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Goldman SachsUK and European Capital Goods Conference 2009

7-8 December 2009London

2

Global Trend 1Continued demand for resources when growth returns

• Global growth will continue postfinancial crisis induced recession –projections for 2010 corrected upwards in IMF World Economic Outlook of October 2009

• Economic growth inducesdemand for

Materials:- Infrastructure- Capital goods- Packaging- Transport/LogisticsEnergy:- Oil- Gas- Electricity

Means continued growth in steel and aluminum production …

Estimated GDP Growth (in %)

Source: IMF Report (October 09)

-5.3-4.2

8.5

5.4

-7.5

-0.7

-2.7

0.3

9.0

6.4

1.53.5

1.50.3

Germany ChinaIndiaRussiaBrazilUSAEurozone

2009 2010

33

Infrastructure build up in emerging economies has only just begun …

Global Trend 1Continued demand for resources when growth returns

Steel and aluminum:• Essential for infrastructure in Asia and Eastern Europe• High per capita growth potential in steel and aluminum in comparison to Western World

Steel consumption Aluminum consumption

Source: World Steel Association Steel Statistical Yearbook 2008Source: European Aluminium Association Aluminium Use in Europe Country Profiles2004-2007

2007 Total Aluminum (kg/capita)2007 Crude Steel (kg/capita)

671 653 621558 555

375 373

236

134 128

321

4547

312

35121

329

0

100

200

300

400

500

600

700

800

Japa

n

Italy

Spai

n

Ger

man

y

Can

ada

Turk

ey

USA

Rus

sia

Chi

na

Fran

ce

Mex

ico

Arge

ntin

a

Braz

il

Sout

h Af

rica

Indi

a

Philip

pine

s

Indo

nesi

a

41 41

33 33 31 29

21

10

136

10

2

84

05

101520253035404550

Italy

Ger

man

y

Japa

n

Spai

n

USA

Can

ada

Fran

ce

Chi

na

Turk

ey

Mex

ico

Rus

sia

Sout

h Af

rica

Braz

il

Indi

a

Philip

pine

s

4

Meanwhile …Worldwide record-size stimulus packages to fuel demand

• Biggest packages in history forUS, Germany and many other countries

• China is committing a massive14% of GDP

• The Far East is committingmuch more than other regions

• Major industries benefitinginclude:

– Infrastructure

– Renewable energy

• Early days but signs of results

0

200

400

600

800

1,000

US

Japan

China

Germ

any

Spain

Canada

Australia

France

UK

Denm

ark

Singapore

Taiwan

South Korea

Hungary

Italy

Netherlands

Indonesia

Sweden

India

Finland

Austria

Malaysia

Greece

0%

2%

4%

6%

8%

10%

12%

14%

16%

Investment $bn

Investment/GDP %

5

Protecting the Vulnerable$81bn

Tax Relief$288bn

Meanwhile …Almost every stimulus package has an infrastructure component

US Stimulus – Investments China Stimulus – Investments

“Most” will be spent on building:• Highways• Airports• Other public works

Germany Stimulus – Investments

Package includes • €17.3bn investment in infrastructure • Cars > 9 year old, receive € 2,500

towards a new car on trade in• 14% of stimulus investment to go to infrastructure• + $17.4bn loans to auto companies

Infrastructureand Science

$111bn

Education & Training$53bn

State & LocalFiscal Relief$144bn

Health Care$59bn

Other $8bn

Energy$43bn

Source: The American Recovery and Reinvestment Act

6

Miscellaneous 5%

Miscellaneous 1%

Titanium 6%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

2005 2006 2007 2008 2009 2010 2011 to2015

Global Trend 2Acceleration of Substitution Process – Example: Civil Aircraft

Boeing 747 – In service 1970

Boeing 787 – Expected in service 2010/2011

Estimated Carbon Fiber Tow Usage*

* Usage in commercial jets worldwide (tonnes)Source: The Carbon Fiber Industry: Global Strategic Market Evaluation 2006 – 2010

Airbus Boeing

Composites 1%

Aluminum 80%

Steel 12%

Titanium 15%

Composites 50%

Aluminum 20%

Steel 10%

Growing demand for raw materials puts pressureon supplies and prices of traditional materials and energy

Accelerated substitution by carbon and graphiteExample: increased composites content in new

aircrafts to reduce fuel consumptionand emissions

7

010.00020.00030.00040.00050.00060.00070.000

2007 2008 2009E 2010E 2011E 2012E 2013E

Global Trend 3Alternative energy sources

Annual wind turbine installations (MW)

Installed cumulative wind turbine capacity (MW)

Growing demand for energy acceleratesdemand for alternative energy sourcesdue to scarcity of fossil fuels as well asglobal warming (CO2 emission)

Example: Wind

Wind energy today provides only ~1.3%of electricity generation worldwide• Economic crisis expected to impact wind

industry in 2009, mainly in US, leading to postponements of large projects

• No dip expected in 2009 on global basis as decline in US is compensated by significant growth expectations in Europe and Asia

• CAGR of annual installations of 22% expected over next years

Source: BTM World Market Update (March 2009)

Source: BTM World Market Update (March 2009)

Europe

Americas

Asia

RoW

050.000

100.000150.000200.000250.000300.000350.000400.000

2007 2008 2009E 2010E 2011E 2012E 2013E

CAGR24%

CAGR22%

8

Global Trend 4“Where other materials fail”

“Carbon – where other materials fail”

Unique properties of carbon, graphite and carbon fiber/composites:

• Stability at very high temperatures (up to 3,000 degrees Celsius)• Very light weight• Self-lubricating• Non-corrosive• Resistance to chemical attack • High purity and inertness• Electrical and thermal conductivity can be varied• Highest degree of stiffness and flexural strength

