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Cheuvreux Pan-European Management Conference – New York
Cheuvreux Pan-European Management Conference – New York November 10 & 11, 2009 New York Cheuvreux – Pan-European Management Conference - New York Agenda SGL Group Business Overview Fundamental trends and mid term outlook Recent Financials and 2009 outlook Q&A 2 SGL Group Business structure Performance Products (PP) Advanced Materials (AM) Performance Products (PP) Graphite Materials & Systems (GMS) Carbon Fibers & Composites (CFC) • Graphite & Carbon Electrodes • Cathodes & Furnace Linings • Graphite Specialties (GS) • Process Technology (PT) • Expanded Graphite (EG) • Carbon Fibers/Composite Materials • Composite Components • Aero Structures Technology and Innovation (T&I) Six Sigma (SGL Excellence) 3 AM PP GMS PP CFC Performance Products Performance Products (PP) Business Lines 2008 Group Sales PP Sales & EBIT Margins • Graphite & Carbon Electrodes • Cathodes & Furnace Linings 14% CAGR* 31% 24% 29% 19% CFC 14% 15% PP 60% 563 GMS 26% 2004 Sales €m 644 2005 713 2006 836 2007 966 2008 EBIT Margin * Compound Annual Growth Rate in Sales 2004 – 2008 2004 – 2005: Carbon & Graphite Business Unit 4 Key industries served Characteristics • Steel • Supplying the metal industries • High ROS & ROCE • Aluminum • Leading competitive position • Strong cash flow • Ferrous and non-ferrous metals • Ongoing growth in eastern world • Stable growth AM PP PP GMS CFC Performance Products (PP) Performance Products (PP) Sales – 2008 Cathodes & Furnace Linings 25% Medium-term targets (2008 – 2011) Graphite & Carbon Electrodes 75% • Volume growth: 2 – 3% p.a. • ROS: > 20% Highlights 2008 Strategic priorities • Production adjusted to reduced demand • Continued cost reduction projects • Investment into 60kt Malaysian carbon & graphite plant continues • Major initiative to increase customer value through product quality and consistency • Start of first graphite electrodes (GE) production module in Malaysia 5 AM PP PP GMS CFC Performance Products Graphite electrodes (GE) Steel Making – An Electric Arc Furnace (EAF) Graphite Electrode SECTION VIEW TROUGH EAF Graphite Electrodes Furnace shell Molten steel 100 – 300 cm Rocker tilt Eccentric bottom tapping (EBT) Tilt cylinder 35 – 80 cm Connecting Pin Teaming ladle Source: steeluniversity.org 6 AM PP PP GMS CFC Performance Products Graphite 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 efficiency gains GE demand growth only 1 – 2% p.a. • GE critical to EAF furnace efficiency but only 2 – 3% of steelmaking conversion cost Worldwide steel production: blast oxygen furnace/electric arc furnace [in tm] 1,000 Blast oxygen furnace Electric arc furnace 750 500 250 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: WSD, IISI, own estimate 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) 7 AM PP PP Performance Products Graphite electrode production process • GE critical to EAF furnace efficiency but only 2 – 3% of steelmaking conversion cost • GE is a consumable – replaced every 5 to 8h • GE sold mostly in annual contracts • Needle coke requirements sourced on basis of multiyear contracts Î Production process takes up to 3 months 8 GMS CFC AM PP PP GMS CFC Performance Products Graphite electrode market Capacity by competitor in 2008* – UHP/HP-quality Regional Demand in 2008 In tmt North/Middle East, Africa, Australia 8% 250 Europe 28% 200 Americas 22% 150 Asia 42% 100 50 0 SGL (GER) (GER) SGL Graftech Graftech (U.S.) (U.S.) Show a Showa Denko (J) Denko (J) Tokai Tokai Carbon (J) (J) Carbon Graphite Graphite India (IN) India (N) HEG (IN) HEG (IN) * Russia and China: Potential UHP capacity dependent on equipment, technical capability and needle coke availability Source: SGL Group‘s own estimates (as of January 2009) 9 Nippor, Nippon Carbon (J) (J) Carbon SEC (J) (J) CGE (U.S.) CGE (U.S.) AM PP PP GMS CFC Performance Products Cathodes for the aluminum industry 10 Aluminum Global