFRIC 11
4) Net debt divided by shareholders' equity
5) Shareholders' equity divided by total assets
Interim Group Management Report
-------------------------------
(unaudited)
-----------
Economic environment
According to financial expects, global growth expectations have deteriorate
further since the end of 2007 due to the impacts or the financial markets
crisis. Accordingly, the International Monetary Fund (IMF) reduced its forecast
for global growth to 3.7% from 4.5% in early April. This development is
supported by the ongoing growth trend in eastern and southeastern Asia as well
as eastern Europe and South America. The traditional economies of Europe, USA
and Japan are only expected to grow moderately. Many experts consider the USA
already in recession.
Most customer industries of SGL Group remain optimistic for 2008 especially due
to the continued upward growth trend of the economies in the emerging markets.
The steel industry had a successful start to this year with the global industry
association IISI expecting an increase in worldwide steel consumption of 7%. The
substitution of traditional materials with lighter and more energy-efficient
solutions as well the growing need for packaging material in the emerging
markets have led to new capacity announcements, therefore the outlook for the
aluminum industry remains positive. Carbon fiber technology also benefits from
these substitution effects and expects ongoing double digit demand growth from
its most important customer industries alternative energy (especially wind),
aerospace, automotive and industrial services. Due to the trend towards energy
saving and environmentally friendly materials and components this business is
benefiting from a supercycle which allows growth far above the growth rates of
the respective customer industries. Specialty graphites also remain optimistic
as demand is supported e. g. by the battery and the LED industry.However, since
the crisis has a much lesser impact on the developing countries, where growth
remains strong, the consequences for the global economy are expected to remain
rather limited, according to the International Monetary Fund (IMF).
Business development
Condensed consolidated income statement
1st Quarter
--------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 343.2 314.6 9.1%
--------------------------------------------------------------------------------
Gross profit 124.8 109.5 14.0%
--------------------------------------------------------------------------------
Selling, administrative, research and other
income/expense -55.4 -52.2 -6.1%
--------------------------------------------------------------------------------
Profit from operations 69.4 57.3 21.1%
--------------------------------------------------------------------------------
Net financing costs -8.6 -11.9 27.7%
--------------------------------------------------------------------------------
Profit before tax 60.8 45.4 33.9%
--------------------------------------------------------------------------------
Income tax expense -16.6 -12.7 -30.7%
--------------------------------------------------------------------------------
Minority interests -0.1 -0.2 50.0%
--------------------------------------------------------------------------------
Net profit after minority interests 44.1 32.5 35.7%
--------------------------------------------------------------------------------
Earnings per share, basic (in (euro)) 0.69 0.52 32.7%
--------------------------------------------------------------------------------
Earnings per share, diluted (in (euro)) 0.65 0.51 27.5%
--------------------------------------------------------------------------------
Consolidated sales increased by 9% to (euro) 343.2 million supported by good
demand development in all three business units. Sales growth in the first
quarter 2008 was negative impacted by currency effects especially due to the
weak US dollar. Thus currency adjusted sales increased more strongly by 14%. We
were able to compensate higher raw material costs by increasing selling prices
and sales volumes, a high capacity utilization and cost savings of around (euro)
5 million. Due to raw material inventories at year end 2007, cost of goods sold
in the first quarter did not fully reflect full year raw material price
increases. This resulted in an increase in the gross margin to 36.4% compared to
34.8% in the first quarter 2007. Selling, administrative, research and other
income/expense increased by 6.1% and thus at a slower pace than sales and now
represent 16.1% of sales (first quarter 2007: 16.6%). As a result, EBIT
increased by 21% to (euro) 69.4 million. Even though the first quarter 2008 will
again be a weaker quarter compared to the remaining quarters of the year, it was
able to continue the outstanding performance of the fourth quarter 2007.
Net financing costs
1st Quarter
--------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Income from companies accounted for at-equity -0.2 0.3 -
--------------------------------------------------------------------------------
Interest income 2.9 1.7 70.6%
--------------------------------------------------------------------------------
Interest expense on loans -5.1 -8.1 37.0%
--------------------------------------------------------------------------------
Imputed interest convertible bond (non-cash) -1.8 0.0 -
--------------------------------------------------------------------------------
Interest expense on pensions -3.5 -3.5 0.0%
--------------------------------------------------------------------------------
Interest expense, net -7.5 -9.9 24.2%
--------------------------------------------------------------------------------
Expense for refinancing costs (non-cash) -0.4 -0.7 42.9%
--------------------------------------------------------------------------------
Other -0.5 -1.6 68.8%
--------------------------------------------------------------------------------
Other financing expenses -0.9 -2.3 60.9%
--------------------------------------------------------------------------------
Net financing costs -8.6 -11.9 27.7%
--------------------------------------------------------------------------------
Compared to the first quarter 2007 net financing costs decreased by (euro) 3.3
million to -(euro) 8.6 million in the reporting period. Interest income
increased by (euro) 1.2 million due to the higher average level of cash and cash
equivalents. Due to the new financing of May 2007, interest expense on loans
decreased substantially by 37% to (euro) 5.1 million (first quarter 2007: (euro)
8.1 million). The non-cash imputed interest component required by IFRS for our
convertible bond amounted to (euro) 1.8 million in the first quarter of 2008.
There was no corresponding expense in the first quarter of 2007 as the
convertible bond was issued on May 16, 2007.