9


Graphite Examples

Special graphite recipes forlithium-ion batteries

Graphite components for solar grade silicon

Specialty graphitesfor semiconductors

Graphite partsfor solar/LED production

10


Carbon Fiber Examples

Carbon fiber com-posite materials and componentsfor automotive

Carbon fiber com-posite components for aerospace

Carbon fibers for reinforcement of cement and con-crete

Carbon fiber prepregs for windmill blades

11

Global trends support the carbon and graphite industry and –SGL Group as its largest global player

• Carbon and graphite industry uniquely positioned to benefit from global trends• SGL Group as the largest global carbon and graphite player to participate in growth

opportunities resulting from these trends

Global Trends

Resources Demand Substitution Process Alternative Energy Unique Properties

1 32 4

Performance Products(PP)

Graphite Materials & Systems (GMS)

Carbon Fibers & Composites (CFC)

Performance Products (PP) Advanced Materials (AM)

12

SGL GroupBusiness structure





• Graphite & Carbon Electrodes

• Cathodes & Furnace Linings

• Graphite Specialties (GS)• Process Technology (PT)• Expanded Graphite (EG)

• Carbon Fibers/Composite Materials

• Composite Components• Aero Structures

Technology and Innovation (T&I)

Six Sigma (SGL Excellence)

13

Performance ProductsGraphite electrodes (GE) for steel production in EAFs

• Growth in steel productionfuelled by infrastructure demandfrom emerging countries

• Scrap availability limits EAFgrowth in emerging countries

• Due to continued efficiencygains GE demand growthonly 1 – 2% p.a.

• GE critical to EAF furnaceefficiency but only 2 – 3% of steelmaking conversion cost

An EAF (electric arc furnace) is a furnace that heats charged scrap steel material (also known as mini mills)BOF (blast oxygen furnace) is the steelmaking route that uses iron ore and coking coal to produce primary steel (also known as integrated steel)

PP AM

CFCGMSPP

0

250

500

750

1,000

Source: WSD, IISI, own estimate

Blast oxygen furnace

Worldwide steel production: blast oxygen furnace/electric arc furnace [in tm]

Electric arc furnace

1970 20101980 1990 20001975 1985 1995 2005

14

Performance Products Graphite electrodes

Source: steeluniversity.org

Graphite Electrode

100 – 300 cm

35 – 80 cmConnecting Pin

Graphite Electrodes

Molten steel

Eccentric bottom tapping (EBT)

Teaming ladle

Furnace shell

Rocker tilt

Tilt cylinder

SECTION VIEW TROUGH EAF

PP AM

CFCGMSPP

Steel Making – An Electric Arc Furnace (EAF)

15

• GE critical to EAF furnace efficiency but only 2 – 3%of steelmaking conversion cost

• GE is a consumable – replaced every 5 to 8h• GE sold mostly in annual contracts• Needle coke requirements sourced on basis

of multiyear contracts

Production process takes up to 3 months

Performance ProductsGraphite electrode production process

PP AM

CFCGMSPP

16

North/Middle East,Africa, Australia 8%

Americas 22%

Asia 42%

Europe 28%

Performance ProductsGraphite electrode market

Capacity by competitor in 2008* – UHP/HP-quality

* Russia and China: Potential UHP capacity dependent on equipment,technical capability and needle coke availability

Source: SGL Group‘s own estimates (as of January 2009)

Regional Demand in 2008

0

50

100

150

200

250

SGL (GER) Graftech(U.S.)

Show aDenko (J)

TokaiCarbon (J)

GraphiteIndia (IN)

HEG (IN) Nippor,Carbon (J)

SEC (J) CGE (U.S.)

In tmt

SGL (GER) Graftech(U.S.)

ShowaDenko (J)

TokaiCarbon (J)

GraphiteIndia (N)

HEG (IN) NipponCarbon (J)

SEC (J) CGE (U.S.)

PP AM

CFCGMSPP

17

Performance ProductsCathodes for the aluminum industry

AluminumGlobal Production Scenarios 2003 – 2020/New

Source: IAI, King, SGL Group‘s own estimates, Hydro, CRU, Rusal

PP AM

CFCGMSPP

• Industrialization of BRICs & weight/ strength/cost advantages in higherenergy cost environment

Quantum leap in aluminum demandfrom historical 2 – 3% to 4 – 6% p.a.

• Cathodes essential to aluminum smeltersExisting smelters reliningInvestment good (5 – 7 years shelf life)New smelter constructionleading to higher relining demand long term

• Existing smelters upgrading=> amorphous cathodes => graphitized

cathodesonly three established producersof graphitized cathodes

• Cathodes essential for aluminum smelting but representing only 1% of productioncosts for 1t aluminum

SGL Group largest producer worldwide

2009 will be affected by the inventory cycle. Fundamentals for Al production growth remain solid – leaving the original long-termoutlook unchanged

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

36 mio. tm

39 mio. tm

49 mio. tm64 mio.

tm

World Primary AL Prod 3.6 % CAGR

2020E2012E 2018E2003 2009E 2015E2006

Prim

ary

AL

Prod

uctio

n in

kt/a

18

Performance ProductsCathodes for the aluminum industry

Source: SGL Group

Cathodes

PP AM

CFCGMSPP

4

4

4

1

3

2

Special glue

Cathode blocks

Ramming pastes

Sidewallblocks

30 – 70 cm

30 –50 cm

100 – 350 cm

Aluminum Smelter

19

Alcan 3%

CIS 12%

Carbone Savoie 20%

SGL 25%

Performance ProductsMarket shares in cathodes 2008

Market Shares in Cathodes 2008

Bawtry 5%

NDK 1%

SEC 13%

SourceSGL Group’s own estimates, market shares based on volume excluding Chinesecapacities

PP AM

CFCGMSPP

China 20%

Others 1%

• Western world concentrated, Chinese expected to follow in long term

• Substantial cathodes growth due to strong aluminum demand and subsequent new greenfield smelter investments and step-change in relining demand

