SGL CARBON SE

Investor Presentation • Nov 1, 2018

Investor Relations Presentation

November 2018

Table of Contents.

1.	The Business Model	Page 3
2.	The Business Units: Composites – Fibers & Materials (CFM)	Page 9
3.	Project Highlights CFM	Page 22
4.	The Business Units: Graphite Materials & Systems (GMS)	Page 27
5.	Project Highlights GMS	Page 37
6.	SGL Innovation – Our Research and Development	Page 42
7.	Market and business developments	Page 45
8.	New mid-term guidance	Page 61
9.	Back-up	Page 64
	• Outlook 2018	Page 65
	• Latest Financials 9M/2018	Page 70
	• Transformation of SGL Group	Page 78
	• Acquisition of SGL ACF (Former JV with BMW Group)	Page 81
	• Acquisition of Benteler SGL	Page 87
	• Efficiency and cost cutting programs	Page 94
10.	Appendix	Page 97

The Business Model

New SGL Group: Innovation leader. Specialized on carbon- and graphite-based solutions

New SGL Group. Re-focused on carbon and graphite based tailormade solutions for growth markets

Corporate SGL Innovation (CI) Operations Management System (OMS)

¹according to their respective latest notifications

Commanding entire value chain in carbon and graphite. Advantages in cost, quality and differentiation

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 CFRPcomponents (CFM) including application know how are essential for differentiation

Group Market Segmentation.

Reflects stronger orientation to customer and growth markets

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

ROCE.

Remains key management principle for managing the business

In 2014, we, the new Board of Management, introduced ROCE as new key management principle, replacing ROS

We wanted to be held accountable for our stated targets and goals

As a result we implemented the ROCE target in all senior management layers, aligning their incentive system with ours

We started reporting ROCE on Group and BU levels on a quarterly basis, so that our progress can be tracked

ROCE¹ development

While we are not yet there, we have made substantial progress toward our targeted ROCE¹

The Business Units: Composites – Fibers & Materials (CFM) 2

Reporting Segment. Composites – Fibers & Materials (CFM)

Activities

• Carbon Fibers
• Composite Materials
• Composite Components
• Ceramic Brake Discs (JV with Brembo)

Group sales 2017 CFM sales 2017

Key industries served

• Automotive
• Energy
• Aerospace
• Industrial Applications
• Textile fibers

Characteristics

• New applications in automotive, energy, industrial
• High earnings improvement potential
• Complete value chain in house

Strategic priorities

• Strengthen capabilities to safeguard globally leading position
• Develop products and production technologies for innovative customer solutions
• Exploit synergies across the value chain

Composites – Fibers & Materials. Market segmentation

Market Segment
Sales	Automotive	Aerospace	Wind Energy	Industrial Applications	Textile Fibers
2017	30 %	6 %	12 %	23 %	29 %
2016	29 %	7 %	15 %	21 %	28 %

Composites – Fibers & Materials (CFM). Integrated value chain from precursor to components

• Lavradio (PT)
• Otake (JP): JV with Mitsubishi Chemicals (33%)
• Muir of Ord (UK)

• Moses Lake (WA, USA)

• Willich (DE)

• Wackersdorf (DE)

• Ried (AT)

• Ort (AT)
• Arkadelphia (AR, USA)
• Meitingen (DE)/Stezzano (IT): JV with Brembo (50%)

Our composites solutions serve key markets.

Unique integrated value chain Markets

Fibers	Broad portfolio of high-performance products
	• Acrylic Fibers	• Carbon Fibers
	• Oxidized Fibers	• Yarns
Materials	Production technologies along the fiber	value chain
	• Woven Fabrics	• Preforms
	• Non-crimped Fabrics	• Prepregs
	• Resins, Adhesives	• Organo Sheets
	• Braidings	• Wet Friction Materials
Components	Lightweight and Application Center	(LAC)
	• development of fiber	In-house bridge between SGL products and customer applications in the reinforced composite components
	•	Engineering solutions and manufacturing prototypes (e.g. CFRP Parts)
	•	Highly automated components production facilities in Austria

Our capabilities are tailored to serve market needs.

Product Toolboxes

≤5 min. cycle time

≤3 min. cycle time Pressing

≤1 min. cycle time Injection molding

Engineering

Concept development

Product design

Process simulation

Structural analysis

Virtual prototyping

Prototyping

Product testing

Virtual factory

Component Processes

Placement

Market Needs

• Mass production
• Automated processing
• Hybrid design (e.g. GF/CF)
• Load path adapted design
• Minimum scrap

14 SGL Carbon | Investor Relations Presentation

The foundation of our automotive composites competence. Lightweight expertise for BMW Group

CFRP supply chain

Our composites in the automotive industry. Integral part of the material mix in serial production

Rear bench for performance sports cars

• Structural Audi MSS (Modular Sportscar System) bodywork system
• The rear bench of the body work is made of carbon-fiber reinforced plastic
• Composite components includes all the connecting parts and elements

This platform is used for

Lamborghini Huracan (Coupé & Spyder)

Audi R8 (Coupé & Spyder)

Audi MSS Platform

Our composites in the automotive industry. Leaf springs for suspension systems

Significant weight-savings through glass fiber based lightweight leaf spring

Our composites in the automotive industry. Leaf springs for suspension systems

Significant weight-savings through glass fiber based lightweight leaf spring

Volvo SPA¹ Platform

• Structural component for axle module, from simulationassisted product design up to parts delivery in large series
• Fully automated production lines
• Peak volume over 550,000 pieces/a
• Weight saving combined with dynamic driving advantages

The next level of Carbon Fiber in Automotive. BMW 7 series

Significant weight-savings through lightweight chassis

New hybrid materials manufactured with automated production systems. Example B-Pillar

Carbon fibers and composite materials. Strong demand growth anticipated

Global Carbon Fiber Reinforced Plastics (CFRP) Demand [in thousand mt p.a.]

