SGL Carbon SE · XETR:SGL
SGL Carbon — FY2014 Earnings Presentation
28 slides from SGL Carbon's earnings presentation, Mar 18, 2015
Slide 1: Investor & Analyst Conference Call
Investor & Analyst Conference Call 18 March 2015 Investor Relations
Slide 2: Agenda
Agenda. 1. Review 2014 2. Financials 2014 3. Next steps 4 O 4. Outlook tl k 2015 Page 2 | SGL Group – Investor Relations | 18 March 2015
Slide 3: Review 2014. Cornerstones of strategic realignment defined
Review 2014. Cornerstones of strategic realignment defined ROCE* Generate shareholder 1)) Right g size return SGL2015 asset and portfolio restructuring 3 2) Improve performance SGL2015 organizational restructuring Minimum return on capital SGL Excellence E ll savings i 15% BU streamlining New proces
Slide 4: Right size. Business and asset portfolio aligned with market and core competencies
Right size. Business and asset portfolio aligned with market and core competencies p Strategic Focus Measures Status A Asset restructuring i Closure Cl L h t (Canada) Lachute (C d ) Relocation, consolidation, closure Termination production Narni (Italy) Focus on cost competiveness Prod
Slide 5: Improve performance. Manifold efficiency measures lead to optimized cost structures
Improve performance. Manifold efficiency measures lead to optimized p cost structures Savings target increased from €150 million to €240 million in two steps SGL2015 SG 0 5 measure easu e Savings Sa gs ta targets gets Status** Status Operational improvements and SGL Excellence ~ €115 million 80% (e.
Slide 6: Generate shareholder return. Stringent resource allocation to targeted growth areas
Generate shareholder return. Stringent resource allocation to targeted g areas Selective growth investments Increasing usage of lithium ion Lightweight automotive construction Profitable growth in high batteries, e.g. by the automotive requires more carbon fiber based performance carbon fiber based
Slide 7: Cultural transformation. Key prerequisite for successfully implementing change
Cultural transformation. Key prerequisite for successfullyy implementing p g change g New Board of Management with new management style New KPI targets provide clear measurability of success New incentive schemes implemented with new remuneration system aligns all management personnel to Board
Slide 8: Agenda
Agenda. 1. Review 2014 2. Financials 2014 3. Next steps 4 O 4. Outlook tl k 2015 Page 8 | SGL Group – Investor Relations | 18 March 2015
Slide 9: Performance Products. Impacted by price decline in graphite electrodes
Performance Products. Impacted by price decline in graphite g p electrodes in € million 2014 2013 Sales revenue 588.2 755.9 EBITDA before b f non-recurring i charges* h * 65 1 65.1 110 2 110.2 EBIT before non-recurring charges* 26.0 69.4 EBIT-Margin before non-recurring charges* (in %) 4.4 9.2 EBIT
Slide 10: Graphite Specialties. Growing anode materials, big ticket order
Graphite Specialties. Growing anode materials, big ticket order, and moderatelyy better order intake in € million 2014 2013 Sales revenue 345.5 296.7 EBITDA before b f non-recurring i charges* h * 49 7 49.7 32 6 32.6 EBIT before non-recurring charges* 29.9 15.9 EBIT-Margin before non-recurring charg
Slide 11: Carbon Fibers & Materials. Improvement despite higher start up losses as SGL ACF
Carbon Fibers & Materials. Improvement despite higher g start up p losses as SGL ACF in € million 2014 2013** Sales revenue 296.4 251.5 EBITDA before b f non-recurring i charges* h * -8.8 88 -14.7 14 7 EBIT before non-recurring charges* -22.5 -27.5 EBIT-Margin before non-recurring charges* (in %) -7
Slide 12: Corporate & Others. Strong reduction in corporate costs
Corporate & Others. Strong reduction in corporate costs p partiallyy offset byy p planned lower PT contribution in € million 2014 2013** Sales revenue 105.5 118.5 EBITDA before b f non-recurring i charges* h * -21.9 21 9 -25.3 25 3 EBIT before non-recurring charges* -30.7 -35.0 EBIT-Margin before no
Slide 13: Group. Price decline in graphite electrodes impacts overall performance
Group. Price decline in graphite electrodes impacts overall performance p in € million 2014 2013* Sales revenue 1,335.6 1,422.6 EBITDA before b f non-recurring i charges h 84 1 84.1 102 8 102.8 EBIT before non-recurring charges 2.7 22.8 Non-recurring charges -51.2 -122.8 EBIT -48.5 -100.0 Results fr
Slide 14: Balance sheet. Improvement reflects October 2014 capital increase
Balance sheet. Improvement reflects October 2014 capital p increase in € million 31.12.2014 31.12.2013* Total assets 2,170.3 2,059.1 Equity ratio (in %) 26.2 29.5 Total liquidity 347.5 235.1 Net financial debt 389.9 491.1 Gearing (net debt/equity) 0 69 0.69 0 81 0.81 * BaFin corrections reflected in
Slide 15: Free cash flow. Negative due to capex for SGL ACF
Free cash flow. Negative due to capex for SGL ACF and cash out for SGL2015 measures Continuing operations in € million 2014 2013** Cash flow from operating activities 17.4 161.6 Capital expenditures in property, plant and equipment and intangible assets -132.6 -117.0 - thereof SGL ACF -70.0 - 25.1 -
Slide 16: Solidly financed. Capital increase in October 2014 restores balance sheet metrics
Solidly financed . Capital increase in October 2014 restores balance sheet metrics SGL Group successfully €250 million Corporate Bond at 4.875% (maturity 2021) prolonged p g maturityy p profile in December 2013 €200 million ll credit d facility, f l undrawn d (maturity 2017) €134.7 million* Co
Slide 17: Agenda
Agenda 1. Key events 2014 2. Financials 2014 3. Next steps 4 O 4. Outlook tl k 2015 Page 17 | SGL Group – Investor Relations | 18 March 2015
Slide 18: Where we stand.
