Annual Report 2020 Annual Report 2020 SGL Carbon SE 2

SGL Carbon SE Annual Report 2020 Annual Report 2020 2 Key Figures 2020 €m Footnote 2020 2019 Change Financial performance Sales revenue 919.4 1,086.7 – 15.4% thereof outside Germany 69% 69% - thereof in Germany 31% 31% - EBITDA before non-recurring items 1) 123.5 120.0 2.9% Operating EBIT before non-recurring items 9) 19.5 46.6 – 58.2% Operating profit/loss (EBIT) before non-recurring items 1) 50.2 48.4 3.7% Result from continuing operations before income taxes – 123.1 – 73.2 – 68.2% Consolidated net result (attributable to the shareholders of the parent company) – 132.2 – 90.0 – 46.9% Return on sales (EBIT-margin) 2) 5.5% 4.5% +1.0%-points Return on capital employed (ROCE EBIT) 3) 4.5% 3.9% +0.6%-points Return on capital employed (ROCE EBITDA)4)11.1% 9.6% +1.5%-points Earnings per share, basic and diluted (in €) – 1.08 – 0.74 – 45.9% Net assets Equity attributable to the shareholders of the parent company 220.7 418.6 – 47.3% Total assets 1,258.8 1,504.8 – 16.3% Net financial debt 286.5 288.5 0.7% Equity ratio 5) 17.5% 27.8% - Leverage Ratio 6) 2.3 2.4 4.2% Headcount 7) 4,837 5,127 – 5.7% Financial position Payments to purchase intangible assets and property, plant and equipment 55.8 95.1 – 41.3% Depreciation/amortization expense 73.3 71.6 2.4% Working capital 351.8 406.8 – 13.5% Free cash flow 8) 73.7 – 17.3 - 1) Before non-recurring items of minus €143.9 million in 2020 and minus €82.7 million in 2019 2) EBIT before non-recurring items to sales revenue 3) EBIT before non-recurring items to average capital employed (total of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity and working capital) 4) EBITDA before non-recurring items to average capital employed (total of goodwill, other intangible assets, property, plant and equipment, investments accounted for At-Equity and working capital) 5) Equity attributable to the shareholders of the parent company to total assets 6) Net financial debt to EBITDA before non-recurring items 7) As of Dec. 31, including employees with fixed-term contracts 8) Cash flow from operating activities (continued operations) minus cash flow from investing activities (continued operations) 9) Before non-recurring items and positive one-off impacts of minus €143.9 million and €30.7 million in 2020, respectively and minus €82.7 million and €1.8 million in 2019 SGL Carbon Geschäftsbericht 2018 3 Key Figures 2020 Table of Contents Key Figures 2020 .................................................................................... 2 Table of Contents .................................................................................... 3 Letter from the Board of Management ..................................................... 4 Report of the Supervisory Board .............................................................. 6 Corporate Social Responsibility .............................................................. 12 SGL Carbon in the Capital Markets ......................................................... 29 Group Management Report ......................... 35 SGL Carbon - the Group ......................................................................... 37 Economic Report .................................................................................. 43 Opportunities and Risk Report ............................................................... 67 Outlook ................................................................................................ 75 Remuneration Report ............................................................................. 81 Disclosures pursuant to Sections 289a and 315a of the HGB ................... 90 Corporate Governance Declaration, Corporate Governance and Compliance Report (unaudited) ............................................................. 92 Consolidated Financial Statements ........... 102 Consolidated Income Statement .......................................................... 104 Consolidated Statement of Comprehensive Income .............................. 105 Consolidated Balance Sheet ................................................................ 106 Consolidated Cash Flow Statement ...................................................... 108 Consolidated Statement of Changes in Equity ...................................... 110 Notes to the Consolidated Financial Statements ................................... 112 Additional Information .............................. 158 Independent Auditor’s Report ............................................................... 159 Responsibility Statement ..................................................................... 168 Corporate Bodies ................................................................................. 169 Glossary .............................................................................................. 172 List of Acronyms .................................................................................. 176 Financial Calendar ............................................................................... 177 Five-year Financial Summary ............................................................... 179 4 Letter from the Board of Management Dear shareholders and friends of SGL Carbon: This is our first letter to you after assuming our respective po- shut down production. The preventative measures taken by our sitions on the Board of Management of SGL Carbon in the spring employees in the workplace also functioned very well. Only two and fall of 2020. We would therefore like to take this opportunity people were infected in the workplace during the period under to give you our impressions of SGL Carbon at the time we as- review, which means that our anti-coronavirus measures are sumed office. working. We found a company that is a top-flight player in terms of tech- We have also been able to keep the economic fallout from the nology and highly regarded by many customers, but still not coronavirus pandemic at a relatively low level. It is true that we earning enough money. Technical solutions often appeared suffered a 15% drop in sales revenue to €919 million in 2020, more important than profit. Moreover, the administrative units primarily due to the pandemic, and that write-downs and re- were too large and too expensive for the size of our Company. structuring expenses kept group profits in the negative range The business units were also very complex. Another complicat- once again. Nevertheless, we were able to stabilize EBIT before ing factor was (and continues to be) the Covid-19 pandemic. non-recurring items by utilizing one-off effects from sales of real estate and our agreement with the buyer of our former Our homework was therefore obvious: We had to develop effec- graphite electrode business. We were also able to counterbal- tive measures against Covid-19; we needed a simpler structure; ance the pandemic's effects from an operational standpoint, and our corporate culture had to be focused on profitability. for example by acquiring new customers in the wind sector and through a variety of already effective cost savings. What sounds a Herculean task under difficult conditions was nevertheless implemented more simply and rapidly than expected. As a result of this determined and systematic crisis manage- This was because, like our shareholders, all of the employees with ment, we managed to keep our operational EBIT before non- whom we spoke were dissatisfied with our Company’s moderate recurring items slightly above expectations at €19.5 million in success in many areas of its business. We quickly performed a this difficult year of 2020. We also significantly improved free detailed analysis and drafted a comprehensive restructuring pro- cash flow from continuing operations to €73.7 million and gram. With the help of some 300 employees, by the end of Octo- slightly reduced our net financing debt. ber we had already defined approximately 700 individual initia- tives to improve profits by more than €100 million annually by How do things look going forward? We have succeeded in han- 2023. In addition, we have radically adapted our spending and in- dling the crisis, while simultaneously creating a structure in vestment policies with strict requirements. which we can promote particularly promising businesses in a more targeted manner. Overall, SGL Carbon is more stable We have also divided our businesses into four clearly differen- thanks to the improved cost structure. Moreover, we have no tiated units. Since January 2021, the management of each of significant payments due on existing financial instruments be- these units has full profit and loss responsibility. This allows fore September 2023. When the global economy returns to nor- them to act more targeted in addressing different customer mal, SGL Carbon will experience a twofold benefit: our business needs. We have pared down administration from 20 functions will come back and costs will be significantly lower. to ten, thereby reducing costs and simplifying processes. We have also defined a new corporate culture. The four basic prin- This is also reflected in our outlook. For example, we are as- ciples of our new culture, which we call “Formula Carbon,” are: suming that fiscal year 2021 will be characterized by a moder- Business First, Keep it simple!, Deliver on promises, and Act ate recovery. Sales revenue should be slightly above the previ- fast & think different. ous year, in the range of €920 – €970 million. We expect the ad- justed EBITDA to improve to €100 – €120 million,

Load more