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: October 2007
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. October 5, 2007 German Press Release - SGL Group plans to triple
carbon fiber capacities
2. October 25, 2007 German Press Release - SGL Group: Strong growth
dynamics and record nine-month results
3. October 25, 2007 German Press Release - SGL Group Acquires epo GmbH,
Strengthening its Market Position in Carbon Fiber Composites
4. October 25, 2007 Shareholder Letter - Report on the First Nine Months
of 2007
Exhibit 1
SGL Group plans to triple carbon fiber capacities
o Capacity increase up to 12,000 metric tons by 2012
o Focus on core applications energy, automotive and aerospace
o Realignment of the Meitingen site including development as global
Technology & Innovation Center
o Meitingen is a "selected landmark 2007" for the "Germany - Land of
Ideas" initiative
Wiesbaden, October 5, 2007. The SGL Group - The Carbon Company - is rigorously
continuing on its path to becoming one of the leading suppliers in the area of
carbon fibers and carbon fiber composites and plans to triple its carbon fiber
production capacity to as much as 12,000 metric tons by 2012. In addition to the
announced expansion of the Inverness location (Scotland) to an annual production
of approximately 4,000 metric tons by the end of 2008, there are also plans to
expand the Evanston location (Wyoming/USA) and to establish a new carbon fiber
production site at Meitingen (Germany) with similar production capacities. The
Group intends to invest a total of around (euro)300 million in these measures
over the coming five years.
These capacity increases should give even greater impetus to the profitable
growth track announced by the company. For the Carbon Fibers & Composites (CFC)
business unit, SGL Group plans to increase sales in the four business lines
Carbon Fibers, Composite Materials, Composite Components and Brake Disks by
considerably more than 15% per annum. The sharp increase in sales is also
expected to lead to a significant improvement in return on sales (ROS). Whilst
the ROS for the previous fiscal year remained negative at -4% as a result of
development and start-up costs, a positive return is already expected in 2007.
The company expects an ROS in the high single digits for 2008. An ROS exceeding
10% is expected by 2011.
Against the 2006 figures, total sales of SGL Group should increase by 40% to 50%
by 2011. Over the whole period, the ROS should be at least in the range between
12% and 16%.
Traditional materials increasingly substituted by carbon fibers
In years to come, the Carbon Fibers & Composites business unit will profit
particularly strongly from the substitution process of basic materials. The
carbon fibers and carbon fiber composites produced by CFC are in increasing
demand as replacements for traditional materials due to their unique properties
such as lightweight and stiffness. As the only European company with own raw
material supply, carbon fiber technology and an integrated value added chain
right up to the finished component, SGL Group deploys 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.
There are currently only eight producers of carbon fibers worldwide. SGL Group
is the only European producer, three are based in Japan, three in the US and one
in Taiwan.
Demand for carbon fibers increasing by considerably more than 10% per annum
Due to the growing substitution process, demand for carbon fibers has been
steadily increasing since 2000. According to conservative estimates, worldwide
demand which is currently at 30,000 tons is expected to double to 60,000 tons
until 2012. The capacity increases announced so far barely cover this increased
demand.
In the next production stage, composite materials are produced from carbon
fibers which are then turned into composite components. At present, the
worldwide market volume for composite materials is some (euro)1.8 billion, that
of carbon composites approximately (euro)13 billion. Both markets are growing by
more than 10% per annum.
SGL Group's objective is to establish a leading position in raw materials
(precursor), carbon fibers and composite materials. With respect to the
Composite Components business line, SGL Group strengthening its core competences
in the materials field by means of strategic alliances and joint ventures with
end component manufacturers. One example of this is the joint venture agreed
upon in July 2007 with the automotive supplier Benteler for the development,
production and marketing of components for the automotive industry based on
carbon fiber reinforced composites. In the field of carbon fiber brake disks,
SGL Group has been working successfully with Audi and Porsche for a long time.
Thanks to the most recent investments in automation technology, the US
subsidiary HITCO is expected to play a similar role with regard to aircraft
construction. The order from Boeing for floor beams made of composite materials
for the Boeing 787 Dreamliner is an example for this.
Important strategic steps already implemented
With the introduction of a new high-quality carbon fiber, SGL Group has set a
milestone during 2005 and 2006 on the path to becoming a leading carbon fiber
company. Since then, SGL Group has taken a number of important strategic steps.
In the past twelve months, the rate of expansion has picked up significantly. At
the end of 2006 one of the most modern facilities worldwide was commissioned at
the Meitingen site for the production of 1,000 metric tons of directly
processable prepreg. In a joint venture with Lenzing AG, in March, SGL Group
exclusively secured its raw material supply for the production of carbon fibers
on a long-term basis. This step has also secured the strategic backward
integration for manufacturing precursor from own German production in Kelheim.
2
Since April 2007, there has also been a strategic partnership with other
companies operating in the field of carbon fiber technology as part of Carbon
Composite e.V. in Bavaria. In addition to the SGL Group, founding members
include the German Aerospace Center (DLR) Stuttgart, EADS, Eurocopter, Swabian
Chamber of Industry and Commerce, KUKA, MT Aerospace, the City of Augsburg, the
University of Stuttgart and the University of Augsburg. In August, SGL Group
announced its intention to create an interdisciplinary donor-funded chair for
carbon fibers and carbon fiber composites at the Technical University of Munich.
The chair has been created for an initial period of eight years and is sponsored
by the SGL Group with (euro)4.8 million. The purpose of this collaboration is to
promote research and development of carbon-fiber-based materials, thus
accelerating innovations in a decisive fashion.
Realignment of the Meitingen site including expansion to become a global
research and development center
The high level of investments in the entire carbon fiber and composites value
added chain result in a considerable realignment of the Meitingen site near
Augsburg, which consequently gains a certain unique positioning. Bundling all of
SGL Group's global research and development (R&D) expertise at this location,
combined with the construction of the new global research and development center
is a further logical milestone here. Together with some 300 guests as well as
prominent representatives from business, politics and academia, SGL Group today
held the topping out ceremony for the construction of this R&D unit at the
Meitingen site. The new center of the Group's research, which goes under the
name of Technology and Innovation (T&I) at SGL Group's largest site worldwide,
will bundle all the company's R&D activities. The company invests some (euro)8
million in this project. In the medium term, the number of scientific employees
will be increased from 80 at present to approximately 120. The R&D activities
will focus mainly on the further development of technology and optimization of
the manufacturing process for carbon fibers.
"Selected landmark 2007" in the "Germany - Land of Ideas" initiative
At the same time as the topping out ceremony, Meitingen also celebrated the
Meitingen site being awarded "selected landmark 2007" status as part of the
"Germany - Land of Ideas" initiative. The company received this status for its
carbon ceramic brake disks produced in Meitingen. The landmark initiative is a
joint project between the German government and German economy with the German
President, Horst Kohler, as patron.
The carbon ceramic brake disk from SGL Brakes GmbH, a subsidiary of the SGL
Group, is produced using the innovative composite material carbon fiber
reinforced silicon carbide (CSiC) and offers numerous advantages. In addition to
the long working life (the working life of a car), innovative features of the
carbon ceramic brake system include the fact that it is half the weight of
traditional steel brake disks, there is almost no wear (dust emission), driving
dynamics are improved and stopping times are shorter.
3
The SGL Group started developing the brake disk in 1997 in conjunction with
Porsche. These brake systems were used from 1999 onwards in various Porsche
models. Since 2005, the SGL Group has also provided brake disks to AUDI AG, for
the A8 W12, among others. SGL and Audi are also working together in developing
carbon ceramic brake systems for luxury class vehicles. In 2007, the SGL Group
will equip some 8,000 vehicles for Porsche, Audi, Bentley, Lamborghini and
Bugatti. The SGL Group received confirmation of the success of carbon fiber
brake disks on June 15 in the form of the "Prof. Ferdinand Porsche Prize" for
"groundbreaking innovations in the automotive field" from the Vienna University
of Technology.
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 around
30 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 2006, the Company's workforce of 5,250 generated sales of
(euro) 1.2 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.
Your contact:
Corporate Communications / Press department / Tino Fritsch
Tel. : +49 611 60 29 105 / Fax : +49 6 11 60 29 101 / Mobil : +49 170 540 2667
E-mail: tino.fritsch@sglcarbon.de / Internet : www.sglcarbon.de
4
Exhibit 2
SGL Group: Strong growth dynamics and record nine-month results
o Sales up 17 %, EBIT up 50 % year-on-year
o ROS improved from 14 % to 18 %
o Pre-tax profit more than doubled to (euro)126 million
o Equity ratio further improved to 41 %
o Guidance for 2007 confirmed, ongoing positive outlook for 2008
Wiesbaden, October 25, 2007. The SGL Group - The Carbon Company -continued its
excellent performance of the first half-year in the third quarter of 2007. The
high demand in all three business units resulted in a 17 % increase in sales to
more than (euro)1.0 billion in the nine months period 2007 (9M 2006: (euro)858.6
million). Excluding currency effects, sales grew by 21 %. Positive selling price
and sales volume effects, continuing strong capacity utilization and further
cost savings of (euro)22 million compensated for the increases in key raw
material prices. As selling, administrative, research and other income/expense
also rose at a lower rate than sales, EBIT increased by 50 % to a new 9M record
level of (euro)185.1 million. Including the antitrust expense impact in the
prior-year period, EBIT increased by 85 %.
