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: August 2005
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
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1. August 9, 2005 German Press Release - First Half 2005 Results
2. August 9, 2005 Letter to Shareholders re First Half 2005 Results
Exhibit 1
[LOGO OF SGL CARBON]
SGL Carbon: First Half of 2005
o Q2/2005 sales up by 17% and EBIT by 57% over Q1/2005
o Disproportionate 29% improvement in EBIT to (euro)53.8 million in H1/2005,
with a positive after-tax result of (euro)14.5 million
o AUDI cooperation agreement goes into effect in Q3/2005
o Ongoing favorable developments anticipated in Q3/2005
Wiesbaden, August 09, 2005. SGL Carbon was able to boost consolidated sales due
to the strong development of demand in all three business areas by 14.0% from
(euro)453.0 million in H1/2004 to (euro)516.4 million in H1/2005. Adjusted for
foreign currency changes, sales increased by 15.9%. EBIT increased by a
disproportionately higher rate than sales from comparable (euro)41.8 million the
previous year to (euro)53.8 million. This corresponds to a 28.7% increase
despite a first-time charge due to share-based remuneration of approximately
(euro)4 million. The principal causes for the growth in earnings were the
ongoing favorable developments in Carbon and Graphite, the earnings turnaround
in Process Technology, the breakeven result achieved by SGL Technologies in Q2,
and cost savings of approximately (euro)10 million in H1/2005.
Net financing costs
First half-year net financing costs improved from (euro)-31.4 million in 2004 to
(euro)-27.8 million in 2005. The net interest expense decreased during the first
half of the year by (euro)0.8 million to (euro)14.6 million over the same period
of the previous year due to the lower level of net debt. In addition, non-cash
interest expenses in connection with the antitrust proceedings declined from
(euro)3.4 million in the first half of 2004 to (euro)2.6 million in H1/2005.
Profit before and after tax
Profit before income taxes amounted to (euro)26.0 million, compared with
(euro)10.4 million in H1/2004. With a tax rate of approximately 44%,
consolidated net profit in H1/2005 doubled from (euro)7.0 million the previous
year to (euro)14.5 million. Taking into consideration the loss from the Surface
Protection business, profit after tax rose from (euro)0.3 million in the first
half of 2004 to (euro)14.5 million during the same period of 2005. Earnings per
share thus amounted to (euro)0.25, compared with the reported figure of
(euro)-0.06 and a comparable figure of (euro)0.01 in H1/2004.
SGL CARBON AG
Corporate Communications, Media Relations
Rheingaustrasse 182, D-65203 Wiesbaden
Tel.: +49 (6 11) 60 29-100, Fax: +49 (6 11) 60 29-101
E-Mail: cpc@sglcarbon.de, Internet: www.sglcarbon.de
Statement of Changes in Consolidated Equity
With equity up by (euro)29 million from (euro)282 million on December 31, 2004
to (euro)311 million on June 30, 2005, the equity ratio improved from 21.4% to
24.3%. Excluding assets and liabilities related to the Corrosion Protection
business in the balance sheet as of December 31, 2004, the equity ratio
increased from 22.5% to 24.3%. When the (euro)50 million convertible bond issue,
which becomes due in September 2005, is deducted from total assets as of the end
of June 2005, a 25.3% pro forma equity ratio results.
Corporate Costs
Corporate costs rose from (euro)-9.9 million in the first half of 2004 to
(euro)-13.8 million in the first half of 2005. This was primarily attributable
to expenses in connection with the implementation of the Sarbanes-Oxley Act as
well as the first time inclusion of share-based remuneration components under
the provisions of IFRS 2 beginning on January 1, 2005, which was not undertaken
in the previous year.
Employees
The number of employees in the Group remained virtually unchanged at 5,097
compared with a total of 5,091 at the end of March 2005, thereby remaining below
the level of 5,109 at the end of December 2004.
Segment Reporting
Carbon and Graphite (CG)
Sales increased by 14.3% to (euro)311.1 million in the first half of 2005.
