SGL CARBON SE

Investor Presentation • Dec 1, 2019

Investor Relations Presentation

December 2019

Table of Contents.

1.	The Business Model	Page 3
2.	The Business Units: Composites – Fibers & Materials (CFM) • Automotive • Aerospace • Energy • Industrial Applications	Page 13 Page 20 Page 27 Page 32 Page 35
3.	The Business Units: Graphite Materials & Systems (GMS) • Battery & other Energy • Semiconductors • LED • Solar • Automotive & Transport • Chemicals • Industrial Applications • The importance of the value chain	Page 39 Page 42 Page 48 Page 53 Page 57 Page 61 Page 64 Page 68 Page 72
4.	Innovation	Page 81
5.	Summary	Page 86
6.	Back -up • Outlook 2019 • Latest Financials 9M/2019	Page 89 Page 90 Page 97
7.	Appendix	Page 104

The Business Model

Successful transformation of SGL Carbon.

Carbon and graphite for Megatrends

New SGL Carbon.

Focus on two innovative businesses

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

New SGL Carbon.

Specialized on carbon- and graphite-based solutions

Global presence. SGL Carbon worldwide sites

Group market segmentation.

Stronger orientation to customer and growth markets

¹ Figures in 2017 do not reflect full consolidation of SGL ACF and Benteler SGL as well as disposal of SGL Kümpers

²comprises automotive, aerospace and transport markets; ³ comprises battery, solar, wind and other energy markets; ⁴ comprises LED and semiconductor markets

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

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

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

¹ROCE defined as EBIT/Capital employed; historical data adjusted to reflect "new" Group structure

Levers to further profitability improvement.

Sales:

Focus on higher margin innovative Megatrend markets (digitization, energy, mobility)

Increase in share of higher margin downstream businesses

Increase utilization of existing capacities (CFM) and capacity extensions (GMS)

Commercial Excellence: margin and KPI steered sales organization with focus on price increases,

improved product mix, high margin and high growth areas

Costs:

Automation

Digitization

Global standardized and efficient processes: e.g. Operations Management System

Fully utilize Shared Service Center and transfer further transactional tasks

Portfolio:

Lightweight and Application

Center will support market penetration in automotive industry by closing the gap between materials and applications

Battery laboratory: continuous build-up of own competencies to develop next generation material

Strategic and KPI-driven CAPEX planning and improved execution

SGL Carbon – our sales growth paths.

Different mid-term growth patterns expected in GMS and CFM

• Well developed material
• Well established markets and businesses
• "Linear" growth expected
• Young material
• Breakthrough in composites today
• We have to develop our markets
• Project-driven growth expected, back-end loaded

Business Unit Composites- Fibers & Materials (CFM)

1

Reporting Segment. Composites – Fibers & Materials (CFM)

Activities

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

Group sales 2018 CFM sales 2018

Key industries served

• Automotive
• Aerospace
• Energy
• 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

Carbon fiber composites industry still in its infancy.

Aluminum industry Carbon fiber industry

1936	Aerospace	Douglas DC-3	Late 1960s	PAN-based carbon fibers	First high-performance carbon fibers
1959	Industrial Applications	Introduction of aluminum cans	1980s	Aerospace	US military aircraft
1961	Automotive	Land Rover V8 engine blocks	2009/13	Aerospace	Boeing 787, Airbus A350
1994	Automotive	Audi Space Frame	2013/15	Automotive	BMW i3 and 7 series
2015	Automotive	Ford F-150

• It took the aluminum industry 40 to 50 years from selected use in aerospace to serial use in automotive
• Carbon fiber industry trails 30 years behind aluminum
• Driven by environmental legislation, serial use of carbon fibers and composites in general just begins

CFM growth strategy is based on commanding the entire value chain

Demonstration of technology, development and series production competence along entire value chain is key

* In particular, the automotive industry, but also the aerospace sector

Our unique value chain and engineered solutions set us apart from competitors.

Our differentiators

• Engineered solutions
• Leading composites serial production
• Unique value chain from carbon fibers to components
• Industrial carbon fiber competence

Competitors

• Carbon fiber producers focused on providing materials, not components
• Focused on expensive carbon fiber not suitable for automated production processes
• Component producers not backward integrated
• Geared to expensive, time consuming and not scalable hand lay-up

Carbon fibers and composite materials.

Strong demand growth anticipated

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

Source: CCeV (November 2018)

CFM expected to grow …

Market Segment

	Automotive	Aerospace	Wind Energy	Industrial Applications	Acrylic Fibers
Sales 2017	30%1	6%	12%2	23%	29%
Sales 2018	53%	5%	2%	17%	23%

¹Automotive sales in 2017 before effect from full consolidation of joint ventures with Benteler and BMW

²Wind energy sales in 2017 including full consolidation of SGL Kümpers, sold end of 2017

Automotive

SGL Carbon acts as full service and solution supplier to the automotive industry by offering engineering, prototyping and large-scale serial production for materials and components.

Together with our global customers we develop new and innovative composite automotive applications, hence transforming the existing material world into a more dynamic one and introducing flexible ways of using high-tech composite materials for diverse customer needs.

