SGL Carbon Stock

Very warm welcome from SGL side as well. Time is running. First half of '26 is behind us. And today, we want to discuss and present to you our first half figures and give you a short overview about our expectations for the second half of 2026. Even today, Andreas Klein, our CEO; and Thomas Dippold, our CFO, will lead the presentation and will be able to answer your questions. And now I hand over to Thomas. Please, it's your turn.

Thank you, Claudia. Hello from my side. This is Thomas Dippold, and it's my privilege and honor to guide you through our results for the first six months of the year. On Slide #4, you can see the overall development of the group. Our total turnover dropped by 13% or roughly EUR 60 million coming from EUR 453 million to now EUR 394 million in the first 6 months of 2026. Where does this come from?

To a large extent, from the discontinuation of our loss-making carbon fiber business, which we still had in our books in the first six months last year. Last year, in June, we closed our site in Lavradio. So they were producing, same with Moses Lake for the first respectively, six months of the year before the closure took place. And therefore, a like-for-like sales decline is derived from that, which is EUR 50 million.

The other EUR 10 million, which our total turnover deteriorated from an operational level can be attributed to the high-margin business in Graphite Solutions, where we still see a very sluggish development and the demand for this high-margin silicon carbide business didn't catch up until now. And second, also our Process Tech business unit suffers from a very weak order intake and order book, which, well, maybe turns a little bit better in the second half of the year, but we come to that when we discuss the business units.

What we have on a contrary is the following, we have compensation payments received. We also mentioned that in the first quarter call, you probably remember that, that we already collected the first EUR 7.7 million in the first quarter of 2026, where we renegotiate the take-or-pay contracts, the customer down payment contracts with our customer. And another one has been renegotiated, which stands for EUR 21 million. And this is also top line, but also profit and cash for the first six months of this year.

And this is what's already also in our top line.

Our EBITDA pre deteriorated only by 3.7% coming from EUR 72.5 million in the first six months last year to now roughly EUR 70 million in 2026 H1. Where does it come from? On the one hand side, of course, we got rid of the loss-making business in Carbon Fibers.

We see, on the other hand, the down payments or the contract renegotiations and the compensation payments in there. And in the end, it also reflects the weak business in the high-margin Graphite Solutions business and the Process Tech business. Our EBITDA pre margin reached 17.7%, which shows a very healthy, well, margin, at least if you include the compensation payment.

Coming to Graphite Solutions, the biggest business unit, and they stand for more than 50% of our overall sales. There, we see an increase in the sales coming from EUR 221 million to EUR 234 million. This is an increase by 6%, but it also includes, as I just said, the compensation payments for the adjustment of the supply contracts with the take-or-pay customers, mainly in the silicon carbide business. If we exclude this, then we would see a slight decline in our turnover by minus 6%, which represents the weak economy that we are currently dealing in and a rather stable or maybe a slightly negative business in all other market segments.

Our EBITDA pre is up 14.2%, coming from EUR 40.8 million in the first six months last year to now in H1 2026, EUR 46.6 million, again affected by the compensation payments. Our EBITDA pre margin in Graphite Solutions reaches some very healthy almost 20%, again, slightly negative impacted by currency effects.

Process Tech, again, a weak quarter, same as Q1.

We see a huge drop in our overall turnover by almost 30%, 28.2% to be precise -- we reached EUR 70.2 million in the first 6 months last year, and we now dropped to a little bit more than EUR 50 million in our top line. We still see a very weak market situation.

Also, the conflict in the Middle East doesn't help because it also makes sure that every investment decision in the chemical business is currently postponed or at least put on hold. So we see large uncertainties and they are really hitting us with the order placement from our chemical industry customers.

We see a lot of maintenance postponements because the assets are not fully utilized. And none of the effects is really helping us at least top line-wise in the business of Process Tech. And as a matter of fact, also EBITDA pre is heavily impacted on that, the huge demand, which we saw over the development over the last three years where we could increase the margin quite a bit, and there was really a very strong demand and our capacities were almost fully loaded and fully utilized. This has turned to the negative.

Our EBITDA pre reached EUR 7.3 million in the first six months of 2026, whereas we had almost EUR 20 million in the same period of time last year. The market situation as everybody in our -- on our level of the value chain is underutilized. There's price pressure from the few orders that are out there in the market and the margin decreased then as a matter of fact, to 14.5% coming from 28.3% in the same period last year.

Last but not least, on Slide #7, we show you the development of our Fiber Composites business. As a reminder, Fiber Composites since beginning of the year is a combination of the former business units, Carbon Fiber and Composite Solutions. We merged the two businesses as we restructured Carbon Fiber to a profitable core. And there, you see also a sales decline by a little bit more than 1/3 coming from EUR 150 million last year to now roughly EUR 100 million in H1 2026.

This is exactly the aforementioned decline coming from the restructuring. This is EUR 50 million, which stands for the continued business that we had in the first six months last year until the closure of Lavradio and then subsequently in Q3, the idling of the capacities in Moses Lake, United States. And this was expected. And if you turn it around, then you see that our -- all our other business or the continued business is Carbon Fiber is at least flat, and we can keep our sales.

When you look at the bottom line at our EBITDA pre, there you see a huge improvement in profitability coming from EUR 10.6 million in the first 6 months last year to now almost EUR 19 million. And I think that clearly shows how successful we were with the restructuring of our Carbon Fiber business. We also kept our promises.

You probably remember that if you follow our calls, we once mentioned that our restructuring cost shall not exceed EUR 50 million over a course of 2 years. We have accomplished the target. Our overall restructuring costs were a little bit more than EUR 40 million, and we did it in less than one year, the overall restructuring.

So I think we clearly showed that it was a very rigid and consequent restructuring and we made it, so to speak, in time and in budget. In the profitability of our Fiber Composite business -- you see that there's also a contribution from BSCCB, our at equity consolidated JV with Brembo.

It also increased their contribution there, but we don't show any sales. We just show our part of the net result in that. If you -- well, if you take out this margin from the margin, the EBITDA pre margin, then we reached a very healthy 11.5% margin in our Fiber Composite business, which I think is quite remarkable that after one year of restructuring and the combination of these two business units, we can achieve that.

And last but not least, a few more KPIs on the bottom line of the P&L, cash flow and also balance sheet ratios. Our net result improved drastically. It went back into black figures. Last year, it was affected by the restructuring where after six months of the year, we have reached minus EUR 31 million negative net result. It turned positive again and improved drastically by more than EUR 40 million. We now reach EUR 11.8 million.

So it's a very stable back-in-black development. And without the impairments that we have seen last year, our net result would also have been positive in the same period of time. So SGL continues to show black results also at the very bottom of the P&L.

Same with the free cash flow. The free cash flow, yes, it includes the compensation payments. But even without them, we show on a quarterly basis, positive free cash flow results. And this is a very strong achievement to have EUR 31.4 million as free cash flow after 6 months in this year, a huge contribution or a huge improvement compared to last year. And last but not least, thanks to the strong free cash flow, also our net financial debt could be lowered by almost EUR 20 million. It now reaches a leverage ratio of 0.6.

So this is super stable and super healthy. Same with the equity ratio, it increased to almost 40%. The ROCE remains stable at roughly 10% and I think that was a very strong start into 2026. After six months, we are still happy with the way at least the balance sheet and also the bottom line of the P&L develops. And having said that, I hand over to Andreas for his remarks.

Thanks, and a warm welcome also from my side. First and foremost, I'm happy that on the basis of the first half Thomas explained, we are well on track to deliver on our guidance 2026. At the same time, SGL Growth 2030 is generating a lot of positive momentum, and that's only less than half a year after its rollout. And we want to give you a couple of insights on where we stand and the momentum we have generated so far.

In the area of semiconductor, next to the already explained talks with our customers on adapting the existing contracts and building the future collaboration, we currently see a positive momentum in the market, especially in China and SiC, and that's mainly volume, but also a price stabilization we are seeing there currently.

We have to wait a little bit. We have to be a little bit patient how sustainable this is, but the momentum clearly is there, and that's a positive sign. On top of that, successful market launch of our novel coating products continued. And yes, it's clearly possible to say that there is outstanding customer feedback on the performance of these products. And this, we will hopefully be able to leverage fully in the calendar year 2027.

