In the first quarter of 2023 that was characterized by multifaceted political and economic uncertainties, the Salzgitter Group achieved an encouraging start to the current financial year by delivering € 290 million in earnings before interest, taxes, depreciation and amortization and a pretax profit of € 184 million. The business units of Steel Production, Steel Processing and Technology in particular generated pleasing results. Despite the high capex level, first and foremost from implementing the SALCOS® – Salzgitter Low CO2 Steelmaking transformation program, the net financial position as well as the equity ratio improved year on year, which underscores Salzgitter AG’s continuing very sound balance sheet and financial basis.
The Salzgitter Group’s external sales declined by 11 % to € 3.0 billion (Q1 2022: € 3.3 billion) due to the downturn in shipment volumes and the lower average selling prices of many rolled steel products compared with the year-earlier period. Nevertheless, a presentable result in the form of EBITDA of € 290 million (Q1 2022: € 548.1 million) and earnings before taxes of € 183.7 million (Q1 2022: € 465.3 million) were achieved. The result includes a contribution of € 29.3 million from Aurubis AG (Q1 2022: € 61.9 million), an investment included at equity (IFRS accounting). The aftertax result came in at € 140.5 million (Q1 2022: € 368.8 million), which brings basic earnings per share to € 2.57 (Q1 2022: € 6.80). The return on capital employed (ROCE) stood at 12.6 % (Q1 2022: 35.2 %). The equity ratio posts an exceptionally sound 44.4 % (Q1 2022: 37.3 %). The net financial position grew by more than € 100 million compared with the year-earlier figure (€ –498.1 million; Q1 2022: € –619.7 million).
As Gunnar Groebler, Salzgitter AG’s Chief Executive Officer, comments:
“The encouraging start to the financial year 2023 has delivered proof of the effectiveness of our ‘Salzgitter AG 2030’ corporate strategy. We have also been given this feedback by our partners, whose group we have been able to expand in recent months, particularly in the key areas of energy and hydrogen supplies. Following the conclusion of detailed engineering, and negotiations with plant engineering companies having reached an advanced stage, the final investment budget has now been affirmed for the first development stage of SALCOS®: Over the period up until the end of 2026, we will be investing approximately € 2.3 billion in the transformation of primary steel production. Through the funding approval awarded on April 18, 2023, SALCOS® will be supported in its first stage of development with funds of around € 700 million from the German government and € 300 million from the federal state. Together with the funds of over one billion euros released by the company itself, the first development stage of SALCOS® has been secured. Construction work is progressing at an impressive speed. The dimensions of the task become clear if one considers that we will be investing the impressive amount of more than € 2 million a day in the transformation over the period up until 2026. We can therefore take pride in claiming: It’s all going on here!”
CFO Burkhard Becker added:
“The reduction in working capital in the mid-triple digit million euro range envisaged for 2023 will make a definitive contribution to financing net expenditure for SALCOS®. Alongside SALCOS®, we also forged ahead with our active portfolio management in the first quarter. The acquisition of Must-Metalle-Container-Recycling GmbH contributes to our scrap strategy, while the sale of the Berg Pipe Group took place in line with the best-owner principle. These two transactions are a blueprint for further activities in this area. A very successful start to the current financial year should not disguise the fact that we are operating in a very volatile environment, in political as well as in economic terms. We have therefore not forgotten to do our internal homework. The profit improvement potential identified under our “Performance 2026” program of measures has meanwhile reached almost € 200 million.
