SGL Carbon : Investor Relations Presentation August 2020

Investor Relations Presentation

August 2020

Table of Contents.

1.	The Business Model	Page 3
2.	The Business Units: Composites - Fibers & Materials (CFM)	Page 13
	•	Automotive	Page 20
	•	Aerospace	Page 28
	•	Energy	Page 35
	•	Industrial Applications	Page 38
3.	The Business Units: Graphite Materials & Systems (GMS)	Page 41
	•	Semiconductors	Page 44
	•	LED	Page 49
	• Battery & other Energy	Page 53
	•	Automotive & Transport	Page 61
	•	Solar	Page 64
	•	Chemicals	Page 68
	•	Industrial Applications	Page 72
	• The importance of the value chain	Page 76
4.	Innovation	Page 83
5.	Summary	Page 87
6.	Back-up	Page 90
	•	Outlook 2020	Page 91
	•	Latest Financials Q1/2020	Page 95
7.	Appendix	Page 102

2	SGL Carbon | Investor Relations Presentation

1

The Business Model

3	SGL Carbon | Investor Relations Presentation

Successful transformation of SGL Carbon.

Carbon and graphite for Megatrends

Lighting

Steel, Aluminum

Mobility, Energy, Digitization

1878

4	SGL Carbon | Investor Relations Presentation

New SGL Carbon.

Focus on two innovative businesses

Composites - Fibers &		Graphite Materials & Systems
Materials (CFM)		(GMS)

Fibers, materials		Graphite based
and composites		technological solutions

Central Innovation

Corporate Functions

Focus on CFM and GMS improves the balance between markets and industries,

and thus reduces volatility in our business

5	SGL Carbon | Investor Relations Presentation

New SGL Carbon.

Specialized on carbon- and graphite-based solutions

29		~5,000
Production		Employees
sites
Mobility	Energy	Digitization

80+		>€1bn
Industrial	Chemical	Textile Fibers
CountriesApplications		Revenue in 2019

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Global presence.

SGL Carbon worldwide sites

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Group market segmentation.

Stronger orientation to customer and growth markets

Market Segment

	Sales	Mobility1	Energy2	Digitization3	Industrial	Chemical	Textile
	€ million				Applications		Fibers
FY2019	1087	28%	19%	8%	25%	12%	8%

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

8	SGL Carbon | Investor Relations 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 chain enables 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 solutions from every step of the value chain

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

Customers

9	SGL Carbon | Investor Relations Presentation

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

Setback in FY2019 mainly due to weakness in

CFM

ROCE1 development

7

6

	5.4%
5
4.6%
4	3.9%

3

2.5%

21.6%

1

0.2%

0

2014.

2015

2016

2017

2018

2019

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

1 ROCE defined as EBIT/Capital employed

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Temporary set-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
• Aerospace and Automotive business not yet not big enough to completely fill upstream capacities
• Therefore temporarily serving the Textile Fibers, commodity markets in Industrial Applications and Wind Energy markets
• 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 by Automotive, Aerospace as well as attractive markets in Industrial
  Applications
• Require upstream capabilities
• Performing as expected or even somewhat better

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Levers to profitability improvement.

Short-term:

Address problems in CFM

Textile 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 in GMS Drivers 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 margin Aerospace market
• Develop attractive end markets in Industrial Applications e.g. marine, medtech, civil engineering

12	SGL Carbon | Investor Relations Presentation

1

Business Unit

Composites- Fibers & Materials (CFM)

13	SGL Carbon | Investor Relations Presentation

Reporting Segment.

Composites - Fibers & Materials (CFM)

Activities	Group sales 2019
• Carbon Fibers
• Composite Materials	CFM
• Composite Components	41%		€1,087m
• Ceramic Brake Discs
(JV with Brembo)

CFM sales 2019

Industrial

Applications 14%

	Automotive
Textile Fibers	49%
20%

Aerospace 4%

Wind Energy 13%

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

14	SGL Carbon | Investor Relations Presentation

Carbon fiber composites industry still in its infancy.

Aluminum industry		Carbon fiber industry
1936	Aerospace	Douglas DC-3		Late 1960s	PAN-based	First high-performance
	carbon fibers	carbon fibers
1959	Industrial	Introduction of		1980s	Aerospace	US military aircraft
Applications	aluminum cans
1961	Automotive	Land Rover V8 engine		2009/13	Aerospace	Boeing 787,
blocks		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

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CFM growth strategy is based on commanding the entire value chain

Upstream Area

Precursor

Carbon fiber

Downstream Area

Textile	Prepreg	Parts/	OEM
(impregnated
(dry material)	Components
material)

• Security of raw material supply
• Quality control (precursor)
• Cost competitive Panox and carbon fiber

• Certified/qualified materials
• Cost control of intermediate production stages
• Elimination of interfaces

• OEMs* request part/component solutions from their suppliers
• Provide "one-stop shopping"
• Customer value creation

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

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

16	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 hand lay-up

17	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)

18	SGL Carbon | Investor Relations Presentation

CFM expected to grow profitably…

Market

Segment

	Automotive	Aerospace	Wind	Industrial
	Energy	Applications	Fibers
Sales FY2019	49%	4%	13%	14%	20%
	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

19	SGL Carbon | Investor Relations Presentation

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.

