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% 29.99%
BU = Business Unit
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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
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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%
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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 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
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*) € -62,3 million restructuring provisions, € -192,9 million impairment as awell as € -140,8 Mio. € other special effects (cartell fine) 9
Salzgitter Group
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
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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
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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)
200 300
175
250
150
200
125
150
100
100
75
50 50
SZAG Investor Relations
Iron ore: dramatic price surge over the past months; currently near record levels
Coking coal: global demand can be satisfied completely at the moment – with a corresponding effect on pricing
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14Market Situation
Steel prices
Spot prices Northern Europe Hot-rolled coil prices international
1.100 1.100
(€/t) (€/t)
1.000 1.000
900 900
800 800
700 700
600 600
500 500
400 400
300 300
Jan. 18 Jul. 18 Jan. 19 Jul. 19 Jan. 20 Jul. 20 Jan. 21 Jan. 18 Jul. 18 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
Strip steel prices recover from the Corona pandemic troughs since late July 2020,
plate prices remain under pressure also due to imports
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15Market Situation
EU steel imports
Forecast steel demand EU-28 2020 (versus previous year‘s quarter) Rolled steel imports into the EU-28 (in t/month)
0% 2.500 20%
-4%
-10% 2.000 16%
-12%
-15%
-16% 1.500 12%
-20%
-26% 1.000 8%
-30%
500 4%
-40%
0 0%
-50% 2014 2016 2017 2018 2019 Q1 Q2 Q3
Q1/2020 Q2/2020 Q3/2020 Q4/2020 Ø 2020 2020 2020 2020
China Ukraine Russia
Turkey India South Korea
Iran Brazil Other
Market share imports Expected market share imports
SZAG Investor Relations
Imports decrease only moderately despite slump of demand,
the market share of steel imports is increasing!
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Source: Eurofer, own calculations, based on the scenario of a slow return to normality 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 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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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
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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19Strip 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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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
2018 2019
Shipments kt 584 532
SZAG Investor Relations
Sales €m 415 369
Employees 12/31 323 317
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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 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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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
2018 2019
Shipments kt 697 625
SZAG Investor Relations
Sales €m 534 494
Employees 12/31 741 655
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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
2018 2019
Shipments kt 526 371
SZAG Investor Relations
Sales €m 378 256
Employees 12/31 539 536
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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
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
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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
2018 2019
Sales €m 678 571
Employees 12/31 378 380
SZAG Investor Relations
english
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 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 1,120
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
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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
2018 2019
Shipments kt 895 581
SZAG Investor Relations
Sales €m 953 777
Employees 12/31 1,047 1,083
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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
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
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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
2018 2019
Shipments kt 276 247
SZAG Investor Relations
Sales €m 497 458
Employees 12/31 2,287 2,256
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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
2018 2019
Shipments kt 23 23
SZAG Investor Relations
Sales €m 245 290
Employees 12/31 1,000 1,021
english
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
2018 2019
SZAG Investor Relations
Sales €m 2,468 2,496
Employees 12/31 2,980 2,947
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 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
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36Trading 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
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37Trading 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
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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
2018 2019
SZAG Investor Relations
Sales €m 1,161 1,260
Employees 12/31 4,714 4,793
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41Technology 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
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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 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) 2,646
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
1,25 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
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 • Temporary reduction of production
infection in the whole Group and detailed continuous • Short-term work in many parts of the Group
monitoring
• Saving without endangering the future: restrictive handling
• Assumption of social responsibility also at our foreign of new investments, but continuation of strategic
locations investment projects
SZAG Investor Relations
Through the crisis with consistency, transparency and stringent liquidity management!
english
50Strategy
“Salzgitter AG 2021” growth strategy – goals and stipulations
Goals Stipulations
Steel-related Less steel-related
1. Qualitative Growth
Rolled steel production and parts of the tubes production can
only grow qualitatively, not quantitatively.
2. Quantitative Growth
Quantitative growth is possible exclusively in activities apart
from steel – especially in the Technology Business Unit.
Start 2016 60% 40%
3. External Growth
H1 2020 50% 50%
External growth on a larger scale is not mandatorily necessary
for the development of the business units – can, however, be
Goal 50% 50% desirable.
