Sgl Carbon Se · XETR:SGL
Sgl Carbon — Investor Day (March 2018)
43 slides from Sgl Carbon's investor day presentation, Mar 14, 2018
Slide 1: Investor & Analyst Conference
Investor & Analyst Conference Frankfurt/Main March 14, 2018 Page 1
Slide 2: Agenda
Agenda. 1. Review of the fiscal year 2017 – Dr. Jürgen Köhler 2. Financials 2017 3. Outlook 2018 4. Market and business developments 5. New mid-term guidance Page 2
Slide 3: Review of the fiscal year 2017: strategic realignment completed
Review of the fiscal year 2017. Strategic realignment completed – growth strategy yielding results Reshaping and deleveraging completed ▪ We completed the sale of the Business Unit PP in the fourth quarter – preliminary cash proceeds of €461 million significantly reduced our net debt ▪ We have prema
Slide 4: Agenda
Agenda. 1. Review of the fiscal year 2017 2. Financials 2017 – Dr. Michael Majerus 3. Outlook 2018 4. Market and business developments 5. New mid-term guidance Page 4
Slide 5: Composites - Fibers & Materials
Composites - Fibers & Materials. Moderate growth and slightly more than proportional EBIT improvement in € million 2017 2016 Sales revenue 331.9 317.4 EBITDA before non-recurring items* 44.2 41.3 EBIT before non-recurring items* 22.7 20.1 EBIT-Margin before non-recurring items* (in %) 6.8 6.3 ROCEEB
Slide 6: Composites – Fibers & Materials. Market segmentation
Composites – Fibers & Materials. Market segmentation Market Segment Sales Automotive Aerospace Wind Industrial Textile Fibers Energy Applications 2017 30 % 6% 12 % 23 % 29 % 2016 29 % 7% 15 % 21 % 28 % Page 6
Slide 7: Graphite Materials & Systems
Graphite Materials & Systems. Strong growth and substantially more than proportionate EBIT improvement in € million 2017 2016 Sales revenue 510.2 444.1 EBITDA before non-recurring charges* 70.8 49.8 EBIT before non-recurring charges* 47.8 27.8 EBIT-Margin before non-recurring charges* (in %) 9.4 6.3
Slide 8: Graphite Materials & Systems. Market segmentation
Graphite Materials & Systems. Market segmentation Market Segment Sales Battery & Solar LED Semi- Automotive Chemical Industrial other Energy conductor & Transport Applications 2017 19 % 10 % 3% 6% 7% 24 % 31 % 2016 16 % 11 % 2% 5% 7% 27 % 32 % Page 8
Slide 9: Corporate. Like-for-like stable development as anticipated
Corporate. Like-for-like stable development as anticipated in € million 2017 2016 Sales revenue 18.0 8.3 EBITDA before non-recurring charges* -24.3 -21.2 EBIT before non-recurring charges* -30.4 -27.2 ▪ Lower recurring EBIT due to Positive one-off effect of approx. €4 million from land sale in Mal
Slide 10: Group. Improved operating profit and disposal proceeds
Group. Improved operating profit and disposal proceeds partially offset by still high interest expense in € million 2017 2016 Sales revenue 860.1 769.8 EBITDA before non-recurring items 90.7 69.9 EBIT before non-recurring items 40.1 20.7 Non-recurring items (reversal of impairment and restructuring
Slide 11: Free cash flow
Free cash flow. Positively impacted by proceeds from the sale of former business unit PP Continued operations in € million 2017 2016 Cash flow from operating activities -82.3 -16.2 Capital expenditures in property, plant and equipment and intangible assets -52.9 -34.6 Cash used in other investing ac
Slide 12: Balance sheet. All balance sheet targets have been reached
Balance sheet. All balance sheet targets have been reached in € million 31.12.2017 31.12.2016 Total assets 1,541.7 1,899.2 Equity ratio (in %) 29.6 17.5 Total liquidity* 382.9 333.0 Net financial debt 139.0 449.4 Gearing (net debt/equity) 0.30 1.35 Leverage ratio (net debt/EBITDA) 1.5 6.4 ▪ All bala
Slide 13: Agenda
Agenda. 1. Review of the fiscal year 2017 2. Financials 2017 3. Outlook 2018 – Dr. Michael Majerus 4. Market and business developments 5. New mid-term guidance Page 13
Slide 14: Business Unit outlook 2018
Business Unit outlook 2018. Composites – Fibers & Materials (CFM) ▪ Substantial increase in sales by 25% Mainly driven by acquisition of former joint ventures with BMW and Benteler Accordingly sales in market segment automotive to more than double, while sales with the wind energy industry shoul
Slide 15: Business Unit outlook 2018 (cont.)