20	SGL Carbon | Investor Relations Presentation

CO2 targets drive lightweight construction in the automotive industry.

OEM fleet target development (EU)1		Relative component weight2
(in g CO2/km)			(in %)
120		-20%	New target	120
			EU 2018

100		100
-37.5%
80		80

-40%

-60%

60						60							-75%
40						40
20						20
0						0
	2021		2030		Steel	.		..		...
2016
								Aluminum		CFRP		CFRP uni-
										quasi-		directional
	Actual	Expected targets							isotropic

1status as of 17/12/2018

2with same functionality Source: ICCT, SGL estimates

21	SGL Carbon | Investor Relations Presentation

Materials and components are suitable for various automotive parts.

Transmission

hump

Engine hood

Bumper

Air deflector	Roof bow
Roof

Door

A-,B-,C-pillar

Battery case

Gear synchronizing	Door sills
rings

Roof frame

Rear bench

Floor reinforcing

bar

Composite leaf spring

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

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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

VW Crafter & Daimler Sprinter

Friction materials

BMW i3/i8

BMW 7 series

Volvo XC 90

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Increasing number of projects in Automotive.

Driven by new automobile designs for electric vehicles

SOP*	2019	2020	2021	2022
Newly awarded
3	11 (+3)	4 (+3)	1
projects**

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

*Start of production; **Status: March 2020 (compared to March 2019)

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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

25	SGL Carbon | Investor Relations Presentation

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

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

26	SGL Carbon | Investor Relations Presentation

Automotive growth is expected to be driven by …

Local reinforcements

• A- and B-pillar reinforcements
• Roof rail

Leaf springs for passenger cars

• Pick-uptrucks, SUVs, Vans
• New BEV vehicle concepts

Thermoplastic components

• Structural parts
• Easy to integrate into OEM assembly plants

Battery cases for BEVs

• Hybrid material solutions

27	SGL Carbon | Investor Relations Presentation

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.

28

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

29	SGL Carbon | Investor Relations Presentation

The 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

30	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 developed large tow Intermediate Modulus (IM) carbon fiber
• Together with Solvay, we will develop the first composite materials based on large tow carbon fibers, which will address the need of next-generationcommercial aircrafts for
• • Improved costs
  • Increased efficiency of production processes
  • Reduced CO2 emissions
  • Increased fuel efficiency
• Opportunity to lead the aerospace adoption of a composite material based on 50K IM carbon fiber, providing a highly competitive value proposition with more affordable high-performancesolutions to our customers
• Composite materials for aerospace applications represent a multi-billion-dollarmarket with strong growth rates in the coming decade.
• SGL Carbon and Solvay uniquely positioned to develop solutions to address the needs of this market
• First step in 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

31	SGL Carbon | Investor Relations Presentation

Aerospace: Composites market will continue to grow.

Focus on operating cost efficiency

•	Airline industry extremely competitive,
	constant battle over cost reduction
•	Composites address this key customer
	requirement as lightweight construction

120

High investments into autoclaves required - uneconomical

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

Production time per wing [%]

100
Capable of 60+ aircraft
80	per month

60

40

20

0

Metallic	Composite today	Composite tomorrow
		Source: SGL Carbon

1Source: CompositesWorld, JEC, MarketsandMarkets.com, internal analysis

32	SGL Carbon | Investor Relations Presentation

Composite materials and components for commercial aircraft parts.

Source: SGL Carbon

33	SGL Carbon | Investor Relations Presentation

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

34	SGL Carbon | Investor Relations Presentation

Energy

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.

35

Wind energy is the key driver for the energy segment.

Key benefits of composites in the wind energy industry:

• Corrosion resistance
• Strength-to-weightratio

Global cumulative installed wind power capacity in gigawatt1
1400
1200
1000
800
600
400
200
0
2017	2020	2025	2030

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

36	SGL Carbon | Investor Relations Presentation

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

• Enables longer blade length for larger turbines
• Reduced levelized cost of energy by using longer blades

Political driven need to reduce CO2 emission

• Countermeasure against global warming

37	SGL Carbon | Investor Relations Presentation

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.

38

Industrial Applications growth expected to be driven by …

Portfolio optimization away from commoditized applications towards attractive markets such as:

• Medtech
• Marine
• Civil Engineering

39	SGL Carbon | Investor Relations Presentation

Levers to further profitability improvement.

CFM by value chain

Precursor +

Carbon Fibers*

Materials

Components

* including Textile Fibers

• 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 highly competitive materials for structure aerospace applications with Solvay based on our IM

carbon fiber

• 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
• Grow battery case business further

40	SGL Carbon | Investor Relations Presentation

1

Business Unit

Graphite Materials & Systems (GMS)

41	SGL Carbon | Investor Relations Presentation

Reporting Segment.

Graphite Materials & Systems (GMS)

Activities

Group sales 2019

GMS sales 2019

• Anode materials	• Expanded
	graphite

Industrial Applications 29%

Battery and

other Energy 17%

•	Isostatic graphite	• Process
•	Fiber materials
technology

• Extruded graphite
• Die molded

GMS

59%€1,087m

Chemical 22%

Solar 7%

LED 5%

Semiconductor 10%

Key industries served

• Semiconductor
• LED
• Fuel Cell
• Lithium-IonBattery
• Solar
• Automotive & Transport
• Chemical
• Industrial Applications1

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

Automotive & Transport 10%

Strategic priorities

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

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

42	SGL Carbon | Investor Relations Presentation

GMS - the hidden champion.

