Shares of Germany's SGL tumble after profit warning, CEO resignation (updated)
15/08/2019 12:00
* Shares down 32%, at lowest in almost 17 years
* CEO quits on lower 2019 outlook, cost overruns
* FY adj EBIT seen down 10 mln eur from 65 mln last year
* Scraps 2020-2022 guidance
* BMW, VW, chairwoman Susanne Klatten hold stakes in SGL
(Adds valuation history, background on investor Klatten)
By Ludwig Burger
FRANKFURT, Aug 15 (Reuters) - Shares of German carbon fibre
maker SGL Group SGCG.DE tumbled 32% to their lowest in nearly
17 years on Thursday after the company withdrew its forecasts
for the next three years and said its CEO quit over flawed
business planning.
The company, in which German billionaire Susanne Klatten
owns a 28% stake alongside smaller stakes held by carmakers BMW
and Volkswagen VOWG_p.DE , also warned profit this year would
fall short of a forecast it affirmed just last week. urn:newsml:reuters.com:*:nASP0015MP
SGL shares fell 32% to 3.68 euros in morning trade, set to
mark their biggest one-day decline. The fall put the company's
market value below 450 million euros, in what a local trader
described as an "absolute disaster" for investor confidence.
BMW and Volkswagen tussled for control of SGL in 2011,
driving its market value above 3 billion euros in anticipation
that carbon fibre-reinforced parts would be used more widely in
electric vehicles.
But the business failed to live up to expectations.
In a statement late on Wednesday, SGL - whose carbon fibre
is used in auto parts and wind turbines - said its forecasts for
the 2020-2022 period had become obsolete and restructuring
measures were being considered.
It also said it expected adjusted operating profit this year
would fall 10 million euros ($11 million) below last year's
level of 65 million euros instead of being flat as previously
expected.
BUYOUT OPTION
Cost overruns in a large order - for rotor-blade materials
from a wind energy company - were partly to blame for the
bleaker outlook, a spokesman added.
The wind energy industry is being weaned off the generous
state subsidies on which it was built.
Turbine maker Vestas VWS.CO on Thursday said earnings were
hit by competitive markets and tariffs while rival Nordex, in
which Klatten also holds a stake, has coped better with price
pressure this year. urn:newsml:reuters.com:*:nL8N25B1BT urn:newsml:reuters.com:*:nL8N25A10X
Christian Obst, an analyst at brokerage Baader Helvea, said
Klatten - who also owns a stake in BMW that she inherited from
her father Herbert Quandt - could opt to buy out SGL. A
spokesman for Klatten declined to comment on her plans with SGL.
SGL said CEO Juergen Koehler would step down at the end of
the month with Klatten, head of the non-executive supervisory
board, showing "complete respect and understanding for this
decision". SGL did not name a successor.
The company's graphite and carbon products go into
semiconductor production gear, anodes of lithium-ion batteries
as well as lightweight parts in BMW electric vehicles and luxury
sedans.
A business that makes graphite electrodes for steel furnaces
- once SGL's major cash generator - was sold in 2017 after it
came under pressure from Chinese rivals.
($1 = 0.8969 euros)
(Additional reporting by Patricia Weiss
Editing by John Stonestreet, Michelle Martin and Deepa
Babington)
((ludwig.burger@thomsonreuters.com; +49 69 7565 1311; Reuters
Messaging: ludwig.burger.thomsonreuters.com@reuters.net))