SGL Carbon Posts 9-month Loss; Sales Down 16.5%

SGL Carbon reported a nine-month net loss of 51.3 million euros, a significant reversal from the prior year's profit, alongside a 14.9% decrease in adjusted EBITDA to 108.6 million euros and a 16.5% drop in sales to 652.9 million euros. For fiscal 2025, the company anticipates consolidated sales to be 10-15% below the previous year's level, with adjusted EBITDA projected between 130 million and 150 million euros. CEO Andreas Klein noted that demand for specialty graphite products from silicon carbide customers is expected to remain low in the second half of 2025, although customer inventory levels are gradually decreasing.

Analysis

SGL Carbon reported a significant deterioration in its nine-month financial performance, swinging to a net loss of 51.3 million euros from a 32.8 million euro profit in the prior year. This decline was accompanied by a 14.9% reduction in adjusted EBITDA to 108.6 million euros and a 16.5% drop in sales to 652.9 million euros, indicating broad-based operational weakness. The strongly negative sentiment and pessimistic tone associated with this announcement underscore the market's concern regarding the company's near-term prospects.

The company's fiscal 2025 guidance projects continued headwinds, with consolidated sales expected to be 10-15% below the previous year's level. Adjusted EBITDA is forecast between 130 million and 150 million euros, suggesting ongoing pressure on profitability despite a slight sequential improvement from the nine-month run rate. CEO Andreas Klein highlighted that demand for specialty graphite products from silicon carbide customers is anticipated to remain low through the second half of 2025.

Despite the challenging demand environment, Klein noted a gradual reduction in customer inventories, which could signal a potential stabilization point in the future. However, the current financial metrics and forward guidance reflect a challenging operating environment, emphasizing the need for careful monitoring of demand recovery and cost management initiatives.

Key Decisions for Investors

• Investors should closely monitor SGL Carbon's next earnings reports for concrete signs that the noted reduction in customer inventories is translating into renewed demand and improved sales figures, particularly in the silicon carbide segment.
• Evaluate the company's ability to achieve its fiscal 2025 adjusted EBITDA guidance amidst projected sales declines, focusing on operational efficiency and cost control measures.
• Consider the broader market trends for specialty graphite and silicon carbide, as sustained weakness in these end markets could prolong SGL Carbon's recovery timeline and impact long-term valuation.