Commerzbank: German Investment Seminar 2020, New York, January 13 - 15, 2020

Commerzbank

German Investment

Seminar 2020

New York (US), January 2020 Dr. Michael Majerus

Spokesman of the Board of Management and CFO

1

The Business Model

2	SGL Carbon | Investor Relations Presentation

A global leader in carbon and graphite-based solutions.

SGL Carbon at a glance

Composites - Fibers & Materials (CFM)		Graphite Materials & Systems (GMS)
At the forefront of innovation		Well established market
developing the market			and materials
€423m	€21m EBIT		€590m		€76m EBIT
External Sales		External Sales
5% margin		13% margin
Revenue		Revenue

Material competence and application know-how in graphite & carbon fiber / fiber

• composites as well as high temperature processes
• Commanding the entire carbon fiber and graphite value chain
• Diversified customer base, serving key megatrends
  Competitive advantage by providing engineered solutions based on
• high-techmaterials

Well-diversified player with long-term partnerships with premier customers

€1,048m					80+
Revenues
	Mobility	Energy	Digitisation	Countries
€65m					31
		Diverse end markets
EBIT
				Sites globally
6.2%
				~5,000
EBIT
				Employees
margin		Industrial	Chemical	Textile
	applications		fibers

End-market sales split (FY18)

Digitization

7%

Textile Fibers	Mobility
9%
29%

Chemical

13%

Energy	Industrial
16%	applications
	26%

Long-term partnerships with premier

customers

3	SGL Carbon | Investor Presentation

Commanding entire value chain in carbon and graphite.

Advantages in cost, quality and differentiation

Customers

CFM

Acrylonitrile,	Acrylic fibers, oxidized	Preforms, prepregs,	Composite components,
Polyacrylonitrile (PAN)	fibers, carbon fibers	multiaxial fabrics,	carbon ceramic brake
		braidings, textile	discs, leaf springs
		products

Control over the entire value chainenables product customization to customer requirements

		Raw materials	Intermediate	Semi finished	Solutions/
		stages	products	components
GMS		Cokes, pitches, natural	Synthetic fine grain	Machining, finishing,	Heaters, anode
	graphites	graphite blocks,	coatings (e. g. SiC),	materials for lithium-ion
			expanded natural	assembly	batteries, sealings, felts,
			graphite		process equipment and
					solutions

Customers receive tailor made solutionsfrom every step of the value chain

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

Customers

4	SGL Carbon | Investor Relations Presentation

1

Business Unit

Composites- Fibers & Materials (CFM)

5	SGL Carbon | Investor Relations Presentation

Reporting Segment.

Composites - Fibers & Materials (CFM)

Activities	Group sales 2018
• Carbon Fibers
• Composite Materials	CFM
• Composite Components	42%		€1,048m
• Ceramic Brake Discs
(JV with Brembo)

CFM sales 2018

Industrial applications 17%

	Automotive
Textile fibers	53%
23%

Aerospace 5%

Wind energy 2%

Key industries served

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

Characteristics

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

Strategic priorities

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

6	SGL Carbon | Investor Relations Presentation

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 handlay-up

7	SGL Carbon | Investor Relations Presentation

Carbon fibers and composite materials.

Strong demand growth anticipated

Global Carbon Fiber Reinforced Plastics (CFRP) Demand

[in thousand mt p.a.]

250

200

	CAGR
150	~10% p.a.

100											197
								114	128	141
							101
50						91
			72	83
			66
		59
51
0
	2011	2012	2013	2014	2015	2016	2017	2018	2019e	2023e
2010

Source: CCeV (September 2019)

8	SGL Carbon | Investor Relations Presentation

CFM expected to grow profitably…

Market

Segment

	Automotive	Aerospace	Wind Energy	Industrial
	Applications	Fibers
Sales 9M/2019	50%	5%	10%	14%	21%
	Grow with high-	Develop highly	High volume market	Active portfolio	Share of sales will
	margin value added	competitive	with limited	management to	decline as lines are
	downstream	advanced materials	profitability;	increase share of	converted to
	products such as	for structural parts;	important in the	higher margin	precursor for CF
	battery	high volume and	short term for	products such as	production; until
	cases	high margin market	utilization of	marine, medtech,	then improve
			upstream capacities	civil construction	product mix and
					restructuring

9	SGL Carbon | Investor Relations Presentation

Automotive: SGL Carbon already well-positioned.

