10-24-2012

Ad hoc notification pursuant to § 15 of the German Securities Trading Act (Wertpapierhandelsgesetz)

SGL CARBON SE: Non-cash Write-down in CFC Business Area related to B-787 Contracts

Wiesbaden, October 24, 2012. As widely reported by the press, the deliveries of the Boeing 787 (Dreamliner) have been delayed substantially. Additionally, the production volumes of the B787-8 have been markedly reduced compared to the original plan, which however will be replaced by higher volumes of the B787-9. As a result, SGL Group’s existing long term contracts for components for the B787-8 have become obsolete. Therefore SGL Group today has - under IFRS rules - established the necessity of a non-cash writedown of the respective long term PoC receivables (Percentage-of-Completion-Method) in the Business Unit Aerostructures (HITCO) within the Business Area Carbon Fibers & Composites (CFC) of approximately €55 million.

The writedown results primarily from the substantially reduced production levels of the B787-8 and their respective components at one of HITCO’s main customers, a major tier 1 supplier to OEMs in the aerospace industry. Consequently, according to IFRS rules, the long term PoC receivables relating to the B787-8 program need to be written down in Q3/2012, affecting accountingwise both sales and EBIT (by approximately minus €55 million) of the Business Area CFC.

In line with our contractual rights and aerospace industry practice, SGL Group has filed a claim with this customer. Potential future compensation payments would reduce the losses associated with this contract, but can only be booked if and to the extent these payments are almost certain.

Furthermore, SGL Group expects to be compensated in part with higher volumes for components for the B787-9, which however can only be reflected in future earnings.

Overall, SGL Group’s EBIT in Q3/2012 remains positive despite the PoC writedown in the Business Unit Aerostructures (HITCO) and is expected to reach a single digit mil-lion amount. The underlying performance in Q3/2012 was supported by the final settlement of a long term supply contract with a customer in the Business Area Performance Products (PP), resulting in an exceptionally high EBIT contribution in Q3/2012 which however had been embedded into our guidance for H2/2012.

The EBIT performance of the Business Area Graphite Materials & Systems was in line with expectations in Q3/2012. The Q3/2012 EBIT in the Business Area CFC before the PoC writedown improved slightly compared to the first two quarters of this year but remains weak.

The nine month report and outlook will be published on November 8, 2012.

About SGL Group – The Carbon Company

SGL Group is one of the world’s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Group’s core competencies are its expertise in high-temperature technology as well as its applications and engineering know-how gained over many years. These competencies enable the Company to make full use of its broad material base. SGL Group’s carbon-based materials combine several unique properties such as very good electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Due to industrialization in the growth regions of Asia and Latin America and increased substitution of traditional with innovative materials, there is a growing demand for SGL Group’s high-performance materials and products. Products from SGL Group are used predominantly in the steel, aluminum, automotive and chemical industries as well as in the semiconductor, solar and LED sectors and in lithium-ion batteries. Carbon-based materials and products are also being used increasingly in the wind power, aerospace and defense industries.

With 47 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group is a company with a global presence. In 2011, the Company’s workforce of around 6,500 employees generated sales of €1,540 million. The Company’s head office is located in Wiesbaden.

Further information about SGL Group can be found online at: www.sglgroup.com

 

Additional Information:
ISIN: DE0007235301
Listing: Amtlicher Markt / Prime Standard / Frankfurter Wertpapierbörse
(Official Market / Prime Standard / Frankfurt Stock Exchange)
Company's seat: Wiesbaden

 

Important note

This press release may contain forward-looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward-looking statements involve known and unknown risks and uncertainties, as a consequence of which actual developments and results can deviate significantly from these forward-looking statements. Forward-looking statements are not to be understood as guarantees. Rather, future developments and results depend on a number of factors; they entail various risks and unanticipated circumstances and are based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable changes in political, economic, legal, and business conditions, particularly relating to our main customer industries, such as electric steel production, to the competitive environment, to interest rate and exchange rate fluctuations, to technological developments, and to other risks and unanticipated circumstances. Other risks that in our opinion may arise include price developments, unexpected developments connected with acquisitions and subsidiaries, and unforeseen risks associated with ongoing cost savings programs. SGL Group does not intend or assume any responsibility to revise or otherwise update these forward-looking statements.

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