New financing successfully implemented
As announced in the first half-year report, SGL Group successfully refinanced
the syndicated loan and high yield bond from 2004 at significantly better
conditions in May 2007. In this context, the early repayment of the high yield
bond resulted in a (euro)20.1 million cash charge and around (euro)10.7 million
non-cash charges for the 2004 refinancing in the second quarter of 2007. Net
financing costs reached -(euro)59.0 million in 9M/2007 compared to -(euro)50.7
million in 9M/2006. Adjusted for one-off effects in both reporting periods the
net financial costs of -(euro)28.2 million for 9M/2007 were significantly better
than the -(euro)37.9 million in 9M/2006. Based on the existing financial debt,
the new finance package will halve cash interest costs as of the fiscal year
2008 onwards. This will result in net financing costs of approximately -(euro)40
million per year from fiscal 2008 onwards (excluding valuation effects of
interest and currency hedging instruments).
Earnings per share more than quadrupled
After nine months of 2007, profit before tax more than doubled to (euro)126.1
million (9M/2006: (euro)49.4 million). The 9M/2007 tax expense amounted to
(euro)46.5 million and corresponds to a tax ratio of 36.9 %. The German
Corporation Tax Reform requires a revaluation of capitalized deferred tax assets
and liabilities. As a result a one time non-cash tax expense of (euro)7.3
million was incurred in Q3/2007. Adjusted for this non-recurring effect, the tax
rate for the reporting period amounted to 31.2 % (9M/2006: 37 % adjusted for the
ECJ effect). Net profit after minority interests increased from (euro)17.4
million in 9M/2006 to (euro)79.4 million in 9M/2007. With an average number of
shares of 63.5 million, earnings per share more than quadrupled to (euro)1.25
(9M/2006: (euro)0.28).
Further improvement in equity ratio and cash flow
The balance sheet structure of the SGL Group improved significantly compared to
December 31, 2006. The equity ratio rose from 35.3 % to 41.0 %. Net debt
increased by (euro)25.8 million to (euro)254.9 million compared to end of 2006
particularly due to the payments related to the new financing. The gearing also
improved from 0.5 to 0.4 compared to the end of 2006. As a result of the
excellent business performance, cash provided by operating activities (before
antitrust payments) also rose considerably from (euro)69.5 million to
(euro)103.8 million.
All three business units report dynamic growth in sales and profit
Performance Products (PP) enjoys rising growth dynamics
The continuing strong demand of the steel and aluminum industry, selling price
increases across all business lines and positive volume effects, particularly in
Cathodes, resulted in a sales increase of 19 % to (euro)603.9 million (9M/2006:
(euro)509.2 million). Excluding currency effects, sales grew up by 23 %. Despite
the higher raw material and electricity costs as well as negative currency
translation effects, EBIT rose by 45 % to (euro)176.6 million (9M/2006:
(euro)121.5 million). In addition to price and volume effects, this increase was
again supported by cost savings of (euro)10 million. Thus, the return on sales
was 29.2 % after 23.9 % in the previous year period.
Graphite Materials & Systems (GMS) with double-digit sales growth
Sales revenue at GMS rose by 10 % (adjusted for foreign currency changes by 14
%) to (euro)272.7 million (9M/2006: (euro)248.0 million). The Business Lines
Graphite Specialties and Process Technology especially contributed to this
increase. EBIT increased by 26 % to (euro)37.0 million in the reporting period
(9M/2006: (euro)29.3 million) due to positive price and volume developments,
high utilization as well as savings of (euro)7 million from the SGL Excellence
initiative. Both order intake and order backlog remain at high levels and
reflect the healthy economic conditions in the customer industries. Compared to
11.8 % in the previous year period, the return on sales improved to 13.6 %.
Carbon Fibers & Composites (CFC) post significant profit turnaround
Sales revenue in the CFC Business Unit increased by 28 % to (euro)123.7 million
(9M/2006: (euro)96.8 million). Adjusted for foreign currency changes, sales grew
by 30 %. Strong sales volumes in carbon fibers, composite materials and brake
discs as well as savings from the SGL Excellence initiative of (euro)5 million
had a sustained positive effect on earnings performance. Thus, EBIT was turned
around from (euro)-2.6 million in 9M/2006 to (euro)2.3 million in 9M/2007. A
high single digit return on sales is expected for 2008. An ROS exceeding 10 % is
expected by 2011.
2
At the beginning of October 2007, SGL Group announced its intentions to triple
its production capacities for carbon fibers to 12,000 metric tons by 2012 to
benefit strongly from the increasing substitution process of basic materials
with the carbon fibers and carbon fiber composites produced by CFC. The SGL
Group intends to invest a total of approximately (euro)300 million for this
expansion over the next five years. Thus, it is rigorously continuing on its
path to becoming one of the leading suppliers in the area of carbon fibers and
carbon fiber composites.
Outlook for 2007 confirmed
For the fiscal year 2007, SGL Group confirms its guidance, which was raised in
the 2007 half-year report. Consolidated sales will grow up to 15 %. EBIT is
expected to improve by around 45 % compared to the 2006 EBIT (before antitrust
effect). The financial result including one-off effects from the new financing
should be around -(euro)70 million for 2007 (excluding valuation effects of
interest and currency hedging instruments). As a consequence, SGL Group
anticipates pre-tax and net profit to more than double against the previous
year, assuming a tax rate of approximately 35 %. As a result of its growth
strategy, especially in the Business Area Advanced Materials as well as in
Cathodes, SGL Group expects capital expenditures up to (euro)120 million in
2007.
For 2008, SGL Group remains confident and estimates further consolidated sales
growth of more than 5 % with EBIT increasing more than proportionately to sales.
With a planned financial result of around -(euro)40 million (excluding valuation
effects of interest and currency hedging instruments), pre-tax and net profit
should increase again by a higher rate than EBIT. A detailed guidance for 2008
will be given on March 13, 2008 at the presentation of the full year results
2007.
The full nine month report 2007 can be found on the Company's web site at
http://www.sglcarbon.com.
3
Financial Highlights of SGL Group
(unaudited / (euro) million)
Nine Months
2007 2006 Change
--------------------------------------------------------------------------------
Sales revenue 1,005.3 858.6 +17.1%
--------------------------------------------------------------------------------
Gross profit 351.9 277.5 +26.8%
--------------------------------------------------------------------------------
EBITDA 220.9 164.5(1) +34.3%
--------------------------------------------------------------------------------
Operating profit (EBIT) 185.1 123.6(1) +49.8%
--------------------------------------------------------------------------------
Return on sales(2) 18.4% 14.4% -
--------------------------------------------------------------------------------
Net profit attributable to equity holders 79.4 17.4 -
--------------------------------------------------------------------------------
Earnings per share, basic (in EUR) 1.25 0.28 -
--------------------------------------------------------------------------------
Cash flows from operating activities(3) 103.8 69.5 +49.4%
--------------------------------------------------------------------------------
Sept. 30, Dec. 31,
2007 2006 Change
----------------------------------------------------------
Total assets 1,409.1 1,260.8 +11.8%
----------------------------------------------------------
Shareholders' equity 577.7 445.0 +29.8%
----------------------------------------------------------
Net debt 254.9 229.1 +11.3%
----------------------------------------------------------
Gearing(4) 0.4 0.5 -
----------------------------------------------------------
Equity ratio(5) 41.0% 35.3% -
----------------------------------------------------------
1) Before effect from ECJ decision of (euro)23.5 million in 2006
2) Ratio of operating profit to sales revenue
3) Before antitrust payments of (euro)98.8 million in 2006 and (euro)22.5
million in 2007
4) Net debt divided by shareholders' equity
5) Shareholders' equity divided by total assets
4
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 around 30 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 2006, the Company's workforce of 5,250 generated
sales of (euro) 1.2 billion. The Company's head office is located in
Wiesbaden/Germany.
Important note - forward-looking-statements:
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.
Your contact:
Corporate Communications / Press Office / Mr Tino Fritsch
Phone: +49 611 60 29-105 / Fax : +49 6 11 60 29-101 / Mobile: +49 170 540 2667
Email: tino.fritsch@sglcarbon.de / Internet : www.sglcarbon.de
5
Exhibit 3
SGL Group Acquires epo GmbH, Strengthening its Market Position in Carbon Fiber
Composites
Wiesbaden, October 25, 2007 - SGL Group - The Carbon Company - has strengthened
its core expertise in high-performance materials by acquiring epo GmbH, one of
the leading European manufacturers of carbon fiber composites. Particularly as
manufacturer of unidirectional semifinished carbon fiber-based products
(prepregs), epo ranks among the technology leaders. With a global presence in
these markets, epo GmbH generated sales of around (euro) 20 million in 2006.The
transaction is still subject to approval by the antitrust authorities.