Adjusted for foreign currency changes, the growth was 16.9%. Due to the
continuing high demand for graphite electrodes and the high capacity utilization
at all the plants as well as to price increases and ongoing cost reduction
measures, EBIT amounted to (euro)60.3 million during the reporting period, up by
32.8% over the previous year's figure of (euro)45.4 million. The return on sales
improved to over 19%, compared with just under 17% in the first half of 2004
(EBIT margin in Q2/2005: 20.0%; Q1/2005: 18.7%). The average price for graphite
electrodes increased by 12% in USD terms and by 4% in EUR terms versus H1/2004.
Total shipments amounted to 110,000 metric tons in the first half of 2005, 10%
higher than in the first half of the previous year. As expected, raw material
and energy costs increased by nearly 10%. Due to seasonally lower volumes, we
are projecting the Q3/2005 EBIT slightly lower than in Q2/2005 ((euro)33.6
million), but in excess of the previous year's Q3 figure of (euro)25.5 million.
2/6
Specialties (S)
Due to the integration of Process Technology (PT) into the Graphite Specialties
Business Area (GS), we have renamed this area of business "Specialties" (S).
Thanks to a very good development of the U.S. business and PT's planned project
launch in Q2/2005, sales increased by 7.2% to (euro)123.6 million versus
H1/2004; growth of 7.7% was posted after adjusting for foreign currency changes.
The rise in sales was modest for GS and substantial for PT. Whereas EBIT of GS
was still below the strong previous year's figure, PT already recorded an
improved result in the first half-year compared with the year earlier period.
EBIT for the overall Specialties Business Area in the first half-year amounted
to (euro)7.9 million, which due to the weak Q1/2005 was still (euro)2.3 million
below the figure for H1/2004. However, with EBIT of (euro)6.6 million, the
Q2/2005 result was already one-third higher than in Q2/2004, with PT
contributing to that growth. From Q3/2005 onwards, the ongoing favorable sales
trend will be further reflected in the EBIT of S, which will result in a
significant double-digit improvement over Q3/2004.
3/6
SGL Technologies (SGL T)
Due to strong demand for Fibers, Composites and Brakes, sales rose by 24.8% to
(euro)80.5 million. After adjusting for foreign currency changes, growth
amounted to 26.2%. EBIT totaled (euro)-0.6 million in the first half of 2005,
compared with (euro)-3.9 million in the first half of the previous year, thereby
reaching breakeven for the first time in Q2/2005. This satisfying development
should continue in Q3/2005, with the increase in sales remaining below the
growth in H1/2005 due to the high comparable figure in Q3/2004 but still
continuing to exceed 10%.
Since the June 7, 2005 announcement of SGL Carbon entering a cooperation
agreement with AUDI for the development of the carbon-ceramic brake disc, the
appropriate bodies have since granted the necessary approvals and the agreement
has received its notarial certification. With the official cooperation agreement
coming into force on July 28, 2005, SGL Carbon will in Q3/2005 receive a low
double-digit million amount payment as compensation for product and process
development services already rendered and still to be provided. After offsetting
these development costs from the received payment, a one-time medium single
digit million amount is expected as positive earnings effect on EBIT in Q3.
Outlook
Due to the typical seasonality, SGL Carbon expects slightly weaker sales and
EBIT in Q3/2005 versus Q2/2005. Compared with Q3/2004, however, marked growth of
approximately 10% is anticipated for sales and a further disproportionate
improvement of up to 50% for EBIT. For the year as a whole, the Company is
forecasting an increase in consolidated sales of between 5% and 10%, a
disproportionate growth in EBIT, and a positive after-tax result. The USD
currency risk is hedged for fiscal year 2005 due to existing hedging
transactions. Net financial debt should be less than (euro)300 million at
year-end 2005 (2004 yearend: (euro)321 million) due to the significant positive
free cash flow expected until the end of this year.