SZAG Investor Relations
Diversification strategy proves to be right especially now!
english
51Strategy
“Salzgitter AG 2021” growth strategy – implementation
1. Qualitative growth in steel-related areas
Ilsenburger Grobblech GmbH: Salzgitter Flachstahl GmbH:
New heat treatment line Hot-Dip Galvanizing Line 3
Optimization of the product portfolio Strengthening of the premium segment for
Commissioning: 2021 automotive customers
Commissioning: 2022
2. Quantitative growth in less steel-related activities
DESMA Schuhmaschinen GmbH: Mannesmann Precision Tubes:
“Factory of the Future” Expansion of the plant in Mexico
Capacity expansion Precision steel tubes for the USMCA area
Inauguration in July 2020 Commissioning: Q3 2019
3. External growth
Aurubis AG KHS GmbH Mannesmann Stainless Tubes Salzgitter Hydroforming GmbH
Increase of the Cooperation with Ferrum AG Acquisition of the stainless Joint Venture with Baolong
participation to 29.99 % for can seaming steel tube producer SOTEP for the production of
hydroformed components
SZAG Investor Relations
english
52Strategy
Challenge: CO2 emission allowances are continuously cut back
Price forecast CO2 allowances
Third trading period Fourth trading period
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 53Strategy
Our path towards a low-CO2, hydrogen-based steel production
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 AG
part until 2030
• Target: Reduction of up to 95 %
• Current market value of the CO2 of the CO2 emissions of
allowances acquired for this Salzgitter Flachstahl until 2050
purpose exceeds the figure
accounted for in the balance
sheet by more than € 400 million*
SZAG Investor Relations
The Salzgitter Group acts decisively!
CO2 emission allowances for the Fourth Trading Period purchased as a precaution
SALCOS® – technological concept for CO2-reduced steel production
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* per January 2021 54Strategy
Ready for the future: transformation towards a low-CO2 business location
12/12/2019
Salzgitter AG has joined the “Foundation 2 Degrees – German CEOs for
Climate Protection” as a promoting company and, being representative of the
energy intensive industry, sets down an important marker for corporate climate
protection.
“With our ‘SALCOS® – Salzgitter Low CO2 Steelmaking’ project, our
Group is pioneering CO2-low steel production of the future. We willingly
contribute our experience from discussions to date about the necessary
framework conditions from the sphere of politics and energy to the
foundation’s work.” Professor Dr.-Ing. Heinz Jörg Fuhrmann
SZAG Investor Relations
We are committed to the current climate targets of the EU and are actively participating
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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
First steps of SALCOS® were already implemented
Feasibility study µDRAL – Mikro-Direkt-
Iron ore direct reduction plant in Wilhelmshaven ReduktionsAnLage
World‘s first steam electrolysis Construction of a
on 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 study
Analysis of framework conditions
Numerical modelling of melt shop
and direct reduction plant
SZAG Investor Relations
First slab successfully produced for
green strip steel
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57Strategy
“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 a 2.5 MW PEM electrolysis plant
SZAG Investor Relations
First industrial sector coupling of
“renewable power – hydrogen production – industrial consumption” at one location in Germany!
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58Strategy
Feasibility study for the direct reduction of iron ore at Wilhelmshaven agreed upon
Study Project partners
• Construction of a direct reduction plant with an upstream
hydrogen electrolyzer as well as
• Developing necessary infrastructure for supplying it with raw
materials, natural gas and hydrogen at the deepwater port of
Wilhelmshaven
• Results to be available by March 31, 2021 at the latest
Goal
• Production of 2 mt p.a. directly reduced iron for the
processing into high-grade, environmentally compatible strip
steel products in Salzgitter Flachstahl GmbH’s integrated
steelworks
SZAG Investor Relations
Another tangible step towards a low-CO2 hydrogen-based steel production on the basis of SALCOS®
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59Strategy
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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601 Salzgitter Group
2 Market Situation
3 Business Units
4 Strategy
SZAG Investor Relations
5 Guidance
englishGuidance
Preliminary key data of the financial year 2020 from January 21, 2021
According to the still preliminary figures now available, the Salzgitter Group closed the
financial year 2020 with a pre-tax result of € –200 million (FY 2019: € –253.3 million). Due to
the rigorous crisis management, the uptrend in business development in the fourth
quarter, particularly in the Strip Steel, Trading and Technology business units, and the very
gratifying contribution from the participating investment in Aurubis AG accounted for
using the (IFRS accounting) equity method (€ 101.6 million; FY 2019: € 99.5 million,
including € 27.8 million in income from an accounting adjustment in connection with the
share purchase), the pre-tax result exceeds the previous year’s figure as well as the last
forecast.1)
SZAG Investor Relations
english
1) Disclosure of inside information pursuant to Article 17 MAR from January 21, 2021Guidance
Salzgitter Group – Guidance as of January 21, 2021
In view of the generally more upbeat sentiment, the recent sharp increase in rolled steel prices – and with specific reference to
the still imminent, virtually unquantifiable risk presented by the Corona pandemic – we assume the following for the Salzgitter
Group in the financial year 2021:
an increase in sales to more than € 8.5 billion compared with the previous year (FY 2020: € 7 billion) and
a pre-tax profit (EBT) of between € 150 million and € 200 million.
