SGL Carbon CEO Jürgen Köhler has resigned after the company cut its full-year earnings guidance following a weaker-than-expected financial performance in July 2019. The results of the company’s Composites—Fibers & Materials (CFM) business unit in July “show a significant deviation from our expectations,” SGL says. “Analyses of the actual results and the plan were conducted to clarify whether this deviation has an impact on the guidance for the business unit and the group.” SGL says it has reduced its 2019 forecast for the CFM business and group following the analyses.
Köhler handed his resignation, which is effective 31 August, to SGL’s supervisory board “as a consequence of this development,” the company says. “The chairwoman of the supervisory board has complete respect and understanding for this decision,” it says. Köhler has been CEO of SGL since January 2014 and a management board member since mid-2013.
The deviation in July from the previously expected recurring EBIT of the CFM business can be attributed equally to two factors, SGL says. “Erroneous planning assumptions” were discovered within the framework of a high-volume contract in the wind energy market segment, which was initially shipped in July, the company says. Meanwhile, the actual results for July document that an anticipated recovery in the industrial applications market segment, as well as planned earnings-improvement measures, will not benefit SGL’s financial results in the second half of 2019 by the expected magnitude, the company says.
SGL says it is considering restructuring measures as part of “counter measures” that will be required following these two findings. The company has not provided details of the possible measures.
SGL’s revised full-year guidance for the CFM business unit is for a recurring EBIT of “a mid-single-digit million euros amount,” having previously forecast recurring EBIT close to the prior-year level of about €21 million ($23 million). The company’s new full-year group outlook is for recurring EBIT about €10 million below the prior-year level, down from previous guidance at approximately the 2018 level of €65 million. This means SGL will post a full-year net loss in the high-single-digit millions of euros, compared with a previously forecast net breakeven, it says.
As a result, SGL’s previously announced group guidance for 2020–22 is also “no longer sustainable,” the company says. SGL plans to publish new medium-term guidance in January 2020 at the latest, after completing a new group plan.
SGL specializes in manufacturing materials and products made from specialty graphite and composites. They have applications in industries including automotive, aerospace, solar and wind energy, and semiconductors. The company posted first-half 2019 recurring EBIT of €37.8 million, down 14.5% year on year, on sales up 6.1% to €561.5 million. Recurring EBIT for the CFM business unit dropped to €2.8 million from €17.3 million in the year-earlier period on flat sales of €219.4 million.
By Ian Young
Source: Chemical Week
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