DGAP-Adhoc: SGL CARBON SE: Adjustment of full year 2013 guidance and impairment charges necessary in the first half year

SGL CARBON SE / Key word(s): Change in Forecast/Miscellaneous

27.06.2013 18:12

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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* Increased competitive pressure from Asia and lack of business recovery
burden in particular the graphite electrode and graphite specialties
businesses
* Additional tax expenses mainly due to the release of capitalized deferred
tax assets related to tax losses carried forward
* Event-driven impairment tests lead to impairment charges in the Business
Area Carbon Fibers & Composites (CFC)

Wiesbaden, June 27, 2013. The weak business environment, which had already
negatively impacted the first quarter of fiscal year 2013, has continued in
the first two months of the second quarter 2013. Additionally, in
particular over the last weeks, competitive pressure from Asia has
significantly increased, intensified by the devaluation of the Japanese
Yen. Consequently, the anticipated business recovery will not occur either
in the second quarter or in the second half of 2013, particularly in our
businesses relating to graphite electrodes within the Business Area
Performance Products (PP) and graphite specialties within the Business Area
Graphite Materials & Systems (GMS). SGL Group therefore now expects Group
EBITDA in the second quarter 2013 to be slightly below the first quarter
2013 (Q1/2013: EUR 34 million).

The full year 2013 EBITDA guidance also has to be adjusted to the altered
expectations: SGL Group now anticipates Group EBITDA to be 50-60% lower
compared to 2012 (2012: EUR 240 million before project write-offs) and the
previous guidance of a 20-25% decline.

The substantially lower EBITDA means that the set target for a positive
free cash flow in 2013 can no longer be met. However, the decline in free
cash flow will be substantially less than the reduction in the EBITDA due
to rigid expense controls particularly relating to capital expenditures and
working capital.

The Company expects mid to high double digit million Euro tax expenses in
the first half 2013. A major share of these tax expenses results from the
release of capitalized deferred tax assets related to tax losses carried
forward. This non cash tax expense is a consequence of the reduced earnings
expectations in Germany and the USA. The measure will not restrict the
possibility to take advantage of the tax losses carried forward in future.

The adjusted guidance for the year also triggered an event-driven review of
asset valuations. Within the framework of these IFRS required impairment
tests, all businesses are prompted to review their 5 year plans and to
identify potential deviations. A delay in the earnings development is
becoming apparent in the Business Units within the Business Area CFC, due
to numerous project shifts and continued high development costs. However,
this does not apply to the activities in the automotive field, which are
developing as scheduled. Altogether, the impairment test for the Business
Area CFC results in a significant impairment charge in the second quarter
2013, which, from today's point of view, is tentatively estimated at EUR
150 million at the most.

The Board of Management will decide on appropriate countermeasures and
potential restructuring projects in close cooperation with the Supervisory
Board.

The interim report on the first half year 2013 and further information on
the outlook will be published on August 8, 2013.

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Information and Explaination of the Issuer to this News:

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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Language: English
Company: SGL CARBON SE
Söhnleinstraße 8
65201 Wiesbaden
Germany
Phone: +49 (0)611 6029 - 0
Fax: +49 (0)611 6029 - 101
E-mail: investor-relations@sglgroup.com
Internet: www.sglgroup.de
ISIN: DE0007235301
WKN: 723530
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart

End of Announcement DGAP News-Service

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