Dr. Hariolf Kottmann, Member of SGL Group's Board of Management: "With this
strategic acquisition, SGL Group has strengthened its market position as the
sole European integrated carbon fibers and composites manufacturer. The
integration of epo's business activities into the Business Unit Carbon Fibers
and Composites (CFC) will enlarge SGL Group's technological expertise and expand
its capacity for producing carbon fiber composites. In addition, epo's product
portfolio and international market presence are a perfect match to SGL Group's
resources."
Based in Willich (Germany), epo GmbH specializes in high-performance, carbon
fiber-based composites combining ultra-low weight with high mechanical strength
and stiffness. Due to these characteristics, composite materials are in
increasing demand as substitutes in a wide range of industrial applications,
particularly in aerospace, mechanical engineering and plant construction, as
well as in the automotive industry. Another major application are wind power
generators - a key area in the alternative energy sector. Given the growing
diameters of rotor blades and the resulting strong mechanical loads, rotors are
increasingly built with carbon fiber-based materials.
The acquisition of epo represents a further important milestone in SGL Group's
Carbon Fibers and Composites strategy and is a major extension of its core CFC
activities. These include own production capacities of raw material (precursor),
the manufacturing of carbon fibers in diverse qualities, strengths and
specifications, as well as the next stage along the value added chain, where
carbon fibers are processed into fabrics, preforms, or prepregs (composite
materials). In this context, epo GmbH will reinforce SGL Group's existing
investment in a state-of-the-art prepreg plant at its Meitingen site, as well as
SGL Kumpers GmbH & Co. KG, which was established in January 2007 following an
acquisition.
SGL Group plans to increase sales of its Carbon Fibers & Composites (CFC)
Business Unit by at least 15% p.a. until 2011. CFC's nine-month figures for 2007
already indicate a sales growth of 28%, up from (euro) 96.8 million during the
same period of 2006, to (euro) 123.7 million. Whilst the ROS for the previous
fiscal year remained negative at -3% as a result of development and start-up
costs, a positive return is already expected in 2007. The company expects an
high single digit ROS for 2008. An ROS exceeding 10% is expected by 2011.
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 around 30 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 2006, the Company's workforce of 5,250 generated
sales of (euro) 1.2 billion. The Company's head office is located in
Wiesbaden/Germany.
Important note - forward-looking-statements:
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.
Your contact:
-------------
Corporate Communications / Press Office / Mr Tino Fritsch
Phone: +49 611 60 29-105 / Fax : +49 6 11 60 29-101 / Mobile: +49 170 540 2667
Email: tino.fritsch@sglcarbon.de / Internet : www.sglcarbon.de
2
Exhibit 4
Report on the First Nine Months of 2007
---------------------------------------
Highlights
o Sales in 9M/2007 +17%, EBIT +50% compared to 9M/2006
o Return on sales improved to 18% from 14%
o Pre-tax profit of (euro)126.1 million more than doubled compared to 9M/2006
o Earnings per share at (euro)1.25 compared to (euro)0.28 in 9M/2006
o Equity ratio further improved to 41%
o Guidance for 2007 confirmed and continued positive outlook for 2008
Financial Highlights (unaudited)
Nine Months
------------------------------------
(euro) million 2007 2006 Change
--------------------------------------------------------------------------------
Sales revenue 1,005.3 858.6 17.1%
--------------------------------------------------------------------------------
Gross profit 351.9 277.5 26.8%
--------------------------------------------------------------------------------
EBITDA 220.9 164.5(1) 34.3%
--------------------------------------------------------------------------------
Operating profit/EBIT 185.1 123.6(1) 49.8%
--------------------------------------------------------------------------------
Return on sales(2) 18.4% 14.4% -
--------------------------------------------------------------------------------
Net profit attributable to equity holders 79.4 17.4 -
--------------------------------------------------------------------------------
Earnings per share, basic (in (euro)) 1.25 0.28 -
--------------------------------------------------------------------------------
Cash flows from operating activities(3) 103.8 69.5 49.4%
--------------------------------------------------------------------------------
Sept. 30, Dec. 31,
(euro) million 2007 2006 Change
--------------------------------------------------------------------------------
Total assets 1,409.1 1,260.8 11.8%
--------------------------------------------------------------------------------
Shareholders' equity 577.7 445.0 29.8%
--------------------------------------------------------------------------------
Net debt 254.9 229.1 11.3%
--------------------------------------------------------------------------------
Debt ratio (gearing)(4) 0.4 0.5 -
--------------------------------------------------------------------------------
Equity ratio(5) 41.0% 35.3% -
--------------------------------------------------------------------------------
1) Before effect from ECJ decision of (euro)23.5 million in 2006
2) Ratio of operating profit to sales revenue
3) Before antitrust payments of (euro)98.8 million in 2006 and (euro)22.5
million in 2007
4) Net debt divided by shareholders' equity
5) Shareholders' equity divided by total assets
Interim Group Management Report
(unaudited)
Economic environment
The global economy continued its growth path during the first nine months of
2007 although growth rates have slightly decelerated in specific regions. The US
economy has expanded at a slightly slower pace, however in Asia, Latin America
and Eastern Europe, growth rates remained high. The healthy development in the
Euro-zone was supported by growing domestic demand and increasing exports.
Most of our key customer industries benefited from the overall economic
developments. Especially in the steel industry, global production remains at
record levels while the aluminum industry is poised for further growth with
announcements of new capacities and merger and acquisition activities. Our
customers in the energy sector (especially in wind power, solar power,
lithium-ion batteries) enjoy robust growth. Industrial, automotive and aviation
demand continue to focus on lightweight materials, where we supply the majority
of the whole value chain based on our graphite, carbon fiber and composite
expertise.
According to key economic research institutes, the recent financial market
turbulences will have a dampening effect on global economic growth, with the USA
to be affected much more by the capital market turbulences as forecasted by the
Organisation for Economic Co-operation and Development (OECD). 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
Nine Months
-----------------------------
(euro) million 2007 2006 Change
----------------------------------------------------------------------------------------
Sales revenue 1,005.3 858.6 17.1%
----------------------------------------------------------------------------------------
Gross profit 351.9 277.5 26.8%
----------------------------------------------------------------------------------------
Selling, administrative, research and other income/expense -166.8 -153.9 -8.4%
----------------------------------------------------------------------------------------
EBIT effect from ECJ decision - -23.5 -
----------------------------------------------------------------------------------------
Profit from operations 185.1 100.1 84.9%
----------------------------------------------------------------------------------------
Net financing costs -59.0 -37.9 -55.7%
----------------------------------------------------------------------------------------
Interest effect from ECJ decision - -12.8 -
----------------------------------------------------------------------------------------
Profit before tax 126.1 49.4 155.3%
----------------------------------------------------------------------------------------
Income tax expense -46.5 -31.9 -45.8%
----------------------------------------------------------------------------------------
Minority interests -0.2 -0.1 -
----------------------------------------------------------------------------------------
Net profit after minority interests 79.4 17.4 -
----------------------------------------------------------------------------------------
Earnings per share, basic (in (euro)) 1.25 0.28 -
----------------------------------------------------------------------------------------
Earnings per share, diluted (in (euro)) 1.25 0.28 -
----------------------------------------------------------------------------------------
Supported by all three business units, consolidated sales grew by 17% to
(euro)1,005.3 million, thus for the first time surpassing the (euro)1 billion
mark in the nine month period. Excluding currency effects, sales grew by 21%.
Increased selling price and sales volume effects, continued high capacity
utilization and further savings of (euro)22 million in 9M/2007 compensated for
the increases in our key raw material prices. Consequently our gross profit
margin on sales increased from 32.3% in 9M/2006 to 35.0% in 9M/2007. Selling,
adminis-trative, research and other income/expense increased by 8.4% and thus at
a slower pace than sales and now represent 16.6% of sales revenue (9M/2006:
17.9%). EBIT reached a record level of (euro)185.1 million, an increase of 50%
compared to 9M/2006 (before antitrust expense). Including the antitrust expense
impact, EBIT increased by 85%.
Net financing costs
New convertible bond and corporate bond placed successfully
On May 16, 2007, SGL Carbon AG issued a convertible bond of (euro)200 million.
This security has a denomination of (euro)50,000 per bond, a maturity of 6
years, an initial conversion price of (euro)36.52 and a coupon of 0.75% p.a.
Also on May 16, 2007, a (euro)200 million floating rate corporate bond with an 8
year maturity was issued. The corporate bond has a coupon of EURIBOR plus a
margin of 1.25%, which corresponds to an initial interest coupon of 5.313%. The
interest coupon is updated quarterly and currently amounts to 5.756%. The
proceeds from the placement of the convertible bond and the corporate bond were
used to repay the 2004 syndicated loan facility and to discharge the 8.5% coupon
and (euro)270 million high yield bond issued by SGL Carbon Luxembourg S.A. in
February 2004 and guaranteed by SGL Group.
On June 12, 2007, we received an upgrade from the rating agency Standard &
Poor's for our new (euro)200 million senior secured notes. The rating for the
senior secured notes was raised from "BB+" to "BBB-". This is the first time
that SGL Group received an Investment Grade status for one of its financial
instruments. The rating of the SGL Carbon AG Corporate Family remains at "BB"
with a stable outlook.