Materials and components are suitable for various automotive parts.

Source: SGL Carbon, based on Volvo XC 90 chassis model

SGL Carbon is already well-positioned in the automotive industry.

Existing projects in different automotive vehicle segments

• Rear bench for performance sports cars
• Structural components for electric vehicles (EV)
• Leaf springs for light commercial vehicles and passenger car suspension systems
• Hybrid designs for large series passenger vehicles
• Friction materials for modern gear boxes

CO² targets drive lightweight construction in the automotive industry.

0 20 40 60 80 100 120 2016 2021 2030 0 20 40 60 80 100 120 Steel . .. ... Actual Expected targets -75% -60% -40% -37.5% Aluminum CFRP quasiisotropic CFRP unidirectional -20% New target EU 2018

OEM fleet target development (EU)¹ (in g CO² /km)

Relative component weight² (in %)

¹status as of 17/12/2018 ²with same functionality Source: ICCT, SGL estimates

Automotive: By 2030 most cars expected to have fiber-reinforced polymer (FRP) parts.

Automotive growth is expected to be driven by …

Local reinforcements

• A- and B-pillar reinforcements
• Roof rail

Leaf springs for passenger cars

• Pick-up trucks, SUVs, Vans
• New BEV vehicle concepts

Thermoplastic components

• Structural parts
• Easy to integrate into OEM assembly plants

Battery cases for BEVs

• Hybrid material solutions

Automotive: Current CFM project pipeline.

Since the beginning of 2018 nominated for 13 new serial products

*Start of production; **Status: March 27, 2019

• Leaf springs
• Trunk lids
• Stiffening elements
• Battery housings
• Preforms

Aerospace

Materials and components must be reliable and safe under extreme conditions. Fuel consumption must be reduced through lightweight design. These demands can be met with our carbon fiber reinforced composites. We offer the right solutions for primary and secondary structures, subsystems or internal fittings.

The high production volume of narrow body commercial aircrafts requires serial production competency.

Airbus monthly production volume forecast

Boeing monthly production volume forecast

	2016	2020		2016	2020
A350 (wide body)	4	10	B787 (wide body)	11	12
A320 (narrow body)	46	60+	B737 (narrow body)	42	58

Remark: "Narrow body" typically describes single aisle aircrafts, "wide body" aircrafts with double aisles. Source: Airbus, Boeing

Aerospace: Composites market will continue to grow. Focus on operating cost efficiency

Production

time per wing

[%]

• 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%)¹ driven by aircraft programs (e.g. A350, B787, B777X)
• Additionally, other commercial aircraft aerospace markets are accelerating – launcher, UAV, etc.
• Clear incentive to use composites, as customers are willing to pay for reduced weight

Composite materials and components for commercial aircraft parts.

Aerospace growth expected to be driven by …

Non-crimp fabrics for primary structures

• Automated textile preforming processes based on lay-up technologies
• Liquid resin infusion and out-of-autoclave curing

High-performance insulation

• Spare parts business for aero-engines, e.g. thrust reverser heat shield
• Fuselage insulation components

TowPreg materials in combination with fiber placement processes

• Fast curing pre-impregnated carbon fiber tow materials
• Automated material deposition by fiber placement processes

Next generation aircraft brakes

• 3D carbon fiber based preforms
• Dedicated carbon fiber for dry friction applications

Energy

32 SGL Carbon | Investor Relations Presentation

Energy companies must ensure a reliable, flexible supply of energy to consumers. At the same time, cost pressures are increasing, and so are greater demands on efficiency. Genuinely high-performance materials are needed – in different sectors of the energy industry.

Wind energy is the key driver for the energy segment.

Key benefits of composites in the wind energy industry:

• Corrosion resistance
• Strength-to-weight ratio

Efficiency requirement for rotor blade design leads to potential for composites:

• The growing demand of efficient wind energy plants has led to new developments in wind turbine designs
• Plants with a large number of wind turbines with short rotor blades are being upgraded with a smaller number of wind turbines with longer rotor blades
• The requirement of longer rotor blades has resulted in a huge potential for composite use in rotor blade construction

¹Source: Globaldata

Energy growth expected to be driven by …

Supply of carbon fiber to growing pultrusion market

• Technology change from prepreg/textile to pultruded profiles
• Pultrusion provides better mechanical properties

Increasing carbon fiber need for on- and offshore wind turbines

• Increased blade length possible
• Reduced levelized cost of energy by using longer blades

Political driven need to reduce CO² emission

• Countermeasure against global warning

Industrial Applications

SGL Group is the only company to master all types of production processes, manufacturing everything from carbon fibers to composites. Our unique expertise allows us to tap the full potential of new materials. We offer solutions that fully meet our customers' expectations in many different industrial sectors.

