Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of: April 2006
SGL CARBON Aktiengesellschaft
(Name of registrant)
Rheingaustrasse 182
65203 Wiesbaden
Germany
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the SEC
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
--- ---
If "Yes" is marked, indicate the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Exhibit Index
-------------
1. April 24, 2006 German Press Release - Graphite Electrode Price Increase
2. April 25, 2006 German Press Release - Successful First Quarter 2006
3. Interim Report First Quarter 2006
SGL Carbon increases Graphite Electrode prices
Wiesbaden, April 24, 2006. SGL Carbon announces today the following new prices
for its Graphite Electrodes effective April 21st, 2006 for all new business:
Europe:
o Regular-size Graphite Electrodes: 3760 (euro)/MT
o Extra-size Graphite Electrodes: 4030 (euro)/MT
Americas, Asia (excluding China*), Near Middle East and Africa:
o For regular-size Graphite Electrodes: 2,08 US$/lb (4585 US-$/mt)
o For extra-size Graphite Electrodes:2,23 US$/lb (4915 US-$/mt)
Regular-sized is defined as: diameter 14" (350 mm) - 24" (600 mm)
Extra-sized is defined as: diameter 26" (650 mm) - 30" (750 mm)
These prices will be applicable for all new orders received from April 21st,
2006 until further notice and for shipments through June 30th, 2007.
This price increase is due to cost increases for the major raw materials and
energy (electricity and gas).
* Pricing in China is the sole responsibility of the joint venture between SGL
Carbon and Tokai in Shanghai (STS).
Forward-looking statements:
This document contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not intended as guarantees; rather,
such developments and results are dependent on a number of factors, they contain
various risks and uncertainties and are based on assumptions that may prove to
be incorrect. These risks and uncertainties include, for example, unforeseeable
changes in political, economic and business conditions, particularly in the area
of electrosteel production, the competitive situation, interest rate and
currency developments, technological developments and other risks and
unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies, and
ongoing cost optimization programs. SGL Carbon does not intend to update these
forward-looking statements.
For further information, please contact:
----------------------------------------
Corporate Communications / Media Relations / Stefan Wortmann
Tel. : +49 611 60 29 105 / Fax : +49 6 11 60 29 101 / Mobil : +49 170 540 2667
e-mail : stefan.wortmann@sglcarbon.de / Internet : www.sglcarbon.de
---------------------------- ----------------
SGL Carbon: Successful First Quarter 2006
o Sales in Q1/2006 up by 11 %, EBIT up by 55 % compared to Q1/2005
o Net profit for the period more than tripled in comparison with Q1/2005
o Successful placement of almost 10 % capital increase
o Earnings expected to further improve in Q2/2006
Wiesbaden, April 25, 2006. Due to the favorable development of demand in all
three business units, consolidated sales increased by 11 % to (euro) 267.3
million in Q1/2006, or 8 % after adjusting for foreign currency changes. There
was an above-average increase in EBIT of 55 % to (euro) 33.1 million. The main
reasons for the growth in earnings were the sustained positive development at
Carbon and Graphite, the substantial increase in income at Specialties and cost
savings of approximately (euro) 5 million in the first quarter of 2006. On March
17, 2006 the rating agency Standard & Poor's placed the ratings for SGL Carbon
on positive watch for an upgrade as a result of the successful capital increase
in March and in the expectation of a further reduction in debt.
On March 17, 2006 the rating agency Standard & Poor's placed the ratings for SGL
Carbon on positive watch for an upgrade as a result of the successful capital
increase in March and in the expectation of a further reduction in debt. On
March 20, 2006, SGL Carbon received an upgrade from the rating agency Moody's on
its ratings. The Corporate Family rating was raised by one notch from "B1" to
"Ba3" with a "stable" outlook. The rating on secured facilities was increased
from "B1" to "Ba3", and the rating on senior notes of SGL Carbon Luxemburg was
upgraded from "B3" to "B2". These upgrades have a positive impact on SGL
Carbon's potential future financing. According to Moody's, the higher rating is
largely a consequence of the substantial improvement in the operational and
financial performance in the last two years as well as the positive outlook for
the Carbon and Graphite business unit presented by SGL Carbon at their annual
press conference on March 9, 2006. The successful capital increase allows the
Company additional financial flexibility.
