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 2020: 6.0 million tons; trading volume: 3.2 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 2020
Salzgitter AG Group
External Sales cons.: € 7.1 billion Employees: 22,604
EBT: € -196 million
Plate /
Strip Steel Mannesmann Trading Technology
Section Steel
External Sales: External Sales: External Sales: External Sales: External Sales:
€ 1.9 billion € 0.7 billion € 0.9 billion € 2.2 billion € 1.2 billion
EBT: EBT: EBT: EBT: EBT:
€ -86.8 million € -94.4 million € -62.0 million € 25.1million € 0.9 million
Employees: Employees: Employees: Employees: Employees:
5,999 2,272 4,366 1,946 5,433
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% 29.99%
BU = Business Unit
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As of December 2019
6
Salzgitter Group
External sales 2020 by customer industries
14% 14%
Other Vehicle construction
16% 13%
Food and beverage industry Construction industry
5% 4%
Mechanical engineering White goods,
electrical equipment
5% 3%
Re-rollers Energy sector and utilities
3% 23%
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 2020 by regions
6%
Other
7%
Asia
11%
Americas 46%
Germany
5%
Other Europe
25%
Other EU
SZAG Investor Relations
Share of ex-Germany sales by consignee 54%
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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 2020/12/31
FY 2020 FY 2019 Δ
Crude steel production kt 6,033.0 6,613.4 -580.4
External sales1 € million 7,090.8 8,547.3 -1,456.5
Earnings before tax € million -196.4 -253.3 56.9
Earnings after tax € million -273.9 -237.3 -36.6
Earnings per share (undiluted) € -5.13 -4.46 -0.67
ROCE % -3.9 -5.8 1.9
Core workforce2 22,604 23,354 -750
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date
SZAG Investor Relations
Financial year 2020 characterized by the distortions of the Corona pandemic
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9
Salzgitter Group
Balance sheet
€ million
8,618 8,618
8,237 8,237
Property, plant and Equity
equipment and other 2,939
2,679
non-current assets 4,099
4,245
Pension
2,299 2,356 provisions
Inventories
2,248
1,934 Other non-current
1,178 1,098 liabilities
Cash and
securities 751 621
Other current 2,225 Current liabilities
2,082
assets 1,519 1,438
FY 2019 FY 2020 FY 2020 FY 2019
SZAG Investor Relations
Continuing sound financial basis
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10Salzgitter Group
Salzgitter Group Investments and Depreciation / Amortization
193
15 49 44
593
411
352 342 342 338 340 348
287 295
2016 2017 2018 2019 2020
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
SZAG Investor Relations
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
Raw materials prices
Iron ore Coking coal
(62% Fe CFR China, US$/dmt) (FOB Australia, US$/t)
250 250
225
200 200
175
150 150
125
100 100
75
50 50
SZAG Investor Relations
Diverging price development of the major raw materials
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14Market Situation
Steel prices
Spot prices Northern Europe Hot-rolled coil prices international
1,700 1,700
(€/t) (€/t)
1,500 1,500
1,300 1,300
1,100 1,100
900 900
700 700
500 500
300 300
Jan' 19 Jul' 19 Jan' 20 Jul' 20 Jan' 21 Jan' 19 Jul' 19 Jan' 20 Jul' 20 Jan' 21
HRC EXW Ruhr Plate EXW Ruhr Medium sections Northern Europe EXW Ruhr USA EXW Indiana China Schanghai
SZAG Investor Relations
Following a period of inadequate steel prices, selling prices rose steadily starting in late summer of 2020
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15Market Situation
EU steel imports
Rolled steel imports into the EU-28 (in Tt/month)
2,500 20%
2,000 16%
1,500 12%
1,000 8%
500 4%
0 0%
2014 2016 2017 2018 2019 2020 Q1 2021
China Ukraine Russia Turkey India South Korea Iran Brazil Other Market share imports
SZAG Investor Relations
High level of imports also in 2020 despite slump of demand
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Source: Eurofer, May 2021, own presentation 161 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 2020
Integrated steel works with three blast 1% 6%
furnaces Mechanical engineering Other
Approx. 4.7 mt/year crude steel capacity 14% 37%
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 37% 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 2020