• Continued substitution with graphitized cathodes where SGL Group’s market share is higher (> 30%)

• Double digit growth for graphitized cathodes due to higher efficiencyand yield advantages

• Graphitized cathodes industry highly concentrated (only 3 – 4 established players) – graphitization capability a bottleneck

20

Graphite Materials & Systems Graphite Specialties – feedstock production and machining

Raw Materials (Pitches & Cokes) PressingPre-pressing Processes

Graphitizing 2,800°C – 3,000°C Baking 850°C – 1,200°C

Machining Finishing

High quality rawmaterials fromreliable sources

Breaking, milling,sieving, binding, mixing, homoge-nizing

Formation of graphite structure and densification

Carbonizing,Densification

Isostatic pressing Extrudingor

Machining of the feedstock:Sawing, turning, milling, sanding,boring, lapping, polishing

Impregnation, coating, purification

PP AM

CFCGMSPP

21

Graphite Materials & SystemsFeedstock production isostatic graphite

PP AM

CFCGMSFurnacesElectrodes

Rest of the World 2%

North America 24%

Asia 48%

Europe 26%

Capacity by Competitor in 2009

Source: Own estimates (as of Feb 2009)


0

2,000

4,000

6,000

8,000

10,000

12,000

Toyo Tanso (J) Tokai Carbon(J)

CarboneLorraine (F)

SGL (GER) Ibiden (J) Nippon TechnoCarbon (J)

In tmt


Isostatic graphite

22

Graphite Materials & SystemsFeedstock production extruded graphite

PP AM


Asia 30%

Rest of the World 4%

North America 28%

Europe 38%

Capacity by Competitor in 2009



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

SGL (GER) Graftech (U.S.) Tokai Carbon (J) Graphite India (IN) Nippon TechnoCarbon (J)

In tmt


Extruded graphite

23

Graphite Materials & SystemsProduction sites

PP AM


Blue MachiningRed FeedstockGray Feedstock and Machining

Pune

Yanqquan

Ningbo

Shanghai

YamanashiKyung Ki-DoNovotcherkassk

SteegVerdello

Madrid

Grenoble

Chedde

Nowy Sacz

Bonn

Limburg

Meitingen

SinkingSprings

Morganton

St. Marys

Valencia

Strongsville

Kitchener

Narita

24

Graphite Materials & SystemsGraphite Specialties can have different properties

The properties are modifiable to suit the required application!

Graphite Specialties have unique properties:

• Self-lubricating – Necessary where oil and grease would be detrimental– Suitable above permissible temperatures for oils and fats

• Mechanically stable up to very high temperatures– Allows faster operating rates than with metals– Some applications e.g. semiconductors could not be produced

without graphite equipment• Electrical and thermal conductivity

– Graphite powder is powerful and effective anode material in lithium-ion batteries– Metallurgical applications

• Highest thermal shock stability of all well-known materials– Graphite is both an effective lining and moderation material in nuclear power plants

PP AM

CFCGMSPP

25

Graphite Materials & SystemsGraphite Specialties – semiconductor application

Extremely pure graphite heater for the semiconductor industryReaches 99.9995% C

PP AM

CFCGMSPP

26

Graphite Materials & SystemsProcess Technology

PP AM

CFCGMSPP

We combat corrosion:

•Graphite and other high-tech materials like PTFE, silicon carbide and exotic metals build the broad base for our portfolio of corrosion resistant process equipment

•Our product portfolio ranges from specialized process equipment to complex engineered systems. Furthermore, we service our products worldwide.

•Our unmatched material, application and engineering know-how is one of our core competencies

•Our key industry segments are chemicals & pharmaceuticals, solar, environmental and steel

•We are the leading supplier of graphite-based process equipment with a global market share of ~40%

27

Graphite Materials & SystemsProcess Technology – product portfolio

PP AM

CFCGMSPP

Overview

Systems• HCl Synthesis• Sulfuric acid• Porous burner• FCHC destruction

Equipment• Heat exchanger• Columns• Pumps• Quenches/Vessels

Services• Parts• Diagnosis• Repairs

28

Graphite Materials & SystemsExpanded Graphite – natural graphite

Natural Graphite Flakes Formation of compound

Graphite Foils & Sheets

Thermal Shock 1,000°C

• Standard widths: 0.5 m; 1.0 m; 1.5 m

• Standard thicknesses: 0.1 – 3 mm

• Range area weight: 100 – 3,000 g/m2

Formation of a graphiteintercalation compound

Thermal expansion(shock) at 1,000°Cexpanded graphite

worms

Pressing expanded graphiteworms to graphite foilsor sheets (without any

binder addition)

Intercalation Solution(usually an acid)

Natural Graphite Flakes(C-content: 96 – 99.98%)

7.98

A

HSO4 H2SO4- .

HSO4 H2SO4- .

PP AM

CFCGMSPP

29

Graphite Materials & SystemsExpanded Graphite – sealing applications

PP AM

CFCGMSPP

• Nearly 90% of Expanded Graphite goes into sealing applications (automotive and industrial)

• Increase in expanded graphite demand due to asbestos ban

• SGL is clear number 1 in sealing application• Sealing applications for various industries:

– Automotive (cylinder head & exhaust pipe)– Chemical, petrochemical– Power plants

• Required properties:– Low emissions acc. German Clean Air Act

(TA Luft, VDI 2440)– Long-term stable sealing properties – High blow-out resistance (TÜV)– Fire safety according to API and BS– High fault tolerance, high safety standard

Fire safety requirement of petrochemical industry

Fire safety test of pressurized flange system with graphite gasket

No leakage detectable during and after firing phase

30

Graphite Materials & SystemsExpanded Graphite for thermal management

• High thermal and electrically conductive graphite material - “Ecophit”• High-performance heat storage systems for industrial and solar processes• Smart gypsum plaster board “Climafit” and “Protekto” for cooling ceilings and EMI shielding