Profit before and after taxes
Profit before taxes increased more than proportionately by 33.9% to (euro) 60.8
million (first quarter 2007: (euro) 45.4 million). Tax expenses increased to
(euro) 16.6 million after (euro) 12.7 million in the first quarter of the
previous year resulting in a tax ratio 27.3% in the reporting period compared to
27.9% in the first quarter 2007. Accordingly, net profit after minority
interests increased 36% to (euro) 44.1 million after (euro) 32.5 million in the
first quarter 2007.
Earnings per share
Based on an average number of 63.9 million shares, undiluted earnings per share
amounted to (euro) 0.69 (first quarter 2007: (euro) 0.52). To calculate fully
diluted earnings per share, we add the shares resulting from conversion of our
convertible bond as well as shares issued as a result of our stock option and
stock appreciation rights plans have to be considered. Accordingly, the average
number of shares increases to 69.9 million, resulting in diluted earnings per
share of (euro) 0.65 (first quarter 2007: (euro) 0.51)
Balance sheet structure
March 31, Dec. 31,
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Assets
------
Non-current assets 691.5 692.0 -0.1%
--------------------------------------------------------------------------------
Current assets 839.0 813.5 3.1%
--------------------------------------------------------------------------------
Total assets 1,530.5 1,505.5 1.7%
--------------------------------------------------------------------------------
Equity And Liabilities
----------------------
Shareholders' equity 674.7 646.6 1) 4.3%
--------------------------------------------------------------------------------
Minority interests 3.5 3.5 0.0%
--------------------------------------------------------------------------------
Total equity 678.2 650.1 4.3%
--------------------------------------------------------------------------------
Non-current liabilities 590.3 588.4 0.3%
--------------------------------------------------------------------------------
Current liabilities 262.0 267.0 -1.9%
--------------------------------------------------------------------------------
Total equity and liabilities 1,530.5 1,505.5 1.7%
--------------------------------------------------------------------------------
1) Adjusted for IFRIC 11
Compared to December 31, 2007, total assets at March 31, 2008, increased
slightly by (euro) 25.0 million to (euro) 1,530.5 million. Currency effects had
a negative impact of -(euro) 39 million on the total assets. Capital expenditure
in property, plant, equipment and intangible assets increased to (euro) 33.6
million in the first quarter 2008 and were thus (euro) 21.4 million above the
level of depreciation. Including negative currency impacts, property, plant and
equipment increased (euro) 10.7 million compared to December 31, 2007. Deferred
tax assets decreased by (euro) 7.0 million to (euro) 93.8 million due to
application of tax losses carried forwards in Germany and the USA as well as due
to currency impacts. The increase in inventory of (euro) 32.5 million partially
reflects the high production levels in the first quarter 2008 especially in GMS
which will be shipped in the second quarter 2008 and only then recognized as
sales. This increase was in part compensated by the decrease in receivables of
(euro) 20.7 million. Higher cash and cash equivalents of (euro) 152.9 million at
March 31, 2008 (December 31, 2007: (euro) 130.0 million) resulted from the
positive free cash flow. Total equity including minority interests increased by
(euro) 28.1 million mainly due to the positive net profit in the first quarter
2008 ((euro) 44.1 million). Currency effects had a negative impact of -(euro)
18.7 million on total equity. Due to the reclassification required by IFRS for
amounts related to the share based bonus plans in Germany as well as the
Matching Share Plan the value of total equity at December 31, 2008 had to be
adjusted retrospectively. This retrospective adjustment led to a decrease of
other current provisions of (euro) 13.2 million and to an increase in the
capital reserves by the same amount ((euro) 13.2 million). Non-current and
current financial liabilities hardly changed in the reporting period compared to
December 31, 2007.
Working capital
March 31, Dec. 31,
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Inventories 418.1 385.6 8.4%
--------------------------------------------------------------------------------
Trade receivables 222.2 242.9 -8.5%
--------------------------------------------------------------------------------
Less trade payables -135.4 -143.4 5.6%
--------------------------------------------------------------------------------
Working Capital 504.9 485.1 4.1%
--------------------------------------------------------------------------------
The increase in working capital by (euro) 19.8 million to (euro) 504.9 million
at March 31, 2008, was a result of higher business activity in all three
business units. The increase in inventory partially reflects the high production
levels in the first quarter 2008 especially in GMS which will be shipped in the
second quarter and only then recognized as sales.
Changes in equity
1st Quarter 2008
----------------------------------
Shareholders' Minority Total
(euro) million equity interests equity
--------------------------------------------------------------------------------
Balance at January 1 1) 646.6 3.5 650.1
--------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 5.2 0.0 5.2
--------------------------------------------------------------------------------
Net profit 44.1 0.1 44.2
--------------------------------------------------------------------------------
Currency exchange differences -18.7 -18.7
--------------------------------------------------------------------------------
Other earnings recognized directly
in equity -2.5 -0.1 -2.6
--------------------------------------------------------------------------------
Total income for the period 22.9 0.0 22.9
--------------------------------------------------------------------------------
Balance at March 31 674.7 3.5 678.2
--------------------------------------------------------------------------------
1) Adjusted for IFRIC 11
Due to the adoption of IFRIC 11 there was a retrospective adjustment in total
equity as at December 31, 2007. Accordingly, the amounts related to share based
bonus plans as well as the Matching Share Plan which used to be recorded in the
provisions had to be reclassified to total equity. This adjustment increased
shareholders' equity by (euro) 13.2 million to (euro) 646.6 million. Current
provisions consequently decreased by the same amount.
