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UniCredit · Kepler Cheuvreux11th German Investment Conference
Jürgen Muth, CFOJürgen Muth, CFOMunich
24 September 2013
Company profile
• SGL Group is one of the world’s largest manufacturers of carbon-based products
• Sales of ~€ 1.7 bn in 2012
• Head office in Wiesbaden/Germany
Investor Relations Presentation
Page 2
• Comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites
• 45 production sites worldwide
• Service network covering more than 100 countries
• Head office in Wiesbaden/Germany
• Approx. 6,500 employees worldwide
Introduction to
Investor Relations Presentation
Page 3
SGL Group’s Businesses
Base Materials Advanced Materials
Performance Products(PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
• Graphite & Carbon Electrodes (GCE)
• Graphite Specialties (GS)*
• Carbon Fibers & Composite Materials
SGL GroupBusiness structure
Investor Relations Presentation
Page 4
Electrodes (GCE)
• Cathodes & Furnace Linings (CFL)
(GS)*
• Process Technology (PT)
Composite Materials(CF/CM)
• Aerostructures (AS)
• Rotor Blades (RB)
Technology and Innovation (T&I)
Six Sigma (SGL Excellence)
* Former Business Unit New Markets integrated into Business Unit GS as of May 1, 2013
Base MaterialsPerformance Products (PP)
Business units
• Graphite & Carbon Electrodes
• Cathodes & FurnaceLinings
2012 Group sales PP sales & EBIT margins
563 644 713836
966
642763
941846
24%19%
31%29%
24%
19%15%
17%19%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
GMS 29%
CFC 16%PP 55%
Investor Relations Presentation
Page 5
Key industries served
• Steel
• Aluminum
• Ferrous and non-ferrous metals
Characteristics
• Supplying the metal industries
• Leading competitive position
• Ongoing growth in BRIC
• High ROS & ROCE
• Strong cash flow
• Stable growth
2004 2005 2006 2007 2008 2009 2010 2011 2012
Sales €m EBIT margin
GMS 29%
Worldwide steel production [in mt]
Performance ProductsGraphite electrodes (GE) for steel production in EAFs
• Growth in steel production fuelled by infrastructure demand from emerging countries
• Scrap availability limits EAF growth in emerging countries
• Due to continued 800
1000
1200
1400Blast oxygen furnace
Electric arc furnace
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 6
• Due to continued efficiency gains GE demand growth only1 – 2% p.a.
• GE critical to EAF furnace efficiency but only ~3% of steel-making conversion cost
An EAF (electric arc furnace) is a furnace that heats charged scrap steel material (also known as mini mills)BOF (blast oxygen furnace) is the steelmaking route that uses iron ore and coking coal to produce primary steel (also known as integrated steel)
0
200
400
600
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: WSD, IISI, own estimate
Section view through EAF
Performance Products Graphite electrodes
Graphite electrodeSteelmaking – An Electric Arc Furnace (EAF)
Graphite Electrodes
Furnace shell
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 7
100 – 300 cm
35 – 80 cmConnecting Pin
Molten steel
Eccentric bottomtapping (EBT)
Teaming ladle
Rocker tilt
Tilt cylinder
Source: steeluniversity.org
Performance ProductsGraphite electrode production process
Graphite production• GE critical to EAF furnace efficiency but only ~ 3%of steelmaking conversion cost
• GE is a consumable – replaced every 5 to 8h
• GE usually sold mostly in annual contracts
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 8
• Needle coke requirements sourced on basisof multiyear contracts
�Production process takes up to 3 months
Fundamentals for Aluminum production growth are solid. Various new Projects under construction and additional feasibility studies for capacity increase underway.
55
60
65
70
Aluminum global production scenarios2003 – 2020 / Above pre-crisis scenarios
Performance ProductsCathodes for the aluminum industry
• Aluminum demand driven by:– Population growth and urbanization
– Further industrialization of BRICs
– Weight / strength / cost advantages in higher energy cost environment
• Cathodes essential to aluminum smelters�Existing smelters relining
�Investment good (5 – 7 years lifetime)
�New smelter construction leading first to
Prim
ary
AL
Pro
duct
ion
in m
io. m
t/p.a
.