In the field of nuclear, we have announced on Monday that we have reached a new agreement with X-energy to expand our nuclear graphite production capacities, and that's mainly affecting our production site in Chedde in France. And this investment really positions us as a key supplier and also gives us capacities to develop even beyond our SGL Growth 2030 horizon into the future. In space, we are successfully progressing in establishing and also expanding customer relationships, and that's mainly affecting heat-resistant materials for rocket nozzle production. So very positive development penetrating the market.

In the area of defense, we are very active at various trade shows in the first half, really expanding our network in the industry, both in the -- yes, drone, but also beyond applications. And in the field of drone projects, we have developed first prototype parts, and we are currently in initial sampling and bidding processes. And then these processes are running well, and we expect to see first relevant contributions in 2028, if not earlier.

Last but not least, in aero, we managed to double our production volume as a supplier of materials for retrofit floor panels. And due to the structure of that industry, this is really supposed to be a lever into further aero applications for SGL and for our lightweight products.

So in summary, it is great to see the SGL Growth 2030 progress so far, and we consider it being well on track towards our EUR 1 billion sales target in 2030. At the same time, we can confirm our guidance 2026, and that's irrespective of still challenging macroeconomics of ongoing geopolitical uncertainties and several key markets remaining weak. Thank you very much for your attention.

Our first question comes from Lars Vom-Cleff, Deutsche Bank.

A couple of smaller questions, if I may. Following the EUR 29 million already received in H1, should we expect further compensation payments from the semiconductor customer for the remainder of '26? And if so, what amount should we build into our models in this case?

Hello, Lars. This is Thomas. Yes, we are currently in negotiation. As I just said, we have reached agreement with two of the contracts. We are, of course, in discussions with others. Some tend to just expand the contract, then of course, it doesn't have an effect with a compensation payment. There might be something coming up in the next quarters. But let's put it this way, the big chunk of it has been renegotiated already.

That's already helpful. And then looking at the divisions and your guidance, I mean, Process Technology sales declined 28% in the first half, divisional EBITDA pre more than half. Unless I'm mistaken, you are still guiding for only a slight decline in both metrics for the full year. So my question would be, does this guidance remain valid?

What we see in Process Tech, we see a little bit of stabilization in the order situation and right now, but on the low level. We always said that the lead time for the -- at least projects, maybe not in maintenance, there still might be the need for maintenance and some parts and service business also in the second half of the year if it catches up, this could improve the situation on a short-term basis. But when we talk about the projects, all projects that we get awarded right now will be turned into sales maybe beginning of 2027.

So we see the development of Process Tech in the remaining six months of the year on the level where we are right now, maybe a little bit better, but not a magic turnaround story.

That's helpful. And then maybe a similar question on Fiber Composites. Here, we saw EBITDA pre rising almost 80% in H1, yet you are guiding for only a slight improvement for the full year. To me, that looks rather conservative after 6 months.

This is true, but you also have to see that in a lot of the EBIT improvement is -- can be attributed to the loss-making business in the first 6 months of last year, which we just stopped and turned around. And you can't duplicate that in the second half of the year after the business has been closed.

Then, of course, it doesn't make any losses anymore. And this positive effect, you can have only once. And of course, then subsequently for Moses Lake, it also goes until August last year.

But the big loss-making unit was, of course, Lavradio, and this is what we closed mid or towards the end of Q2 last year. And this is the kind of compensation in there. And you also have to bear in mind that our BSCCB contribution is also EUR 3 million higher than it was last year. So we have to a little bit compare it like-for-like then maybe what we guided there can be better reconciled.

Understood and much appreciated. And then maybe a quick last one, more or less rather housekeeping. On the Corporate division, most difficult division to forecast, you expect a significant year-on-year decline after a EUR 3.4 million loss last year. Modeling '26, can we simply extrapolate the EUR 3 million H1 loss and arrive at a full year '26 estimate of roughly negative EUR 6 million to EUR 7 million? Or would that be too easy?

It's not too easy. It can be seen in this way. You have to see in corporate, I understand a little bit why it's difficult for you to predict that or to model that because we have a little bit of sales in there and the sales are more or less a result plus cash because we collect a lot of rental income in there.

So what you see as sales are some services, which we do for BSCCB and our site in Meitingen, but the big chunk of it are rental income. And we have increased a little bit of rent because we rented out some unused buildings in our Meitingen site to external parties, which moved in there and now produce on our site, which is, of course, helping there. And -- but you can expect that we keep our corporate cost and our overhead cost on a very strict review and you won't see major increases there.

[Operator Instructions]

Ladies and gentlemen, there are no further questions. I would now like to turn the conference back over to Claudia Kellert for any closing remarks.

Thank you. Yes, no further questions. Then I think all our reporting papers answer all the questions. Thanks for your participation. You will find the presentation and our reporting on our web page. And maybe if additional questions will rise, so please call the Investor Relations team. Thank you, and have a nice afternoon. Bye-bye.

Ladies and gentlemen, welcome to the SGL Carbon Conference Call Results for the First Quarter of 2026. I am Mattilda, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Claudia Kellert. Please go ahead.

Yes. Thank you. Good afternoon, and a very warm welcome to our today's conference call. We would like to give you an overview about the business development of the first three months in 2026 and a short overview on the current sentiment today. Andreas Klein, our CEO; and Thomas Dippold, our CFO, will lead the presentation and will answer your questions. So let's start. So I hand over to Thomas Dippold for the financials.

Hello, everybody. This is Thomas. It's my pleasure and my privilege to guide you through the results for the first quarter. And as a summary, we can clearly state that our top line, as we already anticipated, and I think as everybody of you joining this call already know, is influenced to a large extent by discontinued unprofitable business activities, which we closed down in the course of the year 2024. And therefore, we cannot repeat this unprofitable sales in this year. We also suffer in some sales drops in Graphite Solutions and also Process Tech and the three effects, all in all, stand for, which you can see on this slide here on Slide #3, they stand for a reduction of our group sales of EUR 50 million or 21.3%, coming from EUR 234 million in the first quarter last year to EUR 184 million this year.

And as I said, EUR 28 million clearly can be attributed to the discontinuation of the carbon fiber activities in Lavradio and Moses Lake, which we closed roughly at half year 2025. In Graphite Solutions, we still see weak demand from our silicon carbide customers. The inventory levels are still very high. However, what we are trying to do there is on an individual customer basis, we try to renegotiate with them in a partnership way, some specific adjustment of the CTP contract. And one of them is already in Q1, but I come to that when we talk about Graphite Solutions in particular. And for the first time since four years, the continuous growth, at least in profitability and a stable -- roughly stable sales platform. Also Process Tech suffered a severe downturn in the market. We have anticipated that also in a way. We had always, as you remember that in the second half of last year, already a declining book-to-bill ratio. And this now kicks in, and therefore, also our sales in Q1 for Process Tech suffer.

And these three factors influence our top line. However, we managed to keep the EBITDA pre on a group level in, I think, a moderate way in just a moderate decline. Our EBITDA dropped by EUR 4 million coming from EUR 33.5 million in the first quarter 2025. And in the first three months of this year, we reached EUR 29.6 million. So it's a decline by 11.6%, which is less than the decline in our top line. And how does it come from -- or where does it come from? We have lower contributions, of course, from the high-margin silicon carbide business in Graphite Solutions. We have lower contributions from Process Technology, where in the past, you remember that we also saw margins of about 25% and beyond. But we can compensate that with continuous cost savings and our ambition to keep the cost intact.