Active in very attractive market segments

Market
Segment
	Battery &	Solar	LED	Semi-	Automotive	Chemical	Industrial
	other Energy	conductor	& Transport	Applications
Sales FY2019	17%	7%	5%	10%	10%	22%	29%
	Focus on	Opportu-	Strong growth	Strong growth	Growth driven	GDP	GDP
	development to	nistic	driven by	driven by EV, IoT,	primarily by EV
	expand product	approach	energy	5G mobile
	and customer		efficiency	technology
	portfolio (Battery)
	Grow business
	with Hyundai and
	further expand
	customer portfolio
	(Fuel cells1)

43

SGL Carbon | Investor Relations Presentation

1 Fuel cell components (GDL) from Q4/2019 onwards part of GMS

Market segment Semiconductors

44	SGL Carbon | Investor Relations Presentation

Our solutions and products for the semiconductor industry.

Fields of application and product examples

Polysilicon production		Silicon single crystal growth		Silicon epitaxy		Compound semiconductor
			epitaxy (in MOCVDs2)

SIGRAFINE® electrodes for	SIGRAFINE® meander	SIGRAFINE® SiC coated
Siemens reactors	heater for CZ1 units	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; 3 compound semiconductors are built by a thermo-chemical reaction of two or more semiconductor elements in gas-form

45	SGL Carbon | Investor Relations Presentation

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

Semiconductor - Silicon wafer shipments

(in 1000 x MSI1/a)

20,0

Market details

• Silicon wafer shipments are proportional to graphite demand

18,0			CAGR '17-'25:
16,0			~ 5%
14,0
12,0
10,0
				16.1	17.6
8,0
	12.7	13.5	14.8
6,0	11.8
4,0
2,0
0,0
2017	2018	2019	2021	2023	2025

• 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

Source: SEMI, GMS estimates based on Gartner, Credit Suisse; 1 MSI: mio square inch; 2 AI: Artificial Intelligence; 3 IoT: Internet of Things; 4 MEMS: Sensors

46	SGL Carbon | Investor Relations Presentation

Our expected double digit growth is fueled by high power applications, based on SiC1 and GaN2 semiconductors.

SiC and GaN power device market (in $m)

CAGR 2017-2025

5.000

Market Details

• Wide Band Gap semiconductors offer new options where silicon reaches its limits

4.500
4.000	900	~ 58%

• Especially in power electronics, SiC and to some

extent GaN are expected to establish themselves

− PV inverters and power supply (as existing markets)

3.500

3.000

2.500

Total CAGR

'17-'25: ~ 39%

−	Electric vehicles, supposed to reach 40-50% of the SiC
	device market
−	Rail and industrial motor drives

2.000										~ 36%
			500	3,600
1.500
		311
1.000	23	75	1,517
500	859
	302	566
-
2017	2019	2021	2023	2025
						SiC			GaN

1Silicon Carbide; 2Gallium Nitride

Source: Yole Development. IHS Market

• GMS is well positioned to meet high customer

demands

47	SGL Carbon | Investor Relations Presentation

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

Metallurgical			Polysilicon		Si crystal		Epitaxy wafer		Wafer		(Chip)
silicon				growing			processing		Packaging

Graphite	•	Heaters	•	Heaters	•	Susceptors	•	Arc slits
products	•	Heat shields	•	Crucibles	•	Liners	•	Etch
	•	Reactor	•	Cones				electrodes
		internals	•	Insulation

• Small electrodes

Materials	Iso
Extruded	Extruded
SiC coating
CFRC1, felts	CFRC, felts	GMS business

1Carbon fiber reinforced carbon

48	SGL Carbon | Investor Relations Presentation

Market segment LED

49	SGL Carbon | Investor Relations Presentation

Our solutions for the LED industry.

Fields of application and product examples

Crystal growth		Crystal growth		LED (MOCVD)

SIGRAFINE® meander heater	SIGRATHERM® rigid felt	SIGRAFINE® SiC coated wafer carrier
for crystal growth furnaces	insulation cylinder	for LED wafer production in MOCVD
		reactors

50	SGL Carbon | Investor Relations Presentation

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)

1.800

1.600

1.400			Total CAGR
		'17-'25: ~ 12%
1.200
1.000
800						1,275	1,550
600
		840	950	1,050
400		730
620
200
0
2017	2018	2019	2020	2021	2023	2025

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

51	SGL Carbon | Investor Relations Presentation

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	Substrate wafers2	LED-wafers	LED chips/dies	LED module
(MOCVD)

	Sapphire boules3		Sapphire ingots & wafers3		AIX G5+ C Planetary Reactor®4				LED lamp5

Graphite	•	Heating elements	•	Wafer carriers
products	•	Heat shields	•	Planetary
	•	Insulation		susceptors
			•	Satellite discs
			•	Ceilings
Materials		Iso		Iso
		Extruded

SiC-coating

Felts	GMS business

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

Market segment Battery & other Energy

53	SGL Carbon | Investor Relations Presentation

Our products for energy storage.