Business Unit outlook 2018. (cont.) Graphite Materials & Systems (GMS) ▪ Slight increase in sales – corresponding to currency adjusted mid-to-high single digit sales growth Driven by market segments LED, solar as well as automotive & transport Semiconductor, chemicals and industrial applications
Slide 16: Group outlook 2018. Further improvement in the profit and loss statement
Group outlook 2018. Further improvement in the profit and loss statement ▪ Full year Group sales to increase by approximately 10%, corresponding to a like-for-like (ie. excluding currency and M&A effects) mid-to-high single digit growth rate ▪ Group recurring EBIT* to increase at a slightly faster p
Slide 17: Group outlook 2018. Capex/acquisitions drive higher net debt
Group outlook 2018. Capex/acquisitions drive higher net debt but all balance sheet targets remain intact ▪ Capex to increase compared to prior year to 15-25 million € above level of depreciation Level of depreciation increases to €65 million due to full consolidation of former joint ventures Bro
Slide 18: Agenda
Agenda. 1. Review of the fiscal year 2017 2. Financials 2017 3. Outlook 2018 4. Market and business developments – Dr. Jürgen Köhler 5. New mid-term guidance Page 18
Slide 19: Automotive. CO2 targets drive lightweight construction
Automotive. CO2 targets drive lightweight construction OEM fleet target development (EU) Relative component weight* [in g CO2/km] [in %] -20% -5 to -25% ~ -15% -30% ~ -40% -15% -20% 119 100 -60% 95 ≤ 81 ≤ 67 2016 2021 2025 2030 Steel . Light .. Aluminum ... Mag- . CFRP . uni- CFRP actual Expected ta
Slide 20: Automotive. Driving growth in CFM
Automotive. Driving growth in CFM… ▪ Completion of the FRP* value chain by acquiring and integrating former JVs with Benteler and BMW will allow to better address the increasing number of new requests from both OEM and Tier1 in the market ▪ Growth in components driven by New applications (e.g. lea
Slide 21: Automotive. ...as well as in GMS
Automotive. ...as well as in GMS ▪ E-mobility supports growth with graphite parts: higher demand for brake assistant pumps and water pumps Brake assistant pumps: create missing vacuum (electric vehicles) Water Pumps: cooling remains key topic in all vehicles (e.g. Tesla S has 4 secondary water p
Slide 22: Body and main parts: carbon and graphite in vehicles
1| BODY AND MAIN PARTS * Door, engine hood, rear spoiler * Fender © Coating of gas dampers/shock absorbers Roof 13 MISCELLANEOUS Carbon fibers for seat heaters Conductivity additive based on expanded graphite for lead-acid battery Heat dissipation elements made from expanded graphite Interior compon
Slide 23: Aerospace. Market growth and focus on operating cost efficiency
Aerospace. Market growth and focus on operating cost efficiency ▪ Airline industry extremely competitive, constant battle over cost reduction => composites address this key customer requirement as lightweight construction reduces fuel consumption ▪ Strong commercial aircraft CFRP market growth (CAGR
Slide 24: Aerospace. CFM growth based on proven competence
Aerospace. CFM growth based on proven competence in automated serial manufacturing ▪ Limitations in today’s aerospace composites manufacturing prevented further penetration beyond Boeing 787 and Airbus 380 and 350 Low annual production volume allow labor intensive production processes Composites
Slide 25: Wind energy. Redefine CFM market approach
Wind energy. Redefine CFM market approach to better exploit opportunities ▪ Current market conditions challenging Stagnating global installed wind turbine growth German-centric customer base more than proportionally affected (new tendering procedures) OEMs and suppliers are under high cost pre
Slide 26: Battery & other energy. Investment in lithium-ion battery
Battery & other energy. The whole value chain continues to invest into lithium-ion battery technology Cell Material Cell/Battery Automotive OEMs Producers Producers Multiplying of New capacities > 200 new xEV capacities initiated announced >500 models announced GWh/a until 2030 until 2025 Page 26
Slide 27: Battery & other energy. Accelerated growth drives graphite anode material
Battery & other energy. Accelerated growth drives our graphite anode material business ▪ All prior growth estimates will be exceeded – e-mobility as key driver ▪ Graphite Anode Material (GAM) demand approx. 1kg per 1 kWh ▪ Our strong market share positions us well to participate in anticipated stron
