#1sgl carbon Investor Relations Presentation November 2018#2Table of Contents. 1. The Business Model Page 3 2. The Business Units: Composites - Fibers & Materials (CFM) Page 9 3. Project Highlights CFM Page 22 4. The Business Units: Graphite Materials & Systems (GMS) Page 27 5. Project Highlights GMS Page 37 6. SGL Innovation - Our Research and Development Page 42 7. Market and business developments Page 45 8. 9. New mid-term guidance Back-up Page 61 Page 64 • Outlook 2018 • Latest Financials 9M/2018 • Transformation of SGL Group Page 65 Page 70 • Acquisition of SGL ACF (Former JV with BMW Group) • Acquisition of Benteler SGL Efficiency and cost cutting programs 10. Appendix Page 78 Page 81 Page 87 Page 94 2 SGL Carbon | Investor Relations Presentation Page 97#3Pending#4New SGL Group: Innovation leader. Specialized on carbon- and graphite-based solutions 32 Sites Mobility Energy Digitization 100+ Countries IIL Industrial Applications 4 SGL Carbon | Investor Relations Presentation ~4,800 Employees €1.3bn Chemical Textile Fibers Revenue until 2022#5Pending#6Pending#7Pending#8ROCE. Remains key management principle for managing the business In 2014, we, the new Board of Management, introduced ROCE as new key management principle, replacing ROS We wanted to be held accountable ROCE¹ development 5 4.6% 3 for our stated targets and goals 2.5% 1.7% 1 As a result we implemented the ROCE target in all senior management layers, aligning their incentive system with ours 2014 2015 2016 2017 -1 We started reporting ROCE on Group and BU levels on a quarterly basis, so that our progress can be tracked -3 -3.8% -5 While we are not yet there, we have made substantial progress toward our targeted ROCE 1 8 SGL Carbon | Investor Relations Presentation 1 ROCE defined as EBIT/Capital employed#9Pending#10Reporting Segment. Composites - Fibers & Materials (CFM) Activities Group sales 2017 . Carbon Fibers • Composite Materials CFM 39% • Composite Components €860m CFM sales 2017 Industrial applications 23% • Ceramic Brake Discs (JV with Brembo) Key industries served 10 • Automotive • Energy • Aerospace • Industrial Applications • Textile fibers SGL Carbon | Investor Relations Presentation Automotive 30% Textile fibers 29% Wind energy 12% Aerospace 6% Characteristics • • New applications in automotive, energy, industrial High earnings improvement potential • Complete value chain in house Strategic priorities • Strengthen capabilities to safe- guard globally leading position Develop products and production technologies for innovative customer solutions Exploit synergies across the value chain#11Pending#12Pending#13Pending#14Our capabilities are tailored to serve market needs. Product Toolboxes ≤5 min. cycle time Dry Textiles Material Toolbox Tailored textiles Various dimensions and area weights Carbon and glass fiber-based Fabrics FixTows Non-wovens Stacks. Braidings Preforms Engineering Concept development Product design Process simulation ≤3 min. cycle time Thermoset Material Toolbox Curing time: 30 s/mm at T 150 'C Storage at room temperature 4 weeks, Tg: 140 'C Epoxy snap-cure resin system With internal release agent if required Component Processes Placement Pressing Structural analysis Prepreg materials TowPregs Preimpregnated non-wovens Stacks ≤1 min. cycle time Thermoplastic Material Toolbox Customized sizing solutions Various semi-finished materials as a toolbox approach Carbon and glass fiber-based Virtual prototyping Prototyping Organo sheets Product testing Virtual factory UD tapes LFT material Injection molding Market Needs • Mass production Automated processing Hybrid design (e.g. GF/CF) Load path adapted design Minimum scrap 14 SGL Carbon | Investor Relations Presentation#15The foundation of our automotive composites competence. Lightweight expertise for BMW Group CFRP supply chain 1 2 3 4 5 Precursor Carbon Fiber Production Textiles and Recycling Composite Components BMW i3/18 Production - Japan - - USA - - Germany - - Germany - - Germany - 2 | Moses Lake BMW i3/i8 Series 1 | Otake 5 | Leipzig 3 | Wackersdorf | Landshut Mitsubishi Rayon-SGL Precursor SGL Group BMW Group 15 SGL Carbon | Investor Relations Presentation Source: