Presentation of the Group - Salzgitter AG
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Presentation of the Group
SZAG Investor Relations
1 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
english
Salzgitter Group
Global Presence
Strip Steel
Plate / Section Steel
Mannesmann
Trading
Technology
SZAG Investor Relations
Crude steel production 2018: 7.0 million tons; trading volume: 4.5 million tons;
Among the top 3 producers of beverage filling and packaging machinery
english
3
Salzgitter Group
Diversified product portfolio
Steel and Technology
Strip products Line pipes
Steel Service Center Precision tubes
Heavy plates Stainless tubes
Sections Stockholding trading
Engineering services International trading
Injection molding machinery Beverage filling plants
SZAG Investor Relations
english
4
Salzgitter Group
Group structure and key data FY 2018
Salzgitter AG Group
External Sales cons.: € 9.3 billion Employees: 23,523
EBT: € 347 million
Plate /
Strip Steel Mannesmann Trading Technology
Section Steel
External Sales: External Sales: External Sales: External Sales: External Sales:
€ 2.3 billion € 1.0 billion € 1.1 billion € 3.3 billion € 1.3 billion
EBT: EBT: EBT: EBT: EBT:
€ 205.8 million € 24,8 million € -5,4 million € 50,5 million € 43,1 million
Employees: Employees: Employees: Employees: Employees:
6,182 2,451 4,675 2,109 5,490
SZAG Investor Relations
english
All data about employees as per 12/31 5
Salzgitter Group
Group structure
Salzgitter AG
Salzgitter Mannesmann / Salzgitter Klöckner-Werke
Strip Steel Plate / Section Steel Mannesmann Trading Technology Industrial Participations /
BU BU BU BU BU Consolidation
Salzgitter Ilsenburger Salzgitter Mannesmann Verkehrsbetriebe Peine-
Mannesmannröhren-Werke KHS
Flachstahl Grobblech Handel Salzgitter
Salzgitter Salzgitter Mannesmann Salzgitter Mannesmann
Europipe KHS Corpoplast Hansaport
Europlatinen Grobblech 50% Stahlhandel 51%
Peiner Salzgitter Mannesmann Klöckner DESMA Gesis Gesellschaft für
Salzgitter Bauelemente Mannesmann Line Pipe
Träger International Elastomertechnik Informationssysteme
Salzgitter Mannesmann DEUMU Deutsche Universal Eisen
Mannesmann Grossrohr DESMA Schuhmaschinen Telcat
Stahlservice Erz- und Metall-Union und Stahl
Salzgitter Mannesmann
Mannesmann Precision Tubes
Forschung
Salzgitter Automotive
Mannesmann Stainless Tubes
Engineering
Hüttenwerke Krupp
Salzgitter Hydroforming
Mannesmann 30%
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Borusan
Aurubis
Mannesmann Boru 23% >25%
BU = Business Unit
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As of December 2018
6
Salzgitter Group
External sales 2018 by customer industries
13% 15%
Other Vehicle construction
12% 12%
Food and beverage industry Construction industry
6% 4%
Mechanical engineering White goods,
electrical equipment
6% 3%
Re-rollers Energy sector and utilities
5% 24%
Tubes producers Traders, Steel-Service-Centers
SZAG Investor Relations
Broad customer base
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Only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE Group 7
Salzgitter Group
External sales 2018 by regions
5%
Other
7%
Asia
13%
Americas 48%
Germany
3%
Other Europe
24%
Other EU
SZAG Investor Relations
Share of ex-Germany sales by consignee 52%
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Sales by consignee (only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE-Group) 8
Salzgitter Group
Key data per 2018/12/31
FY 2018 FY 2017 Δ 2018 – 2017
Crude steel production kt 7,039.4 6,955.2 84.2
Consolidated Sales € million 9,278.2 8,990.2 288.0
Earnings before tax € million 347.3 238.0 109.3
Earnings after tax € million 277.7 193.6 84.1
Earnings per share (undiluted) € 5.06 3.52 1.54
ROCE % 10.3 8.6 1.7
Core workforce (12/31) 23,523 23,139 384
SZAG Investor Relations
Salzgitter-Konzern mit bestem Ergebnis der vergangenen zehn Jahre
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9
Salzgitter Group
Balance sheet per 2018/12/31
€ million
8,757 8,757
Goodwill: Equity ratio:
Property, plant and €6m 38.0% Equity
equipment and other 3,332
non-current assets 3,836
Assets to equity: 87%
Pension
provisions
Inventories 2,275
2,327
€ 679 m € 269 m Other non-current
Cash and liabilities
761
securities Net position due to banks:
569
€ 192 m
Other current € 200 m € 418 m
2,389 Current liabilities
assets 2,025
Aktiva Passiva
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Sound financial basis
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10Salzgitter Group
Salzgitter Group Investments and Depreciation / Amortization
52 15 49 44
411
330 340 352 342 342 338 340
270 287
2014 2015 2016 2017 2018
Investments1 Scheduled depreciation Unscheduled depreciation
SZAG Investor Relations
Focus on expansion investments
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1 Property, plant and equipment and intangible assets, excluding financial assets 11Salzgitter Group
History
Strip Steel BU 1998 Salzgitter AG Mannesmann BU Technology
1937 Construction 1989 Name change to
Hüttenwerk Salzgitter 2017 Relaunch of 2007 Integration into SZAG
(Part of Reichswerke) Preussag Stahl AG the brand presence
First broad-flanged 1964 2000 Liquidation of 1992 - 1995
1970 Merger
beam mill in Peine, 1914 Salzgitter Hüttenwerk AG to form Stahlwerke Mannesmann Group, Insolvency, restructuring Cross-rolling process sketch of
(since 1961 part of state-owned
Salzgitter AG old) Peine-Salzgitter AG Integration Tubes into SZ and end of steel production Max Mannesmann, pre 1885