Our EBITDA pre margin increased to, I think, a very healthy 16% for a company which is so capital intensive like us. And this is exactly as we predicted Q1 and which is exactly in line with our guidance. We come to that later in the next chapter. Now on Slide #5, coming to the individual business units, Graphite Solutions, as I already just pointed out, suffered an 8.8% decline in the top line, which stands for EUR 10 million, coming from EUR 116 million last year to now EUR 106. This is influenced in the top line in sales, in EBITDA and also in cash by one settlement with one of our CDP silicon carbide customers, where we anticipate future sales in the course of the year and make it already a payment right now. So we kind of anticipate future sales, but also have a kind of a breakup fee in that where we adjust the conditions of the contract. There's maybe more to come, but Andreas will talk about that later in the chapter when we talk about guidance and outlook and strategy. As I said, we are still suffering from a sluggish demand in silicon carbide customers. The other markets that we see there are also burdened by some difficult macroeconomic environment. You know that our GDP is hardly growing. You know how the overall economic situation in Europe, in particular, but also worldwide in general looks like. And therefore, there is no real spark that our sales go into an opposite direction if we leave out the small, medium reactors, but they're also part of the strategy, Andreas will touch the latest status on that in his chapter.

EBITDA-wise, I think we also managed it quite well that our EBITDA dropped only from EUR 21.6 million last year in the first three months to first quarter 2026, EUR 18.4 million this year, which is minus 14.8% or minus EUR 3 million. The negative impact comes from the decline in the high-margin silicon carbide products, which hit then the bottom line overproportionally. We try to do our best in order to keep our costs in the right way. And I think if you see the decline in the margin only from 18.5% last year to 17.3%. I think this is a remarkable achievement when you see that your super high-margin business goes down in a way as it does in Graphite Solutions.

Coming to Process Tech. And as I said, for the first time since many years, we have to report a major decline in sales and also EBITDA for this business unit. Where does it come from? We see a postponement and a lot of uncertainty in the meantime in the chemical industry. So even a lot of maintenance projects and also some overhauls and parts and service business is really declining significantly for us. And other investment projects where somebody builds up a new synthesis plant or a heat exchanger really came to a standstill and everybody is waiting that the bottleneck gets solved, and we have a little bit more visibility and clarity whether or not these investments are really viable. So our order intake also in the first three months stays below our sales. So this is also for the next months, we don't expect a real recovery. And when you look at our overall performance in the first three months of the year, and we are coming down from EUR 36.5 million to EUR 25.5 million, which is a EUR 30 million decline -- 30% decline, sorry, for that, and minus EUR 11 million in our top line. This is really remarkable how hard it hit us in Q1. And this, of course, also hits our bottom line as this is a project business, and we only are left with some fixed costs. our profitability declined by 62% coming from EUR 11 million to now EUR 4 million. The absolute impact is minus EUR 7 million is not that much given the impact on the group. But relatively, of course, for Process Tech, this is a big decline that we are trying to fight against in the upcoming months. The margin is now 16.1%, which is not bad at all given the historic averages that we've seen. Of course, in the past -- in the last two, three years, we had a very special economic situation for us where we had margins above 25% and beyond. But we always said that 18% is a very good margin, and I think we came close to that. And maybe we can recover a little bit in the course of the year.

And now for the first time, I can introduce our business unit Fiber Composites. As you probably can remember, we merged our remaining carbon fiber activities with the Composite Solutions business unit starting from January 1. So with the start of the new year 2026, we only have Fiber Composites. In the end, you can just add those two business units together. There's hardly inter business unit consolidation effect. In the end, you just can add the two together. This is more or less the right figure. There we see also the impact from the discontinued business, which I started my presentation with. We are coming from EUR 76.6 million first three months last year now to EUR 47.7 million. This is a decline by EUR 29 million. I said EUR 28 million is a decline of the discontinued businesses of the carbon fiber and more or less, this is now the new normal that they roughly have EUR 50 million in a normalized and like-for-like activity.

This is a decline by EUR 37.7 [ million ]. But as I said, the big chunk of it comes from the discontinuation of the unprofitable businesses of Carbon Fiber. The profitability, however, increased significantly. There are many factors in that. On the one hand side, we are only left with the profitable remains of the carbon fiber business. We have a steady and healthy Composite Solutions business, which also pays in for that. And also our BSCCB JV, which is consolidated at equity contributed EUR 4 million to that. So if you exclude the EUR 4 million, then our new business unit has an operative result of EUR 5 million. And this is roughly a 10% operating margin. If you include BSCCB, then it's 18.9%. I think it's a super healthy recovery that we've seen. And I think it was a very stringent and consequent restructuring that we did last year. And I think the result of that can be seen now where we are only left with profitable businesses there.

Then maybe a quick look on the bottom line of the P&L, the cash flow and maybe also some balance sheet figures. Our net result turned positive. Last year in the first three months of the year, we were left with minus EUR 6 million, which was thanks to the fact that we had EUR 16.6 million restructuring and one-off costs in the first quarter. There are also some purchase price allocation depreciation there. So when you look at in our quarterly report, you see EUR 17.7 million, if I'm not mistaken. Now we see EUR 5.9 million. So it's a big turnaround by EUR 12 million from minus EUR 6 million to plus EUR 6 million. And I think this is the other strong message. We only are left with EUR 1.4 million restructuring and one-off costs in Q1. This is exactly what we told you three weeks ago when we presented our full year figures for 2025. The restructuring is over to a large, large extent. We only have some couple of smaller remains, which we digest in the course of the year. But when you see that the first quarter is only affected by EUR 1.4 million, I think this clearly underlines what we said three weeks ago.

Our free cash flow is again positive and increasing from EUR 5.1 million to EUR 6.4 million like-for-like despite the fact that last year, we also had some cash-wise restructuring costs, but we expect the free cash flow to be on the level of last year also for a full year figure. So we are on a good way to achieve that. And last but not least, thanks to the good free cash flow, our net financial debt declined a little bit again. So we have a very healthy leverage ratio of 0.7. Our equity ratio is getting closer to 40%. Again, we are at 39.5% and the ROCE is roughly 10%. So I think these are very, very steady and solid figures that we can report there. For the outlook and the guidance, I hand over to Andreas, who will lead through that chapter.

Thank you very much, Thomas, and also a warm welcome from my side you know the guidance just a couple of weeks ago in the next slide. You even know that slide, the EUR 720 million to EUR 770 million sales level we guided leading to an EBITDA pre of EUR 110 million to EUR 130 million. However, I would like to highlight two topics in the assumptions part of that slide because they have been particularly reconfirmed in the last couple of weeks. It's number one, the assumption of an overall weak economic development and uncertain geopolitical environment. Of course, we all know that this has been underlined by the ongoing Middle East conflict, the Strait of Hormuz developments and also recently the further tariff activities. So overall, all paying into ongoing uncertainty. And of course, for many of our industries, for many of our customers, that's a negative development because it doesn't enable our customers to take the decisions needed. The second thing I would like to highlight is that we do not foresee a recovery in the semiconductor and automotive sector for 2026 yet. This has been confirmed by the development in Q1 and further customer discussions and of course, also the uncertainty and the tariff developments paying into the automotive sector doesn't help the downstream demand for these applications.

Digging a little bit deeper in the next slide, I would like to give you some more details on the current sentiment and how we see it. As already mentioned, we see ongoing high uncertainty, especially in automotive and chemicals, impacting basically all our three business units, as already commented for the Q1 performance by Thomas. We see availability and prices of raw materials and energy negatively impacting key markets. So that's adding to the uncertainty and the weak economic development we were already seeing. And of course, that's a lot driven by the developments in the Middle East. However, we are quite relaxed on the cost side in the short term because a rather nice hedging rate for the year 2026 and also constructive discussions with customers to forward these cost impacts in the chain should be able to limit the effects from the cost side as much as possible. In the area of defense, that's the third point commenting on the current sentiment. We see the budgets feeding slowly through the chains. So the -- especially in the Western government Hemisphere, all these big funds are arriving at the primes in the defense industry, they are feeding through the Tier 1 and Tier 2 steps. And this is what we need to create the certainty and the commitments for us to finally ramp up that business in the area of defense and generate contribution from that business as anticipated in our Strategy 2030 plan.