BMW, SGL#16Our composites in the automotive industry. Integral part of the material mix in serial production Rear bench for performance sports cars Audi MSS Platform • Structural Audi MSS (Modular Sportscar System) bodywork system The rear bench of the body work is made of carbon-fiber reinforced plastic Composite components includes all the connecting parts and elements Rear bench 16 SGL Carbon | Investor Relations Presentation This platform is used for Lamborghini Huracan (Coupé & Spyder) Audi R8 (Coupé & Spyder) Source: Benteler, SGL#17Our composites in the automotive industry. Leaf springs for suspension systems Significant weight-savings through glass fiber based lightweight leaf spring VW Crafter & Daimler Sprinter Rear leaf spring Prototype phase Steel 18kg VS. GFRP 8kg >20kg weight-savings/ vehicle Front leaf spring Serial production >100,000 pcs/a Steel 17.5kg VS. GFRP 5kg 12.5kg weight-savings Our tailor-made glass fiber fabrics serve a fully automated production for high performance leaf springs 17 SGL Carbon | Investor Relations Presentation Source: Benteler, SGL#18Our composites in the automotive industry. Leaf springs for suspension systems Significant weight-savings through glass fiber based lightweight leaf spring Volvo SPA1 Platform ● • Structural component for axle module, from simulation- assisted product design up to parts delivery in large series Fully automated production lines Peak volume over 550,000 pieces/a Weight saving combined with dynamic driving advantages 18 SGL Carbon | Investor Relations Presentation Leaf spring Volvo XC 90 1 Scalable Product Architecture Source: Benteler, SGL#19Pending#20Pending#21Carbon fibers and composite materials. Strong demand growth anticipated Global Carbon Fiber Reinforced Plastics (CFRP) Demand [in thousand mt p.a.] 250 200 150 100 21 CAGR ~10-13% p.a. 112 50 101 83 91 51 59 66 72 0 2010 2011 2012 2013 2014 2015 2016 2017e SGL Carbon | Investor Relations Presentation 156 194 가 ||-- 2020e 2022e Source: CCeV (September 2017)#22Pending#23Optimizing the CFM value chain. Fibers, composite materials and production • • • Commissioning and inauguration of the new precursor production line in Portugal - Precursor is the raw material for carbon fibers Completion of the value chain Total investment amounting to €30 million Concentration of carbon fiber production at two sites Evanston site sold Enhanced efficiency of the production network through concentration at two sites in Moses Lake (USA) and Muir of Ord (UK) Construction and launch of the Lightweight and Application Center (LAC) in Meitingen (DE) OEM-neutral "carbon carrier" developed together with Bertrandt presented in November 2017 Full ownership of Benteler SGL agreed on November 8, 2017 Allowing us to fully control and further develop our composite part marking capabilities 23 SGL Carbon | Investor Relations Presentation#24Developed 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 CFRP back wall and top B-pillar for the Audi MSS platform (Audi R8, Lamborghini Huracán) Close and intensive cooperation with BMW in various additional projects beyond the i3, i8 and 7 series models 50% sales increase in high performance wet friction material based on carbon components (e.g. duplex gear clutch) 24 SGL Carbon | Investor Relations Presentation M.GI 3339#25Initiated 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 existing car models Daimler Carbon fiber supply for CFRP stiffeners (manufactured with pultrusion technology) Development projects for various components with new SGL Group materials • Two Asian OEMs 25 SGL Carbon | Investor Relations Presentation *#26Ready 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 structural parts Development project with aircraft supplier for cabin interior parts Product developments with the large aircraft manufacturers for the adoption of our industrial fiber (50k) in components 26 A350 ASSARBUS A350 SGL Carbon | Investor Relations Presentation Photography source: istockphoto Foto 1-3 f.l.t.r.