Plate / Section Steel BU 1912 first attempts with
stainless steel tubes 1977
1880 Acquisition of Peiner
1897 Start of production First acquisition of part. in
llsenburg: est. 1595, Walzwerk, est.1872
welded steel tubes filling technology (H & K)
plate since 1948
Mülheim an der Ruhr:
plate since 1882 1886 First process 1923
1858 Foundation
for the rolling of Foundation of steel group
Demonstrations to save Ilseder Hütte AG
Peine: Sections since 1876 seamless steel tubes Klöckner-Werke AG
the smelting works in Bottle filling line Phönix
Salzgitter, c. 1950 c. 1936
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Privatization and acquisition
of the Ilsenburg rolling mill, 1992
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1989 privatization with the First blast furnace in Ilsede, 1861 Stock listing 1998
sale to Preussag AG 121 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishMarket Situation
Economic development in the European Union
Industrial production in selected countries of the EU (Jan. 2007 = 100)
120
110
100
90
80
70
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Germany GB France Italy Spain
SZAG Investor Relations
The trend of the previous years continued: Slightly improving EU industrial production,
Germany despite deterioration in the second half of 2018 remains relatively strong
english
Source: Eurostat, own research, last figure from February 2019 14Market Situation
Raw materials prices
Iron ore Coking coal Steel scrap
(62% Fe CFR China, US$/dmt) (FOB Australia, US$/t) (grade 2/8, €/t)
100 350 300
90 300 280
80 250 260
70 200 240
60 150 220
50 100 200
SZAG Investor Relations
Volatile raw materials markets harbor risks, but also opportunities;
2019 price levels – especially for iron ore – expected to be above the average of 2018
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15Market Situation
Steel prices
Spot prices Northern Europe Hot-rolled coil prices international
(€/t) 900 (€/t)
900
800 800
700 700
05/19
05/19
600 600
500 500
400 400
300 300
Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jan 17 Jul 17 Jan 18 Jul 18 Jan 19
HRC EXW Ruhr Plate EXW Ruhr Medium sections Northern Europe EXW Ruhr USA EXW Indiana China Schanghai
SZAG Investor Relations
Following periods of rises, steel prices are consolidating since mid 2018;
different trading policies result in tremendous regional price variations
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16Market Situation
International trade policy
American measures affecting the European Union Reaction of the European Union
Since 2014: USA significantly increase number of anti- June 1, 2018: WTO complaint filed against the Section
dumping cases for steel products 232 tariffs of the United States, result remains to be seen
March 26, 2018: Introduction of protective tariffs under the July 19, 2018: Preliminary safeguard measures for a
guise of “national security” (Section 232) in the U.S.; since broad steel and tubes portfolio implemented
June 1, 2018 these also apply to imports of steel from the
EU February 2, 2019: Implementation of final safeguard
measures
Comparison of imports 2018 vs. 2017 Imports of finished steel products (1,000 t/month)
2,500
2,000
+3.2 + 59%
+10% 1,500
mt
1,000
-3.5 -13% 500
SZAG Investor Relations
mt
-
2014 2016 2017 2018
China Ukraine Russia Turkey India South Korea Rest
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Source: Eurofer, Data per December 2018 171 Salzgitter Group
2 Market Situation
3 Business Units: Strip Steel
4 Strategy
SZAG Investor Relations
5 Guidance
englishStrip Steel Business Unit
Overview
Capabilities External sales by customer industry 2018
Integrated steel works with three blast 1% 4%
furnaces Mechanical engineering Other
Approx. 4.7 mt/year crude steel capacity 16% 35%
Modern production plants Re-rollers Vehicle construction
1%
High processing competence (SSC)
Tube producers
Core competences and products 4%
High-quality steel grades for sophisticated 32% Construction industry
applications Traders 7%
Custom made solutions, e.g., hot-rolled only from entities within the group of
White goods,
and cold-rolled coil, galvanized and consolidated companies of Salzgitter Group electrical equipment
coated sheet, laser-welded tailored Key data FY 2018
blanks, corrugated sheets, coffers,
sandwich and acoustic elements
Consolidated Sales €m 2,341
Customer focus through local presence
Earnings before taxes €m 206
Core workforce (12/31) 6,182
SZAG Investor Relations
Established supplier of the demanding German automotive industry
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19Strip Steel Business Unit
Strip Products
Salzgitter Flachstahl GmbH
Germany; shareholder: SZAG 100%
Hot-rolled coil, cold-rolled coil, electrogalvanized, hot dip
galvanized and organic coated sheet Supplier of premium OEMs
Integrated steel works with 3 blast furnaces
Around 4.7 mt yearly crude steel capacity
Top modern production plants
High-tech downstream facilities
4% market share in the EU28
2018 2017
Shipments kt 4,341 4,154
SZAG Investor Relations
Sales €m 2,887 2,652
Employees 12/31 5,666 5,587
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20Strip Steel Business Unit
Processing
Salzgitter Europlatinen GmbH
Germany; shareholder: SZAG 100%
Custom-made solutions: Laser welded
Tailored Blanks for lighter car bodies
2018 2017
Sales €m 71 77
Employees 12/31 122 117
Salzgitter Bauelemente GmbH
Germany; shareholder: SZAG 100%
Corrugated sheets, coffers, sandwich a. acoustic elements for wall and
