Analyst Meeting. Frankfurt 18 March 2009

Transcription

1 Analyst Meeting Frankfurt 18 March 2009

2 Highlights 2008

3 SGL Group Highlights 2008 P & L Sales increase 17%, financial and economic crisis had only little impact on Q4 performance (Q4 sales up 29% excluding Rotec 24%) EBIT +18% EBIT margin at 19% continues to be above mid term target brackets (12 16%) Profit before tax up 34% due to improved financial result Net profit up 42% due to improved tax situation Balance sheet Equity ratio increased to 42.5%, adjusted for reclassification of actuarial losses from pension liabilities to equity 45% Gearing at 0.44 below target of around 0.5 despite record capex of 239 million Non financial SEC deregistration since June 2008 Purchase of 51% SGL Rotec enhances CFC value chain With completion of Polish expansion SGL Group now global leader in cathodes 3

4 SGL Group Mid term targets largely (over)achieved in 2007 and 2008 Mid term targets initially published in March Group Sales growth: 5 10% p.a. (CAGR organic) Sales: plus 15% Sales: plus 17% ROS: > 12% ROS: 19% ROS: 19% ROCE: > 17% Gearing 0.5 ROCE: 27% Gearing: 0.47 ROCE: 25% Gearing: 0.44 PP Volume growth: 2 3% p.a. Volume growth: 2% Volume growth: -1% ROS: > 20% ROS: 29% ROS: 31% GMS Sales growth: 6 8% p.a. Sales growth: 7% Sales growth: 13% ROS: > 10% ROS: 13% ROS: 14% CFC Sales growth: >15% p.a. Sales growth: 25% Sales growth: 40% ROS: > 10% mid term ROS: 2% ROS: 2% 4

5 Results 2008

6 Latest Results Group Highlights 2008 in million Sales EBITDA Profit from operations (EBIT) Profit before tax Net profit after minority interests EPS, basic [in ] , , Sales increase 17%, thereof price: +12%, volume (incl. acq.): +8%, currency: -3% Increase in EBITDA (+17%) and EBIT (+18%) EBIT margin at 19% continues to be above mid term target brackets (12 16%) Cost savings 28 million Profit before tax up 34% due to improved financial result Net profit up 42% due to improved tax situation 6

7 Latest Results 2008: Performance Products (PP) in million Sales EBITDA Profit from operations (EBIT) Return on sales % % Sales increase 15%, thereof price: +19%, volume: -1%, currency: -3% Strong demand from steel and aluminum industry reflected in selling price increases across all business lines and positive volume effects especially in graphitized cathodes Steel customer production cuts and destocking since autumn 2008 had limited effect in Q4/2008 full year 2008 GE volumes slightly below 2007 level EBIT increase of 20% due to positive price and cathodes volume effects as well as cost savings of 14 million and high capacity utilization 7

8 Latest Results 2008: Graphite Materials & Systems (GMS) in million Sales EBITDA Profit from operations (EBIT) Return on sales % % Sales increase: 13%, thereof price/volume: +15%, currency: -2% Strong demand situation especially from the chemical, solar, and lithium-ion-battery industries in the Graphite Specialties and Process Technology Business Lines EBIT increase of 18% due to positive volume developments, high utilization as well as savings of 6 million 8

9 Latest Results 2008: Carbon Fibers & Composites (CFC) in million Sales EBITDA Profit from operations (EBIT) Return on sales % % Sales increase: 40%, thereof price/volume: +43%, currency: -3% SGL Rotec contributed 12% to CFC sales growth Sales growth among others fueled by composite materials in connection with the consolidation of SGL Kümpers GmbH & Co. KG, SGL epo GmbH and SGL Rotec Brake Disc sales were negatively affected in Q4/2008 by weakness in automotive industry Increase in EBIT from high sales growth, capacity utilization and cost savings of 8 million partially offset by integration costs of SGL Kümpers and SGL epo as well as purchase price allocation (IFRS) in connection with SGL Rotec 9

10 Latest Results 2008: Central T&I and Corporate Costs in million Other sales Central T&I costs Corporate Costs Central T&I costs increased in line with guidance due to various new projects Total R&D expenses (including those borne by Business Units) increased by 19% to 36 million due to various new projects for efficiency and innovation across all business lines Resulting in R&D/sales ratio of 2.2% Corporate costs increased 14% due to higher valuation of share based management incentive programs, increases in pension liabilities, and additional project costs Following delisting of the SGL Group ADR in June 2007 and the required waiting period, SEC required reporting obligations have terminated in June