#27Pending#28Reporting Segment. Graphite Materials & Systems (GMS) Activities Group sales 2017 GMS sales 2017 • Anode materials • Expanded • Isostatic graphite graphite Industrial applications 31% GMS • • • Fiber materials Extruded graphite Die molded Process technology 61% €860m Chemical 24% Key industries served • • Lithium-lon-Battery Solar Semiconductor • LED . Chemical • Automotive & transport . Industrial applications¹ 28 SGL Carbon | Investor Relations Presentation Characteristics • Higher value-added products enabling customer innovations Specialized, partially tailor-made, Strategic priorities • Battery and other energy 19% Solar 10% LED 4% Semiconductor 5% Automotive & transport 7% Focus on forward integration and innovation Combine material know-how and engineering competence • products for differentiated customers • • Innovation driven business Advanced material, equipment, and process solutions in cooperation with customers • Engineered products & solutions for customers from > 35 industries - some with high growth potential • Global competence and presence • Improve cost competitiveness Target new market segments 1 e.g. electric discharge machining (EDM), oil and gas, glass, high temperature applications, metallurgy#29Pending#30Pending#31Pending#32Pending#33Pending#34Pending#35Pending#36Pending#37Pending#38Pending#39Capacity increase in the USA. To meet increased demand for LEDS • Construction of new state-of-the-art production lines for the coating of graphite carrier plates (wafer carriers) in the USA Total investment of approx. €25 million Completion end 2018 SGL Group technology provides critical contribution to LED quality Supporting customers in furthering technical developments of LED production processes Photography source: istockphoto 39 SGL Carbon | Investor Relations Presentation#40Pending#41Pending#426 SGL Innovation Our research and development 42 SGL Carbon | Investor Relations Presentation#43Pending#44Pending#457 Market and business developments 45 SGL Carbon | Investor Relations Presentation#46Pending#47Pending#48Pending#49Pending#50Pending#51Aerospace. 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 > 8%) driven by aircraft programs (e.g. A350, B787, B777X) Besides Boeing and Airbus in the field of commercial aircraft other aerospace markets are accelerating — launcher, UAV, etc. 51 SGL Carbon | Investor Relations Presentation#52Aerospace. 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 for aerospace are by far the most expensive. Average markup (ratio of end-user/raw material cost) is nearly 6.5, and thus far ahead of the next sector, consumer goods (ratio of 2.9) 1 Aerospace industry likely to further increase composites penetration rate between 2016-20211 Requirement: higher use of automation to produce composite parts at lower manufacturing costs and increased production volumes We are ideally positioned to address exactly these issues based on our carbon fiber and composites competence acquired while working for the automotive industry Integrated value chain from precursor to components Materials (e.g. fabrics) for secondary structures, and interior applications New aerospace projects for materials and aircraft components 52 SGL Carbon | Investor Relations Presentation Source: JEC#53Wind 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 pressure and qualify further suppliers Temporarily lower sales share due to sale of SGL Kümpers Changing technologies (prepreg vs. fabrics vs. pultrusion) require adjustment of market approach Several OEMs design new blades for large off-and on-shore wind turbines based on new technologies • 53 Beyond wind energy: additional opportunities identified in oil & gas industry (e.g. pipes, risers, liquid gas tanks, and others) SGL Carbon | Investor Relations Presentation#54Pending#55Pending#56Solar. Growth continues, driven by and depending on China PV module installations [GWp/a] 200 150 100 EPIA historical data1 PV Tech² ITRPV 20173 90 90 77 51 50 40 0 2014 160 140 115 100+ 2016 2018 Solar growth continues · · • China, India and USA are main drivers Levelized costs of PV energy continues to fall Crystalline silicon remains dominant PV technolo- gy but shift towards mono due to higher efficiency Positive impact on GMS • . Technology shift from multi/crystalline to mono/crystalline favoring our graphite product