roof constructions of commercial buildings
2018 2017
SZAG Investor Relations
Sales €m 52 46
Employees 12/31 71 67
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21Strip Steel Business Unit
Steel Service Center
Salzgitter Mannesmann Stahlservice GmbH
Germany; shareholder: SZAG 100%
Two locations
Excellent position in the heart of
Modern plants and processes Europe
600,000 t/year processing capacity
2018 2017
Shipments kt 584 598
SZAG Investor Relations
Sales €m 415 402
Employees 12/31 323 321
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221 Salzgitter Group
2 Market Situation
3 Business Units: Plate / Section Steel
4 Strategy
SZAG Investor Relations
5 Guidance
englishPlate / Section Steel Business Unit
Overview
Capabilities External sales by customer industry 2018
Section steel: 1%
17%
− Top-modern mini mill with two electric Vehicle construction
arc furnaces Other 8%
− Annual crude steel capacity 1 mt 3% Construction industry
Mechanical engineering 5%
− Two rolling mills for medium and heavy
sections White goods,
electrical equipment
Plate:
25%
41%
− Two rolling mills for plate with Tube producers
Traders
1.6 mt annual capacity only from entities within the group of
− Plate width up to 4,800 mm consolidated companies of Salzgitter Group
Core competences and products Key data FY 2018
High-strength, wear resistant and
specialized steel grades Consolidated sales €m 1,026
Medium and heavy sections, heavy plate
incl. offshore and tube grades Earnings before taxes €m 24.8
Core workforce (12/31) 2,451
SZAG Investor Relations
Plate: Broad range of high quality plate products
Section Steel: Efficient production
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24Plate / Section Business Unit
Heavy Plate
Ilsenburger Grobblech GmbH
Germany; shareholder: SZAG 100%
Broad diversified heavy plate steel grades
Construction plate, fine grained construction plate, alloyed
and unalloyed boiler plate, offshore and tube grades
High-strength and wear resistant grades
7% market share in the EU28
State of the art facilities, one of the most modern water
quenching plants
2018 2017
Shipments kt 697 682
SZAG Investor Relations
Sales €m 534 501
Employees 12/31 741 739
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25Plate / Section Steel Business Unit
Heavy Plate
Salzgitter Mannesmann Grobblech GmbH
Germany; shareholder: SZAG 100%
Heavy plate mill specialized in plate for longitudinally
welded line pipe and similar applications, especially for
EUROPIPE GmbH
Pipe bending plant for seamless and welded steel tubes
in carbon, alloyed, and high-alloy steels
Test Center with a wide range of mechanical and
technological tests
2018 2017
Shipments kt 526 584
SZAG Investor Relations
Sales €m 378 394
Employees 12/31 539 607
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26Plate / Section Steel Business Unit
Sections
Peiner Träger GmbH
Germany; shareholder: SZAG 100%
Medium and heavy steel beams, Peine sections
Progressive and flexible mini mill
Two top-modern electric arc furnaces
Adjusted crude steel capacity 1.0 mt/year
13% market share in the EU28 (plus N, CH)
Two of the most efficient section mills worldwide with
comprehensive range of products
2018 2017
Shipments kt 1,022 997
SZAG Investor Relations
Sales €m 619 523
Employees 12/31 785 783
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27Plate / Section Steel Business Unit
Other Companies
Deutsche Erz- und Metall-Union-Gruppe
Germany; shareholder: SZAG 100%
Specialist trader for ferrous scrap, non-ferrous scrap, new metals and
ferro alloys, as well as rolled steel products
2018 2017
Sales €m 678 627
Employees 12/31 378 378
SZAG Investor Relations
english
281 Salzgitter Group
2 Market Situation
3 Business Units: Mannesmann
4 Strategy
SZAG Investor Relations
5 Guidance
englishMannesmann Business Unit
Overview
Capabilities External sales by customer industry 2018
Own crude steel supply via 30%
25%
participation in Hüttenwerke Krupp
40% Vehicle construction
Mannesmann GmbH
Other
Plant for the production of semis for the 1%
seamless tubes business Construction industry
Core competences and products 10%
15%
Line Pipe: participation (50%) in the world Mechanical engineering
Energy sector
market leader EUROPIPE; international 5% and utilities
presence Tube producers 4%
Precision Tubes: European market leader only from entities within the group of Traders
Seamless Stainless Tubes: top player in consolidated companies of Salzgitter Group, excluding EUROPIPE Group
the world market Key Data FY 2018
Longitudinal and spiral welded large-
diameter pipes, medium line pipes, Consolidated Sales €m 1,119
seamless and welded precision tubes,
stainless tubes Earnings before taxes €m -5,4
Core workforce (12/31) 4,675
SZAG Investor Relations
Global player in the high quality segment of the global tubes market
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30Mannesmann Business Unit
Line Pipes
EUROPIPE Group
Germany; shareholder: SZAG 50%, Dillinger Hüttenwerke 50%
Longitudinal and spiral welded large-diameter pipes for
transcontinental and underwater pipelines
In-house coating activities
World market leader (7% market share)
3 locations in D, USA
Since January 1, 2014 reported at equity
2018 2017
Shipments kt 895 1.099
SZAG Investor Relations
Sales €m 953 1.042
Employees 12/31 1.048 1.031
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31Mannesmann Business Unit
Line Pipes
Mannesmann Line Pipe GmbH
Germany; shareholder: SZAG 100%
HFI-welded medium line pipes incl.