Fields of application and product examples

Lithium-ion batteries		Flow and advanced batteries		Fuel cells

Specialty graphite for	Porous electrodes made	SIGRACELL® bipolar plates	SIGRACET ®
lithium-ion battery anodes	from SIGRACELL®	made of expanded graphite	gas diffusion layers
	battery felt	compounds	for PEM fuel cells

54	SGL Carbon | Investor Relations Presentation

The GDL market is expected to grow substantially over the next years.

GDL Market size in Transport 2018-2030

[m€, target market passenger cars]
			~1,000
			Long-term
			estimated
	CAGR	~500	range uncertain
	>50%
~20	~85
2018	2020 est.	2025 est.	2030 est.

Market Details

Market trends

• Growth still driven by Asian OEMs
• Deployment in Asia, California, Europe starting up
• More European OEMs & Tier1s getting engaged

Growth drivers

• Trend to zero emission vehicles and renewables
• Fuel cell vehicles completing electric vehicle portfolio on long range/mid&heavy duty car side
• Synergies in hydrogen supply to other industries e.g., steel making, gas turbines, energy storage

Source: SGL estimate based on current government targets (i.e., 2030: 2.5 mill. FC vehicles)

55	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 substantial ramp-up of current production and delivery volumes
• In the medium-term, SGL Carbon plans to more than quintuple its business with fuel cell components to annual sales of approximately 100 million euro.

56	SGL Carbon | Investor Relations Presentation

SGL supplies Gas Diffusion Layers for Fuel Cells in all major markets.

Value chain

Raw materials

Gas diffusion	GDL substrate	Fuel cell stack
layer substrate	refining

End use (OEM)

• Carbon fiber paper on roll
• Phenolic resin
• PTFE
• Graphite powder

• Impregnation of paper with resin + fillers
• Resin curing
• Carbonization & Graphitization

• Impregnation with hydrophobic PTFE
• Coating of sub- strate with micro- porous layer
• Sintering

• Production of other fuel cell components: membranes, bipolar plates etc.
• Cutting of GDL roll into sheets
• Assembly of Fuel Cell stack

Assembly of fuel cell stack into

•	Fuel cell vehicles
	(car, truck, bus)
•	Stationary
	- heat and power
	- uninterruptable
	power supplies
•	Portable

SGL GDL production

roll to roll process

- mobile back up

power

57	SGL Carbon | Investor Relations Presentation

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

150

200

250

> 300

Cell energy

density (Wh/kg)

Anode material

Solid State/Li-Metal

Silicon/Graphite3 > 30% Si

Graphite/Carbon-Silicon2

~ 10 - 30% Si

Graphite

 Graphite/Carbon-Silicon1

< 10% Si

Graphite

2015

2020

2025

2030

Source: Roadmap Nationale Plattform Elektromobilität and GMS assumptions

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

58	SGL Carbon | Investor Relations Presentation

Mid- to long-term SGL opportunity supported by the regional shift of EV and cell production.

EV LiB demand by region (in GWh)1

					CAGR
43	107	211	322	503	2017-2025

700

600

500

Market Details

• LiB-cellmass 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

		Total CAGR
400		'17-'25: ~ 36%	242
300
							138
200					85	107	140
100
20	45			75			121
	18	44			50	77
0		18
									2
2017	2019			2021	2023	2025
				EUR			NA		Asia

37%

29%

49%

• 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)

59	SGL Carbon | Investor Relations Presentation

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

Value chain

Raw materials

• Coke
• Pitch
• Natural graphite
• Silicon carbide

	Artificial		Anode
	graphite		material
Value chain to	•	Crushing and
produce "bricks":		milling
•	Green	•	Post-treatment
	(various recipes)		(coating and/or
•	Baking		annealing)
•	Graphitization

LiB cells & packs

• Cell production (cathode, electrolyte, separator and anode)
• Assembly of battery pack (located in Tesla's giga factory)

End use (OEM)

• Automotive OEMs
• Electronic devices
• Power tools
• ...

SGL/HCC cooperation

60	SGL Carbon | Investor Relations Presentation

Market segment Automotive & Transport

61	SGL Carbon | Investor Relations Presentation

Our solutions for the automotive industry.

Fields of application and product examples

Vacuum pumps		Fuel and		Sealings		Exhaust gas
	water pumps		and gaskets		recirculation

SIGRAFINE® PTS rotor with	SIGRAFINE® PTS bearings	SIGRAFLEX® expanded
vanes for brake assist pumps	made from carbon graphite	graphite foil for cylinder head
		and recirculation gaskets

SIGRAFINE® graphite bearings for exhaust gas recirculation valves

62	SGL Carbon | Investor Relations Presentation

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)

120

																			14
																					16
100														3
													9
		1			5 1					2
80		8								19												27
60
																		86
40		87			92									91
									77												68
20
																			13
0
Study 1	Study 2		Study 1		Study 2	Study 1	Study 2
	2018			2020					2025
									ICE		HEV			EV

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)

63	SGL Carbon | Investor Relations Presentation

Market segment Solar

64	SGL Carbon | Investor Relations Presentation

Our products and solutions for the photovoltaic industry.

