Presentation of the Group - Salzgitter AG
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english
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 2019: 6.6 million tons; trading volume: 3.8 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 2019
Salzgitter AG Group
External Sales cons.: € 8.5 billion Employees: 23,354
EBT: € -253 million
Plate /
Strip Steel Mannesmann Trading Technology
Section Steel
External Sales: External Sales: External Sales: External Sales: External Sales:
€ 2.2 billion € 0.8 billion € 1.1 billion € 2.8 billion € 1.4 billion
EBT: EBT: EBT: EBT: EBT:
€ -42.8 million € -124.0 million € -41.5 million € 31.0 million € 32.7 million
Employees: Employees: Employees: Employees: Employees:
6,090 2,352 4,643 2,066 5,557
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%
SZAG Investor Relations
Borusan
Aurubis
Mannesmann Boru 23% 30%
BU = Business Unit
english
As of December 2019
6
Salzgitter Group
External sales 2019 by customer industries
12% 15%
Other Vehicle construction
15% 13%
Food and beverage industry Construction industry
6% 4%
Mechanical engineering White goods,
electrical equipment
5% 3%
Re-rollers Energy sector and utilities
3% 24%
Tubes producers Traders, Steel-Service-Centers
SZAG Investor Relations
Broad customer base
english
Only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE Group 7
Salzgitter Group
External sales 2019 by regions
5%
Other
8%
Asia
12%
Americas 46%
Germany
3%
Other Europe
26%
Other EU
SZAG Investor Relations
Share of ex-Germany sales by consignee 54%
english
Sales by consignee (only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE-Group) 8
Salzgitter Group
Key data per 2019/12/31
FY 2019 FY 2018 Δ
Crude steel production kt 6,613.4 7,039.4 -426.0
Consolidated Sales € million 8,547.3 9,278.2 -730.8
Earnings before tax € million -253.3 347.3 -600.6
Earnings after tax € million -237.3 277.7 -515.0
Earnings per share (undiluted) € -4.46 5.06 -9.52
ROCE % -5.8 10.3 -16.1
Core workforce (12/31) 23,354 23,523 -169
SZAG Investor Relations
Result of Salzgitter Group impacted by a total of € -396.0* million in special effects
english
*) € -62,3 million restructuring provisions, € -192,9 million impairment as awell as € -140,8 Mio. € other special effects (cartell fine) 9
Annual Accounts Financial Year 2019
Balance sheet
€ million
8,757 8,618 8,618 8,757
Property, plant and Equity
equipment and other 2,939 3,332
3,836
non-current assets 4,099
Pension
2,356 2,276 provisions
Inventories
2,328
2,248
Other non-current
Cash and 1,098 760
liabilities
securities 623
751
Other current 1,971 2,225 2,389 Current liabilities
assets 1,519
FY 2018 FY 2019 FY 2019 FY 2018
SZAG Investor Relations
Continuing sound financial basis
english
10Salzgitter Group
Salzgitter Group Investments and Depreciation / Amortization
193
15 49 44
593
411
340 352 342 342 338 340 348
287
2015 2016 2017 2018 2019
Investments1 Scheduled depreciation Unscheduled depreciation
SZAG Investor Relations
Focus on expansion investments
english
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
SZAG Investor Relations
Privatization and acquisition
of the Ilsenburg rolling mill, 1992
english
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
Following the slight uptrend since 2013, the EU industrial production recently consolidated;
Germany remains relatively strong despite deterioration since the second half of 2018
english
Source: Eurostat, own research, last figure from December 2019 14Market Situation
Raw materials prices
Iron ore Coking coal
(62% Fe CFR China, US$/dmt) (FOB Australia, US$/t)
140 300
130
120 250
110
100
200
90
80
150
70
60
50 100
SZAG Investor Relations
Iron ore: dramatic price surge in the first half of 2019; after rapid decrease recently high volatility
Coking coal: global demand can be satisfied completely at the moment – with a corresponding effect on pricing
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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
600 600
500 500
400 400
300 300
Jan/ 18 Jul/ 18 Jan/ 19 Jul/ 19 Jan/ 20 Jan/ 18 Jul/ 18 Jan/ 19 Jul/ 19 Jan/ 20
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 consolidated since mid 2018 –
has the trough been reached at the end of 2019?
