Integration of SGL GEʼs Graphite Electrode Business and Our New Strategy

October 6, 2017SHOWA DENKO K.K.

Kohei Morikawa, President and CEOHidehito Takahashi, Director (Managing Corporate Officer and

General Manager, Carbons Division)

Agenda

1. Transfer of SGL GEʼs U.S. business

2. Our new system for running the Carbons business

3. Forecast of the business environment／Strategy after the integration of SGL GEʼs graphite electrode business

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Announcement on Oct. 20, 2016

SDK to acquire SGL GEʼs business (worldʼs Number 2*)SDK to acquire SGL GEʼs business (worldʼs Number 2*)

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• Agreed with SGL Carbon SE (SGL Carbon groupʼs holding company) that SDK will acquire all shares in SGL GE Holding GmbH and make it a fully owned subsidiary; concluded a sale and purchase agreement

• Enterprise value: EUR 350 million (agreed)• Price of share acquisition: ¥15.6 billion in total**

（including advisory fees, etc.; as of the date of announcement）

• Closing: middle of 2017 (planned)＊In terms of production capacity**Based on the exchange rate of ¥115 to the euro; actual price of acquisition will be finalized after price

adjustments at the time of closing in accordance with the provisions of the agreement.

GE business integration to be realized

U.S. authorities approved the transaction on condition that two production sites should be sold.U.S. authorities approved the transaction on condition that two production sites should be sold.

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Hickman/Ozark

Head Office (SDK)

Ridgeville

Plant (SDK)Head Office (SGL) Plant (SGL)

Europe/CIS/Middle East/Africa

TokyoOmachi

Banting

North/Central/South America

Japan/China/Asia Pacific

La Coruna

MeitingenSteeg

Wiesbaden

Sichuan

→Transfer(30 KT/Y)

→ SGL GEʼs U.S. business to be transferred to Tokai Carbon Co., Ltd.

Capacity in EU90 KT/Y

Capacity in USA75 KT/Y

Capacity in Asia85 KT/Y

Positive effect on the integration of SDK/SGL GE businessPositive effect on the integration of SDK/SGL GE business

【Initial goal】Integrate SDK/SGL GE assets and generate synergy

→ Achieve best quality; maximize synergistic effect

【After the transfer】Full-capacity operation of SDKʼs US plant (75 KT/Y)Quick realization of cost reductions→ Focusing on integration and synergy of the sites

outside the U.S.

Influence of transfer of SGL GEʼs US business

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SGL GE integration - Summary

Enterprise value*

Total: EUR 350 million (Approx. ¥40 billion**)US site transfer: $150 million (¥16.5 billion**)

Share sale / purchaseprice

Total purchase price: ¥15.6 billion (incl. advisory fees)US site transfer: $117 million (¥12.9 billion**)

SchedulesBOD decision (SDK/Tokai): Sept. 28, 2017SGL GE share acquisition: Oct. 2, 2017Business transfer agreement: Oct. 2, 2017US business transfer: Early Nov. 2017 (planned)

Influence on performance

B/S, P/L, CF: Consolidation as from 4Q, 2017Influence of SGL GE integration and transfer of SGL GEʼs US business: Influence on SDKʼs fiscal 2017 performance will be disclosed after asset evaluation. “Goodwill” will be disclosed after it is finalized.

*Total enterprise value was announced on Oct. 20, 2016. Value of US business was announced on Sept. 28, 2017.**Based on exchange rates of ¥115 to the euro and ¥110 to the dollar 6

Agenda

1. Transfer of SGL GEʼs U.S. business

2. Our new system for running the Carbons business

3. Forecast of the business environment／Strategy after the integration of SGL GEʼs graphite electrode business

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Showa Denko Groupʼs GE sitesObtain new sites in Europe to cover the whole world → Becoming the leading company in the GE industryObtain new sites in Europe to cover the whole world → Becoming the leading company in the GE industry

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Ridgeville

Head Office(new SDK) Plant(new SDK)

Tokyo

Omachi

Banting

La Coruna

Meitingen Steeg

Wiesbaden

Sichuan

Approx. 250 KT/Y

*Of the worldʼs estimated GE production capacity in 2018(excluding Chinese makers)

Global share after integration

13% ⇒ 32%*

＊SDK estimate

Aiming at functional and globalized operationsAiming at functional and globalized operations

Carbons business operation system

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President / CEO(GM, Carbons Div.)