Fields of application and product examples

Production of multi-

Polysilicon productionSilicon mono crystal pullingAnti-reflection coating crystalline silicon

SIGRAFINE® electrodes for	Support crucible made from	SIGRATHERM® MFA	SIGRABOND® CFRC carrier
Siemens reactors	SIGRABOND® CFRC	graphite rigid felt sheet	frame for solar wafers

65	SGL Carbon | Investor Relations Presentation

Long-term growth path for PV demand intact. Mono PV technology is

set to dominate the growth

Global PV installations (in GW/a)

CAGR 2017-2025

250

Market details:

• China subsidy cut in May 2018 leading to a temporary market decline
• Replacement demand for graphite unaffected

200

Total CAGR

'17-'25: ~ 9%

150
					116
					90
100
38		52	61
	41
50
57	42	46	48	62	74
0	4	4	5	6	8	10
2017	2018	2019	2021	2023	2025

• History proved PV demand to be highly price elastic, thus growth expected to continue

~ 15% • Switch from multi to mono technology impacts the full PV value chain and is beneficial for graphite consumption

• 3%
• 12%

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

66	SGL Carbon | Investor Relations Presentation

Graphite is required along the entire photovoltaic value chain.

Graphite products in the photovoltaic value chain

Polysilicon	Silicon crystal	Cell	PV module
growing

Mono pulling

•

Heating elements

•

Crucibles, cones,

Graphite

plates

•

Wafer boats

•

Heat shields

Products

•

Heating elements

•

Wafer carriers

•

Poly chucks

•

Insulation

CFRC1

Materials

Felts

Extruded/Vibro

Iso

GMS business

SiC/PyC2 coating

1Carbon fiber reinforced carbon; 2Pyrolytic carbon-coating

67	SGL Carbon | Investor Relations Presentation

Market segment Chemicals

68	SGL Carbon | Investor Relations Presentation

Our solutions for the chemical industry.

Selected product examples

Heat exchanger		Columns		Pumps		HCl synthesis		Sealing materials

DIABON® graphite	POLYFLURON®	DIABON® centrifugal	Bottom burner section	SIGRAFLEX® graphite
block heat exchanger	PTFE lined column	pump group in graphite	of HCl synthesis unit	sheet for gaskets
		for hot corrosive fluids

69	SGL Carbon | Investor Relations Presentation

Global chemicals market grows with global GDP.

With high dependence on China

Global chemicals demand (in €bn)

5.000		CAGR '17-'25:
		~ 5%
4.500
			922	965
4.000
	841	881	375
3.500	803		358
327	342
3.000
312		863	904	947
2.500		825
788
2.000
1.500
2,006	2,100	2,199	2,302	2,411
1.000
500
-
2017	2019	2021	2023	2025

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

Commodity		Specialty		Agricultural		Other

Source: Marketline, own calculations

70	SGL Carbon | Investor Relations Presentation

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	•	Acid production, e.g.	•	Various technologies, e.g.	• Variety of end products of
technologies &		hydrochloric or phosphoric		leaching, concentration,	chemical industry, e.g.
systems	•	MDI/TDI1 production		dilution, purification,	plastics, food additives,
	•	VCM2 production		desorption, absorption,	fertilizer, pigments
				distillation
			•	Polyurethane production
			•	PVC production
			•	Phosphoric acid purification

Sealing technologies • Corrosive and high temperature processes

GMS

business

1 Methylene diphenyl diisocyanate/tolylene diisocyanate; 2 Vinyl chloride monomer

71	SGL Carbon | Investor Relations Presentation

Market segment Industrial Applications

72	SGL Carbon | Investor Relations Presentation

Market segment Industrial Applications.

Our solutions for high temperature furnaces

Heating elements		Thermal insulation		Heat shields and		Charging systems
and systems			insulation protection		and elements

Our solutions for electrical discharge machining in toolmaking

Standard ready-to-run
	Detail electrode for precise		Rib electrode		Electrode for turbine blade
electrode		geometries		rib electrode		production

73	SGL Carbon | Investor Relations Presentation

Market segment Industrial Applications.

Our solutions for the metal industry

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

Our solutions for the glass and refractory industries

Container glass		Float glass

74	SGL Carbon | Investor Relations Presentation

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

75	SGL Carbon | Investor Relations Presentation

The importance of the value chain

76	SGL Carbon | Investor Relations Presentation

Specialty graphites come into play where other materials fail.

