Investor Relations Presentation. September 2015

Transcription

1 Investor Relations Presentation September 2015

2 Table of Contents. Introduction to SGL Group s Businesses Page 3 - Reporting Segment Performance Products Page 6 - Reporting Segment Graphite Specialties Page 15 - Reporting Segment Carbon Fibers & Materials Page 23 - Reporting Segment Corporate & Others Page 34 - SGL Excellence, SGL2015, Business Process Excellence Page 38 - Technology & Innovation Page 48 Strategic Realignment Page 51 Latest Financials H Page 64 Outlook Page 74 Appendix Page 79 Page 2

3 Introduction to SGL Group s Businesses Page 3

4 SGL Group in Organization with five business units and four reporting segments Graphite & Carbon Electrodes (GCE) Cathodes & Furnace Linings (CFL) Graphite Specialties (GS) Process Technology (PT) Carbon Fibers & Composite Materials (CF/CM) Main JVs - SGL ACF* - Brembo SGL - Benteler SGL Performance Products (PP) Graphite Specialties (GS) Corporate & Others (C&O) Carbon Fibers & Materials (CFM) Corporate & Others (C&O): SGL Excellence (SGL X), Technology & Innovation (T&I), Corporate Functions JV Partners Business Unit Reporting Segment Business Unit Aerostructures (AS, HITCO) reclassified to discontinued operations as of June 30, 2014 *51% share reported in CFM Page 4

5 SGL Group at a glance. Based on 2014 reporting structure Reporting Segment 2014 Group sales Business Units Performance Products (PP) Graphite Specialties (GS) Carbon Fibers & Materials (CFM) Corporate & Others (C&O) CFM 22% GS 26% 1.3bn C&O 8% PP 44% Graphite & Carbon Electrodes (GCE) Cathodes & Furnace Linings (CFL) Graphite Specialties (GS) Carbon Fibers & Composite Materials (CF/CM) Process Technology (PT) Key industries served Steel Other metallurgy Energy Chemicals Automotive Corporate SGL Excellence T&I Administrative functions Shares services Major Joint Ventures 51% SGL ACF (carbon fibers and fabrics for BMW Group) 50% Brembo SGL (carbon ceramic brake discs) 50% Benteler SGL (fiber based composite components for automotive industry) Page 5

6 Reporting Segment Performance Products Page 6

7 Reporting Segment: Performance Products (PP). Product groups 2014 Group sales PP sales Graphite Electrodes (GE) Cathodes Carbon Electrodes Furnace Linings 1.3bn PP 44% Cathodes & Furnace Linings 21% Graphite & Carbon Electrodes 79% Key industries served Steel Aluminum Ferrous and non-ferrous metals Characteristics Supplying the metal industries Leading competitive position Historically solid ROS & ROCE Historically strong cash flow Strategic priorities Align infrastructure with market development (swing capacities) Reduce unit costs by increasing production and shipments at Malaysian plant Increase customer value with product quality and consistency Page 7

8 Graphite Electrodes. Steel production in EAFs Growth in steel production 2000ff fuelled by infrastructure demand from emerging countries Recently, Chinese steel exports limits EAF growth in most regions, iron ore price decline lowered production cost of blast furnace steel Significantly higher steel consumption 2000ff will lead to higher scrap availability and lower price, favoring again EAF steel production GE critical to EAF furnace efficiency but only ~3% of steel-making conversion cost Page Worldwide steel production [in million t p.a.] Blast furnace produces primary (integrated) steel based on iron ore Electric arc furnace produces secondary (electric) steel based on scrap Source: WSD, IISI, own estimate

9 Graphite Electrodes. Essential consumable for electric steel production Steelmaking in an electric arc furnace (EAF) Section view through EAF Graphite electrode Consumed after 5-8 hours Furnace shell Graphite Electrodes Rocker tilt Tilt cylinder Molten steel Eccentric bottom tapping (EBT) cm Teaming ladle cm Connecting Pin Page 9 Source: steeluniversity.org

10 Graphite Electrodes. Production process Production process takes up to 3 months Needle coke (key raw material) requirements sourced on basis of multiyear contracts Page 10

11 Graphite Electrodes. Graphite electrode market 250 Capacity by competitor in 2015** UHP / HP-quality [in tmt] Regional demand in North / Middle East, Africa 10% Americas 17% Europe / CIS 23% 50 Asia 50% 0 SGL (DE) Graftech (US) Showa Denko (JP) Graphite India (IN) HEG (IN) Tokai Carbon* (JP) SEC (JP) Nippon Carbon (JP) *Announcement on August 5, 2015: graphite electrode capacity reduction by 22kt (Japan ). **Russia and China: Potential UHP capacity dependent on equipment, technical capability and needle coke availability. Source: SGL Group s own estimates (as of August 2015) Page 11

