CommerzbankGerman Investment Seminar

Robert J. Koehler, CEONew York

12 January 2011

2

Agenda

• Carbon: our material

• Introduction to our businesses

• Growth opportunities resulting from fundamental trends – examples

• Summary and outlook

Carbon:Our material

4

Synthetic Carbon & Graphite

– resistance to heat– electrically conductive– resistance to corrosion– environmentally

compatible

Natural Graphite

– conducts heat– dense– energy storing

Carbon Fiber

– light– strong– stiff

Our MaterialWhat is Carbon ?

6C12,01

5

No material is lighter …

1.62.7

7.9

Steel Aluminum CFRP

Our MaterialHas Strategic Competitive Advantages

… nor stronger and stiffer

Specific Stiffness (100 km)

Other ceramics would break … … or fail at temperatures > 1.500 °C

SpecificStiffness

(km)

100 2000

Density(kg/l)

500

200

100

400

300

0

AramidFiber

SiC

Carb

on F

iber

Steel

GlasFiber

Al-alloy

Introduction to our businesses

7

SGL GroupBusiness structure

Base Materials Advanced Materials

Performance Products(PP)

Graphite Materials & Systems (GMS)

Carbon Fibers & Composites (CFC)

• Graphite & Carbon Electrodes (GCE)

• Cathodes & Furnace Linings (CFL)

• Graphite Specialties (GS)• Process Technology (PT)• New Markets (NM)

• Carbon Fibers & Composite Materials (CF & CM)

• Composite Components (CC)

Technology and Innovation (T&I)

Six Sigma (SGL Excellence)

8

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

Steel Making – An Electric Arc Furnace (EAF)

BM AM

CFCGMSPP

9

Performance ProductsGraphite electrodes (GE) for steel production in EAFs

• Growth in steel production fuelled by infrastructure demand from emerging countries

• Scrap availability limits EAF growth in emerging countries

• Due to continued efficiency gains GE demand growth only 1 – 2% p.a.

• GE critical to EAF furnace efficiency but only ~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)

BM 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

10

Performance ProductsCathodes for the aluminum industry

Source: SGL Group

Cathodes

4

4

4

1

3

2

Special glue

Cathode blocks

Ramming pastes

Sidewallblocks

30 – 70 cm

30 –50 cm

100 – 350 cm

Aluminum Smelter

BM AM

CFCGMSPP

11

Performance ProductsCathodes for the aluminum industry

• Aluminum demand driven by- industrialization of BRICs- weight/strength/cost advantages in higher energy cost

environment

• Cathodes essential to aluminum smelters- Existing smelters relining- Investment good (5 – 7 years shelf life)- New smelter construction leads to higher relining

demand long term

BM AM

CFCGMSPP

Source: SGL Estimate, CRU, King, IWF

47 %

53 %

24 26 28 30 32 3438 39

3641 43 45 47 48 51 53

56 59 6265

6871

75

10

20

30

40

50

60

70

80

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

e

2011

e

2012

e

2013

e

2014

e

2015

e

2016

e

2017

e

2018

e

2019

e

2020

e

2021

e

2022

e

2023

e

in M

io M

T pe

r ann

um

Rest of World Near Middle East China

2010/2011 Al Capacity

2020: Pre-crisis 64 mmt

2020: Post-crisis 65 mmt

Investments needed now to meet Al Demand growth 2012 ff

Source: SGL Estimate, CRU, King, IWF

47 %

53 %

24 26 28 30 32 3438 39

3641 43 45 47 48 51 53

56 59 6265

6871

75

10

20

30

40

50

60

70

80

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

e

2011

e

2012

e

2013

e

2014

e

2015

e

2016

e

2017

e

2018

e

2019

e

2020

e

2021

e

2022

e

2023

e

in M

io M

T pe

r ann

um

Rest of World Near Middle East China

2010/2011 Al Capacity2010/2011 Al Capacity

2020: Pre-crisis 64 mmt

2020: Post-crisis 65 mmt

2020: Pre-crisis 64 mmt

2020: Post-crisis 65 mmt

Investments needed now to meet Al Demand growth 2012 ff

Investments needed now to meet Al Demand growth 2012 ff

- Existing smelters upgrading- amorphous graphitized cathodes- only three established producers of graphitized cathodes- SGL Group largest producer worldwide

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

12

Graphite Materials & SystemsMajor customer industries and market shares 2009

25%15%Energy: Batteries & Nuclear

30%29%Chemicals

3%

4%

5%

6%

9%

16%

% of TotalGMS Sales 2009

Global MarketShare 2009

15%Automotive

15%High-temperature Processes

15%Tool Manufacturing

20%Metallurgy

20%Semiconductor

25%Energy: Solar

Source: SGL Group‘s own estimates

BM AM

CFCGMSPP

13

Graphite Materials & SystemsInnovation driving new product portfolio

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

and LEDs• Consumables for semicon production• High purity expanded graphite for

thermal management (electronics, climate) and environmental needs

• Specialty graphite for nuclear power(PBMR)