Source: CCeV (September 2017)

Project highlights CFM

Optimizing the CFM value chain. Fibers, composite materials and production

• Commissioning and inauguration of the new precursor production line in Portugal
• Precursor is 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) in Meitingen (DE)
• OEM-neutral "carbon carrier" developed together with Bertrandt presented in November 2017
• Full ownership of Benteler SGL agreed on November 8, 2017
• Allowing us to fully control and further develop our composite part marking capabilities

Developed customized solutions.

Serial production of structural parts and gear box applications

• 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.

The Business Units: Graphite Materials & Systems (GMS) 4

Reporting Segment. Graphite Materials & Systems (GMS)

• Expanded graphite • Process technology

Activities

• Anode materials
• Isostatic graphite
• Fiber materials
• Extruded graphite
• Die molded

Key industries served

• Lithium-Ion-Battery
• Solar
• Semiconductor
• LED
• Chemical
• Automotive & transport
• Industrial applications¹

Group sales 2017

Characteristics

• Higher value-added products enabling customer innovations
• Specialized, partially tailor-made, products for differentiated customers
• Innovation driven business
• Engineered products & solutions for customers from > 35 industries – some with high growth potential

GMS sales 2017

Strategic priorities

• Focus on forward integration and innovation
• Combine material know-how and engineering competence
• Advanced material, equipment, and process solutions in cooperation with customers
• Global competence and presence
• Improve cost competitiveness
• Target new market segments

¹ e.g. electric discharge machining (EDM), oil and gas, glass, high temperature applications, metallurgy

Graphite Materials & Systems. Market segmentation

Sales	Battery & other Energy	Solar	LED	Semi conductor	Automotive & Transport	Chemical	Industrial Applications
2017	19 %	10 %	4 %	5 %	7 %	24 %	31 %
2016	16 %	11 %	2 %	5 %	7 %	27 %	32 %

Why graphite ? Specialty graphite materials required where other materials fail

Properties can be tailored to specific requirements

Graphite is present in nearly every industrial application

graphite based

Best solutions for our customers. We command the broadest graphite competence in the industry

… in the Solar, Semiconductor and LED Industry

Meander heater for mono-silicon units

SiC¹ coated wafer carrier for LED² production

C/C³ carrier frame for solar wafers

… in the Battery and Energy … in the Chemical Industry Storage Industry

Redox flow battery electrode consisting of battery felt and bipolar

plate

Anode material for lithium-ion batteries

Systems & equipment (e.g. syntheses, heat exchangers)

Flexible graphite foil

Reinforced graphite sealing sheet

¹Silicon Carbide; ²Light-Emitting Diodes; ³Carbon/carbon

/semi-conductor

Integrated value chain and broad materials portfolio. Allow us to serve a wide range of industrial applications

Full integration to ensure consistent quality

• Feedstock
• Machining
• Purification
• Impregnation & coating
• Global production: America, Asia/Pacific and Europe

Most comprehensive portfolio in the industry

• Isostatic
• Extruded
• Vibro molded
• Die molded
• Expanded

• Carbon fiber reinforced carbon

• Soft & rigid felt

• SiC coating
• Syntheses & heat exchangers

Partnering with customers from >35 industries

• Lithium-ion battery
• Chemical
• Solar
• Semi-conductor
• LED
• Automotive

• Transport

• Polysilicon

• Sapphire
• Heat treatment
• Sealing & gaskets
• EDM
• Glass & refractory
• Mechanical engineering

Production of specialty graphite is complex and requires up to six months.

Grinding

Pitch impregnating

Mixing

Shaping Extruding, vibration/die molding, isostatic pressing

Carbonizing

Graphitizing

Finishing Machining, purifying, coating 4-5 months

2-4 weeks

Source: GMS Production

Process Technology. Process solution provider for chemical and related industries

Product portfolio Core industries served

Systems

• Syntheses
• Distillation, purification, concentration, dilution
• Absorption, desorption

Equipment

• Heat exchangers
• Reactors and internals
• Quenchers and vessels

After sales services

• Spare parts

• Training

• Maintenance/Repairs

• Reactors & converters

• Steel pickling
• Pumps and piping

• Accessories

• • Hydrochloric acid (HCl)
• Phosphoric acid (H3PO4)

• Chemicals • Pharma

• Energy

• Metals & Mining

• Sulfuric acid (H2SO4)
• Hydrofluoric acid (HF)
• Oxidizing acids

• Solar

• Environmental

• Isocyanates
• Epichlorohydrine (EPC)
• Vinyl chloride (VCM)
• Polysilicon

Graphite materials enable innovation.