Industrial Applications growth expected to be driven by …

Industrial grade carbon fiber for civil engineering

• Carbon fiber materials to be used e.g. for infrastructure repairs
• Usage for concrete reinforcement in renovation and new buildings

Fiber intermediates for compounding applications

• Chopped carbon fibers within applications for consumer electronics
• Milled carbon fibers as anti-static coatings

Tailor-made pre-impregnated materials for component manufacturing

• Material basis for professional sports gear

Small series components for engineering solutions

• Lightweight applications within machining/tooling parts
• Customized parts for highly stressed applications

Levers to further profitability improvement. CFM by value chain

• Develop advanced carbon fibers; e.g. aerospace, energy
• Sales growth will lead to increased capacity utilization of carbon fiber lines
• Conversion of low profitability textile fiber lines to precursor lines and increase efficiency of precursor production
• Leverage own precursor production and improve properties
• Develop higher margin acrylic fiber products
• Develop new materials and enhance production know-how, leveraging expertise of Lightweight and Application Center
• Broaden competencies in materials for energy and civil engineering market
• Leverage series manufacturing capabilities (former Benteler SGL)
• Expand manufacturing footprint to USA and China
• Develop further products/technical capabilities

Levers to further profitability improvement. CFM by market segments

Overall:

Leverage Lightweight and Application Center: Gain know-how, provide tailor made products and win customer projects

Automotive:

• Full integration of SGL ACF and Benteler SGL post acquiring of remaining JV interests
• Increase presence in regions outside Europe
• Important projects won: significant German OEM project (SOP 2021)
• Numerous projects with OEMs and tier 1 (for leafspring, battery cases, components)

Aerospace:

• Automotive • Expand product portfolio based on own precursor and sell products across entire value chain
• Extension of contract with Elbe Flugzeugwerke (Airbus) for A350 floor panels
• Product development with large aircraft manufacturers for adoption of SGL (50k) fiber in structural components (SOP beyond 2022)
• Planned increase in vertical integration with aerospace supplier for secondary structural parts (SOP beyond 2022)

Energy:

• Temporary sales decline by divestment of Kümpers joint venture
• Significant order with additional wind energy customer won for deliveries from 2019 onwards

Industrial Applications:

• Increase market penetration through leveraging sales agent network
• Increase presence in regions outside Europe
• Develop materials for civil engineering market

Textile Fibers:

• Improve profitability by operational improvements & development of higher margin products (pigmented fibers and flame resistant fibers)

Business Unit Graphite Materials & Systems (GMS)

1

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 2018

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

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

GMS – the hidden champion.

Active in very attractive market segments

Sales	Battery & other Energy	Solar	LED	Semi conductor	Automotive & Transport	Chemical	Industrial Applications
2018	19%	8%	6%	6%	8%	23%	31%
2017	19%	10%	4%	5%	7%	24%	31%

Market segment Battery & other Energy

Our products for energy storage.

Fields of application and product examples

Lithium-ion batteries Flow and advanced batteries

Specialty graphite for lithium-ion battery anodes Porous electrodes made from SIGRACELL battery felt

SIGRACELL bipolar plates made of expanded graphite compounds

SIGRACELL graphite foils

Graphite is essential for lithium-ion batteries (LiB).

Graphite based anodes expected to remain dominant at least until 2030.

Source: Roadmap Nationale Plattform Elektromobilität and GMS assumptions

¹SiO^x or carbon-silicon blended with major share of graphite; ²carbon-silicon: graphite blend ~ 1:1 ³Si-dominant carbon silicon anode with graphite as additive

SGL opportunity supported by the regional shift of EV and cell production.

EV LiB demand by region (in GWh)

¹ Market Details

• LiB-cell mass production will be established in Europe and America
  • Center of cell production will continue to be in Asia
  • Announced cell production capacity for Europe: ~100 GWh
• Opportunity for SGL to participate in European supply chain for European cell manufacturing sites
• Comparable situation and opportunity for SGL in North America

1 IHS Markit (BEV,PHEV, Full-Hybrid, only LIB) + own research ² IHS Markit Data max forecast until 2023: CAGR 2023–2025: 25% (own estimate)

SGL supplies artificial graphite as key component into LiB supply chain.

Value chain

Raw materials	Artificial graphite	Anode material	LiB cells & packs	End use (OEM)
• Coke • Pitch • Natural graphite • Silicon carbide	Value chain to produce "bricks": • Green (various recipes) • Baking • Graphitization	• Crushing and milling • Post-treatment (coating and/or annealing) SGL/HCC cooperation	• Cell production (cathode, electrolyte, separator and anode) • Assembly of battery pack (located in Tesla's giga factory)	• Automotive OEMs • Electronic devices • Power tools •

Market segment Semiconductors

Our solutions and products for the semiconductor industry.

Fields of application and product examples

SIGRAFINE electrodes for Siemens reactors

SIGRAFINE meander heater for CZ¹ units

SIGRAFINE SiC coated susceptors for silicon epitaxy reactors

SIGRAFINE SiC coated wafer carrier for compound semi³ wafer production

¹Czochralski process; ²MOCVD: Metal Organic Chemical Vapor Deposition reactor in which; ³compound semiconductors are built by a thermo-chemical reaction of two or more semiconductor elements in gas-form

Semiconductor industry in super cycle supports base growth for years to come.

