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: November 2005
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. Report on the First Nine Months of 2005
2. Press Release: SGL Carbon: First Nine Months of 2005
3. Press Release: SGL Carbon increases Graphite Electrode prices
EXHIBIT 1
9M
Report on the First Nine Months of 2005
Prepared in accordance with International Financial Reporting Standards, IFRSs
(unaudited)
The report on the first nine months of 2005 was prepared in accordance with the
International Financial Reporting Standards (IFRSs) (unaudited). The same
accounting policies were used in this report as in the annual financial
statements for 2004.
- Sales in Q3/2005 plus 11% to EUR261.7 million
- EBIT plus 75% to EUR32.6 million compared to Q3/2004
- After tax profit of EUR23.6 million in 9M/2005 after EUR7.5 million in year
earlier period
- Net debt reduction to EUR300 million as of Sept. 30, 2005 (compared to
EUR342 million as of June 30, 2005)
- Equity ratio 28% as of Sept. 30, 2005 (compared to 24% as of June 30, 2005)
- Ongoing favourable development anticipated in Q4/2005
Financial Highlights (unaudited)
----------------------------------------------------------------------------------------------------------------
First Nine
Months
(EUR million) 2005 2004
----------------------------------------------------------------------------------------------------------------
Sales revenue 778.1 688.0
----------------------------------------------------------------------------------------------------------------
Gross profit 229.8 199.4
----------------------------------------------------------------------------------------------------------------
EBITDA 137.2 106.8
----------------------------------------------------------------------------------------------------------------
EBIT 86.4 60.4
----------------------------------------------------------------------------------------------------------------
Return on sales(1) 11.1% 8.8%
----------------------------------------------------------------------------------------------------------------
Net profit from continuing operations 23.6 7.5
----------------------------------------------------------------------------------------------------------------
Net loss from discontinued operations - - 8.7
----------------------------------------------------------------------------------------------------------------
Net profit before minority interests 23.6 - 1.2
----------------------------------------------------------------------------------------------------------------
Earnings per share (in EUR) 0.42 - 0.02
----------------------------------------------------------------------------------------------------------------
Operational cash flow from continuing operations(2) 92.8 75.6
----------------------------------------------------------------------------------------------------------------
Sept. 30, Dec. 31,
(EUR million) 2005 2004
----------------------------------------------------------------------------------------------------------------
Total assets 1,156 1,315
----------------------------------------------------------------------------------------------------------------
Equity 326 282
----------------------------------------------------------------------------------------------------------------
Net debt 300 321
----------------------------------------------------------------------------------------------------------------
Debt ratio (gearing)(3) 0.9 1.1
----------------------------------------------------------------------------------------------------------------
Equity ratio(4) 28.2% 21.4%
----------------------------------------------------------------------------------------------------------------
(1) EBIT divided by sales revenue
(2) Without currency exchange rate effects
(3) Net debt divided by shareholders' equity
(4) Equity divided by total assets
Effective January 6, 2005. SGL Carbon concluded the sale of its investment in
SGL ACOTEC GmbH, which included SGL's Surface Protection business. The effects
resulting from this transaction were already recognised in the annual financial
statements for 2004. The Process Technology (PT) business remaining in the Group
was integrated within the Specialties (S) Business Area together with the
Graphite Specialties (GS) business. Only the comparable results of continuing
operations are presented in this interim report.
According to IFRS 2, share-based payments such as stock option plans and share
bonus programs for employees and members of senior management are included under
staff costs, effective January 1, 2005. Based on current calculation, this
change burdens the result of the segments and corporate costs by a total of
approximately EUR2 million each quarter in 2005.
As already discussed at the year-end press conference in March 2005, the
extraordinary restructuring measures have now been largely completed. Therefore,
profit from operations (EBIT) no longer includes a separate presentation of
restructuring expenses.
Business Development in the Group
Consolidated Income Statement (unaudited)
----------------------------------------------------------------------------------------------------------------
First Nine
Months
(EUR million) 2005 2004
----------------------------------------------------------------------------------------------------------------
Sales revenue 778.1 688.0
----------------------------------------------------------------------------------------------------------------
Gross profit 229.8 199.4
----------------------------------------------------------------------------------------------------------------
Selling, administrative, research and other income/expense - 143.4 - 139.0
----------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 86.4 60.4(1)
----------------------------------------------------------------------------------------------------------------
Net financing costs - 45.4 - 45.4
----------------------------------------------------------------------------------------------------------------
Profit (loss) before tax 41.0 15.0
----------------------------------------------------------------------------------------------------------------
Income taxes - 17.4 - 7.5
----------------------------------------------------------------------------------------------------------------
Net profit (loss) from continuing operations 23.6 7.5
----------------------------------------------------------------------------------------------------------------
Net profit (loss) from discontinued operations - - 8.7
----------------------------------------------------------------------------------------------------------------
Net profit (loss) before minority interests 23.6 - 1.2
----------------------------------------------------------------------------------------------------------------
Earnings per share (in EUR, basic) 0.42(2) - 0.02
----------------------------------------------------------------------------------------------------------------
(1) Comparable EBIT for 9M/2004 is calculated as follows: reported EBIT after
restructuring expenses amounted to EUR39.4 million in 9M/2004. Taking into
consideration the EUR12.6 million operating loss from the divested Surface
Protection business, the discontinuation of the EUR4.7 million scheduled
goodwill amortization in accordance with IFRS 3,and the reclassification of
the interest on the North American pension provisions of EUR3.7 million,
which are now unified and shown in the net financing costs, the comparable
EBIT of EUR60.4 million results.