Examples:

• Advanced graphite anode materials for lithium-ion batteries
• Graphite foils and felts for stationary energy storage
• Additives for advanced lead acid batteries
• Advanced silicon carbide coated carriers for LED and semiconductors
• CFRC charging racks carriers for high-temperature applications
• Extra large reactors for polysilicon production
• CFRC column internals for chemical processes
• Special graphite grades for glass bending
• Graphite felts for fuel cell applications

Target approx. 1/3 of sales based on new products introduced over the last 4 years

Graphite Materials & Systems. Leading market shares in major end markets

Global markets shares 2017

Chemicals	30%
Batteries & other energy	20%
LED	20%
Solar	15%
Semiconductor	15%
Automotive & transportation	15%
Industrial applications	10%-50%

Project highlights GMS

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 competencies for battery development in Germany
• Cooperation with leading German companies

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

• Construction of new state-of-the-art production lines for the coating of graphite carrier plates (wafer carriers) in the USA
• Total investment of approx. €25 million
• Completion end 2018
• SGL Group technology provides critical contribution to LED quality
• Supporting customers in furthering technical developments of LED production processes

Photography source : istockphoto

Increased demand for our specialty graphite solutions from the automotive industry.

• Major capacity expansion in Bonn driven by demand from automotive industry
• Investment of €25 million to expand production capacity in Bonn

• Expansion to be completed by 2020

• We were commissioned with a major order from Rheinmetall Automotive Pierburg after years of collaboration

• To supply the centerpiece, rotors, and vanes for generating a vacuum in the EVP 40 for brake booster
• SOP in 2017 with low volumes
• Millions of sets will be delivered 2017-2021
• Annual order volume in the low double-digit million € range

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

SGL Innovation Our research and development 6

SGL Innovation.

Our R&D organization as the foundation for profitable growth

• 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 dedicated to Business Units and Future Growth Areas
• Strategic IP management safeguards our products and processes and is a driver of our long term market success

SGL Innovation. Activity areas in 2017

Strengthen Technology Position in Lightweight Applications for Mobility

• Operate carbon fiber pilot line and improve carbon fiber production processes
• Development of new carbon fiber grades with advanced modulus
• Studies of low cost production processes with reduced energy consumption

New Products for Energy Storage

• Next generation anode materials for Li-ion batteries based on nano silicon/graphite composites to enhance range of electric vehicles by increasing energy density
• New materials for components in fuel cells for cars and stationary applications

Future Growth Areas – New Technologies ensuring Long Term Business Growth

• Material and product development for additive manufacturing "3D-Printing" processes
• Development of prototypes with customers in clean tech and wear & friction segment
• Composite materials for concrete reinforcement and civil engineering
• Development of new textiles for application in filtration and water treatment

Market and business developments

Automotive. Stringent CO² emission restrictions globally

CO² emissions car fleet actual averages and targets [in g CO2 per km, normalized to NEDC¹ ]

• Global approach to reduce CO² emissions
• Progressively more comfort and safety features on board
• Driver for lightweight

Automotive. CO² targets drive lightweight construction

OEM fleet target development (EU) [in g CO² /km]

Automotive. Driving growth in CFM …

• Completion of the FRP¹ value chain by acquiring and integrating former JVs with Benteler and BMW will allow to better address the increasing number of new requests from both OEM and Tier1 in the market
• Growth in components driven by
• New applications (e.g. leaf spring)
• New technologies (e.g. thermoplastics)
• Existing products/markets (e.g. wet friction)
• Clear trend evolving toward multi material mix and FRP¹ usage for local reinforcement
• Globalization and ramp-up in America and Asia
• E-Mobility as a key driver for new lightweight structural FRP¹ concepts also driven by new OEM entrants

Automotive. … as well as in GMS

• E-mobility supports growth with graphite parts: higher demand for brake assistant pumps and water pumps
• Brake assistant pumps: create missing vacuum (electric vehicles)
• Water Pumps: cooling remains key topic in all vehicles (e.g. Tesla S has 4 secondary water pumps)
• Entry into Chinese market via existing and new customers, supply to some key projects opens up additional opportunities
• Due to increased demand for automotive solutions and components based on specialty graphite, we are investing approx. 25 million euros until 2020 to increase capacity at the Bonn site
• We have recently received a major order from "Rheinmetall Automotive Pierburg", where we will supply brake assistant pumps. The annual order volume is in the low double-digit million euros range

Aerospace. Market growth and focus on operating cost efficiency

• Airline industry extremely competitive, constant battle over cost reduction → composites address this key customer requirement as lightweight construction reduces fuel consumption
• Strong commercial aircraft CFRP market growth (CAGR > 8%) driven by aircraft programs (e.g. A350, B787, B777X)
• Besides Boeing and Airbus in the field of commercial aircraft other aerospace markets are accelerating launcher, UAV, etc.

Aerospace. CFM growth based on proven competence in automated serial manufacturing

• Limitations in today's aerospace composites manufacturing prevented further penetration beyond Boeing 787 and Airbus 380 and 350
• Low annual production volume allow labor intensive production processes
• Composites for aerospace are by far the most expensive. Average markup (ratio of end-user/raw material cost) is nearly 6.5, and thus far ahead of the next sector, consumer goods (ratio of 2.9)¹
• Aerospace industry likely to further increase composites penetration rate between 2016-2021¹
• Requirement: higher use of automation to produce composite parts at lower manufacturing costs and increased production volumes
• We are ideally positioned to address exactly these issues based on our carbon fiber and composites competence acquired while working for the automotive industry
• Integrated value chain from precursor to components
• Materials (e.g. fabrics) for secondary structures, and interior applications
• New aerospace projects for materials and aircraft components