The SGL Group has satisfied and discharged its obligations under the 2004 high
yield bond, which are no longer reported on SGL's balance sheet and income
statement, by depositing German government bonds for payment of aggregate
interest, principal and early repayment costs until the first possible repayment
date on February 1, 2008. The costs associated with the early repayment of the
high yield bond resulted in a (euro)20.1 million cash charge in Q2/2007. In
addition, (euro)10.7 million non-cash charges for the 2004 refinancing which has
now been replaced were incurred in Q2/2007.
In addition to the two bonds, SGL Group has secured an undrawn credit line for
working capital and acquisitions ranking pari passu with the new corporate bond
in the form of a new syndicated loan totalling (euro)200 million with the SGL
Group's core banks.
The new financing package will halve the cash interest costs as of the fiscal
year 2008 onwards based on existing financial debt. This will result in net
financing costs of approximately (euro)40 million per annum from 2008 onwards
(excluding valuation effects of our interest and currency hedging instruments),
as already indicated in the Report on the First Half 2007.
Net financing costs
Nine Months
----------------------------------------
(euro) million 2007 2006 Change
-----------------------------------------------------------------------------------------------------------------
Income from companies accounted for at-equity 1.0 0.0 -
-----------------------------------------------------------------------------------------------------------------
Interest income 5.0 4.5 11.1%
-----------------------------------------------------------------------------------------------------------------
Interest expense on loans -18.1 -23.2 22.0%
-----------------------------------------------------------------------------------------------------------------
Imputed interest convertible bond (non-cash) -2.7 0.0 -
-----------------------------------------------------------------------------------------------------------------
Interest expense on pensions -10.7 -10.1 -5.9%
-----------------------------------------------------------------------------------------------------------------
Interest expense on antitrust -0.1 -14.2 99.3%
-----------------------------------------------------------------------------------------------------------------
Interest expense, net -26.6 -43.0 38.1%
-----------------------------------------------------------------------------------------------------------------
Expense for refinancing costs (non-cash) -12.1 -2.6 -
-----------------------------------------------------------------------------------------------------------------
Early repayment costs of the old high yield bond (cash) -20.1 0.0 -
-----------------------------------------------------------------------------------------------------------------
Other -1.2 -5.1 76.5%
-----------------------------------------------------------------------------------------------------------------
Other financing expenses -33.4 -7.7 -
-----------------------------------------------------------------------------------------------------------------
Net financing costs -59.0 -50.7 -16.4%
-----------------------------------------------------------------------------------------------------------------
The issue of the new convertible bond resulted in an initial interest expense of
(euro)3.3 million in 9M/2007, of which (euro)2.2 million are attributable to the
third quarter of 2007. This expense includes the interest relating to the coupon
of 0.75% of around (euro)0.6 million, which will initially be paid on May 16,
2008 plus a non-cash imputed interest component of (euro)2.7 million, which is
calculated in accordance with IFRS.
The new corporate bond resulted in an interest expense of (euro)4.2 million in
the reported period of which (euro)2.8 million was incurred in Q3/2007; the
interest is paid quarterly starting August 15, 2007.
While interest income in 9M/2007 was at a similar level compared to 9M/2006, we
were able to reduce our interest expense on loans by (euro)5.1 million in
9M/2007 to (euro)18.1 million.
Interest expense on antitrust in 9M/2006 of (euro)14.2 million includes mainly
the interest portion related to the ECJ decision from June last year.
Other financing expenses increased to (euro)33.4 million in the reporting period
(9M/2006: (euro)7.7 million). This increase is due to the early repayment costs
of the high yield bond of (euro)20.1 million and the (euro)10.7 million non cash
charge for the old refinancing.
Net financing costs reached (euro)59.0 million in 9M/2007 compared to (euro)50.7
million in 9M/2006. Adjusting for one-off effects in both reporting periods
(charges of (euro)10.7 million and early repayment costs of old high yield bond
of (euro)20.1 million in Q2/2007; interest expense on antitrust related to the
ECJ decision of (euro)12.8 million in Q2/2006) the comparable net financing
costs amount to (euro)28.2 million in 9M/2007 versus (euro)37.9 million in the
respective period in 2006.
Total interest expense (net) in 9M/2007 decreased to (euro)26.6 million
(9M/2006: (euro)43.0 million). Net financial debt at September 30, 2007
increased to (euro)254.9 million compared to (euro)229.1 million at December 31,
2006.
Profit before and after taxes
Profit before tax improved to (euro)126.1 million in 9M/2007 compared to
(euro)49.4 million in 9M/2006. The 9M/2007 tax expense amounted to (euro)46.5
million and corresponds to a tax ratio of 36.9%
The German Corporation Tax Reform which was concluded by the Federal Cabinet on
August 8, 2007 requires a revaluation of capitalized deferred tax assets and
liabilities. As a result a one time non-cash tax expense of (euro)7.3 million
was recorded in Q3/2007. Adjusted for this non-recurring effect, the tax rate
for 9M/2007 amounted to 31.2% (9M/2006 tax rate adjusted for ECJ effect: 37%).
Cash taxes paid in 9M/2007 amounted to (euro)18.5 million (9M/2006: (euro)19.0
million). Net profit after minority interests reached (euro)79.4 million in
9M/2007 after (euro)17.4 million in 9M/2006. With an average number of 63.5
million shares, earnings per share (basic) in 9M/2007 improved to (euro)1.25
from (euro)0.28 in 9M/2006.
Balance sheet structure
Sept. 30, Dec. 31,
(euro) million 2007 2006 Change
---------------------------------------------------------------------------
Assets
Non-current assets 585.2 572.5 2.2%
---------------------------------------------------------------------------
Current assets 821.1 684.7 19.9%
---------------------------------------------------------------------------
Assets held for sale 2.8 3.6 -22.2%
---------------------------------------------------------------------------
Total assets 1,409.1 1,260.8 11.8%
---------------------------------------------------------------------------
Equity And Liabilities
Shareholders' equity 577.7 445.0 29.8%
---------------------------------------------------------------------------
Minority interests 5.2 2.2 136.4%
---------------------------------------------------------------------------
Total equity 582.9 447.2 30.3%
---------------------------------------------------------------------------
Non-current liabilities 570.4 538.5 5.9%
---------------------------------------------------------------------------
Current liabilities 255.8 274.7 -6.9%
---------------------------------------------------------------------------
Liabilities held for sale 0.0 0.4 -
---------------------------------------------------------------------------
Total equity and liabilities 1,409.1 1,260.8 11.8%
---------------------------------------------------------------------------
At September 30, 2007, total assets of (euro)1,409.1 million increased by
(euro)148.3 million compared to the year end 2006 ((euro)1,260.8 million).
Higher non-current assets are primarily the result of capital expenditure above
depreciation level, which increased the assets on property, plant and equipment
by (euro)33 million compared to the end of last year. This effect was partially
compensated by lower deferred tax assets, which decreased by (euro)28.4 million
to (euro)89.2 million due to the revaluation as a result of the German Corporate
Tax Reform as well as the utilization of tax losses carried forward in the USA.
Increased current assets reflect the normal seasonal increases in inventories
(+(euro)63 million) and a higher cash position (+(euro)52 million). Total equity
is up by (euro)135.7 million or 30%, mainly attributable to the equity portion
of our new conver-tible bond ((euro)50 million) as required by IFRS and the net
profit generated in 9M/2007 ((euro)79 million). Non-current liabilities
increased by (euro)32 million mainly related to the new financing package.
Current liabilities decreased by (euro)19 million mainly due to the funding of
our remaining antitrust fine from the year 2002 including interest to the EU
commission in Q1/2007.
Working capital
Sept. 30, Dec. 31,
(euro) million 2007 2006 Change
---------------------------------------------------------------------------
Inventories 379.9 316.6 20.0%
---------------------------------------------------------------------------
Trade receivables 228.7 225.0 1.6%
---------------------------------------------------------------------------
Less trade payables -110.2 -114.2 -3.5%
---------------------------------------------------------------------------
Working capital 498.4 427.4 16.6%
---------------------------------------------------------------------------
Working capital increased by (euro)71.0 million to (euro)498.4 million at
September 30, 2007 as a consequence of the growing business activity in all
three business units.
Changes in equity
Nine Months 2007
-----------------------------------------
Shareholders' Minority
(euro) million equity interests Total equity
------------------------------------------------------------------------------------------------
Balance at January 1 445.0 2.2 447.2
------------------------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 15.8 2.8 18.6
------------------------------------------------------------------------------------------------
IFRS equity component of the convertible bond 50.0 - 50.0
------------------------------------------------------------------------------------------------
Net profit 79.4 0.2 79.6
------------------------------------------------------------------------------------------------
Currency exchange differences -13.3 0.0 -13.3
------------------------------------------------------------------------------------------------
Other net income recognized directly in equity 0.8 0.0 0.8
------------------------------------------------------------------------------------------------
Total income for the period 66.9 0.2 67.1
------------------------------------------------------------------------------------------------
Balance at September 30 577.7 5.2 582.9
------------------------------------------------------------------------------------------------
Shareholders' equity increased by (euro)132.7 million to (euro)577.7 million by
September 30, 2007. The increase largely resulted from the equity portion of the
new convertible bond ((euro)50.0 million) as required by IFRS and the net profit
((euro)79.4 million) generated in 9M/2007. Total shareholders' equity at the end
of September 2007 results in an equity ratio of 41.0% compared to 35.3% at
December 31, 2006.