Semiconductor – Silicon wafer shipments (in 1000 x MSI¹ /a)

50 SGL Carbon | Investor Relations Presentation

Market details

• Silicon wafer shipments are proportional to graphite demand
• Semi is in a super-cycle with main drivers being AI² , IoT³ , 5G, automotive and China 2025
• Memory for mobile and computing drive 300mm silicon wafer demand
• Power electronics and MEMS⁴ for automotive and mobile drive demand for ≤ 200mm Si wafers
• Wafer supply expected to remain short until 2020
  • − Wafer prices continue to rise
  • − Key players cautiously expand wafer capacity
• Increasing performance requirements

Our expected double digit growth is fueled by high power applications, based on SiC¹ and GaN²semiconductors.

SiC and GaN power device market (in \$m)

SiC GaN

¹Silicon Carbide; ²Gallium Nitride Source: Yole Development. IHS Market CAGR

Market Details

• Wide Band Gap semiconductors offer new options where silicon reaches its limits
  • Especially in power electronics, SiC and to some extent GaN are expected to establish themselves
    • − PV inverters and power supply (as existing markets)
    • − Electric vehicles, supposed to reach 40–50% of the SiC device market
    • − Rail and industrial motor drives
  • GMS is well positioned to meet high customer demands

Graphite solutions are mainly required along the entire silicon-based semiconductor value chain.

1Carbon fiber reinforced carbon

Market segment LED

Our solutions for the LED industry.

Fields of application and product examples

SIGRAFINE meander heater for crystal growth furnaces

SIGRATHERM rigid felt insulation cylinder

SIGRAFINE SiC coated wafer carrier for LED wafer production in MOCVD reactors

LED market expected to more than double by 2025. Driven by general lighting, specialty LEDs and micro LEDs in the long-term

Demand for packed LEDs (in bn units/a)

Market details

• General lighting remains the LED volume driver
• LED markets are diversifying
  • − LED technologies open up numerous applications
  • − Specialty LEDs (e.g. IR, UV, horticultural) are booming
• China plays a key role in both supply and demand, driven by government subsidies

Sources: Strategies Unlimited; Yole Development; Merrill Lynch; GMS estimates

LED production requires graphite solutions mainly upstream, in sapphire crystal growth and especially in the MOCVD¹ process.

Graphite products in the LED value chain

	Crystal2 growth	2 Substrate wafers	LED-wafers (MOCVD)	LED chips/dies	LED module
	Sapphire boules3	Sapphire ingots & wafers3	AIX G5+ C Planetary Reactor ®4		LED lamp5
Graphite products	• Heating elements • Heat shields • Insulation		• Wafer carriers • Planetary susceptors • Satellite discs • Ceilings
Materials	Iso Extruded		Iso
	Felts	GMS business	SiC-coating

56 SGL Carbon | Investor Relations Presentation ¹MOCVD: Metal Organic Chemical Vapor Deposition; key equipment for the production of LED wafers; ²> 90% of LEDs are based on sapphire substrates; ³ images with courtesy of Monocrystal; ⁴ image with courtesy of AIXTRON SE; ⁴ ID 52110090 © Yana Bardichevska | Dreamstime.com

Market segment Solar

Our products and solutions for the photovoltaic industry.

Fields of application and product examples

SIGRAFINE electrodes for Siemens reactors

Support crucible made from SIGRABOND CFRC

SIGRATHERM MFA graphite rigid felt sheet

SIGRABOND CFRC carrier frame for solar wafers

2018 likely to see dip in PV demand but long-term growth path intact. Mono PV technology is set to dominate the growth

CAGR

Global PV installations (in GW/a)

Market details:

• China subsidy cut in May 2018 leading to a temporary market decline
  • Replacement demand for graphite unaffected
  • History proved PV demand to be highly price elastic, thus growth expected to continue
• Switch from multi to mono technology impacts the full PV value chain and is beneficial for graphite consumption

PV thin-film PV multi PV mono

Source: GMS estimate based on Solar Power Europe (Global Market Outlook 2018-2022), ITRPV_9th Edition, IHS Markit, Bernreuter Research, Bloomberg

Graphite is required along the entire photovoltaic value chain.

Graphite products in the photovoltaic value chain

	Polysilicon	Silicon crystal growing	Cell	PV module
		Mono pulling
Graphite Products	• Heating elements • Heat shields • Poly chucks	• Crucibles, cones, plates • Heating elements • Insulation	• Wafer boats • Wafer carriers
		CFRC1
		Felts
Materials		Extruded/Vibro
		Iso
		SiC/PyC2 coating		GMS business

¹Carbon fiber reinforced carbon; ²Pyrolytic carbon-coating

Market segment Automotive & Transport

Our solutions for the automotive industry.

Fields of application and product examples

SIGRAFINE PTS rotor with vanes for brake assist pumps SIGRAFINE PTS bearings made from carbon graphite

SIGRAFLEX expanded graphite foil for cylinder head and recirculation gaskets

SIGRAFINE graphite bearings for exhaust gas recirculation valves

Automotive industry is forecasted to grow. GMS offers solutions for both EV and internal combustion engine (ICE) powertrains

Automotive global sales (in million units/a)

Market details

• Environmental legislation/CO² reduction targets
• Strong growth of e-mobility
• Market shifts towards Asia

Significance for SGL

• ICE: CO² reduction enabled by SGL products
• EV: Significant opportunities for SGL solutions in electric water pumps for cooling and in brake assistant pumps

Sources: Diverse sources and own calculations (2017/2018)

Market segment Chemicals

Our solutions for the chemical industry.