What do we focus on at the moment in light of these developments? We mentioned one example already from the semiconductor side that impacted already Q1. We are in negotiations with our silicon carbide customers, with the CDP customers to, yes, bridge the situation we are currently in together with still high inventories in the chain, although we see them continuously decreasing and bridging from that situation in a sustainable long-term cooperation and the growth future we foresee for silicon carbide as an important demand driver for SGL. The second thing is we are expanding project development in the defense sector, a lot of network cooperation activity in the highlighted application fields in defense from our strategy work. And these discussions that networking, that intensification leads now to piloting steps and a step-by-step ramp-up of that business, hopefully having the potential to impact 2027. As you know, for this year, we didn't take into account any more significant contributions from defense yet. Last but not least, and this is for sure, the most present activity with a rather short-term impact. You know that from the publication from the announcement we did in January, we are working intensely on ramping up the full value chain. It's quite a long value chain in our network for the Energy projects and the orders we had received. So we are operationally well on track in that regard. And this is why we can also here reconfirm the impact of the USD 100 million over the next three years from these orders. The three focus areas to the right side of this slide, they are all paying into SGL Growth 2030. So we can clearly confirm we are intensifying the implementation activities for the long-term strategy, and we consider ourselves to be well on track to leverage the potential as soon that is possible in the respective markets. Many thanks for your interest, and we are looking forward to your questions now.

[Operator Instructions]

At the moment, I don't see any questions. So, it seems that our press release and quarterly statements are very clear in our messages. So I think we give you an additional minute to write your questions. So, then I think it's everything really clear. So maybe you have an upcoming question in the next hours or days. Give me a call that we can answer your information needs. Thanks a lot for your time. I know it's a busy day today of announcement of quarterly statements of other companies. So thanks a lot for your participation, and have a nice afternoon. Goodbye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect.

Good morning, and a very warm welcome to our conference call today. We would like to give you an overview about fiscal 2025, but also a detailed outlook and our expectations for the current fiscal year and above all, our new strategy. Andreas Klein, our CEO; and Thomas Dippold, our CFO, will lead the presentation and will be available for your questions after the presentation. But let's get started. Thomas, it's your turn.

Thanks so much. This is Thomas Dippold. It's a pleasure to have you all in this call on the details of 2025. We split the presentation. I will guide you through our figures for 2025, and Andreas Ben will take over and introduce our new strategy and our Growth 2030 -- but first, starting with how we ended up in 2025. On Slide #4, you see our overall profitability performance for the year. As you all know, 2025 has been a difficult year for SGL Carbon. Why is that? Beginning of the year, we informed you that we are about to restructure our carbon fiber business. And while doing that, we closed 2 sites in the course of the year and just were left over with the profitable remains of that business unit.

So what did we do? We closed Lavradio in June and Moses Lake, we idled in August. And by doing that, we lost, of course, a lot of sales, but also some unprofitable losses, which burdened our result also in the years before. And by doing so, you see the impact on our top line. Our sales dropped by 17.2%, coming from EUR 1.026 billion down to EUR 850 million in 2025. And the carbon fiber closures played a major part of that. But the second part of it, and if you follow us in our quarterly presentations, you will also know that especially our silicon carbide business in the semiconductor industry is suffering quite a bit. Andreas will elaborate later on how this market is developing going forward. But 2026, of course, was still a very difficult year for semiconductor in general and silicon carbide, graphite business in particular.

And those 2 businesses mainly contributed to the drop of our sales of 17.2%. Luckily, we could offset the high-margin business drop in silicon carbide, which normally you can't compensate just by cost saving because the margin is really very good. But with overall cost-saving initiatives plus the restructuring of carbon fiber down to a profitable core, we managed to keep the EBITDA drop in our P&L to be roughly on the same level as our sales drop, which is quite remarkable and we reached EUR 135 million in 2025, which is well inside our guidance range, which we initially gave you beginning of the year or just 1 year ago, where we said between EUR 130 million and EUR 150 million, our EBITDA pre guidance should be. So overall, we are suffering from low demand in semiconductors, in particular, silicon carbide business.

We are also suffering from a slow demand from automotive customers. But what we did and we did quite successful is restructuring carbon fiber. And all in all, it ended up in an EBITDA pre margin of EUR 15.9 million, which is quite healthy. Coming to the individual business units and starting with the largest one, which is Graphite Solutions. There we see a drop in sales of roughly 18% coming from EUR 540 million down to EUR 440 million, if I round it up a little bit. So we lose EUR 100 million in our top line. And when you see how profitable the businesses which we lost, this is what you can see when you look at the EBITDA, which is dropping from EUR 131 million to EUR 81 million. So we lose EUR 50 million in EBITDA pre, where we lose EUR 100 million in our top line.

This clearly shows what kind of profitable business we are losing there and how hard it is to compensate that with cost-saving measures. Overall, when you include the group, we were successful with that. Within Graphite Solutions, of course, this is rather impossible. Having a sales drop of 18% reflects then an EBITDA drop of 38% but this is related to the development of silicon carbide business. This is the main drop out of the EUR 100 million sales drop, EUR 88 million, which you can see in the comments is related to semiconductor, but also to industrial applications. And the demand is still very slow. The storage and the inventory levels are still very high. And that's the reason why we see only in a timely manner in the second half of the year or latest 2027 that the demand for this business will be there again.

All other industries which we serve like energy, mobility, chemicals and so on remain stable, but it's also not growing. This is the clear message that we can send for the course of 2025. We lose especially our high-margin business in silicon carbide. Therefore, we are burdened with fixed cost absorption and lower utilization of our assets, which is simply there. And as a result, our EBITDA pre margin drops from 24.3% to 18.3%. But we are confident that in the course of the year 2027 latest, we will see a recovery of our business. Coming to the next business unit on Slide #6, which is Process Tech. They have another strong year. So on the one hand side, sales, but also EBITDA pre are slightly declining compared to the year before.

How do we see that? We had EUR 138.3 million sales in 2024, and we go down to EUR 130.9 million in the top line, which is minus 5%. EBITDA doesn't follow that in that range. We're coming from EUR 33 million in 2024 down to EUR 31.8 million, which is a drop by 3.6%. That means our margin level is still very healthy, reaching 24-plus percent in this business unit, and this is very strong. If you follow us through the course of the year, then you see that our Q4 was also the weakest of all the 4 quarters in Process Tech. And this is exactly what happened, which we indicated with the declining order book and order intake, which we see in Process Tech. And this will also be part of our business in 2026.

Process Tech won't be able to repeat the levels either in sales nor in EBITDA pre in 2026. Now we really are hit with the decline and sluggish development of mainly the chemical industry, which is now really also hitting our business. In the last years, we were, for whatever reasons, able to, yes, still find our niches and our businesses and our projects, but now the overall downturn with all the -- yes, the macroeconomic environment and with all the gas prices and everything that kicks in the chemical industry. Now we also see some sluggish order intake, which is really affecting on the one hand side, Q4 last year, but also the start of the year 2026 to keep this as a kind of a fair view.

Coming to Carbon Fiber. And there, you see a remarkable development. On the one hand side, sales dropped by 29% coming from roughly EUR 210 million in the year 2024, down to roughly EUR 150 million in the year 2025. And normally, you would expect this is a catastrophe and terrible, but we really idled and closed the loss-making business activities on the one hand side in Lavradio, Portugal and also Moses Lake in the United States. We are left with a profitable core, which we keep. This is EUR 150 million top line, at least in 2025. When we compare it like-for-like, then we also have to exclude sales-wise, but we come to that later when it comes to the guidance. The first 6 months where we still had Lavradio in our books and 8 months where we still had Moses Lake business in our books, so it was unprofitable. They at least contributed some sales.

But this drop in the loss-making business restructuring led to an EBITDA pre development, which you can't express in percentages because a minus turns to a plus. We had an EBITDA pre loss of EUR 11 million, where some EUR 60 million of BSCCB JV at equity contributions are included. So the real result, the operative result of Carbon Fiber was minus EUR 27 million in 2024, and we were able to turn this around in the course of the year 2025 to operative plus EUR 7 million result. And together with the equity result of our joint venture with Brembo with BSCCB, where we make this carbon ceramic brake disc, they also contributed in the year 2025, EUR 7 million. So we really managed this year to have a EUR 14.1 million EBITDA pre in this business unit, which is quite remarkable to manage this in 1 year.