plastic- and cement coatings
2018 2017
Sales €m 285 261
Employees 12/31 364 385
Mannesmann Großrohr GmbH
Germany; shareholder: SZAG 100%
Spiral-welded large-diameter pipes made of hot-rolled coil
2018 2017
SZAG Investor Relations
Sales €m 67 78
Employees 12/31 125 124
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32Mannesmann Business Unit
Precision Tubes
Mannesmann Precision Tubes Group
Germany; shareholder: SZAG 100%
Seamless and welded cold drawn precision tubes for the
automotive and engineering industries as well as the energy Structural
Pump case
Airbags
sector tube Stabilizers
State of the art push bench plant for the production of hollows Suspension
components
Market leader in the EU28 (24% market share) Engine-
components
10 locations in D, F, NL and Mexico Seat belt- IHU/IHV
fixings
Camshafts
Drivetrain and steering components Drive shafts
2018 2017
Shipments kt 276 282
SZAG Investor Relations
Sales €m 497 477
Employees 12/31 2,287 2,313
english
33Mannesmann Business Unit
Seamless Stainless Tubes
Salzgitter Mannesmann Stainless Tubes Group
Germany; shareholder: SZAG 100%
Seamless hot- and cold finished stainless tubes
for the chemical- and engineering industries,
as well as for the energy sector
6% market share in the world
5 locations in D, F, I, USA
2018 2017
Shipments kt 23 25
SZAG Investor Relations
Sales €m 245 237
Employees 12/31 1.000 935
english
34Mannesmann Business Unit
Significant shareholdings
Hüttenwerke Krupp Mannesmann GmbH
Germany; shareholder: ThyssenKrupp 50%,
SZAG 30% + Vallourec 20% (Pool)
Steel works with two blast furnaces
Production of slabs and round steel bars
Up to 1,000 different steel grades
Yearly crude steel production of > 4 million tons
2018 2017
SZAG Investor Relations
Sales €m 2,468 2,515
Employees 12/31 2,980 2,907
english
351 Salzgitter Group
2 Market Situation
3 Business Units: Trading
4 Strategy
SZAG Investor Relations
5 Guidance
englishTrading Business Unit
Overview
Capabilities External sales by customer industry 2018
74 sites in 30 countries 7% 14%
Mechanical engineering Other
Own distribution network for steel products
with warehousing sites in Europe 5% 5%
Re-rollers Vehicle construction
Processing group specialized on heavy 2%
29%
plate products Tube producers
Construction industry
International trading 32% 3%
Core competences and products Traders White goods,
electrical equipment
Global presence in all relevant regions with 2%
own representation only from entities within the group of Energy sector and utilities
consolidated companies of Salzgitter Group
Distribution channel for Salzgitter Group
products Key Data FY 2018
Procurement channel for Salzgitter Group
works Consolidated Sales €m 3,268
Value add services for customers
Earnings before taxes €m 51
Core workforce (12/31) 2,109
SZAG Investor Relations
High customer and market orientation through a global sales organization
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37Trading Business Unit
Salzgitter Mannesmann Handel Group
Salzgitter Mannesmann Handel
Shipments 2018: 4.3 mt Sales 2018: € 3.3 billion
Trading Stockholding Agencies
International
Salzgitter Mannesmann Stahlhandel Europa Europa
10 Companies
GmbH, Düsseldorf (SMSD) 7 Companies 4 Agencies
2 Rep. offices
20 Branches with warehouses and
Salzgitter Mannesmann International
further processing (incl. 4 flame
GmbH, Düsseldorf (SMID)
cutting plants), 4 Sales offices
Salzgitter Mannesmann International Stahl-Center Baunatal GmbH,
(USA) Inc., Houston (SMIH) Baunatal (SCB)
Salzgitter Mannesmann International
(Canada) Inc., Vancouver (SMIV)
SZAG Investor Relations
63 locations in 30 countries with 1,739 employees
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38Trading Business Unit
Universal Eisen und Stahl Group
Universal
Shipments 2018: 0.2 mt Sales 2018: € 0.2 billion
North America Europe
Universal
UNIVERSAL STEEL AMERICA, Inc., Houston, USA Universal Aciers Sarl, Couzon au Mont d'Or, France
Eisen und Stahl GmbH, Neuss (UES)
UNIVERSAL STEEL HOLLAND B.V., SK
1 Branch in Chicago 5 Branches
Papendrecht, Netherlands
UNIVERSAL-Stal Sp. z o.o, Gliwice, Poland
UNIVERSAL OCEL spol. s.r.o., Prague,
Czech Republic
SZAG Investor Relations
11 locations in 6 countries with 370 employees
english
391 Salzgitter Group
2 Market Situation
3 Business Units: Technology
4 Strategy
SZAG Investor Relations
5 Guidance
englishTechnology Business Unit
Overview
Capabilities External sales by customer industry 2018
17 Production plants worldwide 3% 1%
60 Service sites
Vehicle White goods,
> 90% of sales outside of Germany construction electrical equipement
Core competences and products
KHS: among the top 3 global suppliers for 9%
filling and packaging machines; technology 87%
Mechanical engineering
and innovation leadership Food and beverage
DESMA Elastomertechnik: Global leader industry
for rubber and silicon injection molding
machines only from entities within the group of
consolidated companies of Salzgitter Group
DESMA Schuhmaschinen: World market
leader for the production of machines for Key data FY 2018
the production of shoes and shoe soles
Turn-key lines, single machines and Consolidated Sales €m 1,338
service
Earnings before taxes €m 43.1
Core workforce (12/31) 5,490
SZAG Investor Relations
Top 3 producer for filling and packing industry, world market leader for rubber and
silicon injection molding as well as direct soling machines
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41Technology Business Unit
Filling and packaging
KHS Group
Germany; shareholder: SZAG 100%
A global leader and solution provider of first choice in the packaging
industry
Among the Top 3 producers
Focus on beverage applications
Supplier of single machines and turnkey solutions (one-stop-shop