Selected product examples

DIABON graphite block heat exchanger

POLYFLURON PTFE lined column

DIABON centrifugal pump group in graphite for hot corrosive fluids

Bottom burner section of HCl synthesis unit

SIGRAFLEX graphite sheet for gaskets

Global chemicals market grows with global GDP. With high dependence on China

2,006 2,100 2,199 2,302 2,411 788 825 863 ⁹⁰⁴947 312 327 342 358 803 375 841 881 922 965 - 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 2017 2019 2021 2023 2025 Commodity Specialty Agricultural Other CAGR '17–'25: ~ 5%

Global chemicals demand (in €bn)

Market details

• New entrants, mainly from China, with the effect of overcapacities and price pressure
• Volatility in exchange rates, raw material prices and margins
• Consolidation ongoing especially in the area of commodities
• High dependence on Chinese growth

Source: Marketline, own calculations

SGL solutions enable many technologies and applications along various chemical value chains.

Chemicals – General description of typical corrosive chemical processes

	Intermediates	Chemical process	Chemical products
Process technologies & systems	• Acid production, e.g. hydrochloric or phosphoric MDI/TDI1 • production VCM2 • production	• Various technologies, e.g. leaching, concentration, dilution, purification, desorption, absorption, distillation • Polyurethane production • PVC production • Phosphoric acid purification	• Variety of end products of chemical industry, e.g. plastics, food additives, fertilizer, pigments
Sealing technologies	• Corrosive and high temperature processes	GMS
1 Methylene diphenyl diisocyanate/tolylene	diisocyanate; 2 Vinyl chloride monomer	business

Market segment Industrial Applications

Market segment Industrial Applications.

Heating elements

and systems Thermal insulation Charging systems Heat shields and insulation protection

and elements

Our solutions for electrical discharge machining in toolmaking

Standard ready-to-run electrode

Detail electrode for precise

geometries rib electrode Rib electrode Electrode for turbine blade production

Market segment Industrial Applications.

Continuous casting Pressure sintering Gas injection and distribution systems Powder metal industry

Our solutions for the glass and refractory industries

Our solutions for the metal industry

Container glass Float glass

Mid term innovation. New markets for our graphite based solutions are continuously developing

Glass bending

• Graphite needed as molds for bending of glass
• Today's applications: smart phones
• Tomorrow: automotive displays

Optical fiber

• Ever increasing data quantities require more fibers
• Products: heating elements, insulation & CFRC support high temperature customer processes

The importance of the value chain

Specialty graphites come into play where other materials fail.

Fine grain graphite manufacturing is complex and know-how intensive with long production times.

Manufacturing process of fine grain graphite

GMS can offer tailored solutions for customer applications due to broadest portfolio and capabilities in the industry.

Fine grain graphite	• Isostatic • Extruded	• Vibro molded • Die molded
Expanded natural graphite	• Foils & Sheets • Yarns	• Panels • Additives
Carbon fiber reinforced carbon and felts	CFRC1 • • Rigid felt	• Soft felt
Value-add process capabilities	• Base machining • Advanced machining • Purification • SiC Coating	• Process & product modeling • System design • System assembly

¹CFRC: carbon fiber reinforced carbon

SiC coating is an example for high-value-add applications, offering premium sales prices and margins in the respective markets.

• SiC coating Full leverage of GMS value chain
  • Difficult to replicate by new-entrants:
    • − Special iso grades applied and highly precise machining needed
    • − High degree of innovation, technological expertise & process stability required
  • High level of technological differentiation vs. competition
  • Applications in fast growing LED and semiconductor industries
  • Business opportunities with OEMs as well as aftermarket sales

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%

GMS already achieves sales growth and EBIT margin targets but expected to grow further. GMS by value chain

Feedstock

Intermediate products

Solutions/ Components

• Operational improvements (energy efficiency, de-bottlenecking, portfolio optimization)
• Sourcing excellence
• Strong growth in energy markets driven by expansion of product and customer portfolio
• Organic growth with investments (following customers production in the region for the region)
• Strong growth in high margin digitization market (LED, semiconductor)
• Leverage ability to provide one-stop shop solutions based on the industry's most comprehensive product portfolio
• Focus on total cost of ownership
• Participate in the fast changing mobility market
• Customize graphite anode materials for electric vehicles
• Components for solutions reducing CO² emissions (e.g. vacuum pumps, water pumps) serving automotive industry
• Technical competence close to the customer to strengthen position as solution partner
• Focus high labor cost activities in low cost countries (Poland, China)
• Automation

Levers to further profitability improvement. GMS by market segments

Overall:

• Efficiency gains in operations improve profitability

Battery & other energy:

• Expand capacities to grow with new customers
• LED • Investment into battery laboratory: develop next generation material
• Semiconductor • "Economies of scale" and operational improvements compensate potential pressure on prices

Semiconductor & LED:

• Strongly growing and attractive market
• Utilize capacity in St. Marys and further expansion in other regions (China)
• Invest into technology & know-how

Automotive:

• Major customer projects won (e.g.: Bosch: parts for diagnosis tank leakage module pumps, Pierburg: parts for brake assistant pump)
• Focus high labor cost activities in low cost countries (Poland)

Chemicals

Solar

• Grow with market while improving profitability
• 80 SGL Carbon | Investor Relations Presentation

Innovation

© Copyright SGL Carbon SE ® Registered trademarks of SGL Carbon SE

SGL Innovation.

