Salzgitter Ag · XETR:SZG
Salzgitter — FY2021 Earnings Presentation
36 slides from Salzgitter's earnings presentation, Mar 22, 2022
Slide 1: Salzgitter Group Analyst Conference
SALZGITTER GROUP ANALYST CONFERENCE March 22, 2022
Slide 2: Highlights Financial Year 2021 / Guidance
HIGHLIGHTS FINANCIAL YEAR 2021 / GUIDANCE / Best pre-tax profit in 13 years! / Strategy review results in ambitious developmental and earnings targets / Focus on sustainability – frontrunner of low CO2 steel production / Partnerships secure success of the transformation / Prudent preparation for uph
Slide 3: Agenda
AGENDA 01 Strategy 02 E c o n o m i c D e v e l o p m en t a n d F i n a n c i als © 2022 Salzgitter AG / 3
Slide 4: Occupational Safety: Groupwide Goal Is Zero Accidents
01 OCCUPATIONAL SAFETY: GROUPWIDE GOAL IS ZERO ACCIDENTS Strategy ACCIDENT INCIDENCE RATE (number of accidents with more than one day off work / number of employees ) 20 18.0 17.8 18 16 13.7 13.6 14 12 11.1 10 8 6 4 2 0 2017 2018 2019 2020 2021 Domestic AI rate We are on the right track – but there
Slide 5: Strategy Review
01 STRATEGY REVIEW Strategy FOUR MAIN CATEGORIES STRATEGY PORTFOLIO EFFICIENCY / Who and what do / What is the right / How do we we want to be in business generate 2025/2030? portfolio for our additional strategy? efficiency gains across the entire value chain? ENABLERS / What management structures
Slide 6: Strategy Salzgitter AG 2030
01 STRATEGY „SALZGITTER AG 2030“ Strategy Launch of the strategy ⟩ Scope: 44,100 persons on February 2, 2022 ⟩ Video views: 23,400 persons Portfolio ⟩ Portfolio review initiated Program 150+ ⟩ Preparation under way Organization ⟩ Group organization adapted and streamlined Strategy scorecard ⟩ Financ
Slide 7: Strategy Review: Our Blueprint
01 STRATEGY REVIEW: OUR BLUEPRINT Strategy STRATEGY / Who and what do We aspire to be Europe’s strongest steel and technology group we want to be in We are putting circularity at the center of our activities 2025/2030? We are a frontrunner in low CO2 steel production We are growing in business areas
Slide 8: Vision and Mission Are Defined
01 VISION AND MISSION ARE DEFINED Strategy PIONEERING FOR PARTNERING FOR CIRCULAR SOLUTIONS TRANSFORMATION We are the market leader for Together we will resolutely circular economy solutions in chart new courses, transform global industrial value chains industry, and create sustainable with our inno
Slide 9: Ambition: To Become Market Leader in Circular Economy
01 AMBITION: TO BECOME MARKET LEADER IN CIRCULAR ECONOMY Strategy KEY POINTS DRI1 plant on the basis of H2 and green electricity / Circularity for us means keeping resources in use for as long as possible, thereby minimizing the feeding of Slags for reuse in Wind farms processes additional resources
Slide 10: Diversification and Profitability
01 DIVERSIFICATION AND PROFITABILITY Strategy PORTFOLIO / What is the right CIRCULAR ECONOMY business / Expansion of business in closed-loop flows of materials (Circular Economy) portfolio for our and securing of choke points strategy? / Complete transformation to SALCOS® by 2033 at the latest / Ali
Slide 11: Profitability Improvement Program Initiated
01 PROFITABILITY IMPROVEMENT PROGRAM INITIATED Strategy EFFICIENCY / How do we PROFITABILITY generate / Differentiation and margin expansion through process technology and additional innovation efficiency gains across the entire / Significant improvement of productivity and cost-effectiveness, e.g.
