Salzgitter AG - Earnings Release 2017

News Details

Corporate | 15 May 2017 07:30

Salzgitter Group consolidates uptrend with successful start to the year

DGAP-News: Salzgitter AG / Key word(s): Quarter Results

15.05.2017 / 07:30

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

First quarter of 2017: EUR 77.1 million in earnings before taxes exceeds capital market expectations

Upward revision of profit forecast for the financial year 2017 affirmed

– pre-tax profit of between EUR 125 million and EUR 175 million

– discernibly higher return on capital employed in a year on year comparison

Internal program of measures paying off

The Salzgitter Group was off to a good start to the financial year 2017 and, with its figures for the first three months, recorded the highest quarterly result since 2008. This performance was mainly attributable to the presentable results of the Strip Steel, Trading and Technology business units. Flanked by the effect of the European Union’s trade defense measures, the Group’s internal programs laid the foundation for this development. “Without the consistent implementation of the measures we introduced in 2013 we would not be where we are now. Despite all adversity, we have rigorously pursued our strategy and engineered a return to the profit zone through our own endeavors. We are now seeing the fruit of our labors and, with our “Salzgitter AG 2021″ strategy approved at the end of 2016, have placed special emphasis on growth. In doing so, we will naturally not lose sight of the market-related and political challenges,” explained CEO Prof. Dr.-Ing. Heinz Jörg Fuhrmann in commenting on the visible success.

The Salzgitter Group’s external sales (EUR 2,353.9 million; first quarter of 2016: EUR 1,868.8 million) rose by a quarter in a year-on-year comparison. The Trading, Strip Steel and Plate / Section Steel business units made major contributions to this result, above all due to better average selling prices for steel products, with the other business units also reporting growth. Pre-tax profit advanced to EUR 77.1 million (first quarter of 2016: EUR 3.1 million) and includes EUR -7.6 million from the Aurubis investment (first quarter of 2016: EUR 11.6 million) that was negative due to the valuation of a bond exchangeable into shares. Earnings after taxes stood at EUR 48.7 million (first quarter of 2016: 1.0 million), which brings earnings per share to EUR 0.87 (first quarter of 2016: EUR – 0.00), while return on capital employed (ROCE) came in at 10.3 % (first quarter of 2016: 1.4 %). With a net financial position of EUR 155.7 million and an equity ratio of 33 %, the company has a sound balance sheet and a comfortable financial basis.

External sales by business unit (EUR million):


	Q1 2017	Q1 2016
Strip Steel	548.9	470.2
Plate / Section Steel	265.5	184.8
Mannesmann	289.3	243.6
Trading	861.8	606.3
Technology	335.1	316.1
Industrial Participations / Consolidation	53.4	47.7
Group	2,353.9	1,868.8

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


	Q1 2017	Q1 2016
Strip Steel	53.7	-20.0
Plate / Section Steel	9.4	0.5
Mannesmann	-3.0	5.6
Trading	21.6	-2.2
Technology	13.1	6.9
Industrial Participations / Consolidation	-17.8	12.3
Group	77.1	3.1

Outlook

Following a good opening quarter, Salzgitter AG lifted its profit forecast on May 2, 2017, which we affirm below. We anticipate:

– an increase in sales to around EUR 9 billion,

– a pre-tax profit of between EUR 125 million and EUR 175 million, as well as

– a return on capital employed that is discernibly higher year on year.

The complete financial statements for the first quarter 2017 can be accessed at https://www.salzgitter-ag.com/en/investor-relations/news-and-publications.html

The forward-looking statements on the individual business units assume the absence of renewed recessionary developments. Instead, we anticipate that the economies of our fiercely contested main markets will continue to firm up in the current financial year. As in recent years, please note that opportunities and risks from currently unforeseeable trends in selling prices, input material prices and capacity level developments, as well as exchange rate fluctuations, may considerably affect performance in the course of the financial year 2017. The resulting fluctuation in the consolidated pre-tax result may be within a considerable range, either to the positive or to the negative. The dimensions of this range become clear if one considers that, with around 12 million tons p.a. of steel products sold by the Strip Steel, Plate / Section Steel, Mannesmann and Trading business units, an average EUR 25 change in the margin per ton is sufficient to cause a variation in the annual result of more than EUR 300 million. Moreover, the accuracy of the company’s planning is restricted by the volatile cost of raw materials and shorter contractual durations, on the procurement as well as on the sales side.

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]

15.05.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

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

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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, Tradegate Exchange