portfolio • Opportunities for price increases and long-term partnerships with industry players CAGR 2010-'15 24% 2020 • Promotion of full graphite portfolio (differentiating factor) CAGR 2016 -'21 16% 1 EU PV Industry Assoc., "Global Market Outlook 2017-2021"; 2 PV Tech article Aug. 16, 2017 and IHS Markit Aug. 24, 2017; 3 ITRPV (International Technology Roadmap for PV, Mar. 15, 2017) "Low scenario" figures are in line with IEA expectations (IEA, Energy Technology Perspective, June 2016) 56 SGL Carbon | Investor Relations Presentation#57Pending#58Pending#59Chemicals. Chemical industry expected to stabilize Chemical production forecast [change 2018 vs. 2017 in %] 0 2 4 6 8 Chemical industry improving profitability Consolidation (e.g. Dow/DuPont) . • US petrochemical industry recovering from low base Shale gas recovery expected We expect our business to benefit from this improvement • World 3.5 USA 3.0 Brazil 1.5 EU 2.0 . China 6.0 India 4.5 South Korea 2.5 Japan 2.0 • ☐ Recent contract win in China for HCI recovery Postponements of projects/system maintenance of recent years now have to be executed Maintenance capex in EMEA and US to drive sealing business 59 Source: Industry Top Trends 2017 - Oil & Gas, EIA: www.eia.gov/todayinenergy, PWC 2017 Chemicals Industry Trends, Chemie Technik June 2017; VCI Business Worldwide Sep. 2017 SGL Carbon | Investor Relations Presentation#60Pending#618 New mid-term guidance 61 SGL Carbon | Investor Relations Presentation#62Targets for 2020 remain valid. We introduce ROCE EBIT as key performance indicator 1200 1000 800 €1.1 billion sales¹ Drivers for ROCE improvement: • · Top line growth (benefiting from megatrends) leading to higher capacity utilization Increasing share of innovative products bearing higher margins 600 €737 million sales Moderate organic sales growth and process Accelerated organic growth phase ≥15% ROCE EBITDA • optimization phase Efficiency improvement 400 200 8% ROCE EBITDA -9% ROCE EBIT Augmented by potential selective and accretive bolt on acquisitions to complement our portfolio in terms of region, technology, etc. programs driving down costs 0 2014 2020 >Min. 15% ROCE EBITDA = ~9% ROCE EBIT based on annual depreciation and amortization levels of €65-70 million following the full consolidation of SGL ACF 1 like-for-like comparison, i.e. before changes in joint venture structures 62 SGL Carbon | Investor Relations Presentation#63We introduce a new mid term guidance. Market trends and business positioning drive accelerated growth 1400 Group Additional 2022 targets: 1200 1000 CAGR accelerates to 8.5% Net profit margin ~6-7% 800 Group €860 million - €1.3 billion sales Free cash flow margin ~5% Over the entire sales 600 ≥11% ROCEE guidance period: EBIT 4.6% Equity ratio ≥30% 400 ROCEEBIT 200 4.7% ROSEBIT 0 2017 ≥10% ROSEBIT Leverage ratio Gearing ≤2.5 ≤0.5 2022 We also introduce margin targets for the business units: ≥12% ROSEBIT until 2022 63 SGL Carbon | Investor Relations Presentation#64Pending#65Pending#66Reporting segment outlook 2018. CFM Composites - Fibers & Materials (CFM) • Substantial increase in sales by approx. 25% expected • Mainly driven by acquisition of former joint ventures with BMW and Benteler Accordingly sales in market segment Automotive expected to more than double, while sales with the Wind Energy industry should decline by more than half due to the sale of SGL Kümpers and lower customer demand Sales to market segment Aerospace expected to increase slightly Sales to market segments Industrial Applications and Textile Fibers expected on prior year level Like-for-like (i.e. excluding currency and M&A effects) mid-to-high single digit growth rate expected No material impact expected from initial IFRS 15 adoption Recurring EBIT expected to remain at previous year level As cautioned in our H1 report due to weaker than previously anticipated operating performance in the market segments Wind Energy, Textile Fibers and Industrial Applications Positive impact from full consolidation of former joint venture with BMW and higher volumes - Partially offset by negative currency effects and higher development expenses - No material impact from initial IFRS 15 adoption Highest quarterly earnings of this fiscal year achieved in the first quarter 2018 due to the high capacity utilization as well as high shipments for particular projects 66 SGL Carbon | Investor Relations Presentation#67Reporting segment outlook 2018. GMS and Corporate Graphite Materials & Systems (GMS) • • . Slight increase in sales expected – corresponding now to currency adjusted growth of approx. 