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16Market Situation
EU steel imports
Import situation EU (in 1.000t/month)
Average 2010-2019
2,500
Imports marked a record level in
2018
2,000
Declining demand in the EU
steel market is only reflected in
1,500 the imports from autumn 2019
onwards
1,000
Initiated review of the
Safeguards must be used to
adapt the measures to the
500 current economic situations and
to reestablish an effective
protective function
-
2014 2016 2018 2019
China
China Ukraine
Ukraine Russia
RusslandTurkey
TürkeiIndiaIndien
South Korea
SüdkoreaIran Iran
Brazil Brasilien
Others Sonstige
SZAG Investor Relations
Slight decrease of imports due to the weakening economy and eroding steel prices
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Source: Eurofer 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 2019
Integrated steel works with three blast 1% 5%
furnaces Mechanical engineering Other
Approx. 4.7 mt/year crude steel capacity 14% 34%
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 34% 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 2019
blanks, corrugated sheets, coffers,
sandwich and acoustic elements
Consolidated Sales €m 2,209
Customer focus through local presence
Earnings before taxes €m -43
Core workforce (12/31) 6,090
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 2019
Shipments kt 4,341 4,239
SZAG Investor Relations
Sales €m 2,887 2,758
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 2019
Sales €m 71 62
Employees 12/31 122 116
Salzgitter Bauelemente GmbH
Germany; shareholder: SZAG 100%
Corrugated sheets, coffers, sandwich a. acoustic elements for wall and
roof constructions of commercial buildings
2018 2019
SZAG Investor Relations
Sales €m 52 51
Employees 12/31 71 70
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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 2019
Shipments kt 584 532
SZAG Investor Relations
Sales €m 415 369
Employees 12/31 323 317
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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 2019
Section steel: 1%
21%
− Top-modern mini mill with two electric Vehicle construction
arc furnaces Other 11%
− Annual crude steel capacity 1 mt 3% Construction industry
Mechanical engineering 8%
− Two rolling mills for medium and heavy
sections White goods,
electrical equipment
Plate: 10%
46%
− Two rolling mills for plate with Tube producers
Traders
1.1 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 2019
High-strength, wear resistant and
specialized steel grades Consolidated sales €m 805
Medium and heavy sections, heavy plate
incl. offshore and tube grades Earnings before taxes €m -124
Core workforce (12/31) 2,352
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 2019
Shipments kt 697 625
SZAG Investor Relations
Sales €m 534 494
Employees 12/31 741 655
english
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 2019
Shipments kt 526 371
SZAG Investor Relations
Sales €m 378 256
Employees 12/31 539 536
english
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 2019
Shipments kt 1,022 953
SZAG Investor Relations
Sales €m 619 553
Employees 12/31 785 773
english
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 2019
Sales €m 678 571
Employees 12/31 378 380
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 2019
Own crude steel supply via 30%
27%
participation in Hüttenwerke Krupp
35% Vehicle construction
Mannesmann GmbH
Other
Plant for the production of semis for the 2%
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 6%
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 2019
Longitudinal and spiral welded large-
diameter pipes, medium line pipes, Consolidated Sales €m 1,110
seamless and welded precision tubes,
stainless tubes Earnings before taxes €m -42
Core workforce (12/31) 4,643
SZAG Investor Relations
Global player in the high quality segment of the global tubes market
english
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 2019
Shipments kt 895 581
SZAG Investor Relations
Sales €m 953 777
Employees 12/31 1,047 1,083
english
31Mannesmann Business Unit
Line Pipes
Mannesmann Line Pipe GmbH
Germany; shareholder: SZAG 100%
HFI-welded medium line pipes incl.