4/6
Financial Highlights SGL Carbon Group
(in Mio. (euro))
First Half
----------
2005 2004
Sales revenue 516.4 453.0
EBITDA 88.6 71.0
EBIT 53.8 41.8
Return on sales (1) 10.4% 9.2%
Net profit from continuing operations 14.5 7.0
Net loss from discontinued operations - -6.7
Net profit before minority interests 14,5 0,3
Earnings per share (in (euro)) 0.25 0.01
Operational cash flow from continuing operations (2) 43.0 45.3
(1) EBIT divided by sales revenue
(2) Without currency exchange rate effects
June 30, Dec. 31,
2005 2004
Total assets 1,278 1,315
Equity 311 282
Net debt 342 321
Debt ratio (gearing) (3) 1.1 1.1
Equity ratio (4) 24.3% 21.4%
(3) Net debt divided by shareholders equity
(4) Shareholders' equity divided by total assets
Remark
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Effective January 6, 2005, SGL Carbon concluded the sale of its investment in
SGL ACOTEC GmbH, which included SGL's Surface Protection business. The effects
resulting from this transaction were already recognized in the annual financial
statements for 2004. The Process Technology (PT) business remaining in the Group
was integrated within the Specialties (S) Business Area. Only the results of
continuing operations are presented in this semi-annual report.
5/6
According to IFRS 2, since January 1, 2005, share-based payments, such as stock
option plans and share bonus programs for employees and members of senior
management are included under staff costs. Based on current calculation, this
change will burden the results of the segments and corporate costs by a total of
approximately (euro)2 million each quarter in 2005.
As we already discussed at the year-end press conference in March, the
restructuring measures have now largely been completed. Therefore, profit from
operations (EBIT) no longer includes a separate presentation of restructuring
expenses.
Important Notice:
This document 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.
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, ongoing restructuring measures
and unforeseeable occurrences in conjunction with the reviews to be performed by
the European antitrust authorities. SGL Carbon does not intend to update these
forward-looking statements.
Your contact:
-------------
Corporate Communications / Press Office / Stefan Wortmann
Tel. : +49 611 60 29 105 / Fax : +49 6 11 60 29 101 / Mobil : +49 170 540 2667
e-mail : stefan.wortmann@sglcarbon.de / Internet : www.sglcarbon.de
6/6
Exhibit 2
H1
Report on the First Half of 2005
Prepared in accordance with International Financial Reporting Standards, IFRSs
(unaudited)
The report on the first half of 2005 was prepared in accordance with the
International Financial Reporting Standards (IFRSs) (unaudited). The same
accounting policies were used in this report as in the annual financial
statements for 2004.
- Q2/2005 sales up by 17% and EBIT by 57% over Q1/2005
- Disproportionate 29% improvement in EBIT to (euro)53.8 million in H1/2005,
- with a positive after-tax result of (euro)14.5 million
- AUDI cooperation agreement goes into effect in Q3/2005
- Ongoing favorable developments anticipated in Q3/2005
Financial Highlights (unaudited)
First Half First Half
((euro) million) 2005 2004
Sales revenue 516.4 453.0
Gross profit 151.2 132.6
EBITDA 88.6 71.0
EBIT 53.8 41.8
Return on sales(1) 10.4 % 9.2 %
Net profit from continuing operations 14.5 7.0
Net loss from discontinued operations - - 6.7
Net profit before minority interests 14.5 0.3
Earnings per share (in (euro)) 0.25 0.01
Operational cash flow from continuing operations(2) 43.0 45.3
((euro) million) June 30, Dec. 31,
2005 2004
Total assets 1,278 1,315
Equity 311 282
Net debt 342 321
Debt ratio (gearing)(3) 1.1 1.1
Equity ratio(4) 24.3 % 21.4 %
(1) EBIT divided by sales revenue
(2) Without currency exchange rate effects
(3) Net debt divided by shareholders' equity
(4) Shareholders' equity divided by total assets
Effective January 6, 2005, SGL Carbon concluded the sale of its investment in
SGL ACOTEC GmbH, which included SGL's Surface Protection business. The effects
resulting from this transaction were already recognized in the annual financial
statements for 2004. The Process Technology (PT) business remaining in the Group
was integrated within the Specialties (S) Business Area. Only the results of
continuing operations are presented in this semi-annual report.
