Salzgitter AG - Earnings Release 2016

News Details

Corporate | 13 May 2016 07:30

Salzgitter AG: Salzgitter Group delivers a pre-tax result at breakeven thanks to sound business model

DGAP-News: Salzgitter AG / Key word(s): Quarterly / Interim Statement

2016-05-13 / 07:30

The issuer is solely responsible for the content of this announcement.

The Salzgitter Group again delivered proof of its sound business model and the sustainable success of its restructuring projects in an extremely challenging European steel market environment. The company closed the first quarter of the financial year 2016 with a pre-tax result at breakeven that exceeded capital market expectations. Presentable performance by the Energy and Technology business units, Peiner Träger GmbH’s gratifying profit trend, and the earnings contribution of the Aurubis investment offset the mid-range double-digit million euro loss of the strip steel and plate companies that were themselves unable to counteract the negative impact of dumping prices – above all for Chinese steel imports – and their competition-distorting effect.

Mainly owing to lower average selling prices for most steel products, the Salzgitter Group’s external sales declined to EUR 1,868.8 million (first quarter of 2015: EUR 2,287.9 million). As a consequence of conditions in the European steel market due to massive imports, pre-tax profit dropped to EUR 3.1 million (first quarter of 2015: EUR 51.8 million). This amount includes a contribution of EUR 11.6 million from the Aurubis investment (first quarter of 2015: EUR 3.1 million). Earnings after taxes stood at EUR 1.0 million, bringing earnings per share to EUR -0.00 (first quarter of 2015: EUR 0.58) and return on capital employed to 1.3 % (ROCE: first quarter of 2015: 7.5 %). With an equity ratio of 33.3 %, Salzgitter AG enjoys a sound balance sheet, also after a reduction to only 1.75 % in the actuarial rate applicable to pension provisions. The net financial position declined to EUR 216 million on the back of brisk business activities, as well as a precautionary tax payment, but nevertheless still remains comfortably sufficient.

Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann commented as follows: “The result of the first quarter of 2016 shows that Salzgitter AG can successfully hold its own, also in an extremely adverse environment, thanks to its diversified product portfolio, its sound balance sheet and financial structure, but above all, due to its self-help measures, successfully implemented since 2012. The most recent bookings of large-diameter pipes projects allow us to look to the future with confidence, particularly in the Energy Business Unit. It is currently not possible to predict how sustainable the recovery in the steel market that set in a few weeks back will be. For this reason alone, we will be unceasing in our rigorous implementation of the remaining tasks we need to implement in order to optimize our competitiveness. We are well equipped for this with our robust positioning.”

External sales by business unit (EUR million):


	Q1 2016	(Q1 2015)
Strip Steel	470.2	(524.8)
Plate / Section Steel	184.8	(253.2)
Energy	243.6	(293.9)
Trading	606.3	(851.9)
Technology	316.1	(315.1)
Industrial Participations / Consolidation	47.7	(49.0)
Group	1,868.8	(2,287.9)

Earnings before taxes (EBT) by business unit (EUR million):


	Q1 2016	(Q1 2015)
Strip Steel	-20.0	(16.6)
Plate / Section Steel	0.5	(-0.7)
Energy	5.6	(-4.7)
Trading	-2.2	(11.8)
Technology	6.9	(10.1)
Industrial Participations / Consolidation	12.3	(18.7)
Group	3.1	(51.8)

Outlook

Against the backdrop of the current conditions, particularly in the rolled steel and pipe market, and taking account of further positive effects from the “Salzgitter AG 2015” program, flanked by additional measures for the individual companies, we affirm our guidance and continue to assume the following for the Salzgitter Group in the year 2016:

– sales virtually stable at around EUR 8.6 billion,

– an operating pre-tax result around breakeven – depending on when anti-dumping measures take effect and net of non-recurrent expenses for specific measures aimed at structural improvements within the Group – as well as

– a marginally positive return on capital employed (ROCE).

Additional information can be found in the full press release and the financial report published today ( www.salzgitter-ag.com/en ).

Disclaimer: Some of the statements made in this report possess the character of forecasts or may be interpreted as such. These are made to the best of the Company’s knowledge and judgment, and by their nature are subject to the proviso that no unforeseeable deterioration occurs in the economy or in the specific market situation pertaining to the division companies, but rather that the underlying bases of plans and outlooks prove to be accurate as expected with regards to their scope and timing. Notwithstanding prevailing statutory provisions and capital market law in particular, the Company accepts no obligation to continuously update any forward-looking statements that are made solely in connection with circumstances prevailing on the day of their publication.

Contact:

Markus Heidler

Head of Investor Relations

Salzgitter AG

Eisenhüttenstraße 99

38239 Salzgitter

Phone +49 5341 21-6105

Fax +49 5341 21-2570

E-Mail [email protected]

2016-05-13 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

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Language:	English
Company:	Salzgitter AG
	Eisenhüttenstraße 99
	38239 Salzgitter
	Germany
Phone:	+49 5341 21-01
Fax:	+49 5341 21-2727
E-mail:	[email protected]
Internet:	www.salzgitter-ag.de
ISIN:	DE0006202005
WKN:	620200
Listed:	Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart; Terminbörse EUREX