Production Scenarios 2003 – 2020/New 2009 will be affected by the inventory cycle. Fundamentals for Al production growth remain solid – leaving the original long-term outlook unchanged 70,000 World Primary AL Prod 3.6 % CAGR 60,000 Primary AL Production in kt/a • Industrialization of BRICs & weight/ strength/cost advantages in higher energy cost environment Æ Quantum leap in aluminum demand from historical 2 – 3% to 4 – 6% p.a. • Cathodes essential to aluminum smelters Æ Existing smelters relining Æ Investment good (5 – 7 years shelf life) Æ New smelter construction leading to higher relining demand long term • Existing smelters upgrading => amorphous cathodes => graphitized cathodes Æ only three established producers of graphitized cathodes • Cathodes essential for aluminum smelting but representing only 1% of production costs for 1t aluminum ÆSGL Group largest producer worldwide 64 mio. tm 49 mio. tm 50,000 39 mio. tm 40,000 36 mio. tm 30,000 20,000 10,000 0 2003 2006 2009E 2012E 2015E Source: IAI, King, SGL Group‘s own estimates, Hydro, CRU, Rusal 2018E 2020E AM PP PP GMS CFC Performance Products Cathodes for the aluminum industry Aluminum Smelter Cathodes 30 – 50 cm 2 3 4 4 100 – 350 cm 1 4 30 – 70 cm Special glue Sidewall blocks Cathode blocks Source: SGL Group 11 Ramming pastes AM PP PP GMS CFC Performance Products Market shares in cathodes 2008 • Western world concentrated, Chinese expected to follow in long term • Substantial cathodes growth due to strong aluminum demand and subsequent new greenfield smelter investments and stepchange in relining demand • Continued substitution with graphitized cathodes where SGL Group’s market share is higher (> 30%) • Double digit growth for graphitized cathodes due to higher efficiency and yield advantages • Graphitized cathodes industry highly concentrated (only 3 – 4 established players) – graphitization capability a bottleneck 12 Market Shares in Cathodes 2008 CIS 12% Bawtry 5% SGL 25% NDK 1% SEC 13% Alcan 3% Others 1% Carbone Savoie 20% China 20% Source SGL Group’s own estimates, market shares based on volume excluding Chinese capacities AM PP GMS PP CFC Advanced Materials Graphite Materials & Systems (GMS) Business Lines 2008 Group Sales GMS Sales & EBIT Margins • Graphite Specialties CAGR* 9% 11% 14% 13% • Process Technology • Expanded Graphite CFC 14% 7% 8% PP 60% GMS 26% Key industries served 287 300 2004 2005 Sales €m 340 364 2006 2007 EBIT Margin • Energy –Solar 13 2008 * Compound Annual Growth Rate in Sales 2004 – 2008 2004 – 2005: (Graphite) Specialties Business Unit incl. Expanded Graphite Business Line • Chemical • Semiconductor Characteristics • High-temperature processes • Supplying the manufacturing industries • Automotive • Focus on innovative applications • Mechanical engineering 412 • Sustainable sales growth • Solid earnings potential AM PP PP GMS Advanced Materials Graphite Materials & Systems (GMS) Sales – 2008 Expanded Graphite 9% Medium-term targets (2008 – 2011) Graphite Specialties 68% • Sales growth: 6 – 8% p.a. • ROS: >10% Process Technology 23% 14 Highlights 2008 Strategic priorities • Graphite Specialties (GS): Æ Capacity expansion soft felt, carbon fiber reinforced carbon, isostatic graphite • Process Technology (PT): Æ Production growth in Asia (China, India) and Russia • Expanded Graphite (EG): Æ Growth via new applications • Increase production and market share in Asia and Eastern Europe • Continue driving growth by innovation and material substitution • Continued cost savings and margin improvement CFC AM PP PP GMS Graphite Materials & Systems Graphite Specialties – feedstock production and machining Raw Materials (Pitches & Cokes) Pre-pressing Processes High quality raw materials from reliable sources Pressing Breaking, milling, sieving, binding, mixing, homogenizing Isostatic pressing or Graphitizing 2,800°C – 3,000°C Baking 850°C – 1,200°C Formation of graphite structure and densification 15 Extruding Carbonizing, Densification Machining