Wind energy. Redefine CFM market approach to better exploit opportunities

• Current market conditions challenging
• Stagnating global installed wind turbine growth
• German-centric customer base more than proportionally affected (new tendering procedures)
• OEMs and suppliers are under high cost pressure and qualify further suppliers
• Temporarily lower sales share due to sale of SGL Kümpers
• Changing technologies (prepreg vs. fabrics vs. pultrusion) require adjustment of market approach
• Several OEMs design new blades for large off-and on-shore wind turbines based on new technologies
• Beyond wind energy: additional opportunities identified in oil & gas industry (e.g. pipes, risers, liquid gas tanks, and others)

Battery & other energy. The whole value chain continues to invest into lithium-ion battery technology

Battery & other energy. Accelerated growth drives our graphite anode material business

Market Development LIB [GWh/a prod capacity]

• All prior growth estimates will be exceeded e-mobility as key driver
• Graphite Anode Material (GAM) demand approx. 1kg per 1 kWh
• Our strong market share positions us well to participate in anticipated strong growth
• Lithium-ion continues to remain the dominant battery technology well beyond 2025, due to
• Established technology and capacities
• Cost/kWh will halve until 2025

Solar.

Growth continues, driven by and depending on China

PV module installations [GWp/a]

Solar growth continues

• China, India and USA are main drivers
• Levelized costs of PV energy continues to fall
• Crystalline silicon remains dominant PV technology but shift towards mono due to higher efficiency

Positive impact on GMS

• Technology shift from multi/crystalline to mono/crystalline favoring our graphite product portfolio
• Opportunities for price increases and long-term partnerships with industry players
• Promotion of full graphite portfolio (differentiating factor)

¹ EU PV Industry Assoc., "Global Market Outlook 2017-2021"; ²PV Tech article Aug. 16, 2017 and IHS Markit Aug. 24, 2017; ³ITRPV (International Technology Roadmap for PV, Mar. 15, 2017 ) "Low scenario" figures are in line with IEA expectations (IEA, Energy Technology Perspective, June 2016)

Semiconductors. Stable long-term growth

Semi sees stable and long-term growth

• 5% CAGR expected 2017-2022¹
• Memory (computing, mobile phones) drives 12''
• Automotive (semi-autonomous and autonomous driving) and industrial ("Industry 4.0") drives 8''
• After strong 2017, we expect 8'' and 12'' wafers in short supply in 2018
• Artificial Intelligence a sustainable growth driver
• Long-term growth particularly in China

Positive impact on GMS' graphite products

• Potential for price increases
• Gain qualification at new accounts
• Maintain/intensify cooperation with Chinese players (>40 new semi fabs to be built in the next years)

Major contributor to GMS' growth expectations

• LED growth driven by
• 7.9%: automotive¹ CAGR 2016-2022 (increasing LED use on vehicle exteriors, headlamps, daytime running lights, rear lighting, turning lights, and interior vehicle illumination for both cars and heavy vehicles)
• 8.5%: signage¹ CAGR 2016-2022 (trend towards finer pitch displays, large full color displays, road signs, traffic lights, and building lettering)
• 6.1%: general lighting¹ CAGR 2016-2022
• Expansion of LED fabs leading to a sellout situation in SiC coated graphite
• Settlement of patent litigation will accelerate our growth 2018ff
• This strong growth drives demand for our graphite susceptors and wafer carriers. Consequently we are beginning with the second expansion stage in our St. Marys (Pennsylvania, USA) coating facility
• First expansion stage started in 2017 to be completed mid 2018
• Second expansion stage to be completed in fourth quarter 2018
• Total capex €25 million over 3 years

Chemicals. Chemical industry expected to stabilize

Chemical production forecast [change 2018 vs. 2017 in %]

Chemical industry improving profitability

• Consolidation (e.g. Dow/DuPont)
• US petrochemical industry recovering from low base
• Shale gas recovery expected

We expect our business to benefit from this improvement

• Recent contract win in China for HCl recovery
• Postponements of projects/system maintenance of recent years now have to be executed
• Maintenance capex in EMEA and US to drive sealing business

Source: Industry Top Trends 2017 – Oil & Gas, EIA: www.eia.gov/todayinenergy, PWC 2017 Chemicals Industry Trends, Chemie Technik June 2017; VCI Business Worldwide Sep. 2017

Industrial Applications. Favorable economic backdrop for continued improvement in high-tech applications

• Economic forecasts (IMF, PMI, etc.) predict ongoing, if not improving favorable general industrial environment
• CFM:
• Industrial applications important end market to bridge automotive and aerospace development time
• New applications/industries: Prepregs, CFRP, grids, thermoplastics for machinery, medical, marine, ballistic
• High growth in carbon fiber, esp. for injection molding parts
• New application possibilities for the use of carbon in civil engineering projects

• GMS:

• US market for industrial applications with cautious improvement driven by increased drilling activities
• New applications under development, for example glass bending and optical fiber enabled by graphite solutions

New mid-term guidance

Targets for 2020 remain valid. We introduce ROCEEBIT as key performance indicator

Drivers for ROCE improvement:

• Top line growth (benefiting from megatrends) leading to higher capacity utilization
• Increasing share of innovative products bearing higher margins
• Efficiency improvement programs driving down costs

based on annual depreciation and amortization levels of €65-70 million following the full consolidation of SGL ACF

We introduce a new mid term guidance. Market trends and business positioning drive accelerated growth