plastic- and cement coatings
2018 2019
Sales €m 285 254
Employees 12/31 364 357
Mannesmann Großrohr GmbH
Germany; shareholder: SZAG 100%
Spiral-welded large-diameter pipes made of hot-rolled coil
2018 2019
SZAG Investor Relations
Sales €m 67 58
Employees 12/31 125 124
english
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 2019
Shipments kt 276 247
SZAG Investor Relations
Sales €m 497 458
Employees 12/31 2,287 2,256
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 2019
Shipments kt 23 23
SZAG Investor Relations
Sales €m 245 290
Employees 12/31 1,000 1,021
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 2019
SZAG Investor Relations
Sales €m 2,468 2,496
Employees 12/31 2,980 2,947
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 2019
74 sites in 30 countries 8% 12%
Mechanical engineering Other
Own distribution network for steel products
with warehousing sites in Europe 3% 6%
Re-rollers Vehicle construction
Processing group specialized on heavy 2%
31%
plate products Tube producers
Construction industry
International trading 31% 4%
Core competences and products Traders White goods,
electrical equipment
Global presence in all relevant regions with 3%
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 2019
Procurement channel for Salzgitter Group
works Consolidated Sales €m 2,846
Value add services for customers
Earnings before taxes €m -31
Core workforce (12/31) 2,066
SZAG Investor Relations
High customer and market orientation through a global sales organization
english
37Trading Business Unit
Salzgitter Mannesmann Handel Group
Salzgitter Mannesmann Handel
Shipments 2019: 4.0 mt Sales 2019: € 2.7 billion
Trading Stockholding Agencies
International
Salzgitter Mannesmann Stahlhandel Europa Europa
10 Companies
GmbH, Düsseldorf (SMSD) 7 Companies 4 Agencies
2 Rep. offices
19 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 27 countries with 1,861 employees
english
38Trading Business Unit
Universal Eisen und Stahl Group
Universal
Shipments 2019: 0.2 mt Sales 2019: € 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
2 Branches 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 365 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 2% 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 7%
filling and packaging machines; technology 90%
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 1.390
service
Earnings before taxes €m 33
Core workforce (12/31) 5.557
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 2019
SZAG Investor Relations
Sales €m 1,161 1,260
Employees 12/31 4,714 4,793
english
42Technology Business Unit
Special machinery
Klöckner DESMA Elastomertechnik Group
World market leader for rubber and silicone injection molding
machinery
2018 2019
Sales €m 116 79
Employees 12/31 552 540
DESMA Schuhmaschinen GmbH
World’s largest producer of machines for the fabrication of
shoes and shoe soles
2018 2019
SZAG Investor Relations
Sales €m 62 52
Employees 12/31 224 224
english
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 Key data FY 2019
allocated to a business unit
Consolidated sales €m 178
Core competences and participations
Earnings before taxes €m -47
Services:
− Research and development for the Core workforce (12/31) 2,648
Group and external customers
− Information technology
− Engineering services
− Real estate- and facility development as
well as management
− Freight traffic
Shareholdings:
− Aurubis
− Hansaport
SZAG Investor Relations
Gratifying contribution from the service companies and the Aurubis investment
english
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 1.25
1.20
1.20 1.10 SZAG shareholding: 29.99%
1.00 1.00
1.00 (per May 23, 2019)
0.80
Net dividend received since
0.65 2009: € 119.4 million
0.60 (per FY18/19)
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
2018/2019
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
Update programs of measures
FitStructure 2.0 (incl. remaining effects of FitStructure) SZAG 2021 Growth Programs
€ million earnings improvement potential € million additional profit contribution
250 180
160
200 ~60 140
~50
~80 120
150
100
80
100 ~50 ~60
60
50 40
~50 20 ~45
0 0
2020 2021 2022 2023 2020 2021 2022 ff.
SZAG Investor Relations
All in all more than € 350 million in additional effects from optimization programs planned
english
51Strategy
FitStructure 2.0: Distribution of full-year effects expected by 2023
8%
Industrial Participations
12% 27%
Technology Strip Steel
21% € >240 m
Mannesmann
total FYE
7% 26%
Trading Plate / Section Steel
SZAG Investor Relations
Steel and tubes producing business units are in the focus of FitStructure 2.0
english
52Strategy
Challenge: CO2 emission allowances are continuously cut back
Price forecast CO2 allowances
50
Third trading period Fourth trading period
45
40
35
30
€/t CO2
25
20
15
10
5
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Price CO2 allowances Estimates price CO2 allowances
SZAG Investor Relations
Price for CO2 emission allowances has surged since 2018 – further increase is highly likely!