Slide 12: Distribution of Cost and Earnings Effects
01 DISTRIBUTION OF COST AND EARNINGS EFFECTS Strategy ~5% Industrial Participations ~15% Technology ~15% € 150 – 200 million ~45% from 2026 onwards Steel Production Trading ~20% Steel Processing The main focuses of the profit improvement program are the Steel Production and Steel Processing business
Slide 13: Foundations for Implementing the Strategy Laid
01 FOUNDATIONS FOR IMPLEMENTING THE STRATEGY LAID Strategy ENABLERS New Group structure adopted / Management structures and Portfolio review initiated instruments, Creation of a dedicated ESG department at the holding level commenced organization of the Group, New package of measures for profit impr
Slide 14: New Group Structure as of April 1, 2022
01 NEW GROUP STRUCTURE AS OF APRIL 1, 2022 Strategy Salzgitter G r o u p Salzgitter Mannesmann / Salzgitter Klöckner-Werke Steel Production Steel Processing Trading Technology Industrial Participations / Business Unit Business Unit Business Unit Business Unit Consolidation Salzgitter Flachstahl Mann
Slide 15: Strategy of the Business Units
01 STRATEGY OF THE BUSINESS UNITS Strategy Steel Production Steel Processing /Complete implementation of SALCOS® by 2033 at the latest /Tubes: expand product portfolio in green markets CIRCULAR ECONOMY e.g. hydrogen, CCS, etc. (with exception of large-diameter pipes) /Expand market position in scrap
Slide 16: Strategy of the Business Units
01 STRATEGY OF THE BUSINESS UNITS Strategy Trading Technology / Trading green steel / Growth in resource-saving and CO2-reduced closed production chains CIRCULAR ECONOMY Expansion of closed loops with customers (recycling and reusables) Continuous profitability improvement driven by measures: incl.
Slide 17: SALCOS: Complete Realization Planned by 2033
01 SALCOS®: COMPLETE REALIZATION PLANNED BY 2033 Strategy KEY POINTS STATUS QUO STAGE I STAGE II STAGE III 380 kV line / SALCOS®: investment eligibility Infrastructure envisioned by summer 2022 Expansion H2 network / Green steel as core of our business model at the Salzgitter location Electrolyzer 1
Slide 18: SALCOS: Controlling Choke Points at an Early Stage
01 SALCOS ®: CONTROLLING CHOKE POINTS AT AN EARLY STAGE Strategy CHOKE POINTS SIMPLIFIED SALCOS® VALUE CHAIN (Critical choke points in the value chain of sustainable steel production) Raw materials Iron and steel production Rolling and downstream processing Sales 1. Access to sources for high- 01 01
Slide 19: SALCOS: Transformation with Partners
01 SALCOS ®: TRANSFORMATION WITH PARTNERS Strategy January 25, 2022 February 1, 2022 February 21, 2022 March 8, 2022 March 21, 2022 ⁄ Establish closed value ⁄ Agreement on serial ⁄ Supply of SALCOS® with ⁄ Agreement of the ⁄ Delivery of low-CO2 steel chains supply green hydrogen planning, design, as
Slide 20: Strategy Scorecard: Making Objectives Measurable
01 STRATEGY SCORECARD: MAKING OBJECTIVES MEASURABLE Strategy Target Target Strategic direction KPI Unit 2025 2030 % > 25 > 50 Expansion of scrap recycling mt p. a. 2.5 3 CO2 reduction (Scope 1 & 2) % CO2 > -30* > -50 Circular Economy Complete alignment to low CO2 steel production - SALCOS® Stage 1 S
Slide 21: Strategy Scorecard: Results Distribution
01 STRATEGY SCORECARD: RESULTS DISTRIBUTION Strategy ~10% Industrial Participations ~15% Technology > 10% EBITDA margin ~45% Steel Production ~10% Trading ~20% Steel Processing Perpetuating the results of exceptional years envisaged © 2022 Salzgitter AG / 21
Slide 22: Agenda
AGENDA 0 1 S t r a t e gy 02 Economic Development and Financials © 2022 Salzgitter AG / 22
Slide 23: Key Data FY 2021: Strong Development of Earnings
01 KEY DATA FY 2021: STRONG DEVELOPMENT OF EARNINGS Economic Development and Financials FY 2021 FY 2020 Δ Q4 2021 Q3 2021 Q2 2021 Q1 2021 Crude steel production kt 6,748.8 6,033.0 715.8 1,677.6 1,693.7 1,733.1 1,644.5 External sales1 € million 9,767.4 7,090.8 2,676.6 2,765.7 2,566.2 2,341.4 2,094.1
Slide 24: Income Statement