• for lithium-ion batteries
• Isostatic and extruded graphite
• Coated graphite for semiconductors
• Carbon and graphite felts
• Thermal management solutions
• Sealing materials
• Equipment for chemical industry
• Die molded materials for automotive
• 1 C/SiC: Carbon fiber reinforced Silicon Carbide
• 82 SGL Carbon | Investor Relations Presentation
• Advanced & future carbon fibers
• Future composites
• Future coatings
• 3D printed materials
• Next generation materials for lithium-ion batteries
• C/SiC¹ ceramics
• Gas diffusion layers for fuel cells
• Textile materials
• Pre-impregnated materials
• Thermoplastic materials
• Wet friction materials
• Lightweight solutions & prototypes

SGL Central Innovation – Future Growth Areas.

From research and development to profitable business

83 SGL Carbon | Investor Relations Presentation 1GDL: Gas diffusion layer; 2C/SiC: Carbon/Silicon carbide; 3Si/C: Silicon/Carbon

SGL Central Innovation – Future Growth Areas. SGL Carbon – A Pioneer in 3D Printing of Carbon Materials

* Developed in cooperation with ExOne, Crosslicenced; ** SGL Group patents pending

SGL Innovation – Start Ups.

Fuel Cell Materials – Profitable Growth in Mobility & Energy

• Gas Diffusion Layers are a non substitutable component in all major fuel cell types. The typical GDL raw material is carbon fiber paper.
• SGL Group has 20 years experience in development, production and sales of GDL material.
• SGL is a quality leader for GDL materials.
• Fuel cell market has grown with high double digit annual growth rates during last years .
• SGL Group delivers more than 50 customers in all continents.
• In 2017 we signed a long term supply contract with Hyundai Motor Corporation, one of the leading fuel cell car OEMs.

Summary

© Copyright SGL Carbon SE ® Registered trademarks of SGL Carbon SE

The new SGL Carbon. In a nutshell:

• Material competence based on carbon¹ and high temperature processes
• Commands entire carbon fiber and graphite value chain
• High tech carbon fiber & graphite based engineered solutions
• Diversified customer base servicing more than 35 industries
• Sales growth fueled by the megatrends energy, mobility and digitization
• Targeting earnings growth more than proportionate to sales growth

¹Carbon refers to the chemical element – graphite and carbon fiber are forms of carbon

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Backup

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Outlook for fiscal year 2019

© Copyright SGL Carbon SE ® Registered trademarks of SGL Carbon SE

Reporting segment outlook 2019.

CFM – guidance revised downwards significantly

• Slight increase in sales expected mainly driven by market segment Wind Energy
• FY2019 guidance for recurring EBIT now negative mid to high single digit million € amount due to
  • − Continued weakness becoming apparent for Q4/2019 in the market segments Textile Fibers and Industrial Applications
  • − Despite the strong growth in the market segment Wind Energy, a substantial year-over-year earnings decline is also expected in this market segment due to the deteriorated product mix.

Reporting segment outlook 2019.

GMS – guidance revised upwards slightly again

• Sales expected to increase slightly on prior year level which was boosted by initial adoption of IFRS 15 − Mainly driven by market segments Semiconductors and Automotive & Transport
• Due to strong 9M/2019, we now expect FY 2019 EBIT to slightly increase
  • − Prior year level was also boosted by initial adoption of IFRS 15
  • − Lower shipments planned for Q4/19 as well as measures to reduce inventory, which decreases fixed cost absorption but improves cash flow
• ROSEBIT target of 12% should again be exceeded in this business unit and thus stability of GMS' business model proven in a weaker overall economic environment

Reporting segment outlook 2019.

Corporate – guidance revised upwards slightly again

• Recurring EBIT anticipated substantially better than prior year level mainly due to
  • − Lower net expenses in Central Innovation resulting from much stronger business development in fuel cell components
  • − Lower expenses for management incentive plans following results decline in CFM and thus also at Group level
• Significant improvement in recurring EBIT expected despite prior year benefiting from a €3.9 million onetime impact from a land sale in Q1/2018

Group outlook 2019. Guidance for recurring EBIT revised downwards

• Full year Group sales expected to increase mid single-digit mainly driven by volume increases
  • − Despite weakening of overall economic environment
  • − Prior year boosted by high effects from initial adoption of IFRS 15
• Group recurring EBIT expected at €45-€50m compared to prior year level which was boosted by positive IFRS 15 effects
  • − Adjusted for effects from initial adoption of IFRS 15, Group EBIT in 2019 is approx. on the same level as in 2018

Group outlook 2019. Adverse impact on net profit guidance due to lower outlook for CFM and impairment losses

