Salzgitter Ag · XETR:SZG

Salzgitter — Non-Deal Roadshow (October 2018)

48 slides from Salzgitter's roadshow presentation, October 2018

  1. Slide 1: Presentation of the Group

    english Presentation of the Group SZAG Investor Relations

  2. Slide 2: Agenda

    1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english

  3. Slide 3: Salzgitter Group History

    Salzgitter 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 - 1

  4. Slide 4: Global Presence

    Salzgitter Group Global Presence Strip Steel Mannesmann Trading Technology Plate / Section Steel SZAG Investor Relations Crude steel production 2017: 7.0 million tons; trading volume: 4.7 million tons; Among the top 3 producers of beverage filling and packaging machinery english 3

  5. Slide 5: Group structure and key data FY 2017

    Salzgitter Group Group structure and key data FY 2017 Salzgitter AG Group External Sales cons.: € 9.0 billion Employees: 23,139 EBT: € 238 million Plate / Strip Steel Mannesmann Trading Technology Section Steel  External Sales:  External Sales:  External Sales:  External Sales:  External Sales:

  6. Slide 6: External sales 2017 by customer industries

    Salzgitter Group External sales 2017 by customer industries 13% 15% Other Vehicle construction 13% 12% Food and beverage industry Construction industry 4% 4% Mechanical engineering White goods, electrical equipment 5% 5% Re-rollers Energy sector and utilities 6% 23% Tubes producers Traders, Steel-Se

  7. Slide 7: External sales 2017 by regions

    Salzgitter Group External sales 2017 by regions 6% Other 7% Asia 12% Americas 48% Germany 4% Other Europe 23% Other EU SZAG Investor Relations Share of ex-Germany sales by consignee 52% english Sales by consignee (only from entities within the group of consolidated companies of Salzgitter Group, exc

  8. Slide 8: Investments and Depreciation / Amortization

    Salzgitter Group Salzgitter Group Investments and Depreciation / Amortization 185 43 15 49 411 359 345 339 340 352 342 342 270 287 2 2013 2014 2015 2016 2017 Investments1 Scheduled depreciation Unscheduled depreciation SZAG Investor Relations Focus on expansion investments Outlook 2018 / 2019: € 70-

  9. Slide 9: Dividend

    Salzgitter Group Dividend € Financial year 2017 € million Dividend per share: 0.45 € 0.50 400 0.40 0.45 300 238 0.30 200 0.30 0.20 0.25 0.20 0.20 53 100 0.10 -15 4 0 0.00 1 1 2013 2014 2015 2016 2017 -100 -0.10 -200 -0.20 -0.30 -300 -0.40 -400 -0.50 -500 -483 SZAG Investor Relations Dividend increas

  10. Slide 10: Shareholder structure and share turnover

    Salzgitter Group Shareholder structure and share turnover Shareholder structure Daily turnover in thousand shares 600 Other shareholders Salzgitter AG 10.0% 19.6% Inst. shareholders – other Regions 400 0.7% State of Inst. shareholders 5.8% 26.5% Lower Saxony – other Europe 2.8% Inst. shareholders 20

  11. Slide 11: Agenda

    1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english

  12. Slide 12: Key Data Overview: Very pleasing first half of 2018

    Key Data / Market Situation Overview Very pleasing first half of 2018 Market  Robust strip steel market  Framework conditions of other product areas developed positively for the most part  High uncertainty from trade policy measures impair planning capability and international projects  Volatile

  13. Slide 13: Key data per 2018/06/30

    Key Data / Market Situation Key data per 2018/06/30 Crude steel production [kt] Consolidated sales [€ million] EBT [€ million] 3,528 4,616 4,617 3,415 199 +114 +1 +99 (+3%) (+0%) 100 (+98%) H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 ROCE [%] Net financial position [€ million] Core workforce [pe

  14. Slide 14: Environment: EU industrial production

    Key Data / Market Situation Environment I Industrial production in selected countries of the EU (Jan. 2007 = 100) 120 110 100 90 80 70 60 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Germany GB France Italy Spain SZAG Investor Relations The trend of the previous years continues: Sligh

  15. Slide 15: Raw materials

    Key Data / Market Situation Raw materials Iron ore Coking coal Steel scrap (62% Fe CFR China, US$/dmt) (FOB Australia, US$/t) (grade 2/8, €/t) 100 350 300 90 300 280 80 250 260 70 200 240 60 150 220 50 100 200 SZAG Investor Relations Raw materials markets marked by high volatility english 14

  16. Slide 16: Update international steel trade

    Key Data / Market Situation Update international steel trade International measures affecting the European Union Reaction of the European Union  USA: Protective tariffs against numerous states cover  June 1, 2018: WTO complaint filed against the Section almost all product groups 232 tariffs of the

  17. Slide 17: Steel prices

    Key Data / Market Situation Steel prices Spot prices Northern Europe Hot-rolled coil prices international (€/t) 900 (€/t) 900 800 800 700 700 10/18 10/18 600 600 500 500 400 400 300 300 Jan 17 Jul 17 Jan 18 Jul 18 Jan 17 Jul 17 Jan 18 Jul 18 HRC EXW Ruhr Plate EXW Ruhr Medium sections Northern Europ