11 Latest Results Condensed Consolidated Income Statement 2008 in million Sales Gross profit Selling, administrative, R&D and other expenses Profit from operations (EBIT) Interest expense, net Market valuations of intercompany loans Write off of old refinancing expense & early repayment costs HYB Profit before tax Income tax expense Minority interests Net profit after minority interests EPS, basic [in ] EPS, diluted [in ] , ,

12 Latest Results Net Financing Costs 2008 in million Income from companies accounted for at-equity Interest income Interest expense on loans Imputed interest convertible bond (non-cash) Interest expense on pensions Interest expense, net Expense for refinancing (non-cash) Market valuation of intercompany loans Write off of old refinancing expense Early repayment costs of HYB Other Other financing expenses Net financing costs

13 Latest Results Condensed Consolidated Balance Sheet 2008 in million Property, plant and equipment Other non-current assets Non-current assets Inventories Trade receivables and other current assets Current Assets Total assets Total Equity Non-current financial liabilities Pension liabilities Trade payables Other liabilities Total equity and liabilities Dec 31, , ,795.9 Dec 31, , ,

14 Latest Results Condensed Consolidated Cash Flow Statement 2008 in million Cash provided by operating activities Capital Expenditure Payments for acquisitions less cash received, others Cash used in investing activities Free cash flow Payments relating to antitrust proceedings Cash provided by financing activities Net change in cash and cash equivalents Currency related changes Cash and cash equivalents at end of period

15 Latest Results Capex and Depreciation After years of consolidation and restructuring, capex since 2006 is significantly exceeding depreciation [in million] Capex Depreciation 15

16 Latest Results Capital Expenditure by Business Unit 2008 Major investment projects: Malaysian plant: 200m investment for 60kt graphite electrode and cathode plant Capital expenditure 2008 and 2007 [in million] m* 240 Carbon fiber expansion: : 6kt carbon fiber capacity operational 2012ff: further expansion up to 12kt planned Total investment approx. 300m ff m* Performance Products Graphite Materials & Systems Carbon Fibers & Composites Corporate projects 0 * Total cap ex for the Group

17 Ensuring the Future SGL Excellence Enable Productivity and Growth SGL Excellence Innovation Excellence Started in 2002 The core element of the Company mission An ongoing and Company wide program Our philosophy of doing business Operational Excellence People Excellence Commercial Excellence SIX SIGMA 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: > 1,600 SIX SIGMA trained employees > 500 Green Belts > 100 Black Belts 17

18 Ensuring the Future SGL Excellence Enable Productivity and Growth Since 2002 continuous cost reduction of 187 million in total % 96% 94% 78% 74% 72% 89% 86% 70% 81% 81% 63% 65% 66% Total Cost*/Sales (%) COGS/Sales (%) Annual Net Savings ( m) * Before antitrust 18

19 Employees 2008 Performance Products Graphite Materials & Systems Carbon Fiber & Composites Corporate SGL Group Dec 31, ,243 2,683 1, ,500 Dec 31, ,213 2,469 1, ,862 Headcount increase of 638 mainly attributable to strong growth in Asian business activities and acquisition of SGL Rotec as well as CFC in North America 19

20 Fundamental Trends Intact

21 Global Trend 1 Continued demand for resources when growth returns Global growth will continue post financial crisis induced recession Despite repeated revisions, growth still expected for China, India and Brazil Economic growth induces demand for Estimated GDP Growth 2009 (in %) Materials: - Infrastructure - Capital goods - Packaging - Transport/Logistics Energy: - Oil - Gas - Electricity Germany Euro zone Source: IMF Report (Jan 09) USA Brazil Russia India China Means continued growth in steel and aluminum production 21

22 Global Trend 1 Continued demand for resources when growth returns Steel and aluminum: Essential for infrastructure in Asia and Eastern Europe High per capita growth potential in steel and aluminum in comparison to Western World Steel consumption 2006 Crude Steel (kg/capita) Aluminum consumption 2006 Total Aluminum (kg/capita) Spain Italy Japan Canada Germany USA Turkey Russia France China Mexico Argentina South Africa Brazil Philippines India Indonesia Germany Japan USA Canada Italy France Spain China Mexico Russia Turkey Brazil South Africa Argentina Indonesia India Philippines Source: International Iron & Steel Institute Steel Statistical Yearbook 2007 Source: Alcan Infrastructure build up in emerging economies has only just begun 22