12 Primary Aluminum Production [in mio. T p.a.] Cathodes. Participates in aluminum industry growth Aluminum demand driven by: Population growth and urbanization Further industrialization of emerging countries Weight/strength/cost advantages Cathodes essential to aluminum smelters Existing smelters relining New smelter construction leading first to project demand and long-term to higher relining demand Comprehensive product portfolio to cope with all technology trends in the AL industry Aluminum global production scenarios / Above pre-crisis scenarios 67 mio. t 39 mio. t 36 mio. t 50 mio. t e 2015 e 2017 e 2019 e Solid fundamentals for aluminum production growth Various new projects under construction, additional feasibility studies for capacity increases underway Page 12 Source: IAI, Habor, SGL Group s own estimates, Hydro; Alcoa, CRU

13 Cathodes. Investment good for the aluminum industry Aluminum smelter Cathodes Investment good (lifetime 5-7 years) cm cm cm Special glue Cathode blocks Ramming pastes Sidewall blocks Page 13

14 Cathodes. Market shares in cathodes Increasing cathode demand due to new projects. High level of plant utilization Prepared to supply all regional growth markets CIS 7% Market shares in cathodes 2014 SGL 18% Balanced product portfolio enabling participation in all technological developments SEC 16% Various (Chinese & Others) 41% Carbone Savoie 18% Page 14 Source: SGL Group s own estimates, market shares based on volume (excl. China domestic) Various (Chinese & others): various cathode producers combined in this number, none of them exceeding 5% market share

15 Reporting Segment Graphite Specialties Page 15

16 Reporting Segment: Graphite Specialties (GS). Product groups Anode materials Isostatic Fiber Materials Extruded Die molded Expanded Process Technology (as of 2015) GS 26% 2014 Group sales Key industries served 1.3bn Energy Solar / Battery Semiconductor / LED High-temperature processes Metallurgy Tool manufacturing Automotive Characteristics Higher value-added products (machining, coating) Specialized, partially tailor-made, products for differentiated customers Innovation driven business Engineered products for customers from > 35 industries some with high growth potential Strategic priorities Focus on forward integration Combine material-know-how and engineering competence Advanced material, equipment, and process solutions in close cooperation with customers Page 16

17 Graphite Specialties. Best solutions for our customers... in the PV, Semiconductor, and LED Industry... in the Battery and Energy Storage Industry... in the Chemical and Automotive Industry SiC coated wafer carrier for LED chip production Meander heater for CZ units Anode material for lithium-ion batteries Reinforced graphite sealing sheet Flexible graphite foil C/C carrier frame for solar wafers Redox flow battery electrode consisting of battery felt and bipolar plate Rotor and vanes for break assistant pumps Page 17

18 Graphite Specialties. The reliable material supplier Full integration to ensure consistent quality Most comprehensive portfolio in the industry Partnering with customers from >35 industries Feedstock Machining Purification Impregnation & coating Global production: America, Asia / Pacific and Europe Isostatic Extruded Vibro molded Die molded Expanded Carbon fiber reinforced carbon Soft & rigid felt SiC coating Lithium ion battery Polysilicon, photovoltaic & semiconductor LED & sapphire Heat treatment Sealings & gaskets EDM Glass & refractories Mechanical engineering Page 18

19 Graphite Specialties. Specialty graphites required where other materials fail Properties can be adapted to requirements Thermal shock resistance Purity Mechanical strength Main properties of carbon and graphite Electrical and thermal conductivity Resistance to high temperatures Corrosion resistance Page 19

20 Graphite Specialties. Fine grain graphite production is complex and requires up to six months Coke & graphite Binder pitch Grinding Mixing Pitch impregnating 800-1,200 C Shaping Extruding, vibration / die molding, isostatic pressing Carbonizing 4-5 months ,000 C Graphitizing Finishing Machining, purifying, coating 2-4 weeks Page 20 Tailor made product Source: GS Production

21 Graphite Specialties. Enabling innovation Examples: Graphite anode material for Lithium-Ion batteries Graphite foils and felts for stationary energy storage 3D filament wound susceptors for semiconductor industry Extra large carriers for photovoltaic Advanced silicon carbide coated carriers for LED CFRC charging carriers for hightemperature applications established Target approx. 1/3 of sales based on new products introduced over the last 4 years new Page 21