We also introduce margin targets for the business units: ≥12% ROSEBIT until 2022

Back-up

Back-up Outlook 2018 9

Reporting segment outlook 2018. CFM

Composites – Fibers & Materials (CFM)

• Substantial increase in sales by approx. 25% expected

• Mainly driven by acquisition of former joint ventures with BMW and Benteler
• Accordingly sales in market segment Automotive expected to more than double, while sales with the Wind Energy industry should decline by more than half due to the sale of SGL Kümpers and lower customer demand
• Sales to market segment Aerospace expected to increase slightly
• Sales to market segments Industrial Applications and Textile Fibers expected on prior year level
• Like-for-like (i.e. excluding currency and M&A effects) mid-to-high single digit growth rate expected
• No material impact expected from initial IFRS 15 adoption

• Recurring EBIT expected to remain at previous year level

• As cautioned in our H1 report due to weaker than previously anticipated operating performance in the market segments Wind Energy, Textile Fibers and Industrial Applications
• Positive impact from full consolidation of former joint venture with BMW and higher volumes
• Partially offset by negative currency effects and higher development expenses
• No material impact from initial IFRS 15 adoption
• Highest quarterly earnings of this fiscal year achieved in the first quarter 2018 due to the high capacity utilization as well as high shipments for particular projects

Reporting segment outlook 2018. GMS and Corporate

Graphite Materials & Systems (GMS)

• Slight increase in sales expected corresponding now to currency adjusted growth of approx. 10%
• Driven by market segments LED, Automotive & Transport as well as Semiconductor
• Industrial Applications and Chemicals expected to show slight increases in sales
• Sales in the market segment Solar limited as we prioritize sales to market segments LED and Semiconductor
• Strong volume increase in market segment Battery & other Energy. In combination with successful pricing initiatives, we expect an increase in sales despite negative currency effects
• Low double digit million Euro positive impact from the initial adoption of IFRS 15
• Recurring EBIT improvement expected to substantially outpace higher expected sales growth
• High single digit to low double digit million Euro positive impact from the initial adoption of IFRS 15
• Group ROCEEBIT target of 9-10% should again be exceeded in this business unit and improvement over prior year expected

Corporate

• Slightly higher expenses due to
• General cost increases (esp. wage increases)
• Higher consulting fees (OMS, new data protection directive)
• Partly offset by one-off income from a land sale in Canada recorded in Q1/2018

Group outlook 2018.

• Full year Group sales expected to increase by approx. 15%, corresponding now to a like-for-like (i.e. excluding currency and M&A effects) high single digit growth rate. In addition, we anticipate a low double digit million € positive impact on Group sales from the initial adoption of IFRS 15
• Group recurring EBIT expected to increase at a slightly faster pace than the now higher expected sales due to
• Volume increases and successful implementation of pricing initiatives
• Additional earnings contribution from the full consolidation of the former joint venture with BMW
• Cost savings
• Partially offset by adverse effects from personnel and raw material cost, and foreign currency developments
• In addition, we anticipate a high single to low double digit million € positive impact from the initial adoption of IFRS 15
• Net result – continued operations expected to improve to a mid double digit € million amount due to
• Improved operating profit (including higher IFRS impacts)
• Lower interest expenses due to early redemption of corporate bond in October 2017 and repayment of convertible bond at maturity in January 2018 – partially offset by higher interest expenses relating to full consolidation of net debt of former JV with BMW
• Impact from positive non-recurring effects in Q1/2018

Group outlook 2018.

• Capex to increase compared to prior year to approx. €80 million i.e. €15 million above level of depreciation
• Level of depreciation increases to €65 million (before PPA) due to full consolidation of former joint ventures
• Total free cash flow expected to reach a "black zero"
• Free cash flow – continued operations expected to improve significantly but remain negative in mid double digit range mainly due to higher capex level and cash outflow for the acquisition of the Wackersdorf site in the former joint venture with BMW
• Free cash flow – discontinued operations expected to reach positive mid double digit range due to payment of final instalments of purchase price for disposal of GE and CFL/CE
• Net debt at end 2018 to substantially increase due to the full consolidation of former joint venture with BMW
• Balance sheet targets expected to continue to be met equity ratio at or above 30%, gearing at or below 0.5 and leverage ratio at or below 2.5

Back-up Latest financials 9M/2018 9

Composites – Fibers & Materials.

in € million	9M/2018	9M/2017
Sales revenue	323.9	253.9
EBITDA1	45.8	32.8
EBIT1	20.9	17.2
EBIT-Margin1 (in %)	6.5	6.8
ROCE (in %) EBIT	4.6	5.2

• Sales revenue increased by 28% (currency adjusted by 30%)
• Primarily due to structural effects in the market segment Automotive resulting from the initial consolidation of the former at-equity accounted JV Benteler SGL as well as the full consolidation of the former partially consolidated JV SGL ACF
• After the sale of our share in SGL Kümpers, the market segment Wind Energy now only includes lower sales of carbon fibers to the wind energy industry
• Higher sales in the market segments Automotive and Aerospace
• Sales in the market segments Textile Fibers and Industrial Applications on prior year level
• Recurring EBIT increased by 22%
• Highest earnings growth in the market segment Automotive, particularly due to the full consolidation of former SGL ACF
• Partially offset by significantly lower earnings contribution from Wind and Industrial Applications
• Earnings in market segments Aerospace and Textile Fibers on prior year level

Graphite Materials & Systems.

