SGL Carbon SE · XETR:SGL
SGL Carbon — Corporate Update (November 2020)
26 slides from SGL Carbon's corporate update, Nov 2, 2020
Slide 1: Update on SGL Carbon
Update on SGL Carbon Investor & Analyst Call Torsten Derr, CEO Michael Majerus, CFO Thomas Dippold, Member of the Board of Management Wiesbaden, November 2, 2020 1 SGL Carbon | Investor Relations| November 2020
Slide 2: Welcome and Agenda
Welcome and Agenda Introduction incoming CFO Thomas Dippold Recent developments The way forward 2 SGL Carbon | Investor Relations| November 2020
Slide 3: Agenda
Agenda Introduction incoming CFO Thomas Dippold Recent developments The way forward 3 SGL Carbon | Investor Relations| November 2020
Slide 4: Incoming CFO Thomas Dippold
Incoming CFO Thomas Dippold • Born and raised in Bamberg, southern Germany • Overall 23 years experience in various finance roles, with particular focus on successful operational and financial restructuring and turnaround situations − Most recently CFO of stock exchange-listed Schaltbau Holding AG −
Slide 5: Agenda
Agenda Recent developments The way forward 5 SGL Carbon | Investor Relations| November 2020
Slide 6: Recent developments
Recent developments 1 Developing new 5 year plan 2 Solid operational and cash development in Q3 – adjustment in net profit guidance for 2020 6 SGL Carbon | Investor Relations| November 2020
Slide 7: Mid term prospects for certain markets have changed considerably
Recent developments 1 Developing new 5 year plan Mid term prospects for certain markets have changed considerably • Automotive: − Industry on the whole challenged – new drives, new competitors, increased pressure from legislation − Automotive customer reduced focus on lightweight construction − Carb
Slide 8: Developing new 5-year plan: key impacts
Recent developments 1 Developing new 5-year plan Key impacts • Impairment charge − Lower expected future cash flows in the Business Unit CFM compared to the last 5-year plan − Non-cash impairment charge in the amount of €80-100m to be recorded in non-recurring items in Q4/2020 • Restructuring − Expe
Slide 9: Solid operational and cash development in Q3
Recent developments 2 Solid operational and cash development in Q3 – adjustment in net profit guidance for 2020 • Group sales approx. €220-230m compared to €210m in Q2/2020 • Group operating recurring EBIT approx. €13-15m, up substantially from €2m in Q2/2020 • Plus positive one-time effects of appr
Slide 10: Agenda
Agenda Recent developments The way forward 10 SGL Carbon | Investor Relations| November 2020
Slide 11: Negative KPI developments in 2020 mitigated by countermeasures
Negative KPI developments in 2020 mitigated by countermeasures, however effects are one-time and insufficient for turnaround EBITDA, in €m Net Debt, in €m Counter- 127 measures 120 289 242 Counter- measures FY2018 FY2019 FY2020e FY 2018 FY 2019 FY 2020e Scale 2020 is indicative 11 SGL Carbon | Inves
Slide 12: SGL Carbon's share and bond prices show negative performance
SGL Carbon’s share and bond prices show negative performance Relative performance of SGL Carbon shares, Absolute performance of corporate bond indexed Jan 2018=100 since issuance 120 SDAX SGL Carbon 120 Corporate Bond 2019/2024 100 100 80 80 60 60 40 40 20 20 0 0 2018 2019 2020 Aug Jan Sep 2019 2020
Slide 13: New leadership has decades of experience in restructuring
New leadership has decades of experience in restructuring Dr. Torsten Derr, CEO Thomas Dippold, incoming CFO ▪ 20 years industry experience ▪ 16 years experience in restructuring ▪ 4 turnarounds in past 15 years ▪ 3 turnarounds 13 SGL Carbon | Investor Relations| November 2020
Slide 14: First observations
Lack of financial rigor and prioritization High complexity (sites, products, customers) First Over-administration (~20 corporate functions, complex observations guidelines) No full P&L accountability in Business Units Culture – focus on perfecting technology instead of improving profitability 14 SGL
Slide 15: SGL Carbon's value creation journey rests on two pillars
SGL Carbon's value creation journey rests on two pillars This is what we will talk about today This is what we will talk about next year Cash generation Graphite Specialties Composites Iso Expanded ACF GAM Precursor Die Molded Carbon Fiber Extruded FC Textile Prepreg Surface Process Technology Compo
Slide 16: What we will do
What we will do Priorities 1 New organization 2 Cost cutting 3 Spend discipline 4 Capital discipline 16 SGL Carbon | Investor Relations| November 2020
Slide 17: New Organization enhances transparency, management rigor and efficiency
1. New Organization enhances transparency, management rigor and efficiency From… …to PRINCIPLES Reporting Reporting Reporting Reporting Reporting Segment Reporting Segment Segment Segment Segment Segment Distinct business model BU BU Homogenous customer BU Composite BU Graphite BU BU Carbon Fiber &
Slide 18: Comprehensive review of all businesses and functions leads to reduced cost
2. Comprehensive review of all businesses and functions leads to reduced cost Zero-based Headcount + Improve Benchmarking budgeting Spend reduction Efficiency • Financial • Minimum cost per • Targeted • Non-essential performance function headcount activities reduced benchmarked determined reduction
Slide 19: Decisive initiatives increased spend control
3. Decisive initiatives increased spend control Hiring freeze Board approval required Spend control tower Every purchase order checked CAPEX discipline Rigorous funnel approach 19 SGL Carbon | Investor Relations| November 2020
Slide 20: Strengthen capital discipline
4. Strengthen capital discipline Establish Capital Structure Define Financial Policies Deliver ROCE improvement Key Priorities ▪ Be cash positive (“stop the ▪ Businesses compete for a fixed ▪ Stop unprofitable bleeding”) capex budget projects/activities ▪ Reduce net debt to reasonable ▪ Strengthen p
Slide 21: Restructuring delivers rapid and sustainable improvement
Restructuring delivers rapid and sustainable improvement while safeguarding selective growth options New operating Improve model performance New organization and >€100m recurring savings1 from management 2023 onwards Clear responsibilities >500 individual measures identified Incentives to be aligned
Slide 22: Recap: Focus now on performance, later on profitable growth
Recap: Focus now on performance, later on profitable growth Short term Mid term Long term • Secure financial headroom • Achieve satisfactory net debt • Step up investments in market • Stabilize operational level opportunities performance • Selective investments Exploit growth opportunities Reduce co
Slide 23: Thank you for your attention! We will now take your questions
Thank you for your attention! We will now take your questions © Copyright SGL Carbon SE ® Registered trademarks of SGL Carbon SE 23 SGL Carbon | Investor Relations| November 2020
Slide 24: Back-up
Back-up © Copyright SGL Carbon SE ® Registered trademarks of SGL Carbon SE 24 SGL Carbon | Investor Relations| November 2020
Slide 25: Bonsai – our transformation
Bonsai – our transformation 25 SGL Carbon | Investor Relations| November 2020
Slide 26: Important Note
Important Note This presentation contains statements relating to the future business and financial performance of and future events or devel opments involving SGL Carbon or its businesses, including statements with respect to SGL Carbon’s outlook, targets and business development, expected customer