10% Driven by market segments LED, Automotive & Transport as well as Semiconductor - Industrial Applications and Chemicals expected to show slight increases in sales - Sales in the market segment Solar limited as we prioritize sales to market segments LED and Semiconductor Strong volume increase in market segment Battery & other Energy. In combination with successful pricing initiatives, we expect an increase in sales despite negative currency effects Low double digit million Euro positive impact from the initial adoption of IFRS 15 Recurring EBIT improvement expected to substantially outpace higher expected sales growth High single digit to low double digit million Euro positive impact from the initial adoption of IFRS 15 Group ROCE EBIT target of 9-10% should again be exceeded in this business unit and improvement over prior year expected Corporate • 67 Slightly higher expenses due to - General cost increases (esp. wage increases) Higher consulting fees (OMS, new data protection directive) Partly offset by one-off income from a land sale in Canada recorded in Q1/2018 SGL Carbon | Investor Relations Presentation#68Pending#69Group outlook 2018. . . • • Capex to increase compared to prior year to approx. €80 million i.e. €15 million above level of depreciation - Level of depreciation increases to €65 million (before PPA) due to full consolidation of former joint ventures Total free cash flow expected to reach a "black zero" Free cash flow - continued operations expected to improve significantly but remain negative in mid double digit range mainly due to higher capex level and cash outflow for the acquisition of the Wackersdorf site in the former joint venture with BMW - Free cash flow - discontinued operations expected to reach positive mid double digit range due to payment of final instalments of purchase price for disposal of GE and CFL/CE Net debt at end 2018 to substantially increase due to the full consolidation of former joint venture with BMW Balance sheet targets expected to continue to be met - equity ratio at or above 30%, gearing at or below 0.5 and leverage ratio at or below 2.5 69 SGL Carbon | Investor Relations Presentation#70Pending#71Composites - Fibers & Materials. in € million Sales revenue EBITDA1 EBIT1 EBIT-Margin (in %) ROCEEBIT (in %) Sales revenue increased by 28% (currency adjusted by 30%) 9M/2017 9 M/2018 323.9 253.9 45.8 32.8 20.9 17.2 6.5 6.8 4.6 5.2 Primarily due to structural effects in the market segment Automotive resulting from the initial consolidation of the former at-equity accounted JV Benteler SGL as well as the full consolidation of the former partially consolidated JV SGL ACF After the sale of our share in SGL Kümpers, the market segment Wind Energy now only includes lower sales of carbon fibers to the wind energy industry - Higher sales in the market segments Automotive and Aerospace • Sales in the market segments Textile Fibers and Industrial Applications on prior year level Recurring EBIT increased by 22% Highest earnings growth in the market segment Automotive, particularly due to the full consolidation of former SGL ACF 71 - Partially offset by significantly lower earnings contribution from Wind and Industrial Applications Earnings in market segments Aerospace and Textile Fibers on prior year level 1 before non-recurring items of €18.1 million in 9M/2018 and minus €6.0 million in 9M/2017 SGL Carbon | Investor Relations Presentation#72Graphite Materials & Systems. in € million Sales revenue EBITDA1 EBIT1 EBIT-Margin (in %) ROCEEBIT (in %) • 9 M/2018 9M/2017 436.8 381.5 76.5 54.4 59.5 37.5 13.6 9.8 16.0 11.8 Sales revenue (including IFRS 15 effects) up 15 % (currency adjusted by 17%) Double digit growth in Battery & other Energy, LED, Semiconductors, Automotive & Transport and Chemicals Slightly higher demand in Industrial Applications; limited sales to the Solar market segment to prioritize sales to Semiconductors and LED Adjusted for IFRS 15 and FX, sales in GMS grew by approx. 