Where we stand. Targets announced with strategic realignment Status at year end 2014: ROCEEBITDA ≥ 15% 5.9% Gearing (net debt/equity) ~ 0.5 0.69 Equity ratio > 30% 26% Net resultcontinuing operations positive minus €128 million Leverage ratio (net debt/EBITDA) < 2.5 4.6 Free cash flowcontinuing ti i
Slide 19: Challenge. Levers to improve ROCE
Challenge. Levers to improve ROCE NEW ! Commercial Improve EBIT(DA): process ONGOING: SGL optimization Increase price Excellence, ROCE SGL2015 Increase sales volume Levers tto improve R Reduce costs (raw materials, indirect spend, …) EBIT(DA) ROCE = Reduce Working g Capital p (short term): Cap
Slide 20: Business Process Excellence (BPX). New Groupwide program introduced
Business Process Excellence (BPX). New Groupwide p program p g introduced Target is to streamline and standardize cross-BU processes Utilization of standardized IT solutions (SAP) After implementation phase BPX will become part of SGL Excellence Focus on procurement, supply chain and sales o
Slide 21: More stringent investment process
More stringent investment process. We have introduced more discipline p in capex p spending p g Budgeting Budget decided on by the BoM (strategy defines investments) Professional project manager from Central Engineering Project Planning BUs remain in charge of Business Case Approval by the B
Slide 22: Agenda
Agenda 1. Key events 2014 2. Financials 2014 3. Next steps 4 O 4. Outlook tl k 2015 Page 22 | SGL Group – Investor Relations | 18 March 2015
Slide 23: SGL Group in 2015. Organization streamlined to three from five business units
SGL Group in 2015. Organization streamlined to three from five business units Performance Graphite Materials & Carbon Fibers & Main JVs Products (PP) Systems (GMS) Composite Materials - SGL ACF* (CF/CM)* (C /C ) - Brembo SGL Graphite electrodes Graphite specialties Carbon electrodes Process technolo
Slide 24: Business unit outlook 2015
Business unit outlook 2015. Group EBIT improvement supported pp byy all three business units Performance Products (PP): Small percentage increase in sales, substantial percentage increase in EBIT. Somewhat higher volumes may be offset by raw material induced price adjustments. Improvement mainly d
Slide 25: Group outlook 2015
Group outlook 2015. Net profit should benefit from improved p EBIT and lower restructuring g expenses p Full year Group sales to remain stable even if lower raw material prices are partially passed on to customers Group recurring EBITDA and EBIT: substantial percentage increase, with H2 expected
Slide 26: 2015 negative free cashflow more than proportionately skewed to Q1
2015 negative free cashflow more than proportionately p p y skewed to Q1 Q1 typically shows a high working capital buildup This development is more pronounced in 2015, as Q4/2014 benefited, for example, from certain premature prepayments of customers, which had been scheduled for Q / 0 5 Q1/2015
Slide 27: SGL Group in 2015. Strategic realignment will continue
SGL Group in 2015. Strategic realignment will continue SGL2015 savings target increased in €240 million Business Process Excellence: implementation of initiatives Commercial process optimization (sales approach, contractual optimization, payment terms) Working capital process optimization (a
Slide 28: Thank you for your attention! Your questions, please
Thank you for your attention ! Your questions, please © Copyright SGL CARBON SE ® Registered trademarks of SGL CARBON SE