According to IFRS 2, since January 1, 2005, share-based payments, such as stock
option plans and share bonus programs for employees and members of senior
management are included under staff costs. Based on current calculation, this
change will burden the results of the segments and corporate costs by a total of
approximately (euro)2 million each quarter in 2005.
As we already discussed at the year-end press conference in March, the
restructuring measures have now largely been completed. Therefore, profit from
operations (EBIT) no longer includes a separate presentation of restructuring
expenses.
Business Development in the Group
Consolidated Income Statement (unaudited)
((euro) million) First Half First Half
2005 2004
Sales revenue 516.4 453.0
Gross profit 151.2 132.6
Selling, administrative, research and other income/expense - 97.4 - 90.8
Profit from operations (EBIT) 53.8 41.8
Net financing costs - 27.8 - 31.4
Profit (loss) before tax 26.0 10.4
Income taxes - 11.5 - 3.4
Net profit (loss) from continuing operations 14.5 7.0
Net profit (loss) from discontinued operations - - 6.7
Net profit (loss) before minority interests 14.5 0.3
Earnings per share (in (euro), basic) 0.25 0.01
1. Comparable EBIT for the H1/2004 is calculated as follows: reported EBIT
after restructuring expenses amounted to (euro)25.4 million in H1/2004.
Taking into consideration the (euro)11.3 million operating loss from
the divested Surface Protection business, the discontinuation of the
(euro)2.6 million scheduled goodwill amortization in accordance with
IFRS 3, and the reclassification of the interest on the North American
pension provisions of (euro)2.5 million, which are now unified and
shown in the net financing costs, the comparable EBIT of (euro)41.8
million results.
2. In H1/2005 approximately 56.9 million shares were outstanding on
average.
Due to the strong development of demand in all three business areas,
consolidated sales were boosted by 14.0% from (euro)453.0 million in H1/2004 to
(euro)516.4 million in H1/2005. Adjusted for foreign currency changes, sales
increased by 15.9%. EBIT increased by a disproportionately higher rate than
sales from comparable (euro)41.8 million the previous year to (euro)53.8
million. This corresponds to a 28.7% increase despite a first-time charge due to
share-based remuneration of approximately (euro)4 million. The principal causes
for the growth in earnings were the ongoing favorable developments in Carbon and
Graphite, the earnings turnaround in Process Technology, the breakeven result
achieved by SGL Technologies in Q2, and cost savings of approximately (euro)10
million in H1/2005.
Details of Net Financing Costs
((euro) million) First Half First Half
2005 2004
Interest expense (net) - 14.6 - 15.4
Interest expense on pensions - 6.7 - 6.7
Interest expense on antitrust (non-cash) - 2.6 - 3.4
Total interest expense, net - 23.9 - 25.5
Currency and hedging valuation adjustments of antitrust liabilities - 1.0 - 1.8
(non-cash)
Amortization of refinancing costs (non-cash) - 1.9 - 1.7
Other - 1.0 - 2.4
Total other financing expenses - 3.9 - 5.9
Net financing costs - 27.8 - 31.4
First half-year net financing costs improved from (euro)-31.4 million in 2004 to
(euro)-27.8 million in 2005. The net interest expense decreased during the first
half of the year by (euro)0.8 million to (euro)14.6 million over the same period
of the previous year due to the lower level of net debt. In addition, non-cash
interest expenses in connection with the antitrust proceedings declined from
(euro)3.4 million in the first half of 2004 to (euro)2.6 million in H1/2005.