What is also fair to say that the overall restructuring for Carbon Fiber is mostly over. All the targets that we aim for in 2025 have been reached. We are happy with the development and the turnaround of the business. And you clearly have to say in the beginning of the year when we informed you that we are about to restructure Carbon Fiber, we also said that we estimate the cash relevant restructuring costs will be around EUR 50 million, and they should be split half-half for the years 2025 and 2026. And I'm happy to share with you that we were able to limit the cash relevant restructuring costs to roughly EUR 35 million, and all of that has been paid in 2025. So what's left in 2026 is I mean there's still a couple of millions, but it's a low single-digit million amount that still has to be paid.

But don't call me arrogant or not -- that I do not respect that. But the overall message that I would like to bring across and to you is this is neglectable given the large chunk of cash that has been -- had to be paid for the restructuring. This has already been digested in 2025, and it's reflected in our bank accounts and our financial statements. On the next slide, you see the development of carbon fiber. And I think this is also fair to show you how things evolved and developed. You see from 2021 onwards is the last year where we still had this take-or-pay contract with BMW on the i3 model then at half year 2022, I'm sorry, this take-or-pay contract expired, and we went into the wind industry where we were still in the second half of 2022, quite successful.

This was in trouble in 2023 and especially in 2024 when we got kind of overwhelmed by Chinese wind capacities, which really took over the whole market. And then with the, I think, very rational decision after we couldn't sell our carbon fiber business to restructure it. I think the turnaround from minus 11% to plus 14% is quite remarkable, especially when you take into account that our joint venture, BSCCB, only contributed less than half of the previous years because they're also in trouble because the OEMs that they serve are also in trouble, especially in China or in the Asian industries. This is -- yes, what's happening. But I mean, we are happy with the EUR 14 million that we achieved in 2025. And just to repeat that, almost all cash relevant restructuring measures have been fully digested and implemented.

Coming to our last operative business unit, which is Composite Solutions. They are also suffering here on Slide #9. You see that a kind of a sluggish development. You know that in the year 2024, at least for a couple of months, we still had a very profitable business in the United States with a big local OEM there with the contract expired and got terminated. And as a result, our sales dropped then by EUR 16 million coming from roughly EUR 125 million down to EUR 108 million. And we are really fighting hard to get new orders. If you get new orders, then often the projects get delayed. You know that with our Composite Solutions business, we are in automotive and there, in particular, in EV business, with electric vehicles. But there, the new models often come later. Sometimes we don't get the quantities, which have been indicated.

And also the tooling often has been borne in the past by the OEMs. Nowadays, we have to pay for it ourselves. And this is then reflected hopefully in the profitability. But when the projects get delayed or come not in the quantities which we want, this is also burdening our profitability. And therefore, as a consequence, you see that our EBITDA drops by 37%, minus EUR 9 million coming from EUR 18.2 million 2024 down to EUR 11.4 million. It's still an okay margin with over 10%, but that's where we are. Coming to the balance sheet. I think this is another year of heavy restructuring, which is affecting our net result. We reached a net result of roughly minus EUR 80 million. This is exactly in line which we had the year before, where we had some major write-offs in our carbon fiber business.

We still have, despite all restructuring efforts, also the cash relevant ones, a very healthy free cash flow of EUR 37 million, which is again on the level which we also had last year. And last but not least, we managed to bring down our net financial debt below EUR 100 million. We have a leverage of 0.7x, which is super healthy. And our equity ratio despite all the losses and despite all the restructuring also reaches a very, very good 39.2%. In our second chapter, I'm happy to share with you the outlook for SGL Carbon for the year to come 2026. And we see, of course, lower sales and also EBITDA pre, but the margin should be on the level that we've seen in 2025. So when you see our sales this year, we have reached EUR 850 million in our top line, thanks to the fact that we closed carbon fiber business in the course of the year, if you exclude the sales contributions from Lavradio and Moses Lake, which is roughly EUR 70 million, you see that our new sales guidance will be between EUR 720 million and EUR 770 million.

This is where we think we can finish this year. But the biggest chunk of the sales drop that you see there is reflected in the like-for-like adjustment for the sales contribution of the restructured sites. And our EBITDA pre, we expect in a range between EUR 110 million and EUR 130 million, reflecting the geopolitical environment and also uncertainties that we see in 2025, we have EUR 135 million. But you know that there are customs FX effects and some other geopolitical uncertainties, which we can't 100% foresee. This is why we say our EBITDA pre range, we expect it to be between EUR 110 million and EUR 130 million. And having said that, I'm happy to turn over to Andreas, who will guide you through our SGL growth 2030 chapter.

Thank you, Thomas. And also from my side, a warm welcome to everyone in this call. It's my great pleasure to introduce you today to the new SGL strategy. This strategy is about growth. It's about growth with top-notch solutions from all our businesses. As outlined in the first part of this call, we laid the foundation for the next growth steps in 2025. We have streamlined our portfolio with the withdrawal from loss-making business activities, especially the carbon fiber restructuring and significant fixed cost reductions. We have created growth-ready company structures by adapting the corporate functions, the corporate setup to the new size of the company and optimizing our internal processes.

And we have created a strong business unit fiber Composites, merging Carbon Fiber and Composite Solutions. Last but not least, we have established a solid balance sheet with positive free cash flow and a low leverage, a stable equity ratio. Now it's time for growth. The name of our new strategy attends very clear SGL Growth 2030, and it consists of 3 growth dimensions. The first one and the basis for our future growth is in established markets and products. Automotive, semiconductor, chemicals and also industrial applications remain core activities and hence, the basis for growth. Building on that, growth in new applications and markets with existing materials and products will be key in our future development. The nuclear industry, defense, aerospace and space will be target areas.

And last but not least, growth via innovations, for example, in novel coatings for semiconductors, natural fiber composites or thermoplastic solutions. Talking you through these 3 growth dimensions, I want to start with our established business, where semiconductor is and remains the biggest growth potential. For semiconductor, the big topic is leveraging our strong market positioning. We know from previous calls, but also from what Thomas explained that the starting point is rather difficult. The inventory backlog driven by the SiC downturn since 1.5 years is still to be digested. Nevertheless, we expect silicon carbide recovery starting end of this year or latest next year. The main driver remains EV. And with that, we have a very strong underlying trend in front of us, and we have great solutions to serve this.

However, we are expecting increasing price pressure from competition, especially from Asia. That means the target and the necessity to continuously work on our cost position is very, very clear for the years to come. Besides silicon carbide, we want to broaden our activity field in the areas of silicon, LED, solar to be able to benefit from interesting developments in AI and digitization. In total, we expect a CAGR of 10% for the years to come in these 3 application fields, which we define as our addressable market. You know that SGL is a market leader with a very wide range of products from heaters over crucibles up and to [indiscernible] components. We have to continuously work on our differentiated market positioning as a quality and technology benchmark, and we aim at leveraging our global network for local-for-local supply, especially in times with geopolitical issues like at the moment.

On top, we developed the product portfolio further by adding new solutions, for example, in the area of coatings. Building on the established markets, it's key for us to leverage our great portfolio and the outstanding capabilities of SGL into new markets. The first market field I want to discuss today as key focus for us is nuclear. Graphite is an important enabler of clean energy technologies. We all know that the SMR trend for low carbon and stable alternative energy sources is crucial for the future development of economies, especially industries like AI, which are energy intense. So we see a huge growth potential in that field. However, we have to remind ourselves that the technologies are still quite new and that the development is largely driven by start-ups.

So there are still question marks out there. This is why we are extremely happy that with a partner like X-energy, we have found one of the most advanced technologies, one of the most stable financed and one of the most attractive customer downstream portfolio partners. And together, we want to grow into that application field. The addressable market today is still small and in development, but the potential over the next 5 or even over the next 10 years is really huge and a CAGR of more than 50% is just something trying to, yes, nominate a number. It could be much higher in that area. SGL is supplying a wide range of products from vibro-molded graphite over ISO or extruded-based fuel pellets up until the graphite powder serving different application fields in reactor setups.