Net Financing Costs
The net financing costs recorded a slight improvement in Q1/2006 to minus (euro)
12.3 million compared with minus (euro) 13.1 million in the same quarter of the
previous year. This is a result of reduced net interest expenses due to the
decrease in financial liabilities and lower interest expenses in connection with
the antitrust proceedings, resulting from the earlier than scheduled payment of
the remaining North American antitrust liabilities in 2005.
The proceeds from the capital increase of March 2006 were used to fund the first
EU antitrust fine in April 2006. Consequently, the bank guarantee for this EU
antitrust fine was cancelled. Therefore guarantee fees and interest accruals are
no longer required. These measures benefit the net financing costs so that from
today's perspective we expect a financial result of approximately minus (euro)
50 million in 2006.
Profit before and after taxes
During the reporting period, earnings before income taxes more than doubled from
(euro) 8.2 million to (euro) 20.8 million. With a tax rate of 40 %, net profit
for the period more than tripled from (euro) 3.9 million to (euro) 12.4 million.
With an average number of shares of 57.5 million, the earnings per share were
(euro) 0.22 in Q1/2006 compared with (euro) 0.07 in Q1/2005.
Statement of Changes in Consolidated Shareholders' Equity
As a result of the capital increase and the net profit for the period, equity as
at March 31, 2006 increased by (euro) 99 million to (euro) 421 million, thus
leading to an improvement in the equity ratio from 27.2 % to 33.9 %. The cash
funding of the EU antitrust fine relating to graphite electrodes to the amount
of around (euro) 69 million plus accumulated interest made in April 2006 will
again lead to a shortening of the balance sheet in Q2/2006. On a pro-forma
basis, this will result in an equity ratio of more than 35 %. In the coming
three months, we will examine whether the EU antitrust fine concerning Graphite
Specialties amounting to (euro) 18.5 million plus accumulated interest should
also be funded with cash for reasons of financial optimisation.
2
Net Debt
As at March 31, 2006, there was a significant improvement in net financial debt
due to the proceeds from the capital increase. The cash received from the
capital increase was used to cash fund the first EU antitrust fine, for which a
restricted account was established at the EU. The final utilization of these
funds still depend on the outstanding appeals before the European courts. As we
do not include restricted accounts in our calculation of net financial debt, we
are adhering to our guidance for the full 2006 fiscal year to reduce net debt to
below (euro) 240 million by year-end despite the positive development of net
debt during Q1/2006.
Segment reporting
Carbon and Graphite (CG)
In Q1/2006, sales increased by 7% to (euro) 152.7 million, currency-adjusted by
3%. Despite planned reduced deliveries of graphite electrodes, EBIT rose by 18 %
to (euro) 31.5 million due to price increases and ongoing cost reduction
measures. The return on sales improved to 20.6 % compared with 18.7 % in the
same quarter of the previous year. The average prices for graphite electrodes
increased by 21 % in USD and 10 % in EUR compared to Q1/2005. As expected,
shipments of graphite electrodes decreased by around 14 % compared to the
exceptionally strong Q1/2005, reaching a level of 45,000 metric tons, which is
comparable to the first quarters of previous years. Factor costs increased in
line with expectation by 10-15 %.
The price increases for graphite electrodes announced on April 24, 2006 will be
applicable for all new orders received from April 21st, 2006 until further
notice and for shipments through June 30th, 2007, and therefore have little
impact on the 2006 fiscal year. For the current fiscal year, we therefore
maintain already indicated price increases of 15-20 % in USD and 5-10 % in EUR,
with prices trending toward the upper ends of both brackets.
3
Specialties (S)
Sales increased by 22 % to (euro) 72.3 million, currency-adjusted by 19 %, with
all businesses contributing to the sales growth. Particularly demand from North
America and from the Automotive and Mechanical Applications and Solar Energy
customer sectors showed a favorable development. EBIT increased more than
fivefold compared to the weak Q1/2005. Return on sales with 12.2 % reached our
target range of 10-15 % for the first time.