(2) In 9M/2005, approximately 56.4 million shares were outstanding on average.
Despite the seasonally weaker third quarter, consolidated sales after 9M/2005
increased 13.1% to EUR778.1 million due to the strong development of demand
in all three business areas. Adjusted for foreign currency changes, sales grew
by 14.4%. EBIT rose by a disproportionately higher rate than sales from
comparable EUR60.4 million the previous year to EUR86.4 million,
corresponding to an increase of 43.0%. The principal reasons for the strong
growth in earnings were the ongoing favourable developments in CG, the profit
contributions from GS and PT as well as the positive results from SGL T which
benefited from the earnings contribution out of the Audi cooperation agreement.
In addition, cost savings of about EUR14 million supported the earnings
growth in 9M/2005.
Details of Net Financing Costs
----------------------------------------------------------------------------------------------------------------
First Nine
Months
(EUR million) 2005 2004
----------------------------------------------------------------------------------------------------------------
Interest expense (net) - 21.9 - 22.2
----------------------------------------------------------------------------------------------------------------
Interest expense on pensions - 10.1 - 10.0
----------------------------------------------------------------------------------------------------------------
Interest expense on antitrust (non-cash) - 5.0 - 5.3
----------------------------------------------------------------------------------------------------------------
Total interest expense, net - 37.0 - 37.5
----------------------------------------------------------------------------------------------------------------
Currency and hedging valuation adjustments of antitrust liabilities (non-cash) - 0.9 - 2.0
----------------------------------------------------------------------------------------------------------------
Amortization of refinancing costs (non-cash) - 4.4 - 2.8
----------------------------------------------------------------------------------------------------------------
Other - 3.1 - 3.1
----------------------------------------------------------------------------------------------------------------
Total other financing expenses - 8.4 - 7.9
----------------------------------------------------------------------------------------------------------------
Net financing costs - 45.4 - 45.4
----------------------------------------------------------------------------------------------------------------
First nine months 2005 net financing costs of EUR45.4 million were burdened
with EUR4.2 million of one-time and non-cash measures in Q3/2005. These were
- the reduction of the US-Dollar credit facility from $112 million to $80
million in September 2005, which led to the write-off of previously
amortised refinancing expenses in Q3/2005 (EUR1.5 million).
- the early repayment of the remaining North American antitrust fines of
around EUR54 million, which had a final effect from the accrued interest
(EUR1.7 million) in Q3/2005 and
- a lower market value of interest derivatives (EUR1.0 million) based on the
mark-to-market valuation on September 30, 2005
Profit before and after tax
Profit before income taxes amounted to EUR41.0 million after nine months 2005
compared to EUR15.0 million in the same year earlier period. With a tax rate
of approximately 42%, consolidated net profit in 9M/2005 more than tripled to
EUR23.6 million (9M/2004: EUR7.5 million). Taking into consideration the
loss from the divested Surface Protection business, profit after tax rose from
EUR-1.2 million in the first nine months of 2004 to EUR23.6 million in the
reported period. Earnings per share thus amounted to EUR0.42 compared to the
comparable figure of EUR-0.02 after 9M/2004.