68 mio. mtWorld Primary AL Prod above 4% CAGR
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 9
20
25
30
35
40
45
50
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012 e
2013 e
2014 e
2015 e
2016 e
2017 e
2018 e
2019 e
2020 e
Investor Relations Presentation
Page 9
�New smelter construction leading first to project demand and long-term to higher relining demand
• Existing smelters upgrading�Amorphous � graphitized cathodes
�Only three to four major established producers of graphitized cathodes
• Cathodes essential for aluminum smelting but representing only 2% of production costs for 1 mt aluminum
Prim
ary
AL
Pro
duct
ion
in m
io. m
t/p.a
.39 mio. mt
36 mio. mt
50 mio. mt
Source: IAI, Habor, SGL Group’s own estimates, Hydro; Alcoa, CRU
Advanced MaterialsGraphite Materials & Systems (GMS)
Business units
• Graphite Specialties*
• Process Technology
2012 Group sales GMS sales & EBIT margins
Key industries served
287 300 340 364 412 365 396486
469
14%18%
8%11% 13% 14%
9%
7%8%
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
GMS 29%
CFC 16%PP 55%
Investor Relations Presentation
Page 10
Key industries served• Chemical• Energy –
Solar/Battery• Semiconductor/LED• Metallurgy• Tool manufacturing• Automotive• High-temperature
processes
Characteristics
• Sustainable growth potential in renewable energies, energy efficiency and energy storage
• Broadest product portfolio
• Global footprint
• C-parts supplier to high tech investment goods industry
2004 2005 2006 2007 2008 2009 2010 2011 2012
Sales €m EBIT margin
GMS 29%
* Former Business Unit New Markets integrated into Business Unit GS as of May 1, 2013
Graphite Materials & SystemsBest solutions for our customers …
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
... in the PV / Semiconductor Industry
... in the LED Industry... in the Chemical and Automotive Industry
Iso graphiteheating element
Flange sealedby a gasket
Investor Relations Presentation
Page 11
Iso susceptor,heating elements,
heat shields/insulation(Soft- and Rigid Felt)
Mono crystalline silicon ingot
MOCVD reactor
SiC coated Iso Graphite Susceptor
ReinforcedGraphite
Sealing Sheet
FlexibleGraphite
Foil
Fine grain graphite manufacturing is complex and requires four to six months production time
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Manufacturing process of fine grain graphite
Coke & graphite Binder pitch
ShapingExtruding, vibration / die molding, isostatic pressing
Mixing
4-5 months
Grinding
Investor Relations Presentation
Page 12
Source: GS Production
800-1,200°C
2.500-3,000°C
Carbonizing
Graphitizing
Pitch impregnating
FinishingMachining, purifying, coating
Tailor made product
2-4weeks
Graphite Materials & SystemsInnovation driving new product portfolio
GMS 2012 sales: €486 millionExamples:
• Advanced Silicon Carbide coated carriers for LED
• Carbon for anode material for lithium-ion batteries
• Expanded graphite for environmental needs and thermal management (JV between SGL Group and
1/3new
2/3
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 13
between SGL Group and Lindner Group for Graphite-based “Green” Air Conditioning)
• SIGRABOND® Performance: carbon fiber reinforced graphite material for heat treatment applications
• Four new products launched in Process Technology: Ecosyn, Ecopor, Heatstorage, Fluegas Heatexchanger
1/3 of sales based on new products introduced over the last 4 years
2/3established
Graphite Materials & SystemsMajor customer industries and market shares 2012
% of totalGMS sales 2012
Global marketshare 2012
Chemicals 24% 35%
Energy: Batteries & Nuclear 18% 30%
Energy: Solar (including Polysilicon) 16% 25%
Semiconductor (incl. LED) 7% 20%
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 14
Semiconductor (incl. LED) 7% 20%
Metallurgy 7% 25%
Tool manufacturing 6% 10%
Automotive 3% 15%
High-temperature processes 3% 15%
Source: SGL Group’s own estimates
Advanced MaterialsCarbon Fibers and Composites (CFC)
Business units
• Carbon Fibers/ Composite Materials
• Aerostructures
• Rotor Blades
2012 Group sales CFC sales & EBIT margins
Key industries served
93 122 131163
193 208 219277
220
-14%4%
2%
-3%-3%
-3%-11%
-18%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Sales €m EBIT margin
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
GMS 29%
CFC 16%PP 55%
-8%
At-Equity JVsWith BMW, Brembo, Benteler
Investor Relations Presentation
Page 15
Key industries served• Energy
• Aerospace & Defense
• Automotive
• Industrial