Finishing Machining of the feedstock: Sawing, turning, milling, sanding, boring, lapping, polishing Impregnation, coating, purification CFC AM PP PP Graphite Materials & Systems Graphite Specialties – semiconductor application Extremely pure graphite heater for the semiconductor industry Î Reaches 99.9995% C 16 GMS CFC AM PP PP Graphite Materials & Systems Process Technology – product portfolio Overview Systems • HCl Synthesis • Sulfuric acid • Porous burner • FCHC destruction 17 Equipment • Heat exchanger • Columns • Pumps • Quenches/Vessels Services • Parts • Diagnosis • Repairs GMS CFC AM PP PP Graphite Materials & Systems Innovation driving new product portfolio Examples: • Graphite for Li-Ion batteries • Crucibles and molds for solar production and LEDs • Molds and spacers for ceramic-armoring applications • Heaters for the semicon industry • High purity expanded graphite for thermal (electronics, climate) management and environmental needs • Specialty graphite for nuclear power (PBMR) • Graphites for particle filter for diesel engines and exhaust systems GMS 2008 sales: € 412 m 1/3 new 2/3 established 1/3 of sales based on new products introduced over the last 4 years 18 GMS CFC AM PP PP GMS CFC Graphite Materials & Systems Major customer industries and market shares 2008 % of Total GMS Sales 2008 Global Market Share 2008 Chemicals 26% 30% Energy: Solar 15% 25% Semiconductor 10% 20% Metallurgy 10% 20% Energy: Batteries & Nuclear 9% 40% Tool Manufacturing 6% 15% High-temperature Processes 5% 15% Automotive 3% 15% Glass and Ceramics 2% 5% Source: SGL Group‘s own estimates, w/o EC Business 19 AM PP GMS PP CFC Advanced Materials Carbon Fibers and Composites (CFC) Business Lines 2008 Group Sales CFC Sales & EBIT Margins • Carbon Fibers/ Composite Materials • Composite Components 25% CAGR* -3% CFC 14% • Aero Structures 2% 2% -3% PP 60% 228 163 93 GMS 26% Key industries served 2004 Sales €m 122 131 2005 2006 2007 2008 EBIT Margin * Compound Annual Growth Rate in Sales 2004 – 2008 2004 – 2005 SGL Technologies Business Unit excl. Expanded Graphite Business Line • Energy • Aerospace & Defense • Automotive Characteristics • Mechanical Engineering • New applications in automotive, energy, aeronautics • Sporting Goods • Medical Technology 20 • High earnings improvement potential • Complete value chain in house • Only EU carbon fiber company AM PP PP GMS Advanced Materials Carbon Fibers and Composites (CFC) Sales – 2008 Aero Structure 18% Medium-term targets (2008 – 2011) Carbon Fibers 15% • Sales growth: • ROS (mid term): > 15% p.a. > 10% Composite Components 9% Brake Discs (until FY 2008) 16% 21 Composite Materials 42% Highlights 2008 Strategic priorities • Carbon Fibers & Composite Materials (CF & CM): Æ Own precursor development Æ New carbon fiber lines in UK, USA Æ Continued growth from wind energy • Composite Components (CC): Æ Integration SGL Rotec • Aero Structures (AS): Æ Investment into automation technologies at HITCO for aerospace & defense business • Secure own raw material supply • Expand Carbon Fiber capacities • Develop specific applications in: – Alternative energies – Aviation/defense technology – Automotive • Support organic growth with targeted partnerships and acquisitions CFC AM PP PP GMS CFC Carbon Fibers & Composites Unique offering of the complete value chain Core Business JV-partnering Composite Components Raw material PAN Precursor • EPG (44% JV with Lenzing) • JV planned with Mitsubishi Rayon (MRC) Carbon Fiber Carbon Fiber • Prod. capacity • ~ 4kt in UK • ~ 2kt in USA Composite Materials Aerospace & Defense e.g. HITCO (100%) Prepreg Preform Industrial & Energy e.g. SGL Rotec (51%) Automotive e.g. Benteler SGL (50%) Brembo SGL Carbon Ceramic Brakes (50%) • SGL epo (100%) • SGL Kümpers (51%) JV with BMW (51%) 22 Core Competencies Core Competencies • Materials • Technology • Processes • Development of final use/applications • Design of finished parts/ manufacturing techniques • Marketing • Promoting substitution AM PP GMS PP Carbon Fibers & Composites Slow down in growth for carbon fibers expected for 2-3 years CF market forecast [in t mt] 55.0 48.0 39.4 40.0 42.0 2008 2009 2010 CF demand forecast 23 2011 2012 CFC AM PP PP GMS CFC Carbon Fibers & Composites Carbon fiber capacity Capacity in t Name plate capacities* carbon fiber (excl. oxidized fiber) 12,000 Toray (J) Toho/ Fortafil (J) 10,000 LT = Low tow fiber 1 – 24k HT = High tow fiber 50 – 300k * Actual production tends to be 20 – 30% below name plate capacity Zoltek (US) Mitsubishi Rayon (J) 8,000 SGL (GER) 6,000 11,000 9,300 Formosa Plastic (TW) 9,000 4,000 7,000 Hexcel (US) approx. 6,000*) 2,000 Cytec (US) 4,000 3,300 2,000 0 Precursor Own Own Own Own Partially own Own Own Own Product LT LT HT LT HT LT LT LT Markets Aero/Ind. Aero/Ind. Ind. Ind. Ind. Ind. Aero/Ind. Aero/Ind. Source: SGL Group‘s own estimates (as of January 2009) *) SGL Group capacity from early 2009 on 24 Ensuring the Future SGL Excellence – enables productivity and growth SGL Excellence • Started in 2002 Innovation Excellence Operational Excellence Commercial Excellence • The core element of the Company mission • An ongoing and Company wide program • Our philosophy of doing business SIX SIGMA • Our core methodology • Focuses on: – Customer value People Excellence – Measurable objectives and results • Applies to every function in our Company • Empowers our employees with skills and tools: – > 2,000 SIX SIGMA trained employees – > 550 Green Belts – > 100 Black Belts 25 Ensuring the Future SGL Excellence – enables productivity and growth Since 2002 continuous cost reduction of € 187 million in total 55 97% 21 96% 78% 2002 * Before antitrust 26 94% 74% 2003 Total Cost*/Sales (%) 16 15 89% 72% 2004 COGS/Sales (%) 25 86% 70% 2005 27 81% 63% 2006 Annual Net Savings (€m) 28 81% 65% 2007 66% 2008 Global Trend 1 Continued demand for resources when growth returns • Global growth will continue post financial crisis induced recession – projections for 2010 corrected upwards in IMF World Economic Outlook of October 2009 • Economic growth induces demand for Æ Materials: - Infrastructure - Capital goods - Packaging - Transport/Logistics Æ Energy: - Oil - Gas - Electricity Estimated GDP Growth (in %) 2009 8.5 9.0 2010 6.4 5.4 3.5 1.5 0.3 1.5 0.3 -0.7 -2.7 -4.2 -5.3 -7.5 Germany Eurozone USA Brazil Russia Source: IMF Report (October 09) Means continued growth in steel and aluminum production … 27 India China 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 Aluminum consumption 2007 Crude Steel (kg/capita) 2007 Total Aluminum (kg/capita) 800 50 45 Source: World Steel Association Steel Statistical Yearbook 2008 4 3 2 1 India Philippines 6 5 0 Brazil 8 South Africa Indonesia Philippines India South Africa Brazil Argentina Mexico France China Russia USA Turkey Canada Germany Spain Italy Japan 0 10 Russia 47 45 35 100 10 Mexico 134 128 121 21 25 20 15 10 Turkey 200 29 China 236 300 31 France 329 321 312 33 Canada 400 33 USA 500 375 373 41 Spain 600 41 40 35 30 558 555 Japan 621 Germany 671 653 Italy 700 Source: European Aluminium Association Aluminium Use in Europe Country Profiles 2004-2007 Infrastructure build up in emerging economies has only just begun … 28 Meanwhile … Worldwide record-size stimulus packages to fuel demand • Biggest packages in history for US, Germany and many other countries • China is committing a massive 14% of GDP 1,000 14% 800 12% 8% 400 • Major industries benefiting include: 200 4% 2% 0 0% Greece Malaysia Austria Finland India Sweden Indonesia Netherlands Italy Hungary South Korea Taiwan Singapore 29 Denmark Investment/GDP % UK Investment $bn France Australia Canada Spain Germany China Japan • Early days but signs of results 6% US – Renewable energy 10% 600 • The Far East is committing much more than other regions – Infrastructure 16% Meanwhile … Almost every stimulus package has an infrastructure component US Stimulus – Investments China Stimulus – Investments