blanks, corrugated sheets, coffers,
sandwich and acoustic elements
Consolidated Sales €m 1,880
Customer focus through local presence
Earnings before taxes €m -87
Core workforce (12/31) 5,999
SZAG Investor Relations
Established supplier of the demanding German automotive industry
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18Strip 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
5% market share in the EU28
2019 2020
Shipments kt 4,239 3,971
SZAG Investor Relations
Sales €m 2,758 2,371
Employees 12/31 5,587 5,501
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19Strip Steel Business Unit
Processing
Salzgitter Europlatinen GmbH
Germany; shareholder: SZAG 100%
Custom-made solutions: Laser welded
Tailored Blanks for lighter car bodies
2019 2020
Sales €m 62 39
Employees 12/31 116 113
Salzgitter Bauelemente GmbH
Germany; shareholder: SZAG 100%
Corrugated sheets, coffers, sandwich a. acoustic elements for wall and
roof constructions of commercial buildings
2019 2020
SZAG Investor Relations
Sales €m 51 41
Employees 12/31 70 70
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20Strip 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
2019 2020
Shipments kt 532 487
SZAG Investor Relations
Sales €m 369 313
Employees 12/31 317 315
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211 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 2020
Section steel: 4%
17%
− Top-modern mini mill with two electric Vehicle construction
arc furnaces Other 7%
− Annual crude steel capacity 1 mt 5% Construction industry
Mechanical engineering 9%
− Two rolling mills for medium and heavy
sections White goods,
electrical equipment
Plate: 12%
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 2020
High-strength, wear resistant and
specialized steel grades Consolidated sales €m 684
Medium and heavy sections, heavy plate
incl. offshore and tube grades Earnings before taxes €m -94
Core workforce (12/31) 2,272
SZAG Investor Relations
Plate: Broad range of high-quality plate products
Section Steel: Efficient production
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23Plate / Section Steel 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
2019 2020
Shipments kt 625 610
SZAG Investor Relations
Sales €m 494 443
Employees 12/31 655 623
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24Plate / 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
2019 2020
Shipments kt 371 309
SZAG Investor Relations
Sales €m 256 204
Employees 12/31 536 470
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25Plate / 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
12% market share in the EU28
Two of the most efficient section mills worldwide with
comprehensive range of products
2019 2020
Shipments kt 953 983
SZAG Investor Relations
Sales €m 553 507
Employees 12/31 773 787
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26Plate / 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
2019 2020
Sales €m 571 498
Employees 12/31 380 392
SZAG Investor Relations
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271 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 2020
Own crude steel supply via 30%
21%
participation in Hüttenwerke Krupp
43% Vehicle construction
Mannesmann GmbH
Other
Plant for the production of semis for the 3%
seamless tubes business Construction industry
Core competences and products 7%
15%
Line Pipe: participation (50%) in the world Mechanical engineering
Energy sector
market leader EUROPIPE; international 4% and utilities
presence Tube producers 7%
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 2020
Longitudinal and spiral welded large-
diameter pipes, medium line pipes, Consolidated Sales €m 948
seamless and welded precision tubes,
stainless tubes Earnings before taxes €m -62
Core workforce (12/31) 4.366
SZAG Investor Relations
Global player in the high-quality segment of the global tubes market
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29Mannesmann 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
2019 2020
Shipments kt 581 471
SZAG Investor Relations
Sales €m 777 629
Employees 12/31 1.083 976
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30Mannesmann Business Unit
Line Pipes
Mannesmann Line Pipe GmbH
Germany; shareholder: SZAG 100%
HFI-welded medium line pipes incl.