english
Source: ICIS, own calculations 53Strategy
Resolution approach: Salzgitter AG with two-fold strategy
First Safety Net Second Safety Net
CO2- emission allowances
acquired as a precaution
• Shortfall in CO2 allowances has • Significant, gradual reduction of
been compensated for the most the CO2 emissions of Salzgitter AG
part at the subsidiaries of the
Salzgitter Group • Target: Reduction of up to 95%
of the CO2 emissions of
• Current market value of the CO2 Salzgitter Flachstahl until 2050
allowances acquired as a
precaution exceeds the figure
accounted for in the balance
sheet by around € 300 million*
SZAG Investor Relations
The Salzgitter Group has two safety nets:
CO2 emission allowances for the Fourth Trading Period purchased as a precaution
SALCOS® – technological concept for CO2-reduced steel production
english
*) Per ad-hoc release from June 14, 2019 54Strategy
Technical solution approach: assessment
Arguments for
1. Biggest CO2 reduction potential per MWh of renewable energies used in a processual as well as
industry and sector comparison
2. The Salzgitter AG has the leading concept. The required individual technical components are
available in the market
3. Lower Saxony has the best preconditions to be the No. 1 transformation state in Germany:
high level of electricity production from renewable sources and required hydrogen infrastructure
4. No relocation of production, no carbon leakage
5. Economical, ecological and social concept
6. Integration with local industrial sectors possible (among others automotive); important component of
a holistic CO2-free product lifecycle
SZAG Investor Relations
Green steel with SALCOS® – sensible and realisable!
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55Strategy
SALCOS® – Gradual conversion to a H2-based steel production
SZAG Investor Relations
We are ready!
Gruadual technical implementation possible as soon as the neceddary framework conditions are realized
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Individual stages may technically also be realized in combination. The actual implementation time depends on the economic and political framework.
56
*with the use of 55% H2 in the Direct Reduction Plants (DRP) / **with the use of 100% H2 in the DRPsStrategy
Realization: first steps were already implemented
Wind-H2 – sector integration
Production of electrical energy via wind power and
World‘s first steam electrolysis on MW scale Wind-H2
electrolytic – Sektorkopplung
hydrogen on the works premises
Weltweit
at erste
Salzgitter Dampf-Elektrolyse
Flachstahl im MW-Maßstab bei
as from 2020
Produktion von elektrischer Energie via Windkraft
der Salzgitter Flachstahl ab 2020
und elektrolytischem Wasserstoff auf dem
Werksgelände
2017 2018 2019 2020 2021
MACOR: SALCOS-feasibility study „Mini-SALCOS“
Project planning of a demonstration plant
Analysis of framework conditions
for direct reduction in Salzgitter
Numercal modelling of melt shop
and direct reduction plant
SZAG Investor Relations
Results of cost-effectiveness analysis
by 2021
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57Strategy
Update investment projects
Ilsenburger Grobblech: New heat treatment line
Optimization of the product portfolio
Expansion of the market position and volume expansion for higher
value grade segments such as high strength and wear resistant, water
tempered steel
Commissioning: 2021
Current status: Preparation for the installment of the plant
Salzgitter Flachstahl: Hot-Dip Galvanizing Line 3
Qualitative growth in the strip steel business
Reinforcement of the market position in the automotive segment
Strengthening of the premium segment for auto customers
Commissioning: 2022
Current status: Construction of the building
SZAG Investor Relations
Sustainable strategy:
Realization of major investment projects also in less comfortable phases!
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581 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishGuidance
Corona virus
“The Commission has prepared the following measures to support EU countries in their
efforts to,
• make sure that state aid can flow to companies that need it
• make full use of the flexibility which exists in the Stability and Growth Pact.”
EU-Commission, March 2020
“We have the financial resources to cope with this crisis.
There’s enough money there, and we’re using it.”
“No healthy company should go bankrupt due to corona, no job should be lost.
We are therefore putting a comprehensive protective shield in place for employees and
companies.”
Federal Ministers Olaf Scholz (Finance) and Peter Altmaier (Economy), March 13, 2020
“The spread of coronavirus is currently impacting the global economy. It is uncertain how
severely or for how long this will also affect the Volkswagen Group.
Currently, it is almost impossible to make a reliable forecast.”