Energy $43bn Education & Training $53bn Health Care $59bn Other $8bn Infrastructure and Science $111bn Protecting the Vulnerable $81bn State & Local Fiscal Relief $144bn • 14% of stimulus investment to go to infrastructure • + $17.4bn loans to auto companies Source: The American Recovery and Reinvestment Act 30 Tax Relief $288bn “Most” will be spent on building: • Highways • Airports • Other public works Germany Stimulus – Investments Package includes • €17.3bn investment in infrastructure • Cars > 9 year old, receive € 2,500 towards a new car on trade in 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 Æ Accelerated substitution by carbon and graphite Æ Example: increased composites content in new aircrafts to reduce fuel consumption and emissions Boeing 747 – In service 1970 Titanium 6% Composites 1% Steel 12% Miscellaneous 1% Aluminum 80% Estimated Carbon Fiber Tow Usage* 4.000 3.500 Airbus Boeing 3.000 Boeing 787 – Expected in service 2010/2011 2.500 2.000 Titanium 15% 1.500 1.000 Steel 10% 500 0 Miscellaneous 5% 2005 2006 2007 2008 2009 2010 2011 to 2015 * Usage in commercial jets worldwide (tonnes) Source: The Carbon Fiber Industry: Global Strategic Market Evaluation 2006 – 2010 31 Aluminum 20% Composites 50% 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 (CO2 emission) Annual wind turbine installations (MW) 70.000 60.000 Europe Asia 50.000 Americas RoW CAGR 22% 40.000 Example: Wind 30.000 20.000 10.000 Wind energy today provides only ~1.3% of electricity generation worldwide • Economic crisis expected to impact wind industry in 2009, mainly in US, leading to postponements of large projects • No dip expected in 2009 on global basis as decline in US is compensated by significant growth expectations in Europe and Asia • CAGR of annual installations of 22% expected over next years 0 2007 2008 2009E 2011E 2012E 2013E Source: BTM World Market Update (March 2009) Installed cumulative wind turbine capacity (MW) 400.000 350.000 300.000 250.000 200.000 150.000 100.000 50.000 0 CAGR 24% 2007 2008 2009E Source: BTM World Market Update (March 2009) 32 2010E 2010E 2011E 2012E 2013E 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” 33 Global Trend 4 “Where other materials fail” Graphite Examples Special graphite recipes for lithium-ion batteries 34 Graphite components for solar grade silicon Specialty graphites for semiconductors Graphite parts for solar/LED production Global Trend 4 “Where other materials fail” Carbon Fiber Examples Carbon fiber composite materials and components for automotive 35 Carbon fiber composite components for aerospace Carbon fibers for reinforcement of cement and concrete Carbon fiber prepregs for windmill blades 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 Group as the largest global carbon and graphite player to participate in growth opportunities resulting from these trends Global Trends 1 2 3 4 Resources Demand Substitution Process Alternative Energy Unique Properties Performance Products (PP) Performance Products (PP) 36 Advanced Materials (AM) Graphite Materials & Systems (GMS) Carbon Fibers & Composites (CFC) Latest results reflect destocking and lower demand in key industries 9M/2009: Performance Products (PP) in € million 9M/2009 9M/2008 Sales 438.7 681.6 EBITDA 130.7 236.0 Profit from operations (EBIT) 110.9 217.0 25.3% 31.8% Return on sales • Sales decrease 36%, thereof price/volume: -37%, currency: +1% • Steel industry characterized by destocking activities and production cuts, therefore substantially reduced demand for GE primarily in H1/2009 • Cathodes, furnace linings, and carbon electrodes business continued to develop satisfactorily • Higher selling prices in all product lines compared to previous year • EBIT decrease of 49% due to lower sales and production levels as well as expenses relating to the commissioning of the new Malaysian production facility • Cost savings of €8 million 37 Latest results reflect destocking and lower demand in key industries 