  18. Slide 18: Agenda

    1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english

  19. Slide 19: Business Units: Strip Steel

    Business Units Strip Steel Capabilities External sales by customer industry 2017  Integrated steel works with three blast 2% 4% furnaces Mechanical engineering Other  Approx. 4.7 mt/year crude steel capacity 13% 37%  Modern production plants Re-rollers Vehicle construction 2%  High processing co

  20. Slide 20: Strip Steel H1 results

    Business Units Strip Steel Order intake Consolidated sales Earnings before taxes 3,000 1,400 120 1,200 1,243 2,500 2,383 1,102 110 2,305 1,000 109.7 2,000 € million € million 800 kt 1,500 100 600 1,000 94.2 400 90 500 200 0 0 80 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 SZAG Investor Relations

  21. Slide 21: Business Units: Plate / Section Steel

    Business Units Plate / Section Steel Capabilities External sales by customer industry 2017  Section steel: 2% 15% − Top-modern mini mill with two electric Vehicle construction arc furnaces Other 11% − Annual crude steel capacity 1 mt 2% Construction industry Mechanical engineering 5% − Two rolling

  22. Slide 22: Plate / Section Steel H1 results

    Business Units Plate / Section Steel Order intake Consolidated sales Earnings before taxes 1,400 600 25 555 1,200 538 500 22.0 1,165 20 1,100 1,000 400 15 € million € million 800 kt 300 600 10 200 400 5 5.7 100 200 0 0 0 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 SZAG Investor Relations PTG was

  23. Slide 23: Business Units: Mannesmann

    Business Units Mannesmann Capabilities External sales by customer industry 2017  Own crude steel supply via 30% 25% participation in Hüttenwerke Krupp 40% Vehicle construction Mannesmann GmbH Other  Plant for the production of semis for the 2% seamless tubes business Construction industry Core com

  24. Slide 24: Mannesmann H1 results

    Business Units Mannesmann Order intake* Consolidated sales* Earnings before taxes 900 600 14 569 563 800 12 791 12.3 767 500 700 10 600 400 8 € million € million € million 500 6 300 400 4 300 200 2 200 0 100 100 -2 -2.7 0 0 -4 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 * excluding EUROPIPE-Grou

  25. Slide 25: Business Units: Trading

    Business Units Trading Capabilities External sales by customer industry 2017  103 sites in 43 countries 5% 13% Mechanical engineering Other  Own distribution network for steel products with warehousing sites in Europe 4% 4% Re-rollers Vehicle construction  Processing group specialized on heavy 3%

  26. Slide 26: Trading H1 results

    Business Units Trading Shipments Consolidated sales Earnings before taxes 3,000 1,800 40 1,600 1,676 2,500 1,549 34.6 2,500 1,400 30 2,247 2,000 1,200 25.0 € million € million 1,000 kt 1,500 20 800 1,000 600 10 400 500 200 0 0 0 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 SZAG Investor Relations

  27. Slide 27: Business Units: Technology

    Business Units Technology Capabilities External sales by customer industry 2017  17 Production plants worldwide 6% 3%  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

  28. Slide 28: Technology H1 results

    Business Units Technology Order intake Consolidated sales Earnings before taxes 700 700 25 600 633 600 630 614 610 20 20.5 500 500 15 € million € million € million 400 400 13.6 300 300 10 200 200 5 100 100 0 0 0 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 SZAG Investor Relations Stable earnings

  29. Slide 29: Agenda

    1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english

  30. Slide 30: Programs of measures I – what we have achieved so far

    Strategy Programs of measures I – what we have achieved so far Restructuring  Extensive optimization measures in Salzgitter AG 2015 / FitStructure numerous Group companies Growth  Product range development RH vacuum plant –  Capacity expansion of the secondary metallurgy Salzgitter Flachstahl  S

  31. Slide 31: Programs of measures II – achieved over the course of the year

    Strategy Programs of measures II – what we have achieved over the course of the year Reconciliation of earnings H1 2018 vs. H1 2017 € million -5 68 199 36 100 Group EBT H1 2017 Market influence Measures Other Group EBT H1 2018 SZAG Investor Relations Earnings improvement to a large extend result of

  32. Slide 32: Programs of measures III – what we intend in the coming years

    Strategy Programs of measures III – What we intend in the coming years Restructuring – 2018-2021 additional € 140 million p.a. earnings improvement potential FitStructure  Focus on Mannesmann and Technology business units Growth – around € 240 million p.a. additive earnings contribution  Growth in

  33. Slide 33: Programs of measures IV

    Strategy Programs of measures IV FitStructure SZAG SZAG 2021 Growth Programs € million earnings improvement potential € million additional profit contribution 250 140 120 ~30 200 100 ~90 150 80 ~50 60 ~50 100 40 ~50 50 20 ~60 ~40 0 0 2018 2019 2020 ff. 2018 2019 2020 2021 SZAG Investor Relations All