plastic- and cement coatings
2019 2020
Sales €m 254 160
Employees 12/31 357 325
Mannesmann Großrohr GmbH
Germany; shareholder: SZAG 100%
Spiral-welded large-diameter pipes made of hot-rolled coil
2019 2020
SZAG Investor Relations
Sales €m 58 51
Employees 12/31 124 117
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31Mannesmann 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
2019 2020
Shipments kt 247 180
SZAG Investor Relations
Sales €m 458 324
Employees 12/31 2.256 2.063
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32Mannesmann 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
2019 2020
Shipments kt 23 22
SZAG Investor Relations
Sales €m 290 260
Employees 12/31 1.021 996
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33Mannesmann 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
2019 2020
SZAG Investor Relations
Sales €m 2,496 1,984
Employees 12/31 2,947 2,880
english
341 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 2020
69 sites in 27 countries 8% 13%
Mechanical engineering Other
Own distribution network for steel products
with warehousing sites in Europe 3% 5%
Re-rollers Vehicle construction
Processing group specialized on heavy 2%
35%
plate products Tube producers
Construction industry
International trading 31% 3%
Core competences and products Traders White goods,
electrical equipment
Global presence in all relevant regions with 4%
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 2020
Procurement channel for Salzgitter Group
works Consolidated Sales €m 2,225
Value add services for customers
Earnings before taxes €m 25
Core workforce (12/31) 1,946
SZAG Investor Relations
High customer and market orientation through a global sales organization
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36Trading Business Unit
Salzgitter Mannesmann Handel Group
Salzgitter Mannesmann Handel
Shipments 2020: 43.0 mt Sales 2020: € 2.1 billion
Trading Stockholding Agencies
International
Salzgitter Mannesmann Stahlhandel Europe Europa
9 Companies
GmbH, Düsseldorf (SMSD) 7 Companies 4 Agencies
2 Rep. offices
16 Branches with warehouses and
Salzgitter Mannesmann International
further processing (incl. 4 flame
GmbH, Düsseldorf (SMID)
cutting plants)
Salzgitter Mannesmann International Stahl-Center Baunatal GmbH,
(USA) Inc., Houston (SMIH) Baunatal (SCB)
Salzgitter Mannesmann International
(Canada) Inc., Vancouver (SMIV)
SZAG Investor Relations
59 locations in 27 countries with 1,603 employees
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37Trading Business Unit
Universal Eisen und Stahl Group
Universal
Shipments 2020: 0.2 mt Sales 2020: € 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 4 Branches
Papendrecht, Netherlands
UNIVERSAL-Stal Sp. z o.o, Gliwice, Poland
UNIVERSAL OCEL spol. s.r.o., Prague,
Czech Republic
SZAG Investor Relations
10 locations in 6 countries with 365 employees
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381 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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40Technology 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
2019 2020
SZAG Investor Relations
Sales €m 1,260 1,131
Employees 12/31 4,793 4,729
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41Technology Business Unit
Special machinery
Klöckner DESMA Elastomertechnik Group
World market leader for rubber and silicone injection molding
machinery
2019 2020
Sales €m 79 53
Employees 12/31 540 486
DESMA Schuhmaschinen GmbH
World’s largest producer of machines for the fabrication of
shoes and shoe soles
2019 2020
SZAG Investor Relations
Sales €m 52 24
Employees 12/31 224 218
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421 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 2020
allocated to a business unit
Consolidated sales €m 148
Core competences and participations
Earnings before taxes €m 21
Services:
− Research and development for the Core workforce (12/31) 2.588
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
44Industrial 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
45Industrial 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%
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46Industrial 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
47Industrial Participations
Aurubis-Participation
Aurubis Dividend (€/Share)
1.80
1.60 1.55
1.45
1.40 1.35 1.35
1.30
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: € 131.8 million
0.60 (per FY19/20)
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
2019/2020
SZAG Investor Relations
Since 2008 successful shareholding in the leading European copper producer
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481 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishStrategy
Management of the COVID-19 impacts
Protecting employee health Ensuring operating ability
Comprehensive risk-minimizing precautions and guidelines Highest priority for liquidity management
Creation of transparency in regards to occurrences of
infection in the whole Group and detailed continuous Temporary reduction of production
monitoring
Short-term work in many parts of the Group
Assumption of social responsibility also at our foreign
locations Restrictive handling of new investments, but continuation
of strategic investment projects
Strengthening of the IT infrastructure in order to enable
more than 5000 employees to make use of the offer to Stringent working capital management
work from home
SZAG Investor Relations
Successful management of the challenges from the corona pandemic!