Despite negative currency impacts of (euro) 18.7 million, shareholders' equity
increased by (euro) 28.1 million to (euro) 674.7 million as at March 31, 2008.
The increase is mainly attributable to the net profit of the first quarter 2008
((euro) 44.1 million). Shareholders' equity as at March 31, 2008 corresponds to
an equity ratio of 44.1% compared to 42.9% as at December 31, 2007.
Holders of the convertible bond issued in 2007 can exercise their conversion
rights as the current share price is above the conversion price of (euro) 36.52,
leading to a maximum of 5.5 million new SGL Carbon AG shares being issued.
Subscribed capital increased to (euro) 164.6 million as at March 31, 2008
(December 31, 2007: (euro) 163.6 million) and is divided into 64,281,192 no-par
value ordinary bearer shares at (euro) 2.56 per share. During the first quarter
2008 370,787 new shares were issued for the employee bonus plan in Germany as
well as for the Matching Share Plan.
Net debt
March 31, Dec. 31,
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Current and non-current financial liabilities 362.7 359.6 0.9%
--------------------------------------------------------------------------------
Remaining interest cost component for the
convertible bond 43.7 45.5 -4.0%
--------------------------------------------------------------------------------
Plus accrued refinancing cost 9.6 10.1 -5.0%
--------------------------------------------------------------------------------
Cash and cash equivalents -152.9 -130.0 -17.6%
--------------------------------------------------------------------------------
Net debt 263.1 285.2 -7.7%
--------------------------------------------------------------------------------
As required by IFRS, we added the remaining equity portion of our convertible
bond to our net debt calculations as at March 31, 2008 to reflect the full
future nominal obligation of (euro) 200.0 million. Due to the cash provided by
operating activities of (euro) 57.0 million and the disproportionately low
capital expenditure in the first quarter 2008, net debt decreased by (euro) 22.1
million to (euro) 263.1 million compared to December 31, 2007 ((euro) 285.2
million).
Liquidity and capital resources
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Cash provided by operating activities before
antitrust payments 57.0 31.4 81.5%
--------------------------------------------------------------------------------
Payments relating to antitrust proceedings 0.0 -22.5 -
--------------------------------------------------------------------------------
Cash provided by/used in operating activities 57.0 8.9 -
--------------------------------------------------------------------------------
Cash used in investing activities -34.5 -19.1 -80.6%
--------------------------------------------------------------------------------
Free cash flow* 22.5 12.3 82.9%
--------------------------------------------------------------------------------
Cash provided by financing activities 1.4 2.5 -44.0%
--------------------------------------------------------------------------------
Effect of foreign currency exchange rate
differences -1.0 -0.1 -
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 22.9 -7.8 -
--------------------------------------------------------------------------------
* defined as cash provided by operating activities before antitrust payments
minus cash used in investing activities
Cash provided by operating activities increased by (euro) 48.1 million to (euro)
57.0 million. The first quarter 2007 was negatively impacted by the (euro) 22.5
million payment of the remaining EU cartel fine of 2002.
Despite increased capital expenditure in property, plant, equipment and
intangible assets as well as other investing activities amounting to (euro) 34.5
million in the first quarter of 2008 (first quarter 2007: (euro) 19.1 million),
free cash flow increased by 82.9% to (euro) 22.5 million compared to (euro) 12.3
million in the first quarter of 2007. The increase in cash used in investing
activities is primarily attributable to investments for our new plant in
Malaysia as well as our carbon fiber capacity expansion.
Cash provided by financing activities amounted to (euro)1.4 million and is a
consequence of increased usage of local credit lines (especially in Malaysia).
Cash and cash equivalents increased by (euro) 22.9 million to (euro) 152.9
million as at March 31, 2008 from (euro) 130.0 million as at December 31, 2007.
Segment Reporting
-----------------
Performance Products (PP)
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 205.2 185.0 10.9%
--------------------------------------------------------------------------------
EBITDA 71.0 58.6 21.2%
--------------------------------------------------------------------------------
Profit from operations/EBIT 64.9 52.7 23.1%
--------------------------------------------------------------------------------
Return on sales 31.6% 28.5% -
--------------------------------------------------------------------------------
The continued strong demand from the steel industry and the growing demand from
the aluminum industry resulted in rising selling prices across all business
lines as well as higher unit sales especially in graphitized cathodes. As a
consequence, sales in the first quarter 2008 increased by 11% to (euro) 205.2
million (first quarter 2007: (euro) 185.0 million). This corresponds to a
currency adjusted increase of 17%. Currency effects had a negative impact of 6%
on sales growth.
EBIT in the reporting period increased by 23% to (euro) 64.9 million despite
higher raw material and electricity prices. This increase was achievable due to
the price and volume effects mentioned above as well as cost savings of (euro) 3
million. Return on sales reached a record level of 31.6%, which was partially
the result of raw material inventory from the previous year as a result of which
the cost of goods sold in the first quarter did not fully reflect full year raw
material price increases. Capacity utilization remained very high across all
business lines.
On January 11, 2008 we announced to significantly increase our investments in
Banting (Malaysia). In addition to the already published graphite electrode
manufacturing site we will also establish a production plant for cathodes. The
fully integrated production facility will come on stream in 2011 and lead to a
total investment of around (euro) 200 million. Total capacity of our new
production site in Banting will be at 60,000 metric tons.