Financial Position
Consolidated Balance Sheet (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) Sept. 30, Dec. 31,
2005 2004
----------------------------------------------------------------------------------------------------------------
Assets
----------------------------------------------------------------------------------------------------------------
Intangible assets 84 85
----------------------------------------------------------------------------------------------------------------
Property, plant and equipment 336 345
----------------------------------------------------------------------------------------------------------------
Long-term investments 31 30
----------------------------------------------------------------------------------------------------------------
Deferred tax assets 137 130
----------------------------------------------------------------------------------------------------------------
Non-current assets 588 590
----------------------------------------------------------------------------------------------------------------
Inventories 270 248
----------------------------------------------------------------------------------------------------------------
Trade receivables 204 184
----------------------------------------------------------------------------------------------------------------
Other current assets 34 36
----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 60 65
----------------------------------------------------------------------------------------------------------------
Restricted cash for repayment of convertible bond - 51
----------------------------------------------------------------------------------------------------------------
Restricted cash for antitrust payments - 77
----------------------------------------------------------------------------------------------------------------
Current assets 568 661
----------------------------------------------------------------------------------------------------------------
Assets held for sale - 64
----------------------------------------------------------------------------------------------------------------
Total assets 1,156 1,315
----------------------------------------------------------------------------------------------------------------
(EUR million) Sept. 30, Dec. 31,
2005 2004
----------------------------------------------------------------------------------------------------------------
Equity and liabilities
----------------------------------------------------------------------------------------------------------------
Equity including minority interests 326 282
----------------------------------------------------------------------------------------------------------------
Non-current financial liabilities 335 353
----------------------------------------------------------------------------------------------------------------
Provisions for pensions and other employee benefits 158 156
----------------------------------------------------------------------------------------------------------------
Deferred tax liabilities 44 45
----------------------------------------------------------------------------------------------------------------
Other non-current liabilities 2 37
----------------------------------------------------------------------------------------------------------------
Other non-current provisions 22 19
----------------------------------------------------------------------------------------------------------------
Non-current liabilities 561 610
----------------------------------------------------------------------------------------------------------------
Financial liabilities 8 63
----------------------------------------------------------------------------------------------------------------
Trade payables 75 91
----------------------------------------------------------------------------------------------------------------
Other liabilities 55 79
----------------------------------------------------------------------------------------------------------------
Other provisions 131 126
----------------------------------------------------------------------------------------------------------------
Current liabilities 269 359
----------------------------------------------------------------------------------------------------------------
Liabilities held for sale - 64
----------------------------------------------------------------------------------------------------------------
Total equity and liabilities 1,156 1,315
----------------------------------------------------------------------------------------------------------------
Compared to December 31, 2004 (EUR1,315 million), total assets as of
September 30, 2005, were substantially reduced to EUR1,156 million due to
- the complete redemption of the convertible bond out of the existing cash
escrow (EUR50 million),
- the early repayment of the North American antitrust fines and the
redemption of the associated currency hedging instruments out of the
existing cash escrow in Q3/2005 (EUR54 million),
- the scheduled payments of EUR15 million to the U.S. antitrust authorities
in H1/2005,
- the reduction of the US-Dollar credit facility by around EUR23 million in
September 2005 by utilising cash on the balance sheet and
- the sale of the Surface Protection business on January 6, 2005 (EUR64
million).
Currency movements (mainly the US-Dollar, the Canadian Dollar, and the Polish
Zloty) have had an expansive effect on the balance sheet of EUR49 million.
Working Capital (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) Sept. 30, Dec. 31,
2005 2004
----------------------------------------------------------------------------------------------------------------
Inventories 270 248
----------------------------------------------------------------------------------------------------------------
Trade receivables 204 184
----------------------------------------------------------------------------------------------------------------
Less trade payables - 75 - 91
----------------------------------------------------------------------------------------------------------------
Working Capital 399 341
----------------------------------------------------------------------------------------------------------------
The increase in working capital by EUR58 million over the year-end 2004
resulted from higher business activities in all segments. especially at CG and
SGL T. Excluding currency effects of EUR15 million, an operational increase
in working capital of EUR43 million remains. Despite the higher level, we
were able to reduce the average days working capital from 151 at September 30,
2004. to 140 at September 30, 2005. For Q4/2005, we expect a seasonally lower
level of working capital compared to the level at September 30, 2005.
Nevertheless, working capital at the end of 2005 will be higher than at the end
of 2004 due to the substantially higher sales development this year.
Statement of Changes in Consolidated Equity (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine Months Equity Ratio
2005
----------------------------------------------------------------------------------------------------------------
Balance at January 1 282 21.4%
----------------------------------------------------------------------------------------------------------------
Capital increase 2
----------------------------------------------------------------------------------------------------------------
Net profit from continuing operations 24
----------------------------------------------------------------------------------------------------------------
Currency exchange rate differences and other 18
----------------------------------------------------------------------------------------------------------------
Balance at September 30 326 28.2%
----------------------------------------------------------------------------------------------------------------
The equity ratio substantially improved to 28.2% at September 30, 2005, compared
to 21.4% at the beginning of this year due to the measures detailed in the
chapter Consolidated Balance Sheet as well as the net profit of EUR23.6
million in the first nine months 2005.
Net Debt (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) Sept. 30, Dec. 31,
2005 2004
----------------------------------------------------------------------------------------------------------------
Financial debt (including convertible bonds as of Dec. 31, 2004) 343 416
----------------------------------------------------------------------------------------------------------------
Refinancing costs 17 21
----------------------------------------------------------------------------------------------------------------
Restricted cash for convertible bonds - - 51
----------------------------------------------------------------------------------------------------------------
Unrestricted cash and cash equivalents - 60 - 65
----------------------------------------------------------------------------------------------------------------
Net debt 300 321
----------------------------------------------------------------------------------------------------------------
Net debt at September 30, 2005, decreased to EUR300 million from EUR321
million at the end of 2004 mainly due to the operational free cash flow
generation of EUR20.8 million in the first nine months 2005. Gearing improved
to 0.9, achieving a value below 1 for the first time in years (31.12.2004: 1.1).
We continue to expect net debt at the end of 2005 to be below EUR300 million.