Barrel

susceptor

Crucibles

EDM1 electrode

Vacuum

pump

Extremely pronounced compared to other materials

Machining

speed not limited by material

Machinability

Thermal shock resistance

Thermal stability

Charging

carrier

Mechanical

strength

Specialty graphite

Resistance

to high temperatures

Increases

with temperature,

peaks

at 2,400 °C

Purity

Corrosion resistance

Finished part

ash content <5 ppm

Resistant to

acids, molten glass & metals

Heat

exchanger

Wafer

carrier

Meander heater & other components

in vacuum over 3,000 C°

Furnace parts &

insulation

1 Electrical Discharge Machining

77	SGL Carbon | Investor Relations Presentation

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

Manufacturing process of fine grain graphite

Binder pitch

Carbonizing

Graphitizing

Grinding	Mixing
		Pitch
	Shaping	impregnating
Coke &	Isostatic pressing,
vibration/die molding,
graphite	extruding
	4-5 months

Finishing

Machining

Purifying

SiC coating 2-12weeks

78	SGL Carbon | Investor Relations Presentation

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

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

1CFRC: carbon fiber reinforced carbon

79	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 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

Value-add/gross margin

80	SGL Carbon | Investor Relations Presentation

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

established

new

81	SGL Carbon | Investor Relations Presentation

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
• Mid- to long-term growth in energy markets driven by expansion of product and customer portfolio
• Strong growth in high margin digitization market (LED, semiconductor)
• Strong profitable growth in fuel cell components
• 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

82	SGL Carbon | Investor Relations Presentation

Innovation

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

SGL Innovation.

Focused on future growth markets

SGL Innovation

GMS		Central		CFM
Application & Technology		Innovation		Technology

•	Graphite anode materials	•	Strategic scouting	• Textile and carbon fibers
	for lithium-ion batteries	•	Advanced & future carbon fibers	•	Textile materials
•	Isostatic and extruded graphite	•	Future composites	•	Pre-impregnated materials
• Coated graphite for semiconductors	•	Future coatings	•	Thermoplastic materials
• Carbon and graphite felts	•	3D printed materials	•	Wet friction materials
•	Thermal management solutions	•	Next generation materials for	• Lightweight solutions & prototypes
•	Sealing materials		lithium-ion batteries
• Equipment for chemical industry	•	C/SiC1 ceramics
• Die molded materials for automotive

1 C/SiC: Carbon fiber reinforced Silicon Carbide

84	SGL Carbon | Investor Relations Presentation

SGL Central Innovation - Future Growth Areas.

From research and development to profitable business

Startups:

Develop business with profitable growth

Development: Products & technology in cooperation with customers and partners

Future growth areas:

Defined by analysis of markets and Megatrends in technology

Devel

Commercialization

Startup GDL1 for fuel cell

C/SiC

ceramics	C/SiC2 ceramics	GDL for fuel cell
3D printing
Nano Si/C for	Si
next generation
lithium-ion batteries	Nano Si/C3 for LIB	3D printing
Future carbon
fibers & textiles
Future	Future coatings	Fut. composites
composites
Future
coatings
Scouting: Medtec,
water treatment, etc.	Water treatment	Future C-fibers

1GDL: Gas diffusion layer, regrouped from CI to BU GMS in Q4/2019 ; 2C/SiC: Carbon/Silicon carbide; 3Si/C: Silicon/Carbon

85	SGL Carbon | Investor Relations Presentation

SGL Central Innovation - Future Growth Areas.

SGL Carbon - A Pioneer in 3D Printing of Carbon Materials

Base Process*

3D printing of

Trademarks

Prototypes

Customers Advantage

carbon/SiC materials

• Post Treatment** Metal impregnation

Polymer impregnation

Siliconization

CARBO-

PRINT

C®

CARBO-

PRINT

M®

CARBO-

PRINT

P®

CARBO-

PRINT

Si®

SICA-

PRINT

P ®

SICA-

PRINT

Si ®

• Degree of freedom Arbitrary design
• Individualization Prototypes & small series
• High flexibility Fast set up
• Cost reduction Avoid/reduce machining

• Developing prototypes with customers,
  First products sold into real application

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

86	SGL Carbon | Investor Relations Presentation

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
• Command 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
• Return to profitable growth path

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

88	SGL Carbon | Investor Relations Presentation

Thank you for your attention !

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

Backup

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

Outlook for fiscal year 2020

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

COVID-19 impact on our operations.

• SGL Carbon has two clear priorities:
• • To deploy preventive measures to protect the health of our employees, their families and our business partners
  • To steer our Company in the best way and as unscathed as possible through these difficult times
  • Implemented rules of conduct have contributed to the fact that only very few SGL Carbon employees have so far been positively tested for the Corona virus
• SGL Carbon is globally active with 29 production sites. Some countries resp. regional authorities have implemented far- reaching measures such as lockdowns, which had immediate impact on our operations
• • GMS sites in China, India, Italy and Spain temporarily affected by these restrictions, which have in the meantime been lifted and the sites have resumed operations
  • Due to customer production stops, CFM sites in Wackersdorf and Willich (Germany) as well as Austria have reduced their production and introduced short time work. This also applies to the two production sites of the Brembo SGL JV
  • Thanks to the implemented measures, remaining sites of SGL Carbon in Germany, USA, UK, France, Portugal and Poland were able to largely maintain production and delivery of products without interruption, albeit at different degrees of capacity utilization
• To counteract the effects of the partially massive interruptions in the supply chain and their resulting lost work time, SGL Carbon is utilizing personnel measures such as short time work and reduction of vacation and overtime in some sites and businesses that are particularly affected.
• Administrative employees and teams have continued to work largely out of their home offices. To enable this, we have multiplied the capacity of our IT networks

92	SGL Carbon | Investor Relations Presentation

Business performance in Q2/2020 better than initially anticipated.