in € million	9M/2018	9M/2017
Sales revenue	436.8	381.5
EBITDA1	76.5	54.4
EBIT1	59.5	37.5
EBIT-Margin1 (in %)	13.6	9.8
ROCE (in %) EBIT	16.0	11.8

• Sales revenue (including IFRS 15 effects) up 15 % (currency adjusted by 17%)
• Double digit growth in Battery & other Energy, LED, Semiconductors, Automotive & Transport and Chemicals
• Slightly higher demand in Industrial Applications; limited sales to the Solar market segment to prioritize sales to Semiconductors and LED
• Adjusted for IFRS 15 and FX, sales in GMS grew by approx. 11% (approx. 10% at H1/2018)
• Recurring EBIT in 9M/2018 increased substantially more than proportionately to sales by 59% due to improvements in nearly all market segments and successful implementation of price increase initiatives (IFRS 15 effects of €14.7 million)

Corporate.

in € million	9M/2018	9M/2017
Sales revenue	25.6	6.7
EBITDA1	-16.6	-17.1
EBIT1	-21.2	-21.7

• Sales revenue improved significantly due to the disposal of our former PP activities. Services to PP now recorded as sales to third parties
• Recurring EBIT remained nearly stable due to the earnings contributions of approx. €4 million from a land sale in Canada, which more than compensated for
• Costs for the implementation of the Operations Management System (OMS)
• End of cost pass through to former PP activities, which were sold in 2017
• Central Innovation expenses remained stable at €6.1 million

Group.

in € million	9M/2018	9M/2017
Sales revenue	786.3	642.1
EBITDA before non-recurring items	105.7	70.1
EBIT before non-recurring items	59.2	33.0
ROCE (in %) EBIT	6.1	4.8
Non-recurring items	20.5	-5.0
EBIT	79.7	28.0
Net financing result	-21.3	-38.6
Results from continuing operations before income taxes	58.4	-10.6
Income tax expense and non controlling interests	-6.7	-9.6
Result from discontinued operations, net of income taxes	-4.0	25.5
Consolidated net result attributable to shareholders of parent company	47.7	5.3

• EBIT before non-recurring items increased by 79% to €59.2 million due to acquisition-driven higher results in CFM and improved earnings in the business unit GMS
• Non-recurring items predominantly relate to ppa effects relating to the purchase of remaining shares in former JVs with BMW and Benteler
• Net financing result improved significantly due to the repayment of the corporate bond and the convertible bond 2012/2018

Free cash flow.

in € million (continuing operations)	9M/2018	9M/2017
Cash flow from operating activities	7.6	-27.2
• Capital expenditures in property, plant, equipment and intangible assets	-38.7	-30.3
Cash flow from other investing activities1 •	-8.8	20.1
Cash flow from investing activities	-47.5	-10.2
Free cash flow	-39.9	-37.4
Free cash flow from discontinued operations	58.6	4.1

• Cash flow from operating activities improved significantly mainly due to the improved result from continuing operations and lower build-up of working capital
• Higher cash outflow from investing activities due to
• Cash outflow for the payment for the remaining interest in SGL ACF Germany of €23.1 million
• Higher capex compared to prior year
• Free cash flow from discontinued operations contained cash inflow from the final outstanding payments for the sale of former PP activities

¹ dividends received, payments for capital contributions in investments accounted for At-Equity and other financial assets, payments for acquiring remaining stakes in our joint ventures, proceeds from sale of intangible assets and property, plant and equipment

Balance sheet.

in € million	30.09.2018	31.12.2017
Equity ratio (in %)	33.6	29.6
Total liquidity (incl. discontinued operations in 2017)	247.4	382.9
Net financial debt	220.9	139.0
Gearing (net debt/equity)	0.41	0.30
Leverage ratio (net debt/EBITDA)	1.7	1.5

• Equity ratio improved by 400bps mainly due to positive net result of the period of €47.7 million as well as
• Adoption of IFRS 15 and IFRS 9 on transition date January 1, 2018 amounting to €13.8 million
• Contribution from the IFRS equity component of the new convertible bond of €13.7 million
• Adoption of higher interest rates on pension liabilities led to a positive impact of €12.9 million
• Total liquidity decreased mainly as a result of the repayment of the convertible bond in January 2018 (€239.2 million) and the repayment of a portion of the debt of SGL Composites (€67.5 million) which more than offset the cash inflow from the new convertible bond 2018/2023 (€159.3 million)
• Higher net financial debt reflects initial consolidation of the proportional debt relating to the full consolidation of SGL Composites amounting to €92.2 million

Back-up Transformation of SGL Group 9

Fully on track. In achieving our strategic realignment

Right size

Disposal¹ of businesses that are not performing or that no longer fit to the new SGL Group

Improve performance

Cost savings and organizational streamlining² , as well as strengthening of capital structure³

2

Generate shareholder return with profitable growth CFM: CFM 2020+ GMS: Growth strategy 2020

Capital employed

¹includes Rotorblades, HITCO, and former business unit Performance Products (PP); ²Cost savings programs SGL 2015, CORE as well as SGLX; ³early redemption of the €250m corporate bond on October 30, 2017 and repayment of the €240m convertible bond on January 25, 2018 with proceeds from PP disposal and December 2016 capital increase

The transformation of SGL Group. We are 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

