SGL Carbon expects moderate recovery for 2021 composite segments

According to SGL Carbon’s (Wiesbaden, Germany) recently released 2020 annual report, the company’s business development was negatively impacted by the COVID-19 pandemic for the fiscal year 2020. Despite not having to shut down production, the company says it was faced with a substantial reduction in demand. Consolidated sales in 2020 amounted to €919.4 million ($1.077 million), 15% below 2019 (€1,086.7 million), with a consolidated net result of minus €132.2 million (2019: minus €90.0 million) due to impairment of SGL’s Composites – Fibers & Materials (CFM) segment and expenses for its restructuring program in October 2020.

The company’s CFM segment indicated negative effects of the pandemic for Q2 2020, which reportedly eased over the course of the fiscal year. Earnings were positively impacted by improvement measures in the production process, and lower raw material and energy costs. In total, sales during the period under review fell by around 9% (no notable currency effects) to €391.3 million ($458.5 million) from €431.6 million ($505.7 million) in the same period of the previous year.

The largest percentage downturn was seen in the Textile Fibers market
segment. SGL Carbon says this was impacted by the two acrylic fiber lines that it left to idle at the end of 2019 and the conversion of another line to precursors, all to improve earnings. COVID-19-related declines were also recorded in the automotive and industrial applications market segments. Aerospace remained relatively stable year-on-year. In contrast, business with the wind industry increased year-on-year by around 45%, better than originally forecasted. 

EBIT before non-recurring items in the CFM reporting segment improved to
€19.1 million ($22.38 million) compared to minus €8.3 million ($9.73 million) in the previous year. This corresponds to a return on sales of 4.9% after minus 1.9% in the prior year. The substantially improved earnings in the business with the wind industry and in the Textile Fibers market segment as well as the positive impact of the activities put in place to improve earnings have only been partially offset by the weaker automotive business and the lower earnings contributions from investments accounted for At-Equity (down by around €4 million/$4.69 million). 

Following the dramatic economic slump seen in 2020, SGL Carbon says it anticipates that fiscal year 2021 will be marked by a moderate recovery. Under the company’s Carbon Fibers (CF) reporting segment, it is expected that sales will be on the same level as 2020, while EBITDA pre-exceptionals should improve slightly due to the restructuring measures that have been initiated. Sales in its Composite Solutions (CS) reporting segment are expected to increase significantly in 2021 in accordance to newly launched automotive projects, such as composite battery cases.