SGL Technologies (T)
Due to continued positive development of demand for carbon fibers and carbon
fiber reinforced composite materials, sales increased by 10 % to (euro) 41.8
million, currency adjusted by 7 %. EBIT is burdened by a receivables writedown
due to the Chapter 11 proceedings of Dana Corporation in the USA, a customer in
the area of Expanded Graphite. Without this effect, EBIT would have reached
break even, as announced in March 2006 despite ongoing development expenses in
the Brakes business and new projects for the defense industry.
Employees
The number of employees in the Group was 5,250 as at March 31, 2006 compared
with 5,263 at the end of December 2005. Although the number of employees in
Carbon and Graphite and Specialties declined slightly, headcount increased at
SGL Technologies due to the ongoing expansion of business.
Outlook
For Q2/2006, SGL Carbon is anticipating an increase in sales of around 5 % and
an EBIT growth of at least 20% compared to the strong Q2/2005. The increase in
sales for Carbon and Graphite is likely to continue comparable to the growth
4
rate in Q1/2006, while the improvement in EBIT is likely to accelerate slightly.
For Specialties, we expect another solid quarter in terms of sales and EBIT
which should reach roughly the same levels of the strong second quarter of the
previous year. At SGL Technologies, we expect stable sales as a result of
project-related order and delivery cycles affecting Q2/2006 however with an
improved EBIT compared to Q2/2005. For the year as a whole, the company's
outlook at Group level remains unchanged for the time being at an expected
increase in sales of around 5 % and a low double digit improvement in EBIT.
Retroactive adjustments
For the first time since the consolidated financial statements as at December
31, 2005, all previously non-consolidated subsidiaries are fully included in the
scope of consolidation and two joint ventures are accounted for under the equity
method. For the quarterly representation of the 2005 fiscal year, the reported
data were adjusted to include the previously non-consolidated companies and thus
made comparable.
5
Financial Highlights SGL Carbon Group
((euro) million / unaudited)
First Quarter
-------------------
2006 2005
--------------------------------------------------------------------------------
Sales revenue 267.3 241.0
--------------------------------------------------------------------------------
EBITDA 45.9 35.5
--------------------------------------------------------------------------------
EBIT 33.1 21.3
--------------------------------------------------------------------------------
Return on Sales (1) 12,4% 8,8%
--------------------------------------------------------------------------------
Net profit before minority interests 12.4 3.9
--------------------------------------------------------------------------------
Earnings per share (in (euro)) 0,22 0,07
--------------------------------------------------------------------------------
Cash flow from operations before
antitrust payments (2) -1.3 -9.7
--------------------------------------------------------------------------------
March 31, Dec. 31,
2006 2005
--------------------------------------------------------------------------------
Total assets 1,244 1,183
--------------------------------------------------------------------------------
Shareholders' equity 421 322
--------------------------------------------------------------------------------
Net debt 196 265
--------------------------------------------------------------------------------
Debt Ratio (gearing) (3) 0,5 0,8
--------------------------------------------------------------------------------
Equity ratio (4) 33.9% 27.2%
--------------------------------------------------------------------------------
(1) Ratio of profit from operations to sales revenue
(2) Without currency exchange rate effects
(3) Net debt divided by shareholders' equity
(4) Shareholders' equity divided by total assets
Forward-looking statements:
This document contains statements on future developments that are based on
currently available information and that involve risks and uncertainties that
could lead to actual results deviating from these forward-looking statements.
The statements on future developments are not intended as guarantees; rather,
such developments and results are dependent on a number of factors, they contain
various risks and uncertainties and are based on assumptions that may prove to
be incorrect. These risks and uncertainties include, for example, unforeseeable
changes in political, economic and business conditions, particularly in the area
of electric steel production, the competitive situation, interest rate and
currency developments, technological developments and other risks and
unanticipated circumstances. We see other risks in price developments,
unexpected developments relating to acquired and consolidated companies, and
ongoing cost optimization programs. SGL Carbon does not intend to update these
forward-looking statements.
