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

SGL CARBON SE  / Key word(s): Miscellaneous

24.10.2012 17:59

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

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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 EUR55 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 EUR55
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 million 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.


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Information and Explaination of the Issuer to this News:

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.

24.10.2012 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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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@sglcarbon.de
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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