SGL Carbon SE · XETR:SGL
SGL Carbon — SGL Group — Deutsche Bank 9th German Corporate Conference 2012
42 slides from SGL Carbon's conference presentation, Aug 28, 2012
Slide 1: Deutsche Bank 9th German Corporate Conference
Deutsche Bank 9th German Corporate Conference Raj Roychowdhury, Head of Investor Relations Tokyo, 27 - 28 August 2012
Slide 2: Company profile
Company profile • SGL Group is one of the world’s largest • Sales of ~€ 1.5 bn in 2011 manufacturers of carbon-based products • Head office in Wiesbaden/Germany • Comprehensive portfolio ranging from carbon and graphite products to carbon • Approx. 6,500 employees worldwide fibers and composites • C
Slide 3: Introduction to SGL Group's Businesses
Introduction to SGL Group’s Businesses Investor Relations Presentation Page 3
Slide 4: SGL Group Business structure
SGL Group Business structure Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) • Graphite & Carbon • Graphite Specialties (GS) • Carbon Fibers & Electrodes (GCE) • Process Technology (PT) Composite Materials • Cathodes & F
Slide 5: Base Materials Performance Products (PP)
Base Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Performance Products (PP) Business units 2011 Group sales PP sales & EBIT margins • Graphite & Carbon 31% 29% Electrodes 24% 17% 24% 19% 19% CFC 15% 15% • Ca
Slide 6: Graphite electrodes for electric steel production
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite electrodes for electric steel production Steelmaking – An Electric Arc Furnace (EAF) Graphite electrode Section view through EAF Graphite Elec
Slide 7: Graphite electrode production process
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite electrode production process • GE critical to EAF furnace efficiency but only ~ 3% Graphite production of steelmaking conversion cost • GE is
Slide 8: Graphite electrodes (GE) for steel production in EAFs
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite electrodes (GE) for steel production in EAFs • Growth in steel Worldwide steel production [in mt] production fuelled by infrastructure demand
Slide 9: Cathodes for the aluminum industry
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Cathodes for the aluminum industry Aluminum smelter Cathodes 30 – 2 50 cm 4 3 4 100 – 380 cm 1 4 30 – 70 cm Special Sidewall glue blocks Cathode Rammin
Slide 10: Cathodes for the aluminum industry
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Cathodes for the aluminum industry • Aluminum demand driven by: Aluminum global production scenarios – Population growth and urbanization 2003 – 2020 /
Slide 11: Performance Products (PP) sales and highlights 2011
Base Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Performance Products (PP) Sales – 2011 Highlights 2011 • Continued improvement in graphite electrode volumes Cathodes & Furnace Linings 14% • Construction of
Slide 12: Graphite Materials & Systems (GMS)
Advanced Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite Materials & Systems (GMS) Business units 2011 Group sales GMS sales & EBIT margins • Graphite Specialties 18% 14% • New Markets 8% 9% 13% 11% •
Slide 13: Best solutions for our customers
Graphite Materials & Systems Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Best solutions for our customers … ... in the PV / ... in the Chemical and ... in the LED Industry Semiconductor Industry Automotive Industry I
Slide 14: Graphite manufacturing passes multiple process steps
Graphite manufacturing passes multiple process steps Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) and requires 4 to 6 months of production time (net) Raw Materials (Pitches & Cokes) Pre-pressing Processes Pressing Bre
Slide 15: Innovation driving new product portfolio
Graphite Materials & Systems Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Innovation driving new product portfolio Examples: GMS 2011 sales: €469 million • Heaters, molds and insulation for photovoltaic applications •
Slide 16: Major customer industries and market shares 2011
Graphite Materials & Systems Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Major customer industries and market shares 2011 % of total Global market GMS sales 2011 share 2011 Chemicals 24% 30% Energy: Solar 21% 25% Ene
Slide 17: Graphite Materials & Systems (GMS) sales and highlights 2011
Advanced Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite Materials & Systems (GMS) Sales – 2011 Highlights 2011 • Record sales and ROS due to high demand from all customer industries New Markets 11% •
Slide 18: Carbon Fibers and Composites (CFC)