• Graphites for particle filter for diesel engines and exhaust systems

GMS 2009 sales: € 365 m

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

1/3new

2/3established

BM AM

CFCGMSPP

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Carbon Fibers & CompositesComplete Carbon Fiber Value Chain

PANPrecursor CF Fabrics Preforms

Prepregs CFRP CFRC C/SiCStages

Applica-tions

–Wind–Industrial

applications–Automobile–Aerospace–Defense–Sports

–Aircraft/ F1 Brakes

–High temperature furnaces

–Chemical industry

–Semi-conductor

–Car Brakes–Armoring

Techno-logies

EngineeringCompetence

Polymerchemicals

High temp.technology

Textiletechnology

Produc-tion

MaterialsSGL Group core competences

ComponentsJV with OEM / Tier-I-supplier

BM AM

CFCGMSPP

15

Carbon Fibers & CompositesGlobal Carbon Fiber Supplier Structure

Established Carbon fiber producers

North America AsiaEurope

SGL Group: only integrated European producer

BM AM

CFCGMSPP

16

3531

34

41

48

58

66

73

2008 2009 2010 2011 2012 2013 2014 2015

21 19 20 23 2734

40476

4 57

8

10

11

13

65

66

7

7

7

7

2008 2009 2010 2011 2012 2013 2014 2015

2831

3642

33

51

58

67

Updated forecast

Forecast 2009Sports

Aerospace

[in thousand mt p.a.]

Growth delayed 2-3 years due to crisis, yet long-term growth drivers are intact Demand reduction between 2010 and 2009 esp. due to Aerospace and Wind

Carbon Fibers & CompositesAnnual Carbon Fiber Consumption by Application

Industrial

Source: SGL Group market research

BM AM

CFCGMSPP

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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– > 600 Green Belts– > 100 Black Belts

Ensuring the FutureSGL Excellence – enables productivity and growth

InnovationExcellence

CommercialExcellence

OperationalExcellence

PeopleExcellence

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Ensuring the FutureSGL Excellence savings

Since 2002 continuous cost reduction of €210 million in total

55

2116 15

25 27 2823*

2002 2003 2004 2005 2006 2007 2008 2009

Annual Net Savings (€m)*excluding Brakes business

Growth opportunities resulting from fundamental trends

- Examples -

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Fundamental Trends Opportunities for SGL

• Scarcity of resources

• Climate change(CO2 reduction)

• Energy efficiency

• Mobility

• Digital lifestyle

• UrbanizationLightweight construction

Alternative Energies

Energy efficiency

Growth opportunities resulting from fundamental trends

21

Our Carbon-based Products Offer Sustainable Solutionstowards less CO2

€1.226 m*

€736 m*

67%

22%

11% Light Weight

Alt. Energies

EnergyEfficiency

Scrap Recycling

Wind

Aerospace60% of

Group SalesAutomotive

Solar

Batteries

Cooling Systems

Automotive

*Based on 2009 sales

2222

Infrastructure build up in emerging economies has only just begun …

Growing demand for resources due to ongoing industrializationrequires carbon and graphite for the production of steel and aluminum

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 World Steel in Figures 2009 Source: Alcoa analysis

2008 Aluminum (kg/capita)2008 Finished Steel (kg/capita)

597 582

502452 441

316281 247

160125 120

58 44

124

250319

0

100

200

300

400

500

600

700

Japa

n

Italy

Ger

man

y

Can

ada

Spai

n

Chi

na

USA

Turk

ey

Rus

sia

Fran

ce

Mex

ico

Sout

h Af

rica

Braz

il

Arge

ntin

a

Oth

er A

sia

Indi

a

1715

2 24

810

0

5

10

15

20

25

Nor

thAm

eric

a

Euro

pe

Chi

na

Rus

sia

Braz

il

Asia

w/o

Chi

na

Oth

er

23

Carbon Fiber Composites• Reduce weight

• Increase safety

• Lower emissions and conserve resources

1. JV with BMW Group for production of carbon fibers and fabrics

2. JV with Benteler Automobiltechnikfor development of lightweight components from carbon fiber composites

3. JV with Brembofor carbon ceramic brake discs

Growth MarketsExample: Lightweight Construction for Automotive

24

SGL Group / BMW Group Joint Venture

PrecursorOtake, Japan

Carbon FibersMoses Lake, USA

FabricsWackersdorf, D

CFRP-Comp.Landshut, D

BMW MCVLeipzig, D

SGL Automotive Carbon FibersJV w/Mitsubishi BMW

MegacityVehicle

25

SGL Group / BMW Group Joint VentureNew carbon fiber plant in Washington State (USA)

• Most cost efficient carbon fiber plant globally

• $100 million cap ex in first investment stage for 3.000t p.a. carbon fiber production

