SGL Carbon (ETR:SGL) raised its 2026 earnings outlook after a stronger-than-expected third quarter, as a ramp-up in nuclear graphite production and improved profitability in its composites business offset continued weakness in equipment supplied to the chemical industry.
The company reported nine-month sales of €595 million, down almost 9% from approximately €653 million a year earlier. Chief Financial Officer Thomas Dippold attributed the decline to the discontinuation of unprofitable carbon fiber operations. Adjusted for that structural effect, he said, the company’s businesses were broadly flat overall.
EBITDApre, the company’s earnings measure, edged down to €106.3 million from €108.6 million, while the corresponding margin rose to almost 18%. Dippold said the improvement reflected a more favorable product mix in Graphite Solutions and higher margins in Fiber Composites, partly offset by lower contributions from Process Technology.
Guidance raised after strong third quarter
SGL now expects approximately €770 million in full-year sales, at the upper end of its previous €720 million to €770 million range. It raised its EBITDApre outlook to €130 million to €140 million from €110 million to €130 million.
Asked whether sales of €780 million could fall within the revised forecast, Dippold said the “around €770 million” figure could encompass either €780 million or €760 million, depending on how the final months developed.
The company’s nine-month net result swung to a €31.3 million profit from a €51.3 million loss in the prior-year restructuring period. Free cash flow increased to €38 million from €12.5 million, and net financial debt fell to €78.5 million from roughly €100 million at the end of 2025.
The results included approximately €30 million associated with the termination of take-or-pay contracts with a silicon carbide customer. Dippold said the amount included one-off payments and compensation for sales that otherwise would have occurred later in the year. Less than €2 million came in the third quarter, and he said nothing major was expected in the fourth quarter.
Nuclear graphite and China semiconductor demand support growth
Graphite Solutions sales rose 10% to €358.3 million, while EBITDApre reached roughly €72 million, up from €58.2 million. Dippold said the business benefited from nuclear graphite production for X-energy’s small modular reactors, as well as recovering demand for semiconductor components, particularly in China.
Chief Executive Officer Andreas Klein said SGL recently secured a second X-energy order announced at $90 million. He said each of the two orders covers graphite for four reactors and would be executed over approximately three years. The company is also expanding its nuclear customer and product portfolio, with some contribution expected in 2027 and 2028.
Klein said China’s silicon carbide semiconductor market had emerged earlier from an inventory slowdown and remained a major growth area for substrate wafer production. He said the positive demand effect had only recently begun translating into SGL’s sales and invoices and was expected to contribute into the fourth quarter and 2027.
The company is also participating in development work involving indium phosphide, a semiconductor material used in optical data transfer. Klein cautioned that the application remained small relative to established silicon and silicon carbide markets and required less graphite and less frequent replacement.
Process Technology remains under pressure
Process Technology sales fell 27.7% to €74 million, and EBITDApre dropped to €11.2 million from €28 million. Dippold cited weak chemical industry demand, project delays and smaller or less profitable projects.
Klein said a recovery would depend on chemical customers regaining confidence to expand capacity and resume normal maintenance and upgrade cycles. Based on the current order book, he said, SGL could not yet expect a meaningful recovery in the business in 2027.
Fiber Composites sales declined to €147 million from €210 million, reflecting the discontinued operations. EBITDApre rose to €28.7 million from €17.8 million, supported in part by a higher contribution from the Brembo SGL Carbon Ceramic Brakes joint venture. The venture contributed €10.9 million, compared with €5.6 million a year earlier.
Moses Lake sale and growth initiatives
SGL sold its idled carbon fiber site in Moses Lake, Washington, for $70 million. Dippold said the company had received $45 million and expected the remaining $25 million in 2027. The transaction produced an overall disposal gain of $46 million, he said.
As part of its SGL Growth 2030 strategy, Klein said the company had secured its first 2027 orders from new defense customers, though their initial contribution was expected to be small. SGL also reported increased supply volumes of heat-resistant materials for rocket nozzles and continued development work with space startups.
About SGL Carbon (ETR:SGL)
SGL Carbon SE, together with its subsidiaries, engages in the manufacture and sale of special graphite, carbon fibers, and composite products in Germany, rest of Europe, the United States, China, rest of Asia, and internationally. The company operates in four segments: Graphite Solutions, Process Technology, Carbon Fibers, and Composite Solutions. It offers products for automotive industries, including body and main parts; carbon-ceramic brake discs; body shell components; battery solutions; friction materials; chassis components; gas diffusion layers and bipolar plates; vanes and rotors; sealing materials; bearings and mechanical seals; commutator discs and carbon brushes; and temperature management materials, as well as other products.