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 2020/09/30
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
Crude steel production kt 4,334.2 5,060.1 -725.9 1,381.5 1,271.2 1,681.5
External sales1 € million 5,264.3 6,637.3 -1,373.0 1,633.4 1,522.7 2,108.3
Earnings before tax € million -224.4 40.7 -265.1 -96.6 -96.4 -31.4
Earnings after tax € million -243.0 -29.8 -213.2 -98.3 -101.0 -43.7
Earnings per share (undiluted) € -4.54 -0.63 -3.91 -1.84 -1.88 -0.83
ROCE % -8.1 2.5 -10.6 -10.9 -10.0 -2.4
Core workforce2 22,785 23,562 -777 22,785 23,009 23,308
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date
SZAG Investor Relations
Considerable impact of COVID-19 pandemic on sales and the result
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65Financials
Income statement
Income Statement (€ million) 9M 2020 9M 2019 Δ
Sales 5,264.3 6,637.3 -1,373.0
Increase/decrease in finished goods and work in process/other own
-154.8 2.3 -157.1
work capitalized
5,109.6 6,639.7 -1,530.1
Other operating income 186.7 188.0 -1.3
Cost of materials 3,358.5 4,329.6 -971.0
Personnel expenses 1,248.5 1,335.7 -87.3
Amortization and depreciation of intangible assets and property, plant
219.2 262.2 -43.0
and equipment
Other operating expenses 694.5 888.3 -193.8
Result from impairment losses and reversal of impairment losses of
-11.1 -1.2 -9.9
financial assets
Income from shareholdings 2.1 1.8 0.3
Result from investments accounted for using the equity method 50.7 73.9 -23.1
Finance income 5.7 13.9 -8.1
Finance expenses 47.5 59.5 -12.1
SZAG Investor Relations
Earnings before taxes (EBT) -224.4 40.7 -265.1
Income tax 18.6 70.5 -51.9
Consolidated result -243.0 -29.8 -213.2
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66Financials
Consolidated balance sheet
Assets (€ million) 30.09.2020 31.12.2019 Δ
Non-current assets 4,188.8 4,099.0 89.8
Intangible assets, property, plant and equipment 2,387.0 2,343.0 44.0
Investment property 80.9 82.0 -1.1
Financial assets 56.2 64.7 -8.4
Investments accounted for using the equity method 1,113.7 1,072.9 40.8
Trade receivables 17.5 18.4 -0.9
Other receivables and other assets 32.7 25.6 7.0
Income tax assets 0.0 0.0 0.0
Deferred income tax assets 500.7 492.3 8.4
Current assets 3,801.1 4,518.5 -717.5
Inventories 1,871.3 2,248.1 -376.8
Trade receivables 1,015.9 1,118.4 -102.5
Contract assets 297.3 186.3 110.9
Other receivables and other assets 207.5 191.8 15.7
Income tax assets 23.7 22.6 1.1
Securities 39.6 50.9 -11.2
Cash and cash equivalents 339.0 700.5 -361.5
SZAG Investor Relations
Assets available for sale 6.9 0.0 6.9
Balance sheet total 7,989.9 8,617.5 -627.6
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67Financials
Consolidated balance sheet
Equity and liabilities (€ million) 30.09.2020 31.12.2019 Δ
Equity 2,631.6 2,938.7 -307.0
Subscribed capital 161.6 161.6 0.0
Capital reserve 257.0 257.0 0.0
Retained earnings 2,546.2 2,845.2 -299.0
Other reserves 16.3 23.0 -6.6
Unappropriated retained earnings 12.1 12.1 0.0
Treasury shares -369.7 -369.7 0.0
Minority Interest 8.2 9.6 -1.4
Non-current liabilities 3,653.8 3,453.6 200.1
Provisions for pensions and similar obligations 2,399.5 2,356.1 43.3
Deferred tax liabilities 72.0 72.0 0.0
Income tax liabilities 36.2 36.6 -0.4
Other provisions 327.5 334.9 -7.4
Financial liabilities 806.7 637.1 169.6
Other liabilities 11.8 16.8 -5.0
Current liabilities 1,704.5 2,225.3 -520.8
Other provisions 198.0 224.6 -26.6
Financial liabilities 257.7 430.1 -172.4
Trade payables 711.6 915.2 -203.7
SZAG Investor Relations
Liability contracts 209.1 200.7 8.4
Income tax liabilities 6.0 8.6 -2.6
Other liabilities 322.1 446.0 -123.9
Balance sheet total 7,989.9 8,617.5 -627.6
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68Financials
Cash flow statement
€ million
800
-96,5
600
-228,8
400
700,5 -27,7
-8,6
200
339,0
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
Negative cash flow from operating activities characterized by the pre-tax loss;
Cash flow from investment activities notably lower also due to the immediate measures