For further information, please contact:
----------------------------------------
Corporate Communications / Media Relations / Stefan Wortmann
Tel. : +49 611 60 29 105 / Fax : +49 6 11 60 29 101 / Mobil : +49 170 540 2667
e-mail : stefan.wortmann@sglcarbon.de / Internet : www.sglcarbon.de
---------------------------- ----------------
6
Report on the first quarter 2006
Highlights
----------
- Sales in Q1/2006 up by 11%, EBIT up by 55% compared to Q1/2005
- Net profit for the period more than tripled in comparison with Q1/2005
- Successful placement of almost 10% capital increase
- Earnings expected to further improve in Q2/2006
Financial Highlights (unaudited)
--------------------------------
1st Quarter
-----------------------
2006 2005
(euro) million -----------------------
Sales revenue 267.3 241.0
Gross profit 82.1 66.3
EBITDA 45.9 35.5
EBIT 33.1 21.3
Return on sales (1) 12.4% 8.8%
Net profit before minority interests 12.4 3.9
Earnings per share (in (euro)) 0.22 0.07
Cash flow from operations before
antitrust payments (2) -1.3 -9.7
Mar 31, Dec 31,
2006 2005
(euro) million -----------------------
Total assets 1,244 1,183
Shareholders' equity 421 322
Net debt 196 265
Debt ratio (gearing) (3) 0.5 0.8
Equity ratio (4) 33.9% 27.2%
(1) Ratio of profit from operations to sales revenue
(2) Without currency exchange rate effects
(3) Net debt divided by shareholders' equity
(4) Shareholders' equity divided by total assets
Retroactive adjustments
-----------------------
For the first time since the consolidated financial statements as at December
31, 2005, all previously non-consolidated subsidiaries are fully included in the
scope of consolidation and two joint ventures are accounted for under the equity
method. For the quarterly representation of the 2005 fiscal year, the reported
data were adjusted to include the previously non-consolidated companies and thus
made comparable.
Business Development in the Group
Consolidated Income Statement (unaudited)
-----------------------------------------
1st Quarter
-----------------------
2006 2005
(euro) million -----------------------
Sales revenue 267.3 241.0
Gross profit 82.1 66.3
Selling, administrative, research
and other income/expense -49.0 -45.0
Profit from operations 33.1 21.3
Net financing costs -12.3 -13.1
Profit before tax 20.8 8.2
Income taxes -8.4 -4.3
Net profit before minority interests 12.4 3.9
Earnings per share 0.22 0.07
Due to the favorable development of demand in all three business units,
consolidated sales increased by 11% to (euro)267.3 million in Q1/2006, or 8%
after adjusting for foreign currency changes. There was an above-average
increase in EBIT of 55% to (euro)33.1 million. The main reasons for the growth
in earnings were the sustained positive development at Carbon and Graphite, the
substantial increase in income at Specialties and cost savings of approximately
(euro)5 million in the first quarter of 2006.
On March 17, 2006 the rating agency Standard & Poor's placed the ratings for SGL
Carbon on positive watch for an upgrade as a result of the successful capital
increase in March and in the expectation of a further reduction in debt. On
March 20, 2006, SGL Carbon received an upgrade from the rating agency Moody's on
its ratings. The Corporate Family rating was raised by one notch from "B1" to
"Ba3" with a "stable" outlook. The rating on secured facilities was increased
from "B1" to "Ba3", and the rating on senior notes of SGL Carbon Luxemburg was
upgraded from "B3" to "B2". These upgrades have a positive impact on SGL
Carbon's potential future financing. According to Moody's, the higher rating is
largely a consequence of the substantial improvement in the operational and
financial performance in the last two years as well as the positive outlook for
the Carbon and Graphite business unit presented by SGL Carbon at their annual
press conference on March 9, 2006. The successful capital increase allows the
Company additional financial flexibility.