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50Strategy
Challenge: CO2 emission allowances are continuously cut back
Price forecast CO2 allowances
60
50
40
€/t CO2
30
20
10
0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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 51Strategy
Our decarbonization strategy
We are in control… …and pioneer at the same time
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
part until 2030 AG
Current market value of the CO2 Target: Reduction of more than
allowances acquired for this 95% of the CO2 emissions of
purpose exceeds the figure Salzgitter Flachstahl until 2050
accounted for in the balance
sheet by more than € 800 million*
SZAG Investor Relations
The Salzgitter Group acts decisively!
Purchase of CO2 emission allowances for the Fourth Trading Period as a precaution carries us to 2030
SALCOS® – our technological concept for the medium and long-term CO2-reduced steel production
english
* per May 2021 52Strategy
SALCOS® – Flexible hydrogen-based direct reduction
Carbon dioxide
→ classic coal-based blast furnace route Blast furnace
→ innovative SALCOS-route (direct reduction)
Carbon (C): Coke, coal
Pig iron Crude steel
Iron ore (Fe2O3)
Basic oxygen converter (BOF)
Water
Iron ore (Fe2O3)
H2O
Carbon dioxide
Scrap
Hydrogen (H2)
Natural gas
Crude steel
Renewable Electrolyzer (CH4)
electric energy
SZAG Investor Relations
Direct Direct reduced Electric arc furnace
(variable use of natural gas and H2) reduction iron (DRI) (EAF)
plant
english
53Strategy
SALCOS® – Gradual conversion to a H2-based steel production
Today Indicative: 2026 Indicative: 2030+ Indicative: until 2050
Status Quo Pilot phase Completion
CO2-Emissions (8 m t/a)
- 30% CO2
DRP
- 50% CO2
- 83% bis - 95% CO2
(Stage I) (Stage II)
Blast Furnaces
EAF
Electrolyzer
Basic Oxygen Furnaces
(Stage III)
SZAG Investor Relations
Status Quo Stage I Stage II Stage III
english
EAF= Electric Arc Furnace DRP= Direct Reduction Plant 54Strategy
Our path towards a low-CO2, hydrogen-based steel production
Feasibility study µDRAL – Mikro-Direkt-
Iron ore direct reduction plant in Wilhelmshaven ReduktionsAnLage
First steam electrolysis on Construction of a
MW scale at Salzgitter demonstration plant
Flachstahl as from 2020 for direct reduction in
Wind-H2: First industrial sector Salzgitter
World’s largest high-
coupling of “renewable power –
temperature
hydrogen production – industrial
electrolyzer
consumption” at one location in
commences trial
Germany!
operation in Salzgitter
2017 2018 2019 2020 2021
MACOR: SALCOS-feasibility
Bundling of
study regional
Analysis of framework conditions H2 expertise
SZAG Investor Relations
Numerical modelling of melt shop
and direct reduction plant First slab successfully produced for
green strip steel
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55Strategy
“Salzgitter Wind Hydrogen”
Important building block on the way towards climate-friendly steel
production
Production of electricity via wind power and electrolytic
hydrogen at the plant site
Erection of seven wind turbines with an overall output of 30
megawatt
Hydrogen production with two 1.25 MW PEM electrolysis
plants
Supported by the State of Lower Saxony and KfW
(Kreditanstalt für Wiederaufbau)
Start March 11, 2021
SZAG Investor Relations
First industrial sector coupling of
“renewable power – hydrogen production – industrial consumption” at one location in Germany!
