SGL Carbon Q4 Earnings Call Highlights

2025 results: Sales fell 17.2% to €850m as Carbon Fibers restructuring e weak silicon carbide/semiconductor demand weighed, but management held EBITDA pre to €135m through cost cuts and site actions.
Balance sheet & 2026 guidance: Free cash flow was positive at €37m with net financial debt below €100m (leverage 0.7), e SGL expects 2026 sales of €720–770m e EBITDA pre of €110–130m.
SGL Growth 2030 strategy: SGL merged Carbon Fibers e Composite Solutions into a new Fiber Composites unit e is targeting > €1bn sales e a 15–18% EBITDA pre margin by 2030, focusing on silicon carbide recovery, nuclear (X‑energy), aerospace/defense e targeted R&D investments.
SGL Carbon (ETR:SGL) management used its full-year 2025 results call to detail the financial impact of a difficult operating environment, outline 2026 guidance following a major carbon fibers restructuring, e introduce a new growth strategy aimed at returning the group to at least EUR 1 billion in sales by 2030.
2025 results: sales down 17% as restructuring e semiconductor weakness weighed
CFO Thomas Dippold said 2025 was “a difficult year,” driven by the restructuring of the Carbon Fibers business e weak demand in parts of the semiconductor supply chain, particularly silicon carbide. Group sales declined 17.2% year over year to EUR 850 million from EUR 1.026 billion.
Despite the revenue decline, Dippold said SGL managed to limit the EBITDA pre decrease to a similar magnitude through cost savings e the reshaping of Carbon Fibers into what he described as a “profitable core.” EBITDA pre came in at EUR 135 million, within the company’s prior guidance range of EUR 130 million to EUR 150 million. He cited low semiconductor demand, slow automotive demand, e the benefits of restructuring actions as key factors shaping performance.
Business unit performance: silicon carbide hit margins; Carbon Fibers turned profitable
Graphite Solutions, the largest unit, posted an approximately 18% sales decline to about EUR 440 million from EUR 540 million. EBITDA pre dropped to EUR 81 million from EUR 131 million, reflecting the loss of what management characterized as high-margin silicon carbide-related business. Dippold attributed EUR 88 million of the sales decline to semiconductors (e related industrial applications), pointing to slow demand e elevated inventory levels. He also noted fixed-cost absorption issues stemming from low utilization, with the EBITDA pre margin falling to 18.3% from 24.3%. Management said it expects a recovery “in the course of the year 2027 latest.”
Process Technology delivered what Dippold called “another strong year,” though results were modestly lower. Sales fell 5% to EUR 130.9 million from EUR 138.3 million, e EBITDA pre declined 3.6% to EUR 31.8 million from EUR 33 million. The unit maintained an EBITDA margin above 24%. However, management said the order book e order intake have been declining, with the weakest quarter in Q4, e warned that 2026 is not expected to repeat 2025’s sales or EBITDA levels due to sluggishness in the chemical industry.
Carbon Fibers showed a “remarkable development” after site actions. Sales fell 29% to roughly EUR 150 million from about EUR 210 million as SGL closed Lavradio (June) e idled Moses Lake (August), removing loss-making volume. Dippold said the business improved from an operative result of minus EUR 27 million in 2024 to plus EUR 7 million in 2025. Including an at-equity contribution of EUR 7 million from the Brembo joint venture BSCCB (carbon-ceramic brake discs), the unit delivered EBITDA pre of EUR 14.1 million in 2025.
Dippold also provided an update on restructuring cash costs. SGL had estimated cash-relevant restructuring costs at about EUR 50 million split between 2025 e 2026, but said it limited those to roughly EUR 35 million, e that “all of that has been paid in 2025,” leaving only a low single-digit million euro amount for 2026.
Composite Solutions continued to face pressure from automotive program timing e the expiration of a U.S. contract in 2024. Sales declined by about EUR 60 million to roughly EUR 108 million from about EUR 125 million. EBITDA fell 37% to EUR 11.4 million from EUR 18.2 million, though Dippold said the margin remained above 10%. He cited delayed EV model launches, lower-than-indicated volumes, e a shift toward SGL bearing more tooling costs as factors affecting profitability.