22 Graphite Specialties. Major customer industries and market shares 2014 % of total GS sales 2014 Global market share 2014 Energy: Batteries & Nuclear 23% 35% Semiconductor (incl. LED) 12% 15% Chemicals 12% 35% Tool manufacturing 11% 10% Energy: Solar (including Polysilicon) 10% 15% Metallurgical applications 10% 25% Automotive & Transportation 8% 15% High-temperature processes 4% 15% Other industrial applications 10% - Page 22 Source: SGL Group s own estimates

23 Reporting Segment Carbon Fibers & Materials Page 23

24 Reporting Segment: Carbon Fibers & Materials (CFM). Product groups* 2014 Group sales CFM sales 2014 Carbon Fibers Composite Materials 51% SGL ACF (JVs with BMW) CFM 22% 1.3bn SGL ACF 20% Carbon Fibers / Composite Materials 80% Key industries served Automotive Energy Industrial Recreation Medical Technology Pressure Vessels Characteristics New applications in automotive, energy, industrial High earnings improvement potential Complete value chain in house The only EU based carbon fiber company * Former Business Unit Aerostructures reclassified to discontinued operations as of June 30, 2014 Strategic priorities Develop innovative customer solutions along the value chain Optimize carbon fiber and composite capabilities along the value chain Convert Fisipe acrylic fiber lines into PAN precursor production Page 24

25 Carbon Fibers / Composite Materials. Carbon fiber demand growth delayed but all growth drivers intact CF market forecast [July 2014; in thousand mt p.a.] Page 25 Source: SGL Group market research

26 Carbon Fibers / Composite Materials. Carbon fiber capacity Capacity [in mt] Name plate capacities* carbon fiber (excl. oxidized fiber) LT = Low tow fiber 1 24k HT = High tow fiber k * Actual production tends to be 20 30% below name plate capacity Toray** (JP) Toho / Fortafil (JP) SGL Group (DE) MRC (JP) Formosa Plastic (TW) Hexcel (US) Aksa (TR) Cytec (US) Product LT/HT LT HT HT/LT LT LT LT LT Markets Aero / Ind. Aero / Ind. Ind. Ind. Ind. Aero / Ind. Ind. Aero / Ind. Page 26 ** Including Zoltek Source: SGL Group s own estimates, company websites (as of March 2015)

27 Carbon Fibers / Composite Materials. Composite Materials 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 Weaving (e.g. sporting goods, automotive, medical industry) Preforms (e.g. automotive industry) Braiding (e.g. automotive industry) SGL Kümpers Impregnation (e.g. prepregs for wind turbine blades or aircraft parts) SGL epo SGL Kümpers SGL epo Page 27

28 SGL Group only integrated European carbon fiber producer. Carbon Fibers & Composite Materials Composite Components Refocused on materials & automotive / other industrial components* Raw Material Carbon Fiber Composite Materials PAN Precursor Carbon Fiber Prepreg Preform Automotive & other industrial Fisipe MSP: JV with Mitsubishi Rayon (33%) Prod. Capacity ~ 4kt in UK ~ 2kt in USA SGL ACF: JV with BMW (51%) - up to 9kt in USA SGL epo SGL Kümpers (51%) SGL ACF: JV with BMW (51%) Benteler SGL (50%) Brembo SGL Carbon Ceramic Brakes (50%) * Former Business Unit Rotor Blades sold as of December 31, 2013 and former Business Unit Aerostructures reclassified to discontinued operations as of June 30, 2014 Page 28

29 Carbon in Automotive. Stringent CO 2 Emission Restrictions Globally Global approach to reduce CO 2 emissions Progressively more comfort and safety features on bord Driver for lightweight Page 29

30 Example EU. CO2 reduction targets can only be achieved with lightweight construction OEM fleet target development (EU) in g CO 2 /kg Only achievable with lightweight -30% % ~ Targets 2014 ICE efficiency package 3 Moderate lightweight Reachable 0 w/out electrification Page 30

31 Relative component weight for the same functions in % Carbon in Automotive. Lightweight materials offer significant weight advantages especially CFRP to -25% -40% 50-15% -20% -60% 25 0 Steel Lightweight steel construction Aluminum Magnesium CFRP quasiisotropic CFRP unidirectional Source: N/EK-L; EKP Page 31

