SGL CARBON SE, DE0007235301

SGL CARBON SE, DE0007235301

05.12.2018 - 17:33:14

SGL CARBON SE: SGL Carbon SE passes resolution on new five-year plan

NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA.  SGL Carbon SE passes resolution on new five-year plan   Higher capital expenditures for organic growth planned in the business unit Graphite Materials & Systems (GMS) to execute on additional growth opportunities Accordingly, capital expenditures to remain significantly above level of depreciation up to and including 2021 Free Cashflow target postponed by one year Higher mid term targets for Group sales and EBIT1 Financing for the existing maturities and the business growth to be provided by cash on hand and a potential new corporate bond Stronger organic growth achievable without additional equity and in alignment with our financial targets for equity ratio and leverage ratio   Wiesbaden, December 5, 2018: Board of Management and Supervisory Board of SGL Carbon SE discussed and passed resolution on the new five-year plan in today's Supervisory Board Meeting.   Following strong volume growth in the last few years in the business unit GMS, we are beginning to experience capacity constraints, particularly in the market segments Battery & other Energy (especially in materials for lithium-ion batteries), LED as well as Automotive & Transport. To execute further growth opportunities in the short term, we plan to increase our capital expenditures in the years 2019 to 2021 by EUR80 million in total compared to prior budgets. Accordingly, capital expenditures in these years will remain substantially above the level of depreciation, and only return to or below the level of depreciation from 2022 onwards. Due to higher capital expenditures as well as growth-related higher working capital requirements, the target to reach at least a break even free cash flow from 2020 onwards will be postponed by one year to 2021. For the same reason, the ROCE (based on EBIT) target of approx. 9% in the year 2020 will also be postponed by one year, as higher capital expenditures and higher working capital requirements first increase capital employed and the growth only positively impacts EBIT with some time delay.   At the same time, the additional capital expenditures for organic growth increase our mid-term targets for Group sales and EBIT. Group sales in 2022 is now targeted to be a high double digit million EUR amount higher than our previous target of EUR1.3 billion. Furthermore, the higher sales level leads to an expected additional EBIT contribution target in a low double digit million EUR amount for the year 2022. The EBIT margin in 2022 is targeted to remain within the framework of the communicated target of at least 10%.   While the improved business development mainly benefits the business unit GMS, the business unit Composites - Fibers & Materials (CFM) has shown weakness as a result of the business with acrylic fibers and the wind energy industry. We currently anticipate this trend to continue into 2019.   In contrast, we currently expect that the projects in the market segments Automotive, Aerospace and Industrial Applications in the business unit CFM should in certain cases develop even more positively than expected one year ago, so that in the mid term, the previously anticipated profitable growth path remains achievable, even though the earnings level in 2018 and 2019 may be lower than prior expectations. In the fiscal year 2018, this development was substantially more than compensated by the significantly better development in the business unit GMS, so that on Group level we anticipate much higher earnings than at the beginning of the year. Based on current trading, we anticipate that the positive development at GMS will compensate for the weakness in the wind energy and acrylic fiber business at CFM in the fiscal year 2019, so that we in total are targeting a Group recurring EBIT in fiscal year 2019 on approximately the level as fiscal year 2018 and thus as previously expected from us.   The foundation for financing in the coming years, which also includes the maturity of existing debt, particularly the convertible bond 2015/2020 as well the financing of the former joint venture SGL ACF by BMW Group, are cash on hand as well as a potential corporate bond up to an amount of EUR275 million. The Board of Management and the Supervisory Board today in principle authorized the issue of a bond. Depending on market conditions such an issue could also be launched in the short term.   For this reason and from today's perspective, the planned increase of capital expenditures for growth projects can be funded without additional equity and in alignment with our financial targets of an equity ratio of at least 30% and a leverage ratio based on EBITDA of at most 2.5. We only expect to temporarily exceed our gearing target of approx. 0.5 in the years 2019 and 2020 but expect to be able to meet our gearing target from 2021 onwards.   We expect to publish details on the new capital expenditures program as well as to the guidance for the fiscal year 2019 at the annual press conference on March 27, 2019.  1 The use of KPIs in this notification is aligned to the annual report 2017 which is available under www.sglcarbon.com.    

Information and Explanation of the Issuer to this News:Disclaimer: This release may not be published, distributed or transmitted in the United States, Canada, Australia, Japan or any other jurisdiction in which the distribution or release would be unlawful. This release is not an offer of securities for sale in the United States or in any other jurisdiction.  The securities referred to in this release have not been and will not be registered under the US Securities Act of 1933, as amended (the 'Securities Act'), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act.  There will be no public offering of such securities in the United States.  Important note: To the extent that our press release contains forward-looking statements, the latter are based on information that is available at present and on our current forecasts and assumptions. Forward-looking statements, by their very nature, entail known as well as unknown risks and uncertainties that may lead to actual developments and events differing substantially from the forward-looking assessments. Forward-looking statements must not be understood to be guarantees. Instead, future developments and events depend on a large number of factors; they comprise various risks and imponderables and are based on assumptions that may possibly turn out not to be appropriate. These include unforeseeable changes to fundamental political, economic, legal and societal conditions, particularly in the context of our main customers' industries, the competitive situation, interest and exchange rate trends, technological developments as well as other risks and uncertainties. We perceive additional risks e.g. in pricing developments, unforeseeable events in the environment of companies acquired and Group member companies as well as in current cost savings programs from time to time. The SGL Carbon assumes no obligation and does not intend to adjust or otherwise update these forward-looking statements either.  

05-Dec-2018 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

Language: English Company: SGL CARBON SE Söhnleinstraße 8 65201 Wiesbaden

Germany Phone: +49 (0)611 6029 - 0 Fax: +49 (0)611 6029 - 101 E-mail: investor-relations@sglcarbon.com Internet: www.sglcarbon.com ISIN: DE0007235301 WKN: 723530 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange   End of Announcement DGAP News Service

754717  05-Dec-2018 CET/CEST

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