Graphite Materials & Systems (GMS)
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 90.7 89.9 0.9%
--------------------------------------------------------------------------------
EBITDA 17.4 16.1 8.1%
--------------------------------------------------------------------------------
Profit from operations/EBIT 14.0 12.7 10.2%
--------------------------------------------------------------------------------
Return on sales 15.4% 14.1% -
--------------------------------------------------------------------------------
Sales in Graphite Materials & Systems amounted to (euro) 90.7 million in the
reporting period and was 1% above the first quarter 2007 level which was
characterized by a high level of invoicing in the business line Process
Technology. Adjusted for currency impacts, sales in the first quarter 2008
increased by 5% and was mainly driven by demand from the semiconductor, solar,
LED and lithium ion battery markets.
EBIT increased by 10% to (euro) 14.0 million due to positive volume
developments, continued high capacity utilization as well as cost savings of
(euro)1 million, leading to a return on sales of 15.4% compared to 14.1% in the
first quarter of the previous year. This record margin level was also partially
the result of raw material inventory from the previous year as a result of which
the cost of goods sold in the first quarter did not fully reflect full year raw
material price increases. In addition to this, the high production levels in the
first quarter 2008, which will be shipped in the second quarter and only then
recognized as sales, had a positive effect on EBIT margins due to economies of
scale. This effect cannot be assumed to benefit further quarters in this
magnitude.
Carbon Fibers & Composites (CFC)
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 45.7 38.7 18.1%
--------------------------------------------------------------------------------
EBITDA 4.5 2.3 95.7%
--------------------------------------------------------------------------------
Profit from operations/EBIT 2.1 0.3 -
--------------------------------------------------------------------------------
Return on sales 4.6% 0.8% -
--------------------------------------------------------------------------------
Sales in the first quarter 2008 increased to (euro) 45.7 million compared to
(euro) 38.7 million in the first quarter of 2007 mainly due to higher sales of
carbon fibers and composites in connection with the consolidation of SGL Kumpers
GmbH & Co. KG and SGL epo GmbH. This corresponds to a currency adjusted increase
of 21%, while currencies had a negative impact of 3% on sales growth. High sales
growth and capacity utilization as well as cost savings from the SGL Excellence
initiative lead to a significant increase in EBIT from (euro) 0.3 million in the
first quarter of the previous year to (euro) 2.1 million in the reporting
period, corresponding to a return on sales of 4.6%.
As expected, past and current investments and acquisitions have not yet had an
impact on sales, earnings, and EBIT margin in the first quarter of this year. As
the year progresses, we expect the ramp up of new capacities along all business
lines to significantly accelerate sales growth, leading to a sales increase of
30% for the full year 2008, thus markedly surpassing our mid-term target of more
than 15% sales growth per annum. This strong surge in sales will have a
corresponding effect on earnings, reflecting our 2008 target of a mid to high
single digit EBIT margin. Surpassing the 10% EBIT margin threshold remains our
goal for 2009.
The business unit Carbon Fiber & Composites is benefiting from the substitution
process in basic materials. The carbon fibers and carbon fiber composite
materials produced by CFC are increasingly in demand as replacements for
traditional materials due to their unique properties such as lightweight and
stiffness. As the only European company with own raw materials supply, carbon
fiber technology and an integrated value chain right up to the finished
component, SGL uses its core competences in high-temperature technology,
carbonization and graphitization. The company is currently benefiting
particularly from a strong demand upturn in the aerospace industry, the
automotive sector and alternative energy sources such as wind power.
Accordingly, on February 20, 2008, SGL Group and the Paderborn (Germany)-based
Benteler Automobil-technik launched their joint venture to develop, produce and
market components based on carbon fiber -reinforced composites (CFRP) for the
automotive industry upon approval from relevant antitrust authorities. Each
company has a 50% stake in the joint venture Benteler SGL GmbH & Co. KG, based
in Paderborn.
Central T&I and corporate costs
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Other revenue 1.6 1.0 60.0%
--------------------------------------------------------------------------------
Central T&I costs -3.3 -1.3 -153.8%
--------------------------------------------------------------------------------
Corporate Costs -8.3 -7.1 -16.9%
--------------------------------------------------------------------------------
In order to support our innovation strategy we established our new corporate
center for Technology and Innovation (T&I) by the end of 2005 and further
enhanced this structure during 2006. Within corporate costs we will report all
initiatives and start-up projects, which cannot be directly assigned to one of
our existing businesses. This relates to basic research activities as well as to
new product developments, which have not yet reached a commercial status. We
decided to show such expenses at a corporate level in order to increase
transparency and not to charge our businesses with expenses not directly related
to their ongoing business. Central T&I costs in 9M/2007 at (euro)6.0 million
reached a significantly higher level than in the same period 2006, which still
reflected the implementation phase. Central T&I costs in the reporting period
was also influenced by the first payment for establishing the professorship for
carbon fibers and carbon fiber composites at the Technical University of Munich.
Corporate costs increased from (euro)23.0 million in 9M/2006 to (euro)24.8
million in 9M/2007. The increase is in part related to our management incentive
plans, which are influenced by higher market valuation for share based programs.
Lower costs associated with our US delisting were partially compensated by
higher market and project costs as well as the gradual build up of our central
services.
Employees
Compared to the year end 2007, total number of employees increased by 121 to
5,983 at March 31, 2008. In particular, the two business units Graphite
Materials & Systems and Carbon Fibers & Composites recorded an increase in
headcount due to the growth in their respective activities.
While the number of employees in Europe increased only slightly, headcount in
the future growth markets of Asia was increased more strongly to support the
growth of our business in this region. At March end, 38% of our employees were
based in Germany, 32% in Europe ex-Germany, 22% in North America and 8% in
Asia.