Details of Net Financing Costs
------------------------------
1st Quarter
-----------------------
2006 2005
(euro) million -----------------------
Interest expense on loans (net) -6.4 -7.0
Interest expense on pensions -3.3 -3.1
Interest expense on antitrust (non-cash) -0.7 -1.3
Total interest expense, net -10.4 -11.4
Currency and hedging valuation
adjustments of antitrust liabilities
(non-cash) 0.0 -0.7
Amortization of refinancing costs -0.9 -1.0
Other -1.0 0.0
Total other financing expenses -1.9 -1.7
Net financing costs -12.3 -13.1
The net financing costs recorded a slight improvement in Q1/2006 to minus
(euro)12.3 million compared with minus (euro)13.1 million in the same quarter of
the previous year. This is a result of reduced net interest expenses due to the
decrease in financial liabilities and lower interest expenses in connection with
the antitrust proceedings, resulting from the earlier than scheduled payment of
the remaining North American antitrust liabilities in 2005.
The proceeds from the capital increase of March 2006 were used to fund the first
EU antitrust fine in April 2006. Consequently, the bank guarantee for this EU
antitrust fine was cancelled. Therefore guarantee fees and interest accruals are
no longer required. These measures benefit the net financing costs so that from
today's perspective we expect a financial result of approximately minus (euro)50
million in 2006.
Profit before and after taxes
-----------------------------
During the reporting period, earnings before income taxes more than doubled from
(euro)8.2 million to (euro)20.8 million. With a tax rate of 40%, net profit for
the period more than tripled from (euro)3.9 million to (euro)12.4 million. With
an average number of shares of (euro)57.5 million, the earnings per share were
(euro)0.22 in Q1/2006 compared with (euro)0.07 in Q1/2005.
Financial Position
Consolidated Balance Sheet (unaudited)
--------------------------------------
Assets Mar 31, Dec 31,
(euro) million 2006 2005
-----------------------
Non-current assets
Intangible assets 85 86
Property, plant and equipment 341 346
Long-term investments 15 15
Deferred tax assets 123 129
564 576
Current assets
Inventories 297 281
Trade receivables 195 195
Other current assets 36 34
Cash and cash equivalents 148 93
676 603
Assets held for sale 4 4
Total assets 1,244 1,183
Equity And Liabilities Mar 31, Dec 31,
(euro) million 2006 2005
-----------------------
Shareholders' equity 421 322
Minority interests 1 1
Total equity 422 323
Non-current liabilities
Financial liabilities 327 336
Provisions for pensions and
other employee benefits 160 159
Deferred tax liabilities 31 35
Other liabilities 0 1
Other provisions 14 13
532 544
Current liabilities
Financial liabilities 2 6
Trade payables 81 89
Other liabilities 65 70
Other provisions 142 151
290 316
Total equity and liabilities 1,244 1,183
As at March 31, 2006, total assets increased by around (euro)61 million compared
with year-end 2005. The main reasons for this were the inflow of liquidity from
the capital increase and the seasonally typical increase in working capital,
while exchange rate effects had a shortening impact due primarily to the
weakening of the US dollar against the euro. Cash and cash equivalents increased
by (euro)55 million compared with December 31, 2005. The inflow of (euro)81
million from the capital increase in particular had a positive impact while cash
and cash equivalents to the amount of (euro)13 million were used to pay back a
loan.
Working Capital
---------------
Mar 31, Dec 31,
(euro) million 2006 2005
-----------------------
Inventories 297 281
Trade receivables 195 195
Less trade payables -81 -89
Working capital 411 387
The increase in working capital of around (euro)24 million (currency-adjusted
(euro)28 million) compared with year-end 2005 is the result of higher than
expected business activity primarily in Carbon and Graphite as well as in
Specialties and corresponds to the typical seasonal development at this time of
the year as part of the year's order book needs to be produced in advance.