• At the beginning of Q2/2020, business development particularly in the business unit Composites - Fibers & Materials (CFM) was still dominated by the pandemic protection measures in place in Europe and North America as well as a sharp initial decline in volumes
• In the further course of Q2/2020, own measures to adapt to the effects of the pandemic were accompanied by a beginning volume recovery
• As a consequence, preliminary results for Q2/2020 do not look as weak as anticipated at the Q1/2020 quarterly statement presentation in May 2020 (Group sales to decline substantially double-digit compared to the prior year level, negative recurring EBIT)
• While Group sales has likely declined by approx. 25% compared to the prior year level of approx. €273 million, recurring EBIT is likely to have remained at break-even level in the second quarter 2020
• Liquidity position at approx. €150 million at end of Q2/2020 has remained stable compared to the end of the prior quarter and thus continues to be above the level at year-end 2019 (approx. €137 million)

93	SGL Carbon | Investor Relations Presentation

Reinstating new FY2020 guidance based on certain assumptions.

• On April 1, 2020, the Board of Management of SGL Carbon SE decided to suspend the guidance for the fiscal year 2020 given Covid-19 pandemic related uncertainties
• As the view on H2/2020 is becoming more consistent, we published a new FY2020 guidance on July 28, 2020
  (based on certain assumptions, in particular a second pandemic wave and its economic effects are not incorporated into our current guidance):
• • Group sales to decline year-over-year by 15% to 20%
  • Group operating recurring EBIT to be slightly positive
  • Group net result from continuing operations to reach a similar amount as expected before the COVID-19 pandemic outbreak (negative low double-digit €m amount) despite a lower operating Group recurring EBIT
  • Capex to be reduced further to €60m (pre-crisis guidance: €70-80 million)
  • Group net financial debt to increase by a mid double-digit €m amount, which is roughly inline with our guidance from March 2020, despite substantially lower operating earnings expectations
• Accordingly, a comfortable liquidity position is expected at year-end 2020, despite planned purchase price payment for the US carbon fiber activities (Moses Lake facility) in Q4/2020. In addition, the syndicated loan in the amount of €175 million continues to remain available and undrawn
• A more detailed outlook will be provided on August 13, 2020 with publication of H1/2020 results

94	SGL Carbon | Investor Relations Presentation

Latest financials Q1/2020

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

Composites - Fibers & Materials.

in € million	Q1/2020	Q1/2019
Sales revenue	104.5	115.0
EBITDA1	10.5	9.0
EBIT1		3.7	0.4
EBIT1-Margin (in %)	3.5	0.3
ROCE	1 (in %)	-0.8	1.8
	EBIT

• Overall no material impact yet from Covid-19 pandemic
• Sales revenue in Q1/2020 in line with expectations with decline of 9% (currency adjusted minus 10%)
• • Sales revenue decline anticipated due to the restructuring driven lower sales revenues in the market segment Textile Fibers
  • Corona-relateddeclining trends in the market segments Automotive and Aerospace were compensated by the higher than expected sales growth in Wind Energy
  • Sales in Industrial Applications were stable and thus also slightly better than planned
• EBIT1 in Q1/2020 improved substantially to €3.7m despite almost €3 million lower contribution from At-Equity result
• • JV with Brembo in particular was directly impacted by the production curtailments of European automotive OEMs
  • Driven by earnings improvement measures implemented in the prior year, particularly restructuring in Textile Fibers, price increases in the market segment Wind Energy as well as the segment-wide improvement of the operational performance
• Decline in ROCE results from calculation method employing recurring EBIT for the last twelve months

96	1	before non-recurring items of minus €2.6 million in Q1/2020 and minus €2.4 million in Q1/2019
SGL Carbon | Investor Relations Presentation

Graphite Materials & Systems.

in € million	Q1/2020	Q1/20191
Sales revenue	134.6	166.4
EBITDA	18.9	32.8
EBIT	11.9	26.5
EBIT-Margin (in %)	8.8	15.9
ROCEEBIT (in %)	13.2	17.4

• Overall no material impact yet from Covid-19 pandemic
• Sales revenue in Q1/2020 down 19% (currency adjusted by 20%)
• • Decline in sales revenues anticipated due to changes in supply chain in our lithium-ion battery business (Market Segment Battery & other Energy)
  • All market segments declined compared to the prior year period
  • Except Semiconductors, which continued to grow double-digit
• EBIT in Q1/2020 decreased more than proportionately by 55%
• • Note that prior year quarter was at record level and also benefited from IFRS 15 effect
  • In line with sales revenue development, almost all markets segments posted lower earnings compared to the prior year period
  • Based on the substantially higher sales revenues, earnings in the market segment Semiconductors improved slightly
  • Earnings in market segment Automotive & Transport stable despite lower sales revenues due to productivity improvements.