Outlook
Based on the favorable performance in the first quarter 2008 and positive
signals from our customer industries we remain very confident for the business
year 2008. For the full year 2008 we confirm our guidance which we initially
published on March 12, 2008 at the 2007 annual results presentation. Group sales
is expected to grow by 10-15% and EBIT to improve by 15-20%. Due to the new
financing structure of May 2007, net financing costs on the basis of our
existing business portfolio before mark-to-market valuations of our hedging
instruments will amount to around -(euro) 40 million. Consequently, we are
expecting profit before and after tax as well as earnings per share to rise more
than proportionately to EBIT growth, assuming a tax rate of 30% at the most.
Sales in the second quarter 2008 will show a significantly higher growth rate
than in the first quarter 2008, supported partially by the described high
production levels in the first quarter 2008 especially in GMS, wich will be
shipped in the second quarter and only then recognized as sales. At the same
time, the effects which supported the very high Group EBIT margin of 20% (high
production levels in GMS, inventory of raw materials at 2007 prices and
inventory valuation effects in PP and GMS) will not be repeated in the following
quarters in the same magnitude.
Thanks to the global production network of SGL Group we have no material
transactional impact on our earnings as a result of the significant
strengthening of the euro against other currencies. As seen in our report on the
first quarter 2008, there is some translational impact in sales which however
has no influence on our sales and earnings guidance for the full year 2008.
Due to our growth strategy, especially in the Business Area Advanced Materials
and in cathodes, we expect capital expenditure for property, plant and equipment
to amount to around (euro)200 million. In the period under review, SGL Group's
risk situation did not change materially from year end 2007 as described in our
2007 annual report.
Interim Condensed Consolidated Financial Statements
---------------------------------------------------
(unaudited)
-----------
Interim Condensed Consolidated Income Statement
1st Quarter
-------------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue 343.2 314.6 9.1%
--------------------------------------------------------------------------------
Cost of sales -218.4 -205.1 -6.5%
--------------------------------------------------------------------------------
Gross profit 124.8 109.5 14.0%
--------------------------------------------------------------------------------
Selling, administrative, research
and other income/expense -55.4 -52.2 -6.1%
--------------------------------------------------------------------------------
Profit from operations/EBIT 69.4 57.3 21.1%
--------------------------------------------------------------------------------
Income from companies accounted for at-equity -0.2 0.3 -
--------------------------------------------------------------------------------
Interest income 2.9 1.7 70.6%
--------------------------------------------------------------------------------
Interest expense -10.4 -11.6 10.3%
--------------------------------------------------------------------------------
Other financing costs -0.9 -2.3 60.9%
--------------------------------------------------------------------------------
Profit before tax 60.8 45.4 33.9%
--------------------------------------------------------------------------------
Income tax expense -16.6 -12.7 -30.7%
--------------------------------------------------------------------------------
Net profit for the period 44.2 32.7 35.2%
--------------------------------------------------------------------------------
thereof:
Minority interests 0.1 0.2 -
--------------------------------------------------------------------------------
Equity holders of the parent company 44.1 32.5 -
--------------------------------------------------------------------------------
Earnings per share,
basic (in (euro)) 0.69 0.52 32.7%
--------------------------------------------------------------------------------
Earnings per share,
diluted (in (euro)) 0.65 0.51 27.5%
--------------------------------------------------------------------------------
Interim Condensed Consolidated Balance Sheet
March 31, Dec. 31,
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Assets
------
Non-current assets
------------------
Intangible assets 114.3 119.3 -4.2%
--------------------------------------------------------------------------------
Property, plant and equipment 460.2 449.5 2.4%
--------------------------------------------------------------------------------
Other non-current assets 23.2 22.4 3.6%
--------------------------------------------------------------------------------
Deferred tax assets 93.8 100.8 -6.9%
--------------------------------------------------------------------------------
691.5 692.0 -0.1%
-------------------------------
Current assets
--------------
Inventories 418.1 385.6 8.4%
--------------------------------------------------------------------------------
Trade receivables 222.2 242.9 -8.5%
--------------------------------------------------------------------------------
Other receivables and other current assets 45.8 55.0 -16.7%
--------------------------------------------------------------------------------
Cash and cash equivalents 152.9 130.0 17.6%
--------------------------------------------------------------------------------
839.0 813.5 3.1%
-------------------------------
Total assets 1,530.5 1,505.5 1.7%
--------------------------------------------------------------------------------
Equity and Liabilities
----------------------
Shareholders' equity 674.7 646.6 1) 4.3%
--------------------------------------------------------------------------------
Minority interests 3.5 3.5 0.0%
--------------------------------------------------------------------------------
Total equity 678.2 650.1 4.3%
--------------------------------------------------------------------------------
Non-current liabilities
-----------------------
Non-current financial liabilities 360.7 358.8 0.5%
--------------------------------------------------------------------------------
Provisions for pensions and other employee
benefits 169.7 170.1 -0.2%
--------------------------------------------------------------------------------
Deferred tax liabilities 34.9 35.2 -0.9%
--------------------------------------------------------------------------------
Other non-current liabilities and provisions 25.0 24.3 2.9%
--------------------------------------------------------------------------------
590.3 588.4 0.3%
-------------------------------
Current liabilities
-------------------
Current financial liabilities 2.0 0.8 -
--------------------------------------------------------------------------------
Other provisions 52.7 68.4 1) -23.0%
--------------------------------------------------------------------------------
Trade payables 135.4 143.4 -5.6%
--------------------------------------------------------------------------------
Other current liabilities 71.9 54.4 32.2%
--------------------------------------------------------------------------------
262.0 267.0 -1.9%
-------------------------------
Total equity and liabilities 1,530.5 1,505.5 1.7%