supplier)
Leadership in technology and innovation
11 production sites: 5 in Germany, 2 in the US, and 1 each in Mexico,
Brazil, China and India
2018 2017
SZAG Investor Relations
Sales €m 1,161 1,138
Employees 12/31 4,714 4,648
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42Technology Business Unit
Special machinery
Klöckner DESMA Elastomertechnik Group
World market leader for rubber and silicone injection molding
machinery
2018 2017
Sales €m 116 100
Employees 12/31 552 530
DESMA Schuhmaschinen GmbH
World’s largest producer of machines for the fabrication of
shoes and shoe soles
2018 2017
SZAG Investor Relations
Sales €m 62 47
Employees 12/31 224 208
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431 Salzgitter Group
2 Market Situation
3 Industrial Participations
4 Strategy
SZAG Investor Relations
5 Guidance
englishIndustrial Participations
Overview
Comprises activities that are not directly Derivation of pre-tax result 2018
allocated to a business unit
in € million
Core competences and participations
Services:
− Research and development for the
Group and external customers
− Information technology
− Engineering services
− Real estate- and facility development as
well as management
− Freight traffic Key data FY 2018
Shareholdings: Consolidated sales €m 186
− Aurubis
Earnings before taxes €m 28
− Hansaport
Core workforce (12/31) 2,616
SZAG Investor Relations
Gratifying contribution from the service companies and the Aurubis investment
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45Industrial Participations
Engineering
Salzgitter Mannesmann Forschung GmbH
Germany; shareholder: SZAG 100%
Research and development for the Group and external customers
with a focus on:
Processes for the manufacture, processing
and application of metallic materials and products made of them
Development of new materials
Development of application areas
Material and component characterization including testing
techniques
Application and engineering technology from component design
through forming and assembly to corrosion protection
Automation and testing techniques, as well as the construction
of non-destructive testing facilities
SZAG Investor Relations
english
46Industrial Participations
Raw Materials and Logistics
Glückauf Immobilien, RSE
Companies specialized in real estate- and facility development
as well as management
Hansaport1
Germany's largest seaport terminal for handling dry bulk goods
(coal and ores), annual capacity of approximately 15 million tons
Verkehrsbetriebe Peine-Salzgitter
Commercial transportation provider with an annual freight
volume of approximately 43 million tons
SZAG Investor Relations
1 SZAG share: 51%
english
47Industrial Participations
Data Processing and Communications
Telcat Multicom/Telcat Kommunikationstechnik
Systems for decentralized communication, Broad array of
information solutions ranging from office communication and
video technology to network services
GESIS Gesellschaft für Informationssysteme
Integration of business processes into one uniform IT-solution
that reflects the entire workflow, Electronic data processing
center capacities and
the internet-based eService platform as a unified hub for order
processing are offered for group companies and external clients
SZAG Investor Relations
english
48Industrial Participations
Aurubis-Participation
Aurubis Dividend (€/Share)
1.80
1.60 1.55
1.45
1.40 1.35 1.35
1.25
1.20
1.20 1.10 SZAG shareholding: 25.50%
1.00 1.00
1.00 (per December 31, 2018)
0.80
Net dividend received since
0.65 2009: € 106.5 million
0.60 (per FY17/18)
0.40
0.20
0.00
2008/2009
2009/2010
2010/2011
2011/2012
2012/2013
2013/2014
2014/2015
2015/2016
2016/2017
2017/2018
SZAG Investor Relations
Since 2008 successful shareholding in the leading European copper producer
english
491 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishStrategy
Strategy – review
Structural measures 2012 – 2018
“Salzgitter AG 2015” Other programs
(since end of 2016 combined
under FitStructure SZAG)
2012 – 2016
€ 260 million p.a. € 350 million p.a.
> € 600 million € p.a. earnings improvement potential realized
SZAG Investor Relations
Initial Emphasis inevitably on restructuring and cost reduction measures
english
51Strategy
What we envisage for the coming years – examples
Growth – additive earnings contributions of around € 180 million p.a. planned for 2019 to 2021ff
Trading
▸ Expansion of the digitalization and pre-
Strip Steel processing activities as well as the
▸ Growth in target segments and warehousing presence in Europe
expansion of the product portfolio in
the premium sector
Mannesmann
▸ Internationalization and extension
Plate / Section Steel of the product range
▸ Increase of the share of higher
quality grade such as wear-resistant
Technology
and high-strength plate
▸ Strengthening of core segments,
focusing of product development
SZAG Investor Relations
Focus on innovation and growth
english
52Strategy
External growth
Activities in 2018
Increase of the shareholding to Acquisition of the French stain- Salzgitter Hydroforming GmbH
more than 25% less steel tubes specialist SOTEP starts joint venture with Chinese
automotive supplier
Net dividend received since 2009: Internationalization and
> € 100 million expansion of the value chain Production of components for
chassis and body applications in
cars
SZAG Investor Relations
Additional M&A measures are imaginable and realizable
english
53Strategy
What we envisage for the coming years – effects
FitStructure SZAG SZAG 2021 Growth Programs
€ million earnings improvement potential € million additional profit contribution
80 200
70 180
~25 160
60
140
50 ~100
120
40 100
~25
30 80
60 ~40
20
40
10
~25
20 ~40
0 0
2019 2020 2021 ff. 2019 2020 2021 ff.
