Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SGL Carbon SE (SGLFF, Financial) reported a healthy EBITDA margin of 16.1% despite a decline in sales, indicating improved profitability.
- Graphite Solutions business unit saw a significant improvement in profitability, driven by growth in the Semiconductor and LED sectors.
- Process Technology unit achieved record sales and margins, with an 8.5% increase in sales compared to the previous year.
- The company maintained a positive free cash flow, demonstrating effective cash management.
- SGL Carbon SE (SGLFF) confirmed its full-year guidance, expecting sales to remain at prior year's level and EBITDApre to be within the guidance corridor, albeit at the lower end.
Negative Points
- Overall sales declined by 4% year-on-year, impacted by currency adjustments and portfolio changes.
- Carbon Fibers business unit experienced a 12% decrease in sales, with negative price trends and overcapacity issues.
- Composite Solutions faced a 16% decline in sales due to the premature termination of a major automotive contract.
- The slowdown in the growth of the silicon carbide segment is expected to impact sales in the second half of the year.
- The company's net financial debt increased slightly, reflecting ongoing investment and spending activities.
Q & A Highlights
Q: What is the expected net impact of down payments in the second half of the year?
A: Unfortunately, we can't provide a specific figure as we are still negotiating with customers. The net effect in the first half was EUR7 million, and we expect a lower level of down payments compared to last year. However, the exact amount for the second half is not disclosed.
Q: How will the 6 to 12 months delay in the Graphite Solutions segment affect sales?
A: We expect sales in the silicon carbide segment to be slightly softer in the second half of the year. Our contracts are protected by down payments, which helps mitigate the impact. The delay varies by customer and region, with some expecting a V-shaped recovery and others anticipating a longer duration.
Q: Can you provide details on the free cash flow expectations for the full year?
A: We aim for a positive free cash flow for the full year. CapEx is typically more back-end loaded, and we are closely monitoring both working capital and CapEx to ensure a positive outcome. We will only invest what is necessary to support future business growth.
Q: What improvements are expected in the Composite Solutions segment in the second half?
A: The segment experienced a significant decline in H1 due to the loss of a major automotive project. However, we anticipate a compensation payment for the premature contract termination, which will positively impact the second half results. This compensation is factored into our slight decline outlook for the segment.
Q: Is there any update on the strategic review of the Carbon Fibers segment?
A: The market remains flat, but we see some positive signs. We are actively exploring all strategic options for the segment and will update stakeholders as soon as there are developments. The business is performing as planned.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