Solutions

• Wall/floor air conditioning systems• Heating/cooling ceilings • Thermal storages

Objective

• Plaster board improvement– Raise thermal conductivity of gypsum board (x3)– Protect rooms from EMI radiation

Objective

PP AM

CFCGMSPP

&

31

Graphite Materials & SystemsInnovation driving new product portfolio

PP AM

CFCGMSPP

Examples:• Graphite for Li-Ion batteries• Crucibles and molds for solar production

and LEDs• Molds and spacers for ceramic-armoring

applications• Heaters for the semicon industry• High purity expanded graphite for

thermal (electronics, climate) manage-ment and environmental needs

• Specialty graphite for nuclear power(PBMR)

• Graphites for particle filter for diesel engines and exhaust systems

GMS 2008 sales: € 412 m

1/3 of sales based on new products introduced over the last 4 years

1/3new

2/3established

32

Graphite Materials & SystemsMajor customer industries and market shares 2008

PP AM

CFCGMSPP

30%26%Chemicals

2%

3%

5%

6%

9%

10%

10%

15%

% of TotalGMS Sales 2008

Global MarketShare 2008

5%Glass and Ceramics

15%Automotive

15%High-temperature Processes

15%Tool Manufacturing

40%Energy: Batteries & Nuclear

20%Metallurgy

20%Semiconductor

25%Energy: Solar

Source: SGL Group‘s own estimates, w/o EC Business

33

Core Competencies Core Competencies

• Materials• Technology• Processes

• Development of final use/applications• Design of finished parts/

manufacturing techniques• Marketing• Promoting substitution

JV-partneringCore Business

PANPrecursor

CarbonFiber

PrepregPreform

Industrial & Energy

Aerospace &Defense

Automotive

Carbon FiberCompositeMaterials

e.g.HITCO (100%)

e.g.SGL Rotec (51%)e.g.Benteler SGL (50%)Brembo SGL Carbon Ceramic Brakes (50%)

Raw material

Composite Components

• EPG (44% JVwith Lenzing)

• JV planned with Mitsubishi Rayon (MRC)

• Prod. capacity• ~ 4kt in UK • ~ 2kt in USA

• SGL epo (100%)• SGL Kümpers

(51%)

PP AM

CFCGMSPP

Carbon Fibers & CompositesUnique offering of the complete value chain

JV with BMW (51%)

34

Carbon Fibers & CompositesPAN precursor and carbon fiber

Source: Grafil Inc.

Pre

curs

or

Process:

IntermediateMaterial:

PAN CF Precursor:

Process:

Propylene Ammonia

Ammoxidation

Acrylonitrile

Polymerization &Spinning

PAN Precursor

PAN Precursor

Oxidation(250°C)

Carbonization(1,300°C)

Carbon Fiber

Oxidized PAN:

Carbon Fiber:

Process:

Car

bon

Fibe

r

PP AM

CFCGMSPP

35

Carbon Fibers & CompositesCarbon fiber characteristics

Source: CARBON FIBERS Updated: April, 2004 – Raghavendra R. Hegde, Atul Dahiya, M. G. Kamath (Monika Kannadaguli & Haoming Rong)

ApplicationsCharacteristics

Large generator retaining rings, radiological equipmentElectromagnetic properties

Chemical industry; nuclear field; valves, seals, and pump components in process plantsChemically inert, high corrosion resistance

Textile machinery, general engineeringFatigue resistance, self-lubrication, high damping

Medical applications in prostheses, surgery and x-ray equipment, implants, tendon/ligament repair

Biologically inert,x-ray permeability

Automobile hoods, tooling, casings and bases for electronic equipments,electromagnetic interference (EMI) and radio frequency (RF) shielding, brushes

Electrical conductivity

Audio equipment, loudspeakers for Hi-fi equipment, pickup arms, robot arms, rollersGood vibration damping, strength, and toughness

Missiles, aircraft brakes, aerospace antenna and support structures, large telescopes, optical benches, waveguides for stable high-frequency (GHz) precision measurement frames

High dimensional stability,low coefficient of thermal expansion, low abrasion

Aerospace, transport, sporting goodsPhysical strength, toughness, light weight

PP AM

CFCGMSPP

36

CF market forecast [in t mt]

39.4 40.0 42.048.0

55.0

2008 2009 2010 2011 2012

CF demand forecast

PP AM

CFCGMSPP

Carbon Fibers & Composites Slow down in growth for carbon fibers expected for 2-3 years

37

Carbon Fibers & Composites Carbon fiber capacity

PP AM

CFCGMSPP

11,000

9,300 9,000

4,0003,300

2,000

approx.6,000*)

7,000

0

2,000

4,000

6,000

8,000

10,000

12,000

Source: SGL Group‘s own estimates (as of January 2009)*) SGL Group capacity from early 2009 on

Capacity in t

Toray (J)

Toho/Fortafil (J)

SGL (GER)

FormosaPlastic (TW) Hexcel

(US)

Cytec (US)

Aero/Ind.Aero/Ind.Ind.Ind.Ind.Ind.Aero/Ind.Aero/Ind.Markets

LTLTLTHTLTHTLTLTProduct

OwnOwnOwnPartially ownOwnOwnOwnOwnPrecursor

Name plate capacities* carbonfiber (excl. oxidized fiber)LT = Low tow fiber 1 – 24kHT = High tow fiber 50 – 300k

* Actual production tends to be 20 – 30%below name plate capacity

Zoltek (US)

MitsubishiRayon (J)

38

Carbon Fibers & CompositesComposite Materials

• Carbon fibers are braided, woven or impregnated with resin before component production

• We aim to have a broad range of technologies for prepreging/preforming

– Braiding (e.g. car bumpers)• SGL Kümpers

– Impregnated (e.g. prepregsfor windmill blades or aircraft parts)• SGL epo

– Preforms (e.g. auto industry)