Volkswagen Group, March 17, 2020
SZAG Investor Relations
Massive impact on all sectors – comprehensive measures on European and national level in implementation
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60Guidance
Business Units – Guidance before impacts from Corona Crisis
Strip Steel Plate / Section Steel Mannesmann Trading Technology
anti-dumping quotas based market situation and demand LD pipe mills: unsatisfactory prospects in international KHS Group: further increase
on record levels fail in will remain tight capacity utilization in GER, trading will remain under of profitability and moderate
delivering the desired effect consistently high import US much better pressure due to restrictive growth of shipments and
across the board volumes in the plate segment medium line pipes: slight in- trading policies sales
stabilizing tendencies in the crease in volumes accom- expected margin increase in KDE and KDS: decreasing
European steel markets panied by lower selling prices stockholding steel trade due earnings due to overall
should be reflected in precision tubes: continuously to stabilizing selling prices muted market forecasts
earnings increasing gradually tight market
over the course of the year stainless tubes: positive
development
Guidance for sales and earnings of the business units
decline in sales sales virtually stable sales at around the same growth in volumes and sales almost stable sales
level
considerably reduced pre-tax reduced pre-tax loss noticeably higher, positive slightly higher pre-tax profit
loss depending on the expected significantly increased, pre-tax result
strength and stability of the marginally positive pre-tax
trend reversal result
SZAG Investor Relations
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61Guidance
Salzgitter Group – Guidance before impacts from Corona Crisis
The Salzgitter Group anticipates for the financial year 2020:
earnings before taxes around breakeven,
an increase in sales to € 9 billion,
a return on capital employed (ROCE) that is tangibly above the previous year’s figure.
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.
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
SZAG Investor Relations
result of the utilization of the information or data contained in this document.
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.
englishBACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishFinancials
Key data per 2019/12/31
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
Crude steel production kt 6,613.4 7,039.4 -426.0 1,553.3 1,648.0 1,672.3 1,739.8
External sales1 € million 8,547.3 9,278.2 -730.8 1,910.0 2,111.1 2,232.4 2,293.8
Earnings before tax € million -253.3 347.3 -600.6 -294.0 -104.6 19.4 125.9
Earnings after tax € million -237.3 277.7 -515.0 -207.5 -126.2 -0.3 96.7
Earnings per share (undiluted) € -4.46 5.06 -9.52 -3.83 -2.36 -0.03 1.76
ROCE % -5.8 10.3 -16.1 -31.2 -10.0 2.8 14.1
Core workforce2 23,354 23,523 -169 23,354 23,562 23,639 23,683
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date
SZAG Investor Relations
Result of Salzgitter Group impacted by a total of € -396.0* million in special effects
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*) € -62,3 million restructuring provisions, € -192,9 million impairment as awell as € -140,8 Mio. € other special effects (cartell fine) 64Financials
Income statement
Income Statement (€ million) FY 2019 FY 2018 Δ
Sales 8,547.3 9,278.2 -730.9
Increase/decrease in finished goods and work in process/other own
-8.2 161.6 -169.8
work capitalized
8,539.1 9,439.8 -900.7
Other operating income 285.6 256.8 28.8
Cost of materials 5,602.6 6,131.4 -528.8
Personnel expenses 1,815.7 1,739.5 76.2
Amortization and depreciation of intangible assets and property, plant
541.0 384.0 157.0
and equipment
Other operating expenses 1,157.8 1,099.9 57.8
Result from impairment losses an reversal of impairment losses of
-25.1 -1.9 -23.3
financial assets
Income from shareholdings 2.0 2.4 -0.4
Result from investments accounted for using the equity method 125.2 74.7 50.5
Finance income 17.5 15.0 2.5
Finance expenses 80.4 84.6 -4.2
Earnings before taxes (EBT) -253.3 347.3 -600.6
SZAG Investor Relations
Income tax -16.0 69.5 -85.5