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56Strategy
µDRAL – Construction of a direct reduction plant in demonstration scale
First iron ore direct reduction plant that can be flexibly operated with hydrogen
and natural gas
Testing of iron ore reduction with natural gas and/or hydrogen in variable
proportions
The direct reduced iron will initially be used in the Salzgitter plant as well as
the electric arc furnace of the Peine site
Groundbreaking on May 17, 2021
Start of production in the first half of 2022
Presentation of the funding approval
by Federal Minister for the
Environment Ms. Svenja Schulze on
December 4, 2020 in Salzgitter
SZAG Investor Relations
Plant completes the hydrogen-based value chain in crude steel production
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57Strategy
Green strip steel – these days already…
Since the end of 2020, Salzgitter Flachstahl GmbH is offering green strip steel
products a defined range of various dimensions and grades
The carbon footprint of these products is markedly below that of
conventional products
TÜV SÜD has confirmed this in February of 2021:
“A reduction in the CO2 footprint of more than 75 % of a
steel slab and more than 66 % of a hot-dip galvanized coil
can be achieved by changing the steel production method
from the conventional blast furnace route to the electric
route.”
SZAG Investor Relations
…renowned steel processors demonstrate keen interest for this low CO2 product!
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58Strategy
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: Trial operation
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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591 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishGuidance
Business Units – Forecast
Strip Steel Plate / Section Steel Mannesmann Trading Technology
fully utilized capacity plate: general trend reversal large-diameter pipes: exceptionally good earnings KHS Group: sustained good
currently not foreseeable demand remains insufficient situation of the first quarter order situation
considerably improved price
cannot be anticipated in
levels compared with the section steel: volatile market medium line pipes: uptrend in specialist mechanical
these dimensions in the
previous year environment that will volumes to resume engineering companies of
months ahead
positive trend is also continue to focus on the precision tubes: demand the DESMA Group: notable
expected to continue in the short term rebounding especially in the
selling price growth rates will rebound of the market
slow
second half of the year automotive industry
prices will remain at a high
stainless tubes: growing
level
demand
Business Unit
significant increase in sales notable increase in sales higher sales level higher sales higher sales compared with
very gratifying pre-tax profit the previous-year period
discernibly reduced pre-tax pre-tax result will tangibly earnings before taxes
of more than € 200 million loss compared with the improve while nevertheless notably higher than in the significant increase in pre-tax
previous year remain in negative territory previous year profit, positively influenced
from non-recurrent effects
SZAG Investor Relations
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61Financials
Salzgitter Group – Guidance per June 15, 2021
Given the better-than-recently-expected earnings situation, above all in the Trading Business Unit, we are raising our
earnings forecast for the financial year 2021 once more – conditionally on the assumption of a stable market
development in spite of the latent coronavirus crisis – and now anticipate the following for the Salzgitter Group in the
financial year 2021:
an increase in sales to more than € 8.5 billion,
a pre-tax profit of between € 400 million and € 600 million, as well as
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
SZAG Investor Relations
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.