23 Meanwhile Worldwide record-size stimulus packages to fuel demand Biggest packages in history for US, Germany and many other countries Major industries benefiting include: 1, % 14% 12% 10% Infrastructure Renewable energy 400 8% 6% Early days but signs of results 200 4% China is committing a massive 14% of GDP The Far East is committing much more than other regions 0 US Japan China Germany Spain Canada Australia France UK Denmark Singapore Taiwan South Korea Hungary Italy Netherlands Indonesia Sweden India Finland Austria Malaysia Greece 2% 0% Investment $bn Investment/GDP % 23

24 Meanwhile Almost every stimulus package has an infrastructure component US Stimulus Investments Energy $43bn Education & Training $53bn Health Care $59bn Other $8bn Infrastructure and Science $111bn China Stimulus Investments Most will be spent on building: Highways Airports Other public works Protecting the Vulnerable $81bn Tax Relief $288bn Germany Stimulus Investments State & Local Fiscal Relief $144bn 14% of stimulus investment to go to infrastructure + $17.4bn loans to auto companies Package includes 17.3bn investment in infrastructure Cars > 9 year old, receive 2,500 towards a new car on trade in Source: The American Recovery and Reinvestment Act 24

25 Global Trend 2 Acceleration of substitution process example: civil aircraft Growing demand for raw materials puts pressure on supplies and prices of traditional materials and energy Accelerated substitution by carbon and graphite Example: increased composites content in new aircrafts to reduce fuel consumption and emissions Boeing 747 In service 1970 Titanium 6% Steel 12% Miscellaneous 1% Composites 1% Aluminum 80% Estimated Carbon Fiber Tow Usage* 4,000 3,500 3,000 2,500 2,000 1,500 Airbus Boeing Boeing 787 Expected in service 2010 Titanium 15% 1, to 2015 * Usage in commercial jets worldwide (tonnes) Source: The Carbon Fiber Industry: Global Strategic Market Evaluation Steel 10% Miscellaneous 5% Aluminum 20% Composites 50% 25

26 Global Trend 3 Alternative energy sources Growing demand for energy accelerates demand for alternative energy sources due to scarcity of fossil fuels as well as global warming (CO 2 emission) Example: Wind Wind turbine installations (MW) 60,000 50,000 Europe Asia 40,000 Americas RoW 30,000 20,000 CAGR 31% Wind energy today provides only 1% of electricity generation worldwide Installations postponed not cancelled After potential 2009 dip continued CAGR growth of 25 30% expected over next 5 years 10, E 2009E 2010E 2011E 2012E Source: BTM World Market Update (March 2008), updated by UBS estimates (December 2008) Wind turbine installed base (MW) 350, , , , , ,000 50,000 0 CAGR 25% E 2009E 2010E 2011E 2012E Source: BTM World Market Update (March 2008), updated by UBS estimates (December 2008) 26

27 Global Trend 4 Where other materials fail Unique properties of carbon, graphite and carbon fiber/composites: Stability at very high temperatures (up to 3,000 degrees Celsius) Very light weight Self-lubricating Non-corrosive Resistance to chemical attack High purity and inertness Electrical and thermal conductivity can be varied Highest degree of stiffness and flexural strength Carbon where other materials fail 27

28 Global trends support the carbon and graphite industry and SGL Group as its largest global player Carbon and graphite industry uniquely positioned to benefit from global trends SGL as the largest global carbon and graphite player to participate in growth opportunities resulting from these trends Global Trends Resources Demand Substitution Process Alternative Energy Unique Properties Performance Products (PP) Advanced Materials (AM) Performance Products (PP) Graphite Materials & Systems (GMS) Carbon Fibers & Composites (CFC) 28

29 Financing Structure, Balance Sheet Ratios and Cash on Hand Allow continuation of growth path SGL Group has established a solid long term financial structure in May million Corporate Bond at EURIBOR plus 125 bps (maturity 2015) 200 million Convertible Bond at 0.75%, conversion price of (maturity 2013) 200 million undrawn credit facility (maturity 2012) SGL Group has no refinancing requirements until 2012 SGL Group has solid balance sheet ratios and cash on hand at end 2008 Equity ratio: 42% Gearing: 0.44 Cash on hand: 123 million 29