Financial Condition
Consolidated Cash Flow Statement (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 86.4 60.4
----------------------------------------------------------------------------------------------------------------
Depreciation 50.8 46.4
----------------------------------------------------------------------------------------------------------------
EBITDA 137.2 106.8
----------------------------------------------------------------------------------------------------------------
Decrease (increase) in working capital - 44.4 - 31.2
----------------------------------------------------------------------------------------------------------------
Operational cash flow 92.8 75.6
----------------------------------------------------------------------------------------------------------------
Other operating cash sources (uses) - 55.3 - 39.6
----------------------------------------------------------------------------------------------------------------
Cash provided by operating activities before antitrust payments 37.5 36.0
----------------------------------------------------------------------------------------------------------------
Payments relating to antitrust proceedings(1) - 69.4 - 42.6
----------------------------------------------------------------------------------------------------------------
Cash used by operating activities - 31.9 - 6.6
----------------------------------------------------------------------------------------------------------------
Capital expenditures - 27.5 - 25.9
----------------------------------------------------------------------------------------------------------------
Other investing activities 10.8 - 2.4
----------------------------------------------------------------------------------------------------------------
Cash used in investing activities - 16.7 - 28.3
----------------------------------------------------------------------------------------------------------------
Free Cash Flow(2) 20.8 7.7
----------------------------------------------------------------------------------------------------------------
Net change in financial liabilities - 86.7 - 44.9
----------------------------------------------------------------------------------------------------------------
Payments in connection with refinancing - 0.8 - 23.9
----------------------------------------------------------------------------------------------------------------
Net proceeds from capital increase 1.9 245.3
----------------------------------------------------------------------------------------------------------------
Cash provided by (used in) financing activities - 85.6 176.5
----------------------------------------------------------------------------------------------------------------
Cash used in discontinued operations - - 8.6
----------------------------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes 1.5 0.3
----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents - 132.7(3) 133.3
----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of the year 192.7 46.1
----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of nine months 60.0 179.4
----------------------------------------------------------------------------------------------------------------
(1) From restricted cash account for antitrust payments
(2) Cash provided by operating activities before antitrust payments less cash
used in investing activities
(3) Net decrease in cash of EUR132.7 million results from the payment of the
remaining North American antitrust liabilities, the redemption of the
convertible bond, and the reduction of the US-Dollar credit facilities
Details of other operating cash sources (uses)(1) (unaudited)
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Interest payments (net) - 27.1 - 21.2
----------------------------------------------------------------------------------------------------------------
Cash interest expense for pensions - 5.7 - 9.5
----------------------------------------------------------------------------------------------------------------
Other cash components of financial result (net) - 2.9 - 2.3
----------------------------------------------------------------------------------------------------------------
Cash restructuring expense - 3.1 - 6.3
----------------------------------------------------------------------------------------------------------------
Tax payments - 12.1 - 8.3
----------------------------------------------------------------------------------------------------------------
Bonus payments/accruals 2.8 6.5
----------------------------------------------------------------------------------------------------------------
Other cash payments - 7.2 1.5
----------------------------------------------------------------------------------------------------------------
Other operating cash sources (uses) - 55.3 - 39.6
----------------------------------------------------------------------------------------------------------------
(1) adjusted by currency effects
SGL Carbon achieved a positive operating cash flow of EUR92.8 million in the
first nine months of 2005 compared to EUR75.6 million in the year earlier
period. Higher profit contributions from operating activities were again
partially offset by a temporary build up of working capital, which was largely
attributable to servicing higher than expected demand. Other operating cash uses
increased to EUR55.3 million in the reporting period from EUR39.6 million
in the first nine months 2004. The main reason for this was the corporate bond,
which was issued in February 2004. Two semi-annual interest payments for this
bond were made in February and August 2005, while in 2004, only one interest
payment was made in August. Further causes were higher tax payments and bonus
payments in 2005, since the Board of Management and 156 members of senior
management waived their bonuses in 2004 as part of the refinancing and capital
increase efforts of the Company. As a result, net cash provided by operating
activities before antitrust payments amounted to EUR37.5 million in the first
nine months 2005 compared to EUR36.0 million in the same year earlier period.
Payments made in connection with antitrust proceedings consisted of the
scheduled payments to the North American antitrust authorities of EUR15.1
million in H1/2005 as well as the premature and complete payment of the
remaining North American antitrust liabilities and the closing of the associated
currency hedging instruments in Q3/2005 out of the restricted cash account for
antitrust payments (around EUR54 million).
Capital expenditures of EUR27.5 million slightly exceeded the previous year's
figure of EUR25.9 million, and was EUR23.3 million below depreciation of
EUR50.8 million during the reporting period, compared to EUR46.4 million
in the first nine months 2004. This resulted in free cash flow for the first
nine months 2005 of EUR20.8 million compared to EUR7.7 million in the
comparable 2004 period.
Segment Reporting
Carbon and Graphite [CG]
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Sales revenue 468.0 412.6
----------------------------------------------------------------------------------------------------------------
EBITDA 121.4 93.7
----------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 90.0 70.9
----------------------------------------------------------------------------------------------------------------
Return on sales 19.2% 17.2%
----------------------------------------------------------------------------------------------------------------
Sales increased by 13.4% to EUR468.0 million in the first nine months 2005.