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 2021/03/31
Q1 2021 Q1 2020 Δ
Crude steel production kt 1,644.5 1,681.5 -37.0
External sales1 € million 2,094.1 2,108.3 -14.2
Earnings before tax € million 117.3 -31.4 148.7
Earnings after tax € million 76.6 -43.7 120.3
Earnings per share (undiluted) € 1.38 -0.83 2.21
ROCE % 13.2 -2.4 15.6
Core workforce2 22,475 23,308 -833
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date
SZAG Investor Relations
Encouraging start to the year
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64Financials
Income statement
Income Statement (€ million) Q1 2021 Q1 2020
Sales 2,094.1 2,108.3
Increase/decrease in finished goods and work in process/other own work capitalized -18.2 -36.5
2,075.9 2,071.8
Other operating income 114.8 90.1
Cost of materials 1,333.1 1,378.8
Personnel expenses 424.3 439.0
Amortization and depreciation of intangible assets and property, plant and equipment 74.2 74.1
Other operating expenses 265.2 260.8
Result from impairment losses and reversal of impairment losses of financial assets -1.4 -2.5
Income from shareholdings 0.0 0.0
Result from investments accounted for using the equity method 36.1 -18.3
Finance income 1.9 2.4
Finance expenses 13.2 22.2
SZAG Investor Relations
Earnings before taxes (EBT) 117.3 -31.4
Income tax 40.7 12.3
Consolidated result 76.6 -43.8
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65Financials
Consolidated balance sheet
Assets (€ million) 31.03.2021 31.12.2020 Δ
Non-current assets 4,205.8 4,244.5 -38.7
Intangible assets, property, plant and equipment 2,423.5 2,423.6 -0.1
Investment property 81.1 81.5 -0.4
Financial assets 55.1 54.6 0.5
Investments accounted for using the equity method 1,192.0 1,169.1 22.9
Trade receivables 10.3 11.0 -0.7
Other receivables and other assets 16.1 22.3 -6.2
Income tax assets 1.6 0.5 1.1
Deferred income tax assets 426.1 481.9 -55.8
Current assets 4,393.7 3,992.9 400.8
Inventories 1,892.5 1,933.7 -41.2
Trade receivables 1,312.8 923.9 388.9
Contract assets 295.1 300.2 -5.1
Other receivables and other assets 236.8 188.3 48.5
Income tax assets 26.5 23.7 2.8
Securities 50.0 0.0 50.0
SZAG Investor Relations
Cash and cash equivalents 578.4 621.4 -43.0
Assets available for sale 1.7 1.7 0.0
Balance sheet total 8,599.5 8,237.4 362.1
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66Financials
Consolidated balance sheet
Equity and liabilities (€ million) 31.03.2021 31.12.2020 Δ
Equity 2,834.6 2,678.9 155.8
Subscribed capital 161.6 161.6 0.0
Capital reserve 257.0 257.0 0.0
Retained earnings 2,750.4 2,594.5 155.9
Other reserves 24.5 26.4 -1.9
Unappropriated retained earnings 0.0 0.0 0.0
Treasury shares -369.7 -369.7 0.0
Minority Interest 10.8 9.1 1.7
Non-current liabilities 3,342.1 3,476.4 -134.3
Provisions for pensions and similar obligations 2,179.9 2,298.6 -118.7
Deferred tax liabilities 73.6 73.9 -0.3
Income tax liabilities 30.4 30.4 0.0
Other provisions 265.0 267.1 -2.1
Financial liabilities 739.2 749.4 -10.2
Other liabilities 54.0 57.1 -3.1
Current liabilities 2,422.7 2,082.1 340.6
Other provisions 213.1 210.4 2.7
Financial liabilities 516.4 488.3 28.1
Trade payables 1,020.2 802.4 217.8
SZAG Investor Relations
Liability contracts 319.8 272.8 47.0
Income tax liabilities 10.3 5.5 4.8
Other liabilities 342.9 302.8 40.1
Balance sheet total 8,599.5 8,237.4 362.1
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67Financials
Cash flow statement
(€ million) Q1 2021 Q1 2020 Δ
Cash and cash equivalents at the start of the period 621.4 700.5 -79.1
Cash flow from operating activities 108.8 -142.8 251.6
Cash flow from investment activities -122.7 -94.7 -27.9
Cash flow from financial activities -34.9 3.6 -38.5
Changes in cash -43.0 -236.1 193.1
Cash and cash equivalents at the end of the period 578.4 464.5 113.9
SZAG Investor Relations
Cash flow from operating activities of € 109 million
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68Financials
Strip Steel Business Unit
Q1 2021 Q1 2020 Δ
External sales € million 606.4 566.2 40.2
Order bookings kt 1,187.6 1,193.1 -5.4
Order backlog1 kt 1,078.4 917.8 160.6
EBITDA € million 78.0 34.6 43.3
EBT € million 43.1 -6.8 49.9
Core workforce1 6,010 6,113 -103
SZAG Investor Relations
