SGL Group financial outlook promising

SGL Group — The Carbon Company reports that it met its expectations for the fiscal year 2010, which had been increased in November. Sales are expected to increase through 2011.

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SGL Group – The Carbon Company (Wiesbaden, Germany) reported on March 17 that it met its expectations for the fiscal year 2010, which had been increased in November. Group sales in 2010 increased by 13 percent (currency-adjusted: 10 percent) to €1,381.8 million (2009: €1,225.8 million). Operating profit (EBIT) improved by 16 percent to 128.4 million (2009: €111.0 million), resulting in a return on sales (ROS) of 9.3 percent (2009: 9.1 percent). This was due to the overall improved economic climate driven by the rapid recovery of the global economy, which benefited all three business areas.

Robert Koehler, CEO of SGL Group: “The results for the fiscal year 2010 are better than we originally expected. Our success is also the result of a multiyear investment program securing the sustainability of the Group in which we have consistently aligned SGL Group’s activities to growth markets. For 2011, we expect sales to grow by at least 10 percent and operating profit (EBIT) to continue to see a significant increase over 2010 to €150 million to €165 million. This will mainly be driven by our growth areas GMS and CFC. In the medium term, we expect Group sales to increase to approximately €2.5 billion in 2015. Our carbon fiber and composites activities alone will reach the sales threshold of €1 billion in 2015, including total sales from At-Equity consolidated Joint Ventures of approximately €500 million.”

Carbon Fibers & Composites (CFC)
Despite the persistently difficult market environment – particularly with respect to carbon fiber prices – sales in the Business Area Carbon Fibers & Composites increased in full-year 2010 by 5 percent (currency-adjusted: 3 percent) to €218.5 million (2009: €208.0 million), primarily in response to improved sales volumes of carbon fibers, composite materials and structural components for the aviation and defense industries (HITCO). This improvement was partially offset by lower sales at SGL Rotec due primarily to the production conversions in offshore rotor blades and project postponements. Excluding SGL Rotec, CFC sales increased by over 30 percent.

Sales for the equity-accounted investments in the Business Area Carbon Fibers & Composites, which are not included in the consolidated sales of SGL Group, increased by 77 percent to €137.0 million in 2010 (2009: €77.3 million; 100 percent of the sales revenue of these companies).

Particularly due to operational improvements in all business units as well as higher sales and costs savings of approximately €6 million, the loss in the Business Area CFC was considerably reduced from €22.9 million to €6.6 million.