SGL Carbon SE · XETR:SGL
SGL Carbon — SGL Group — UniCredit German Investment Conference 2011
43 slides from SGL Carbon's conference presentation, Sep 28, 2011
Slide 1: UniCredit German Investment Conference
UniCredit German Investment Conference Jürgen Muth, CFO Munich, September 28, 2011
Slide 2: SGL Group – The Carbon Company
SGL Group – The Carbon Company • SGL Group is one of the world’s largest manufacturers of carbon-based products • Comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites • 45 production sites worldwide • SGL Group supplies a broad range of industries needing
Slide 3: Fundamental long-term growth drivers
Fundamental long-term growth drivers Investor Relations Presentation Page 3
Slide 4: 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 4
Slide 5: 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 6: Introduction to SGL Group’s Businesses
Introduction to SGL Group’s Businesses Investor Relations Presentation Page 6
Slide 7: 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 8: 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 2010 Group sales PP sales & EBIT margins • Graphite & Carbon 29% 31% Electrodes 24% 24% 19% 19% CFC 16% 15% • Cathod
Slide 9: Performance Products Graphite electrodes
Performance Products Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Graphite electrodes Steelmaking – An Electric Arc Furnace (EAF) Graphite electrode Section view through EAF Graphite Electrodes Furnace shell Molten st
Slide 10: 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 11: 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 12: 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 13: 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 14: 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) Sales – 2010 Highlights 2010 • Production increased to meet recovering demand Cathodes & Furnace Linings 14% • Investment into 60kt
Slide 15: Advanced Materials 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 2010 Group sales GMS sales & EBIT margins • Graphite Specialties 13% 14% 9% • New Markets 11% 8% • Proc
Slide 16: 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 17: Graphite manufacturing process steps
Graphite manufacturing passes multiple process steps and requires 4 to 6 months of production time (net). Raw Materials (Pitches & Cokes) Pre-pressing Processes Pressing Breaking, milling, or High quality raw sieving, binding, materials from mixing, homoge- reliable sources Isostatic pressing Extrud
Slide 18: 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 2010 sales: €396 million • Heaters, molds and insulation for photovoltaic applications •
Slide 19: Major customer industries and market shares 2010
Graphite Materials & Systems Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Major customer industries and market shares 2010 % of total Global market GMS sales 2010 share 2010 Chemicals 29% 30% Energy: Solar 16% 25% Ene
Slide 20: Advanced Materials 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) Sales – 2010 Highlights 2010 • GMS sales into Asia nearly 30% Process • Capacity expansion on stream to accompany Tech
Slide 21: Advanced Materials 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 2010 Group sales CFC sales & EBIT margins • Carbon Fibers/ 4% Composite Materials 2% -11% -3% -3% -3% •
Slide 22: 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 22
Slide 23: Unique offering of the complete value chain
Carbon Fibers & Composites Base Materials Advanced Materials Performance Products Graphite Materials & Carbon Fibers & (PP) Systems (GMS) Composites (CFC) Unique offering of the complete value chain Carbon Fibers & Composite Materials Composite Components Aerospace & Defense • HITCO (100%) Raw Carbo
Slide 24: Advanced Materials 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) Sales – 2010 Highlights 2010 • Carbon Fibers & Composite Materials (CF & CM): – Substantially improved volumes and cap
Slide 25: 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 Operational Commercial • Our core methodology Excel
Slide 26: SGL Excellence savings