Consolidated result -237.3 277.7 -515.0
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65Financials
Consolidated balance sheet
Assets (€ million) 2019/12/31 2018/12/31 Δ
Non-current assets 4,099.0 3,835.9 263.1
Intangible assets, property, plant and equipment 2,343.0 2,339.9 3.1
Investment property 82.0 83.5 -1.5
Financial assets 64.7 75.6 -10.9
Investments accounted for using the equity method 1,072.9 888.3 184.6
Trade receivables 18.4 25.5 -7.1
Other receivables and other assets 25.6 24.0 1.6
Income tax assets 0.0 0.1 -0.1
Deferred income tax assets 492.3 399.1 93.2
Current assets 4,518.5 4,921.0 -402.5
Inventories 2,248.1 2,327.5 -79.4
Trade receivables 1,118.4 1,367.2 -248.8
Contract assets 186.3 175.2 11.1
Other receivables and other assets 191.8 403.7 -211.9
Income tax assets 22.6 24.5 -1.9
SZAG Investor Relations
Securities 50.9 67.4 -16.5
Cash and cash equivalents 700.5 555.6 144.9
Balance sheet total 8,617.5 8,756.9 -139.4
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66Financials
Consolidated balance sheet
Equity and liabilities (€ million) 2019/12/31 2018/12/31 Δ
Equity 2,938.6 3,332.1 -393.5
Subscribed capital 161.6 161.6 0.0
Capital reserve 257.0 257.0 0.0
Retained earnings 2,845.1 3,181.0 -335.9
Other reserves 23.0 60.0 -37.0
Unappropriated retained earnings 12.1 33.1 -21.0
Treasury shares -369.7 -369.7 0.0
Minority Interest 9.6 9.1 0.5
Non-current liabilities 3,453.6 3,035.7 417.9
Provisions for pensions and similar obligations 2,356.1 2,275.5 80.6
Deferred tax liabilities 72.0 67.6 4.4
Income tax liabilities 36.6 36.9 -0.3
Other provisions 334.9 358.4 -23.5
Financial liabilities 637.1 291.1 346.0
Other liabilities 16.8 6.1 10.7
Current liabilities 2,225.3 2,389.2 -163.9
Other provisions 224.6 281.4 -56.8
Financial liabilities 430.1 426.9 3.2
Trade payables 915.2 1,130.2 -215.0
SZAG Investor Relations
Liability contracts 200.7 250.2 -49.5
Income tax liabilities 8.6 37.0 -28.4
Other liabilities 446.0 263.4 182.6
Balance sheet total 8,617.5 8,756.9 -139.4
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67Financials
Cash flow statement
€ million
1,000
800
250.7 4.3
-304.8
600 194.7
400
700.5
555.6
200
0
Cash and cash Cash flow Cash flow Cash flow Other Cash and cash
equivalents at start from operating from investment from financing equivalents at end
of period activities activities activities of period
SZAG Investor Relations
Cash flow from investing activities contains € 96 million for the increase of the shareholding in Aurubis
Cash flow from financing activities includes € 364 million from the issuance of a bonded loan in May of 2019
english
68Financials
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: 2,150.2463 Shares per Bond1
Conversion price: € 46.50631
Underlying shares: 3,610,2631
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 2019/05/28
english
69Financials
Strip Steel Business Unit
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 2,209.0 2,341.0 -132.0 478.9 554.6 576.7 598.8
Order bookings kt 4,318.4 4,518.1 -199.7 971.2 1,064.8 1,143.6 1,138.8
Order backlog1 kt 913.7 917.5 -3.8 913.7 910.2 932.4 911.5
EBITDA € million 259.5 439.2 -179.7 16.3 75.0 68.1 100.1
EBT € million -42.8 205.8 -248.6 -127.4 24.3 14.0 46.3
Core workforce1 6,090 6,182 -92 6,090 6,138 6,192 6,207
SZAG Investor Relations
Erosion of selling prices, accompanied by the increase in iron ore costs over the course of the year, as well as
impairment of € -100.0 million placed a burden on the result
english
1 per reporting date 70Financials
Plate / Section Steel Business Unit
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 804.7 1,026.4 -221.7 174.1 188.3 212.6 229.6
Order bookings kt 1,873.3 2,188.6 -315.3 444.2 394.0 510.8 524.5
Order backlog1 kt 309.1 383.8 -74.6 309.1 243.8 314.6 337.8
EBITDA € million -30.0 71.8 -101.8 -52.7 -2.1 10.7 14.0
EBT € million -124.0 24.8 -148.8 -111.0 -13.5 -1.2 1.7
Core workforce1 2,352 2,451 -99 2,352 2,414 2,425 2,444
SZAG Investor Relations
Result impacted by the difficult market situation in heavy plate and by impairment (€ -47.8 million) as well as by
restructuring provisions (€ -17.1 million) for the initiated programs of measures
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1 per reporting date 71Financials
