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