SGL Carbon confirms 2026 guidance after Q1 results beat expectations – Image for illustrative purposes only (Image credits: Pixabay)
Wiesbaden – SGL Carbon demonstrated resilience in a tough market on Thursday, reporting first-quarter results that showed improved profitability metrics despite a sharp sales drop. The German carbon materials specialist confirmed its full-year outlook, signaling confidence in its post-restructuring trajectory. This development underscores the company’s ability to maintain margins through cost discipline even as demand remains subdued in key sectors.
Q1 Performance Highlights Lower Volumes but Higher Margins
Consolidated sales fell 21. percent to €184.5 million in the first quarter from €234.4 million a year earlier.[1][2] The decline stemmed largely from the mid-2025 shutdown of unprofitable carbon fibers operations, which eliminated related sales activities. Weaker demand in semiconductors and chemicals further pressured the top line.
Adjusted EBITDA declined 11.6 percent to €29.6 million, a less severe drop than sales, lifting the margin to 16.0 percent from 14.3 percent.[1] EBIT surged to €15.9 million from €3.4 million, reflecting reduced restructuring costs from the prior year. The net result flipped to a €5.9 million profit, compared with a €6.1 million loss previously. Free cash flow rose 25.5 percent to €6.4 million.
| Key Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Sales | €184.5m | €234.4m | -21.3% |
| Adj. EBITDA | €29.6m | €33.5m | -11.6% |
| EBITDA Margin | 16.0% | 14.3% | +1.7 pp |
| Net Result | €5.9m | -€6.1m | Positive turn |
Segment Results Reflect Mixed Market Dynamics
Graphite Solutions, the largest unit, posted sales of €106.4 million, down 8.8 percent, hit by persistent high inventories at semiconductor clients.[2] A €7.7 million compensation payment from a supply contract adjustment provided some offset, yet adjusted EBITDA fell 14.8 percent to €18.4 million, with the margin slipping to 17.3 percent.
Process Technology saw the steepest sales drop at 30.1 percent to €25.5 million, as chemical firms delayed projects amid high energy costs and regulatory uncertainty. Adjusted EBITDA plunged 62.7 percent to €4.1 million, though the margin of 16.1 percent exceeded the full-year 2025 average.
Fiber Composites, newly formed by merging Carbon Fibers and Composite Solutions, reported €47.7 million in sales, down 37.7 percent due to discontinued loss-making lines. Restructuring benefits shone through, boosting adjusted EBITDA to €9.0 million from €1.5 million and lifting the margin to 18.9 percent. Equity-accounted ventures, including brake joint ventures, contributed €4.0 million.
Restructuring Efforts Yield Tangible Gains
Prior-year initiatives in the Carbon Fibers area continued to deliver, with cost savings enabling margin expansion across segments. The completion of site closures and production adjustments stabilized profitability after fiscal 2025’s challenges, where group sales dropped 17.2 percent to €850.2 million but EBITDA held a 15.9 percent margin.[3]
CEO Andreas Klein highlighted semiconductor dynamics: “High inventory levels at our semiconductor customers are currently still weighing on demand for our specialty graphite products. The agreed contractual terms also complicate the establishment of long-term business relationships with our customers. We are therefore in discussions to find solutions for future partnership-based cooperation that serve the interests of both parties.”[1]
Balance sheet strength persisted, with equity at €463.9 million and net debt at €98.1 million, supporting a 39.5 percent equity ratio.
2026 Outlook Intact Amid Geopolitical Clouds
SGL Carbon stuck to its March guidance, projecting sales of €720 million to €770 million and adjusted EBITDA of €110 million to €130 million.[1][2] The company anticipates stable EBITDA margins around 15.9 percent, assuming no further economic worsening.
Risks loom from Middle East tensions, which could disrupt supply chains and elevate energy costs. Semiconductor recovery may not materialize until 2027, while automotive and chemical sectors face overcapacity and caution. Still, ongoing customer dialogues and new market explorations in nuclear and defense offer potential upside.
For more details, see the official press release and quarterly statement.
As SGL Carbon navigates persistent headwinds, its margin discipline positions the firm for steady execution on long-term growth ambitions.