The convertible equity portion as required by IFRS represents the difference
between the bond's nominal value ((euro)200 million) and net present value
((euro)150 million), which was calculated with an SGL specific market interest
rate of 5.8%. The IFRS required equity component will be expensed through the
income statement over the bond's lifetime. In the 9M/2007 period, (euro)0.6
million were expensed in the financial result for the interest coupon and
(euro)2.7 million for the IFRS required imputed interest. As the SGL Carbon AG
share price currently trades above the conversion price of (euro)36.52,
bondholders are able to exercise their rights to convert their bonds in up to
5.5 million of new SGL Carbon AG shares.
At September 30, 2007, subscribed capital increased to (euro)163.4 million
(December 31, 2006: (euro)161.0 million) and is divided into 63,835,882 no-par
value ordinary bearer shares at (euro)2.56 per share. During 9M/2007 the Company
issued 577,797 new shares for employees, which have been granted in the annual
bonus plan in Germany and for the matching share plan. In addition 366,307 new
shares were issued for employees in connection with the existing stock option
plan and stock appreciation rights plan.
The increase in minority interests from (euro)2.2 million at the end of 2006 to
(euro)5.2 million is attributable to the newly consolidated Process Technology
joint venture in Asia and to SGL Quanhai Carbon (Shanxi) Co. Ltd. in China,
which was initially consolidated in Q3/2007.
Net debt
Sept. 30, Dec. 31,
(euro) million 2007 2006 Change
----------------------------------------------------------------------------------------
Current and non-current financial liabilities 351.2 319.5 9.9%
----------------------------------------------------------------------------------------
Remaining equity-portion convertible bond 47.3 - -
----------------------------------------------------------------------------------------
Plus accrued refinancing cost 11.6 12.6 -7.9%
----------------------------------------------------------------------------------------
Cash and cash equivalents -155.2 -103.0 50.7%
----------------------------------------------------------------------------------------
Net debt 254.9 229.1 11.3%
----------------------------------------------------------------------------------------
We added the remaining equity portion of our convertible bond as required by
IFRS into our net debt calculation by end of September 2007 to reflect the full
future nominal obligation of (euro)200.0 million. Due to the payments related to
the refinancing, our net debt has increased by (euro)25.8 million to (euro)254.9
million by end of September 2007 compared to (euro)229.1 million at the year-end
2006.
Liquidity and capital resources
Nine Months
--------------------------------------
(euro) million 2007 2006 Change
-----------------------------------------------------------------------------------------------------------------
Cash provided by operating activities before antitrust payments 103.8 69.5 49.4%
-----------------------------------------------------------------------------------------------------------------
Payments relating to antitrust proceedings -22.5 -98.8 77.2%
-----------------------------------------------------------------------------------------------------------------
Cash provided by/used in operating activities 81.3 -29.3 -
-----------------------------------------------------------------------------------------------------------------
Cash used in investing activities -70.1 -42.7 -64.2%
-----------------------------------------------------------------------------------------------------------------
Free cash flow* 33.7 26.8 25.7%
-----------------------------------------------------------------------------------------------------------------
Cash provided by financing activities 43.2 63.6 -32.1%
-----------------------------------------------------------------------------------------------------------------
Change in cash due to changes in scope of consolidation -1.8 0.0 -
-----------------------------------------------------------------------------------------------------------------
Effect of foreign currency rate changes -0.4 -1.0 60.0%
-----------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 52.2 -9.4 -
-----------------------------------------------------------------------------------------------------------------
* defined as cash provided by operating activities before antitrust payments
minus cash used in investing activities
Cash provided by operating activities before antitrust payments for the
remaining antitrust fine from the year 2002 including interest to the EU
commission at (euro)103.8 million was 49.4% higher in 9M/2007 compared with
(euro)69.5 million in the same period of the previous year. 9M/2007 interest
paid amounts to (euro)26.5 million compared to (euro)28.9 million in 9M/2006.
Despite higher capital expenditure and other investing activities of (euro)70.1
million in total in the first nine months 2007 (9M/2006: (euro)42.7 million),
free cash flow in the reporting period recorded a positive (euro)33.7 million
compared to (euro)26.8 million in the same period of 2006.
Cash provided by financing activities resulted in cash inflow of (euro)43.2
million. The higher number of the previous year's nine months of (euro)63.6
million was due to the proceeds from the capital increase in March 2006.
Cash and cash equivalents increased by (euro)52.2 million from (euro)103.0
million at the end of 2006 to (euro)155.2 million at the end of September 2007.
Segment Reporting
-----------------
Performance Products (PP)
Nine Months
------------------------------------
(euro) million 2007 2006 Change
-----------------------------------------------------------------------------
Sales revenue 603.9 509.2 18.6%
-----------------------------------------------------------------------------
EBITDA 194.6 144.7 34.5%
-----------------------------------------------------------------------------
Profit from operations/EBIT 176.6 121.5 45.3%
-----------------------------------------------------------------------------
Return on sales 29.2% 23.9% -
-----------------------------------------------------------------------------
In 9M/2007, sales revenue grew by 19% (adjusted for foreign currency changes by
23%) to (euro)603.9 million (9M/2006: (euro)509.2 million) due to the continued
strong demand from the steel and the growing demand from the aluminum industry
resulting in increased selling prices across all business lines and positive
volume effects especially in Cathodes. Volumes contributed 7%, prices 16% to the
sales development in Performance Products.
Despite higher raw material and electricity costs as well as negative currency
translation effects, EBIT in 9M/2007 increased by 45% to (euro)176.6 million due
to the above mentioned price and volume effects as well as savings of (euro)10
million. Capacity utilization level remains high at all facilities.
On September 28, 2007 we announced price increases for graphite electrodes
effective immediately for all new business. This price increase is due to cost
increases for key raw materials and energy.
Graphite Materials & Systems (GMS)
Nine Months
-----------------------------------
(euro) million 2007 2006 Change
----------------------------------------------------------------------------
Sales revenue 272.7 248.0 10.0%
----------------------------------------------------------------------------
EBITDA 47.4 39.6 19.7%
----------------------------------------------------------------------------
Profit from operations/EBIT 37.0 29.3 26.3%
----------------------------------------------------------------------------
Return on sales 13.6% 11.8% -
----------------------------------------------------------------------------
Sales revenue rose by 10% (adjusted for foreign currency changes by 14%) to
(euro)272.7 million in 9M/2007. The business lines Graphite Specialties and
Process Technology especially contributed to this sales growth with strong
demand coming especially from the semiconductor, solar, LED, lithium-ion battery
and chemical industries. EBIT increased by 26% to (euro)37.0 million in the
reporting period due to positive price and volume developments, high capacity
utilization as well as savings of (euro)7 million. Both order intake and order
back-log remain at high levels and reflect healthy global economic conditions in
our customer industries.
Effective October 1, 2007, we acquired Dr. Schnabel GmbH & Co KG, a leading
manufacturer of fluorine plastic apparatus, headquartered in Limburg/Lahn,
Germany. We are planning to consolidate this company in Q4/2007.
The approximately 80 employees of the family-owned company, which has a history
stretching back many decades with innovative expertise, produce pipelines,
tubes, compensators, containers, columns (devices for heat and material
transmission) and heat exchangers lined with fluorine plastic (PTFE =
polytetrafluoro-ethylene). The highly non-corroding products are used in
machines in the electronic, pharmaceutical, chemical and in the petrochemical
industry.
Integration of the Dr. Schnabel activities into the global sales network of the
SGL Group business line Process Technology (PT) will now give customers access
to complementary corrosion protection products in the premium segment of
fluorine plastics. The SGL Group is thus enhancing its existing product
portfolio in this area, and can thus continue the growth of the PT business
line.
Carbon Fibers & Composites (CFC)
Nine Months
-------------------------------------
(euro) million 2007 2006 Change
------------------------------------------------------------------------------
Sales revenue 123.7 96.8 27.8%
------------------------------------------------------------------------------
EBITDA 8.9 3.8 134.2%
------------------------------------------------------------------------------
Profit from operations/EBIT 2.3 -2.6 -
------------------------------------------------------------------------------
Return on sales 1.9% -2.7% -
------------------------------------------------------------------------------
Sales revenue increased by 28% (adjusted for foreign currency changes by 30%) to
(euro)123.7 million in 9M/2007 (9M/2006: (euro)96.8 million). A disruption of
our carbon fiber production in Inverness, Scotland, in Q1/2007 caused shipment
delays, negatively impacting earnings in 9M/2007. These delays were partially
made up in the third quarter 2007. Strong sales volumes in carbon fibers,
composite materials and brake discs as well as savings from the SGL Excellence
initiative of (euro)5 million partially compensated for the shortfall in carbon
fiber production in Q1/2007. EBIT in the reporting period reached (euro)2.3
million com-pared to a loss of (euro)2.6 million in the same period 2006.