Adjusted for foreign currency changes, sales growth was 15.4%. Due to the
continuing good demand for graphite electrodes, higher prices and ongoing cost
reduction measures, EBIT in the reporting period increased by 26.9% to
EUR90.0 million. The slightly lower return on sales compared to H1/2005
(19.4%) is a result of the seasonally typical lower production volumes in the
third quarter. The average price for graphite electrodes increased by 13% in
US-Dollar and by 5% in Euro compared to the first nine months of the previous
year. Total shipments amounted to 165.000 metric tons in the first nine months
of this year, 7.8% higher than in the comparable period last year (153.000
metric tons). As expected, raw material and energy costs increased by around
10%.
For the full year 2005 we are expecting a sales increase comparable to the
growth in the first nine months 2005 and an EBIT, which will again show a more
than proportionate growth by up to 30% over the full year 2004.
Specialties [S]
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Sales revenue 188.1 176.1
----------------------------------------------------------------------------------------------------------------
EBITDA 23.8 25.8
----------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 13.9 14.4
----------------------------------------------------------------------------------------------------------------
Return on sales 7.4% 8.2%
----------------------------------------------------------------------------------------------------------------
Due to a good development in demand particularly from the industrial and
automotive industries, sales in the reporting period increased by 6.8% to
EUR188.1 million. Currency movements had no impact on the sales growth. EBIT
in Q3/2005 increased by a strong 42.9% to EUR6.0 million compared with
Q3/2004, with the improvement coming from both GS and PT. Due to the weak
Q1/2005, the Specialties EBIT in the first nine months 2005 remained marginally
below the strong year earlier period, whereby PT's result was already
significantly above the comparable 2004 result, but GS's still slightly below.
For the full year 2005 we expect Specialties to achieve a sales increase of
about 5% and a more than proportionate growth n EBIT of slightly above 10% over
the full year 2004.
SGL Technologies [T]
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Sales revenue 120.2 97.9
----------------------------------------------------------------------------------------------------------------
EBITDA 12.6 3.9
----------------------------------------------------------------------------------------------------------------
Profit from operations (EBIT) 3.1 - 6.0
----------------------------------------------------------------------------------------------------------------
Return on sales 2.6% - 6.1%
----------------------------------------------------------------------------------------------------------------
Due to the continued good demand for Fibres, Composites and Brakes, sales rose
by 22.8% to EUR120.2 million. After adjusting for foreign currency changes,
growth amounted to 23.8%. The EBIT in the first nine months 2005 of EUR3.1
million benefited from a low single digit million profit contribution from the
AUDI cooperation agreement in Q3/2005, as already announced in our H1/2005
report.
For the full year 2005, we continue to expect a break even in EBIT compared to a
loss of EUR10 million in the year 2004.
Corporate Costs
----------------------------------------------------------------------------------------------------------------
(EUR million) First Nine
Months
2005 2004
----------------------------------------------------------------------------------------------------------------
Other revenue 1.8 1.4
----------------------------------------------------------------------------------------------------------------
Corporate costs - 20.6 - 18.9
----------------------------------------------------------------------------------------------------------------
Corporate costs increased from EUR18.9 million in the first nine months 2004
to EUR20.6 million in the reporting period. This was primarily attributable
to expenses in connection to the implementation of the Sarbanes-Oxley Act as
well as the first time inclusion of share-based remuneration components under
the provisions of IRFS 2 from January 1, 2005, onwards and higher bonus accruals
compared to 2004.
Employees
The number of employees in the Group remained virtually unchanged at 5,096 as of
September 30, 2005, compared to a total of 5,097 as of June 30, 2005, thereby
remaining below the level of 5,109 as of December 31, 2004.
Outlook
Group EBIT in Q4/2005 is expected to be lower than in Q3/2005 due to the
shortfall of the profit contribution from the AUDI cooperation agreement as well
as a traditionally weak December in GS. Nevertheless, EBIT in Q4/2005 will
likely be more than four times as high as the result of Q4/2004 (EUR5.2
million).
For the full year 2005 we anticipate group sales to increase a little above 10%
and group EBIT to rise more than proportionately to above 60% as well as a
positive after tax result.