Existing projects in different automotive vehicle segments

• Structural components for electric vehicles (EV) esp. battery enclosures for various car producers (e.g. NIO)
• Leaf springs for light commercial vehicles (VW Crafter and Daimler Sprinter) and passenger car suspension systems (Volvo XC series) as well as commercial vehicles with heavy payload (Ford Transit)
• Hybrid designs for large series passenger vehicles
• Rear bench for performance sports cars
• Friction materials for modern gear boxes

Source: Audi AG, BMW AG, Volkswagen AG, Volvo CC, SGL Carbon

Audi MSS platform		BMW i3/i8

VWCrafter & DaimlerSprinter		BMW 7 series

Friction materials		Volvo XC 90

10	SGL Carbon | Investor Relations Presentation

Automotive: Current CFM project pipeline.Since the beginning of 2018 we have been nominated for 18 new serial products

SOP*	2019	2020	2021	2022
Newly awarded	3	10	4	1
projects**

*Start of production; **Status: November 28, 2019

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

11	SGL Carbon | Investor Relations Presentation

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

Production volumes

					Serial production
			Small series
Racing/
Super sports car					•	"Life Cell"
		•	"Class A" Carbon	•	Pillars
		•	Roofs
		•	Roofs
		•	Rear benches
		•	Mirror caps
		•	etc.

• Monocoques

Serial production

• "Carbon Core"
• Multi-materialmix
• Center roof rail
• Windshield frames
• Etc.

Industrial standard

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

1981-20032008201320152030

Source: RedBull F1, Daimler AG, Audi AG, BMW Group

12	SGL Carbon | Investor Relations Presentation

Automotive: Tailor-Made Composites Solutions for Battery Cases.

Optimized use of materials due to application-specific design

Environment & Energy

Up to 50 % weight saving

compared to conventional steel and aluminum construction methods

Optimized thermal management

Low energy consumption for heating/cooling the battery due to good thermal insulation

Higher specific battery capacities

Less installation space due to higher specific stiffness

Positive secondary effects

Down-sizing potential with other components (e.g. brakes, springs etc.)

Safety

Excellent fire protection

due to high heat resistance and low thermal conductivity as well as flame retardant material modification

Very good protection against underbody penetration (Impact)

through adjustable material parameters

Economic Efficiency

Attractive lightweight construction costs

up to cost-neutral substitution for aluminum

Stable long-term quality

No additional measures necessary for corrosion protection

Consumer Advantages

Lower energy consumption and higher range

due to low weight and high battery capacities

Dynamic driving experience

due to low weight and high rigidity

Safety: impact, crash

due to improved impact behavior and excellent mechanical properties

Safety: fire protection

Special composite solutions with increased fire resistance delay the spread of fire: occupants and rescue services gain valuable time to evacuate the vehicle in the event of a fire

13	SGL Carbon | Investor Relations Presentation

Aerospace: Largest and highly profitable market for composites.

2018 Global CFRP Consumption

Others

9%

Civil Engineering

5%

Leisure

13%

Wind Energy

13%

Automotive

24%

Aerospace

36%

• Aerospace is the largest single market for carbon fiber composite materials and parts
• The aerospace sector is expected to continue growing with above global GDP rates for the next decade

	EBITDA	EBITDA
	[m€]	margin
Hexcel	330	30 %
Toray	290	29 %
Teijin	188	28 %
Solvay	338	26 %

Sources: Lucintel, CCeV, Composites World; Annual Report 2018 of the respective companies showing Aerospace related EBITDA

14	SGL Carbon | Investor Relations Presentation

Aerospace: High production volume of narrow body commercial aircrafts requires serial production competency.