• Recreation
• Medical Technology
• Construction
• Pressure Vessels
Characteristics
• New applications in automotive, energy, aeronautics, industrial
• High earnings improvement potential
• Complete value chain in house
• Only EU carbon fiber company
Sales €m EBIT margin2004-05 SGL Technologies Business Unit excl. Expanded Graphite2004-07 incl. Brake Disc businessSGL Rotec consolidated from September 2008 onwardsFisipe consolidated from April 2012 onwards
GMS 29%
Where is carbon? Everywhere! Touching More and More of Everyday's Life
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Page 16
Investor Relations Presentation
SGL GroupThe only integrated European carbon fiber producer
Carbon Fibers & Composite Materials Composite Components
PAN Carbon Prepreg
Automotive
CarbonFiber
CompositeMaterials
• Benteler SGL (50%)
• Brembo SGL Carbon Ceramic Brakes (50%)RawMaterial
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 17
Investor Relations Presentation
Page 17
PAN
Precursor
Carbon
Fiber
Prepreg
PreformAerospace &
Defense
Industrial & Energy
• HITCO (100%)
• SGL Rotec (100%)
• Fisipe (100%)• MSP: JV with
Mitsubishi Rayon (33%)
• Prod. Capacity~ 4kt in UK~ 2kt in USA
• SGL-ACF : JV with BMW (51%)~ 3kt in USA
• SGL epo (100%)
• SGL Kümpers(51%)
• SGL-ACF : JV with BMW (51%)
Page 17
68
Carbon Fibers & Composites: Carbon fiber demandgrowth delayed but all growth drivers intact
CF market forecast (in thousand mt p.a.)
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 18
28 30 34 39 4149 53
6068
2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: SGL Group market research
CF demand forecast (January 2013)
Carbon Fibers & CompositesComposite Materials as differentiating factor
• Carbon fibers can be woven or braided and are often impregnated with resin before component production
• We aim to have a broad range of technologies for prepreging / preforming
– Impregnation (e.g., prepregs for wind turbine blades or aircraft parts)– SGL epo SGL Kümpers
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 19
– SGL epo
– Weaving (e.g., sporting goods, automotive, medical industry)
– Preforms (e.g., automotive industry)
– Braiding (e.g., automotive industry)– SGL Kümpers
SGL epo
Carbon Fibers & CompositesJVs in automotive
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
• Benteler-SGL:– 50/50 JV between SGL Group and Benteler AG to
develop composite based automotive components– Leading position in developing structural automotive
parts and modern, automated production technologies– Successful manufacturing of prototype parts for the
BMW i projects– Set-up of the first high volume composite components
production plant
• Brembo-SGL:
Investor Relations Presentation
Page 20
• Brembo-SGL:– 50/50 JV between SGL Group and Brembo SPA for
carbon ceramic based automotive brakes– Leading global position, supplying most of the high-
end car makers, with production sites in Germany and Italy
• SGL Group’s strategic objectives in automotive:– Drive the metal substitution process in automotive to
become a major automotive parts supplier– Ensure that SGL Group’s materials are at the forefront
in the automotive industry
• Milestone in serial application of carbon fibers in automotive industry –market launch of first serially produced car (BMW i3) with a CFRPpassenger cell in 2013
• €90 million total investment volume in initial phase, overall investmentvolume €230 million subject to BMW demand increase
• JVs to be accounted for at equity by SGL and BMW during build-up phase
• BMW guarantees certain minimum purchasing volumes at contractuallyagreed conditions in the context of safeguarding the overall project
• BMW provides debt financing
Carbon Fibers & CompositesJVs with BMW, Mitsubishi exclusively for BMW’s demand
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
Investor Relations Presentation
Page 21
Investor Relations Presentation
Page 21
• SGL Automotive Carbon Fibers LLC, Moses Lake (USA): 51/49 JV betweenSGL Group and BMW Group to produce carbon fibers exclusively for BMW’sdemand (3kt carbon fiber capacity in 1st stage)
• SGL Automotive Carbon Fibers, Wackersdorf (Germany): 51/49 JV betweenSGL and BMW Group to produce composite materials (fabrics) in Wackersdorf(Germany) based on carbon fiber produced in Moses Lake (USA)
• These fabrics to be sold to BMW who will produce automotive parts and then assemble the BMW i3 and i8 in Leipzig (Germany)