Back-up Acquisition of SGL ACF (former JV with BMW Group) 9

Taking full ownership of SGL ACF. Rationale

Background & objectives

• SGL Group is the "natural owner" of the carbon fiber and composites value chain. Therefore, process and valuation methodology of taking over BMW's share was already pre-defined in the joint venture agreement
• Initiate step-wise full integration of SGL ACF activities into business unit Composites Fibers & Materials (CFM) while maintaining debt financing from BMW Group until end 2020
• Leverage SGL ACF's capacities and capabilities for CFM growth strategy
• Gain operating degrees of freedom, e.g. growing main North American production hub in Moses Lake (Washington, USA)
• Attractive valuation metrics (high single digit EV/EBITDA) compared to other M&A transactions in the composites industry in recent years (double digit EV/EBITDA)

Taking full ownership of SGL ACF. Main cornerstone for CFM's mid- to long-term growth perspective

Key value driver 1: i- and 7-series project with BMW

• Contractually agreed take-or-pay mechanism ensures a good profitability level until end of production of BMW i3
• The i-series project is the foundation of an excellent supplier relationship with BMW

Key value driver 2: SGL ACF's capabilities beyond existing BMW projects

• Full ownership enables CFM to utilize the sites in Moses Lake (USA) and Wackersdorf (D) as additional hubs not just for the automotive industry but also for energy, aerospace and civil engineering
• Developed knowledge and available capacities can also be leveraged for other automotive OEMs
• Development, production and marketing of new generation carbon fiber technology

Taking full ownership of SGL ACF. Main cornerstone for CFM's mid- to long-term growth perspective (cont.)

Key value driver 3: Synergies

• The site in Moses Lake (USA) will be CFM's main hub for all North American activities
• Potential for reduced capex
• SGL ACF's existing site overhead functions can be leveraged for CFM (avoided headcount increase)

Acquisition of SGL ACF. Two-step transaction structure

Innovative transaction structure limits near term cash outflow

• Agreement includes full acquisition of both Wackersdorf and Moses Lake sites
• Closing of Wackersdorf acquisition will be pursued immediately and is expected in Q1/2018 leading to cash outflow of purchase price relating to Wackersdorf
• Closing of Moses Lake site acquisition (incl. payment of related purchase price) can be pursued at any time until the end of 2020 – BMW Group will continue to provide debt financing until then
• However, agreement does lead to full consolidation of the total SGL ACF debt (excl. purchase price for Moses Lake) as of January 1, 2018 (see next page)

Acquisition of SGL ACF. Financial Impact on 2018

Financial impact on KPIs in 2018 (based on closing in Q1/2018)

• Additional turnover: mid double digit million € (change from proportionate to full consolidation)
• Additional EBITDA: low double digit million € (change from proportionate to full consolidation)
• Net income: small positive impact as higher depreciation related to purchase price allocation and higher interest expenses (due to full consolidation of SGL ACF debt) to partially offset higher EBITDA contribution
• Purchase price:
• approx. €24 million for Wackersdorf (payable upon closing Q1/2018)
• approx. USD 62 million for Moses Lake (payable upon closing end of 2020 at the latest)
• Net debt effect: approximately €100-150 million increase (full consolidation of SGL ACF debt and purchase price Wackersdorf)

Back-up Acquisition of Benteler SGL 9

Acquisition of Benteler SGL. Provides the right component platform for the business unit CFM

Leading large-scale serial manufacturer for automotive composite parts

Business process competencies

• Strong automotive mind-set
• Proximity to automotive customers
• Process capabilities and systems to handle quotations, automotive logistics, and development projects
• Supporting quality management and tools incl. ISO/TS 16949
• Experienced team (commercial, engineering, and technical)

Technology competencies

• Development and prototyping capabilities
• Pilot line equipment (close to serial production equipment)
• Track record in the industrialization of large scale production processes incl. automation
• Existing technologies (wet press, RTM) can serve as basis for future modification/expansion

Acquisition of Benteler SGL. Rationale

Background & objectives

• Acquisition of 50% share from Benteler Automobil Technik (BAT) in JV B-SGL to achieve 100% of control
• Complete integration of Benteler SGL into the business unit CFM will significantly strengthen the automotive activities of the business unit and provide synergies
• Privileged partnership with Benteler Automotive Technologies (BAT) in the area of composite leaf springs for chassis systems
• Continuation of the growth path in structural composite components
• Leverage synergies throughout the SGL value chain (i.e. captive use of carbon fibers)

Acquisition of Benteler SGL. An attractive investment case for SGL Group

• Long-term market growth is expected to continue (CAGR 2017-2026 >10% p.a.) driven by major automotive technology trends incl. battery electric mobility, lightweight, multi material design concepts and local composite reinforcements
• Key value driver 1: Sustainable mid-term growth. Benteler SGL's leading technology positions and project portfolio allow growth with or above market rate. Structural parts and leaf springs as two complementary business segments. Established partnerships with OEMs incl. privileged partnership with BAT (leaf springs/suspension systems). Upside from offering technology to other industries
• Key value driver 2: Long-term growth perspective. Leverage technology platform and manufacturing experience to establish CFM as leading 1st tier supplier. Several project/program discussions are related to SOPs beyond five years planning horizon

Acquisition of Benteler SGL. An attractive investment case for SGL Group (cont.)