Profit before and after tax
Profit before income taxes amounted to (euro)26.0 million, compared with
(euro)10.4 million in H1/2004. With a tax rate of approximately 44%,
consolidated net profit in H1/2005 doubled from (euro)7.0 million the previous
year to (euro)14.5 million. Taking into consideration the loss from the Surface
Protection business, profit after tax rose from (euro)0.3 million in the first
half of 2004 to (euro)14.5 million during the same period of 2005. Earnings per
share thus amounted to (euro)0.25, compared with the reported figure of
(euro)-0.06 and a comparable figure of (euro)0.01 in H1/2004.
Financial Position
Consolidated Balance Sheet (unaudited)
((euro) million) June 30, Dec. 31,
2005 2004
Assets
Intangible assets 89 85
Property, plant and equipment 342 345
Long-term investments 30 30
Deferred tax assets 136 130
Non-current assets 597 590
Inventories 271 248
Trade receivables 216 184
Other current assets 34 36
Cash and cash equivalents 46 65
Restricted cash for repayment of convertible bonds 51 51
Restricted cash for antitrust payments 63 77
Current assets 681 661
Assets held for sale - 64
Total assets 1,278 1,315
((euro) million) June 30, Dec. 31,
2005 2004
Equity and liabilities
Equity including minority interests 311 282
Non-current financial liabilities 359 353
Provisions for pensions and other employee benefits 158 156
Deferred tax liabilities 43 45
Other non-current liabilities 1 37
Other non-current provisions 19 19
Non-current liabilities 580 610
Financial liabilities(1) 61 63
Trade payables 87 91
Other liabilities 114 79
Other provisions 125 126
Current liabilities 387 359
Liabilities held for sale - 64
Total equity and liabilities 1,278 1,315
(1) Including convertible bonds totaling (euro)50 million as of June 30, 2005
Primarily due to the sale of the Surface Protection business on January 6, 2005,
total assets declined by (euro)37 million to (euro)1,278 million as of June 30,
2005. In the first half of 2005 a scheduled payment of (euro)15 million was made
out of the restricted cash account for antitrust payments to the U.S. antitrust
authorities.
Working Capital (unaudited)
((euro) million) June 30, Dec. 31,
2005 2004
Inventories 271 248
Trade receivables 216 184
Less trade payables - 87 - 91
Working Capital 400 341
The increase in working capital by (euro)59 million over the year-end 2004
resulted from higher than expected business activity especially at CG and SGL T.
Despite the typically high seasonal level at mid-year, we were nevertheless able
to reduce the average days working capital from 149 as of June 30, 2004, to 139
as of June 30, 2005.
Statement of Changes in Consolidated Equity (unaudited)
((euro) million) First Half Equity Ratio
2005
Balance at January 1 282 21.4 %
Capital increase 2
Net profit from continuing operations 15
Currency exchange rate differences and other 12
Balance at June 30 311 24.3 %
With equity up by (euro)29 million from (euro)282 million on December 31, 2004
to (euro)311 million on June 30, 2005, the equity ratio improved from 21.4% to
24.3%. Excluding assets and liabilities related to the Corrosion Protection
business in the balance sheet as of December 31, 2004, the equity ratio
increased from 22.5% to 24.3%. When the (euro)50 million convertible bond issue,
which becomes due in September 2005, is deducted from total assets as of the end
of June 2005, a 25.3% pro forma equity ratio results.
Net Debt (unaudited)
((euro) million) June 30, Dec. 31,
2005 2004
Financial debt (including convertible bonds) 420 416
Refinancing costs 19 21
Restricted cash for convertible bonds - 51 - 51
Unrestricted cash and cash equivalents - 46 - 65
Net debt 342 321
Net financial debt as of June 30, 2005, increased compared to the year-end 2004
level due to the (euro)20 million lower level of unrestricted cash and cash
equivalents. Due to exchange rate effects of (euro)10 million, net debt at
comparable exchange rates increased by only (euro)11 million.
