SGL CARBON SE — AGM Information 2017

Mar 21, 2017

Annual Press Conference 2017 Significant progress in the implementation of strategic realignment

Frankfurt/Main March 21, 2017

Dr. Jürgen Köhler (CEO) | Dr. Michael Majerus (CFO)

• 1. Review of the fiscal year 2016 Dr. Jürgen Köhler
• 1. Financials 2016
• 1. Outlook 2017
• 1. The "new" SGL Group
• 1. Project Highlights

Review of the fiscal year 2016.

Key elements of strategic realignment implemented

• We completed the carve out of Business Unit PP six months ahead of schedule
• We have adapted the business model for graphite electrodes (GE) to commodity markets
• We found an ideal new owner for the GE business in Showa Denko at an attractive EV of €350 million and cash proceeds of at least €200 million
• We have started to significantly reduce net debt with the €173 million net proceeds from the rights issue in December 2016
• We have launched Project CORE (COrporate REstructuring) with which we are adapting the "new" SGL Group to a growth business model
• Business Units will exclusively focus on development, production and marketing of their products
• All other processes and functions will be centralized and streamlined in corporate functions, yielding cost savings of €25 million until end of 2018
• We have achieved the SGL2015 cost savings target of €240 million

Summary of key figures 2016.

First steps toward sustainable improvement in earnings

Sales at €770 million slightly below prior year level

EBIT before non-recurring effects improves to €21 million, ROCEEBITDA rises to 8.4%

• CFM again improved EBIT considerably
• GMS also contributed positively to Group EBIT despite oil industry-related lower earnings

Net result improves to minus €112 million but still impacted by negative result from discontinued operations, high interest expenses and administrative structures that need to be streamlined to the smaller SGL Group following the disposal of the former business unit PP

Improved free cash flow of minus €81 million includes minus €33 million free cash flow from discontinued activities

New Group Market Segmentation. Reflects stronger orientation to customer and growth markets

Market Segment
Sales	Mobility1	Energy2	Digitization3	Industrial Applications	Chemical	Textile Fibers
2016	20 %	22 %	4 %	27 %	15 %	12 %
2015	18 %	20 %	4 %	27 %	17 %	14 %

1comprises automotive, aerospace and transport markets; 2comprises battery, solar, wind and other energy markets; 3comprises LED and semiconductor markets

1. Review of the fiscal year 2016

2. 1. Financials 2016 Dr. Michael Majerus
3. 1. Outlook 2017
4. 1. The "new" SGL Group

5. Project Highlights

Composites – Fibers & Materials.

New market segmentation

Market Segment
Sales	Automotive	Aerospace	Wind Energy	Industrial Applications	Textile Fibers
2016	29 %	7 %	15 %	21 %	28 %
2015	28 %	4 %	15 %	20 %	33 %

Composites – Fibers & Materials.

Further considerable improvement in earnings

in € million	2016	2015
Sales revenue	317.4	327.3
EBITDA before non-recurring items*	41.3	32.0
EBIT before non-recurring items*	20.1	11.3
EBIT-Margin before non-recurring items* (in %)	6.3	3.5
ROCE (in %) EBITDA	10.9	9.2

• Sales revenue decreased by 3% (currency adjusted by 1%) due to
• 17% lower sales revenue in market segment textile fibers (pricing based on acrylonitrile/crude oil price development)
• Partially offset by higher aerospace sales revenues due mainly to high level of invoicing in HITCO's materials business
• Sales revenue with automotive, wind energy and industrial applications remained on prior year level
• Recurring EBIT with significant improvement due to
• Improved earnings in market segment automotive (completion of ramp up and efficiency improvements at SGL ACF, improvement in atequity accounted investments, new products ramp up)
• Higher capacity utilization in market segment industrial applications due to higher carbon fiber demand
• Aerospace market segment benefited from high level of invoicing in HITCO's materials business
• Partially offset by lower earnings contribution in market segment textile fibers due to precursor line conversion and higher energy costs
• Stable earnings in market segment wind energy

* Non-recurring items include reversal of impairment of €12.8 million in 2016 and restructuring charges of €1.1 million in 2016 and €0.5 million in 2015

Graphite Materials & Systems.

New market segmentation

Market Segment
Sales	Battery& other Energy	Solar	LED	Semi conductor	Automotive & Transport	Chemical	Industrial Applications
2016	16 %	11 %	2 %	5 %	7 %	27 %	32 %
2015	14 %	10 %	3 %	5 %	7 %	30 %	31 %

Graphite Materials & Systems.

