SGL Carbon SE · XETR:SGL
SGL Carbon — Berenberg Convertible Bonds Conference 2017
42 slides from SGL Carbon's conference presentation, Mar 30, 2017
Slide 1: Berenberg Convertible Bonds Conference 2017
Berenberg Convertible Bonds Conference 2017 Paris Dr. Michael Majerus, CFO March 30, 2017
Slide 2: Agenda
Agenda. 1. Review of the fiscal year / Financials 2016 2. Outlook 3. Strategic realignment 4. The “new” SGL Group 5. Project Highlights Page 2 Berenberg Convertible Bonds Conference 2017
Slide 3: Review of the fiscal year 2016
Review of the fiscal year 2016. Key elements of strategic realignment implemented We completed the carve out of Business Unit PP six months ahead of schedule We adapted the business model for graphite electrodes (GE) to commodity markets We found an ideal new owner for the GE business in Showa
Slide 4: Summary of key figures 2016
Summary of key figures 2016. First steps toward sustainable improvement in earnings Sales at €770 million slightly below prior year level EBIT before non-recurring effects improves to €21 million, corresponding to ROCEEBIT of 2.5% ROCEEBITDA rises to 8.4% CFM again improved EBIT considerably GMS
Slide 5: New Group Market Segmentation
New Group Market Segmentation. Reflects stronger orientation to customer and growth markets Market Segment Sales Mobility1 Energy2 Digitization3 Industrial Chemical Textile Applications Fibers 2016 20 % 22 % 4% 27 % 15 % 12 % 2015 18 % 20 % 4% 27 % 17 % 14 % 1comprises automotive, aerospace and tran
Slide 6: Agenda
Agenda. 1. Review of the fiscal year / Financials 2016 2. Outlook 3. Strategic realignment 4. The “new” SGL Group 5. Project Highlights Page 6 Berenberg Convertible Bonds Conference 2017
Slide 7: Business Unit outlook 2017
Business Unit outlook 2017. Composites – Fibers & Materials (CFM) Slight increase in sales − Particularly driven by higher carbon fiber demand for industrial applications − Slight increase in sales also in market segments automotive and textile fibers − Partially to be offset by lower sales with a
Slide 8: Group outlook 2017
Group outlook 2017. Improvement in all major KPIs expected Full year Group sales to increase mid single-digit in percentage terms Group recurring EBITDA* and EBIT* to increase more than proportionately to sales due to expected volume increase and initial CORE savings Net result – continued ope
Slide 9: Update on PP disposal process
Update on PP disposal process. Status of closing proceedings of GE sale to Showa Denko − Antitrust approval received from respective authorities in Germany, Japan and Russia − Merger clearance process in US ongoing − Execution of step plan between signing and closing progressing as scheduled − We
Slide 10: Clearly defined deleveraging building blocks
Clearly defined deleveraging building blocks. We are fully committed to reducing leverage Expected cash proceeds from announced measures Key observations • SGL113 ACF debt provided by BMW shareholder loans >200 • Significant deleveraging at end of 2016 due to 173 rights issue Net financial debt Net
Slide 11: Target for GMS and CFM
Target for GMS and CFM. Profitable sales growth of 50% 1200 Drivers for ROCE improvement: 1000 Top line growth (benefiting from 800 Megatrends) leading to higher ~ €1.1 billion capacity utilization 600 sales at or above Increasing share of innovative €737 million Moderate organic products bearin
Slide 12: Agenda
Agenda. 1. Review of the fiscal year / Financials 2016 2. Outlook 3. Strategic realignment 4. The “new” SGL Group 5. Project Highlights Page 12 Berenberg Convertible Bonds Conference 2017
Slide 13: We are fully on track in achieving our strategic realignment
We are fully on track in achieving our strategic realignment. ROCE* 1) Right size Status Disposal Rotorblades ACHIEVED Generate Disposal HITCO ACHIEVED shareholder return 3 Sale of GE (signing) ACHIEVED Sale of CFL/CE 2017 2) Improve performance 15% Minimum return on capital SGL2015** ACHIEVED S
Slide 14: Agenda
Agenda. 1. Review of the fiscal year / Financials 2016 2. Outlook 3. Strategic realignment 4. The “new” SGL Group 5. Project Highlights Page 14 Berenberg Convertible Bonds Conference 2017
Slide 15: The transformed SGL Group
