Slide 1: Analyst Conference Financial Year 2019
Analyst Conference Financial Year 2019 Prof. Dr.-Ing. Heinz Jörg Fuhrmann, Chairman of the Executive Board Burkhard Becker, Chief Financial Officer SZAG Investor Relations Salzgitter, March 17, 2020 english
Slide 2: Agenda
Prof. Dr.-Ing. Heinz Jörg Fuhrmann 1 Key Data / Market Situation 2 Business Units 3 Strategy SZAG Investor Relations Burkhard Becker 4 Annual Accounts Financial Year 2019 5 Guidance english
Slide 3: Key Data / Market Situation: Overview
Key Data / Market Situation Overview Market Market environment characterized by political uncertainty, compounded by multiple trade conflicts and economic headwind Gradual decline in rolled steel selling prices over the course of the year, accompanied by a temporary sharp increase in the cost of
Slide 4: Key data per 2019/12/31
Key Data / Market Situation Key data per 2019/12/31 FY 2019 FY 2018 Δ Q4 2019 Q3 2019 Q2 2019 Q1 2019 Crude steel production kt 6,613.4 7,039.4 -426.0 1,553.3 1,648.0 1,672.3 1,739.8 External sales1 € million 8,547.3 9,278.2 -730.8 1,910.0 2,111.1 2,232.4 2,293.8 Earnings before tax € million -253.3
Slide 5: Order intake of steel consumers
Key Data / Market Situation Order intake of steel consumers Order intake of selected branches of the German industrial sector (Jan. 2018 = 100) 130 120 110 100 90 80 Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Construction Mechanical engineering Metal processing Automotive SZAG Investor
Slide 6: Raw materials and steel prices
Key Data / Market Situation Raw materials and steel prices Raw Materials Hot rolled coil & Heavy Plate Iron ore Coking Coal 700 (62% Fe CFR China, US$/dmt) (FOB Australia, US$/t) 140 300 (€/t) 91 158 130 Ø 614 521 120 250 600 110 Ø 560 Ø 207 Ø 556 100 Ø 93 200 90 Ø 177 80 500 150 70 Ø 69 Ø 474 60 50
Slide 7: EU steel imports
Key Data / Market Situation EU steel imports Import situation EU (in 1.000t/month) Average 2010-2019 2,500 Imports marked a record level in 2018 2,000 Declining demand in the EU steel market is only reflected in 1,500 the imports from autumn 2019 onwards 1,000 Initiated review of the Safeguard
Slide 8: Agenda
Prof. Dr.-Ing. Heinz Jörg Fuhrmann 1 Key Data / Market Situation 2 Business Units 3 Strategy SZAG Investor Relations Burkhard Becker 4 Annual Accounts Financial Year 2019 5 Guidance english
Slide 9: Business Units: Strip Steel
Business Units Strip Steel Order intake Consolidated sales Earnings before taxes Special effects: 5,000 2,500 250 2018: - 2019: € -119.3 m 4,500 2,341 4,518 4,318 2,209 200 4,000 2,000 205.8 3,500 150 3,000 1,500 € million € million kt 2,500 100 2,000 1,000 50 1,500 1,000 500 0 500 -42.8 0 0 -50 201
Slide 10: Business Units: Plate / Section Steel
Business Units Plate / Section Steel Order intake Consolidated sales Earnings before taxes Special effects: 2,500 1,200 50 2018: - 2019: € -64.9 m 2,189 1,000 24.8 2,000 1,026 0 1,873 800 805 1,500 € million € million kt 600 -50 1,000 400 -124.0 -100 500 200 0 0 -150 2018 2019 2018 2019 2018 2019 Ea
Slide 11: Business Units: Mannesmann
Business Units Mannesmann Order intake* Consolidated sales* Earnings before taxes Special effects: 1,600 1,200 20 2018: € -24.0 m 2019: € -54.1 m 1,400 1,464 1,119 1,120 10 1,384 1,000 1,200 0 800 -5.4 1,000 € million € million € million -10 800 600 -20 600 400 -30 400 200 -41.5 200 -40 0 0 -50 2018
Slide 12: Business Units: Trading
Business Units Trading Shipments Consolidated sales Earnings before taxes Special effects: 5,000 3,500 60 2018: - 2019: € -5.4 m 4,500 3,268 50 4,478 3,000 50.5 4,000 40 2,846 3,796 2,500 3,500 30 3,000 20 € million € million 2,000 kt 2,500 10 1,500 2,000 0 1,500 1,000 -10 1,000 -20 500 500 -30 -31,
Slide 13: Business Units: Technology
Business Units Technology Order intake Consolidated sales Earnings before taxes Special effects: 1,600 1,600 50 2018: - 2019: € -3.3 m 1,400 1,400 1,374 1,390 43.1 1,334 1,338 40 1,200 1,200 1,000 1,000 32.7 30 € million € million € million 800 800 20 600 600 400 400 10 200 200 0 0 0 2018 2019 2018