SGL Kümpers

SGL epo

PP AM

CFCGMSPP

39

Carbon Fibers & CompositesComposite Components – HITCO

• HITCO: California based composite component manufacturer for aerospace & defense industry

• Historically, the prevailing process in carbon fiber based aero structures was hand lay-up – very slow and expensive & no competitive differentiation

• Investment into automation technologies AFP (Automated Fiber Placement machine) & ATL (Automatic Tape Layer machine) substantially improves competitiveness of HITCO

• Won Gold Level Preferred Supplier Certification for100% quality & delivery performance from The Boeing Company

• Supplier of the Year 2007 award in Structures Commodity category from The Boeing Company

• Recent contract wins/extensions:– Composite floor beams for Boeing 787 “Dreamliner”– Boeing 767 flap track fairings– … and more to follow …

AFP

ATL

PP AM

CFCGMSPP

40

** Previous years adjusted for actuarial losses from pensions

-3

190

50

193

259

-62 -66 -62 -65 -47

3144

13382

0

5.18.6

4.3

28.8

13.1

2004 2005 2006 2007 2008

94462 116 175 258 306

1,3731,1911,069

1,612

10.9%

14.7%18.8%

19.0%

6.6%

2004 2005 2006 2007 2008

SGL GroupRecent performance

2007 – 2008

• Sales up 17%

• EBIT up 18%

• EBIT margin 19% in 2008

• Cash interest cover reaches 28.8

8.1%2006

p.a.Average Cash Interest

3.4%2008

5.1%2007

• Profit before tax up 34%

• Net profit + 42%

Cash interest cover defined as EBITDA dividedby net cash interest paid

In € million

In € million

SalesEBIT

EBIT Margin

Net ProfitProfit before taxFinancial Result

Cash interest Cover

-3

**

**

41


2008

• EBIT at record level of € 306 million

• ROCE 25%

• Internal rate of return (hurdle rate) 10% pre tax

Capital employed is defined as working capital plus property, plant and equipment and intangible assets

In € million

Capital Employed ROCE

819 8601,054

785

1,355

14%

21%27%

25%

7%

2004 2005 2006 2007 2008

42


2007 – 2008

• Gearing down to 0.44

• Equity ratio increased to 43%

• € 200m convertible bonds & € 200m corporate bond issued in 2007

• € 200m undrawn credit facility for working capital and bolt on acquisitions

• Credit ratings improved

* Prior to 2007 refinancing

In € million

Net Debt Gearing

Ba1

Ba3

Ba2 (* Ba3)

Moody’s

BB (* BB-)SGL Group

S&PCredit Ratings

BBB-Corporate bond

BBConvertible bond

Equity ratio

321 265 229 285 333

41% 43%

0.58

1.06

1.41

0.440.47

32%18% 22%

2004 2005 2006 2007 2008

43

SGL GroupBusiness structure






• Cathodes & Furnace Linings

• Graphite Specialties (GS)• Process Technology (PT)• Expanded Graphite (EG)

• Carbon Fibers/Composite Materials


Technology and Innovation (T&I)

Six Sigma (SGL Excellence)

44

GMS 26%

CFC 14%

Performance ProductsPerformance Products (PP)

Business Lines


• Cathodes & FurnaceLinings

2008 Group Sales PP Sales & EBIT Margins

Key industries served

• Steel• Aluminum• Ferrous and non-ferrous

metals

Characteristics

• Supplying the metal industries• Leading competitive position• Ongoing growth in eastern world

PP 60%

563 644 713836

966

19%

24%31%

15%

29%

2004 2005 2006 2007 2008

• High ROS & ROCE• Strong cash flow• Stable growth

* Compound Annual Growth Rate in Sales 2004 – 20082004 – 2005: Carbon & Graphite Business Unit

Sales €m EBIT Margin

14% CAGR*

PP AM

CFCGMSPP

45

Graphite & CarbonElectrodes

75%

Performance Products (PP)Performance Products (PP)

Sales – 2008

Highlights 2008

• Production adjusted to reduced demand• Investment into 60kt Malaysian carbon &

graphite plant continues

Medium-term targets (2008 – 2011)

• Volume growth: 2 – 3% p.a.• ROS: > 20%

Strategic priorities

• Continued cost reduction projects• Major initiative to increase customer value

through product quality and consistency• Start of first GE production module in

Malaysia

Cathodes &Furnace Linings25%

PP AM

CFCGMSPP

46

GMS 26%

CFC 14%

Advanced MaterialsGraphite Materials & Systems (GMS)

Business Lines

• Graphite Specialties• Process Technology• Expanded Graphite

2008 Group Sales GMS Sales & EBIT Margins


• Chemical• Energy –Solar• Semiconductor• High-temperature

processes• Automotive• Mechanical engineering

Characteristics

• Supplying the manufacturingindustries

• Focus on innovativeapplications

PP 60%

287 300 340 364412

14%11%

8%7%

13%

2004 2005 2006 2007 2008

• Sustainable sales growth• Solid earnings potential

* Compound Annual Growth Rate in Sales 2004 – 20082004 – 2005: (Graphite) Specialties Business Unit incl. Expanded Graphite Business Line


9% CAGR*

PP AM

CFCGMSPP

47

GraphiteSpecialties

68%

Advanced MaterialsGraphite Materials & Systems (GMS)

Sales – 2008 Medium-term targets (2008 – 2011)

• Sales growth: 6 – 8% p.a.• ROS: >10%

Strategic priorities

• Increase production and market sharein Asia and Eastern Europe

• Continue driving growth by innovationand material substitution

• Continued cost savings and margin improvement

ExpandedGraphite9%

Process Technology23%

Highlights 2008

• Graphite Specialties (GS):Capacity expansion soft felt, carbon fiber reinforced carbon, isostatic graphite