And on top of that graphite solutions offer, we have our business unit process technology, which can bring in engineering and assembly competency to leverage the full power of SGL. With that, we want to establish the one-stop shop for nuclear applications with full value chains in the EU and the U.S. and hence, have the best possible potential to develop and sustain a #1 position in the Western world. For sure, nuclear is one of the most tremendous growth potentials of that time, and SGL is ready to participate. The second area I want to touch today is the area of defense. It's a perfect fit to SGL's automotive-based capabilities, and we have a scale-up ready setup implemented. Of course, the improvement of defense capabilities in basically all the countries in the world, together with the massive budget increases in today's times, creates a significant momentum.

For us, it's very important to understand exactly which applications can be served by our products where our products can add the greatest value. And 2, I would like to mention today, it's clearly the application of our composites in drones with lightweight solutions, still stability and high resistance being key. The second thing is protective equipment, a top priority in the defense industry, of course, and our material combinations, again, leveraging our business units as a whole are a great strength to serve these needs. The fact that also the defense industry is largely driven by start-ups means that especially for these applications just mentioned, there is only a limited number of mass production capacities available, and this is exactly where we come into play with our automotive-based readily available setup.

We assume the CAGR for the next 5 years to be more than 20% for the focus areas we have identified, namely body armor, vehicle armor and drones. The full offering of what we can bring at SGL into that market will be illustrated in the next slide where you can really see we cover a very wide range of defense applications, and we can bring in carbon and aramid fabrics. We can bring in established composite components with scale-up ready capacities, and we deliver solutions based on Rayon carbon fabrics for thermal protection, for example. The overall potential similar to nuclear and semiconductor potentials I just mentioned, is considered at more than EUR 50 million comparing the base year 2026 to our strategy target year 2030.

So 3 equally significant growth areas for SGL. Last but not least, I want to touch the topic and the application field of aerospace and space, where also a lightweight composite and heat-resistant graphite combination can be developed into many of the applications. There is a continued boom of air traffic growth and also of space traffic growth, I would like to include. In generally, we are talking about an industry with high entry barriers. But at the same time, there's also a very high need for high-performance and reliable solutions, a perfect fit to SGL and its portfolio. Our opportunity to enter that industry with high entry barriers in general is especially the retrofit aftermarket and consumable market, for example, in the area of brake disc. So we see significant potential for us to participate.

The overall growth of that addressable market for us is assumed at close to 10% over the next couple of years. And you can see that due to the rather long development cycles in that industry and the fact that we are now developing our experience into prototyping and ramp-up for that industry gives this only a comparably low growth potential of EUR 15 million plus for the years to come comparing the 2026 base to 2030. In the third dimension of our SGL Growth 2030 strategy, I want to talk about creating new solutions for our customers' most demanding applications. We are talking about innovations, and these innovations in general, are supposed to build on the thermal and production process capabilities we have in-house. We should leverage our competencies.

With innovations, we want to reinforce our high-end positioning for extreme applications, be it corrosive environment, be it high temperature applications. And we want with that create strong synergies with existing materials and businesses in our portfolio. We built on our global R&D network on collaborations with universities and research partnerships to make it a very focused innovation approach and establish resource in terms of testing and certification. Examples we have in development at the moment are mentioned to the left on that slide. It's the area of advanced coatings, where we are investing EUR 30 million in surface treatment facilities at our site in St. Marys in Pennsylvania and the U.S. and where we are intensifying our R&D collaboration with the University of Linköping.

We are currently in market introduction of new tantalum carbide-based coatings, and this is running very successful. The second example is the area of natural composite materials that's bringing in additional fibers into our composites portfolio, and we have just recently been awarded by BMW for its M natural fiber composite projects. Also in that area, because it often goes hand-in-hand, we are in intense research partnerships with various composite recycling projects. Having outlined the 3 growth dimensions of SGL Growth 2030, I want to now give you an overview of what this will lead to over the next 5 years, reaching out till 2030, where it is our clear ambition to reach again the sales level of EUR 1 billion or higher.

Building on the guidance of EUR 720 million to EUR 730 million for this year 2026, bringing in growth in established businesses like outlined, especially in silicon carbide and semiconductor and LED, developing new markets, SMRs, defense, aerospace and space and developing further innovations to broaden our product portfolio and especially this also includes selective M&As to leverage our core competencies, we want to reach that EUR 1 billion sales level in 2030. With the growth activities, we also strengthen our profile as a leading Performance Materials platform. And with these leading performance materials serving our customers' most demanding applications, we aim at achieving an EBITDA pre level in the range of 15% to 18%.

This growth by diversification in attractive new markets and new product groups clearly builds on key success factors we have established in SGL, and we want to develop further. It's our strong technology competency, it's our customer centricity and being able to develop together with customers their applications and its future-ready and competitive operation setups. We are building on a great SGL team, clear sustainability agenda and financial stability. This will be the basis to reach these growth goals, EUR 1 billion and 15% to 18%. I thank you very much for your attention and your support on this growth journey. Thank you.

So now we can start with the Q&A session. And I think Valentina will give you some more technical instructions how to handle -- to ask questions.

[Operator Instructions] The first question comes from Sven Sauer from Kepler Cheuvreux.

I have just one on energy prices for this year, given that SGL Carbon is sometimes an energy-intensive company. I was wondering if you could share some color on hedging for energy this year and what your thoughts on this are?

Thank you very much for that question. Of course, this is a very important one, especially with the turbulent developments over the last couple of weeks. It's an area difficult to predict. However, we are largely hedged. That has been the strategy of SGL already in the last couple of years dealing with these uncertainties. For the calendar year 2026, especially in our high energy intense locations, we are talking about electricity and gas, and we have a hedging ratio of 80%.

The next question comes from Lars Vom-Cleff from Deutsche Bank.

First of all, excuse my ignorance, the merger of Carbon Fibers and Composite Solutions, did you already address that in advance? Or is that something new? And when will it be starting with the reporting from Q1 '26 onwards?

Sorry for that surprise, but those both segments, Lars, have reached a size after restructure that where we thought it's relevant to combine the forces that we have there and to have a strong integrated business unit there. We call it fiber Composites, and we start running the business under that new flag from 2026 onwards. So when you see our Q1 figures beginning of May, you will see Fiber Composite as a new business unit and both the remainder of Carbon Fiber plus Composite Solutions will be merged in this new business unit.

Perfect. And then looking at your medium-term strategy, I mean, I'm following SGL for 26, 27 years now. So I would love to give you the benefit of the doubt that it works -- that the strategy works this time. But I mean, for me, to see the success building up, when shall we expect first milestones becoming visible with your new -- with regards to your new strategy? Is it rather back-end loaded? Or can we already expect contribution in '26? And will there be additional start-up costs entering new businesses and innovations besides the EUR 30 million you intend to invest in Advanced Coatings?

Yes, Lars, thanks for that question, and thanks for your trust looking into the future. We are building on that. Actually, the first proof point that we are well on track, we have already communicated with the big framework contract for the next 10 years and the first USD 100 million order with X-energy in the field of nuclear. Of course, with a very differentiated picture of these applications and growth areas we have described, it will be a mixed picture. And some of them, like I mentioned for aerospace and space will take longer. So there, we have a back-end loaded situation. But yes, it will start to develop over that time of the next 5 years with X-energy now being the first announcement.

Of course, in some areas, it will be difficult even to announce in that explicit way when we're talking about areas of defense, but you see -- you should be able to see the ramp-up and the contributions intensifying going into next year and the years after.

The next question comes from Ulle [indiscernible] from SDK.

First of all, congratulations to the turnaround of the CF business. I think that is certainly Yes, a big and great job done. Also very motivating is the number of new products and applications you are approaching. I understand that ramp-up will take place in the coming years. However, there are some or quite a number of applications, which probably take some time to develop. Two questions today. First of all, to the SiC market one more time. You said market drop is largely due to high inventory levels and also slow demand. And you expect an uptake of the demand in the coming -- starting already in, I believe, 2027. Is -- yes, my question is, is there also a shift to other technologies? Could that also be a reason that the SiC demand is not developing as expected? Second question to CF. You reduced the turnover by around 30% of unprofitable business. What about the fixed cost? Will you be able to reduce the fixed cost in the same magnitude?