In years to come, the Carbon Fibers & Composites business unit will benefit
strongly from the substitution process of basic materials. The carbon fibers and
carbon fiber composites produced by CFC are in increasing demand as replacements
for traditional materials due to their unique properties such as lightweight and
stiffness. As the only European company with own raw material supply, carbon
fiber technology and an integrated value added chain right up to the finished
component, SGL Group deploys 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.
An example of this development was demonstrated with our announcement on August
6, 2007, that our US-Los Angeles based subsidiary HITCO Carbon Composites, Inc.
entered into a long-term contract with Kawasaki Heavy Industries, Ltd., to
become a supplier of composite floor beams for the aircraft fuselage section of
the Boeing 787 Dreamliner. The composite floor beams will be produced using
HITCO's recently acquired Automated Tape Lay-up machine.
On August 24, 2007, we established a professorship for carbon fibers and carbon
fiber composites at the Technical University of Munich. The professorship has
initially been set up for eight years and will be funded by the SGL Group for a
total of around (euro)5 million. The cooperation is intended to support the
research and development of carbon fiber based materials and thus to accelerate
innovation in this area.
In September 2007, SGL Group signed a joint venture contract with Benteler
Automobiltechnik, Paderborn, a market leader for developing and producing
structural components for the automotive industry. The transaction is still
subject to approval by the antitrust authorities.
The strategic alliance named Benteler-SGL-Automotive Composite GmbH, located in
Paderborn, will focus on developing structural and other car components using
CFRP (Carbon Fibre Reinforced Plastic) technology. The CO2 discussions and the
resulting requirement for lower fuel consumption in vehicles will increasingly
require lightweight solutions based on carbon fibers and metal hybrids.
We are rigorously continuing on our path to becoming one of the leading
suppliers in the area of carbon fibers and carbon fiber composites. On October
5, 2007, we announced plans to triple our carbon fiber production capacity to as
much as 12,000 metric tons by 2012. In addition to the announced expansion of
the Inverness location (Scotland) to an annual production of approximately 4,000
metric tons by the end of 2008, there are also plans to expand the Evanston
location (Wyoming/USA) and to establish a new carbon fiber production site at
Meitingen (Germany) with similar production capacities. The SGL Group intends to
invest a total of around (euro)300 million in these measures over the next five
years.
These capacity increases should give even greater impetus to the profitable
growth track announced by the Company. For the Carbon Fibers & Composites (CFC)
business unit, SGL Group plans to increase sales in the four business lines
Carbon Fibers, Composite Materials, Composite Components and Brake Disks by
considerably more than 15% per annum. The sharp increase in sales is also
expected to lead to a significant improvement in return on sales (ROS). Whilst
the ROS for the previous fiscal year remained negative at minus 3% as a result
of development and start-up costs, a positive return is already expected in
2007. The company expects an ROS in the high single digits for 2008. An ROS
exceeding 10% is expected by 2011.
Central T&I and corporate costs
Nine Months
------------------------------------
(euro) million 2007 2006 Change
-----------------------------------------------------------------------------
Other revenue 5.0 4.6 8.7%
-----------------------------------------------------------------------------
Central T&I?costs -6.0 -1.6 -
-----------------------------------------------------------------------------
Corporate costs -24.8 -23.0 -7.8%
-----------------------------------------------------------------------------
Antitrust expense - -23.5 -
-----------------------------------------------------------------------------
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.
As already published in our 2007 half year report, we voluntarily delisted our
American Depositary Receipts (ADRs) from the New York Stock Exchange effective
June 22, 2007 and terminated our ADR program effective June 25, 2007. Under the
new SEC rules which became effective June 4, 2007, delisting is a prerequisite
for deregistration from the reporting obligations under the US Securities
Exchange Act of 1934. Within the framework of our ADR program termination, ADR
holders had the opportunity to convert their ADRs to ordinary shares of SGL
Carbon AG until August 24, 2007. The shares underlying the remaining ADRs were
sold on behalf of the ADR holders. We are therefore expecting to deregister in
June 2008 according to the new SEC rules. With deregistration, we will no longer
have to bear the costs associated with SEC reporting obligations.
Employees
Compared to the year end 2006, total number of employees increased by 317 to
5,566 by end of September 2007. This increase is mainly related to the initial
consolidation of SGL Kumpers GmbH & Co. KG, Germany, Graphite Chemical
Engineering Co. Ltd., Japan, and especially SGL Quanhai Carbon (Shanxi) Co.
Ltd., China. Headcount in Europe increased only slightly, while headcount in
Asia was increased more strongly to support the growth of our business.
Outlook
For the full year 2007 we confirm our guidance, which was raised in our 2007
half year report. Consoli-dated sales will grow up to 15%. EBIT is expected to
improve by around 45% compared to the 2006 EBIT (before antitrust effect). The
financial result including one-off effects from the new financing should be
around minus (euro)70 million for 2007 excluding valuation effects of our
interest and currency hedging instruments. As a consequence, SGL Group
anticipates reported pre-tax and net profit to more than double against the
previous year, assuming a tax rate of 35%.
As a result of our growth strategy especially in the business area Advanced
Materials as well as in the Cathodes business line, we are expecting a capital
expenditure level of up to (euro)120 million in 2007.
For 2008, SGL remains confident and anticipates further consolidated sales
growth of more than 5% with EBIT increasing more than proportionately to sales.
With a planned financial result of around minus (euro)40 million (excluding
valuation effects of our interest and currency hedging instruments), pre-tax and
net profit should increase by a faster rate than EBIT.
Detailed guidance on 2008 will be given on March 13, 2008 at the presentation of
our full year results 2007.
In the period under review, SGL Group's risk situation did not change materially
from year end 2006 as described in our 2006 annual report.
Interim Condensed Consolidated Financial Statements
(unaudited)
Interim Condensed Consolidated Income Statement
3rd Quarter Nine Months
-----------------------------------------------------------------
EUR million 2007 2006 Change 2007 2006 Change
--------------------------------------------------------------------------------------------------------------
Sales revenue 357.8 289.7 23.5% 1,005.3 858.6 17.1%
--------------------------------------------------------------------------------------------------------------
Cost of sales -237.5 -193.4 -22.8% -653.4 -581.1 -12.4%
--------------------------------------------------------------------------------------------------------------
Gross profit 120.3 96.3 24.9% 351.9 277.5 26.8%
--------------------------------------------------------------------------------------------------------------
Selling, administrative, research and other
income/expense -57.2 -51.9 -10.2% -166.8 -153.9 -8.4%
--------------------------------------------------------------------------------------------------------------
EBIT effect from ECJ decision - - - - -23.5 -
--------------------------------------------------------------------------------------------------------------
Profit from operations/EBIT 63.1 44.4 42.1% 185.1 100.1 84.9%
--------------------------------------------------------------------------------------------------------------
Income from companies accounted for at-equity 0.7 0.0 - 1.0 0.0 -
--------------------------------------------------------------------------------------------------------------
Interest income 2.3 1.6 43.8% 5.0 4.5 11.1%
--------------------------------------------------------------------------------------------------------------
Interest expense -10.2 -11.1 8.1% -31.6 -47.5 33.5%
--------------------------------------------------------------------------------------------------------------
Other financing costs -1.5 -5.9 - -33.4 -7.7 -
--------------------------------------------------------------------------------------------------------------
Profit before tax 54.4 29.0 - 126.1 49.4 155.3%
--------------------------------------------------------------------------------------------------------------
Income tax expense -24.2 -12.5 -93.6% -46.5 -31.9 -45.8%
--------------------------------------------------------------------------------------------------------------
Net profit for the period 30.2 16.5 83.0% 79.6 17.5 -
--------------------------------------------------------------------------------------------------------------
thereof:
Minority interests 0.2 0.1 - 0.2 0.1 -
--------------------------------------------------------------------------------------------------------------
Equity holders of the parent company 30.0 16.4 82.9% 79.4 17.4 -
--------------------------------------------------------------------------------------------------------------
Earnings per share, basic (in EUR ) 0.47 0.26 - 1.25 0.28 -
--------------------------------------------------------------------------------------------------------------
Earnings per share, diluted (in EUR ) 0.47 0.26 - 1.25 0.28 -
--------------------------------------------------------------------------------------------------------------
Interim Condensed Consolidated Balance Sheet
Sept. 30, Dec. 31,
(euro) million 2007 2006 Change
------------------------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets 89.9 83.8 7.3%
------------------------------------------------------------------------------------------
Property, plant and equipment 381.9 348.9 9.5%
------------------------------------------------------------------------------------------
Other non-current assets 24.2 22.2 9.0%
------------------------------------------------------------------------------------------
Deferred tax assets 89.2 117.6 -24.1%
------------------------------------------------------------------------------------------
585.2 572.5 2.2%
---------------------------------
Current assets
Inventories 379.9 316.6 20.0%
------------------------------------------------------------------------------------------
Trade receivables 228.7 225.0 1.6%
------------------------------------------------------------------------------------------
Other receivables and other current assets 57.3 40.1 42.9%
------------------------------------------------------------------------------------------
Cash and cash equivalents 155.2 103.0 50.7%
------------------------------------------------------------------------------------------
821.1 684.7 19.9%
---------------------------------
Assets held for sale 2.8 3.6 -22.2%
------------------------------------------------------------------------------------------
Total assets 1,409.1 1,260.8 11.8%
------------------------------------------------------------------------------------------
Equity and Liabilities
Shareholders' equity 577.7 445.0 29.8%
------------------------------------------------------------------------------------------
Minority interests 5.2 2.2 136.4%
------------------------------------------------------------------------------------------
Total equity 582.9 447.2 30.3%
------------------------------------------------------------------------------------------