Quarterly Sales Revenue & Profit from Operations (EBIT) by Segment (unaudited)
-------------------------------------------------------------------------------------------------------------------
2004 2005
-------------------------------------------------------------------------------------------------------------------
EUR million Q1 Q2 Q3 Q4 Full Q1 Q2 Q3 9M
Year
-------------------------------------------------------------------------------------------------------------------
Sales revenue
-------------------------------------------------------------------------------------------------------------------
Carbon and Graphite 122.6 149.5 140.5 142.9 555.5 142.9 168.2 156.9 468.0
-------------------------------------------------------------------------------------------------------------------
Specialties 58.1 57.2 60.8 59.7 235.8 57.3 66.3 64.5 188.1
-------------------------------------------------------------------------------------------------------------------
SGL Technologies 29.8 34.7 33.4 35.3 133.2 37.5 43.0 39.7 120.2
-------------------------------------------------------------------------------------------------------------------
Other 0.5 0.6 0.3 0.3 1.7 0.6 0.6 0.6 1.8
-------------------------------------------------------------------------------------------------------------------
211.0 242.0 235.0 238.2 926.2 238.3 278.1 261.7 778.1
-------------------------------------------------------------------------------------------------------------------
2004 2005
-------------------------------------------------------------------------------------------------------------------
EUR million Q1 Q2 Q3 Q4 Full Q1 Q2 Q3 9M
Year
-------------------------------------------------------------------------------------------------------------------
Profit (loss) from
operations (EBIT)
-------------------------------------------------------------------------------------------------------------------
Carbon and Graphite 17.9 27.5 25.5 18.8 89.7 26.7 33.6 29.7 90.0
-------------------------------------------------------------------------------------------------------------------
Specialties 5.3 4.9 4.2 0.8 15.2 1.3 6.6 6.0 13.9
-------------------------------------------------------------------------------------------------------------------
SGL Technologies - 1.8 - 2.1 - 2.1 - 4.1 - 10.1 - 0.6 0.0 3.7 3.1
-------------------------------------------------------------------------------------------------------------------
Corporate - 4.7 - 5.2 - 9.0 - 10.4 - 29.3 - 6.5 - 7.3 - 6.8 - 20.6
-------------------------------------------------------------------------------------------------------------------
16.7 25.1 18.6 5.1 65.5 20.9 32.9 32.6 86.4
-------------------------------------------------------------------------------------------------------------------
Quarterly Consolidated Income Statement (unaudited)
-------------------------------------------------------------------------------------------------------------------
2004 2005
-------------------------------------------------------------------------------------------------------------------
EUR million Q1 Q2 Q3 Q4 Full Q1 Q2 Q3 9M
Year
-------------------------------------------------------------------------------------------------------------------
Sales revenue 211.0 242.0 235.0 238.2 926.2 238.3 278.1 261.7 778.1
-------------------------------------------------------------------------------------------------------------------
Cost of sales - 151.5 - 168.9 - 168.2 - 174.8 - 663.4 - 174.0 - 191.2 - 183.1 - 548.3
-------------------------------------------------------------------------------------------------------------------
Gross profit 59.5 73.1 66.8 63.4 262.8 64.3 86.9 78.6 229.8
-------------------------------------------------------------------------------------------------------------------
Selling/administrative
/R&D/other - 42.8 - 48.0 - 48.2 - 58.3 - 197.3 - 43.4 - 54.0 - 46.0 - 143.4
-------------------------------------------------------------------------------------------------------------------
Profit (loss) from operations
(EBIT) 16.7 25.1 18.6 5.1 65.5 20.9 32.9 32.6 86.4
-------------------------------------------------------------------------------------------------------------------
Net financing costs - 15.2 - 16.2 - 14.0 - 15.1 - 60.5 - 13.1 - 14.7 - 17.6 - 45.4
-------------------------------------------------------------------------------------------------------------------
Profit (loss) before tax 1.5 8.9 4.6 - 10.0 5.0 7.8 18.2 15.0 41.0
-------------------------------------------------------------------------------------------------------------------
Income taxes - 0.9 - 2.5 - 4.1 6.3 - 1.2 - 4.1 - 7.4 - 5.9 - 17.4
-------------------------------------------------------------------------------------------------------------------
Net profit (loss) from
continuing operations 0.6 6.4 0.5 - 3.7 3.8 3.7 10.8 9.1 23.6
-------------------------------------------------------------------------------------------------------------------
Net loss from discontinued
operations - 4.0 - 2.7 - 2.0 - 76.8 - 85.5 - - - -
-------------------------------------------------------------------------------------------------------------------
Net profit (loss) before
minority interests - 3.4 3.7 - 1.5 - 80.5 - 81.7 3.7 10.8 9.1 23.6
-------------------------------------------------------------------------------------------------------------------
Important note:
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.
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, ongoing restructuring measures
and unforeseeable occurrences in conjunction with the reviews to be performed by
the European antitrust authorities. SGL Carbon does not intend to update these
forward-looking statements.
EXHIBIT 2
SGL Carbon: First Nine Months of 2005
o Sales in Q3/2005 plus 11% to EUR261.7 million
o EBIT plus 75% to EUR32.6 million compared to Q3/2004
o After tax profit of EUR23.6 million in 9M/2005 after EUR7.5 million in year
earlier period
o Net debt reduction to EUR300 million as of Sept. 30, 2005 (compared to
EUR342 million as of June 30, 2005)
o Equity ratio 28% as of Sept. 30, 2005 (compared to 24% as of June 30, 2005)
o Ongoing favourable development anticipated in Q4/2005
Wiesbaden, November 09, 2005. Despite the seasonally weaker third quarter,
consolidated sales of SGL Carbon after 9M/2005 increased 13.1% to EUR778.1
million due to the strong development of demand in all three business areas.
Adjusted for foreign currency changes, sales grew by 14.4%. EBIT rose by a
disproportionately higher rate than sales from comparable EUR60.4 million the
previous year to EUR86.4 million, corresponding to an increase of 43.0%. The
principal reasons for the strong growth in earnings were the ongoing favourable
developments in CG, the profit contributions from GS and PT as well as the
positive results from SGL T which benefited from the earnings contribution out
of the AUDI cooperation agreement. In addition, cost savings of about EUR14
million supported the earnings growth in 9M/2005.