Statement of Changes in Consolidated Shareholders' Equity
---------------------------------------------------------
Three
months Equity
2006 Ratio
(euro) million -----------------------
Balance at January 1 322 27.2%
Capital increase 82
Net profit 12
Currency exchange differences and other 5
Balance at March 31 421 33.9%
As a result of the capital increase and the net profit for the period, equity as
at March 31, 2006 increased by (euro)99 million to (euro)421 million, thus
leading to an improvement in the equity ratio from 27.2% to 33.9%. The cash
funding of the EU antitrust fine relating to graphite electrodes to the amount
of around (euro)69 million plus accumulated interest made in April 2006 will
again lead to a shortening of the balance sheet in Q2/2006. On a pro-forma
basis, this will result in an equity ratio of more than 35%. In the coming three
months, we will examine whether the EU antitrust fine concerning Graphite
Specialties amounting to (euro)18.5 million plus accumulated interest should
also be funded with cash for reasons of financial optimisation.
Net Debt
--------
Mar 31, Dec 31,
2006 2005
(euro) million -----------------------
Financial liabilities 329 342
plus accrued refinancing cost 15 16
Cash and cash equivalents -148 -93
Net financial debt 196 265
As at March 31, 2006, there was a significant improvement in net financial debt
due to the proceeds from the capital increase. The cash received from the
capital increase was used to cash fund the first EU antitrust fine, for which a
restricted account was established at the EU. The final utilization of these
funds still depend on the outstanding appeals before the European courts. As we
do not include restricted accounts in our calculation of net financial debt, we
are adhering to our guidance for the full 2006 fiscal year to reduce net debt to
below (euro)240 million by year-end despite the positive development of net debt
during Q1/2006.
Financial Condition
Consolidated Cash Flow Statement (unaudited)
-------------------------------------------- 1st Quarter
-----------------------
adjusted by currency impacts / (euro) million 2006 2005
-----------------------
Cash Flows from operating activities
Net income before taxes 20.8 8.2
Loss/(gain) on disposal of property,
plant and equipment 0.1 -0.1
Depreciation and amortization of
fixed assets 12.8 14.2
Amortization of refinancing costs 0.9 0.8
Income taxes paid -4.7 -1.7
Interest on financial debt paid -12.7 -13.6
Changes in provisions, net 1.6 -5.7
Changes in Working Capital -27.6 -23.6
Changes in other operating assets and
other liabilities 7.5 11.8
Cash used in operating activities
before antitrust payment -1.3 -9.7
Payments relating to antitrust - -7.4
Cash used in operating activities -1.3 -17.1
Cash Flows from investing activities
Capital expenditure in property, plant
and equipment and intangible assets -12.2 -7.2
Other investing activities - -
Cash used in investing activities -12.2 -7.2
Free Cash Flow * -13.5 -16.9
Cash Flows from financing activities
Changes in corporate debt -11.8 -3.2
Net proceeds from capital increase 80.8 -
Other financing activities - -
Cash provided by/used in financing
activities 69.0 -3.2
Effect of FX-changes/others -0.7 0.5
Total Cash Flow 54.8 -27.0
Cash and cash equivalents at
beginning of period 93.4 195.5
Cash and cash equivalents at
end of period 148.2 168.5
(thereof cash escrow account) (0.0) (120.0)
*defined as cash used in operating activities before antitrust payments plus
cash used in investing activities
In line with the reporting in the annual report, we have adapted the quarterly
cash flow statements according to the indirect method as defined under IAS 7.
In Q1/2006, SGL Carbon achieved an improved but still slightly negative
operating cash flow of minus (euro)1.3 million compared with minus (euro)9.7
million in Q1/2005. The main reasons for the negative cash flow are the
currency-adjusted increase in working capital of (euro)27.6 million ((euro)23.6
million in Q1/2005) which is typical for this time of the year and the
(euro)12.7 million ((euro)13.6 million in Q1/2005) interest payments on our
financial liabilities which are influenced by the half-yearly payment schedule
on our bond (8.5% coupon.
Accordingly, free cash flow also posted a negative though improved figure of
minus (euro)13.5 million compared with minus (euro)16.9 million in Q1/2005
despite higher capital expenditure of (euro)12.2 million this quarter compared
to (euro)7.2 million in Q1/2005. With the typical normalization of working
capital in the course of the year and despite higher capital expenditure of
around (euro)60 million (2005: (euro)45 million), we still expect for the full
year 2006 a free cash flow of at least (euro)25 million, which we want to use to
reduce our net debt to below (euro)240 million.