--------------------------------------------------------------------------------
1) Adjusted for IFRIC 11
Interim Condensed Consolidated Statement of Changes in Equity
1st Quarter 2007
----------------------------------
Shareholders' Minority Total
(euro) million equity interests equity
--------------------------------------------------------------------------------
Balance at January 1 1) 455.9 2.2 458.1
--------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 3.5 3.5
--------------------------------------------------------------------------------
Net profit 32.5 0.2 32.7
--------------------------------------------------------------------------------
Currency exchange differences -3.6 -3.6
--------------------------------------------------------------------------------
Other net income recognized directly in
equity -0.6 -0.6
--------------------------------------------------------------------------------
Total income for the period 28.3 0.2 28.5
--------------------------------------------------------------------------------
Balance at March 31 1) 487.7 2.4 490.1
--------------------------------------------------------------------------------
1st Quarter 2008
----------------------------------
Shareholders' Minority Total
(euro) million equity interests equity
--------------------------------------------------------------------------------
Balance at January 1 646.6 3.5 650.1
--------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 5.2 0.0 5.2
--------------------------------------------------------------------------------
Net profit 44.1 0.1 44.2
--------------------------------------------------------------------------------
Currency exchange differences -18.7 -18.7
--------------------------------------------------------------------------------
Other net income recognized directly in
equity -2.5 -0.1 -2.6
--------------------------------------------------------------------------------
Total income for the period 22.9 0.0 22.9
--------------------------------------------------------------------------------
Balance at March 31 674.7 3.5 678.2
--------------------------------------------------------------------------------
1) Adjusted for IFRIC 11
Interim Condensed Consolidated Cash Flow Statement
1st Quarter
----------------
(euro) million 2008 2007
--------------------------------------------------------------------------------
Cash flows from operating activities
------------------------------------
Profit before tax 60.8 45.4
--------------------------------------------------------------------------------
Add back of net interest expenses 7.5 10.0
--------------------------------------------------------------------------------
(Gain) Loss on disposal of property, plant and equipment 0.6 0.1
--------------------------------------------------------------------------------
Depreciation and amortization expense 12.2 11.5
--------------------------------------------------------------------------------
Expenses for refinancing (non-cash) 0.4 0.7
--------------------------------------------------------------------------------
Income taxes paid -4.4 -3.4
--------------------------------------------------------------------------------
Interest received 3.0 1.7
--------------------------------------------------------------------------------
Interest on financial debt paid -4.9 -14.6
--------------------------------------------------------------------------------
Changes in provisions, net -17.4 -6.3
--------------------------------------------------------------------------------
Changes in working capital, net -28.8 -22.9
--------------------------------------------------------------------------------
Changes in other operating assets and other liabilities 28.0 9.2
--------------------------------------------------------------------------------
Cash provided by operating activities before antitrust payments 57.0 31.4
--------------------------------------------------------------------------------
Payments relating to antitrust proceedings 0.0 -22.5
--------------------------------------------------------------------------------
Cash provided by/used in operating activities 57.0 8.9
--------------------------------------------------------------------------------
Cash flows from investing activities
------------------------------------
Capital expenditure in property, plant and equipment
and intangible assets -33.6 -14.4
--------------------------------------------------------------------------------
Cash payments for acquisitions less acquired cash -1.1 -4.7
--------------------------------------------------------------------------------
Other investing activities 0.2 0.0
--------------------------------------------------------------------------------
Cash used in investing activities -34.5 -19.1
--------------------------------------------------------------------------------
Free cash flow* 22.5 12.3
--------------------------------------------------------------------------------
Cash flows from financing activities
------------------------------------
Proceeds from corporate debt 4.8 1.9
--------------------------------------------------------------------------------
Repayment of corporate debt -3.4 -
--------------------------------------------------------------------------------
Net proceeds from capital increase 0.0 0.6
--------------------------------------------------------------------------------
Cash provided by financing activities 1.4 2.5
--------------------------------------------------------------------------------
Effect of foreign exchange rate changes -1.0 -0.1
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 22.9 -7.8
--------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 130.0 103.0
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period 152.9 95.2
--------------------------------------------------------------------------------
* defined as cash provided by operating activities before antitrust payments
minus cash used in investing activities
Notes to the Condensed Consolidated interim Financial Statements
----------------------------------------------------------------
Description of business:
SGL Carbon Aktiengesellschaft (hereafter "SGL Carbon AG" or "the Company"),
located at Rheingaustr. 182, Wiesbaden (Germany), together with its subsidiaries
(the "SGL Group") is a global manufacturer of carbon and graphite products.
Basis of preparation and accounting policies:
The interim report on the condensed consolidated financial statements of the SGL
Group has been prepared in accordance with the International Financial Reporting
Standards (IFRS) including IAS 34 (Interim Financial Reporting). The interim
condensed consolidated financial statements do not include all the information
and disclosures required in the annual financial statements, and should be read
in conjunction with the SGL Group's annual financial statements as at December
31, 2007. Accounting and valuation methods have been consistently applied as in
our annual consolidated financial statements for financial year 2007 with the
exception of IFRIC 11. Other new IFRS standards and interpretations applicable
for periods starting January 1, 2008 had no material impact on the interim
reporting as of March 31, 2008. These financial statements were not reviewed by
our auditors.