• Process Technology (PT):Production growth in Asia (China, India)and Russia

• Expanded Graphite (EG):Growth via new applications

PP AM

CFCGMSPP

48

GMS 26%

CFC 14%

Advanced MaterialsCarbon Fibers and Composites (CFC)

Business Lines

• Carbon Fibers/ Composite Materials


2008 Group Sales CFC Sales & EBIT Margins


• Energy• Aerospace & Defense• Automotive• Mechanical Engineering• Sporting Goods• Medical Technology

Characteristics

• New applications in auto-motive, energy, aeronautics

• High earnings improvementpotential

PP 60%

93122 131

163

228

-3%

2%

-3%

2%

2004 2005 2006 2007 2008

• Complete value chain in house• Only EU carbon fiber company

* Compound Annual Growth Rate in Sales 2004 – 20082004 – 2005 SGL Technologies Business Unit excl.Expanded Graphite Business Line


25% CAGR*

PP AM

CFCGMSPP

49

Composite Components 9%

Composite Materials42%

Advanced MaterialsCarbon Fibers and Composites (CFC)

Highlights 2008

Medium-term targets (2008 – 2011)

• Sales growth: > 15% p.a.• ROS (mid term): > 10%

Strategic priorities• Secure own raw material supply• Expand Carbon Fiber capacities • Develop specific applications in:

– Alternative energies– Aviation/defense technology– Automotive

• Support organic growth with targeted partnerships and acquisitions

• Carbon Fibers & Composite Materials (CF & CM):Own precursor development New carbon fiber lines in UK, USA Continued growth from wind energy

• Composite Components (CC):Integration SGL Rotec

• Aero Structures (AS): Investment into automation technologiesat HITCO for aerospace & defense business

PP AM

CFCGMSPP

Sales – 2008

Carbon Fibers 15%

Aero Structure18%

Brake Discs (until FY 2008)16%

50

SGL GroupGroup outlook for 2009

P & L Statement

• Sales below record 2008 level

• Corresponding EBIT to decline more than proportionately – H2 EBIT roughly on same level as H1

• Net financial costs higher than in 2008

Capex and Balance Sheet

• Key KPI: Gearing level to remainaround 0.5 based on today‘s portfolio

• Capex substantially below €200 million

• Gearing ~ 0.5 defines capex level

51

Mid term Minimum Targets Over the Cycle Unchanged …… Once normality returns post 2009

To deliver profitable growth!

Group • Sales growth: 5 – 10% p.a. CAGR organic• ROS: > 12%• ROCE: > 17%

PerformanceProducts (PP)


Carbon Fibers &Composites (CFC)

• Volume growth: 2 – 3% p.a.• ROS: > 20%

• Sales growth: 6 – 8% p.a.• ROS: > 10%

• Sales growth: > 15% p.a.• ROS: > 10% mid term

52

SGL Excellence

• Started in 2002• The core element of the Company mission• An ongoing and Company wide program• Our philosophy of doing business

SIX SIGMA

• Our core methodology• Focuses on:

– Customer value– Measurable objectives and results

• Applies to every function in our Company• Empowers our employees with skills and tools:

– > 2,000 SIX SIGMA trained employees– > 550 Green Belts– > 100 Black Belts

Ensuring the FutureSGL Excellence – enables productivity and growth

InnovationExcellence

CommercialExcellence

OperationalExcellence

PeopleExcellence

53

Ensuring the FutureSGL Excellence – enables productivity and growth

* Before antitrust

Since 2002 continuous cost reduction of € 187 million in total

97% 96% 94% 89% 86% 81% 81%72%

63% 65% 66%74%78%

70%

2002 2003 2004 2005 2006 2007 2008

Total Cost*/Sales (%) COGS/Sales (%)

55 2725151621

Annual Net Savings (€m)

28

54

Ensuring the FutureTechnology & Innovation – foundation for profitable growth

Technology & Innovation: SGL Group’s centralized R&D organization

• Combines material, process and application Know-how • T&I Center in Meitingen with working space for 150 scientists

Main Objectives

• Identify, evaluate and initiate new business opportunities fitting to company business product portfolio(new business development)

• Perform R&D projects for BUs and SGL Group to strengthen profitable growth of existing businesses (development & corporate projects)

• Develop high potential business ideas like ceramic composites and energy systems to profitable new business lines for SGL Group (start-ups)

• Safeguard new and existing businesses by managing a strong IP portfolio (total patents held: 1072)

55

Ensuring the FutureTechnology & Innovation – foundation for profitable growth

Activity Areas of T&I 2008

Strengthen Carbon Fiber Based Value Chain:• Development of PAN-Precursor to broaden Carbon Fiber Product Portfolio• Development of 50k Carbon Fiber based on own precursor• Development of Carbon Fiber based composite materials and components

New Business Opportunities in Energy Sector:• New graphite based materials for Li-ion batteries• Graphite foil and C-felt based materials for new battery systems• CFRC-components for nuclear applications

New Production Processes to Improve SGL Group’s Technology and Cost Position: • Continuous processes for ceramic materials and heat exchanger tubes• Processes for improved natural graphite foil

Innovations for Performance Products:• New raw materials and process technologies for consumption improvements of graphite electrodes• Projects for high performance Graphite Electrodes• Next generation Cathode & Furnace Lining materials for energy efficiency and life time improvement

56

Capital expenditure 2007 and 2008 [in € million]

* Total cap ex for the Group

11 14

21

25

69

111

90

30

0

40

80

120

160

200

240

280

2007 2008Carbon Fibers & Composites

Corporate projects

€131m*

Major investment projects:• Malaysian plant:

– € 200m investment 2007 – 2011for 60kt graphite electrode and cathode plant

• Carbon fiber expansion:– 2009: 6kt carbon fiber

capacity operational– 2012ff: further expansion

up to 12kt planned– Total investment approx.