President / CEO(GM, Carbons Div.)

Executive CoordinatorLEAN/SCM/Purchasing &

Planning

Executive CoordinatorLEAN/SCM/Purchasing &

PlanningIntegrationIntegration

IMS/ESHAIMS/ESHA ExcellenceExcellence

Management Committee members

Management Committee members

CHROCHRO CMOCMOCFO/Central Planning/LegalCFO/Central

Planning/Legal

CTOCTO Production/Maintenance/Engineering

Production/Maintenance/Engineering

SCM/ProcurementSCM/Procurement

Managers for respective functions, at each site(Tokyo/Omachi/USA/China + Germany/Austria/Spain/Malaysia）

COOCOO

Agenda

1. Transfer of SGL GEʼs U.S. business

2. Our new system for running the Carbons business

3. Forecast of the business environment／Strategy after the integration of SGL GEʼs graphite electrode business

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GE demand will recover, hitting the bottom in 2016.GE demand will recover, hitting the bottom in 2016.

Market environment forecast ①

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0.20

0.25

0.30

0.35

300

350

400

450

500

2006 2008 2010 2012 2014 2016 2018

（Mil. t）【Production volume & share of electric steel】 （%）

Percentage of electric steel in total crude steel production (right axis)

（World Steel Association; for 2016 and after, based on WSA’s short-term forecast)

【Rolled steel price trends】

200

300

400

500

600

700

Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul

U.S.A. China Western Europe World Export Price2017

（$/ｔ）

2015 2016

（Steel BenchmarkerTM ）

Impact of excessive production by Chinese

blast furnace steelmakers

Electric steel share

hitting the bottom

Continuous improvement in supply-demand balance along the GE value chainContinuous improvement in supply-demand balance along the GE value chain

Market environment forecast ②

【2015〜2016】 【2017〜2018】CustomersWorld: Slowdown in steel demand and crude steel productionChina: Excessive steel production & export

⇒ Sluggish electric steel demand

CustomersN. America: Steady steel demandChina: Environmental control and ban on production of low-quality steel ⇒ Rise in the share of electric steelASEAN: Recovery in operating rate of electric steelmaking plants

Raw materialsNeedle coke:Low crude oil/coal price and excessive production capacity

⇒ Fall in price

CompetitionReductions in production capacity worldwidePenetration into the U.S. market by benefitting from the exchange rate situation

Raw materialsNeedle coke: in tight supply

CompetitionRationalization of production capacity(950 KT/Y in 2013 → 750 KT/Y in 2017)

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Our Integration VisionIntegration

Goal

Become the Strongest and most Profitable GE Companyby achieving Number - 1 cost and quality leadership.

Plans for the next 30, 60, and 90 days have been established.

Place 1st priority on Safety and Compliance.

Establish an excellent and resilient company by pursuing SDK/SGL Best Practices with a fair and transparent processproviding stable and positive cash flow over the cycle.

Combine SGL/SDK manufacturing and process technology to supply global Number. 1 Value in Use.

Complete integration initiatives by FY 2018, thereby realizing financial benefit in FY 2019 from all identified synergies.

Strengthen win-win relationship with customers and suppliers through quality, service and reliability.

IntegrationPrinciples

Integration Plan

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Disclaimer Regarding Forward-Looking Statements:

Any statements made in this communication that are not descriptions of historical facts, including those relating to the anticipated timing, closing conditions, completion and success of the proposed transaction, and the potential effects and benefits of the transaction on SDK and any other statements about future expectations, are forward-looking statements that are based on managementʼs beliefs, certain assumptions and current expectations and evaluated as such. Forward-looking statements are based on, among other things, opinions, assumptions, estimates and analyses that are inherently subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to differ materially from those expressed or implied by the forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements. These risks and uncertainties include, but are not limited to, general economic and market conditions and the satisfaction of the conditions to the consummation of the proposed transaction. Further, forward-looking statements speak only as of the date they are made, and SDK does not undertake any obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by laws.