According to IFRIC 11, share-based payment transactions, in which beneficiaries
have a right to receive an entity's equity instruments, are to be treated as
equity-settled share based payment transactions if the -entity chooses or is
required to buy those equity instruments from another party or if these equity
instruments are made available by the shareholders of the entity. The
interpretation also addresses the issue of how IFRS 2 "Share-based Payment" is
to be applied to share-based payments in which the equity instruments are the
entity's own equity instruments or the equity instruments of another entity
within the same group. IFRIC 11 is to be applied for the first time to financial
years that begin on or after March 1, 2007. The adoption of IFRIC 11 has an
impact on the financial presentation of the share plan (Matching Share Plan) and
the bonus shares for employees, for which accruals have been made until December
31, 2007.
The interim financial report was authorized for issue in accordance with a
resolution of the Board of Management on April 23, 2008.
Changes in scope of consolidation:
Launched in February 2008, the Benteler SGL GmbH & Co. KG joint venture, in
which the SGL Group has a 50% holding, is accounted for at equity in the group
accounts i.e. valued with its proportional equity. There were no further changes
in scope of consolidation at March 31, 2008 compared to December 31, 2007.
Seasonality of operations:
Our sales revenue from graphite electrodes fluctuates from quarter to quarter
due to factors related to our customers' businesses, such as customer inventory
levels, scheduled customer plant shutdowns and vacations, and changes in
customer production schedules in response to seasonal changes in customer energy
costs, strikes and work stoppages by our customers' employees. In addition,
customers may change their order patterns in response to price changes. During
the period prior to the effective date of a price increase, customers tend to
buy additional quantities of graphite electrodes at the then lower price, which
adds to our sales revenue during that period. During the period following the
effective date of a price increase, customers tend to use those additional
quantities before placing further orders, which reduces our sales revenue during
that period. Similarly, customers tend to use up their inventories and delay
purchases when they expect price reductions. Usually SGL Group's 1st and 3rd
quarter tend to be weaker as a reaction of customer inventory usage (1st
quarter) and European vacation season (3rd quarter). Usually the 2nd and 4th
quarters tend to be stronger.
Change in equity compared to December 31, 2007:
Up to and including the business year 2007 accruals were made for the shares
issued for bonus entitlements of employees in Germany and Matching Shares from
the share plan in accordance with IFRS 2. The initial obligatory adoption of
IFRIC 11 and the resulting retrospective adjustment of the balance sheet of
December 31, 2007 led to changes in balance sheet entries. Equity increased by
(euro) 13.2 million while correspondingly, accruals decreased by the same amount
(euro) 13.2 million. Adjustments required for the Matching Shares from the share
plan of SGL Group amounted to (euro) 2.3 million while an adjustment of (euro)
10.9 million had to be made for the bonus shares.
Other information:
In the first quarter 2008, 380,787 new shares were issued for employees, of
which 263,996 shares were issued under the bonus system and 70,787 under the
share plan (Matching Share Plan). In the same period, 44,500 options from the
existing stock option plan and 160,795 SARs from of the existing share
appreciation rights plan were exercised. On January 15, 2008, 716,675 new SARs
were granted from the SAR Plan 2005 with a strike price of (euro) 34.98. In
March 2008, members of the Board of Management and the top three management
tiers purchased a total of 70,239 shares at a price of (euro) 37.65 for the
Matching Share Plan. 2,110,987 SARs, 163,904 Matching Shares and 646,500 stock
options are outstanding at March 31, 2008. The number of outstanding SGL Carbon
AG shares at March 31, 2008 is 64,281,192, of which SGL Group holds a total of
46,004 own shares.
During the first quarter 2008 there have been no material unusual items or
changes in estimates except the above mentioned compared to the financial year
2007. Contingent liabilities and contingent assets did not change materially
compared to the last annual balance sheet date. The SGL Group did not pay a
dividend in the period reported.
The Board of Management and Supervisory Board have submitted the proposal to our
shareholders at the upcoming Annual General Meeting on April 25, 2008 to convert
the SGL Carbon Aktiengesellschaft into a European Company (Societas Europaea,
SE) named SGL Carbon SE.
Sales revenue and operating profit by segment:
1st Quarter
-----------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Sales revenue
-------------
Performance Products 205.2 185.0 10.9%
--------------------------------------------------------------------------------
Graphite Materials & Systems 90.7 89.9 0.9%
--------------------------------------------------------------------------------
Carbon Fibers & Composites 45.7 38.7 18.1%
--------------------------------------------------------------------------------
Other 1.6 1.0 60.0%
--------------------------------------------------------------------------------
343.2 314.6 9.1%
-----------------------------
1st Quarter
-----------------------------
(euro) million 2008 2007 Change
--------------------------------------------------------------------------------
Profit (loss) from operations/EBIT
----------------------------------
Performance Products 64.9 52.7 23.1%
--------------------------------------------------------------------------------
Graphite Materials & Systems 14.0 12.7 10.2%
--------------------------------------------------------------------------------
Carbon Fibers & Composites 2.1 0.3 -
--------------------------------------------------------------------------------
Central T&I costs -3.3 -1.3 -
--------------------------------------------------------------------------------
Corporate costs -8.3 -7.1 -16.9%
--------------------------------------------------------------------------------
69.4 57.3 21.1%
-----------------------------
Events occurring after the balance sheet date:
There were no material occurrences between the balance sheet and the reporting
date.