30 SGL Group prepared to counter global crisis Leading market position and balanced company structure focused on Fundamental trends Growth markets International orientation and global presence Diverse portfolio with broad range of products and core competencies Strong T&I focus with broad innovative product pipeline Solid financial structure and strong balance sheet Long-term financing (maturities from 2012 on) Gearing ~0.5 Equity ratio: ~42 % SGL Excellence program: Continuous improvement and ongoing cost savings 30

31 Outlook

32 SGL Group Response to counter economic crisis Action plan Temporary production cuts aligned to lower demand margins over volume policy Reduction of overtime and shifts, extraordinary plant holidays, short time work in Germany (Meitingen, Bonn, Griesheim) SGL Excellence Initiative: Continuous cost savings and efficiency improvements of approx. 26 million in 2009 Gearing ~ 0.5 defines capex level Stringent working capital management Customer Value Programs to improve quality and services 32

33 SGL Group Focus on operating cash flow and working capital management PP Production cuts up to 30 percent for 2009 Up to 250 headcount reductions (mainly temp work, no redundancies) Short time work to start April 1, 2009 in Meitingen, Griesheim and Narni (Italy) Reduced shifts Customer Value Initiative GMS Reduced feedstock production to match lower demand Inventory reduction In USA and Asia, headcount reduction of approx. 10% Short time work to start at Bonn site by May 1, 2009 CFC Short time work to start May 1, 2009 in Meitingen at SGL Brakes Reduction of contract workers at Evanston site (USA) and SGL Brakes in Meitingen 90 headcount reductions at carbon fiber site in Inverness (Scotland) Reduced shifts, extraordinary plant holidays 33

34 SGL Group Group outlook for 2009 P & L Statement Sales below record 2008 level Corresponding EBIT to decline more than proportionately Net financial costs slightly higher than in 2008 Capex and Balance Sheet Key KPI: Gearing level to remain around 0.5 based on today s portfolio Gearing ~ 0.5 defines capex level (below 2008) Capex for organic growth largely to be financed through operational cash flow These expectations are based on economic recovery in 2H 2009! 34

35 SGL Group Business Unit outlook 2009 based on economic recovery 2H 2009 PP GE Latest estimate for crude steel production -11%* Major customers still not projecting their demand, destocking continues into Q2, this will be reflected in GE demand Higher raw material prices require higher GE prices CA Solid cathode year (however below excellent 2008) based on customers completing scheduled maintenance capex projects Short term aluminum production cuts may cause delay of smelter investments GMS GS Sales and earnings below record 2008 level PT Strong order backlog promises solid performance EG Weaker automotive sales lead to reduced volumes and profitability CFC High double digit sales growth, EBIT impacted by ongoing high R&D expenses, start up and integration costs CF&CM Earnings impacted by lower CF pricing, start up costs and higher depreciation of new lines CC (Industrial) Strong sales growth, earnings impacted by ppa CC (Aerostructures) Growth impacted by customer program delays BD Impacted by weak luxury car sales *BAS Merrill Lynch Global Steel Research 13 March

36 SGL Group Group Outlook for Q1/2009 Q1 historically always weakest quarter of the year Q additionally burdened by continued destocking in steel industry and start up costs in CFC However, EBIT will be markedly positive! 36

37 Mid term Targets Minimum Targets over the Cycle Unchanged Once normality returns post 2009 Group Sales growth: 5 10% p.a. CAGR organic ROS: > 12% ROCE: > 17% Performance Products (PP) Volume growth: 2 3% p.a. ROS: > 20% Graphite Materials & Systems (GMS) Sales growth: 6 8% p.a. ROS: > 10% Carbon Fibers & Composites (CFC) Sales growth: > 15% p.a. ROS: > 10% mid term To deliver profitable growth! 37

38 Questions?

39 Important Notice Forward-looking statements: This presentation contains statements on future developments that are based on currently available information and that involve risks and uncertainties that could lead to actual results deviating from these forward-looking statements. The statements on future developments are not intended as guarantees; rather, such developments and results are dependent on a number of factors, they contain various risks and uncertainties and are based on assumptions that may prove to be incorrect. These risks and uncertainties include, for example, unforeseeable changes in political, economic and business conditions, particularly in the area of electric steel production, the competitive situation, interest rate and currency developments, technological developments and other risks and unanticipated circumstances. We see other risks in price developments, unexpected developments relating to acquired and consolidated companies, and ongoing cost optimization programs. SGL Group does not intend to update these forward-looking statements.