  34. Slide 34: Group strategy SZAG 2021: Acquisition of SOTEP

    Group strategy SZAG 2021 May 22, 2018: Acquisition of the French stainless steel tube producer SOTEP and Key data of the acquisition Landing gear Airbus A320 ceo/neo Founding year  1980 Headquarters  Issoudun, France Sales (2017)  > € 10 million SAM 146 engine Sukhoi Superjet 100 Employees  65 

  35. Slide 35: Group strategy SZAG 2021: e-AUCTION platform

    Group strategy SZAG 2021 May 23, 2018: Salzgitter Group launches bidding platform e-AUCTION SZAG Investor Relations Steel trading takes another step in the direction of digitalization english 34

  36. Slide 36: Group strategy SZAG 2021: Offer for ArcelorMittal facilities

    Group strategy SZAG 2021 July 16, 2018: Insider information pursuant to Article 17 MAR Today, the Executive Board of Salzgitter AG has decided to submit an offer to acquire production facilities in Dudelange (Luxembourg) and Liege (Belgium) in the context of the divestment process currently conducte

  37. Slide 37: Agenda

    1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english

  38. Slide 38: Best half-year result since 2008

    Financials Overview Best half-year result since 2008  Profit before taxes almost doubled compared to the previous year  „FitStructure“ and „SZAG 2021“ contribute nearly € 70 million additional profit improvement potential realized for the first time  ROCE has reached 12.8 %  Earnings per share c

  39. Slide 39: Group Result

    Financials Group Result € million 500 400 169.4 300 38.6 200 406.6 63,3 237.2 100 198.6 135.4 0 EBITDA Depr./Amort. EBIT Net Interest EBT Taxes EAT SZAG Investor Relations Depreciation and amortization around the previous year’s level and similarly high interest income Improvement in EBT is reflecte

  40. Slide 40: Income statement

    Financials Income statement Income Statement (€ million) H1 2018 H1 2017 Sales 4,617.1 4,616.2 Increase/decrease in finished goods and work in process/other own work capitalized 29.7 37.9 4,646.8 4,654.1 Other operating income 147.2 145.2 Cost of materials 3,013.9 3,086.9 Personnel expenses 862.3 84

  41. Slide 41: Consolidated balance sheet – assets

    Financials Consolidated balance sheet Assets (€ million) 2018/06/30 2017/12/31 Δ Non-current assets 3,621.9 3,565.9 56.0 Intangible assets, property, plant and equipment 2,393.5 2,433.3 -39.8 Investment property 21.4 21.5 -0.1 Financial assets 94.9 84.1 10.8 Investments accounted for using the equit

  42. Slide 42: Consolidated balance sheet – equity and liabilities

    Financials Consolidated balance sheet Equity and liabilities (€ million) 2018/06/30 2017/12/31 Δ Equity 3,075.9 2,989.7 86.2 Subscribed capital 161.6 161.6 0.0 Capital reserve 257.0 257.0 0.0 Retained earnings 2,973.6 2,854.6 119.0 Other reserves 42.7 51.1 -8.4 Unappropriated retained earnings 2.8 2

  43. Slide 43: Bonds

    Financials Bonds Convertible Bond  Volume: € 167,900,000  Coupon: 0.0 % p.a.  Issue date: June 5, 2015  Maturity date: June 5, 2022  Denomination: € 100,000  Conversion ratio: 2,125.4708 Shares per Bond1  Conversion price: € 47.04841  Underlying shares: 3,568,6651  Conversion right period:

  44. Slide 44: Balance Sheet – Figures

    Financials Balance Sheet – Figures Equity ratio Net financial position (€ million) H1 450 403 415 381 2018 36% 400 350 302 2017 36% 300 240 2016 34% 250 200 2015 35% 150 100 2014 34% 50 0 Pension provisions (€ million) 2014 2015 2016 2017 H1 3,000 2.25% 2.50% 2018 1.75% 2.00% 1.50% 1.50% 2,500  Equ

  45. Slide 45: Cash flow statement

    Financials Cash flow statement € million 1,000 800 170.1 -276.4 600 -45.7 1.1 400 679.4 528.6 200 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 peri

  46. Slide 46: Business Units – Forecast 2018

    Financials Business Units – Forecast 2018 Strip Steel Plate / Section Steel Mannesmann Trading Technology  market environment remains  Plate: market environment  Large-diameter pipe mills:  other areas will not be able  KHS Group: continuing fierce sensitive still characterized by high still te

  47. Slide 47: Salzgitter Group – Guidance from September 19, 18

    Financials Salzgitter Group – Guidance from September 19, 2018 We now anticipate:  a marginal increase in sales to above € 9 billion,  a pre-tax profit of between € 300 million and € 350 million and  a marginally higher return on capital employed of between 9% and 11% compared with the previous y

  48. Slide 48: Disclaimer – Legal Note

    Disclaimer 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 fo

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