• Precursor supply safeguarded by MRC – SGL Precursor Co. Ltd., Otake (Japan): 33/67 JV between SGL Group and Mitsubishi Rayon
Source: BMW Group
Moses Lake, USAStart C-Fiber Production
Q3/2011
Wackersdorf, GermanyStart Non-Crimp Fabric Production Q3/2010
Otake, JapanStart Precursor Production
April 2011
JV with Mitsubishi Rayon JV with BMW: SGL Automotive Carbon Fibers
Carbon fiberPrecursor Fabric
Carbon Fibers & CompositesSGL Automotive Carbon Fibers – A Truly Global Value Chain
Base Materials Advanced Materials
Performance Products (PP)
Graphite Materials & Systems (GMS)
Carbon Fibers & Composites (CFC)
BMW i3Official market launch
July 29, 2013
Q3/2011 Production Q3/2010April 2011
BMW Group
Leipzig, GermanyGround Breaking - Site extension
November 2010
Landshut, GermanyGround Breaking CFRP Production
July 2010
CFRPFabric
Investor Relations Presentation
Page 22
Ensuring the futureSGL Excellence – enables productivity and growth
InnovationExcellence
CommercialOperational
SGL Excellence
• Started in 2002
• The core element of the Company mission
• An ongoing and Company wide program
• Our philosophy of doing business
SIX SIGMA + LEAN
• Our core methodology
Investor Relations Presentation
Page 23
CommercialExcellence
OperationalExcellence
PeopleExcellence
• Our core methodology
• Focuses on:– Customer value
– Measurable objectives and results
• Applies to every function in our Company
• Empowers our employees with skills and tools:– > 4,000 SIX SIGMA trained employees
– > 350 active Green Belts
– > 120 Black Belts
Ensuring the futureSGL Excellence savings
Since 2002 continuous cost reduction of €283 millio n in total
55
Investor Relations Presentation
Page 24
55
2116 15
25 27 2823 24 2623
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Annual Net Savings (€m)
Latest Financials and Outlook 2013
Investor Relations Presentation
Page 25
Latest Financials and Outlook 2013
SGL GroupH1/2013 Results for the Group
in € million H1/2013 H1/2012*
Sales revenue 828.2 809.8
EBITDA before extraordinary effects 67.3 108.2
Return on sales based on EBITDA before extraordinary effects (in %) 8.1 13.4
Operating profit (EBIT) before extraordinary effects 25.6 69.9
Return on sales based on EBIT before extraordinary effects (in %) 3.1 8.6
Extraordinary effects -153.2 -
Results from At-Equity accounted investments -10.8 -7.2
Investor Relations Presentation
Page 26
Net financing result -25.9 -22.7
Profit before tax -164.3 40.0
Consolidated net profit attributable to equity holders -243.0 23.0
EPS, basic (in €) -3.43 0.33
* Adjusted for effects of adopting IAS 19R
• Sales revenue increase: 2.0%, currency adjusted 1% - Fisipe (acquired in Q2/2012) sales contribution of €59.0 or 4%
• EBITDA significantly decreased due to price pressure in PP, cyclical low at GMS, difficult market environment at CFC
• Sustainable cost savings of €13 million from SGL Excellence Initiative (SGL X)
• Negative non cash extraordinary effects of €153.2 million relating to the impairment of assets recorded within CFC
• High tax expense of €78.9 million include impairment of deferred tax assets on loss carry forwards due to lower short and midterm earnings expectations and provisions for tax risks from ongoing tax audits totaling €69 million
SGL GroupH1/2013 Results for Performance Products (PP)
• Sales revenue (+2%) virtually unchanged due to price pressure in graphite electrodes, currency effects had no impact
in € million H1/2013 H1/2012*
Sales revenue 420.1 413.1
EBITDA 74.4 93.1
Return on sales based on EBITDA (in %) 17.7 22.5
Operating profit (EBIT) 54.0 74.3
Return on sales based on EBIT (in %) 12.9 18.0
Investor Relations Presentation
Page 27
• Sales revenue (+2%) virtually unchanged due to price pressure in graphite electrodes, currency effects had no impact
• Lower EBITDA (-20%) due to
– higher factor costs
– lower selling prices
• €6 million savings from SGL X Initiative
* Adjusted for effects of adopting IAS 19R
SGL GroupH1/2013 Results for Graphite Materials & Systems (GMS)
• Sales revenue decrease: 17%, currency adjusted 14%
in € million H1/2013 H1/2012*
Sales revenue 210.1 252.8
EBITDA 21.5 49.1
Return on sales based on EBITDA (in %) 10.2 19.4
Operating profit (EBIT) 12.8 40.3
Return on sales based on EBIT (in %) 6.1 15.9
Investor Relations Presentation
Page 28
• Sales revenue decrease: 17%, currency adjusted 14%
– H1/2012 still benefited from high order backlog at the end of 2011