Slide 14: Industrial Participations / Consolidation
Business Units Industrial Participations / Consolidation Consolidated sales Earnings before taxes Special effects: 200 120 2018: € -38.8 m 2019: € -148.9 m 180 186 100 178 160 80 Contribution Aurubis investment: 140 60 2018: € 44.0 m 120 2019: € 99.5 m € million € million 40 SZAG shareholding in
Slide 15: Agenda
Prof. Dr.-Ing. Heinz Jörg Fuhrmann 1 Key Data / Market Situation 2 Business Units 3 Strategy SZAG Investor Relations Burkhard Becker 4 Annual Accounts Financial Year 2019 5 Guidance english
Slide 16: Update programs of measures
Strategy Update programs of measures FitStructure 2.0 (incl. remaining effects of FitStructure) SZAG 2021 Growth Programs € million earnings improvement potential € million additional profit contribution 250 180 160 200 ~60 140 ~50 ~80 120 150 100 80 100 ~50 ~60 60 50 40 ~50 20 ~45 0 0 2020 2021 202
Slide 17: FitStructure 2.0: Distribution of full-year effects
Strategy FitStructure 2.0: Distribution of full-year effects expected by 2023 8% Industrial Participations 12% 27% Technology Strip Steel 21% € >240 m Mannesmann total FYE 7% 26% Trading Plate / Section Steel SZAG Investor Relations Steel and tubes producing business units are in the focus of FitStr
Slide 18: Climate neutrality – task of a century
Strategy Climate neutrality – task of a century „The vast majority of the countries of the European Union have committed themselves to the objective of climate neutrality “ „The Commission President was here yesterday and presented the Green Deal to you. Europe intends to be the first continent to b
Slide 19: CO2 emission allowances are continuously cut back
Strategy Challenge: CO2 emission allowances are continuously cut back Price forecast CO2 allowances 50 Third trading period Fourth trading period 45 40 35 30 €/t CO2 25 20 15 10 5 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 Price CO2 allowances Estimates price CO2 allowances SZAG Investor Relatio
Slide 20: Salzgitter AG with two-fold strategy
Strategy Resolution approach: Salzgitter AG with two-fold strategy First Safety Net Second Safety Net CO2- emission allowances acquired as a precaution • Shortfall in CO2 allowances has • Significant, gradual reduction of been compensated for the most the CO2 emissions of Salzgitter AG part at the s
Slide 21: Technical solution approach: assessment
Strategy Technical solution approach: assessment Arguments for 1. Biggest CO2 reduction potential per MWh of renewable energies used in a processual as well as industry and sector comparison 2. The Salzgitter AG has the leading concept. The required individual technical components are available in t
Slide 22: SALCOS – Gradual conversion to H2-based steel production
Strategy SALCOS® – Gradual conversion to a H2-based steel production SZAG Investor Relations We are ready! Gruadual technical implementation possible as soon as the neceddary framework conditions are realized english Individual stages may technically also be realized in combination. The actual imple
Slide 23: Realization: first steps already implemented
Strategy Realization: first steps were already implemented Wind-H2 – sector integration Production of electrical energy via wind power and World‘s first steam electrolysis on MW scale Wind-H2 electrolytic – Sektorkopplung hydrogen on the works premises Weltweit at erste Salzgitter Dampf-Elektrolyse
Slide 24: Update investment projects
Strategy Update investment projects Ilsenburger Grobblech: New heat treatment line Optimization of the product portfolio Expansion of the market position and volume expansion for higher value grade segments such as high strength and wear resistant, water tempered steel Commissioning: 2021 Cu
Slide 25: Agenda
Prof. Dr.-Ing. Heinz Jörg Fuhrmann 1 Key Data / Market Situation 2 Business Units 3 Strategy SZAG Investor Relations Burkhard Becker 4 Annual Accounts Financial Year 2019 5 Guidance english