€ 300m 2007 – 2012ff

Ensuring the Future Capital expenditure by business unit 2007 and 2008

Performance Products

Graphite Materials & Systems

€240m*

57

Ensuring the FutureMalaysia – the largest single project in our history

• First …– Greenfield development for 25 years

Graphite Electrodes and Cathodes plantin South East Asia

• Lowest cost plant worldwide:– State of the art technology– Optimal logistics– Favorable energy and labour costs– Integration into global production network

• Start up end 2008 (GE)Completion 2011 (full integration GE + CA):– Combined graphite electrode and cathode

capacity 60 kmt– Cathode production largely booked

under long-term supply contracts

Target RegionSoutheast Asia + Taiwan, India, Korea

58

Inverness (UK):Capacity end 2008 4,000t

Evanston (USA):Capacity early 2009 2,000t

Ensuring the FutureCarbon fiber capacity already at 6,000t by early 2009

Inverness, Scotland

Wyoming, USA

12,000t total planned capacity by 2012ff basedon market applicationand regional demand developments

59

Ensuring the FutureRecent acquisitions and new joint ventures

Production & distribution of specialty graphite products in Asia

75%SGL Quanhai Carbon (Shanxi), China (JV with Shanxi Quanhai Graphite, China)

1 Jul 07GS

PT

PT

BusinessUnit GMS

Manufacturer of fluorine plastic apparatus for corrosion protection

Process technology productsfor Asian market

Activity

1 Oct 07

1 Jun 07

EffectiveDate

Ownedby SGL %Company (Partner)

100%Dr. Schnabel GmbH & Co. KG, Germany

51%SGL Tokai Process Technology, Singapore (JV with Tokai Carbon, Japan)

60

Ensuring the FutureRecent acquisitions and new joint ventures

Precursor supply for JV with BMW33%JV planned with Mitsubishi Rayon (MRC)TBDCF

Manufacturing and processing carbon fibers and fabrics for the automotive industry

51%JV with BMW29 Oct 09CF/CM

Development of carbon ceramic brake systems as well as production and sale of carbon ceramic brake discs for the premium automotive segment

50%Brembo SGL Carbon Ceramic Brakes(JV with Brembo S.p.A., Italy)

28 May 09CC

Supplier of composite components for the automotive industry

50%Fischer Composite Technology GmbH (via JV Benteler Automobiltechnik GmbH)

Mar 09CC

Manufacturing of rotor bladeson “build-to-print” requirements

51%SGL Rotec GmbH & Co. KG, Germany (JV with Abeking & Rasmussen Rotec, Germany)

19 Sep 08CC

Development of carbon fiber reinforced composites for the automotive industry

50%Benteler SGL GmbH & Co. KG, Germany (JV with Benteler Automobiltechnik GmbH, Germany)

20 Feb 08CC

Carbon fiber unidirectional composite materials

100%epo GmbH, Germany27 Oct 07CM

Development of carbon fiberPAN-precursor

44%European Precursor GmbH, Germany (JV with Lenzing AG, Austria)

1 Mar 07CF

CM

CF

BusinessUnit CFC

Processing multi-axial carbonfibers into fabrics (braiding)

US carbon fiber production hub

Activity

1 Apr 07

29 Nov 07

EffectiveDate

Owned by SGL %Company (Partner)

51%SGL Kümpers GmbH & Co. KG, Germany (JV with Kümpers GmbH)

100%SGL Carbon Fibers LLC, USA

Appendix

62

SGL GroupHistory

Conversion to European Company (SocietasEuropaea/SE)

SGL Carbon SE2009

Delisted from NYSE in 2007, independent 100% free float Company with operations in EU, NA, Asia and 3 global Business Units

SGL Group – The Carbon Company2008

Listing on NYSE/USA, full independenceSGL Carbon AG 100% free float1996

IPO Frankfurt/Main, Hoechst remains shareholderSGL Carbon AG1995

Merger with Great Lakes Carbon (USA) 1992and with Pechiney Graphite (F) 1993

SIGRI Great Lakes Carbon GmbH59% Hoechst30% Horsehead Industries11% Pechiney

1993

Merger with Ringsdorff, BonnSIGRI GmbH100% Hoechst

1989

Merger Siemens Plania and Hoechst AG; GriesheimSIGRI GmbH50% Siemens 50% Hoechst

1985

Merger Gesco and Plania sites in PolandSiemens Plania Werke1928

Start of Carbon ProductionGebr. Siemens & Co. (Gesco)1878

63

12 Production Sites

7 Production Sites

21 Production Sites

SGL Grouphas a global presence

64

Latest results reflect destocking and lower demand in key industries9M/2009: Group

• Sales decrease 22%, thereof price/volume: -24%, currency: +2% mainly due to continued destocking and production cuts in steel industry particularly in H1/2009

• Disproportionate reduction in EBITDA (-54%) and EBIT (-65%) due to reduced production volumes and associated fix cost charges as well as high start up costs of new production facilities

• EBIT margin at 9% • Sustainable cost savings €15 million, once-off savings from temporary measures € 26 million• More than proportionate decrease in profit before tax (-79%) due to higher net financial costs• Despite economic crisis positive net profit at €31 million

2.340.48EPS, basic [in €]

150.531.2Net profit after minority interests

209.943.7Profit before tax

1,137.8892.4Sales

234.6

272.2

9M/20089M/2009in € million

81.9Profit from operations (EBIT)

125.7EBITDA

65

Latest results reflect destocking and lower demand in key industries9M/2009: Performance Products (PP)

• Sales decrease 36%, thereof price/volume: -37%, currency: +1% • Steel industry characterized by destocking activities and production cuts, therefore substantially

reduced demand for GE primarily in H1/2009• Cathodes, furnace linings, and carbon electrodes business continued to develop satisfactorily• Higher selling prices in all product lines compared to previous year• EBIT decrease of 49% due to lower sales and production levels as well as expenses relating to

the commissioning of the new Malaysian production facility• Cost savings of €8 million