Advanced Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Carbon Fibers and Composites (CFC) Business units 2011 Group sales CFC sales & EBIT margins • Carbon Fibers/ -3% -8% 4% -11% 2% Composite Materials -3% -
Slide 19: Carbon Fibers & Composites: Best solutions for our customers
Carbon Fibers & Composites Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Best solutions for our customers Investor Relations Presentation Page 19
Slide 20: The only integrated European carbon fiber producer
SGL Group The only integrated European carbon fiber producer Carbon Fibers & Composite Materials Composite Components Aerospace & Defense • HITCO (100%) Raw Carbon Composite Material Fiber Materials PAN Carbon Prepreg Industrial & Precursor Fiber Preform Energy • SGL Rotec (74.9%) • Fisipe (target •
Slide 21: Recent Acquisition Fisipe: Facts & Figures
Recent Acquisition Fisipe: Precursor for Carbon Fiber Production Facts & Figures Company • Established manufacturer of acrylic fiber specialties in Europe since 1973 • Listed since 1985 (86.2% Negofor, 10.5% single investor, 3.3% free float) • Well developed logistics: Based near Lisbon with direct
Slide 22: Fisipe: Precursor Decisive for Cost and Quality
Recent Acquisition Fisipe: Precursor for Carbon Fiber Production Decisive for Cost and Quality Precursor: Most important raw material Cost calculation model for 50K carbon fiber for carbon fibers • Determines material properties of carbon fibers Shipping Overhead 1% Other • Primary factor for carbon
Slide 23: Carbon Fibers and Composites (CFC) highlights 2011
Advanced Materials Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Carbon Fibers and Composites (CFC) Sales – 2011 Highlights 2011 • Carbon Fibers & Composite Materials (CF/CM): – Improved volumes and capacity utilizatio
Slide 24: SGL Excellence – enables productivity and growth
Ensuring the future SGL Excellence – enables productivity and growth SGL Excellence • Started in 2002 • The core element of the Company mission Innovation • An ongoing and Company wide program Excellence • Our philosophy of doing business SIX SIGMA + LEAN Operational Commercial • Our core methodolog
Slide 25: SGL Excellence savings
Ensuring the future SGL Excellence savings Since 2002 continuous cost reduction of €257 million in total 55 25 27 28 21 23 23 24 16 15 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Annual Net Savings (€m) Investor Relations Presentation Page 25
Slide 26: Near term outlook
Near term outlook Investor Relations Presentation Page 26
Slide 27: Outlook 2012 strongly dependent on macroeconomic development in H2
SGL Group Outlook 2012 strongly dependent on macroeconomic development in H2 Group • Assuming world economy will begin to pick up pace in H2, FY 2012 sales to grow vs. 2011 • EBIT to remain on 2011 level of approx. €160 million due to higher losses in CFC vs. 2011 • Relief from lower loss from inves
Slide 28: Financing Structure, Balance Sheet Ratios and Cash on Hand
Financing Structure, Balance Sheet Ratios and Cash on Hand Allow Continuation of Growth Path SGL Group established a solid long term financial structure in May 2007 • €200 million Corporate Bond at EURIBOR plus 125 bps (maturity 2015) • €145.5 million* Convertible Bond at 0.75%, adjusted conversion
Slide 29: Fundamental long-term growth drivers and mid term horizon
Fundamental long-term growth drivers and mid term horizon Investor Relations Presentation Page 29
Slide 30: Fundamental long-term growth drivers for our businesses
Fundamental long-term growth drivers for our businesses Strong growth in emerging countries (BRIC etc.) • Industrialization • Infrastructure build up Increasing demand for graphite electrodes and cathodes Investor Relations Presentation Page 30
Slide 31: Fundamental long-term growth drivers for our businesses
Fundamental long-term growth drivers for our businesses Changed economic Climate Energy / raw Key challenges environment change materials availability SGL Group “Towards an ecologically sensitive world” approach Sustainable Energy Alternative Light solutions efficiency energies weight Carbon contrib
Slide 32: Our carbon based products offer sustainable solutions towards less CO2
Our carbon based products offer sustainable solutions towards less CO2 2011 Sales (in €m) Aerospace 1.540 Automotive approx. 70% of Group Sales Wind ~ 1.050 12% Solar Light weight 13% Alternative energies Scrap recycling Batteries Energy 76% efficiency Automotive Cooling systems Investor Relations P
Slide 33: Group Sales to increase by more than 10% p.a.