Net financing costs
First nine months 2005 net financing costs of EUR45.4 million were burdened
with EUR4.2 million of one-time and non-cash measures in Q3/2005. These were
- the reduction of the US-Dollar credit facility from $112 million to $80
million in September 2005, which led to the write-off of previously
amortised refinancing expenses in Q3/2005 (EUR1.5 million).
- the early repayment of the remaining North American antitrust fines of
around EUR54 million, which had a final effect from the accrued interest
(EUR1.7 million) in Q3/2005 and
SGL CARBON AG
Corporate Communications, Media Relations
Rheingaustrasse 182, D-65203 Wiesbaden
Tel.: +49 (6 11) 60 29-100, Fax: +49 (6 11) 60 29-101
E-Mail: cpc@sglcarbon.de, Internet: www.sglcarbon.de
- a lower market value of interest derivatives (EUR1.0 million) based on the
mark-to-market valuation on September 30, 2005.
Profit before and after tax
Profit before income taxes amounted to EUR41.0 million after nine months 2005
compared to EUR15.0 million in the same year earlier period. With a tax rate
of approximately 42%, consolidated net profit in 9M/2005 more than tripled to
EUR23.6 million (9M/2004: EUR7.5 million). Taking into consideration the
loss from the divested Surface Protection business, profit after tax rose from
EUR-1.2 million in the first nine months of 2004 to EUR23.6 million in the
reported period. Earnings per share thus amounted to EUR0.42 compared to the
comparable figure of EUR -0.02 after 9M/2004.
Statement of Changes in Consolidated Equity
The equity ratio substantially improved to 28.2% at September 30, 2005, compared
to 21.4% at the beginning of this year due to the measures detailed in the
chapter Consolidated Balance Sheet of the shareholder letter as well as the net
profit of EUR23.6 million in the first nine months 2005.
Net Debt
Net debt at September 30, 2005, decreased to EUR300 million from EUR321
million at the end of 2004 mainly due to the operational free cash flow
generation of EUR20.8 million in the first nine months 2005. Gearing improved
to 0.9, achieving a value below 1 for the first time in years (31.12.2004: 1.1).
SGL Carbon continues to expect net debt at the end of 2005 to be below EUR300
million.
Corporate Costs
Corporate costs increased from EUR18.9 million in the first nine months 2004
to EUR20.6 million in the reporting period. This was primarily attributable
to expenses in connection to the implementation of the Sarbanes-Oxley Act as
well as the first time inclusion of share-based remuneration components under
the provisions of IRFS 2 from January 1, 2005, onwards and higher bonus accruals
compared to 2004.
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Employees
The number of employees in the Group remained virtually unchanged at 5,096 as of
September 30, 2005, compared to a total of 5,097 as of June 30, 2005, thereby
remaining below the level of 5,109 as of December 31, 2004.
Segment Reporting
Carbon and Graphite (CG)
Sales increased by 13.4% to EUR468.0 million in the first nine months 2005.
Adjusted for foreign currency changes, sales growth was 15.4%. Due to the
continuing good demand for graphite electrodes, higher prices and ongoing cost
reduction measures, EBIT in the reporting period increased by 26.9% to
EUR90.0 million. The slightly lower return on sales compared to H1/2005
(19.4%) is a result of the seasonally typical lower production volumes in the
third quarter. The average price for graphite electrodes increased by 13% in
US-Dollar and by 5% in Euro compared to the first nine months of the previous
year. Total shipments amounted to 165.000 metric tons in the first nine months
of this year, 7.8% higher than in the comparable period last year (153.000
metric tons). As expected, raw material and energy costs increased by around
10%. For the full year 2005 SGL Carbon is expecting a sales increase comparable
to the growth in the first nine months 2005 and an EBIT, which will again show a
more than proportionate growth by up to 30% over the full year 2004.
Specialties (S)
Due to a good development in demand particularly from the industrial and
automotive industries, sales in the reporting period increased by 6.8% to
EUR188.1 million. Currency movements had no impact on the sales growth. EBIT
in Q3/2005 increased by a strong 42.9% to EUR6.0 million compared with
Q3/2004, with the improvement coming from both GS and PT. Due to the weak
Q1/2005, the Specialties EBIT in the first nine months 2005 remained marginally
below the strong year earlier period, whereby PT's result was already
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significantly above the comparable 2004 result, but GS's still slightly below.
For the full year 2005 the Company expects Specialties to achieve a sales
increase of about 5% and a more than proportionate growth in EBIT of slightly
above 10% over the full year 2004.
SGL Technologies (SGL T)
Due to the continued good demand for Fibres, Composites and Brakes, sales rose
by 22.8% to EUR120.2 million. After adjusting for foreign currency changes,
growth amounted to 23.8%. The EBIT in the first nine months 2005 of EUR3.1
million benefited from a low single digit million profit contribution from the
AUDI cooperation agreement in Q3/2005, as already announced in our H1/2005
report. For the full year 2005, SGL Carbon continues to expect a break even in
EBIT compared to a loss of EUR10 million in the year 2004.