Thank you, Ulle, for the questions and also for the feedback. Talking about SiC, the underlying demand really comes from electric vehicle development where these high-performance semiconductors are needed. We see this representing the SiC downstream demand today with more than 80% of the demand going into that application. So this is really the driver for that development. And why do we have this situation of a downturn since 1.5 years? It's the delta of the expectations for EV growth, 40%, 50% at that time compared to how the reality has developed with growth rates more in the area of 20%. It's still a heavy growth area. So that's clear, and this is also what we will build on going into the future. But the difference in expectation versus reality has created a huge inventory along the whole chain.

From substrate wafers down to the device production. And this has to be digested now. And due to the bullishness of that industry and everyone creating capacity and already ramping up production, the inventory digestion unfortunately takes rather long. And we are in that process. We can hear from our customers and also see in their publications that inventory management is progressing, but we need to continue to be a little patient.

And coming back to your second question regarding CF and the fixed cost, you're super right asking this question. Yes, we closed down Lavradio and we idled Moses Lake. And as a consequence, there were another year of write-offs in this industry where we brought down the fixed cost and the values for the fixed assets. As we haven't sold the sites yet, you know that we are about to sell Moses Lake and -- but Lavradio is just something that needs to be closed. There's nothing to sell. We wrote off the fixed cost to the levels of the book -- of the market values of the land and the buildings. But I can tell you, this is not a significant amount that's left only for the profitable core, which we continue. We have the fair values of our machinery and assets that's reflected. But when we come to the fixed assets, everything has been brought down to the market levels, what the land and buildings are still valued.

[Operator Instructions] We now have a follow-up question from Lars vom-Cleff from Deutsche Bank.

Yes, me again. Sorry. Once again, the medium-term strategy and your profitability estimates, you're guiding or you're targeting a 15% to 18% EBITDA pre margin. I mean, at midpoint, that would be 16.5%. And if I take this year's guidance, also midpoint, it would be 16.1%. So it would be 40 basis points improvement within the next 4 to 5 years. And comparing that to your statements like you're offering top-notch solutions, you want to become the #1 in the Western world when it comes to nuclear, you make a difference in the customers' most demanding applications. I'm trying to square the cycle. Is that the profitability guidance cautious then? Or is it difficult? Or is it costly? I mean 40 basis points looks rather low for me.

Lastly, I understand your concerns, but you are probably -- at least you indicated that, our most long-serving follower in our profitability. And what we try to do is we try to keep our promises, and I think this is what we try to deliver also. We are more than happy also to surprise you and all the other investors with higher margins there. But when we give a promise, we also want to keep that. And this is the reason why we focus on profitable growth, but we don't want to kind of dilute that by saying our margin will be 25% and then we say no in 4 years, nobody cares about what we said at beginning of 2026. We say that, that we want to grow in this dimension. We also have to see that, for example, in silicon carbide over the course of the year and the more this technology and this product get implemented and penetrated into the market, the margin will also go down. And with such a high margin, for example, this will be impossible to contain that forever because you can't reduce your cost in the course of the margin.

And the same will be the case also when SMRs, for example, get more and more popular, also there, the prices will have to go down. Of course, we have to go with that. There are potentials also for us to bring down our cost and to streamline that. But we want to keep our promises. And before we just tell you 2030 will be nice and shiny and everything is fine, and we just see some unicorns jumping around. We rather tell you something that we can deliver, and we are very confident that we can deliver on the one hand side, the growth and the growth target of more than EUR 1 billion, but also the profitability, but there's also room to surprise you, and this is also something that we want to keep as a kind of a buffer.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Claudia Kellert for any closing remarks.

Yes. First, thanks for your participation. And as always, you find the presentation on our web page. I think if you read the presentation, cautious, you will have additional questions. Please call the Investor Relations team with [indiscernible] and myself. Thanks a lot, and have a nice afternoon. Bye-bye.

Ladies and gentlemen, welcome to the SGL Carbon 9 Months Results 2025 Conference Call. I am Moira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Claudia Kellert. Please go ahead.

Yes. Thank you. Yes, a very warm welcome, and thanks for your interest to our conference call today. Andreas Klein and Thomas Dippold will present our 9 months figures, inform you about our -- the status of our carbon fiber restructuring and give you some more insights about our expectations for the upcoming months. After the presentation, we look forward to answering your questions. But let's start with the financials. I hand over to Thomas Dippold.

Thank you, Claudia. Hello also from my side. This is Thomas Dippold. I'm happy to guide you through the performance of our 9 months figures, and I jump directly to the overview of our group performance on Slide #5. We have reached after 9 months 2025, EUR 653 million in sales in our top line, which is 16.5% lower than last year at a 9-month time frame. And in the end, we lose EUR 130 million. This is quite remarkable, and this -- there are 2 effects behind it. On the one hand side, there is a continuous weakness in our demand from semiconductors. And the second is that we restructure our carbon fiber business unit and therefore, also lose some unprofitable sales and both effects, together with the cost savings and cost measures that we have undertaken level more or less out.

And you can see that also in our EBITDApre on the same slide. We have reached EUR 108.6 million in the first 9 months of 2025, which is roughly 15% less than last year. And as you can see, our profitability despite the impact from our high-margin silicon carbide business, which goes down so massively, and we see that on the next slide, we still can manage it on this level that we -- that our EBITDA goes down not proportionally as the sales, but even lower. And therefore, our EBITDApre margin even slightly increases to 16.6% compared to 16.3% after the first 3 quarters of last year.

I think that's a quite remarkable achievement that we see here. On the one hand side, how we manage the restructuring of our carbon fiber side. We are -- I'm very happy with the progress that we did there after such a few couple of months that we are conducting this. We closed down more or less 2 sites. Lavradio site is more or less closed. Moses Lake site in the U.S. is idled and we stopped production there and therefore, adjusted the workforce quite massively.

And with these effects, together with the overall cost savings that we put in place, we are able to manage the downturn in the silicon carbide business, which is a business where the margin exceeds the cost quite significantly. And therefore, it's hard to compensate on that, but we achieved that. And I also said here for the first time in this call, we confirm our guidance. I want to make this very clear that we have adjusted our top line sales previously this year, that we say, 10% to 15% lower than last year, but the EBITDApre will be in the range of EUR 130 million to EUR 150 million. This is what we can say today.

I think the split of the sales, I mean, it is very much the same as in previous quarters. Graphite Solutions is still dominating our business by far. And this is also why the impact of this very profitable business hits us so far.

Coming to the individual business units. You see on Slide #6, the performance of Graphite Solutions. And here exactly the impact that we're all talking about. We have a 21% drop in our sales after the first 3 quarters of the relevant years compared to last year, now reaching only EUR 325.7 million sales in this business unit. And the downturn, the impact of EUR 87 million drop in the top line can be almost exclusively contributed to the downturn of our business line, semiconductor and LED. You see it here in the comments, EUR 77 million is the downturn in this business line, almost a drop by 40%. This gets compensated because the other businesses are rather stable that the overall impact is then just roughly 20%. But thanks to the high profitability in this business, our EBITDApre gets hit by 44%, now reaching EUR 58.2 million, which is a drop by EUR 46 million, and this shows how profitable this business are and how dependent we can say we are profit-wise on that. We will come to that and the development. Andreas will elaborate a little bit. But our EBITDApre margin dropped from 25% to now 18%.

Yes. Good afternoon also from my side. Thomas has commented already on the EUR 77 million year-on-year drop in our core segments, semi and LED. This is in line with the development we have seen in the first half already, and it's also in line with our expectations of around 2-year slowdown of that business. However, we remain confident that the market is set to recover after this dip. First of all, the underlying battery electric vehicle sales and demand is back strong. Second, we see the inventory management along the chain happening. And third, last but not least, the silicon carbide is set as the semiconductor material of choice in e-mobility. So semiconductor sales are set to recover from our perspective. Back to you, Thomas.

Thank you. I'm -- I continue with the development of Process Tech on Slide #8. Process Tech remains rather stable in the top line despite the market, chemical industries, especially in Europe is still in a continuous trouble. But Process Tech managed, thanks to the international or even global setup that we have that we can balance our portfolio with the United States, with the Americas, but also with the Asian sites that we managed to keep our sales on the level that we've seen also last year. We have reached EUR 102.4 million in the top line, and this is just a decline by 3% compared to last year.