• Net result – continued operations now expected at approx. negative €100m (2018: €41m)
  • − Prior year included a high positive one-time effect of €28m from the full consolidation of SGL ACF
  • − Current year includes approx. €75m impairment losses at CFM and approx. €7m DTA write-offs
  • − In addition, we expect substantially higher interest cost in net financial results mainly from the corporate bond issue in April 2019
• Capex 2019 to increase compared to prior year to approx. €100m
• Substantial improvement in negative free cash flow from continued operations to a low double-digit m€ amount expected mainly due to working capital improvement and despite higher capex and higher interest costs – i.e. free cash flow positive on normalized capex levels
• Net debt at end 2019 to increase by a mid double-digit m€ amount
• Net debt and free cash flow target attainment could be slightly affected by earnings decline in CFM

Sneak preview on 2020.

• Sales revenues to be slightly lower than 2019 level
  • − 2019 sales expected between €1.05 and €1.1bn
• Recurring EBIT to be 10-15% lower than in 2019
  • − 2019 recurring EBIT expected between €45 and €50m
• Further details in January 2020 at the latest

Latest financials 9M/2019

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Composites – Fibers & Materials.

in € million	9M/2019	9M/2018
Sales revenue	328.6	323.9
EBITDA1	24.1	45.8
EBIT1	-1.8	20.9
EBIT1 -Margin (in %)	-0.5	6.5
1 ROCE (in %) EBIT	-0.3	4.6

• Sales revenue in 9M/2019 slightly above prior year level (currency adjusted 1%)
  • − Strong growth in market segment Wind Energy (albeit from a very low base) offset by market segments Industrial Applications and Textile Fibers (weakening global economy and structural reasons) as well as Aerospace (project billings skewed to H2/2019)
  • − Remaining market segment Automotive approximately on prior year level
• EBIT¹ in Q3/2019 significantly declined compared to the first two quarters due to the deterioration in Textile Fibers, Wind Energy and Industrial Applications
• Overall EBIT¹ in 9M/2019 substantially below prior year level

− Mainly due to earnings decline in market segments Textile Fibers (weak economic conditions and structural effects), Wind Energy (lower earnings despite higher sales due to unfavorable product mix), Automotive (temporary unfavorable product mix), Aerospace (different billing patterns)

Graphite Materials & Systems.

in € million	9M/2019	9M/2018
Sales revenue	471.3	436.8
EBITDA1	91.2	76.5
EBIT1	70.9	59.5
EBIT1 -Margin (in %)	15.0	13.6
1 ROCE (in %) EBIT	16.9	16.0

• Sales revenue in 9M/2019 up 8% (currency adjusted by 6%)
  • − Substantial double-digit growth in market segments Semiconductors, Automotive & Transport and LED
  • − Slight increase also in Industrial Applications and Chemicals
  • − Battery & other Energy close to prior year level as expected
  • − Sales to market segment Solar again limited to below prior year level as supply to LED and Semiconductor industries again prioritized
• EBIT¹ in 9M/2019 increased by 19% and thus more than proportionately to sales to a record level
  • − Due to improvements in most market segments
  • − Automotive & Transport was able to improve earnings significantly in Q3 vs. the first half 2019 (reduced start-up costs), thus stabilizing earnings over the reporting period
  • − Earnings in the market segment Battery & other Energy were also maintained close to the prior year level
  • − Solar below prior year level due to shift of business to more profitable Semiconductor customers

Corporate.

in € million	9M/2019	9M/2018
Sales revenue	32.5	25.6
- of which Central Innovation	9.4	3.6
EBITDA1	-8.1	-16.6
EBIT1	-14.9	-21.2
- of which Central Innovation	-4.0	-6.1

• Higher sales revenue resulting primarily from stronger demand in the market segment Energy relating to parts for fuel cell customers supplied by our central research and development department (Central Innovation)
  • − Accordingly, sales revenue at Central Innovation more than doubled in the reporting period to €9.4 million
• EBIT¹ improved significantly compared to the prior year level – despite a €3.9 million one-time gain from a land sale in the prior year period
  • − Lower expenses for management incentive plans mainly as a result of the weak performance in CFM and thus in the Group
  • − Central Innovation net expenses of €4.0 million below prior year level of €6.1 million due to higher earnings contribution from business with parts for fuel cells

Group.

in € million	9M/2019	9M/2018
Sales revenue	832.4	786.3
EBITDA before non-recurring items	107.2	105.7
EBIT before non-recurring items	54.2	59.2
ROCE (in %) EBIT	4.7	6.1
Non-recurring items	-81.0	20.5
EBIT	-26.8	79.7
Net financing result	-32.6	-21.3
Results from continuing operations before income taxes	-59.4	58.4
Income tax expense and non controlling interests	-14.7	-6.4
Result from discontinued operations, net of income taxes	-0.1	-4.0
Consolidated net result attributable to shareholders of parent company	-74.5	47.7

• Recurring EBIT declined by 8% to €54.2 million due to gain from a land sale in prior year period (impact of €3.9 million in Q1/2018). Excluding this effect in the prior year period, EBIT would have been nearly stable as higher earnings contribution from GMS and lower expenses in Corporate almost entirely compensated for lower CFM contribution

