DGAP-Adhoc

SGL CARBON SE: First outlook on 2016 significantly impacted by renewed pricing pressure in graphite electrodes at the beginning of the contract negotiation season

SGL CARBON SE / Key word(s): Forecast

03.11.2015 19:08

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Wiesbaden, November 3, 2015. SGL Carbon SE will report a solid Q3/2015 in
all businesses - including the graphite electrode business - on November 5,
2015, in the context of its 9M/2015 consolidated statement. However,
contrary to the Group's prior expectations, the renewed deterioration in
the overall steel markets is expected to have a negative impact on graphite
electrode profitability going forward despite past and ongoing cost cutting
measures.

Due to the worsening of the overall steel markets, customers are starting
to reduce and/or postpone their demand for graphite electrodes already for
the fourth quarter of this year. Consequently, the earnings contribution
from the Business Unit Performance Products (PP) is expected to
significantly decline in the final quarter of this year compared to the
first three quarters and the significant improvement in the 2015 EBIT of
the Business Unit PP compared to 2014 - as previously expected - is no
longer achievable; the PP EBIT 2015 is now expected to come in slightly
below the 2014 level of EUR26 million (before non-recurring effects).

The guidance revision relates only to the graphite electrode business. The
remaining businesses are performing in line with expectations or even
slightly better. Thus, the Group outlook for a significant increase in the
2015 EBIT (before non-recurring effects) compared to the EUR3 million
reported in 2014 remains unchanged.

Planning for 2016 is still at an early stage. From today's point of view,
the Business Units Graphite Materials & Systems and Carbon Fibers &
Materials as well as the cathodes business within the Business Unit PP will
develop in line with SGL Group's expectations. However, the anticipated
renewed price erosion in graphite electrodes will prevent a further EBIT
improvement in the Business Unit PP. In fact, the graphite electrode
business is anticipated to be EBIT negative in 2016, resulting in a
significant deterioration of the EBIT of the Business Unit PP.

The renewed downturn in the graphite electrode business confirms SGL
Group's strategy to legally separate the Business Unit PP, as announced on
July 7, 2015. Furthermore, it calls for accelerated implementation and