02 INCOME STATEMENT Economic Development and Financials Income Statement (€ million) FY 2021 FY 2020 Δ Sales 9,767.4 7,090.8 2,676.6 Increase/decrease in finished goods and work in process/other own work 522.9 -158.1 681.1 capitalized 10,290.4 6,932.7 3,357.6 Other operating income 548.5 345.3 203.2
Slide 25: Balance Sheet
02 BALANCE SHEET Economic Development and Financials Assets (€ million) 12/31/2021 12/31/2020 Δ Non-current assets 4,250.1 4,244.5 5.6 Intangible assets, property, plant and equipment 2,267.8 2,423.6 -155.7 Investment property 79.5 81.5 -1.9 Financial assets 51.4 54.6 -3.2 Investments accounted for
Slide 26: Balance Sheet
02 BALANCE SHEET Economic Development and Financials Equity and liabilities (€ million) 12/31/2021 12/31/2020 Δ Equity 3,357.0 2,678.9 678.1 Subscribed capital 161.6 161.6 0.0 Capital reserve 257.0 257.0 0.0 Retained earnings 3,252.3 2,594.5 657.8 Other reserves 0.0 26.4 -26.4 Unappropriated retaine
Slide 27: Cash Flow Statement: Liquid Funds Increase by €120 M
02 CASH FLOW STATEMENT: LIQUID FUNDS INCREASE BY € 120 M Economic Development and Financials CASH FLOW (€ million) DEVELOPMENTS / Increase of liquid funds by € 120.4 million driven by significant improvement of operating cashflow / Working Capital with marked increase: Trade receivables Δ 526.2 Inve
Slide 28: Dividend: Highest Dividend Proposal Since 2008
02 DIVIDEND: HIGHEST DIVIDEND PROPOSAL SINCE 2008 Economic Development and Financials Dividende (€/Aktie) 0.80 0.75 0.70 0.60 0.55 0.50 0.45 0.45 0.40 0.32 0.30 0.30 0.25 0.25 0.20 0.20 0.20 0.10 0.00 0.00 0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021e © 2022 Salzgitter AG / 28
Slide 29: War in Ukraine: General Classification
02 WAR IN UKRAINE: GENERAL CLASSIFICATION Economic Development and Financials PEOPLE INDUSTRY / War begun on February 24, 2022 / Production essentially halted / Approx. 3 million refugees* / Steel industry / Broad wave of support – also within Salzgitter AG / Supplies industry, especially auto / Ukr
Slide 30: Immediate Impact on Salzgitter AG
02 IMMEDIATE IMPACT ON SALZGITTER AG Economic Development and Financials PERSONNEL AND EMPLOYEES SHIPMENTS AND TRADING / Ukraine: All 17 employees of KHS are well and still in the country / Supply constraints in the automotive sector (cable harnesses, wiring systems) / They are ensuring bottling wat
Slide 31: Indirect Impact on Salzgitter AG
02 INDIRECT IMPACT ON SALZGITTER AG Economic Development and Financials RISKS FROM BUSINESS OPERATIONS IN UA/RUS OPPORTUNITIES IN THE CRISIS / External sales of Salzgitter AG companies < 0,7 % / Rising steel prices, especially in the heavy plate market / Main exposure for Trading and Technology busi
Slide 32: Sharply Rising Raw Materials and Steel Prices
02 SHARPLY RISING RAW MATERIALS AND STEEL PRICES Economic Development and Financials RAW MATERIAL PRICES (US$/t) SPOT PRICES NORTHERN EUROPE (€/t) IRON ORE COKING COAL (62% Fe CFR C h i n a , U S $ / d m t ) (FOB Australia, U S $ / t ) 250 750 1,700 225 650 1,500 200 1,300 550 175 450 1,100 150 350
Slide 33: Guidance
02 GUIDANCE Economic Development and Financials In view of the decidedly encouraging start to the year and the sustained, strong profit trend, above all in the strip steel business, we anticipate the following for the Salzgitter Group in the financial year 2022: / an increase in sales to just under
Slide 34: Contact
CONTACT MARKUS HEIDLER Head of Investor Relations / Head of Corporate Communication heidler.m@salzgitter-ag.de Telephone : +49 5341 - 21-6105 VERENA GROTE JAN MATHIAS LESEMANN Senior Investor Relations Manager Senior Investor Relations Manager grote.v@salzgitter-ag.de lesemann.j@salzgitter-ag.de Tel
Slide 35: Disclaimer
DISCLAIMER Salzgitter AG LEGAL NOTE COPYRIGHTS To the extent that our Internet pages contain statements oriented towards or related to This data file and the data contained on these pages (including, among others, texts, the future, such statements are based on our current state of knowledge and the
Slide 36: Salzgitter AG
SALZGITTERAG People, Steel and Technology