Salzgitter Ag · XETR:SZG
Salzgitter — Non-Deal Roadshow (December 2019)
47 slides from Salzgitter's roadshow presentation, December 2019
Slide 1: Presentation of the Group
english Presentation of the Group SZAG Investor Relations
Slide 2: Agenda
1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english
Slide 3: Salzgitter Group at a glance
Salzgitter Group At a glance Key data 2018 Steel and Technology External sales: € 9.3 billion EBT: € 347 million – best earnings of the past ten years Earnings improvement potential: Strip Steel Business Unit Mannesmann Business Unit € 150 million p.a. realized for the Strip products Line pipe
Slide 4: Global Presence
Salzgitter Group Global Presence Strip Steel Plate / Section Steel Mannesmann Trading Technology SZAG Investor Relations Crude steel production 2018: 7.0 million tons; trading volume: 4.5 million tons; Among the top 3 producers of beverage filling and packaging machinery english 4
Slide 5: 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
Slide 6: Group structure and key data FY 2018
Salzgitter Group Group structure and key data FY 2018 Salzgitter AG Group External Sales cons.: € 9.3 billion Employees: 23,523 EBT: € 347 million Plate / Strip Steel Mannesmann Trading Technology Section Steel External Sales: External Sales: External Sales: External Sales: External Sales:
Slide 7: External sales 2018 by customer industries
Salzgitter Group External sales 2018 by customer industries 13% 15% Other Vehicle construction 12% 12% Food and beverage industry Construction industry 6% 4% Mechanical engineering White goods, electrical equipment 6% 3% Re-rollers Energy sector and utilities 5% 24% Tubes producers Traders, Steel-Se
Slide 8: External sales 2018 by regions
Salzgitter Group External sales 2018 by regions 5% Other 7% Asia 13% Americas 48% Germany 3% Other Europe 24% 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
Slide 9: Investments and Depreciation / Amortization
Salzgitter Group Salzgitter Group Investments and Depreciation / Amortization 17 43 15 49 411 339 340 352 342 342 338 367 270 287 2014 2015 2016 2017 2018 Investments1 Scheduled depreciation Unscheduled depreciation SZAG Investor Relations Focus on expansion investments english 1 Property, plant and
Slide 10: Dividend
Salzgitter Group Dividend € Financial year 2018 € million 0.80 Dividend per share: 0.55 € 400 347 0.60 300 238 0.55 0.40 200 0.45 0.30 0.20 0.25 100 0.20 53 4 0.00 0 2014 2015 1 2016 2017 2018 -15 -0.20 -100 1 restated SZAG Investor Relations Dividend increased by another 20% english 10
Slide 11: 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% Inst. shareholders 20.6% – other Regions 400 1.1% State of Inst. shareholders 26.5% Lower Saxony – other Europe 5.0% 3.3% Inst. shareholders 20
Slide 12: Agenda
1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english
Slide 13: Key data per 2019/09/30
Financials Key data per 2019/09/30 9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019 Crude steel production kt 5,060.1 5,203.6 -143.5 1,648.0 1,672.3 1,739.8 External sales1 € million 6,637.3 6,931.2 -293.9 2,111.1 2,232.4 2,293.8 Earnings before tax2 € million 40.7 284.6 -243.9 -104.6 19.4 125.9 Earnings a
Slide 14: Earnings development of the business units
Key Data / Market Situation Earnings development of the business units 9M 2019 9M 2018 Δ Earnings before taxes € million 40.7 284.6 - 243.9 Strip Steel1 € million 84.6 171.2 - 86.5 Plate / Section Steel2 € million -13.0 14.5 - 27.4 Mannesmann € million -2.9 20.7 - 23.5 Trading € million 3.3 35.2 - 3
Slide 15: Economic development in the European Union
Key Data / Market Situation Economic development in the European Union 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 2019 Germany GB France Italy Spain SZAG Investor Relations Following the
Slide 16: Raw materials prices