31.8%25.3%Return on sales

681.6438.7Sales

217.0

236.0



130.7EBITDA

66

Latest results reflect destocking and lower demand in key industries9M/2009: Graphite Materials & Systems (GMS)

• Sales decrease: 5%, thereof price/volume: -9%, currency: +4%• Besides positive currency translation effects sales supported by Business Line Process

Technology and the invoicing of a large project• GMS still benefiting from high order backlog from previous year, which was mainly related to

chemical, solar and lithium ion battery business – however order intake weak since beginning of year

• EBIT decrease of 46% due to currency losses from hedging transaction in Q1 and lack of fix cost absorption from declining sales, which were partially offset by the invoicing of a large project in Q2

• Cost savings of €4 million

15.9%8.9%Return on sales

299.3285.5Sales

47.6

58.2



37.8EBITDA

67

Latest results reflect destocking and lower demand in key industries 9M/2009: Carbon Fibers & Composites (CFC)

• Sales increase: 26%, thereof price/volume/SGL Rotec: +24%, currency: +2%• Strong sales increase mainly driven by consolidation of SGL Rotec• On May 28, 2009, we completed the transfer of our brake disc activities into 50-50 JV with

Brembo. Up to this date, brake disc business was still consolidated in SGL Group and reported separately under Corporate Costs. Former Business Line Brake Discs was retroactively separated from CFC

• Earnings of CFC impacted by weak carbon fiber market, further start up costs and ongoing high R&D expenses

• Cost savings of €4 million

6.5%-12.0%Return on sales

124.1156.3Sales

8.1

13.1


-18.7Profit from operations (EBIT)

-10.0EBITDA

68

Latest results 9M/2009: Central T&I, Brake Discs, and Corporate Costs

• On May 28, 2009, we completed the transfer of our brake disc activities into 50-50 JV with Brembo. Up to this date, brake disc business was still consolidated in SGL Group and reported separately under Corporate Costs. Since end of May, earnings of brakes business reported in financial result

• Central T&I Costs decreased by 24% reflecting clear focus of our R&D activities given difficult economic environment

• Corporate Costs decreased by 27% due to stringent cost management relating to purchased services and lower expense level relating to Management Incentive Systems

-1.3-8.6Brake Discs (EBIT)

32.811.9Other sales (incl. Brake Discs)

-25.4

-11.4


-18.5Corporate Costs

-8.7Central T&I Costs

69

SGL Group has no refinancing requirements until 2012

• € 200 million Corporate Bond at EURIBOR plus 125 bps (maturity 2015)

• € 200 million Convertible Bond at 0.75%, conversion price of € 36.52(maturity 2013)

• € 200 million credit facility (maturity 2012)

• € 190 million Convertible Bond at 3.5%, conversion price of € 29.39 (maturity 2016)

SGL Group has established a solid long term financial structure in May 2007

Financing Structure, Balance Sheet Ratios and Cash on HandAllow continuation of growth path

• Equity ratio: 42%

• Gearing: 0.45

• Cash on hand: €337 million

SGL Group has solid balance sheet ratios and cash on hand at end of September 2009

Followed by a supplemental debt instrument in June 2009

70

Shares in Issue and Shareholder Structure

~ 73%Free float

65,379,227Number of Shares

723530Security Identification Number

Cusip Number

ISIN Number

Basic Shares

784 188 203

DE0007235301

16 May 2007Issue Date

0.75%Coupon

16 May 2013Date of maturity

€ 200 millionPrincipal Amount

Conversion Right

Conversion Price

Convertible Notes (maturity 2013)

5.48 million shares

€ 36.52

4.43%Landesbank Baden-Württemberg

3.55%Mackenzie Financial Corporation

5.12%Voith AG

22.25%SKion GmbH

Reported shareholdings according to §§ 21 ff. WpHG

16 May 2007Issue Date

EURIBOR + 1,25%Coupon

16 May 2015Date of maturity


Corporate Bond

30 June 2009Issue Date

3.5%Coupon

30 June 2016Date of maturity


Conversion Right

Conversion Price

Convertible Notes (maturity 2016)

6.46 million shares

€ 29.39

71

Financial Calendar/Contact Details

Contact

SGL CARBON SERheingaustraße 18265203 WiesbadenGermanyPhone +49 (0) 611 - 6029 - 103Fax +49 (0) 611 - 6029 - [email protected] on Nine Months04-11-2010

Interim Financial Reporting First Half04-08-2010

Annual Report18-03-2010

30-04-2010

28-04-2010

Financial Calendar

Annual General Meeting

Report on the First Quarter

72

IR Rankings and Awards

LACP 2008 Vision Awards

„Annual Report Competition“

GOLD

for SGL Group annual report 2008

in mid-cap material sector category

Thomson Reuters Extel Survey,

Wirtschaftswoche and

DIRK (German Investor Relations Association):

„German Investor Relations Award“

2008: 6th

2009: 5th

for SGL Group Investor Relations

in MDAX sector category

Forward-looking statements:

This presentation contains statements on future developments that are based on currently available information and that involve risks and uncertainties that could lead to actual results deviating from these forward-looking statements. The statements on future developments are not intended as guarantees; rather, such developments and results are dependent on a number of factors, they contain various risks and uncertainties and are based on assumptions that may prove to be incorrect. These risks and uncertainties include, for example, unforeseeable changes in political, economic and business conditions, particularly in the area of electric steel production, the competitive situation, interest rate and currency developments, technological developments and other risks and unanticipated circumstances. We see other risks in price developments, unexpected developments relating to acquired and consolidated companies, and ongoing cost optimization programs. SGL Group does not intend to update these forward-looking statements.

Important Notice

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