Airbus monthly production volume	Boeing monthly production volume
forecast	forecast

		2016	2020
A350	(wide body)	4	10
A320	(narrow body)	46	60+

		2016	2020
B787	(wide body)	11	12
B737	(narrow body)	42	58

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

Source: Airbus, Boeing

15	SGL Carbon | Investor Relations Presentation

Joint development agreement with Solvay.Highly competitive value proposition in carbon fiber composites for aerospace primary structures

• Development based on SGL's newly developedlarge tow Intermediate Modulus (IM) carbon fiber
• Together withSolvay, we will develop the first composite materials based on large tow carbon fibers, which will address the need ofnext-generationcommercial aircraftsfor
• • Improvedcosts
  • Increasedefficiency of production processes
  • ReducedCO2emissions
  • Increasedfuel efficiency
• Opportunityto lead the aerospace adoption of a composite material based on 50K IM carbon fiber, providing a highly competitive value propositionwith more affordablehigh-performancesolutionsto our customers
• Composite materials for aerospace applications represent amulti-billion-dollarmarket with strong growth ratesin the coming decade.
• SGL Carbonand Solvayuniquely positioned to develop solutions to address the needs of this market
• First stepin a long-term partnership

	Combining SGL Carbon's expertise in high volume carbon fiber manufacturing with
	Solvay's leadership in supplying advanced materials to the aerospace industry
16	SGL Carbon | Investor Relations Presentation
•

1

Business Unit

Graphite Materials & Systems (GMS)

17	SGL Carbon | Investor Relations Presentation

Reporting Segment.

Graphite Materials & Systems (GMS)

Activities

Group sales 2018

GMS sales 2018

•	Anode materials	• Expanded
•	Isostatic graphite	graphite	GMS

Industrial applications 31%

Battery and

other energy 19%

• Fiber materials	• Process	58%	€1,048m
	technology

• Extruded graphite
• Die molded

Chemical 23%

Solar 8%

LED 6%

Semiconductor 6%

Automotive & transport 8%

Key industries served

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

Characteristics

• Highervalue-added products enabling customer innovations
• Specialized, partiallytailor-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 materialknow-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

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

18	SGL Carbon | Investor Relations Presentation

GMS - the hidden champion.

Active in very attractive market segments

Market
Segment
	Battery & other	Solar	LED	Semi-	Automotive	Chemical	Industrial
	Energy	conductor	& Transport	Applications
Sales	17%	7%	5%	9%	10%	22%	30%
9M/2019
	Focus on	Opportu-	Strong	Strong growth	Growth driven	GDP	GDP
	development to	nistic	growth	driven by EV,	primarily by EV
	expand product	approach	driven by	IoT, 5G mobile
	and customer		energy	technology
	portfolio (Battery)		efficiency
	Grow business
	with Hyundai and
	further expand
	customer portfolio
	(Fuel cells1)				1Fuel cell components (GDL) from Q4/2019 onwards part of GMS

19	SGL Carbon | Investor Relations Presentation

Highly diversified end-market mix with strong exposure to structural growth trends.

SGL growth market semiconductor		SGL growth market digitization
SiC1and GaN2power device market(a)		Global LED demand(b)
In $m	Bn units

CAGR 17-25'	1.550
~12%	1.275
950	1.050
840
730
620

	2017	2018	2019	2020	2021	2023	2025
1Silicon Carbide; 2Gallium Nitride
Wide Band Gap semiconductors offer new	LED will substitute other lighting technologies
options where silicon reaches its limits

Structural growth trends impacting positively the outlook for SGL Carbon's key end-markets

Source: (a) Yole Development, IHS Market, (b) Strategies Unlimited, Yole Development, Bank of America Merrill Lynch, SGL Carbon estimates

20	SGL Carbon | Investor Relations Presentation

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

Price/kg

SiC coating

+ purification

Iso block

+ machining

• Full leverage of GMS value chain
• Difficult to replicate bynew-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

Value-add/gross margin

21	SGL Carbon | Investor Relations Presentation

Gas Diffusion Layers.

Strong Profitable Growth in Materials for Fuel Cell Cars

Microstructure of a

Gas Diffusion Layer (SEM)

GDL Roll

Fuel Cell Stack

Fuell Cell Car

• Gas Diffusion Layers are a non substitutable component in all major fuel cell types.
• SGL Carbon has 20 years experience in development, production and sales of GDL material and is perceived a quality leader for GDL materials.
• Fuel cell market has grown with high double digit annual growth rates during last years and SGL Carbon delivers to around 200 customers in all continents.
• In 2017 we signed a long term supply contract with Hyundai Motor Corporation, a leading fuel cell car OEM.
• In 2019, this contract was prematurely extended and now provides for a substantialramp-up of current production and delivery volumes
• In themedium-term, SGL Carbon plans to more than quintuple its business with fuel cell components to annual sales of approximately 100 million euro.