Ensuring the future SGL Excellence savings Since 2002 continuous cost reduction of €233 million in total 55 25 27 28 21 23* 23 16 15 2002 2003 2004 2005 2006 2007 2008 2009 2010 Annual Net Savings (€m) * Excluding Brakes business Investor Relations Presentation Page 26
Slide 27: Latest Financials and 2011 Outlook
Latest Financials and 2011 Outlook Investor Relations Presentation Page 27
Slide 28: H1/2011 Results for the Group
SGL Group H1/2011 Results for the Group in € million H1/2011 H1/2010*) Sales 725.0 644.6 EBITDA 110.3 94.7 Profit from operations (EBIT)1) 76.2 65.0 Profit from operations (EBIT) 80.3 65.0 Return on sales (in %)1) 10.5 10.1 Result from investments accounted for At-Equity -14.7 -4.4 Net financing res
Slide 29: 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) • €200 million Convertible Bond at 0.75%, conversion price of €36
Slide 30: Outlook 2011: Double digit sales and EBIT growth
SGL Group Outlook 2011: Double digit sales and EBIT growth Group • Sales to rise more than 10% • EBIT grows to approx. €160 million resulting in Group ROS of 10-11% • Net financial costs up on 2010 (including results from at-equity consolidated companies) • Tax rate 30%-35% Capex, Balance Sheet, Cas
Slide 31: Fundamental long-term growth drivers and mid term outlook
Fundamental long-term growth drivers and mid term outlook Investor Relations Presentation Page 31
Slide 32: 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 32
Slide 33: 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 34: Group sales to increase by more than 10% p.a. reaching €2.5 bn in 2015
2011 – 2015 Group sales to increase by more than 10% p.a. reaching €2.5 bn in 2015* Advanced Materials targeted to reach ~ 50% of Group sales by 2015 €m CFC** 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
Slide 35: Return on sales (ROS) target remains at minimum 12%
2011 – 2015 Return on sales (ROS) target remains at minimum 12% Group ROS target of ≥ 12% to be achieved again from 2012 onwards 20% 15% Target ≥ 12% 10% 5% 2005 2006 2007 2008 2009 2010 2011 2012 • New assets coming on stream contribute to sales and cash flow growth • Higher capacity utilization es
Slide 36: Capex remains high until 2012 – free cash flow positive from 2013
2011 – 2015 Capex remains high until 2012 – free cash flow positive expected from 2013 Capex and depreciation expected to converge 250 Capex Depreciation 200 150 €m 100 50 0 2005 2006 2007 2008 2009 2010 2015 • Major investments on schedule • Capex requirements up to €150 million p.a. in 2011 and 20
Slide 37: Return on capital employed (ROCE) target remains at minimum 17%
2011 – 2015 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% 0% 20
Slide 38: Performance Products
2011 – 2015 Performance Products New state-of-the-art facility 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 ROS target > 20% 15% 600 10% 400 5% 200 0% 2005 2006 2007 2008 2009 2010 2011 2012 2015 • Inv
Slide 39: Graphite Materials & Systems
2011 – 2015 Graphite Materials & Systems Sales growth accelerating; ROS ≥ 10% throughout planning period 700 Sales (left hand scale) Sales growth 16% ROS (right hand scale) ≥ 10% p.a. 14% 600 12% 500 ROS target > 10% 10% €m 400 8% 6% 300 4% 200 2% 100 0% 2005 2006 2007 2008 2009 2010 2011 2015 • Acc
Slide 40: Carbon Fibers & Composites
2011 – 2015 Carbon Fibers & Composites Sales growth accelerating; 10% ROS by end 2013 Additional sales from At-Equity consolidated JVs in CFC* 1200 Sales (left hand scale) 15% ROS (right hand scale) 1000 10% ROS target > 10% 800 5% €m 600 CFC sales growth ≥ 20% p.a. 0% 400 -5% 200 0 -10% 2005 2006 2
Slide 41: To summarize…. Key messages and 2015 targets
To summarize…. 2011 – 2015 Key messages and 2015 targets • New assets leading to significant sales growth more than 10% p.a. • reaching Group sales of €2.5 billion by 2015 • plus approximately €500 million from at-equity consolidated JVs in CFC (calculated on 100% ownership) • Sales growth targets r
Slide 42: Thank you for your attention! Any Questions?
Thank you for your attention ! Any Questions ? Investor Relations Presentation Page 42
Slide 43: 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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