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SGL: Half-year Report 2013

Adjusted for the sales contribution of the Portuguese acrylic fiber producer Fisipe acquired in 2012, a slight decrease would have been recorded. Due to the weak development in all three Business Areas, Group EBITDA decreased by 38 % to EUR 67,3 million (H1/2012: EUR 108,2 million). This corresponds to an EBITDA margin of 8,1 % after 13,4 % in the previous-year period. Group EBIT before extraordinary effects declined accordingly and amounted to EUR 25,6 million (H1/2012: EUR 69,9 million). The negative developments in all segments – especially the increased competitive pressures from Asia and lack of business recovery in the second half year – resulted in an adjustment of the guidance for the full year 2013, which was already published on June 2013. Group EBITDA is forecasted 50–60 % below the comparable previousyear EBITDA of EUR 240 million. Group sales is expected to be slightly lower than the previous year level mainly due to reduced expectations in PP (performance products) and GMS graphite materials and systems). In the full year 2013, the Company expects to post reduced sales in the Business Area PP compared to the previous year mainly due to pricing pressure in graphite electrodes. SGL Group also does not expect a recovery in the Business Area GMS in the second half of this year. Therefore, GMS will record lower sales in 2013 compared to the record year 2012. In the Business Area CFC (carbon fibers and composites) project delays will continue to affect the Business Units Carbon Fibers and Composite Materials, Aerostructures and Rotor Blades. Rotor Blades should be able to reduce their losses thanks to the acquisition of new orders and internal optimization measures. Demand recovery in our ongoing development projects is expected in the fourth quarter of 2013 at the earliest. The anticipated slight reduction in full-year 2013 operational losses is therefore mainly due to internal optimization measures. On the whole, the Business Area CFC continues to be impacted by a strong R&D driven substitution trend, which can lead to delays and start-up/development expenses that may partially not be predictable until a certain commercial maturity is reached. However, the considerable long-term growth potential in this material segment remains unaffected by this. To account for the changed fundamental environment, the management board will set up a comprehensive global cost savings program: SGL2015. This program consists of two pillars: on one hand, the organizational structure will be reviewed (adjustment and simplification of business processes as well as streamlining management structures). On the other hand, the program will also include measures for site restructuring (potential divestment of non-core activities, transferring activities into partnerships as well as the relocation, closure or sale of production assets). The individual projects are currently being developed and will be incorporated into the 2014 planning session. The already established SGL Excellence philosophy will also play a major role in this context to safeguard continuous efficiency improvements. (8/2013)

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