Gearing was 1.1 as of June 30, 2005. Although unchanged from December 31, 2004,
it slightly improved over the 1.2 figure as of March 31, 2005.
Financial Condition
Consolidated Cash Flow Statement (unaudited)
((euro) million) First Half First Half
2005 2004
Profit from operations (EBIT) 53.8 41.8
Depreciation 34.8 29.2
EBITDA 88.6 71.0
Decrease (increase) in working capital - 45.6 - 25.7
Operational cash flow 43.0 45.3
Other operating cash sources (uses) - 37.7 - 22.8
Cash provided by operating activities before antitrust payments 5.3 22.5
Payments relating to antitrust proceedings(1) - 15.1 - 31.7
Cash used by operating activities - 9.8 - 9.2
Capital expenditures - 17.4 - 15.5
Other investing activities 0.0 - 3.6
Cash used in investing activities - 17.4 - 19.1
Free Cash Flow(2) - 12.1 3.4
Net change in financial liabilities - 9.1 - 43.8
Payments in connection with refinancing 0.0 - 23.6
Net proceeds from capital increase 1.8 245.1
Cash provided by (used in) financing activities - 7.3 177.7
Cash used in discontinued operations - - 3.0
Effect of foreign exchange rate changes 1.3 0.5
Net increase (decrease) in cash and cash equivalents - 33.2 146.9
Cash and cash equivalents at beginning of the year 192.7 46.1
Cash and cash equivalents at end of half year 159.5 193.0
(1) From restricted cash account for antitrust payments
(2) Cash provided by operating activities before antitrust payments less cash
used in investing activities
Details of other operating cash sources (uses)(1) (unaudited)
((euro) million) First Half First Half
2005 2004
Interest payments (net) - 14.6 - 7.3
Cash interest expense for pensions - 4.1 - 8.7
Other cash components of financial result (net) - 0.6 - 1.4
Cash restructuring expense - 2.6 - 1.5
Tax payments - 6.3 - 5.8
Bonus payments/accruals - 3.8 3.5
Other cash payments - 5.7 - 1.6
Other operating cash sources (uses) - 37.7 - 22.8
(1) adjusted by currency effects
SGL Carbon attained a positive operating cash flow of (euro)43.0 million in the
first half of 2005, compared with (euro)45.3 million in the same period of the
previous year. Higher profit contributions from operating activities contrasted
with a temporary build-up of working capital, which was largely attributable to
servicing higher than expected demand. Other operating cash uses increased to
(euro)37.7 million from (euro)22.8 million in the first half of 2004. The main
reasons for this are the semi-annual interest payment for the corporate bond,
which had been paid for the first time in August 2004 as well as the bonus
payment in 2005, since the Board of Management and 156 members of senior
management waived their bonuses in 2004 as part of the refinancing and capital
increase efforts of the company. As a result, net cash provided by operating
activities before antitrust payments amounted to (euro)5.3 million in the first
half of 2005, compared with (euro)22.5 million in the same period the previous
year.
Payments made in connection with antitrust proceedings comprised the scheduled
payments to the North American antitrust authorities of (euro)15.1 million,
which were paid out of the restricted cash account for antitrust payments.
Capital expenditure of (euro)17.4 million exceeded the previous year's figure of
(euro)15.5 million, and was approximately (euro)17 million below depreciation of
(euro)34.8 million during the reporting period, compared with (euro)29.2 million
in H1/2004. Due to the above-mentioned development of working capital as well as
the higher interest and bonus payments, free cash flow amounted to (euro)-12.1
million in the first half of 2005, compared with (euro)3.4 million in the first
half of 2004.
Segment Reporting
Carbon and Graphite [CG]
((euro) million) First Half, First Half,
2005 2004
Sales revenue 311.1 272.1
EBITDA 82.2 60.5
Profit from operations (EBIT) 60.3 45.4
Return on sales 19.4 % 16.7 %
Sales increased by 14.3% to (euro)311.1 million in the first half of 2005.