• Net financing result deteriorated mainly due to the one-time expense of €6.3 million for the repurchase of the convertible bond 2015/2020 as well as due to higher interest expenses from new convertible bond issued in September 2018 and the new corporate bond issued in April 2019 as well as from the first time adoption of IFRS 16.
• Lower net result due mainly to impairment losses and lower financial result in the current year and non-recurrence of positive nonrecurring items of approximately €28 million from the full consolidation of former JV with BMW (SGL ACF) in the prior year period
• 101 SGL Carbon | Investor Relations Presentation

Free cash flow.

in € million (continuing operations)	9M/2019	9M/2018
Cash flow from operating activities	29.9	7.6
• Capital expenditures in property, plant, equipment and intangible assets	-50.7	-38.7
Cash flow from other investing activities1 •	11.2	-8.8
Cash flow from investing activities	-39.5	-47.5
Free cash flow	-9.6	-39.9
Free cash flow from discontinued operations	-9.8	58.6

• Cash flow from operating activities improved significantly to €29.9 million from €7.6 million due to
  • − The lower increase in working capital
  • − A higher positive non-cash effect from IFRS15 in the prior year result
• Free cash flow also improved significantly to close to break even level due to
  • − Improvement in operating cash flow
  • − Lower cash outflow from investing activities despite significantly higher capex as prior year period included payment for German part of SGL ACF (Wackersdorf site)

• Free cash flow from discontinued operations included

• − Cash outflow relating to final settlement payments to the buyer of HITCO Aerostructures in the reporting period
• − Prior year benefited from cash inflow from the final outstanding payments for the sale of former PP activities

¹dividends 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	30.09.2019	31.12.2018
Equity ratio (in %)	26.6	33.5
Total liquidity	146.7	181.6
Net financial debt	279.5	242.2
Gearing (net debt/equity)	0.68	0.46
Leverage ratio (net debt/EBITDA)	2.2	1.9

• Equity ratio deteriorated mainly due to the lower net result impacted by the impairment and decreased equity from adoption of lower interest rates on pension liabilities. Positive effects from FX were not sufficient to compensate for these adverse effects
• Higher net financial debt primarily reflects final settlement payments to the buyer of HITCO Aerostructures, the small negative free cash flow, and incurred costs for the corporate bond issue

Appendix

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The transformation of SGL Group.

We have implemented the announced strategy

• ✓ Disposal of the PP business to concentrate our resources on the growth areas CFM and GMS
• ✓ Focus on CFM and GMS improves the balance between markets and industries, and thus reduces volatility in our business

Regional Sales Distribution.

Sales by destination

		Europe outside
Sales	Germany	Germany	North America	Asia	Rest of World
2018	34 %	18 %	16 %	28 %	4 %
2017	26 %	22 %	19 %	28 %	6 %

Sales by origin

Europe outside
Sales	Germany	Germany	North America	Asia
2018	39 %	31 %	23 %	7 %
2017	41 %	32 %	21 %	6 %

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 November 30, 2019)	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 2018/2023

ISIN-Number:	DE000A2G8VX7
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

Corporate bond 2019/2024

ISIN-Number:	XS1945271952
Coupon	4.625%
Principal Amount	€ 250 million
Issue Date	10 April 2019
Date of Maturity	30 September 2024

Convertible notes 2015/2020

ISIN-Number: DE000A168YY5

Repaid fully ahead of maturity in July 2019 following a tender offer.

Financial calendar/contact details.

Financial calendar 2020		Contact
March 12, 2020	Annual Report 2019	SGL Carbon SE
April 22, 2020	Annual General Meeting	Soehnleinstrasse 8
May 14, 2020	Report on the first quarter 2020	65201 Wiesbaden Germany
August 13, 2020	Report on the first half year 2020	Phone +49 (0) 611 - 6029 - 103
November 12, 2020	Report on the nine months 2020	Fax +49 (0) 611 - 6029 - 101 investor-relations@sglcarbon.com

www.sglcarbon.com

Important Note

This presentation contains statements relating to the future business and financial performance of and future events or developments involving SGL Carbon or its businesses, including statements with respect to SGL Carbon's outlook, targets and business development, expected customer demand, expected industry trends and expected trends in the business environment. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "target," "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 Carbon'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 Carbon's main customer industries, competitive products and pricing, the ability to achieve sustained growth and profitability in SGL Carbon's 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 Carbon, 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 Carbon's ability to refinance its indebtedness, development of the SGL Carbon's pension obligations, share price fluctuation may have on SGL Carbon's financial condition and results of operations and other risks identified in SGL Carbon's financial reports. Should one or more of these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of the SGL Carbon may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. These forward-looking statements are made only as of the date of this document. SGL Carbon does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

This document includes supplemental financial measures that are or may be alternative performance measures (non-IFRS or alternative performance measures). These supplemental financial measures should not be viewed in isolation or as alternatives to measures of SGL Carbon's net assets and financial positions or results of operations as presented in accordance with IFRS in SGL Carbon's consolidated financial statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

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