Development impacted by weakness in oil related industries

in € million	2016	2015
Sales revenue	444.1	453.5
EBITDA before non-recurring charges*	49.8	56.6
EBIT before non-recurring charges*	27.8	34.1
EBIT-Margin before non-recurring charges* (in %)	6.3	7.5
ROCE (in %) EBITDA	12.7	14.5

• Sales revenue down 2% (currency adjusted down 3%)
• Market segment chemicals declined by 13% due weak demand from oil related industries
• Partially compensated by 10% higher sales in battery & others market segment
• Higher sales revenues also in market segments solar and semiconductor
• Sales revenue in market segments LED, automotive & transport and industrial applications remained on prior year level
• Recurring EBIT declined 18% primarily due to
• lower earnings contribution from market segment chemicals due to weak demand from oil related industries
• non-recurrence of positive one-time effects in prior year (land sale and insurance compensations)

Group. Improved operational performance but high burden from interest charges and disc. operations

in € million	2016	2015
Sales revenue	769.8	789.5
EBITDA before non-recurring items	69.9	63.9
EBIT before non-recurring items	20.7	13.7
Non-recurring items (reversal of impairment and restructuring)	3.0	-6.8
EBIT	23.7	6.9
Net financing result	-50.9	-52.3
Results from continuing operations before income taxes	-27.2	-45.4
Income tax expense and non controlling interests	-6.8	-22.1
Net result – continuing operations	-34.0	-67.5
Discontinued operations	-75.7	-225.8
Consolidated net result attributable to the shareholders of the parent company	-111.7	-295.0

Balance sheet. Effect from negative free cash flow more than compensated by rights issue proceeds

in € million	31.12.2016	31.12.2015
Total assets	1,899.2	1,856.1
Equity ratio (in %)	17.5	15.6
Total liquidity	329.5	250.8
Net financial debt	449.4	534.2
Gearing (net debt/equity)	1.35	1.85

• Further improvements in KPIs to come until beginning of 2018 as we close the GE sale, complete the CFL/CE sale and repay the €250 million corporate bond and the €240 million convertible bond
• Liquidity at end 2016 more than sufficient to cover expected operational cash outflow in 2017 with expected proceeds of more than €200 million at closing of the GE sale we intend to exercise our call on the corporate bond. Remaining cash and proceeds from sale of CFL/CE will be more than sufficient to meet the January 2018 maturity of the convertible bond issued in 2012

• Early repayment of the corporate bond will make a further €100 million available under the syndicated loan which could be used for the repayment of the convertible bond (in case the CFL/CE sale is delayed)

• 1. Review of the fiscal year 2016
• 1. Financials 2016
• 1. Outlook 2017 Dr. Michael Majerus
• 1. The "new" SGL Group
• 1. Project Highlights

Outlook 2017 Business Units. Composites – Fibers and Materials

• Slight increase in sales
• Particularly driven by higher carbon fiber demand for industrial applications
• Slight increase in sales also in market segments automotive and textile fibers
• Partially to be offset by lower sales with aerospace market segment (high level of invoicing in US aerospace materials in prior year)

EBIT* close to 2016 level

• Included effect from high invoicing level in US aerospace materials
• Positive impact of higher capacity utilization to be offset by ramp up of Lightweight and Application Center for new developments in automotive and aerospace applications and higher depreciation resulting from conversion of precursor line

Outlook 2017 Business Units. Graphite Materials & Systems

• Slight increase in sales
• Driven by market segments LED, chemicals and industrial applications
• Market segment solar also to increase sales due to improved positioning and product portfolio (and despite subdued market outlook for 2017)
• Very strong volume increase in market segment battery and other energy, partially offset by price adjustments
• Strong EBIT improvement from higher capacity utilization and cost savings
• Getting very close, maybe even achieving our minimum ROCEEBITDA* target of 15%

Group outlook 2017.

Improvement in all major KPIs expected

• Full year Group sales to increase mid single digit in percentage terms
• Group recurring EBITDA* and EBIT* to increase more than proportionately to sales due to expected volume increase and initial CORE savings
• Net result – continued operations expected at a mid double digit million Euro loss
• Prior year result included positive effect from sale of Evanston site
• Higher interest expenses in 2017 relating to planned early redemption of corporate bond (acceleration fee)
• Capex to increase compared to prior year but at the most at D&A level
• Discontinued operations to improve significantly driven by
• Operational improvement in CFL/CE
• Tax impact related to PP carve out and restructuring charges in GE in prior year
• Potential sale and closing of CFL/CE

• Net debt at end 2017 to be substantially reduced due to expected cash proceeds from sale of GE and potentially CFL/CE (depending on timing of transaction)

• 1. Review of the fiscal year 2016
• 1. Financials 2016
• 1. Outlook 2017
• 1. The "new" SGL Group Dr. Jürgen Köhler

• Project Highlights

The transfomed SGL Group.

We are consistently implementing the announced strategy

The disposal of the PP/GE business enables the new SGL Group to concentrate its resources on the growth areas CFM und GMS

Focus on CFM and GMS improves the balance between markets and industries, and thus reduces volatility in our business

New SGL Group with focus on:

Mobility, energy supply and digitization

Growing with global megatrends. Carbon based solutions

Market growth, CAGR 2015 - 2020 SGL Growth Energy 10 %¹ Digitization 7 - 9 %² Mobility 3 - 5 %³ CFM 10 %⁴ Wind Pressure vessels mobile 3C end devices Automotive Aerospace Pressure vessels GMS 6 - 8 %⁴ Stationary energy storage Lithium-ion batteries Lithium-ion batteries Solar, LED Nuclear, Polysilicon Stationary energy storage Heat recovery etc. LED Semiconductor Sapphire glass Automotive

Page 20 | Annual Press Conference | March 21, 2017 Energy efficiency, storage and generation ; CCeV, Technavio, GreenTech Media, Siemens; ³CCeV, Yole Développement, Avicenne Energy, own forecasts

Carbon and Graphite.