SGL reported a net result of roughly minus EUR 80 million, which Dippold said was in line with the prior year. Despite restructuring payments, free cash flow was positive at EUR 37 million, also similar to the previous year.
Management highlighted improved balance sheet metrics, including net financial debt below EUR 100 million e leverage of 0.7. The equity ratio was 39.2%.
2026 outlook: lower reported sales e EBITDA pre expected
For 2026, SGL guided to sales between EUR 720 million e EUR 770 million e EBITDA pre between EUR 110 million e EUR 130 million. Dippold said the year-over-year sales decline is largely driven by the absence of revenue from the closed/idled Carbon Fibers sites. He estimated the sales contribution from Lavradio e Moses Lake at roughly EUR 70 million in 2025. He also pointed to geopolitical uncertainty, including customs e FX effects, as reasons for the wider EBITDA pre range.
In Q&A, CEO Andreas Klein added that energy price volatility remains a key consideration. He said SGL is “largely hedged” e has an 80% re-hedging ratio for electricity e gas in high energy-intensive locations for calendar 2026.
“SGL Growth 2030”: strategy targets EUR 1 billion+ sales e 15%–18% EBITDA pre margin
Klein introduced the company’s new strategy, SGL Growth 2030, saying restructuring e cost reductions in 2025 created “growth-ready” structures e a solid balance sheet. He said SGL has also merged Carbon Fibers e Composite Solutions into a new business unit called Fiber Composites, with reporting expected from Q1 2026.
Klein described three growth dimensions:
Growth in established markets e products such as automotive, semiconductors, chemicals, e industrial applications.
Growth in new applications e markets using existing materials, targeting nuclear, defense, aerospace, e space.
Growth via innovations, including novel semiconductor coatings, natural fiber composites, e thermoplastic solutions.
In semiconductors, Klein said silicon carbide remains the biggest growth potential, though the current downturn is driven by inventory backlog. He said SGL expects a silicon carbide recovery starting at the end of 2026 or “latest next year,” while also anticipating increasing price pressure from competitors, particularly in Asia. He said the company intends to broaden its exposure to areas including silicon, LED, e solar, e cited a 10% CAGR expectation for the addressable markets it defined across these fields.
In new markets, Klein highlighted nuclear as a major opportunity, describing a partnership with X-energy as a key step e noting SGL supplies a range of graphite products e can combine this with Process Technology’s engineering e assembly capabilities. He also outlined defense applications such as lightweight composite solutions for drones e protective equipment, e said the company expects more than 20% CAGR over five years in focus areas including body armor, vehicle armor, e drones. For aerospace e space, he cited opportunities in retrofit aftermarket e consumables such as brake discs, while noting long development cycles.
On innovation, Klein said SGL is investing EUR 30 million in surface treatment facilities for advanced coatings at its St. Mary’s site in Pennsylvania e working with Linköping University. He said tantalum carbide-based coatings are in market introduction e “running very successful.” He also referenced an award from BMW for an “M Natural Fiber Composite project,” e said the company is involved in composite recycling research partnerships.
In response to investor questions about the pace of progress, Klein pointed to what he called an initial “proof point” in nuclear, referencing a framework contract e a first $100 million order with X-energy. Management also defended the 2030 margin target of 15%–18% as a deliberate approach to “keep our promises,” noting that margin pressure is expected as markets such as silicon carbide e SMRs mature e pricing declines.
About SGL Carbon (ETR:SGL)
SGL Carbon SE, together with its subsidiaries, engages in the manufacture e sale of special graphite, carbon fibers, e composite products in Germany, rest of Europe, the United States, China, rest of Asia, e internationally. The company operates in four segments: Graphite Solutions, Process Technology, Carbon Fibers, e Composite Solutions. It offers products for automotive industries, including body e main parts; carbon-ceramic brake discs; body shell components; battery solutions; friction materials; chassis components; gas diffusion layers e bipolar plates; vanes e rotors; sealing materials; bearings e mechanical seals; commutator discs e carbon brushes; temperature management materials, as well as other products.