Cash provided by financing activities amounted to (euro)69.0 million Q1/2005:
cash used (euro)3.2 million), which is mainly due to the net cash inflow from
the capital increase.
Segment Reporting
Carbon and Graphite (CG) 1st Quarter
------------------------ -----------------------
2006 2005
(euro) million -----------------------
Sales revenue 152.7 143.3
EBITDA 38.4 34.5
Profit from operations 31.5 26.8
Return on sales 20.6% 18.7%
In Q1/2006, sales increased by 7% to (euro)152.7 million, currency-adjusted by
3%. Despite planned reduced deliveries of graphite electrodes, EBIT rose by 18%
to (euro)31.5 million due to price increases and ongoing cost reduction
measures. The return on sales improved to 20.6% compared with 18.7% in the same
quarter of the previous year. The average prices for graphite electrodes
increased by 21% in USD and 10% in EUR compared to Q1/2005. As expected,
shipments of graphite electrodes decreased by around 14% compared to the
exceptionally strong Q1/2005, reaching a level of 45,000 metric tons, which is
comparable to the first quarters of previous years. Factor costs increased in
line with expectation by 10-15%.
The price increases for graphite electrodes announced on April 24, 2006 will be
applicable for all new orders received from April 21st, 2006 until further
notice and for shipments through June 30th, 2007, and therefore have little
impact on the 2006 fiscal year. For the current fiscal year, we therefore
maintain already indicated price increases of 15-20% in USD and 5-10% in EUR,
with prices trending toward the upper ends of both brackets.
Specialties (S) 1st Quarter
--------------- -----------------------
2006 2005
(euro) million -----------------------
Sales revenue 72.3 59.1
EBITDA 11.7 4.7
Profit from operations 8.8 1.5
Return on sales 12.2% 2.5%
Sales increased by 22% to (euro)72.3 million, currency-adjusted by 19%, with all
businesses contributing to the sales growth. Particularly demand from North
America and from the Automotive and Mechanical Applications and Solar Energy
customer sectors showed a favorable development. EBIT increased more than
fivefold compared to the weak Q1/2005. Return on sales with 12.2% reached our
target range of 10-15% for the first time.
SGL Technologies (T) 1st Quarter
-------------------- -----------------------
2006 2005
(euro) million -----------------------
Sales revenue 41.8 38.0
EBITDA 2.0 2.8
Profit from operations -0.8 -0.5
Return on sales -1.9% -1.3%
Due to continued positive development of demand for carbon fibers and carbon
fiber reinforced composite materials, sales increased by 10% to (euro)41.8
million, currency adjusted by 7%. EBIT is burdened by a receivables writedown
due to the Chapter 11 proceedings of Dana Corporation in the USA, a customer in
the area of Expanded Graphite. Without this effect, EBIT would have reached
break even, as announced in March 2006 despite ongoing development expenses in
the Brakes business and new projects for the defense industry.
Corporate Costs 1st Quarter
--------------- -----------------------
2006 2005
(euro) million -----------------------
Other revenue 0.5 0.6
Corporate costs -6.4 -6.5
Despite higher expenses arising from the implementation of the Sarbanes-Oxley
Act as well as share-based payments, Corporate costs at (euro)6.4 million
remained virtually unchanged in Q1/2006 compared to the same quarter of the
previous year.
Employees
---------
The number of employees in the Group was 5,250 as at March 31, 2006 compared
with 5,263 at the end of December 2005. Although the number of employees in
Carbon and Graphite and Specialties declined slightly, headcount increased at
SGL Technologies due to the ongoing expansion of business.
Outlook
-------
For Q2/2006, SGL Carbon is anticipating an increase in sales of around 5% and an
EBIT growth of at least 20% compared to the strong Q2/2005. The increase in
sales for Carbon and Graphite is likely to continue comparable to the growth
rate in Q1/2006, while the improvement in EBIT is likely to accelerate slightly.