Mannesmann Business Unit
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 1,119.6 1,118.6 1.0 277.5 259.8 292.0 290.3
Order bookings kt 1,384.4 1,464.2 -79.8 318.5 379.9 343.9 342.1
Order backlog1 kt 446.4 511.9 -65.5 446.4 481.4 461.1 477.3
EBITDA € million 70.0 98.6 -28.6 19.3 6.6 18.5 25.6
EBT € million -41.5 -5.4 -36.1 -11.9 0.7 8.4
-38.7
Core workforce1 4,643 4,675 -32 4,643 4,670 4,696 4,700
SZAG Investor Relations
Pre-tax result includes € -40.0 million in impairment and restructuring provisions amounting to € -14.1 million
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1)per reporting date 72Financials
Trading Business Unit
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 2,846.2 3,267.7 -421.5 551.6 716.3 780.4 797.9
Shipments kt 3,795.8 4,477.5 -681.8 768.1 936.9 1,047.4 1.043.4
EBITDA € million -2.9 75.9 -78.8 -28.0 6.7 8.7 9.8
EBT € million -31.0 50.5 -81.6 -34.3 -0.9 1.2 3.0
Core workforce1 2,066 2,109 -43 2,066 2,106 2,121 2,126
SZAG Investor Relations
Economic downturn and decreasing selling prices shape FY 2019; pre-tax result comprises € -5.4 million in
restructuring provisions as well as burdens from impairments of € -30.5 million
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1 per reporting date 73Financials
Technology Business Unit
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 1,390.3 1,338.2 52.1 389.4 344.0 323.1 333.8
Order bookings kt 1,374.2 1,334.3 39.8 364.2 328.1 352.0 330.0
Order backlog1 kt 709.3 696.9 12.5 709.3 716.4 724.0 704.5
EBITDA € million 61.9 64.9 -3.0 20.9 12.6 10.6 17.8
EBT € million 32.7 43.1 -10.4 10.2 6.4 4.3 11.8
Core workforce1 5,557 5,490 67 5,557 5,576 5,556 5,559
SZAG Investor Relations
KHS Group recorded highest pre-tax profit since joining the consolidated group!
earnings include € -3.3 million in restructuring provisions
english
1 per reporting date 74Financials
Industrial Participations / Consolidation
FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019
External sales € million 177.6 186.3 -8.8 38.4 48.2 47.7 43.3
EBITDA € million -4.2 46.9 -51.1 26.6 -100.6 8.7 61.0
EBT € million -46.7 28.4 -75.0 7.2 -109.0 0.4 54.7
Core workforce1 2,646 2,616 30 2,646 2,658 2,649 2,647
SZAG Investor Relations
Pre-tax result comprises a net amount of € -148.9 million in burdens, first and foremost the liability formed in
connection with the end to the investigations conducted on the grounds of suspected cartel arrangements
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1 per reporting date 75BACKUP
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
77Pensions
Funding of pension commitments
(2019/12/31) € bn (2019/12/31)
5
Projected Benefit Obligation (PBO): Balance sheet: pension provisions
€ 2,422 m1 € 2,356 m
4
According to IAS 19: Assets held by external funds:
− Discount rate of 1.40% € 65.6 m
3
– in line with market average Non-current assets: € 4,099 m
− Trend in salaries: 2.75% p.a. 2 Net position due to banks:
− Trend in pensions: € -140 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 € 65.6 million covered by assets held by external funds 78BACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishInvestor Relations
Dividend proposal
€ Financial year 2019
0.60 Proposal: € 0.20 dividend per share
0.55
0.45 0.45
0.40
0.32
0.30
0.25 0.25
0.20
0.20 0.20 0.20
0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
SZAG Investor Relations
Continuous dividend payment since going public
english
80Investor Relations
Shareholder structure and share turnover
Shareholder structure Daily turnover in thousand shares
600
Salzgitter AG
Other shareholders 10.0%
23.9%
Inst. shareholders 400
– other Regions State of
0.9% 26.5% Lower Saxony
Inst. share-
holders – 4.8%
other Europe 2.8%
200
Inst. shareholders Inst. Shareholders
– UK + Ireland 8.5% – Germany
22.7%
Inst. shareholders – North America 0
1Q 13 4Q 13 3Q 14 2Q 15 1Q 16 4Q 16 3Q 17 2Q 18 1Q 19 4Q 19
Free float: 63.5%
Treasury shares: as of July 8, 2010; other information is based on the external
shareholder identification as of January 2020
SZAG Investor Relations
Balanced shareholder structure High liquidity
english
81Disclaimer
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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