Slide 28: Solar. Growth continues, driven by and depending on China
Solar. Growth continues, driven by and depending on China PV module installations [GWp/a] Solar growth continues ▪ China, India and USA are main drivers EPIA historical data1) 160 ▪ Levelized costs of PV energy continues to fall PV Tech 2) 140 ▪ Crystalline silicon remains dominant PV technology ITR
Slide 29: Semiconductors. Stable long-term growth
Semiconductors. Stable long-term growth Semi sees stable and long-term growth ▪ 5% CAGR expected 2017-2022* ▪ Memory (computing, mobile phones) drives 12’’ ▪ Automotive (semi-autonomous and autonomous driving) and industrial (“Industry 4.0”) drives 8’’ ▪ After strong 2017, we expect 8’’ and 12’’ waf
Slide 30: LED. Major contributor to GMS' growth expectations
LED. Major contributor to GMS‘ growth expectations ▪ LED growth driven by 7.9%: automotive* CAGR 2016-2022 (increasing LED use on vehicle exteriors, headlamps, daytime running lights, rear lighting, turning lights, and interior vehicle illumination for both cars and heavy vehicles) 8.5%: signage
Slide 31: Chemicals. Chemical industry expected to stabilize
Chemicals. Chemical industry expected to stabilize Chemical production forecast Chemical industry improving profitability [change 2018 vs. 2017 in %] ▪ Consolidation (e.g. Dow/DuPont) ▪ US petrochemical industry recovering from low base World 3,5 ▪ Shale gas recovery expected USA 3,0 We expect our b
Slide 32: Industrial Applications. Favorable economic backdrop
Industrial Applications. Favorable economic backdrop for continued improvement in high-tech applications ▪ Economic forecasts (IMF, PMI, etc.) predict ongoing, if not improving favorable general industrial environment ▪ CFM: Industrial applications important end market to bridge automotive and aer
Slide 33: Agenda
Agenda. 1. Review of the fiscal year 2017 2. Financials 2017 3. Outlook 2018 4. Market and business developments 5. New mid-term guidance – Dr. Jürgen Köhler Page 33
Slide 34: Targets for 2020 remain valid. ROCE EBIT as key performance indicator
Targets for 2020 remain valid. We introduce ROCEEBIT as key performance indicator 1200 1000 Drivers for ROCE ~ €1.1 billion improvement: 800 sales* ▪ Top line growth (benefiting from megatrends) leading to 600 Moderate organic ≥15% higher capacity utilization €737 million sales growth and process Ac
Slide 35: We introduce a new mid term guidance
We introduce a new mid term guidance. Market trends and business positioning drive accelerated growth 1400 Group Additional 2022 targets: Net profit margin ~6-7% 1200 Free cash flow margin ~5% 1000 Group ~ €1.3 billion sales Over the entire guidance 800 €860 million ≥11% ROCEEBIT period: 600 sales E
Slide 36: Thank you for your attention!
Thank you for your attention! Page 36
Slide 37: Backup
@ SGL GROUP THE CARBON COMPANY Backup Page 37
Slide 38: Group Market Segmentation
Group Market Segmentation. Reflects stronger orientation to customer and growth markets Market Segment Sales Mobility1 Energy2 Digitization3 Industrial Chemical Textile Applications Fibers 2017 19 % 22 % 5% 29 % 14 % 11 % 2016 20 % 22 % 4% 27 % 15 % 12 % 1comprises automotive, aerospace, and transpo
Slide 39: Carbon and Graphite. Positioned along the entire value chain
Carbon and Graphite. Positioned along the entire value chain Customers Control over the entire value chain enables product customization to customer requirements Acrylonitrile, Acrylic fibers, oxidized Preforms, prepregs, Composite CFM Polyacrylonitrile (PAN) fibers, carbon fibers multiaxial fabrics
Slide 40: CFM. Capabilities tailored to serve market needs
CFM. Capabilities tailored to serve market needs Page 40
Slide 41: GMS. Challenges for series application of Solid State
GMS. Yet unsolved challenges for series application of Solid State will allow LiB to thrive for many years Solid State Technical Challenges Solid State Business Challenges ▪ Metallic lithium presents safety issue. ▪ Supply chain does not exist yet Highly reactive and self-igniting ▪ Re-investment in
Slide 42: GMS. Further improvement potential supports LiB outlook
GMS. Further improvement potential supports positive LiB technology outlook Current LiB technology still has large improvement potential and is not fully optimized yet ▪ Capacity & power limits have not been reached ▪ Silicon additives to anode materials will allow capacity improvements ▪ Raw materi
Slide 43: Important note
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