32 SGL ACF. Milestone in serial application of carbon fibers in automotive industry Market launch of BMW i3 in November 2013, the first serially produced car with a CFRP passenger cell; market launch of BMW i8 in May 2014 Source: BMW Group Global value chain: carbon fibers produced in Moses Lake (USA) and converted into composite materials (fabrics) in Wackersdorf (Germany). fabrics are sold to BMW who manufactures carbon based automotive parts for the BMW i3 and i8. New BMW 7 series (2015): first large scale application of innovative carbon fiber materials in premium car segment October 2009: 90 million combined investment volume for initial capacity of 3kt carbon fiber and corresponding fabric capacity; May 2014: further combined investment of approx. 145 million to expand carbon fiber capacities up to 9kt BMW guarantees certain minimum purchasing volumes at contractually agreed conditions and provides debt financing Page 32

33 Equity accounted JVs in automotive. Complement our carbon fiber product offering 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: 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 Page 33

34 Reporting Segment Corporate & Others Page 34

35 Reporting Segment: Corporate & Others (C&O) Group sales C&O sales bn C&O 8% Corporate 10% Process Technology 90% Business units + corporate Process Technology (PT) plus Corporate T&I Corporate Costs Key industries served by PT Chemicals Pharmaceuticals Environmental Page 35

36 Process Technology. Process solution provider for chemical and related industries Product portfolio Systems Syntheses Distillation, purification, concentration, dilution Absorption, desorption Reactors & converters Steel pickling Equipment Heat exchangers Reactors and internals Quenchers and vessels Pumps and piping Accessories After sales services Spare parts Maintenance / Repairs Training Chemicals Pharma Metals & Mining Energy Solar Environmental Core industries served Core applications Hydrochloric acid (HCl) Phosphoric acid (H 3 PO 4 ) Sulfuric acid (H 2 SO 4 ) Hydrofluoric acid (HF) Oxidizing acids Isocyanates Epichlorohydrine (EPC) Vinyl chloride (VCM) Polysilicon Page 36

37 Process Technology. Business model and 3D growth strategy Engineered process solutions lead to high value leverage on graphite Idea Graphite SiC PTFE Ex. Metals Engineering Value chain Production Process Solutions: Systems 1 st Dimension: Regional roll-out Process Solutions: Equipment 3D growth strategy engine for sustainable profitable growth Leading to higher sales, ROS and ROCE 2 nd Dimension: New products 3 rd Dimension: New industries Page 37

38 SGL Excellence SGL2015 Business Process Excellence Page 38

39 SGL Excellence. Drives efficiency and customer focus SGL X is more than savings: started in 2002 ongoing and company wide program integral part of our culture continuously questioning the status quo strives for sustainable improvements provides the right mind and tool set important cornerstone in the development of our people empowers our employees with skills and tools: > 190 trained Black Belts > 200 trained Champions > 900 trained Green Belts majority of employees SIX SIGMA trained Innovation Excellence New ideas and solutions for profitable growth Operational Excellence Continuous improvement of our manufacturing, administrative and supply chain processes Commercial Excellence Sustainable partnerships with our customers to secure our future People Excellence Well educated employees as foundation of our success New: Business Process Excellence Streamline and standardize processes Page 39

40 SGL Excellence savings. Since 2002 continuous cost reduction of 335 million in total Annual Net Savings ( m) Page 40

41 SGL2015 cost savings program. Target savings increased twice to 240 million Organizational Restructuring Asset Restructuring Portfolio Restructuring Simplify processes and streamline management structures Review all workstreams and identify redundancies Adjust organizations and Corporate and Service Functions Reduce personnel costs and indirect spend Adjust asset base to changes in market demand Optimize global production network, relocate production Improve capacity utilization Reduce fix costs Use synergies between the Business Units Consolidate sites Carbon fiber business: focus on materials competence Analyze our business portfolio Concentrate portfolio on core activities Investigate options for businesses Already 183 million savings achieved by mid 2015 remainder to follow by mid 2016 Page 41

42 SGL2015. Organizational restructuring A Reducing personnel costs by streamlining corporate and service functions Board of Management Upper Management Middle Management Other Employees -40% -22% -14% -14% Affecting approximately 300 jobs Primarily at management levels B Substantial reduction in indirect spend 1 2 Cost management Review of purchasing structures and processes 30 million savings Cost reduction through adjusted guidelines Transparent monitoring 3 4 Page 42

43 SGL2015. Asset restructuring Adjusting production network to changed demand and market environment Closure of Canadian facility in Lachute completed end Q Reduced 30,000 t graphite electrode capacity 110 jobs cut Discontinuation of our graphite electrode production in Italian facility in Narni Production discontinued in H Reduced 30,000 t graphite electrode capacity Dismissal agreement signed by unions all employment contracts (~120) terminated in December 2014 Further projects to optimize production structure Page 43