For Specialties, we expect another solid quarter in terms of sales and EBIT
which should reach roughly the same levels of the strong second quarter of the
previous year. At SGL Technologies, we expect stable sales as a result of
project-related order and delivery cycles affecting Q2/2006 however with an
improved EBIT compared to Q2/2005.
For the year as a whole, the company's outlook at Group level remains unchanged
for the time being at an expected increase in sales of around 5% and a low
double digit improvement in EBIT.
Quarterly Sales Revenue and Profit from Operations by Business Area
-------------------------------------------------------------------
2005 2005 2006
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------- --------- --------- --------- --------- ---------
Sales revenue
Carbon and Graphite 143.3 168.6 157.3 174.5 643.7 152.7
Specialties 59.1 68.1 66.3 69.9 263.4 72.3
SGL Technologies 38.0 43.5 40.2 37.3 159.0 41.8
Other 0.6 0.6 0.6 0.9 2.7 0.5
241.0 280.8 264.4 282.6 1,068.8 267.3
2005 2005 2006
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------- --------- --------- --------- --------- ---------
Profit (loss) from operations
Carbon and Graphite 26.8 33.7 29.8 31.3 121.6 31.5
Specialties 1.5 6.8 6.2 5.3 19.8 8.8
SGL Technologies -0.5 0.1 3.8 -3.2 0.2 -0.8
Corporate costs -6.5 -7.3 -6.8 -8.2 -28.8 -6.4
21.3 33.3 33.0 25.2 112.8 33.1
Quarterly Consolidated Income Statement
---------------------------------------
2005 2005 2006
(euro) million Q1 Q2 Q3 Q4 Full Year Q1
--------- --------- --------- --------- --------- ---------
Sales revenue 241.0 280.8 264.4 282.6 1,068.8 267.3
Cost of sales -174.7 -191.9 -183.8 -196.3 -746.7 -185.2
Gross profit 66.3 88.9 80.6 86.3 322.1 82.1
Selling/administration/
research/other -45.0 -55.6 -47.6 -61.1 -209.3 -49.0
Profit from operations 21.3 33.3 33.0 25.2 112.8 33.1
Net financing costs -13.1 -14.7 -17.6 -20.2 -65.6 -12.3
Profit before tax 8.2 18.6 15.4 5.0 47.2 20.8
Income taxes -4.3 -7.6 -6.1 -1.1 -19.1 -8.4
Net profit before
minority interests 3.9 11.0 9.3 3.9 28.1 12.4
Important note:
This interim report contains opinions on future developments which are based on
currently available information and do not include the risks and uncertainties
which may result in the actual results deviating from the opinions given on
future developments. The opinions on future developments are not to be taken as
guarantees. Rather, the future developments and occurrences are dependent on a
multitude of factor, they include different risks and imponderables and are
based on assumptions which may prove to be inaccurate. These include, for
example, unforeseeable changes in policy, economic and social conditions,
especially in terms of electric steel production, the competitive situation,
interest rate and currency developments, technological developments and other
risks and imponderables. We see further risks in, amongst other things, price
developments, unforeseeable events in terms of acquired companies and Group
companies, as well as with the current cost optimization programs. SGL Carbon
does not intend to update these opinions on future developments.
Calendar 2006
-------------
April 28 Annual General Meeting
July 26 Q2 Shareholders letter
October 26 Q3 Shareholders letter
Investor Relations Contact
--------------------------
SGL CARBON AG o Head Office o Investor Relations
Rheingaustr. 182 o D-65203 Wiesbaden
Phone +49 611 60 29-0 o Fax +49 611 60 29-101
e-mail cpc@sglcarbon.de o www.sglcarbon.de
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SGL CARBON Aktiengesellschaft
Date: April 25, 2006 By: /s/ Robert J. Kohler
-------------------------------
Name: Robert J. Koehler
Title: Chairman of the Board of
Management
By: /s/ Sten Daugaard
-------------------------------
Name: Mr. Sten Daugaard
Title: Member of the Board of
Management