The transformed SGL Group. We are consistently implementing the announced strategy Discontinued operations Composites – Fibers & Graphite Materials & Performance Materials (CFM) Systems (GMS) Products (PP) Graphite electrodes (GE) Sold to Showa Denko Fibers and materials for Graphite based Cathodes
Slide 16: New SGL Group with focus on: Mobility, energy supply and digitization
New SGL Group with focus on: Mobility, energy supply and digitization Page 16 Berenberg Convertible Bonds Conference 2017
Slide 17: Growing with global megatrends
Growing with global megatrends. Carbon based solutions Market growth, CAGR 2015 - 2020 Energy Digitization Mobility 10 %1 7 - 9 %2 3 - 5 %3 Wind mobile 3C end devices Automotive CFM Pressure vessels Aerospace 10 %4 Pressure vessels SGL Growth Stationary energy storage Lithium-ion batteries Lithium-i
Slide 18: 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, CFM Composite Polyacrylonitrile (PAN) fibers, carbon fibers multiaxial fabrics
Slide 19: Agenda
Agenda. 1. Review of the fiscal year / Financials 2016 2. Outlook 3. Strategic realignment 4. The “new” SGL Group 5. Project Highlights Page 19 Berenberg Convertible Bonds Conference 2017
Slide 20: Launch of Lightweight and Application Center (LAC)
Launch of Lightweight and Application Center (LAC). For serial lightweight construction Tailor made solutions for serial production of fiber reinforced plastics Initial focus on automotive industry, solutions for aerospace, wind energy and other industries to follow Cooperation between CAD eng
Slide 21: Developed customized solutions
Developed customized solutions. Serial production of structural parts and gear box applications 500,000 leaf springs p.a. from 2020 onwards based on composite materials for the models S60, S90, V60, V90 and XC60 Project with highest production volume of a composite component in the industry CF
Slide 22: Strengthened position in lithium-ion battery industry
Strengthened position in lithium-ion battery industry. Expansion of business opportunities Synthetic anode material qualified with further cell manufacturers Cooperation intensified with long-standing partner Hitachi Chemicals Development of next generation lithium-ion batteries with higher st
Slide 23: A look into the market segments
A look into the market segments. Summary of important project highlights Developed customized solutions and kicked off new projects Contract extension and development projects Strengthened position in lithium-ion battery industry Capacities expanded based on increased LED demand Received large contr
Slide 24: Strategic realignment of SGL Group
Strategic realignment of SGL Group. 2017: Focus on growth Achieve prerequisites for returning to sustainable profitable growth Closing of sale of graphite electrode business to Showa Denko Sale of cathode, furnace lining and carbon electrode business Early repayment of corporate bond Imple
Slide 25: Thank you for your attention!
Thank you for your attention! Page 25 Berenberg Convertible Bonds Conference 2017
Slide 26: Appendix: Latest Financials FY 2016
Appendix: Latest Financials FY 2016 Backup Page 26 Berenberg Convertible Bonds Conference 2017
Slide 27: Composites – Fibers & Materials. New market segmentation
Composites – Fibers & Materials. New market segmentation Market Segment Sales Automotive Aerospace Wind Industrial Textile Fibers Energy Applications 2016 29 % 7% 15 % 21 % 28 % 2015 28 % 4% 15 % 20 % 33 % Page 27 Berenberg Convertible Bonds Conference 2017
Slide 28: Composites – Fibers & Materials. Further considerable improvement in earnings
Composites – Fibers & Materials. Further considerable improvement in earnings in € million 2016 2015 Sales revenue 317.4 327.3 EBITDA before non-recurring items* 41.3 32.0 EBIT before non-recurring items* 20.1 11.3 EBIT-Margin before non-recurring items* (in %) 6.3 3.5 ROCEEBITDA (in %) 10.9 9.2 S
Slide 29: Graphite Materials & Systems. New market segmentation
Graphite Materials & Systems. New market segmentation Market Segment Sales Battery & Solar LED Semi- Automotive Chemical Industrial other Energy conductor & Transport Applications 2016 16 % 11 % 2% 5% 7% 27 % 32 % 2015 14 % 10 % 3% 5% 7% 30 % 31 % Page 29 Berenberg Convertible Bonds Conference 2017