SZAG Investor Relations
All in all around € 250 million in additional effects planned;
the dynamism started in 2012 will be maintained – hence a new initiative in preparation
englishStrategy
Innovation and growth – example Strip Steel BU
Bainitic steel “SZBS800” for automotive chassis applications
Shipments in kt
120
100
80
Spring link MB C-Class
60
40
20
0
2012 2013 2014 2015 2016 2017 2018
Wishbone MQB Golf GTI 7
SZAG Investor Relations
Continuous steel grade development and market penetration
english
55Strategy
Innovation and growth – example Strip Steel BU
Salzgitter brands seca®, seca xtra®, Pretex focar® und StronSal®
Shipments in kt
120 Hot dip coating for steel with the best
corrosion protection properties
100 Processing properties with strong
loads considerably better than standard zinc
80
Designed specifically for laser cutting
60 Optimized internal stress and consistent material
properties
40 Guaranteed minimum flatness tolerances
20 Innovative surface structure for coldrolled and
galvanized steel sheets
0
Good paint adhesion
2014 2015 2016 2017 2018 Avoidance of moiré effects
SZAG Investor Relations
Demand for proprietary brands is continuously increasing
english
56Strategy
“Salzgitter AG 2021” – example Plate / Section Steel BU
Measures at the Ilsenburg site
Strategy SZAG 2021 – focus on qualitative growth
Investment into a modern and competitive heat treatment line
Commissioning: 2020
FitStructure SZAG – cost cutting and efficiency
improvement
Capacity reduction to 700 kt p.a. with corresponding 52%
workforce adjustment
41%
Temporary decrease of weekly working time to 36%
32 hours without wage compensation
Goal: Profitability improvement of the company
Optimization of the product portfolio
Strengthening of the market position and volume
2016 2018 2020*
expansion for higher value grade segments such as high Volume development of
strength and wear resistant, water tempered steel higher value grades
SZAG Investor Relations
Restructuring and future orientation go hand in hand
english
* planned volumes 57Strategy
Innovation and growth – example Mannesmann BU
Strategy SZAG 2021 – focus on growth
Expansion of the precision tubes plant in Mexico
Construction of a production line for thick-walled tubes
Upgrade of the existing finishing line Structural
tube
Airbags
Pump case
Stabilizers
Suspension
FitStructure SZAG – cost cutting and efficiency components
improvement Engine-
components
Realignment of Mannesmann Precision Tubes Group as a
technology provider Seat belt-
fixings
IHU/IHV
Camshafts
Program comprising 180 individual measures
Goal: Sustainable pre-tax margin of 5% as of 2021 Drivetrain and steering components
Drive shafts
Growth with profitable products
Extension of the value chain
Growth through internationalization
SZAG Investor Relations
Cost reduction, efficiency increase and growth
english
58Strategie
Wir arbeiten an der Zukunft: Forschungsprojekt GrInHy2.0
Green Industrial Hydrogen via steam electrolysis (GrInHy2.0)
Januar 2019 Februar 2019 Aktuell
Start GrInHy2.0 mit Sunfire, Erfolgreicher Abschluss des GrInHy- Bau GrInHy2.0-System und Fortführung
Paul Wurth und Tenova Projekts mit 10.000 Betriebsstunden des GrInHy-Anlagenbetriebs
This project has received
funding from the Fuel Cells
and Hydrogen 2 Joint
Undertaking (JU) under
grant agreement No
826350. The JU receives
support from the European
Union’s Horizon 2020
research and innovation
programme and Germany,
Luxembourg, Italy, France.
SZAG Investor Relations
GrInHy2.0 – efficient hydrogen production for a CO2-reduced steel production:
Salzgitter-Group is an important research partner for the highly efficient steam electroysis technology
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59Strategy
SALCOS – SAlzgitter Low CO2 Steelmaking
Utilization of hydrogen (H2) instead of carbon (C) for the reduction of iron
Use of already established
(direct reduction using natural
gas) as well as innovative
(hydrogen generation and use)
technologies
Integration into existing and
optimized steel works
gradual reduction of CO2
emissions: between 10% and
80% CO2 savings!
SZAG Investor Relations
The future of CO2-reduced and sustainable steel production – in Salzgitter!
english
Source: Fraunhofer-Gesellschaft/SZAG 601 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishGuidance
Business Units – Forecast 2019
Strip Steel Plate / Section Steel Mannesmann Trading Technology
glut on the European steel plate: continuing high imports large-diameter pipe mills: prospects in international KHS Group: selective order
market from non EU-countries unsatisfactory capacity utili- trading will remain under intake, expanding service
higher raw material costs, zation expected in Germany pressure due to restrictive business and additional
impact from the low
especially for iron ore utilization of the large- – but better in the US trading policies positive effects from the
medium line pipes: norma- measures introduced to
diameter pipes segment expected margin decrease in
lization of demand enhance efficiency
stockholding steel trade at
section steel: lower, but sill
precision tubes over all least partly compensable specialist mechanical
satisfactory margins
stable through business with engineering companies of
stainless tubes: moderate additional value added the DESMA Group: earnings
improvement in the market will return to normal levels
Business Unit
stable sales sales at the year earlier level sales slight upturn price-induced sales growth moderate increase in sales
tangible reduction in the pre- result notably below the positive pre-tax result gratifying earnings before decline pre-tax profit
tax profit due to margins previous year’s figure taxes but notably below the
previous year
SZAG Investor Relations
english
62Guidance
Salzgitter Group – Guidance
Salzgitter AG affirmes its guidance for the financial year 2019. We continue to anticipate:
a slight increase in sales to above the € 9.5 billion mark,
a pre-tax profit of between € 125 million and € 175 million and
a return on capital employed (ROCE) that is tangibly below the previous year’s figure.
Following a strong first quarter, we currently expect a pre-tax result rather more in the upper end of the aforementioned range. However,
with reference to the unstable economic situation, not only in the EU, and the associated reduced forecasting reliability for the remainder
of the financial year, we consider revising the forecast to be premature at present.
Legal Note and other remarks
We make explicit reference to the fact that imponderables, including changes in the cost of raw materials, precious metal prices and exchange rates, along with global trade policy measures and their possible impact may still exert a considerable influence over
the course of the financial year.
SZAG Investor Relations
To the extent that this presentation contains statements oriented towards or related to the future, such statements are based on our current state of knowledge and the estimates based on such knowledge made by the management of Salzgitter AG.
However, as is the case with any forecasts or prognosis, such statements are also subject to uncertainties and risks. Notwithstanding prevailing statutory provisions and capital market law in particular, we are not obligated to update this data. In particular, we
shall not assume liability of any kind for knowledge and statements, as well as any acts resulting on the basis of such knowledge or statements that emanate directly or indirectly from the analysis of the data, content and correlations of this document. The
information and data made available do not represent an encouragement or invitation to buy, sell or conduct any other type of trade in securities. Salzgitter AG shall neither assume liability for direct nor indirect damages, including lost profits, arising as a
result of the utilization of the information or data contained in this document.