Declaration of the Board of Management:
We confirm, to the best of our knowledge, that the Condensed Consolidated
Interim Financial Statements and the Interim Group Management Report have been
prepared in accordance with the generally accepted accounting principles for
interim financial reporting under IFRS and give a fair presentation of SGL
Group's net assets, financial position and results of operations. The Interim
Group Management Report presents a true and fair view of the actual operations
of the Group, including the results of operations and the position of the Group,
and material prospects and risks of the Group's future development in the
remainder of the fiscal year are described.
Wiesbaden, April 23, 2008
SGL Carbon AG
The Board of Management
Investor Relations Contact
SGL Carbon AG o Head Office o Investor Relations
Rheingaustra(beta)e 182 o D-65203 Wiesbaden
Phone +49 611 60 29-100 o Fax +49 611 60 29-101
e-mail Investor-Relations@sglcarbon.deo www.sglcarbon.com
Calendar 2008
April 25 Annual General Meeting
July 31 Report on the First Half Year
October 30 Report on the First Nine Months
Quarterly Sales Revenue and Operating Profit by Segment
2007 2007 2008
-------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------------------------------------------------------------------------------
Sales revenue
-------------
Performance Products 185.0 202.1 216.8 232.3 836.2 205.2
--------------------------------------------------------------------------------
Graphite Materials & Systems 89.9 87.4 95.4 91.6 364.3 90.7
--------------------------------------------------------------------------------
Carbon Fibers & Composites 38.7 41.2 43.8 39.7 163.4 45.7
--------------------------------------------------------------------------------
Sonstige 1.0 2.2 1.8 4.1 9.1 1.6
--------------------------------------------------------------------------------
SGL Group 314.6 332.9 357.8 367.7 1,373.0 343.2
--------------------------------------------------------------------------------
2007 2007 2008
-------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------------------------------------------------------------------------------
Profit (loss) from operations
(EBIT)
-------
Performance Products 52.7 60.9 63.0 67.9 244.5 64.9
--------------------------------------------------------------------------------
Graphite Materials & Systems 12.7 12.7 11.6 10.9 47.9 14.0
--------------------------------------------------------------------------------
Carbon Fibers & Composites 0.3 0.6 1.4 0.8 3.1 2.1
--------------------------------------------------------------------------------
Zentrale T&I Kosten -1.3 -1.5 -3.2 -2.8 -8.8 -3.3
--------------------------------------------------------------------------------
Corporate Costs -7.1 -8.0 -9.7 -7.4 -32.2 -8.3
--------------------------------------------------------------------------------
SGL Group 57.3 64.7 63.1 69.4 254.5 69.4
--------------------------------------------------------------------------------
Quarterly Consolidated Return on Sales
2007 2007 2008
-------------------------------------------------
ROS in% million Q1 Q2 Q3 Q4 Full Year Q1
--------------------------------------------------------------------------------
Performance Products 28.5 30.1 29.1 29.2 29.2 31.6
--------------------------------------------------------------------------------
Graphite Materials & Systems 14.1 14.5 12.2 11.9 13.1 15.4
--------------------------------------------------------------------------------
Carbon Fibers & Composites 0.8 1.5 3.2 2.3 2.0 4.6
--------------------------------------------------------------------------------
SGL Group 18.2 19.4 17.6 18.9 18.5 20.2
--------------------------------------------------------------------------------
* before effect from ECJ decision
Quarterly Consolidated Income Statement
2007 2007 2008
-------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------------------------------------------------------------------------------
Sales revenue 314.6 332.9 357.8 367.7 1,373.0 343.2
--------------------------------------------------------------------------------
Cost of sales -205.1 -210.8 -237.5 -242.6 -896.0 -218.4
--------------------------------------------------------------------------------
Gross profit 109.5 122.1 120.3 125.1 477.0 124.8
--------------------------------------------------------------------------------
Selling/administration/
research/other -52.2 -57.4 -57.2 -55.7 -222.5 -55.4
--------------------------------------------------------------------------------
Profit from operations (EBIT) 57.3 64.7 63.1 69.4 254.5 69.4
--------------------------------------------------------------------------------
Net financing costs -11.9 -38.4 -8.7 -6.4 -65.4 -8.6
--------------------------------------------------------------------------------
Profit (loss) before tax 45.4 26.3 54.4 63.0 189.1 60.8
--------------------------------------------------------------------------------
Income tax expense -12.7 -9.6 -24.2 -11.4 -57.9 -16.6
--------------------------------------------------------------------------------
Minority interests -0.2 0.2 -0.2 -0.1 -0.3 -0.1
--------------------------------------------------------------------------------
Net profit (loss) attributable
to equity holders 32.5 16.9 30.0 51.5 130.9 44.1
--------------------------------------------------------------------------------
Important note:
This interim report contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not to be understood as guarantees.
The future developments and events are dependent on a number of factors. They
include various risks and unanticipated circumstances and are based on
assumptions that may not be correct. These risks and uncertainties include, for
example, unforeseeable changes in political, economic and business conditions,
particularly in the area of electrosteel production, the competitive situation,
interest rate and currency developments, technological developments and other
risks and unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies and in
the ongoing cost optimization programs. SGL Group does not intend to update
these forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SGL CARBON Aktiengesellschaft
Date: April 23, 2008 By: /s/ Robert J. Kohler
-------------------------------
Name: Robert J. Koehler
Title: Chairman of the Board of
Management
By: /s/ Sten Daugaard
-------------------------------
Name: Mr. Sten Daugaard
Title: Member of the Board of
Management