• 80 new jobs in first investment stage

• Groundbreaking on 7 July 2010

• Competitive energy prices – maximum 1/3 of German prices

• Environmentally friendly energy from hydropower

• Favorable infrastructure and logistics

26

Growth MarketsExample: Lightweight Construction for Aerospace

Components from carbon fiber composites

• substitute traditional materials (Aluminum)

• share of carbon composites increases to 50% and more in new aircraft generations

• subsidiary Hitco is leading Tier-II-supplier for aerospace industry

• Hitco supplies commercial aircraft programs (e.g. Boeing 767 and 787 „Dreamliner“) aswell as military programs (e.g. F-35 „Joint Strike Fighter“)

27

Growth MarketsExample: Energy Efficiency - Graphite for High Performance Batteries

Graphite for lithium ion batteries allows

• reduction of CO2 emission for hybrid vehicles • no CO2 emission for electrical vehicles • storage of energy from renewable energy sources

28

Growth MarketsExample: Energy Efficiency - Expanded Natural Graphite for Cooling Systems

Expanded Natural Graphite embedded in cooling systems for• an optimal air conditioning• low energy consumption• efficient energy storage

29

Growth MarketsExample: Alternative Energies - Carbon Fibers and Composites for Wind Energy

Carbon Fibers

• enable big offshorewindparks

• increase wind turbineperformance

30

Growth MarketsExample: Alternative Energies - Graphite and CFRC for solar applications

Graphite and carbon fiber reinforced carbon (CFRC)

• enable the production of products for the solar industry

• are indispensable for thesemiconductor industry

31

Global growth potential for carbon fiber andgraphite related green technologies

2010 2015 CAGR

Carbon Fibers (kt) 34 73 16%

Photovoltaic (GWp) 7 24 28%

Acc. Wind Turbine Installations (GW) 186 407 17%

Li-ion Batteries (Mio cells, only 3c) 3800 6000 10%

Share of Composites in Airplanes (%) 1 (B 747) ~50 (B 787) >50 (A 350)

GW: Gigawatt = 109 Watt; GWp:Gigawatt peak; kt: 1000 tonsSource: Public available surveys, client information and own estimates

To summarize…

33

Chemical

• Sealing materials• Equipment for HCl

synthesis• Heat exchangers

Iron & Steel

• Graphite electrodesfor electric steel

• Furnace linings made from carbon and graphite

Established business in basic industries

New businessin growth markets

• High purity fine grain graphite for polysilicon and mono crystal pulling

Solar

Wind

• Carbon fibers, prepregs and rotor blades for wind turbines

Automotive

• Ceramic brake discs• Carbon fiber fabrics for

composite materials

Air Conditioning

• Air conditioning systems made from expanded graphite

Aircraft

• Structural components made from carbon fiber composite materials

e-Mobility

• Graphite anode material for lithium-ion batteries

Portfolio

Emerging countriesinfrastructure build up

Industrialized marketstechnology step changes

34

Present Future

Portfolio:Core Areas for Growth

Carbon/Graphite Natural graphite Carbon FibersC/SiC

AircraftsA380, A350, B787

Wind

Car brakes

LED

Automotivecomponents

CNG tanks

NuclearHTR

CFCdamage

Heat recoveryAir conditioning

LIB for CCCmarketsScrap-

recycling

Solar

DefenseF 35 Project i

Energy efficiency

AlternativeEnergies

LightweightConstruction

BatteriesMaterials for

HEV/EV

LIB: Li-Ion-Batteries; CFC: chlorofluorocarbon; HEV/EV (Hybrid) electric vehicles; HTR: high temperature reactors; CNG: compressed natural gas

35

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, undrawn (maturity 2012)

SGL Group 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: 0.50

• Total liquidity: €275 million

SGL Group has solid balance sheet ratios and cash on hand at end of September 2010

Followed by a supplemental debt instrument in June 2009

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

36

Outlook2010 will show a moderate but better than expected improvement over 2009

2010

• Sales growth of ~10% vs. 2009

• EBIT growth of almost 20% vs. 2009 to up to €130 million(compared to guidance of flat EBIT at beginning of 2010)

• Net financial costs higher than in 2009 (including results from at equity companies)

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

• Gearing ~ 0.5 defines capex level

• Capex up to 10% lower than 2009

2011

• 40-50% improvement possible in 2011 compared to original 2010 guidance of an EBIT close to the 2009 (recurring) level of €110 million

• Earnings improvement driven by GMS and CFC• Capex approx. flat compared to 2009 – exact level defined by gearing target of ~ 0.5

37

Mid term Minimum Targets Over the Cycle Unchanged …… Once normality returns after transitional post crisis years

To deliver profitable growth!

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

PerformanceProducts (PP)

Graphite Materials & Systems (GMS)

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

Thank you for your attention !

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