11% (approx. 10% at H1/2018) Recurring EBIT in 9M/2018 increased substantially more than proportionately to sales by 59% due to improvements in nearly all market segments and successful implementation of price increase initiatives (IFRS 15 effects of €14.7 million) 72 SGL Carbon | Investor Relations Presentation 1 before non-recurring items of €0.6 million in 9M/2018 and €1.0 million in 9M/2017#73Pending#74Pending#75Free cash flow. in € million (continuing operations) Cash flow from operating activities • Capital expenditures in property, plant, equipment and intangible assets • Cash flow from other investing activities1 Cash flow from investing activities Free cash flow Free cash flow from discontinued operations 9 M/2018 9M/2017 7.6 -27.2 -38.7 -30.3 -8.8 20.1 -47.5 -10.2 -39.9 -37.4 58.6 4.1 Cash flow from operating activities improved significantly mainly due to the improved result from continuing operations and lower build-up of working capital • Higher cash outflow from investing activities due to • - Cash outflow for the payment for the remaining interest in SGL ACF Germany of €23.1 million Higher capex compared to prior year Free cash flow from discontinued operations contained cash inflow from the final outstanding payments for the sale of former PP activities 1 dividends received, payments for capital contributions in investments accounted for At-Equity and other financial assets, payments for acquiring remaining stakes in our joint ventures, proceeds from sale of intangible assets and property, plant and equipment 75 SGL Carbon | Investor Relations Presentation#76Pending#779 Back-up Transformation of SGL Group 77 SGL Carbon | Investor Relations Presentation#78Pending#79The transformation of SGL Group. We are implementing the announced strategy <> sgl carbon Discontinued operations Composites - Fibers & Materials (CFM) Graphite Materials & Systems (GMS) Performance Products (PP) Graphite electrodes (GE) Sold to Showa Denko Fibers and materials for composites Graphite based technological solutions Cathodes Furnace linings Carbon electrodes (CFL/CE) Sold to Triton ✓ The disposal of the PP/GE business enables the new SGL Group to concentrate its resources on the growth areas CFM und GMS ✓ Focus on CFM and GMS improves the balance between markets and industries, and thus reduces volatility in our business 79 SGL Carbon | Investor Relations Presentation#80Pending#81Pending#82Pending#83Taking full ownership of SGL ACF. Main cornerstone for CFM's mid- to long-term growth perspective (cont.) Key value driver 3: Synergies . • • The site in Moses Lake (USA) will be CFM's main hub for all North American activities Potential for reduced capex SGL ACF's existing site overhead functions can be leveraged for CFM (avoided headcount increase) 83 SGL Carbon | Investor Relations Presentation#84Acquisition of SGL ACF. Two-step transaction structure Innovative transaction structure limits near term cash outflow . Agreement includes full acquisition of both Wackersdorf and Moses Lake sites • • • Closing of Wackersdorf acquisition will be pursued immediately and is expected in Q1/2018 - leading to cash outflow of purchase price relating to Wackersdorf Closing of Moses Lake site acquisition (incl. payment of related purchase price) can be pursued at any time until the end of 2020 - BMW Group will continue to provide debt financing until then However, agreement does lead to full consolidation of the total SGL ACF debt (excl. purchase price for Moses Lake) as of January 1, 2018 (see next page) 84 SGL Carbon | Investor Relations Presentation#85Pending#869 Back-up Acquisition of Benteler SGL 86 SGL Carbon | Investor Relations Presentation#87Acquisition of Benteler SGL. Provides the right component platform for the business unit CFM Leading large-scale serial manufacturer for automotive composite parts Business process competencies • Strong automotive mind-set Proximity to automotive customers • Process capabilities and systems