22	SGL Carbon | Investor Relations Presentation

Summary

©CopyrightSGL Carbon SE

• Registered trademarks ofSGL Carbon SE

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 systemwith ours

ROCE1development

7

6

5.4%

5	4.6%
4

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

3

2

1

2.5%

1.6%

0.2%

0

2014.

2015

2016

2017

2018

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

24	SGL Carbon | Investor Relations Presentation

Temporaryset-backin ROCE development due to weaker commodity business in CFM.Strategic growth business case remains intact

CFM Value Chain

Polyacrylonitrile (PAN)

Carbon fibers

• Upstream capacities capital intensive
• AerospaceandAutomotive business not yet not big enough to completely fill upstream capacities
• Therefore temporarily serving theTextile Fibers, commodity markets in Industrial Applicationsand Wind Energymarkets
• These have come under pressure recently due to weaker economy and structural issues (acrylic fibers)

Composite materials	Composite components

• Attractive value added,high-margin downstream products
• Mainly driven byAutomotive, Aerospace as well as attractive markets inIndustrial
  Applications
• Require upstream capabilities
• Performing as expected or even somewhat better

25	SGL Carbon | Investor Relations Presentation

Levers to profitability improvement.

Short-term:

Address problems in CFM

Acrylic Fibers

• Headcount reduction
• Faster conversion of fiber lines to precursor
• Improve product mix (discontinue lowest margin business)

Industrial Applications

• Improve product mix (discontinue lowest margin business)

Wind Energy

• Negotiate higher prices

Long-term:

• Continue to profitably grow inGMSDrivers esp. Energy(fuel cells) and
  Semiconductors

CFM

• Execute and continue to acquire attractive tailor made composites business in
  Automotive
• Develop highly competitive composite materials for high volume, high marginAerospacemarket
• Develop attractive end markets inIndustrial Applicationse.g. marine, medtech, civil engineering

26	SGL Carbon | Investor Relations Presentation

The new SGL Carbon.

In a nutshell:

• Material competence based oncarbon1and high temperature processes
• Commandentirecarbon fiber and graphite value chain
• High techcarbon fiber & graphite basedengineered solutions
• Diversified customer base- servicing more than 35 industries
• Sales growthfueled by themegatrends energy, mobility anddigitization
• Return toprofitable growth path

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

27	SGL Carbon | Investor Relations Presentation

Thank you for your attention !

©CopyrightSGL Carbon SE

• Registered trademarks ofSGL Carbon SE

Backup

©CopyrightSGL Carbon SE

• Registered trademarks ofSGL Carbon SE

Global presence.

SGL Carbon worldwide sites

30	SGL Carbon | Investor Relations Presentation

Outlook for fiscal year 2019

©CopyrightSGL Carbon SE

• Registered trademarks ofSGL Carbon SE

Reporting segment outlook 2019.

CFM - guidance revised downwards significantly

• Slightincreasein salesexpected mainly driven by market segment Wind Energy
• FY2019 guidancefor recurring EBITnow negative mid to high single digit million € amount due to
• • Continued weakness becoming apparent for Q4/2019 in the market segmentsTextile Fibersand
    Industrial Applications
  • Despite the strong growth in the market segmentWind Energy, a substantial year-over-year earnings decline is also expected in this market segment due to the deteriorated product mix.

32	SGL Carbon | Investor Relations Presentation

Reporting segment outlook 2019.

GMS - guidance revised upwards slightly again

• Salesexpected to increase slightly on prior year level which was boosted by initial adoption of IFRS 15
• • Mainly driven by market segmentsSemiconductorsand Automotive & Transport
• Due to strong 9M/2019, we now expectFY 2019 EBITto 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
• ROSEBITtarget of 12% should again be exceeded in this business unit and thus stability of GMS' business modelproven in a weaker overall economic environment

33	SGL Carbon | Investor Relations Presentation

Reporting segment outlook 2019.

