SGL CARBON SE

Investor Presentation • Jan 14, 2019

Commerzbank German Investment Seminar 2019

Roundtable | Michael Majerus | New York | January 2019

New SGL Carbon. Specialized on carbon- and graphite-based solutions in the two business units CFM¹ and GMS²

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

Business Unit Composites- Fibers & Materials (CFM)

CFM expected to grow …

Market Segment

	Automotive	Aerospace	Wind Energy	Industrial Applications	Textile Fibers
Sales 2017	30%1	6%	12%2	23%	29%
Sales 2018 (pro forma)	51%	6%	2%	17%	24%
CFM midterm growth expectation

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

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

5 SGL Carbon | Investor Relations Presentation

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

By 2030 most cars expected to have fiber-reinforced polymer (FRP) parts and thermoplastic components.

Serial production Serial production

• "Carbon Core"
• Multi-material mix
• Center roof rail

2015

• Windshield frames
• Etc.

Industrial standard

• Local FRP reinforcement
• Thermoplastic components
• Hybrid materials for battery enclosures
• Leaf springs

2030

Business Unit Graphite Materials & Systems (GMS)

GMS – the hidden champion. Favorable positioning in high growth markets contribute to SGL Carbon's CAGR of more than 8.5%

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%
Mid-term targeted CAGR in %	High single digit	Mid single digit	Double digit	Double digit	High single digit	Mid single digit	GDP-like

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 /semi-conductor 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

Financial targets

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

Growth & profitability targets. We adjusted our mid-term targets in December 2018 to reflect new growth opportunities

Driver for ROCE improvement: Top line growth, higher margin products, efficiency improvements

Note: EBIT always refers to EBIT before non-recurring items

Group Additional 2022 targets:

Net profit margin	~ 6–7%
Free cash flow margin	~ 5%

Business Unit 2022 targets:

ROS EBIT	≥ 12%
-------------	-------

Impact of new growth program on previous sales and EBIT targets for 2022:

Higher sales and unchanged margin targets add low double digit million € amount to our EBIT target for 2022

Over the entire guidance period:

Equity ratio	≥30%
Leverage ratio	≤2.5
Gearing (except 2019-2020)	≤0.5

Thank you for your attention !

Backup

SGL Carbon. New five-year plan to capture additional mid-term growth opportunities. Capex spending mainly allocated to GMS

New growth program with €80m additional capex to be spent over three years (2019 – 2021)

GMS capex projects:

• Battery & other Energy (GAM¹ ):
• Capacity expansion at low cost site Poland
• Favorable market position esp. with Panasonic
• Modular expansion strategy

• LED:

• Capacity expansion in SiC² -coating
• Move to Asia to be near our customers and to mitigate potential risks from trade barriers
• Highly innovative product

• Automotive & Transport:

• Expansion at our site in Bonn (Germany)
• Parts for brake assistant and cooling water pumps
• 16 SGL Carbon | Investor Relations Presentation

CFM capex projects:

• Automotive:
• Capacity expansion for new leaf spring customer
• Textile Fibers:
• Conversion of textile fiber line to precursor in Portugal

Outlook 2018

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

Latest financials 9M/2018

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

Appendix

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 November 30, 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 November 30, 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
May 7, 2019	Report on the first quarter 2019	Soehnleinstrasse 8
May 10, 2019	Annual General Meeting	65201 Wiesbaden Germany
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

This presentation contains statements relating to the future business and financial performance of and future events or developments involving SGL Group or its businesses, including statements with respect to SGL Group'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 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 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. 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 Group 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 Group 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.