Outlook
Group EBIT in Q4/2005 is expected to be lower than in Q3/2005 due to the
shortfall of the profit contribution from the AUDI cooperation agreement as well
as a traditionally weak December in GS. Nevertheless, EBIT in Q4/2005 will
likely be more than four times as high as the result of Q4/2004 (EUR5.2
million). For the full year 2005 SGL Carbon anticipates group sales to increase
a little above 10% and group EBIT to rise more than proportionately to above 60%
as well as a positive after tax result.
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Financial Highlights SGL Carbon Group
(unaudited / in Mio. EUR)
First Nine Months
-----------------
2005 2004
---------------------------------------------------------------------------------------------------------
Sales revenue 778.1 688.0
---------------------------------------------------------------------------------------------------------
EBITDA 137.2 106.8
---------------------------------------------------------------------------------------------------------
EBIT 86.4 60.4
---------------------------------------------------------------------------------------------------------
Return on sales (1) 11.1% 8.8%
---------------------------------------------------------------------------------------------------------
Net profit from continuing operations 23.6 7.5
---------------------------------------------------------------------------------------------------------
Net loss from discontinued operations - -8.7
---------------------------------------------------------------------------------------------------------
Net profit before minority interests 23.6 -1.2
---------------------------------------------------------------------------------------------------------
Earnings per share (in EUR) 0.42 -0.02
---------------------------------------------------------------------------------------------------------
Operational cash flow from continuing operations (2) 92.8 75.6
---------------------------------------------------------------------------------------------------------
(1) EBIT divided by sales revenue
(2) Without currency exchange rate effects
Sept. 30, Dec. 31,
2005 2004
--------------------------------------------------------------------------------------------------------
Total assets 1,156 1,315
--------------------------------------------------------------------------------------------------------
Equity 326 282
--------------------------------------------------------------------------------------------------------
Net debt 300 321
--------------------------------------------------------------------------------------------------------
Debt ratio (gearing) (3) 0.9 1.1
--------------------------------------------------------------------------------------------------------
Equity ratio (4) 28.2% 21.4%
--------------------------------------------------------------------------------------------------------
(3) Net debt divided by shareholders equity
(4) Equity divided by total assets
Remark
------
Effective January 6, 2005. SGL Carbon concluded the sale of its investment in
SGL ACOTEC GmbH, which included SGL's Surface Protection business. The effects
resulting from this transaction were already recognised in the annual financial
statements for 2004. The Process Technology (PT) business remaining in the Group
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was integrated within the Specialties (S) Business Area together with the
Graphite Specialties (GS) business. Only the comparable results of continuing
operations are presented in this interim report.
According to IFRS 2, share-based payments such as stock option plans and share
bonus programs for employees and members of senior management are included under
staff costs, effective January 1, 2005. Based on current calculation, this
change burdens the result of the segments and corporate costs by a total of
approximately EUR2 million each quarter in 2005.
As already discussed at the year-end press conference in March 2005, the
extraordinary restructuring measures have now been largely completed. Therefore,
profit from operations (EBIT) no longer includes a separate presentation of
restructuring expenses.
Important Notice:
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.
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, ongoing restructuring measures
and unforeseeable occurrences in conjunction with the reviews to be performed by
the European antitrust authorities. SGL Carbon does not intend to update these
forward-looking statements.
Your contact:
-------------
Corporate Communications / Press Office / 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
6/6
EXHIBIT 3
SGL Carbon increases Graphite Electrode prices
Wiesbaden, October 18, 2005. SGL Carbon announces today new prices for its
Graphite Electrodes effective November 1st, 2005 for all new businesses in:
Americas, Asia (excluding China*), Near Middle East and Africa:
o For regular-size Graphite Electrodes: 1,91 US$/lb (4210 US-$/mt)
o For extra-size Graphite Electrodes: 2,07 US$/lb (4560 US-$/mt)
Europe:
o For regular-size Graphite Electrodes: 3180 EUR/MT
o For extra-size Graphite Electrodes: 3450 EUR/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 orders received between November 1st,
2005 until January 31st, 2006 and for shipments effected prior to December 31st,
2006.
This price increase for Graphite Electrodes is due to further cost increases for
all raw materials as well as for energy and logistics affecting 2006.
*Pricing in China is the sole responsibility of the joint venture between SGL
Carbon and Tokai in Shanghai (STS).
Important Notice:
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.
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, ongoing restructuring measures
and unforeseeable occurrences in conjunction with the reviews to be performed by
the European antitrust authorities. SGL Carbon does not intend to update these
forward-looking statements.
Your contact:
-------------
Corporate Communications / Press Office / 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 AG
Corporate Communications, Media Relations
Rheingaustrasse 182, D-65203 Wiesbaden
Tel.: +49 (6 11) 60 29-100, Fax: +49 (6 11) 60 29-101
E-Mail: cpc@sglcarbon.de, Internet: 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: November 9, 2005 By: /s/ Robert J. Kohler
------------------------------
Name: Robert J. Koehler
Title: Chairman of the Board
of Management
By: /s/ Dr. Bruno Toniolo
------------------------------
Name: Dr. Bruno Toniolo
Title: Member of the Board
of Management