External sales and earnings before taxes exceeded the year-earlier figure first and foremost due to the
improved price level
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1 per reporting date 69Financials
Plate / Section Steel Business Unit
Q1 2021 Q1 2020 Δ
External sales € million 214.4 194.5 19.9
Order bookings kt 525.1 583.8 -58.7
Order backlog1 kt 408.1 369.4 38.7
EBITDA € million -12.4 2.2 -14.6
EBT € million -21.0 -4.2 -16.9
Core workforce1 2,260 2,353 -93
SZAG Investor Relations
Sales growth is attributable to the development of Peiner Träger and DEUMU and DEUMU,
erosion of earnings mainly due to lower selling prices realized by the heavy plate companies
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1 per reporting date 70Financials
Mannesmann Business Unit
Q1 2021 Q1 2020 Δ
External sales € million 256.6 295.9 -39.3
Order bookings € million 412.7 319.5 93.1
Order backlog1 € million 448.3 402.3 45.9
EBITDA € million 8.1 10.5 -2.4
EBT € million -7.5 -4.6 -2.9
Core workforce1 4,317 4,609 -292
SZAG Investor Relations
Positive earnings contribution of the precision tubes group cannot fully compensate losses incurred by
the other product segments
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1)per reporting date 71Financials
Trading Business Unit
Q1 2021 Q1 2020 Δ
External sales € million 673.3 703.4 -30.1
Shipments kt 888.0 977.5 -89.5
EBITDA € million 48.1 5.8 42.3
EBT € million 44.7 0.3 44.4
Core workforce1 1,931 2,036 -105
SZAG Investor Relations
Price increases combined with favorable procurement prices in the stockholding business and at the
UES Group drive earnings improvement
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1 per reporting date 72Financials
Technology Business Unit
Q1 2021 Q1 2020 Δ
External sales € million 300.9 310.3 -9.4
Order bookings kt 358.0 337.3 20.7
Order backlog1 kt 734.3 739.3 -5.0
EBITDA € million 31.8 12.6 19.3
EBT € million 25.0 5.2 19.8
Core workforce1 5,353 5,568 -215
SZAG Investor Relations
KHS Group exceeded the year-earlier result, deriving strong support from the accounting profit
achieved by selling the US-pouch business, DESMA companies stabilized their results
english
1 per reporting date 73Financials
Industrial Participations / Consolidation
Q1 2021 Q1 2020 Δ
External sales € million 42.5 38.0 4.5
EBITDA € million 49.2 -8.5 57.7
EBT € million 33.0 -21.3 54.4
Core workforce1 2,604 2,629 -25
SZAG Investor Relations
Pre-tax profit includes a contribution of € 42.5 million from the participating investment in Aurubis AG
accounted for using the equity method
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1 per reporting date 74BACKUP
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
76Pensions
Funding of pension commitments
(2020/12/31) € bn (2020/12/31)
5
Projected Benefit Obligation (PBO): Balance sheet: pension provisions
€ 2,367 m1 € 2,299 m
4
According to IAS 19: Assets held by external funds:
− Discount rate of 1.40%1 € 68.1 m
3
– in line with market average Non-current assets: € 4,245 m
− Trend in salaries: 2.50% p.a. 2 Net position due to banks:
− Trend in pensions: € -432 m
1
1.50% 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!
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1 thereof € 68.1 million covered by assets held by external funds 1 per March 31, 2021, before that 1.10% 77BACKUP
1 Financials
2 Pensions
3 Investor Relations
SZAG Investor Relations
englishInvestor Relations
Shareholder structure and share turnover
Shareholder structure Daily turnover in thousand shares
600
Salzgitter AG
Other shareholders
10.0%
15.9%
400
State of
26.5% Lower Saxony
15.1%
Retail investors
200
32.5%
Institutional investors 0
1Q 15 4Q 15 3Q 16 2Q 17 1Q 18 4Q 18 3Q 19 2Q 20 1Q 21
Free float: 63.5%
Treasury shares: as of July 8, 2010; other information is based on the external
shareholder identification as of January 2021
SZAG Investor Relations
Balanced shareholder structure High liquidity
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79Disclaimer
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
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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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