• Key value driver 3: Enabling of CFM projects. Customers/partners expect SGL Group to demonstrate and guide how to design and develop solutions and how to industrialize manufacturing. Already today, Benteler SGL serves as an important partner in particular for OEMs who are less experienced with composites, e.g. Asian car producers
• Key value driver 4: Synergies from the integration into the business unit CFM. Shared resources in business development, sales, engineering, industrialization, quality management, and usage of prematerials from the SGL Group value chain incl. gross margin and working capital benefits. Benteler SGL has appropriate business process and technology competencies and the team can make a strong nucleus for automotive business within CFM

Acquisition of Benteler SGL. Current JV project pipeline

Benteler SGL project pipeline analysis Annual sales in m€

Current JV project pipeline expected to generate additional low to mid double digit million euro sales by 2020/21

¹In total 17 different projects being pursued; ²Based on experience and status of project discussions

Acquisition of Benteler SGL. Financial impact

Financial impact on KPIs (based on expected closing mid-December)

•	Sales FY 2018	Additional sales (low to mid-double digit million euro amount)
•	Net debt at end 2017	mid double-digit million euro increase
•	EBITDA FY 2017	Negligible
•	Sales FY 2017	Negligible

• EBITDA FY 2018 Small positive impact

92 SGL Carbon | Investor Relations Presentation

Back-up Efficiency and cost cutting programs 9

Operations Management System. Aims for global standardization and higher performance

Situation

Analysis shows improvement potential in

• performance orientation and performance management
• shopfloor and people management
• global standards in methods
• transparency and comparability in KPIs
• continuous improvement
• performance culture and discipline

Project Content

Detailed definition of a standardized OMS include

• Strategic Alignment and Objectives
• Organizational Set-Up
• People and Performance Culture
• Performance Management
• Shopfloor Management
• Methods and Tools

to evaluate each plant's OMS maturity levels

Objective

Globally standardized OMS provides

• Unified KPIs to compare performance at various technologies/production sites
• Harmonized shopfloor and performance management
• Foundation for continuous improvement
• Standardized processes, methods and tools to enable continuous improvement
• High plant and operations performance

Project CORE. Transforms the "new" SGL Group" to a growth business model

Business Units will be refocused to concentrate purely on activities that generate growth: Development, Production, Marketing & Sales

All administrative tasks will be streamlined and concentrated in the corporate functions

Savings potential of €25 million until the end of 2018 (base year: 2015) identified

More than 75% of expected savings reached until end of 2017

Business Process Excellence (BPX).

Group wide program introduced in 2015 and reinforced in 2017

• 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

Appendix

Global presence.

SGL Group Worldwide Sites

Regional Sales Distribution.

Sales by destination

	Europe outside
Sales	Germany	Germany	North America	Asia	Rest of World
2017	26 %	22 %	19 %	28 %	6 %
2016	27 %	22 %	18 %	27 %	5 %

Sales by origin

		Europe outside
Sales	Germany	Germany	North America	Asia
2017	41 %	32 %	21 %	6 %
2016	41 %	33 %	21 %	5 %

Shares in issue and shareholder structure.

Basic shares

Security Identification Number	723530
ISIN Number	DE0007235301
Cusip Number	784 188 203
Number of Shares (as at October 31, 2018)	122,341,478
Free float	~ 46%

Reported shareholdings according to §§ 21 f. WpHG and other notifications

SKion GmbH	28.5%
BMW AG	18.4%
Volkswagen AG	7.4%

Debt market instruments.

Convertible notes 2015/2020

Coupon	3.5%
Principal Amount	€ 167 million
Adjusted Conversion Price	€ 17.0732
Conversion Right (as at October 31, 2018)	9.78 million shares
Issue Date	14 September 2015
Date of Maturity	30 September 2020

Convertible notes 2018/2023

Coupon	3.0%
Principal Amount	€ 159.3 million
Initial Conversion Price	€ 13.0220
Conversion Right	12.234 million shares
Issue Date	20 September 2018
Date of Maturity	20 September 2023

Financial calendar/contact details.

Financial calendar 2019		Contact
March 27, 2019	Annual Report 2018	SGL Carbon SE Soehnleinstrasse 8 65201 Wiesbaden Germany
May 7, 2019	Report on the first quarter 2019
May 10, 2019	Annual General Meeting
August 6, 2019	Report on the first half year 2019	Phone	+49 (0) 611 - 6029 - 103
November 5, 2019	Report on the first nine months 2019	Fax	+49 (0) 611 - 6029 - 101
			investor-relations@sglcarbon.com

www.sglcarbon.com

Important note.

Important note:

This presentation contains statements relating to certain projections and business trends that are forward-looking, including statements with respect to SGL Group's outlook and business development, including developments in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, expected customer demand, expected industry trends and expected trends in the business environment, statements related to SGL Group's cost savings programs. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue" and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about SGL Group's businesses and future financial results, and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance and involve risks and uncertainties. These risks and uncertainties include, without limitation, changes in political, economic, legal and business conditions, particularly relating to SGL Group's main customer industries, competitive products and pricing, the ability to achieve sustained growth and profitability in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, the impact of any manufacturing efficiencies and capacity constraints, widespread adoption of carbon fiber products and components in key end-markets of the SGL Group, including the automotive and aviation industries, the inability to execute additional cost savings or restructuring measures, availability of raw materials and critical manufacturing equipment, trade environment, changes in interest rates, exchange rates, tax rates, and regulation, available cash and liquidity, SGL Group's ability to refinance its indebtedness, development of the SGL Group's pension obligations, share price fluctuation may have on SGL Group's financial condition and results of operations and other risks identified in SGL Group's financial reports. These forward-looking statements are made only as of the date of this document. SGL Group does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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