9M/2009: Graphite Materials & Systems (GMS) in € million 9M/2009 9M/2008 285.5 299.3 EBITDA 37.8 58.2 Profit from operations (EBIT) 25.5 47.6 8.9% 15.9% Sales Return on sales • Sales decrease: 5%, thereof price/volume: -9%, currency: +4% • Besides positive currency translation effects sales supported by Business Line Process Technology and the invoicing of a large project • GMS still benefiting from high order backlog from previous year, which was mainly related to chemical, solar and lithium ion battery business – however order intake weak since beginning of year • EBIT decrease of 46% due to currency losses from hedging transaction in Q1 and lack of fix cost absorption from declining sales, which were partially offset by the invoicing of a large project in Q2 • Cost savings of €4 million 38 Latest results reflect destocking and lower demand in key industries 9M/2009: Carbon Fibers & Composites (CFC) in € million 9M/2009 9M/2008 Sales 156.3 124.1 EBITDA -10.0 13.1 Profit from operations (EBIT) -18.7 8.1 -12.0% 6.5% Return on sales • Sales increase: 26%, thereof price/volume/SGL Rotec: +24%, currency: +2% • Strong sales increase mainly driven by consolidation of SGL Rotec • On May 28, 2009, we completed the transfer of our brake disc activities into 50-50 JV with Brembo. Up to this date, brake disc business was still consolidated in SGL Group and reported separately under Corporate Costs. Former Business Line Brake Discs was retroactively separated from CFC • Earnings of CFC impacted by weak carbon fiber market, further start up costs and ongoing high R&D expenses • Cost savings of €4 million 39 Latest results 9M/2009: Central T&I, Brake Discs, and Corporate Costs in € million 9M/2009 9M/2008 Other sales (incl. Brake Discs) 11.9 32.8 Central T&I Costs -8.7 -11.4 Brake Discs (EBIT) -8.6 -1.3 -18.5 -25.4 Corporate Costs • On May 28, 2009, we completed the transfer of our brake disc activities into 50-50 JV with Brembo. Up to this date, brake disc business was still consolidated in SGL Group and reported separately under Corporate Costs. Since end of May, earnings of brakes business reported in financial result • Central T&I Costs decreased by 24% reflecting clear focus of our R&D activities given difficult economic environment • Corporate Costs decreased by 27% due to stringent cost management relating to purchased services and lower expense level relating to Management Incentive Systems 40 Latest results reflect destocking and lower demand in key industries 9M/2009: Group in € million 9M/2009 9M/2008 Sales 892.4 1,137.8 EBITDA 125.7 272.2 Profit from operations (EBIT) 81.9 234.6 Profit before tax 43.7 209.9 Net profit after minority interests 31.2 150.5 EPS, basic [in €] 0.48 2.34 • Sales decrease 22%, thereof price/volume: -24%, currency: +2% mainly due to continued destocking and production cuts in steel industry particularly in H1/2009 • Disproportionate reduction in EBITDA (-54%) and EBIT (-65%) due to reduced production volumes and associated fix cost charges as well as high start up costs of new production facilities • EBIT margin at 9% • Sustainable cost savings €15 million, once-off savings from temporary measures € 26 million • More than proportionate decrease in profit before tax (-79%) due to higher net financial costs • Despite economic crisis positive net profit at €31 million 41 SGL Group Group outlook for 2009 P & L Statement Capex and Balance Sheet • Sales below record 2008 level • Key KPI: Gearing level to remain around 0.5 based on today‘s portfolio • Corresponding EBIT to decline more than proportionately – H2 EBIT roughly on same level as H1 • Net financial costs higher than in 2008 42 • Capex substantially below €200 million • Gearing ~ 0.5 defines capex level Mid term 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. 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 • ROS: > 20% To deliver profitable growth! 43 Any questions ? 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.