– Business Unit Graphite Specialties (GS) reached cyclical trough in H1/2013 driven by downward trend in new orders from all three regions (Asia, Europe and North America). Order intake in the previously more stable industrial applications substantially weakened in H1/2013, in addition to an already weak demand development in solar, semiconductor and LED industries
– Business Unit Process Technology sales reached previous year level
• EBITDA decreased significantly due to
– Underabsorption of fixed costs particularly in Business Unit GS as production levels adjusted to low order backlog
– Increasing price pressure in Business Unit GS due to intensified competition
• €3 million savings from SGL X initiative
* Adjusted for effects of adopting IAS 19R
SGL GroupH1/2013 Results for Carbon Fibers & Composites (CFC)
• Sales revenue increase: 37%, currency adjusted 38%
in € million H1/2013 H1/2012 *
Sales revenue 195.8 142.9
EBITDA before extraordinary effects** -11.3 -8.7
Return on sales based on EBITDA before extraordinary effects (in %) -5.8 -6.1
Operating profit (EBIT) before extraordinary effects** -21.3 -16.5
Return on sales based on EBIT before extraordinary effects (in %) -10.9 -11.5
Investor Relations Presentation
Page 29
• Sales revenue increase: 37%, currency adjusted 38%
– Initial consolidation of Fisipe (acquired in Q2/2012) contributed 16%-points of sales growth (H1/2013: €59.0 million, H1/2012: €29.8 million)
– like-for-like sales growth of 21% mainly due to higher sales in Business Unit Rotor Blades
• EBITDA decreased due to
– low capacity utilization in the carbon fiber business due to project shifts, resulting in lower material demand from wind industry and other industrial applications
– unsatisfactory utilization level in the Business Unit AS caused by Boeing 787 and Joint Strike Fighter delays
• €4 million savings from SGL X initiative
* Adjusted for effects of adopting IAS 19R** Negative non cash extraordinary effects of €153.2 million relating to the impairment of assets recorded within CFC
SGL Group H1/2013 Results for Central T&I and Corporate Costs
• Central T&I costs decreased by 26% mainly due to the already implemented cost savings measures as well as an investment grant received in H1/2013
• Corporate costs decreased by 31% primarily due to lower expenses for variable remuneration components and cost savings related to external services
in € million H1/2013 H1/2012*
Sales revenue/other revenue 2.2 1.0
Central T&I costs -4.9 -6.6
Corporate costs -15.0 -21.6
Investor Relations Presentation
Page 30
savings related to external services
* Adjusted for effects of adopting IAS 19R
Financing Structure, Balance Sheet Ratios and Cash on HandAllow continuation of growth path
SGL Group established a solid long term financial s tructure in May 2007
• €200 million Corporate Bond at EURIBOR plus 125 bps (maturity 2015)
• €200 million credit facility, undrawn (original 2012 maturity extended to 2015)
• Partially converted in 2011/12, remainder (€145.5 million) repaid at maturity in May 2013: €200 million Convertible Bond at 0.75%
Followed by supplemental debt instruments in June 2 009 and in April 2012
• €134.7 million* Convertible Bond at 3.5%, adjusted conversion price of €29.00 (maturity 2016)(originally €190 million prior to conversion)
Investor Relations Presentation
Page 31
SGL Group has currently no refinancing requirements
(originally €190 million prior to conversion)
• €240 million Convertible Bond at 2.75%, adjusted conversion price of €43.5164 (maturity 2018)
SGL Group has solid balance sheet ratios and liquidi ty at end of June 2013
• Equity ratio: 37%
• Gearing: 0.65
• Total liquidity: €148 million
* As at August 31, 2013
SGL GroupGroup Outlook 2013
Group
• FY 2013 sales slightly below 2012 level*
• EBITDA (before extraordinary effects) 50-60% below comparable 2012 level (€240 million before project write-offs)
• Improved At-Equity results from CFC JVs
• Substantial Group-wide cost savings program initiated: SGL2015
Capex, Balance Sheet, Cash Flow
• GEARING temporarily above mid term target of approx. 0.5
• CAPEX limited to €100 million
• Negative FREE CASH FLOW (however, variance vs. previous guidance of positive free cash flow limited and less than EBITDA deterioration due to restricted cap ex and working capital requirements)
Key risks to forecasts
• Further political, economic, and currency related uncertainties
• Further market risks arising from new capacities temporarily exceeding demand
* Based on constant currencies
Investor Relations Presentation