Corporate - guidance revised upwards slightly again

• Recurring EBITanticipated substantially better thanprior 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 millionone- time impactfrom a land sale in Q1/2018

34	SGL Carbon | Investor Relations Presentation

Group outlook 2019.Guidance for recurring EBIT revised downwards

• Full yearGroup salesexpected 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 EBITexpected 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

IFRS15

	€47.2m	~€45-50m

2018

2019

35	SGL Carbon | Investor Relations Presentation

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

• Net result - continued operationsnow expected at approx. negative €100m (2018: €41m)
• • Prior year included a high positiveone-time effect of €28m from the full consolidation of SGL ACF
  • Current year includes approx. €75m impairment losses at CFM and approx. €7m DTAwrite-offs
  • In addition, we expect substantially higher interest cost in net financial results mainly from the corporate bond issue in April 2019
• Capex2019 to increase compared to prior year to approx. €100m
• Substantial improvement in negativefree cash flowfrom 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 positiveon normalized capex levels
• Net debtat end 2019 to increase by a mid double-digit m€ amount
• Net debtand free cash flowtarget attainment could be slightly affected by earnings decline in CFM

36	SGL Carbon | Investor Relations Presentation

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 be10-15% lower than in 2019
• • 2019 recurring EBIT expected between €45 and €50m
• Further details in January 2020 at the latest

37	SGL Carbon | Investor Relations Presentation

Latest financials 9M/2019

©CopyrightSGL Carbon SE

• Registered trademarks ofSGL Carbon SE

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
ROCE	1(in %)	-0.3	4.6
	EBIT

• Sales revenuein 9M/2019 slightly above prior year level (currency adjusted 1%)
• • Strong growth in market segmentWind Energy(albeit from a very low base) offset by market segments Industrial Applicationsand Textile Fibers(weakening global economy and structural reasons) as well as Aerospace(project billings skewed to H2/2019)
  • Remaining market segmentAutomotiveapproximately on prior year level
• EBIT1in Q3/2019 significantly declined compared to the first two quarters due to the deterioration in Textile Fibers, Wind
  Energy and Industrial Applications
• OverallEBIT1in 9M/2019 substantially below prior year level
• • Mainly due to earnings decline in market segmentsTextile 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)

39	1	before non-recurring items of minus €81.0 million in 9M/2019 and €18.1 million in 9M/2018
SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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
ROCE	1(in %)	16.9	16.0
	EBIT

• Sales revenue in 9M/2019up 8% (currency adjusted by 6%)
• • Substantialdouble-digit growth in market segments Semiconductors, Automotive & Transportand LED
  • Slight increase also inIndustrial Applications andChemicals
  • Battery & other Energyclose to prior year level as expected
  • Sales to market segmentSolaragain limited to below prior year level as supply to LEDand Semiconductorindustries again prioritized
• EBIT1in 9M/2019increased by 19% and thus more than proportionately to sales to a record level
• • Due to improvements in most market segments
  • Automotive & Transportwas 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 segmentBattery & other Energywere also maintained close to the prior year level
  • Solarbelow prior year level due to shift of business to more profitable Semiconductor customers

1before non-recurring items of €0.6 million in 9M/2018

40	SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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

• Highersales revenueresulting primarily from stronger demand in the market segment Energyrelating 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
• EBIT1improved 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

1before non-recurring items of €1.8 million in 9M/2018

41	SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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
ROCEEBIT(in %)	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 EBITdeclined 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 resultdeteriorated 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.
• Lowernet resultdue mainly to impairment losses and lower financial result in the current year and non-recurrence of positive non- recurring items of approximately €28 million from the full consolidation of former JV with BMW (SGL ACF) in the prior year period

42	SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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 activitiesimproved significantly to €29.9 million from €7.6 million due to
• • The lower increase in working capital
  • A higher positivenon-cash effect from IFRS 15 in the prior year result
• Free cash flowalso 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 operationsincluded
• • 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

43	SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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 ratiodeteriorated 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
• Highernet financial debtprimarily reflects final settlement payments to the buyer of HITCO Aerostructures, the small negative free cash flow, and incurred costs for the corporate bond issue

44	SGL Carbon | Investor and Analyst Call Q1 2019 | May 2019

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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