Mid Term Horizon Group Sales to increase by more than 10% p.a.* Advanced Materials targeted to reach ~ 50% of Group sales €m 3000 CFC CFC JV sales GMS ~ € 0.5 bn** 2500 PP CFC ~25% 2000 GMS 1500 ~25% Group sales ~ €2.5 bn 1000 PP ~50% 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 34: Return on Sales (ROS) target remains at minimum 12%
Mid Term Horizon Return on Sales (ROS) target remains at minimum 12% Group ROS target of ≥ 12% to be achieved again in course of 2013 onwards 20% 15% Target ≥ 12% 10% 5% 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Outlook for 2012, especially for H2, uncertain due to unclear macroeconomic environ
Slide 35: Return on Capital Employed (ROCE) target remains at minimum 17%
Mid Term Horizon Return on Capital Employed (ROCE) target remains at minimum 17% Group ROCE target of ≥ 17% to be reached again by the end of the planning period 30% 120% Target ~80% 25% 100% 20% 80% 15% 60% 10% Target ≥ 17% 40% 5% ROCE (left hand scale) 20% Capital intensity* (right hand scale) 0%
Slide 36: Capex remains high until 2012 – Free Cash Flow positive expected from 2013
Mid Term Horizon Capex remains high until 2012 – Free Cash Flow positive expected from 2013 Capex and depreciation expected to converge, capex/sales ratio to return to historical levels 250 20% Capex 200 Depreciation Capex/Sales 15% 150 €m 10% 100 5% 50 0 0% 2005 2006 2007 2008 2009 2010 2011 • Majo
Slide 37: Mid Term Horizon: Performance Products
Mid Term Horizon Performance Products New state-of-the-art facility in Malaysia on stream; strong cash flow 1400 Sales (left hand scale) Sales to reach 35% ROS (right hand scale) new peak levels 1200 30% 25% 1000 20% €m 800 15% 600 10% 400 5% 200 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015
Slide 38: Mid Term Horizon: Graphite Materials & Systems
Mid Term Horizon Graphite Materials & Systems Sales growth accelerating; ROS ≥ 10% throughout planning period 700 Sales (left hand scale) Sales growth 20% ROS (right hand scale) ≥ 10% p.a. 18% 600 16% ROS target > 10% 14% 500 12% €m 400 10% 8% 300 6% 4% 200 2% 100 0% 2005 2006 2007 2008 2009 2010 20
Slide 39: Mid Term Horizon: Carbon Fibers & Composites
Mid Term Horizon Carbon Fibers & Composites Sales growth to accelerate 1200 Sales (left hand scale) Additional sales from At-Equity 15% ROS (right hand scale) consolidated JVs in CFC* 1000 10% ROS target > 10% 800 5% €m 600 0% 400 CFC sales growth ≥ 20% p.a. -5% 200 0 -10% 2005 2006 2007 2008 2009 2
Slide 40: Key Messages and Targets on track
Mid Term Horizon Key Messages and Targets on track • New assets leading to significant sales growth more than 10% p.a. • Reaching Group sales of more than €2.5 billion • in addition approximately €500 million from At-Equity accounted JVs in CFC (calculated on 100% ownership) • Sales growth targets r
Slide 41: Thank you very much for your attention
Thank you very much for your attention - I am now happy to take your questions Investor Relations Presentation Page 41
Slide 42: Important note: forward looking statements
Important note: This presentation contains forward looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward looking statements are associated with known and unknown risks and uncertainties, as a consequence of which actu
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