Non-current liabilities
Non-current financial liabilities 346.0 319.5 8.3%
------------------------------------------------------------------------------------------
Provisions for pensions and other employee benefits 169.0 167.6 0.8%
------------------------------------------------------------------------------------------
Deferred tax liabilities 33.3 37.9 -12.1%
------------------------------------------------------------------------------------------
Other non-current liabilities and provisions 22.1 13.5 63.7%
------------------------------------------------------------------------------------------
570.4 538.5 5.9%
---------------------------------
Current liabilities
Current financial liabilities 5.2 0.0 -
-----------------------------------------------------------------------------------------
Other provisions 81.3 104.6 -22.3%
-----------------------------------------------------------------------------------------
Trade payables 110.2 114.2 -3.5%
-----------------------------------------------------------------------------------------
Other current liabilities 59.1 55.9 5.7%
-----------------------------------------------------------------------------------------
255.8 274.7 -6.9%
Liabilities held for sale 0.0 0.4 -
-----------------------------------------------------------------------------------------
Total equity and liabilities 1,409.1 1,260.8 11.8%
-----------------------------------------------------------------------------------------
Interim Condensed Consolidated Statement of Changes in Equity
Nine Months 2006
-----------------------------------------------
Shareholders' Minority Total
(euro) million equity interests equity
-----------------------------------------------------------------------------------------------------
Balance at January 1 322.1 1.3 323.4
-----------------------------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 92.6 - 92.6
-----------------------------------------------------------------------------------------------------
Net profit 17.4 0.1 17.5
-----------------------------------------------------------------------------------------------------
Currency exchange differences -10.7 -0.2 -10.9
-----------------------------------------------------------------------------------------------------
Other net income recognized directly in equity 1.2 0.0 1.2
-----------------------------------------------------------------------------------------------------
Total income for the period 7.9 -0.1 7.8
-----------------------------------------------------------------------------------------------------
Balance at September 30 422.6 1.2 423.8
-----------------------------------------------------------------------------------------------------
Nine Months 2007
-----------------------------------------------
Shareholders' Minority Total
(euro) million equity interests equity
-----------------------------------------------------------------------------------------------------
Balance at January 1 445.0 2.2 447.2
-----------------------------------------------------------------------------------------------------
Capital increase/IFRS 2 allocation 15.8 2.8 18.6
-----------------------------------------------------------------------------------------------------
IFRS equity component of the convertible bond 50.0 - 50.0
-----------------------------------------------------------------------------------------------------
Net profit 79.4 0.2 79.6
-----------------------------------------------------------------------------------------------------
Currency exchange differences -13.3 0.0 -13.3
-----------------------------------------------------------------------------------------------------
Other net income recognized directly in equity 0.8 0.0 0.8
-----------------------------------------------------------------------------------------------------
Total income for the period 66.9 0.2 67.1
-----------------------------------------------------------------------------------------------------
Balance at September 30 577.7 5.2 582.9
-----------------------------------------------------------------------------------------------------
Interim Condensed Consolidated Cash Flow Statement
Nine Months
(euro) million 2007 2006
-------------------------------------------------------------------------------------------
Cash flows from operating activities
------------------------------------
Profit before tax 126.1 49.4
-------------------------------------------------------------------------------------------
Add back of net interest expenses 46.7 30.2
-------------------------------------------------------------------------------------------
Reclassification of the ECJ expense - 36.3
-------------------------------------------------------------------------------------------
(Gain) Loss on disposal of property, plant and equipment 0.0 -1.0
-------------------------------------------------------------------------------------------
Depreciation and amortization expense 35.8 40.9
-------------------------------------------------------------------------------------------
Expenses for refinancing (non-cash) 12.1 2.6
-------------------------------------------------------------------------------------------
Income taxes paid -18.5 -19.0
-------------------------------------------------------------------------------------------
Interest received 5.0 4.5
-------------------------------------------------------------------------------------------
Interest on financial debt paid -26.5 -28.9
-------------------------------------------------------------------------------------------
Changes in provisions, net 12.8 9.7
-------------------------------------------------------------------------------------------
Changes in working capital, net -79.6 -48.3
-------------------------------------------------------------------------------------------
Changes in other operating assets and other liabilities -10.1 -6.9
-------------------------------------------------------------------------------------------
Cash provided by operating activities before antitrust payments 103.8 69.5
-------------------------------------------------------------------------------------------
Payments relating to antitrust proceedings -22.5 -98.8
-------------------------------------------------------------------------------------------
Cash provided by/used in operating activities 81.3 -29.3
-------------------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditure in property, plant and equipment
and intangible assets -64.0 -44.2
-------------------------------------------------------------------------------------------
Cash payments for acquisitions less acquired cash -6.9 -
-------------------------------------------------------------------------------------------
Other investing activities 0.8 1.5
-------------------------------------------------------------------------------------------
Cash used in investing activities -70.1 -42.7
Cash flows from financing activities
Proceeds from corporate debt 406.6 -
-------------------------------------------------------------------------------------------
Repayment of corporate debt -333.6 -18.0
-------------------------------------------------------------------------------------------
Net proceeds from capital increase 2.5 81.6
-------------------------------------------------------------------------------------------
Payments in connection with the new refinancing -12.2 -
-------------------------------------------------------------------------------------------
Early repayment of the high yield bond -20.1 -
-------------------------------------------------------------------------------------------
Cash provided by financing activities 43.2 63.6
-------------------------------------------------------------------------------------------
Change in cash due to changes in scope of consolidation -1.8 -
-------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes 0.4 -1.0
-------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 52.2 -9.4
-------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 103.0 93.4
-------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period 155.2 84.0
-------------------------------------------------------------------------------------------
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 disclosure required in the annual financial statements, and should be read
in conjunction with the SGL Group's annual financial statements as at December
31, 2006. Accounting and valuation methods have been consistently applied as in
our annual consolidated financial statements for financial year 2006. New IFRS
standards and interpretations applicable for periods starting January 1, 2007
had no material impact on the interim reporting as of September 30, 2007. These
financial statements were not reviewed by our auditors.
The interim financial report was authorized for issue in accordance with a
resolution of the Board of Management on October 25, 2007.
Changes in scope of consolidation:
SGL Carbon S.A., Belgium, which was shown as asset held for sale at December 31,
2006, was sold in February 2007.
SGL Group acquired shares in Kumpers GmbH & Co. KG, Germany, and holds 51% of
the new joint venture. SGL Group and Kumpers intend to jointly use the growth
opportunities in glass and carbon fibers. SGL Group started to consolidate the
company on April 1, 2007.
On May 24, 2007, SGL Group and Tokai Carbon Co., Ltd., Japan, enhanced their
cooperation by setting up the company SGL Tokai Process Technology, Ltd., for
the production and distribution of process technology products for the Asian
market, in particular China, Japan and South Korea. SGL Carbon AG holds 51% and
Tokai Carbon Co., Ltd. holds 49% of the shares in this joint venture. SGL Group
has started to consolidate this joint venture in Asia with its subsidiaries on
June 1, 2007.
On June 4, 2007, SGL Group has signed a joint venture agreement with the Chinese
graphite producer Shanxi Quanhai Graphite Co. Ltd. in Shanxi/Central China for
the production of specialty graphite in China. SGL Group will hold 75% of the
new joint venture. After receiving final approval by the appropriate government
bodies, SGL Quanhai Carbon (Shanxi) Co. Ltd. was consolidated in the SGL Group
in Q3/2007.
The initial consolidation of Kumpers GmbH & Co. KG, Graphite Chemical
Engineering Co., Ltd and SGL Quanhai Carbon (Shanxi) Co. Ltd. into the SGL
Group's financial statements as of September 30, 2007 have increased the
goodwill by (euro)7.8 million and total assets by (euro)26.3 million.
Transactions with related parties:
Mr. Franz-Jurgen Kumpers is managing director of the new joint venture SGL
Kumpers GmbH & Co. KG in Rheine, Germany. 49% of the joint venture are in the
hands of the company Kumpers GmbH & Co. KG, where Mr. Kumpers holds a minority
interest.
Successful refinancing:
The SGL Group has refinanced its financial liabilities in May 2007. The proceeds
of the new corporate bond and the convertible bond were used by the SGL Group to
pay back the loan facility syndicated in 2004 and to discharge the (euro)270
million high yield bond issued in 2004. The remaining accrued refinancing cost
of (euro)10.7 million and the costs associated with the early repayment of the
old high yield bond amounting to (euro)20.1 million were expensed in Q2/2007.
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.
Other information:
In 9M/2007, 577,797 shares were issued for employees under the bonus system and
Matching Share Plan of SGL Group. In the same period, 188,000 shares were issued
under the Stock Options Plan and 178,307 shares were issued under the Stock
Appreciation Plan. A total of 668,700 Stock Appreciation Rights (SAR) were
granted on January 15, 2007 at a strike price of (euro)18.74 under the SAR Plan
2005. In March 2007 the Board of Management and Senior Management acquired a
total of 94,192 shares of the company at a price of (euro)23.86 under the
Matching Shares Plan. At September 30, 2007, there are 1,577,832 SARs, 196,915
matching shares and 742,000 stock options outstanding.