Page 32
SGL GroupBusiness Area Outlook and Key Assumptions 2013
Performance Products (PP)
• Graphite Electrodes: comparable volume in H2/2013 vs. H1/2013 expected, prices in H2/2013 below H1/2013 and below previous year
• Cathodes: previous year EBITDA boosted by final settlement of long term contract, stepwise recovery in demand continues, price increases not yet enforceable
=> FY 2013 sales substantially lower YoY*, EBITDA ROS in H2/2013 significantly below H1/2013 level
Graphite Materials and Systems (GMS)
• Graphite Specialties: impacted by cyclical downturn across all end markets; demand from lithium-ion-battery industry for consumer segment in H2/2013 also weaker than originally expectedbattery industry for consumer segment in H2/2013 also weaker than originally expected
• Process Technology: strong order backlog at year end 2012 to positively impact 2013 sales and earnings resulting in a performance similar to its record year 2012
=> Sales significantly lower YoY*, EBITDA ROS below mid term target of ≥ 14%
Carbon Fibers & Composites (CFC)
• Carbon Fibers/Composite Materials: continues to be affected by overcapacities and low demand in the wind, sports and leisure markets as well as other industrial applications
• Aerostructures: HITCO continues to be negatively affected by delays in civil and military aerospace projects• Rotor Blades: SGL Rotec to reduce losses compared to 2012 thanks to new orders and further improving
productivity
=> Slight reduction in operating losses compared to 2012 due mainly to internal optimization measures
* Based on constant currencies
Investor Relations Presentation
Page 33
SGL GroupSGL2015: Comprehensive group wide cost cutting plan introduced
Organizational restructuring
Review of organizational structure with support of external consultant
Site restructuring
Develop measures for site restructuring
• PP & GMS affected by cyclical downturn and temporary overcapacities, CFC impairedby repeated project and development delays
• requires decisive and urgent action of the management board: SGL2015, acomprehensive global cost savings program consisting of two pillars
with support of external consultant
• adjustment and simplification of business processes
• streamlining management structures
• Reduce SG&A cost base
restructuring
• Potential divestment of non core activities
• Transfer activities into partnerships
• Relocation, closure or sale of production assets
• individual projects currently being developed• details, including schedule, associated costs, and expected benefits, to be published
near term
Investor Relations Presentation
Page 34
Fundamental long-term growth drivers for our busine sses
SGL Group approach
“Towards an ecologically sensitive world”
Key challengesChanged economic
environmentEnergy / raw
materials availabilityClimatechange
approach
Sustainable solutions
Energyefficiency
Lightweight
Alternativeenergies
Carbon contributes to all three sustainable solutio ns
Investor Relations Presentation
Page 35
Thank you for your attention !
Investor Relations Presentation
Page 36
Any Questions ?
Important note: This presentation contains forward looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward looking statements are associated with known and unknown risks and uncertainties, as a consequence of which actual developments and results can deviate significantly from the assessment published in this presentation. Forward looking statements are not to be understood as guarantees. Rather, future developments and results depend on a number of factors; they entail various risks and unanticipated circumstances and are based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable
Investor Relations Presentation
Page 37
based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable changes in political, economic, legal and business conditions, particularly relating to our main customer industries, such aselectric steel production, to the competitive environment, to interest rate and exchange rate fluctuations, to technological developments, and to other risks and unanticipated circumstances. Other risks that may arise in our opinion include price developments, unexpected developments associated with acquisitions and subsidiaries, and unforeseen risks associated with ongoing cost savings programs. SGL Group assumes no responsibility in this regard and does not intend to adjust or otherwise update these forward looking statements.