to handle quotations, automotive logistics, and development projects • • Supporting quality management and tools incl. ISO/TS 16949 Experienced team (commercial, engineering, and technical) + Technology competencies • • Development and prototyping capabilities ⚫ Pilot line equipment (close to serial production equipment) . Track record in the industrialization of large scale production processes incl. automation Existing technologies (wet press, RTM) can serve as basis for future modification/expansion 87 SGL Carbon | Investor Relations Presentation#88Acquisition of Benteler SGL. Rationale Background & objectives . · . Acquisition of 50% share from Benteler Automobil Technik (BAT) in JV B-SGL to achieve 100% of control Complete integration of Benteler SGL into the business unit CFM will significantly strengthen the automotive activities of the business unit and provide synergies Privileged partnership with Benteler Automotive Technologies (BAT) in the area of composite leaf springs for chassis systems • Continuation of the growth path in structural composite components • Leverage synergies throughout the SGL value chain (i.e. captive use of carbon fibers) 88 SGL Carbon | Investor Relations Presentation#89Acquisition of Benteler SGL. An attractive investment case for SGL Group • • • Long-term market growth is expected to continue (CAGR 2017-2026 >10% p.a.) driven by major automotive technology trends incl. battery electric mobility, lightweight, multi material design concepts and local composite reinforcements Key value driver 1: Sustainable mid-term growth. Benteler SGL's leading technology positions and project portfolio allow growth with or above market rate. Structural parts and leaf springs as two complementary business segments. Established partnerships with OEMs incl. privileged partnership with BAT (leaf springs/suspension systems). Upside from offering technology to other industries Key value driver 2: Long-term growth perspective. Leverage technology platform and manufacturing experience to establish CFM as leading 1st tier supplier. Several project/program discussions are related to SOPs beyond five years planning horizon 89 SGL Carbon | Investor Relations Presentation#90Pending#91Acquisition of Benteler SGL. Current JV project pipeline Benteler SGL project pipeline analysis Annual sales in m€ 80 70 60 28 50 40 30 20 32 42 70 70 -40% 30 Current JV project pipeline expected to generate additional low to mid double digit million euro sales by 2020/21 Sales contribution 2020/21 1 In total 17 different projects being pursued; 2 Based on experience and status of project discussions 10 0 CFRP parts Leaf spring Total¹ Assumed success rate² 91 SGL Carbon | Investor Relations Presentation#92Acquisition of Benteler SGL. Financial impact Financial impact on KPIs (based on expected closing mid-December) Negligible . Sales FY 2017 • EBITDA FY 2017 Negligible • Net debt at end 2017 mid double-digit million euro increase . Sales FY 2018 . EBITDA FY 2018 92 22 SGL Carbon | Investor Relations Presentation Additional sales (low to mid-double digit million euro amount) Small positive impact#939 Back-up Efficiency and cost cutting programs 93 SGL Carbon | Investor Relations Presentation#94Pending#95Project CORE. Transforms the,,new" SGL Group" to a growth business model Business Units will be refocused to concentrate purely on activities that generate growth: Development, Production, Marketing & Sales All administrative tasks will be streamlined and concentrated in the corporate functions Savings potential of €25 million until the end of 2018 (base year: 2015) identified. More than 75% of expected savings reached until end of 2017 95 SGL Carbon | Investor Relations Presentation#96Pending#97Pending#98Global presence. SGL Group Worldwide Sites 98 Moses Lake St. Marys Strongsville Valencia Gardena ●Sinking Spring Morganton Arkadelphia. Muir Of Ord Halifax Willich Bonn Limburg Racibórz Wiesbaden (Germany) Head Office Wackersdorf Nowy Sacz Ort Meitingen Ried Chedde Stezzano Grenoble • Verdello Charlotte [USA] Headquarters North America Lavradio Madrid. Production Sites Graphite Materials & Systems [downstream] Graphite Materials & Systems [upstream] Composites - Fibers & Materials [downstream] Composites Fibers & Materials [upstream] SGL Carbon | Investor Relations Presentation Pune Yangquan Kyung Ki-Do Otake Narita Yamanashi Shanghai#99Regional Sales Distribution. Sales by destination Europe outside Sales Germany Germany North America Asia 2017 26 % 22 % 19 % 28 % Rest of World 6% 2016 27 % 22% 18% 27 % 5 % Sales by origin Sales 2017 2016 99 Germany Europe outside Germany North America Asia 41 % 32 % 21 % 6 % 41 % 33 % 21 % 5 % SGL Carbon | Investor Relations Presentation#100Shares in issue and shareholder structure. Basic shares Security Identification Number ISIN Number Cusip Number Number of Shares (as at October 31, 2018) Free float Reported shareholdings according to §§ 21 f. W pHG and other notifications SKion GmbH BMW AG Volkswagen AG 100 SGL Carbon | Investor Relations Presentation 723530 DE0007235301 784 188 203 122,341,478 ~ 46% 28.5% 18.4% 7.4%#101Debt market instruments. Convertible notes 2015/2020 Coupon Principal Amount Adjusted Conversion Price 3.5% € 167 million € 17.0732 Conversion Right 9.78 million shares Convertible notes 2018/2023 Coupon Principal Amount Initial Conversion Price Conversion Right 3.0% € 159.3 million € 13.0220 12.234 million shares (as at October 31, 2018) Issue Date 14 September 2015 Date of Maturity 30 September 2020 Issue Date Date of Maturity 20 September 2018 20 September 2023 Corporate bond (4.875% coupon, €250m principal amount, maturity 15 January 2021) with issue date 12 December 2013 redeemed early on October 30, 2017 101 SGL Carbon | Investor Relations Presentation#102Financial calendar/contact details. Financial calendar 2019 March 27, 2019 Annual Report 2018 Report on the first quarter 2019 Annual General Meeting Contact SGL Carbon SE Soehnleinstrasse 8 65201 Wiesbaden Germany May 7, 2019 May 10, 2019 August 6, 2019 November 5, 2019 Report on the first nine months 2019 Fax Report on the first half year 2019 Phone +49 (0) 611-6029 - 103 +49 (0) 611-6029 - 101 [email protected] www.sglcarbon.com 102 SGL Carbon | Investor Relations Presentation > sgl carbon#103Important note. Important note: This presentation contains statements relating to certain projections and business trends that are forward-looking, including statements with respect to SGL Group's outlook and business development, including developments in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, expected customer demand, expected industry trends and expected trends in the business environment, statements related to SGL Group's cost savings programs. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue" and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about SGL Group's businesses and future financial results, and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance and involve risks and uncertainties. These risks and uncertainties include, without limitation, changes in political, economic, legal and business conditions, particularly relating to SGL Group's main customer industries, competitive products and pricing, the ability to achieve sustained growth and profitability in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, the impact of any manufacturing efficiencies and capacity constraints, widespread adoption of carbon fiber products and components in key end-markets of the SGL Group, including the automotive and aviation industries, the inability to execute additional cost savings or restructuring measures, availability of raw materials and critical manufacturing equipment, trade environment, changes in interest rates, exchange rates, tax rates, and regulation, available cash and liquidity, SGL Group's ability to refinance its indebtedness, development of the SGL Group's pension obligations, share price fluctuation may have on SGL Group's financial condition and results of operations and other risks identified in SGL Group's financial reports. These forward-looking statements are made only as of the date of this document. SGL Group does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. O Copyright SGL CARBON SE Registered trademarks of SGL CARBON SE 103 SGL Carbon | Investor Relations Presentation