The number of outstanding SGL Carbon AG shares at September 30, 2007, is
63,835,882. At September 30, 2007, SGL Group holds a total of 34,451 own shares.
The graphite specialty fine of (euro)22.3 million from the year 2002 including
accrued interest was cash deposited with the EU commission on February 8, 2007
without legal recognition of the 2005 Court of First Instance judgement.
During 9M/2007 there have been no material unusual items except the above
mentioned or changes in estimates compared to the financial year 2006.
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.
Sales Revenue and Operating Profit by Segment:
Nine Months
-------------------------------------
(euro) million 2007 2006 Change
----------------------------------------------------------------------------------------------
Sales revenue
-------------
Performance Products 603.9 509.2 18.6%
----------------------------------------------------------------------------------------------
Graphite Materials & Systems 272.7 248.0 10.0%
----------------------------------------------------------------------------------------------
Carbon Fibers & Composites 123.7 96.8 27.8%
----------------------------------------------------------------------------------------------
Other 5.0 4.6 8.7%
----------------------------------------------------------------------------------------------
1,005.3 858.6 17.1%
-----------------------------------
Nine Months
-------------------------------------
(euro) million 2007 2006 Change
----------------------------------------------------------------------------------------------
Profit (loss) from operations/EBIT
----------------------------------
Performance Products 176.6 121.5 45.3%
----------------------------------------------------------------------------------------------
Graphite Materials & Systems 37.0 29.3 26.3%
----------------------------------------------------------------------------------------------
Carbon Fibers & Composites 2.3 -2.6 -
----------------------------------------------------------------------------------------------
Central T&I costs -6.0 -1.6 -
----------------------------------------------------------------------------------------------
Corporate costs (including effect of ECJ decision) -24.8 -46.5 46.7%
----------------------------------------------------------------------------------------------
185.1 100.1 84.9%
---------------------------------
Based on the reclassification of our Expanded Graphite business line and for
corporate driven costs for our T&I organization sales revenue and profit (loss)
from operations reported for the first nine months 2006 changed as follows:
Sales revenue
-------------
PP -(euro)2.0 million GMS +(euro)29.5 million CFC -(euro)30.8 million Other +(euro)3.3 million
----------------------------------------------------------------------------------------------------------------
Profit (loss) from operations
-----------------------------
PP +(euro)0.9 million GMS +(euro)3.7 million CFC -(euro)3.0 million Central T&I -(euro)1.6 million
----------------------------------------------------------------------------------------------------------------------
Events occurring after the balance sheet date:
On October 24, 2007, SGL Group has signed a contract for the purchase of epo
GmbH in Willich, Germany, a leading European manu-facturer of carbon fiber
composites and thus strengthened its core competency in high technology
materials. epo GmbH is seen as the technology leader especially in the
production of unidirectional prepregs. The transaction is still subject to
approval by the antitrust authorities.
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, October 25, 2007
SGL Carbon AG
The Board of Management
Investor Relations Contact
SGL Carbon AG - Head Office - Investor Relations
Rheingaustrasse 182 - D-65203 Wiesbaden
Phone +49 611 60 29-0 - Fax +49 611 60 29-101
e-mail cpc@sglcarbon.de - www.sglcarbon.com
Calendar 2008
March 13 Annual Report, Year-End Press Conference, Analyst Meeting,
Conference Call
April 23 Report on the First Quarter, Conference Call
April 25 Annual General Meeting
July 31 Report on the First Half, Conference Call
October 30 Report on the First Nine Months, Fall Press Conference, Analyst
Meeting, Conference Call
Quarterly Sales Revenue and Operating Profit by Segment
2006 2006 2007 2007
----------------------------------------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 9M
-------------------------------------------------------------------------------------------------------------------
Sales revenue
-------------
Performance Products 152.7 184.4 172.1 204.2 713.4 185.0 202.1 216.8 603.9
-------------------------------------------------------------------------------------------------------------------
Graphite Materials & Systems 81.7 83.8 82.5 92.3 340.3 89.9 87.4 95.4 272.7
-------------------------------------------------------------------------------------------------------------------
Carbon Fibers & Composites 32.4 31.0 33.4 33.7 130.5 38.7 41.2 43.8 123.7
-------------------------------------------------------------------------------------------------------------------
Other 0.5 2.4 1.7 2.0 6.6 1.0 2.2 1.8 5.0
-------------------------------------------------------------------------------------------------------------------
SGL Group 267.3 301.6 289.7 332.2 1,190.8 314.6 332.9 357.8 1,005.3
-------------------------------------------------------------------------------------------------------------------
2006 2006 2007 2007
----------------------------------------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 9M
-------------------------------------------------------------------------------------------------------------------
Profit (loss) from operations (EBIT)
------------------------------------
Performance Products 31.5 45.0 45.0 50.9 172.4 52.7 60.9 63.0 176.6
-------------------------------------------------------------------------------------------------------------------
Graphite Materials & Systems 8.0 10.7 10.6 7.5 36.8 12.7 12.7 11.6 37.0
-------------------------------------------------------------------------------------------------------------------
Carbon Fibers & Composites 0.1 -1.0 -1.7 -1.8 -4.4 0.3 0.6 1.4 2.3
-------------------------------------------------------------------------------------------------------------------
Central T&I costs -0.1 -0.7 -0.8 -1.5 -3.1 -1.3 -1.5 -3.2 -6.0
-------------------------------------------------------------------------------------------------------------------
Corporate costs -6.4 -7.9* -8.7 -8.7* -31.7* -7.1 -8.0 -9.7 -24.8
-------------------------------------------------------------------------------------------------------------------
SGL Group 33.1 46.1* 44.4 46.4* 170.0* 57.3 64.7 63.1 185.1
-------------------------------------------------------------------------------------------------------------------
* before effect from ECJ decision
Quarterly Consolidated Return on Sales
2006 2006 2007 2007
----------------------------------------------------------------------------------
ROS in % Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 9M
-------------------------------------------------------------------------------------------------------------------
Performance Products 20.6 24.4 26.1 24.9 24.2 28.5 30.1 29.1 29.2
-------------------------------------------------------------------------------------------------------------------
Graphite Materials & Systems 9.8 12.8 12.8 8.1 10.8 14.1 14.5 12.2 13.6
-------------------------------------------------------------------------------------------------------------------
Carbon Fibers & Composites 0.3 -3.2 -5.1 -5.3 -3.4 0.8 1.5 3.2 1.9
-------------------------------------------------------------------------------------------------------------------
SGL Group 12.4 15.3* 15.3 14.0* 14.3* 18.2 19.4 17.6 18.4
-------------------------------------------------------------------------------------------------------------------
* before effect from ECJ decision
Quarterly Consolidated Income Statement
2006 2006 2007 2007
--------------------------------------------------------------------------------
(euro) million Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 9M
-------------------------------------------------------------------------------------------------------------------
Sales revenue 267.3 301.6 289.7 332.2 1,190.8 314.6 332.9 357.8 1,005.3
-------------------------------------------------------------------------------------------------------------------
Cost of sales -185.2 -202.5 -193.4 -225.7 -806.8 -205.1 -210.8 -237.5 -653.4
-------------------------------------------------------------------------------------------------------------------
Gross profit 82.1 99.1 96.3 106.5 384.0 109.5 122.1 120.3 351.9
-------------------------------------------------------------------------------------------------------------------
Selling/administration/
-----------------------
research/other -49.0 -53.0 -51.9 -60.1 -214.0 -52.2 -57.4 -57.2 -166.8
-------------------------------------------------------------------------------------------------------------------
EBIT effect from ECJ decision 0.0 -23.5 0.0 -8.6 -32.1 - - - -
-------------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 33.1 22.6 44.4 37.8 137.9 57.3 64.7 63.1 185.1
-------------------------------------------------------------------------------------------------------------------
Net financing costs -12.3 -10.2 -15.4 -10.8 -48.7 -11.9 -38.4 -8.7 -59.0
-------------------------------------------------------------------------------------------------------------------
Interest effect from ECJ decision 0.0 -12.8 0.0 0.0 -12.8 - - - -
-------------------------------------------------------------------------------------------------------------------
Profit (loss) before tax 20.8 -0.4 29.0 27.0 76.4 45.4 26.3 54.4 126.1
-------------------------------------------------------------------------------------------------------------------
Income tax expense -8.4 -11.0 -12.5 -3.6 -35.5 -12.7 -9.6 -24.2 -46.5
-------------------------------------------------------------------------------------------------------------------
Minority interests 0.0 0.0 -0.1 -0.1 -0.2 -0.2 0.2 -0.2 -0.2
-------------------------------------------------------------------------------------------------------------------
Net profit (loss) attributable
to equity holders 12.4 -11.4 16.4 23.3 40.7 32.5 16.9 30.0 79.4
-------------------------------------------------------------------------------------------------------------------
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: October 25, 2007 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