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[August 2009]
SGL Group – Positive Net Income in the First Half 2009
SGL Group (Wiesbaden, Germany) achieved in line with its guidance a second quarter result on the level of the first quarter. Profit after taxes even increased slightly in the second quarter compared to the first quarter 2009 (Q2/2009: €14.4 million; Q1/2009: €8.7 million).Primarily due to the continued strong destocking activities and dramatic production cuts in the steel industry, which led to a substantially reduced demand for graphite electrodes in the Business Unit Performance Products, group sales declined by 20% to €584 million in the first half 2009 (H1/2008: €735 million). EBIT in the first half 2009 decreased by 63% to €57.3 million (H1/2008: €152.6 million). This corresponds to a group return on sales of 10% (H1/2008: 21%).
Sustainable cost savings of €11 million from the SGL Excellence initiative could only partially compensate for the earnings impact from sales and production declines as well as from high start-up costs associated with new production facilities. The announced measures for further cost cutting led to further cost savings of approximately another €15 million.
Robert Koehler, CEO of SGL Group, said: “Despite our 20 percent decline in sales we were able to maintain an EBIT margin of 10% in the first half of the year. Given the extraordinary current economic circumstances, this is a positive confirmation of our business model. As indicated, there is evidence that destocking is coming to an end – particularly in the steel industry – and that production is increasing. We therefore continue to expect improvement in the second half of the year. However, long-term sustainable recovery is not yet visible and, in addition, the destocking phase has not yet ended for certain late cyclical businesses”.
www.sglgroup.com
ENDS