Slide 26: Overview
Annual Accounts Financial Year 2019 Overview Financial Year 2019 impacted by special effects Pre-tax result of € -253 million includes a total of € -396 million in special effects Aurubis, Technology Business Unit and effects from programs of measures bolster the result Impairments will posi
Slide 27: Group Result
Annual Accounts Financial Year 2019 Group Result € million 400 300 200 354.2 100 0 -100 -541.0 -187.5 -253.3 -237.3 -200 -65.8 16.0 -300 EBITDA Depr./Amort. EBIT Net interest EBT Taxes EAT SZAG Investor Relations Impairments main driver of significant increase of depreciation, consolidated result wi
Slide 28: Earnings bridge Group
Annual Accounts Financial Year 2019 Earnings bridge Group € million SZAG Investor Relations Margin erosion and special effects drive deterioration of earnings, counterbalanced by effects of programs of measures and Aurubis english 28
Slide 29: Comparison earnings – forecast
Annual Accounts Financial Year 2019 Comparison earnings – forecast € million SZAG Investor Relations Earnings before special effects within original guidance of € 125-175 million EBT from February 2019 english 29
Slide 30: Dividend proposal
Annual Accounts Financial Year 2019 Dividend proposal € Financial year 2019 0.60 Proposal: € 0.20 dividend per share 0.55 0.45 0.45 0.40 0.32 0.30 0.25 0.25 0.20 0.20 0.20 0.20 0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SZAG Investor Relations Continuous dividend payment since going publ
Slide 31: Income statement
Annual Accounts Financial Year 2019 Income statement Income Statement (€ million) FY 2019 FY 2018 Δ Sales 8,547.3 9,278.2 -730.9 Increase/decrease in finished goods and work in process/other own -8.2 161.6 -169.8 work capitalized 8,539.1 9,439.8 -900.7 Other operating income 285.6 256.8 28.8 Cost of
Slide 32: Consolidated balance sheet: Assets
Annual Accounts Financial Year 2019 Consolidated balance sheet Assets (€ million) 2019/12/31 2018/12/31 Δ Non-current assets 4,099.0 3,835.9 263.1 Intangible assets, property, plant and equipment 2,343.0 2,339.9 3.1 Investment property 82.0 83.5 -1.5 Financial assets 64.7 75.6 -10.9 Investments acco
Slide 33: Consolidated balance sheet: Equity and liabilities
Annual Accounts Financial Year 2019 Consolidated balance sheet Equity and liabilities (€ million) 2019/12/31 2018/12/31 Δ Equity 2,938.6 3,332.1 -393.5 Subscribed capital 161.6 161.6 0.0 Capital reserve 257.0 257.0 0.0 Retained earnings 2,845.1 3,181.0 -335.9 Other reserves 23.0 60.0 -37.0 Unappropr
Slide 34: Cash flow statement
Annual Accounts Financial Year 2019 Cash flow statement € million 1,000 800 250.7 4.3 -304.8 600 194.7 400 700.5 555.6 200 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 acti
Slide 35: Agenda
Prof. Dr.-Ing. Heinz Jörg Fuhrmann 1 Key Data / Market Situation 2 Business Units 3 Strategy SZAG Investor Relations Burkhard Becker 4 Annual Accounts Financial Year 2019 5 Guidance english
Slide 36: Guidance: Corona virus
Guidance Corona virus “The Commission has prepared the following measures to support EU countries in their efforts to, • make sure that state aid can flow to companies that need it • make full use of the flexibility which exists in the Stability and Growth Pact.” EU-Commission, March 2020 “We have t
Slide 37: Guidance before impacts from Corona Crisis
Guidance Salzgitter Group – Guidance before impacts from Corona Crisis The Salzgitter Group anticipates for the financial year 2020: earnings before taxes around breakeven, an increase in sales to € 9 billion, a return on capital employed (ROCE) that is tangibly above the previous year’s figur
Slide 38: Analyst Conference Financial Year 2019
Analyst Conference Financial Year 2019 Prof. Dr.-Ing. Heinz Jörg Fuhrmann, Chairman of the Executive Board Burkhard Becker, Chief Financial Officer SZAG Investor Relations Salzgitter, March 17, 2020 english