1Adjusted to reflect the reclassification of the business with gas diffusion layers from Corporate

97	SGL Carbon | Investor Relations Presentation

Corporate.

in € million	Q1/2020	Q1/20191
Sales revenue	7.7	7.4
- of which Central Innovation	0.3	0.2
EBITDA	-4.8	-5.5
EBIT	-6.6	-8.2
- of which Central Innovation	-3.0	-2.3

• Sales revenue in absolute terms close to prior year level
• EBIT improved significantly despite slightly higher expenses in Central Innovation (central R&D department)
• • primarily due to one-time income from final invoicing of services to divested business units (former Business Unit Performance Products)

1Adjusted to reflect the reclassification of the business with gas diffusion layers to the reporting segment GMS

98	SGL Carbon | Investor Relations Presentation

Group.

in € million	Q1/2020	Q1/2019
Sales revenue	246.8	288.8
EBITDA before non-recurring items	24.6	36.3
EBIT before non-recurring items	9.0	18.7
ROCEEBIT (in %)	3.1	5.0
Non-recurring items	-2.6	-2.4
EBIT	6.4	16.3
Net financing result	-9.4	-6.2
Results before income taxes	-3.0	10.1
Income tax expense and non controlling interests	-1.3	-1.2
Consolidated net result attributable to shareholders of parent company	-4.3	8.9

• Group sales revenue and recurring EBIT development described on prior pages. Group recurring EBIT declined as operational improvements in CFM and Corporate were offset by the substantial reduction in recurring EBIT of GMS
• Net financing result deteriorated primarily due to the lower foreign currency valuation of group loans which offset the slight improvement in the net interest expense resulting from the lower interest expenses for pensions
• Lower net result due to reduced EBIT and net financing result

99	SGL Carbon | Investor Relations Presentation

Free cash flow.

in € million (continuing operations)	Q1/2020	Q1/2019
Cash flow from operating activities	20.7	4.1
•	Capital expenditures in property, plant, equipment and intangible assets	-7.9	-15.4
•	Cash flow from other investing activities1	5.1	+7.6
Cash flow from investing activities	-2.8	-7.8
Free cash flow	17.9	-3.7
Free cash flow from discontinued operations	-2.3	-10.5

• Cash flow from operating activities improved significantly by €16.6m to €20.7m despite lower earnings primarily due to no significant increase in working capital in contrast to usual seasonal patterns
• Free cash flow also improved significantly to €17.9m from minus €3.7m in the prior year period
• • Substantial improvement in operating cash flow
  • Significantly lower capex as we push some expenditures back to preserve liquidity in current uncertain environment
  • Despite €1m lower dividend payment from JV with Brembo (Ceramic Brake Discs)
• Free cash flow from discontinued operations also improved significantly and included a tax payment for prior years for the former business unit PP
• • Prior year included cash outflow relating to final settlement payments to the buyer of HITCO Aerostructures

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

100 SGL Carbon | Investor Relations Presentation

Balance sheet.

in € million	31.03.2020	31.12.2019
Equity ratio (in %)	29.6	27.8
Total liquidity	149.8	137.1
Net financial debt	281.5	288.5
Gearing (net debt/equity)	0.66	0.69
Leverage ratio (net debt/EBITDA)	2.6	2.4

• Equity ratio improved mainly due to positive effects of €25.2m resulting from the adjustment of interest rates for pension provisions to the increased interest rate environment in Germany. Positive foreign currency changes of €3.8m were offset by the net result of minus €4.3m
• In contrast to normal seasonal patterns we were able to increase liquidity to nearly €150m at the end of Q1/2020 compared to approx. €137m at year-end 2019
• Slight improvement in net financial debt is primarily attributable to the positive free cash flow of €17.9m, slightly offset by an increase in financial debt relating to a loan for the acquisition of a building lease in the amount of €6.7m

101 SGL Carbon | Investor Relations Presentation

Appendix

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE

The transformation of SGL Group.

We have implemented the announced strategy

Composites - Fibers &		Graphite Materials & Systems
Materials (CFM)		(GMS)

Fibers, materials		Graphite based
and composites		technological solutions

Central Innovation

Corporate Functions

Discontinued operations sold

Q4/2017

Performance

Products (PP)

Graphite electrodes

Cathodes

Furnace linings

Carbon electrodes

• 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

103 SGL Carbon | Investor Relations Presentation

Regional Sales Distribution.

Sales by destination

		Europe outside
Sales	Germany	Germany	North America	Asia	Rest of World
2019	31 %	17 %	15 %	32 %	4 %
2018	34 %	18 %	16 %	28 %	4 %

Sales by origin

		Europe outside
Sales	Germany	Germany	North America	Asia
2019	39 %	29 %	25 %	7 %
2018	39 %	31 %	23 %	7 %

104 SGL Carbon | Investor Relations Presentation

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 June 30, 2020)	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%

105 SGL Carbon | Investor Relations Presentation

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.

106 SGL Carbon | Investor Relations Presentation

Financial calendar/contact details.

Financial calendar 2020

March 12, 2020	Annual Report 2019
May 14, 2020	Quarterly statement as of March 31,
2020
June 16, 2020	Annual General Meeting
August 13, 2020	Report on the first half year 2020
November 12, 2020	Statement on the nine months 2020

Contact

SGL Carbon SE

Soehnleinstrasse 8

65201 Wiesbaden

Germany

Phone	+49 (0) 611 - 6029 - 103
Fax	+49 (0) 611 - 6029 - 101

[e-mail] www.sglcarbon.com

107 SGL Carbon | Investor Relations Presentation

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.

© Copyright SGL Carbon SE

• Registered trademarks of SGL Carbon SE