Key Data / Market Situation Raw materials prices Iron ore Coking coal (62% Fe CFR China, US$/dmt) (FOB Australia, US$/t) 140 350 130 120 300 110 250 100 90 200 80 70 150 60 50 100 SZAG Investor Relations Iron ore: dramatic price surge in the first half-year; recently rapid decrease Coking coal: glob
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 12/19 12/19 600 600 500 500 400 400 300 300 Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jul 19 Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jul 19 HRC EXW Ruhr Plate EXW Ruhr Me
Slide 18: EU import quotas for steel products
Key Data / Market Situation EU import quotas for steel products Safeguard quotas are already based on record levels of imports Developing countries are exempt from the measures even though their import volumes were included in the quota calculation Quota increases in February and July of 2019
Slide 19: Agenda
1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english
Slide 20: Strip Steel
Business Units Strip Steel Capabilities External sales by customer industry 2018 Integrated steel works with three blast 1% 4% furnaces Mechanical engineering Other Approx. 4.7 mt/year crude steel capacity 16% 35% Modern production plants Re-rollers Vehicle construction 1% High processing co
Slide 21: Strip Steel results
Business Units Strip Steel Order intake Consolidated sales Earnings before taxes1 4,000 2,000 200 1,800 3,500 1,812 175 3,487 1,730 3,347 1,600 171.2 3,000 150 1,400 2,500 125 1,200 € million € million kt 2,000 1,000 100 800 1,500 75 84.6 600 1,000 50 400 500 25 200 0 0 0 9M 2018 H1 2019 9M 2018 9M
Slide 22: Plate / Section Steel
Business Units Plate / Section Steel Capabilities External sales by customer industry 2018 Section steel: 1% 17% − Top-modern mini mill with two electric Vehicle construction arc furnaces Other 8% − Annual crude steel capacity 1 mt 3% Construction industry Mechanical engineering 5% − Two rolling m
Slide 23: Plate / Section Steel results
Business Units Plate / Section Steel Order intake Consolidated sales Earnings before taxes1 1,800 900 20 1,600 1,689 800 15 774 1,400 1,429 700 10 1,200 600 631 14.5 € million € million 1,000 500 5 kt 800 400 0 600 300 -5 400 200 -13.0 -10 200 100 0 0 -15 9M 2018 9M 2019 9M 2018 9M 2019 9M 2018 9M 2
Slide 24: Mannesmann
Business Units Mannesmann Capabilities External sales by customer industry 2018 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 1% seamless tubes business Construction industry Core com
Slide 25: Mannesmann results
Business Units Mannesmann Order intake* Consolidated sales* Earnings before taxes 1,200 900 25 1,118 800 842 842 1,066 1,000 20 700 800 600 15 € million € million € million 500 600 10 20.7 400 400 300 5 200 200 0 100 -2.9 0 0 -5 9M 2018 9M 2019 9M 2018 9M 2019 9M 2018 9M 2019 * excluding EUROPIPE-Gr
Slide 26: Trading
Business Units Trading Capabilities External sales by customer industry 2018 74 sites in 30 countries 7% 14% Mechanical engineering Other Own distribution network for steel products with warehousing sites in Europe 5% 5% Re-rollers Vehicle construction Processing group specialized on heavy 2%
Slide 27: Trading results
Business Units Trading Shipments Consolidated sales Earnings before taxes 4,000 3,000 40 3,500 35 2,500 35.2 3,382 3,000 2,406 30 3,028 2,295 2,000 2,500 25 € million € million kt 2,000 1,500 20 1,500 15 1,000 1,000 10 500 500 5 3.3 0 0 0 9M 2018 9M 2019 9M 2018 9M 2019 9M 2018 9M 2019 SZAG Investor
Slide 28: Technology
Business Units Technology Capabilities External sales by customer industry 2018 17 Production plants worldwide 3% 1% 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
Slide 29: Technology results
Business Units Technology Order intake Consolidated sales Earnings before taxes 1,200 1,200 35 30 1,000 1,000 30.5 1,001 1,001 957 957 25 800 800 22.5 € million € million € million 20 600 600 15 400 400 10 200 200 5 0 0 0 9M 2018 9M 2019 9M 2018 9M 2019 9M 2018 9M 2019 SZAG Investor Relations Signif