44 SGL2015. Portfolio restructuring Focusing our business on core competencies and target return on capital Disposal of rotor blade activities Sale of all shares in SGL Rotec to a strategic investor as per December 31, 2013 Strong cooperation in carbon and glass material supply to continue Agreement on sale of aerostructures business of HITCO in July 2015 Decision to sell HITCO in Q2/2014 triggered reclassification of BU AS to discontinued operations as of June 30, 2014 Decision to terminate JV with Lindner Group in Q1/2015 Next steps Focus on core competence material development and production Page 44

45 Levers to improve ROCE Challenge. Levers to improve ROCE ROCE = EBIT(DA) Capital Employed Improve EBIT(DA): Increase price Increase sales volume NEW! Commercial process optimization Reduce costs (raw materials, indirect spend, ) Reduce Working Capital (short term): Inventory: Receivables: Payables: minimize inventory level ONGOING: SGL Excellence, SGL2015 improve customer payment terms longer payment terms with suppliers NEW! Working capital process optimization Reduce Asset Base (mid term): Limit investments: use existing assets, outsourcing ONGOING: SGL2015 Asset and portfolio optimization Page 45

46 Business Process Excellence (BPX). New Group wide program introduced Target is to streamline and standardize cross-bu processes Utilization of standardized IT solutions (SAP) Initial focus on procurement, supply chain and sales processes Procurement ongoing procurement optimization project launched under SGL2015. Target: reduce procurement costs and improve profitability Supply chain improve alignment between all stages of the supply chain, from sales to procurement to production, etc. Target: improve supply chain process to further reduce net working capital Sales organization implementation of uniform CRM system, development of new group wide standards and best practices for optimized customer and market approach. Target: generate additional, profitable sales, optimize pricing External consultant appointed for outside-in view and for project set up phase Recently implemented: more stringent investment process Page 46

47 More stringent investment process. We have introduced more discipline in capex spending Budgeting Project Planning Approval Execution & Monitoring Review Budget decided on by the BoM (strategy defines investments) Professional project manager from Central Engineering BUs remain in charge of Business Case Approval by the BoM Stronger challenging of business assumptions Project execution by Central Engineering Independent project controlling Quarterly Monitoring and review by the BoM Post project audit intensified to capture learnings and evaluate performance Page 47

48 Technology & Innovation Page 48

49 Technology & Innovation. Foundation for profitable growth Technology & Innovation: SGL Group s centralized R&D organization Market driven R&D ensures best-in-class support for current and future customers. Industry networks with suppliers and customers are an essential part of our development strategy thus ensuring close contacts to our markets. Global networks with leading universities cover the basic research. Material, process and application know-how is the platform for our development clusters: synthetic graphite, carbon fibers and composites, energy systems, and ceramic materials. Strategic IP management safeguards our products and processes and is a driver of our long term market success. Page 49

50 Technology & Innovation. Activity areas of T&I in 2014 Raw materials & synthetic graphite development for steel and aluminum industry Reduce graphite electrode consumption in EAF by optimizing raw materials, oxidation resistance and GE-joint. Increase energy efficiency of aluminum production process with improved cathode recipes and advantageous cathode designs. Elongate lifetime of furnace linings by improved microporous carbon-ceramic recipes and advanced lining bloc designs. Strengthen carbon fiber based value chain Operate carbon fiber pilot line and improve carbon fiber production processes. Develop new carbon fiber grades based on own precursor. Develop new composite system based on Thermoplastic matrix as well as SnapCure thermoset resins for automotive applications. Energy systems Low cost graphite based anode materials for Li-ion batteries. New carbon & graphite based composite anode materials with enhanced energy density for 3 rd generation Li-ion batteries. Develop carbon felt with enhanced surface characteristics and improved electrochemical behavior for stationary energy storage systems such as redox flow batteries. Advanced gas diffusion layers for PEM fuel cells for automotive and stationary applications. Improved Ceramic Materials Develop new C/SiC materials and manufacturing methods for complex shaped ceramic structures. Page 50