Positioned along the entire value chain

Control over the entire value chain enables product customization to customer requirements

Customers receive tailor made solutions from every step of the value chain

Forward integration in finishing technologies (GMS) and CFRP-components (CFM) including application know how are essential for differentiation

• 1. Review of the fiscal year 2016
• 1. Financials 2016
• 1. Outlook 2017
• 1. The "new" SGL Group

• Project Highlights – Dr. Jürgen Köhler

Optimizing the CFM value chain.

Fibers, composite materials and production

• Commissioning and inauguration of the new precursor production line in Portugal
• Precursor being the raw material for carbon fibers
• Completion of the value chain
• Total investment amounting to €30 million
• Concentration of carbon fiber production at two sites
• Evanston site sold
• Enhanced efficiency of the production network through concentration at two sites in Moses Lake (USA) and Muir of Ord (UK)
• Construction and launch of the Lightweight and Application Center (LAC)
• At Meitingen site

Launch of Lightweight and Application Center (LAC). For serial lightweight construction

• Tailor made solutions for serial production of fiber reinforced plastics
• Initial focus on automotive industry, solutions for aerospace, wind energy and other industries to follow
• Cooperation between CAD engineers, production technicians, experts for production methods and automation technologies on 1,000 square meters
• From feasibility study to prototype manufacturing
• Already several development projects

A look into the market segments. Summary of important project highlights

Developed customized solutions and kicked off new projects

Contract extension and development projects

Strengthened position in lithium-ion battery industry

Capacities expanded based on increased LED demand

Received large contracts and expanded portfolio

Developed customized solutions.

• 500,000 leaf springs p.a. from 2020 onwards based on composite materials for the models S60, S90, V60, V90 and XC60
• Project with highest production volume of a composite component in the industry
• CFRP back wall and top B-pillar for the Audi MSS platform (Audi R8, Lamborghini Huracán)
• Close and intensive cooperation with BMW in various additional projects beyond the i3, i8 and 7 series models
• 50% sales increase in high performance wet friction material based on carbon components (e.g. duplex gear clutch)

Initiated development projects globally. For material mix solutions in passenger cars

• Jaguar Land Rover
• Cooperation with British research institutes and OEMs under SGL Group leadership
• Development of new composite materials structures and manufacturing prototypes for structural parts of existing car models
• Daimler
• Carbon fiber supply for CFRP stiffeners (manufactured with pultrusion technology)
• Development projects for various components with new SGL Group materials
• Two Asian OEMs

Ready for lift-off.

Contract extension and various development projects

• Extension of contract with Airbus-subsidiary Elbe Flugzeugwerke (pre-impregnated carbon fiber textiles for Airbus A350 floor panels)
• Planned increase in vertical integration with an aerospace industry supplier for secondary structural parts
• Development project with aircraft supplier for cabin interior parts
• Product developments with the large aircraft manufacturers for the adoption of our industrial fiber (50k) in components

Photography source: istockphoto Foto 1-3 f.l.t.r.

Strengthened position in lithium-ion battery industry. Expansion of business opportunities

• Synthetic anode material qualified with further cell manufacturers
• Cooperation intensified with long-standing partner Hitachi Chemicals
• Development of next generation lithium-ion batteries with higher storage density
• Together with research institute ZSW and supported with research grants
• Bundling of competences for battery development in Germany
• Cooperation with leading German companies

Capacity increase in the USA. To meet increased demand for LEDs

• Construction of a new state-of-the-art production line for the coating of graphite carrier plates (wafer carriers) in the USA
• Total investment of €7.5 million
• Completion 2017
• SGL Group technology provides critical contribution to LED quality
• Supporting customers in furthering technical developments of LED production processes

Photography source : istockphoto

Large orders and portfolio extension. Continued industrialization in China

• Largest order ever in China for PTFE coated pipes for a recycling facility for hydrochloric acid (photovoltaic industry)
• Large order from Sabic Cartagena (Spain) for pipes for treatment of process waste water
• Extension of product portfolio and first successful application of carbon fiber reinforced carbon (CFRC) for distillation apparatus in the Chinese chemical industry
• Construction of an additional hard felt production in China. This high performance graphite based insulation material is used in high temperature furnaces

Strategic realignment of SGL Group. 2017: Focus on growth

• Achieve prerequisites for returning to sustainable profitable growth
• Closing of sale of graphite electrode business to Showa Denko
• Sale of cathode, furnace lining and carbon electrode business
• Early repayment of corporate bond
• Implement project CORE to further enhance profitability and to align and adapt the organization to the growth targets
• Consistently pursue and execute growth projects
• Support growth through targeted investments (e.g. capacity increase anode materials)
• Drive forward cultural change in the new SGL Group

Thank you for your attention!

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 changes in political, economic, legal and business conditions, particularly relating to our main customer industries, such as electric 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.

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