Adjusted for foreign currency changes, the growth was 16.9%. Due to the
continuing high demand for graphite electrodes and the high capacity utilization
at all the plants as well as to price increases and ongoing cost reduction
measures, EBIT amounted to (euro)60.3 million during the reporting period, up by
32.8% over the previous year's figure of (euro)45.4 million. The return on sales
improved to over 19%, compared with just under 17% in the first half of 2004
(EBIT margin in Q2/2005: 20.0%; Q1/2005: 18.7%). The average price for graphite
electrodes increased by 12% in USD terms and by 4% in EUR terms versus H1/2004.
Total shipments amounted to 110,000 metric tons in the first half of 2005, 10%
higher than in the first half of the previous year. As expected, raw material
and energy costs increased by nearly 10%. Due to seasonally lower volumes, we
are projecting the Q3/2005 EBIT slightly lower than in Q2/2005 ((euro)33.6
million), but in excess of the previous year's Q3 figure of (euro)25.5 million.
Specialties [S]
(Mio. (euro))
First Half, First Half,
2005 2004
Sales revenue 123.6 115.3
EBITDA 14.5 17.7
Profit from operations (EBIT) 7.9 10.2
Return on sales 6.4 % 8.8 %
Due to the integration of Process Technology (PT) into the Graphite Specialties
Business Area (GS), we have renamed this area of business "Specialties" (S).
Thanks to a very good development of the U.S. business and PT's planned project
launch in Q2/2005, sales increased by 7.2% to (euro)123.6 million versus
H1/2004; growth of 7.7% was posted after adjusting for foreign currency changes.
The rise in sales was modest for GS and substantial for PT. Whereas EBIT of GS
was still below the strong previous year's figure, PT already recorded an
improved result in the first half-year compared with the year earlier period.
EBIT for the overall Specialties Business Area in the first half-year amounted
to (euro)7.9 million, which due to the weak Q1/2005 was still (euro)2.3 million
below the figure for H1/2004. However, with EBIT of (euro)6.6 million, the
Q2/2005 result was already one-third higher than in Q2/2004, with PT
contributing to that growth. From Q3/2005 onwards, the ongoing favorable sales
trend will be further reflected in the EBIT of S, which will result in a
significant double-digit improvement over Q3/2004.
SGL Technologies [T]
((euro) million) First Half, 2005 First Half, 2004
Sales revenue 80.5 64.5
EBITDA 5.7 2.6
Profit from operations (EBIT) - 0.6 - 3.9
Return on sales - 0.7 % - 6.0 %
Due to strong demand for Fibers, Composites and Brakes, sales rose by 24.8% to
(euro)80.5 million. After adjusting for foreign currency changes, growth
amounted to 26.2%. EBIT totaled (euro)-0.6 million in the first half of 2005,
compared with (euro)-3.9 million in the first half of the previous year, thereby
reaching breakeven for the first time in Q2/2005. This satisfying development
should continue in Q3/2005, with the increase in sales remaining below the
growth in H1/2005 due to the high comparable figure in Q3/2004 but still
continuing to exceed 10%.
Since the June 7, 2005 announcement of SGL Carbon entering a cooperation
agreement with AUDI for the development of the carbon-ceramic brake disc, the
appropriate bodies have since granted the necessary approvals and the agreement
has received its notarial certification. With the official cooperation agreement
coming into force on July 28, 2005, SGL Carbon will in Q3/2005 receive a low
double-digit million amount payment as compensation for product and process
development services already rendered and still to be provided. After offsetting
these development costs from the received payment, a one-time medium
single-digit million amount is expected as positive earnings effect on EBIT in
Q3.
Corporate Costs
((euro) million) First Half, First Half,
2005 2004
Other revenue 1.2 1.1
Corporate costs - 13.8 - 9.9
Corporate costs rose from (euro)-9.9 million in the first half of 2004 to
(euro)-13.8 million in the first half of 2005. This was primarily attributable
to expenses in connection with the implementation of the Sarbanes-Oxley Act as
well as the first time inclusion of share-based remuneration components under
the provisions of IFRS 2 beginning on January 1, 2005, which was not under-taken
in the previous year.