english
For computational reasons, rounding-off differences of +/– one unit (€, % etc.) may occur in the tables. This document is also available in German language. In the event of any discrepancy, the German version shall prevail.BACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishFinancials
Key data per 2019/03/31
Q1 2019 Q1 2018 Δ
Crude steel production kt 1,739.8 1,773.8 -34.0
External sales1 € million 2,293.8 2,307.5 -13.7
Earnings before tax € million 125.9 95.9 30.0
Earnings after tax € million 96.7 65.2 31.5
Earnings per share (undiluted) € 1.76 1.18 -1.18
ROCE % 14.1 11.6 2.5
Core workforce2 23,683 23,333 350
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date
SZAG Investor Relations
Salzgitter Group off to successful start to the year
english
65Financials
Income statement
Income Statement (€ million) Q1 2019 Q1 2018
Sales 2,293.8 2,307.5
Increase/decrease in finished goods and work in process/other own work capitalized 26.9 18.9
2,320.7 2,326.4
Other operating income 53.7 55.8
Cost of materials 1,495.1 1,505.0
Personnel expenses 442.5 422.4
Amortization and depreciation of intangible assets and property. plant and equipment 87.4 84.6
Other operating expenses 262.6 270.7
Income from shareholdings 0.0 0.1
Result from investments accounted for using the equity method 52.9 9.5
Finance income 5.6 3.6
Finance expenses 19.4 16.9
Earnings before taxes (EBT) 125.9 95.9
Income tax 29.2 30.7
SZAG Investor Relations
Consolidated result 96.7 65.2
english
66Financials
Consolidated balance sheet
Assets (€ million) 2019/03/31 2018/12/31 Δ
Non-current assets 4,082.5 3,835.9 246.6
Intangible assets, property, plant and equipment 2,452.2 2,339.9 112.3
Investment property 83.1 83.5 -0.4
Financial assets 73.7 75.6 -1.9
Investments accounted for using the equity method 987.7 888.3 99.4
Trade receivables 23.0 25.5 -2.5
Other receivables and other assets 26.6 24.0 2.6
Income tax assets 0.1 0.1 0.0
Deferred income tax assets 436.0 399.1 36.9
Current assets 4,934.1 4,921.0 13.1
Inventories 2,341.9 2,327.5 14.4
Trade receivables 1,437.6 1,367.2 70.4
Contract assets 173.8 175.2 -1.4
Other receivables and other assets 441.3 403.7 37.7
Income tax assets 26.7 24.5 2.2
Securities 68.6 67.4 1.1
SZAG Investor Relations
Cash and cash equivalents 444.3 555.6 -111.3
Balance sheet total 9,016.6 8,756.9 259.7
english
67Financials
Consolidated balance sheet
Equity and liabilities (€ million) 2019/03/31 2018/12/31 Δ
Equity 3,246.9 3,332.1 -85.1
Subscribed capital 161.6 161.6 0.0
Capital reserve 257.0 257.0 0.0
Retained earnings 3,154.3 3,181.0 -26.7
Other reserves 0.0 60.0 -60.0
Unappropriated retained earnings 33.1 33.1 0.0
Treasury shares -369.7 -369.7 0.0
Minority Interest 10.7 9.1 1.6
Non-current liabilities 3,290.0 3,035.7 254.4
Provisions for pensions and similar obligations 2.440.5 2.275.5 165.0
Deferred tax liabilities 67.6 67.6 0.0
Income tax liabilities 36.3 36.9 -0.6
Other provisions 353.2 358.4 -5.2
Financial liabilities 387.8 291.1 96.6
Other liabilities 4.6 6.1 -1.5
Current liabilities 2,388.2 2,389.2 -1.0
Other provisions 287.7 281.4 6.2
Financial liabilities 419.3 426.9 -7.6
Trade payables 1,101.9 1,130.2 -28.3
200.4 250.2 -49.8
SZAG Investor Relations
Liability contracts
Income tax liabilities 39.1 37.0 2.2
Other liabilities 339.8 263.4 76.3
Balance sheet total 8,925.2 8,756.9 168.3
english
68Financials
Cash flow statement
(€ million) Q1 2019 Q1 2018 Δ
Cash and cash equivalents at the start of the period 555.6 679.4 -123.9
Cash flow from operating activities 53.6 100.6 -47.0
Cash flow from investment activities -143.2 -147.0 3.8
Cash flow from financial activities -24.6 -7.0 -17.6
Changes in cash -111.3 -55.5 -55.8
Cash and cash equivalents at the end of the period 444.3 624.0 -179.7
SZAG Investor Relations
Operating cash flow positively impacted by improved quarterly result
english
69Financials
Bonds
Convertible Bond
Volume: € 167,900,000
Coupon: 0.0 % p.a.