We still live very much from the strong order book how we started into the year and all this very attractive large-scale projects really contributed also margin-wise to this development. We now see a little bit declining order book as we entered into Q3, and this will continue also a little bit in Q4. And we see also a continuous price pressure when new projects get awarded. So the continuation of this very strong performance that we see after 9 months in this year will potentially get a little bit eroded by end of the year. But so far in this year, we have reached EUR 28 million EBITDApre, which is a 9.4% increase compared to last year. Despite the sales stay rather on the same level, I think that's a remarkable performance that our Process Tech colleagues achieved here, and we are very grateful for that. And the margin reached now 27.3% in this business. I think that's a very strong performance, and we are very happy about that.

Coming to Carbon Fiber, which is another -- yes, good result. And you might wonder why I say that because sales dropped by 20% or EUR 32 million, now reaching EUR 125.7 million. And why do we still say this is a success because for the first time since 3 years, our Carbon Fiber business unit shows positive results on an operative level. And I think that's quite remarkable that we achieved that with the closure of 2 sites in Lavradio and the shutdown of the production in Moses Lake in the United States. We managed to have a very quick turnaround in our performance there. And when you look at the EBITDApre compared last year at the same point of time, we reached after 9 months, minus EUR 8 million. And today, we can show EUR 9.5 million. As you remember, there's always a split because we also show our proportional net result of our BSCCB JV in the result of Carbon Fiber.

Last year, the JV impact was EUR 11.7 million. So the operative loss was even higher by almost EUR 20 million then. This time, it's only -- this is attributable to the, yes, weak business of BSCCB at the moment. At the moment, the impact is EUR 5.5 million. And I mean, you can do the math in the end, the operative performance of Carbon Fiber then is plus EUR 4 million after 9 months this year. I think beginning of the year, if somebody had told me that we achieved that after 9 months, we all would have bet on that. I think it's a great, great achievement of the management there, and we are very grateful for that to achieve this turnaround and to continue with a profitable business as we have it.

Last but not least, Composite Solutions. Yes, we also see a EUR 11 million or 11% decline in sales there as well, coming from EUR 95.8 million after 9 months last year, now reaching EUR 84.8 million this year. Why that? You probably remember in the first 3, 4 months of last year's performance, we still had this very profitable business within U.S., American SUV OEM, and this project got canceled at that point of time with a breakup fee. But then, of course, last year's figures still contain that at least for the first 3, 4 months of the year.

On the one hand side, the sales, but also the bottom line, both are now out, and this is the reason for the decline, so to speak, in sales, but also EBITDApre. On the other hand, this also shows that it's very difficult to win new projects. And we did that only recently. I think we've won a couple of projects. But until they materialize into turnover and sales, this will be the second half of 2026 until they really materialize and impact also our profitability and bottom line.

Our EBITDApre margin, thanks to the cost measures that we also do there, still reaches almost double-digit figure. It's 9.8%. And I think for automotive tier 1, there's nothing to hide with such a margin. But yes, you're right, the business declined and became small over there.

Last but not least, on the next slide, I look at our bottom line in the P&L and also some cash and balance sheet figures. Our net result is massively negative as it has been already in -- at half year. We now reach after 9 months of 2025, a net result of minus EUR 50.3 million. This is mainly affected by the nonrecurring restructuring costs. We have about EUR 30 million, EUR 34 million of impairment in carbon fiber, where we impaired some inventory, but also the remaining assets in our Moses Lake site. I can tell you now there's really almost hardly anything left, which you can write off in our carbon fiber business. If you put the EUR 81 million restructuring cost on the minus EUR 51 million, then we would be on the level of last year with plus EUR 30 million. That shows that if you leak out the onetime effects, we have a positively contributing business that's despite the problems that we see in the market, contributing every quarter positive results.

And you also can see it in the free cash flow. It's down EUR 3 million compared to last year. I think this is also a very strong performance after 9 months in this year to have a more or less stable cash flow despite all the restructuring efforts, which, of course, you can call pre, but in the end, they cost you some money and they are affecting the free cash flow. We managed to keep 3 positive quarters of free cash flow in 2025, and we are proud on that. And despite all the restructuring efforts and all the costs involved, our equity ratio still is around 40% with 39.7%. I think that clearly shows the resilience and the very strong balance sheet that SGL has. Our leverage ratio is at 0.8. The ROCE that we still achieved is 9.7%.

I think given the circumstances that we face, we are very happy with our performance and our development here. And with that, I hand over to Andreas, who will guide you through the next chapter.

Thank you, Thomas. And in the second part of our call today, I would like to reflect on our activities in the 3 quarters 2025 so far and also on what is next in our journey. In order to counterbalance the structural challenges in our CF business as well as the market slowdowns around us, we have taken various measures this year, as already explained in previous calls. The first thing is the restructuring of the Carbon Fibers business. Of course, Thomas has described it, the exit from unprofitable business activities, especially in the areas of acrylic fibers and precursors, and that generated in total cost savings of EUR 25 million, and it enabled us to return to a positive EBITDA for that business.

The second block is for SGL in total, the optimization of our headcount setup and implementation of really extensive group-wide cost reduction measures. And we are overall working on simplification of our processes and our corporate setup in order to reflect the smaller footprint we are in as a company now. Group-wide onetime effects totaled minus EUR 84.7 million. But as already described, the equity ratio remained high at almost 40%. That's quite an achievement from our perspective. In parallel to these 2 activity blocks, we have kicked off our corporate strategy process. We are looking at who SGL Carbon will be 5 years down the road in 2030, which businesses will remain, which businesses will be expanded and what are our new growth areas. So a lot of interesting things to look at. And the communication of this new corporate strategy is supposed to happen in the context of our 2025 results publication in March 2026.

To give you a flavor for the direction we are thinking already today, I would like to give you some insights into 3 current development projects. The first block is new technologies for energy generation, where we have a great offer of various graphite grades for high-temperature reactors, which supply energy in a decentralized way close to where the energy demand is. And also, we have developed materials for energy storage systems that will help to shift to renewable energy sources.

The second big block for our Graphite Solutions business is the research and development on new coating technologies. And we are currently in the market introduction for new metal coated materials, especially building on tantalum carbide as a technology. And by that, we hope to build up further growth fields.

Last but not least, a third area of current development projects that the security and defense industry, obviously, quite a big topic at the moment. And our products basically in all the business units offer a wide range of great characteristics for these applications. For example, carbon composite components made with prepreg from our CS and CF businesses, which help to enable lightweight solutions like in the picture shown here to the right on that slide. Thermal insulation for high-performance needs is also a big topic for SGL, where we have great capabilities and that includes, for example, target industries like the space industry.

So you see there's a lot to be excited about. And of course, we will keep you posted, especially in that strategy update end of the first quarter next year. Last but not least, for this call also from my side, underlining that we confirm our guidance 2025. Sales minus 10% to 15% lower than last year and the EBITDApre in the range of EUR 130 million to EUR 150 million. Thank you very much for your attention today.

Now we start with questions.

[Operator Instructions] The first question comes from Thomas Deser from Union Investment, Frankfurt.

My question is about the investment plans of Infineon and others in the semiconductor industry in Germany. To what extent is that relevant for SGL?

Thanks for that question. Of course, not specifically commenting on particular companies, but yes, the investment activities in our region in Germany and Europe. This is, of course, important. There's a lot of momentum, a lot of new applications developing in EV, but also in data centers and the like. So that's a real megatrend for us as a company. But as far as we are concerned with our global setup and network, it's actually really a global demand we are serving. So for us, there's no particular location in particular focus. We are involved in the global semiconductor supply chains. And in that sense, for our sales, for our business, it does not matter whether investments happen in a specific country or not. I hope that answers your question.

Okay. Then if we see no further questions, then thanks for your participation, and you can find the presentation on our web page. So if a question is upcoming, please call the Investor Relations team, Jürgen Reck and myself. Thanks a lot, and have a nice afternoon. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.