Slide 30: Graphite Materials & Systems. Development impacted by weakness in oil related industries
Graphite Materials & Systems. Development impacted by weakness in oil related industries in € million 2016 2015 Sales revenue 444.1 453.5 EBITDA before non-recurring charges* 49.8 56.6 EBIT before non-recurring charges* 27.8 34.1 EBIT-Margin before non-recurring charges* (in %) 6.3 7.5 ROCEEBITDA (i
Slide 31: T&I and Corporate. Further improvement
T&I and Corporate. Further improvement in € million 2016 2015 Sales revenue 8.3 8.7 EBITDA before non-recurring charges* -21.2 -24.7 EBIT before non-recurring charges* -27.2 -31.7 Recurring EBIT improvement due to − positive one-off effect from land sale in Malaysia − Higher expenses for IT and ma
Slide 32: Group. Improved operational performance
Group. Improved operational performance but high burden from interest charges and disc. operations in € million 2016 2015 Sales revenue 769.8 789.5 EBITDA before non-recurring items 69.9 63.9 EBIT before non-recurring items 20.7 13.7 Non-recurring items (reversal of impairment and restructuring ) 3.
Slide 33: Balance sheet
Balance sheet. Effect from negative free cash flow more than compensated by rights issue proceeds in € million 31.12.2016 31.12.2015 Total assets 1,899.2 1,856.1 Equity ratio (in %) 17.5 15.6 Total liquidity 329.5 250.8 Net financial debt 449.4 534.2 Gearing (net debt/equity) 1.35 1.85 Further imp
Slide 34: Free cash flow. Improved but still negative
Free cash flow. Improved but still negative Continued operations in € million 2016 2015 Cash flow from operating activities -16.2 -66.4 Capital expenditures in property, plant and equipment and intangible assets -34.6 -44.4 Cash used in other investing activities* 2.7 11.5 Free cash flow -48.1 -99.3
Slide 35: Optimizing the CFM value chain
Optimizing the CFM value chain. Fibers, composite materials and production Commissioning and inauguration of the new precursor production line in Portugal Precursor being the raw material for carbon fibers Completion of the value chain Total investment amounting to €30 million Concentratio
Slide 36: Initiated development projects globally
Initiated development projects globally. For material mix solutions in passenger cars Jaguar Land Rover Cooperation with British research institutes and OEMs under SGL Group leadership Development of new composite materials structures and manufacturing prototypes for structural parts of existi
Slide 37: Large orders and portfolio extension
Large orders and portfolio extension. Continued industrialization in China Largest order ever in China for PTFE coated pipes for a recycling facility for hydrochloric acid (photovoltaic industry) Large order from Sabic Cartagena (Spain) for pipes for treatment of process waste water Extension
Slide 38: Capacity increase in the USA
Capacity increase in the USA. To meet increased demand for LEDs Construction of a new state-of-the-art production line for the coating of graphite carrier plates (wafer carriers) in the USA Total investment of €7.5 million Completion 2017 SGL Group technology provides critical contribution t
Slide 39: Ready for lift-off
Ready for lift-off. Contract extension and various development projects Extension of contract with Airbus-subsidiary Elbe Flugzeugwerke (pre-impregnated carbon fiber textiles for Airbus A350 floor panels) Planned increase in vertical integration with an aerospace industry supplier for secondary
Slide 40: Shares in issue and shareholder structure
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 February 28, 2017) 122,341,478 Free float ~ 45% Reported shareholdings according to §§ 21 f. WpHG SKion GmbH (Oct 15, 2014) 27.46%*
Slide 41: Debt market instruments
Debt market instruments. Corporate bond Convertible notes 2015/2020 Coupon 4.875% Coupon 3.5% Principal Amount € 250 million Principal Amount € 167 million Issue Date 12 December 2013 Conversion Price € 17.0732 Date of Maturity 15 January 2021 Conversion Right 9.78 million shares (as at February 28,
Slide 42: 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
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