Issue date: June 5, 2015
Maturity date: June 5, 2022
Denomination: € 100,000
Conversion ratio: 2,125.4708 Shares per Bond1
Conversion price: € 47.04841
Underlying shares: 3,568,6651
Conversion right period: July 25, 2015 to May 26, 2022
Early redemption at the option of the Issuer: On or after June 5, 2018, and upon giving not less than 30 nor more than 40 calendar days notice,
only possible if the volume adjusted average XETRA-quotation on at least 20 of the 30 consecutive trading days directly prior to the notification
date exceeds 130% of the then applicable conversion price
SZAG Investor Relations
1 Most recently adjusted per 2018/05/29
english
70Financials
Strip Steel Business Unit
Q1 2019 Q1 2018 Δ
External sales € million 598.8 609.4 -10.6
Order bookings kt 1,138.8 1,238.3 -99.5
Order backlog1 kt 911.5 944.6 -33.1
EBITDA € million 100.1 117.9 -17.8
EBT € million 46.3 62.5 -16,2
Core workforce1 6,207 6,183 24
SZAG Investor Relations
Gratifying result; decline compared with excellent year-earlier result mainly due to raw material price increases
english
1 per reporting date 71Financials
Plate / Section Steel Business Unit
Q1 2019 Q1 2018 Δ
External sales € million 229.6 286.6 -57.0
Order bookings kt 524.5 629.2 -104.8
Order backlog1 kt 337.8 380.8 -42.9
EBITDA € million 14.0 20.6 -6.6
EBT € million 1.7 9.3 -7.6
Core workforce1 2,444 2,467 -23
SZAG Investor Relations
Lower pre-tax result due to the earnings development of the heavy plate producers
english
1 per reporting date 72Financials
Mannesmann Business Unit
Q1 2019 Q1 2018 Δ
External sales € million 290.3 271.0 19.3
Order bookings kt 342.1 382.8 -40.7
Order backlog1 kt 477.3 539.7 -62.4
EBITDA € million 25.6 19.0 6.6
EBT € million 8.4 1.6 6.8
Core workforce1 4,700 4,651 49
SZAG Investor Relations
Growth in result thanks to better performance in nearly all product segments
english
1)per reporting date 73Financials
Trading Business Unit
Q1 2019 Q1 2018 Δ
External sales € million 797.9 759.8 38.0
Shipments kt 1,043.4 1,122.7 -79.4
EBITDA € million 9.8 17.9 -8.1
EBT € million 3.0 13.8 -10.8
Core workforce1 2,126 1,991 135
SZAG Investor Relations
Lower pre-tax profit because of decline in volumes and the margin situation of the stockholding steel trade business
english
1 per reporting date 74Financials
Technology Business Unit
Q1 2019 Q1 2018 Δ
External sales € million 333.8 327.7 6.1
Order bookings kt 330.0 305.9 24.1
Order backlog1 kt 704.5 686.1 18.4
EBITDA € million 17.8 15.9 1.9
EBT € million 11.8 11.2 0.6
Core workforce1 5,559 5,425 134
SZAG Investor Relations
Doubled result of the KHS Group more than compensates earnings decrease of special machinery producers
english
1 per reporting date 75Financials
Industrial Participations / Consolidation
Q1 2019 Q1 2018 Δ
External sales € million 43.3 52.9 -9.6
EBITDA € million 61.0 1.8 59.3
EBT € million 54.7 -2.4 57.1
Core workforce1 2,647 2,616 31
SZAG Investor Relations
Earnings before taxes significantly improved, result impacted by the contribution of Aurubis AG
english
1 per reporting date 76BACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishPensions
Mechanics of internal pension commitment funding
Internal funding over lifetime of employee
... ...
Joins 5 years Retirement
company
Pension provision (non-cash) Contribution by SZAG (non-cash) Pension payment (cash)
SZAG Investor Relations
Provision is determined by development of individual salary, time in employment at SZAG, actuarial life expectancy and inflation
Contribution as personnel expense and interest element (both non-cash)
Monthly payout from operating cash flow
english
78Pensions
Funding of pension commitments
(2018/12/31) € bn (2018/12/31)
5
Projected Benefit Obligation (PBO): Balance sheet: pension provisions
€ 2,351 m1 € 2,275 m
4
According to IAS 19: Assets held by external funds:
− Discount rate of 1.25%2 € 75.2 m
3
– in line with market average Non-current assets: € 3,836 m
− Trend in salaries: 2.75% p.a. 2 Net position due to banks:
− Trend in pensions: € 192 m
1
1.75% p.a.
− Staff turnover: 1% p.a. 0
− Valuation based on the actuarial
provisions
assets + cash
PBO
Non-current
Pension
principles
SZAG Investor Relations
Pension obligations completely covered by internal funds!
english
1 thereof € 75.2 million covered by assets held by external funds 2 per 2019/03/31, before: 1.75% 79BACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishInvestor Relations
Dividend proposal
€ Financial year 2018 € million
0.70 Dividend per share: 0.55 € 400
347
300
0.50 238 0.55
0.45 200
0.30
0.30
0.25 100
0.20 53
0.10 4
0
2014 2015 1 2016 2017 2018
-0.10 -15
-100
-0.30
-200
-0.50 -300
1 restated
SZAG Investor Relations
Dividend increased by another 20%
english
81Investor Relations
Shareholder structure and share turnover
Shareholder structure Daily turnover in thousand shares
600
Other shareholders Salzgitter AG
10.0%
Inst. shareholders 20.6%
– other Regions 400
1.1% State of
Inst. shareholders
26.5% Lower Saxony
– other Europe 5.0%
3.3%
Inst. shareholders 200
– UK + Ireland Inst. Shareholders
19.6% – Germany
13.9%
Inst. shareholders – North America 0
1Q 13 4Q 13 3Q 14 2Q 15 1Q 16 4Q 16 3Q 17 2Q 18 1Q 19
Free float: 63.5%
Treasury shares: as of July 8, 2010; other information is based on the external
shareholder identification as of January 2019
SZAG Investor Relations
Balanced shareholder structure High liquidity
english
82Disclaimer
Legal Note
To the extent that our Internet pages contain statements oriented towards or related to the future, such statements are based on our current state of
knowledge and the estimates based on such knowledge made by the management of Salzgitter AG. However, as is the case with any forecasts or
prognosis, such statements are also subject to uncertainties and risks. Notwithstanding prevailing statutory provisions and capital market law in
particular, we are not obligated to update this data. In particular, we shall not assume liability of any kind for knowledge and statements, as well as any
acts resulting on the basis of such knowledge or statements that emanate directly or indirectly from the analysis of the data, content and correlations of
this document. The information and data made available do not represent an encouragement or invitation to buy, sell or conduct any other type of trade
in securities. Salzgitter AG shall neither assume liability for direct nor indirect damages, including lost profits, arising as a result of the utilization of the
information or data contained in this document.
Copyrights
This data file and the data contained on these pages (including, among others, texts, images and graphics) are subject to copyright and other laws on
the protection of intellectual property. To the extent that nothing contradicting or deviating is stated, all trademarks bear legal trademark protection. This
SZAG Investor Relations
applies in particular for Salzgitter company logos and product names. The brands and design elements used on our web pages are the intellectual
property of Salzgitter AG. We therefore reserve all rights as such. The document serves to provide non-binding information regarding our company to
english
the respective user, and may not be used within the framework of other depictions, in particular websites, without our express prior written consent.
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