english
69Financials
Strip Steel Business Unit
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 1,384.9 1,730.1 -345.1 482.1 336.6 566.2
Order bookings kt 3,010.9 3,347.2 -336.3 1,176.9 640.9 1,193.1
Order backlog1 kt 889.6 910.2 -20.5 889.6 779.4 917.8
EBITDA € million 23.0 243.2 -220.3 10.6 -22.3 34.6
EBT € million -94.9 84.6 -179.5 -25.7 -62.4 -6.8
Core workforce1 6,029 6,138 -109 6,029 6,040 6,113
SZAG Investor Relations
Significant recovery in the third quarter,
negative earnings before taxes due to decrease in shipments and earnings
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1 per reporting date 70Financials
Plate / Section Steel Business Unit
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 530.3 630.6 -100.3 167.1 168.7 194.5
Order bookings kt 1,399.8 1,429.2 -29.3 434.3 381.7 583.8
Order backlog1 kt 287.3 243.8 43.5 287.3 274.2 369.4
EBITDA € million -42.8 22.7 -65.4 -30.1 -14.9 2.2
EBT € million -64.7 -13.0 -51.8 -37.8 -22.8 -4.2
Core workforce1 2,313 2,414 -101 2,313 2,347 2,353
SZAG Investor Relations
Decline of earnings due to decreasing volumes and margins especially in the heavy plate companies
english
1 per reporting date 71Financials
Mannesmann Business Unit
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 723.3 842.1 -118.8 228.8 198.6 295.9
Order bookings € million 762.9 1,065.9 -303.0 265.1 178.3 319.5
Order backlog1 € million 357.7 481.4 -123.7 357.7 347.8 402.3
EBITDA € million -2.0 50.7 -52.7 -10.1 -2.4 10.5
EBT € million -48.3 -2.9 -45.4 -25.6 -18.1 -4.6
Core workforce1 4,416 4,670 -254 4,416 4,511 4,609
SZAG Investor Relations
Negative earnings bevor taxes particularly reflects the development in the precision tubes segment
english
1)per reporting date 72Financials
Trading Business Unit
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 1,667.9 2,294.5 -626.6 438.7 525.8 703.4
Shipments kt 2,361.1 3,027.7 -666.6 636.7 746.9 977.5
EBITDA € million -8.4 25.1 -33.5 -3.3 -10.8 5.8
EBT € million -22.9 3.3 -26.2 -7.1 -16.1 0.3
Core workforce1 1,962 2,106 -144 1,962 1,990 2,036
SZAG Investor Relations
Decrease of shipments due to lower volumes, especially in international trading, and tense margins situation in the
stockholding business cause negative pre-tax result
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1 per reporting date 73Financials
Technology Business Unit
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 853.6 1,000.9 -147.3 279.1 264.3 310.3
Order bookings kt 841.9 1,010.0 -168.1 283.4 221.2 337.3
Order backlog1 kt 626.4 716.4 -90.1 626.4 618.2 739.3
EBITDA € million 8.4 41.1 -32.6 3.9 -8.1 12.6
EBT € million -13.8 22.5 -36.3 -3.2 -15.8 5.2
Core workforce1 5,457 5,576 -119 5,457 5,504 5,568
SZAG Investor Relations
Positive result of KHS-Group in the third quarter cannot
compensate the diminishing development of the DESMA companies
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1 per reporting date 74Financials
Industrial Participations / Consolidation
9M 2020 9M 2019 Δ Q3 2020 Q2 2020 Q1 2020
External sales € million 104.2 139.1 -34.9 37.6 28.7 38.0
EBITDA € million 57.2 -30.9 88.1 14.8 51.0 -8.5
EBT € million 20.2 -53.9 74.1 2.8 38.8 -21.3
Core workforce1 2,608 2,658 -50 2,608 2,617 2,629
SZAG Investor Relations
Earnings before taxes includes € 53.4 million contribution from the participating investment in
Aurubis AG accounted for using the equity method
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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
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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 1.50%2 € 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 1 per 2020/09/30, previously 1.50% per 2020/06/30, previously 1.80% per 2020/03/31, previously: 1.40% 78BACKUP
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
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
english
80Disclaimer
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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