51 Strategic Realignment Page 51

52 September Transformation of SGL Group guided by clearly defined targets Create flexibility for restructuring and repositioning with capital increase and required disposal (HITCO, etc.) Stop loss makers and cash drainers by restructuring or disposing Capex for selective growth opportunities subject to minimum hurdle rates Return on capital is key management principle for strategic realignment and future investment Gearing ~ 0.5 Equity ratio > 30% Net debt/ebitda < 2.5 Positive net result Positive free cash flow* ROCE 15%** * Excluding disposal proceeds ** ROCE defined as EBITDA/Capital employed Page 52

53 September Transformation process defined with cornerstones of strategic realignment 15% ROCE* 2 Improve performance Generate shareholder return 3 Minimum return on capital Right size 1 1) Right size SGL2015 asset and portfolio restructuring 2) Improve performance SGL2015 organizational restructuring SGL Excellence savings BU streamlining Process excellence initiatives 3) Generate shareholder return Define selective growth areas *EBITDA divided by capital employed Capital employed Page 53

54 Analysis of business model of GMS and CFM. Many similarities GMS/CFM Meaningful exposure to end markets growing above GDP driven by global mega trends High share of customer-specific products, tailored applications and solutions High potential for innovation since products typically serve as key enablers of innovation in target industries and/or provide vital products for their customers value chains In depth knowledge and control of the complete graphite and carbon value chain provides opportunity for product customization Specific application requirements allow to leverage knowledge and technology as competitive advantage Continued process and cost optimization as well as R&D investments necessary Page 54

55 Analysis of business model of PP(GE). Market requirements increasingly differ from GMS and CFM PP(GE) Global steel markets in structural oversupply, thus EAF steel development cannot be expected to drive GE demand in near and mid term despite reasonable long term perspectives from increasing scrap availability in China Therefore supply-demand imbalance remains, industry becoming increasingly commoditized with customers focusing predominantly on price Consequently, GE in particular and PP in general have to be managed in a different way than before and also different to GMS/CFM Optimization efforts will have to continue to lower costs, improve processes and thus further increase competitiveness Continued overcapacities and low profitability will trigger the need for industry consolidation, in which we want to participate Page 55

56 Business models of GMS and CFM share similarities, whereas PP(GE) has become distinctively different Separation will enable the businesses to progress without constraints associated with the plans of the other business GMS/CFM SGL Group has unique strengths and depth of knowledge to drive forward the development of GMS and CFM In our perception, the majority of the current investors of SGL Group are more excited about the innovation and growth businesses GMS and CFM PP(GE) GE/PP is increasingly becoming commoditized where the most required skills are capacity control, cost effectiveness and customer value (quality, supply reliability, etc.) PP needs to adapt its business model to changed market fundamentals and prepare for participation in potential industry consolidation scenarios Page 56

57 July 2015: Path forward for SGL Group. Dedicated business models for different market requirements Accelerate growth mode by adapting processes and launching growth initiatives Implement commodity business model and prepare for strategic options with carve-out Graphite Materials & Systems (GMS) Graphite specialties Process technology Carbon Fibers & Materials (CFM) Carbon fibers Composite materials 51% SGL ACF Performance Products (PP) Graphite electrodes Carbon electrodes Cathodes Furnace linings Page 57

58 Target for GMS and CFM. Profitable organic sales growth of 50% by million sales at 8% ROCE EBITDA Moderate organic sales growth and process optimization phase Accelerated organic growth phase ~ 1.1 billion sales at or above min. 15% ROCE EBITDA Augmented by potential selective and accretive bolt-on acquisitions to complement our portfolio in terms of region, technology, etc. Page 58

59 GMS and CFM. Both units serve a broad range of fast growing segments linked to global megatrends Growth opportunities GMS anode materials CFM carbon fibers/mat. >10% 6-8% Energy* Digital Lifestyle Mobility Industry Urbanization ~10%* 7-9% 3-5% 3-4% ~2% Stationary energy storage Lithium ion batteries Wind, Pressure vessels Mobile 3C devices Aerospace, Automotive, Pressure vessels Industrial applications GMS high growth** ~6% Solar,Polysilicon, LED LED, Semiconductor Industrial applications GMS medium growth*** 3-5% Solar, Nuclear, Stationary energy storage, Heat Recovery, etc. Sapphire glass Exhaust gas recirculation, Brake assistant pumps Engine technologies, etc. Mechanical parts, Water management, etc. Page 59 % Approx. market growth, CAGR Market potential 2015: < 50 mill. > 50 mill. > 100 mill. * Energy efficiency, storage, reversal of energy generation and climate change (10% growth rate represents renewable energy); ** Product Groups: Isostatic, Fiber materials; *** Product Groups: Extruded/Vibro, DieMolded, Expanded, Process technology