Employees
The number of employees in the Group remained virtually unchanged at 5,097
compared with a total of 5,091 at the end of March 2005, thereby remaining below
the level of 5,109 at the end of December 2004.
Outlook
Due to the typical seasonality, SGL Carbon expects slightly weaker sales and
EBIT in Q3/2005 versus Q2/2005. Compared with Q3/2004, however, marked growth of
approximately 10% is anticipated for sales and a further disproportionate
improvement of up to 50% for EBIT. For the year as a whole, the Company is
forecasting an increase in consolidated sales of between 5% and 10%, a
disproportionate growth in EBIT, and a positive after-tax result. The USD
currency risk is hedged for fiscal year 2005 due to existing hedging
transactions. Net financial debt should be less than (euro)300 million at
year-end 2005 (2004 year-end: (euro)321 million) due to the significant positive
free cash flow expected until the end of this year.
Quarterly Sales Revenue & Profit from Operations (EBIT) by Segment (unaudited)
2004 2005
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 H1
Sales revenue
Carbon and Graphite 122.6 149.5 140.5 142.9 555.5 142.9 168.2 311.1
Specialties 58.1 57.2 60.8 59.7 235.8 57.3 66.3 123.6
SGL Technologies 29.8 34.7 33.4 35.3 133.2 37.5 43.0 80.5
Other 0.5 0.6 0.3 0.3 1.7 0.6 0.6 1.2
211.0 242.0 235.0 238.2 926.2 238.3 278.1 516.4
2004 2005
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 H1
Profit (loss) from Operations
(EBIT)
Carbon and Graphite 17.9 27.5 25.5 18.8 89.7 26.7 33.6 60.3
Specialties 5.3 4.9 4.2 0.8 15.2 1.3 6.6 7.9
SGL Technologies - 1.8 - 2.1 - 2.1 - 4.1 - 10.1 - 0.6 0.0 - 0.6
Corporate - 4.7 - 5.2 - 9.0 - 10.4 - 29.3 - 6.5 - 7.3 - 13.8
16.7 25.1 18.6 5.1 65.5 20.9 32.9 53.8
Quarterly Consolidated Income Statement (unaudited)
2004 2005
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 H1
Sales revenue 211.0 242.0 235.0 238.2 926.2 238.3 278.1 516.4
Cost of sales - 151.5 - 168.9 - 168.2 - 174.8 - 663.4 - 174.0 - 191.2 - 365.2
Gross profit 59.5 73.1 66.8 63.4 262.8 64.3 86.9 151.2
Selling/administrative/R&D/other - 42.8 - 48.0 - 48.2 - 58.3 - 197.3 - 43.4 - 54.0 - 97.4
Profit (loss) from operations 16.7 25.1 18.6 5.1 65.5 20.9 32.9 53.8
(EBIT)
Net financing costs - 15.2 - 16.2 - 14.0 - 15.1 - 60.5 - 13.1 - 14.7 - 27.8
Profit (loss) before tax 1.5 8.9 4.6 - 10.0 5.0 7.8 18.2 26.0
Income taxes - 0.9 - 2.5 - 4.1 6.3 - 1.2 - 4.1 - 7.4 - 11.5
Net profit (loss) from continuing 0.6 6.4 0.5 - 3.7 3.8 3.7 10.8 14.5
operations
Net loss from discontinued - 4.0 - 2.7 - 2.0 - 76.8 - 85.5 - - -
operations
Net profit (loss) before minority - 3.4 3.7 - 1.5 - 80.5 - 81.7 3.7 10.8 14.5
interests
Important note:
This document 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.
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, ongoing restructuring measures
and unforeseeable occurrences in conjunction with the reviews to be performed by
the European antitrust authorities. SGL Carbon 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: August 9, 2005 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