Slide 30: Industrial Participations Overview
Industrial Participations Overview Comprises activities that are not directly Derivation of pre-tax result 2018 allocated to a business unit in € million Core competences and participations Services: − Research and development for the Group and external customers − Information technology − Enginee
Slide 31: Industrial Participations / Consolidation
Business Units Industrial Participations / Consolidation Consolidated sales Earnings before taxes1 Contribution Aurubis investment: 160 100 9M 2018: € +29.2 m 9M 2019 2017: € +78.1 m 140 80 141 139 60 120 40 100 € million € million 20 80 12.6 0 60 -20 -53.9 40 -40 20 -60 0 -80 9M 2018 9M 2019 9M 201
Slide 32: Agenda
1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english
Slide 33: Strategy Review
Strategy Review Structural measures 2012-2018 “Salzgitter AG 2015” Other programs (since end of 2016 combined under FitStructure SZAG) 2012 – 2016 € 260 million p.a. € 350 million p.a. > € 600 million € p.a. earnings improvement potential realized SZAG Investor Relations Initial emphasis on restruct
Slide 34: Salzgitter AG 2021 growth strategy
Strategy “Salzgitter AG 2021” growth strategy Goals Stipulations Status implementation Steel-related Less steel-related Rolled steel production and parts Development of the portfolio towards of the tubes production can only high- and highest-strength grades: to grow qualitatively, not this large-s
Slide 35: 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 Salz
Slide 36: Update programs of measures
Strategy Update programs of measures FitStructure 2.0 (incl. remaining effects of FitStructure 1.0) SZAG 2021 Growth Programs € million earnings improvement potential € million additional profit contribution 300 180 160 250 140 ~50 200 ~70 120 100 150 ~80 80 ~60 100 60 40 50 ~90 20 ~45 0 0 2020 2021
Slide 37: Research project GrInHy2.0
Strategy We are developing the future: research project GrInHy2.0 Green Industrial Hydrogen via steam electrolysis (GrInHy2.0) January 2019 February 2019 Currently Start GrInHy2.0 with Sunfire, Successful conclusion of the GrInHy Construction of GrInHy2.0 system and Paul Wurth and Tenova project wit
Slide 38: SALCOS – Salzgitter Low CO2 Steelmaking
Strategy – SAlzgitter Low CO2 Steelmaking Use of hydrogen (H2) instead of carbon (C) for iron ore reduction. Use of already established Standard DRP (direct reduction with natural gas) and novel (hydrogen production and use) technologies Integration into existing and optimized integrated iron-an
Slide 39: SALCOS milestones
Strategy CO2 I – Salzgitter Low CO2 Steelmaking April 3, 2019 Currently Memorandum of Understanding with Tenova on the mutual Discussions with relevant stakeholders about cooperation for the realization of SALCOS ® the creation of suitable framework conditions SZAG Investor Relations We affirm our o
Slide 40: CO2 II: Price forecast CO2 allowances
Strategy CO2 II Price forecast CO2 allowances 50 Third trading period Fourth trading period 45 40 35 30 €/t CO2 25 20 Insider information from June 14, 2019 15 “[…] The market value of all CO2 allowances acquired as a precautionary measure exceeds the figure 10 accounted for in the balance sheet as
Slide 41: Agenda
1 Salzgitter Group 2 Key Data / Market Situation 3 Business Units 4 Strategy SZAG Investor Relations 5 Financials english
Slide 42: Income statement
Financials Income statement Income Statement (€ million) 9M 2019 9M 2018 Δ Sales 6,637.3 6,931.2 -293.9 Increase/decrease in finished goods and work in 2.3 24.7 -22.4 process/other own work capitalized 6,639.7 6,955.9 -316.3 Other operating income 196.4 196.7 -0.3 Cost of materials 4,329.6 4,503.6 -
Slide 43: Consolidated balance sheet: assets
Financials Consolidated balance sheet Assets (€ million) 30.09.2019 31.12.2018 Δ Non-current assets 4,159.7 3,835.9 323,8 Intangible assets, property, plant and equipment 2,499.5 2,339.9 159.6 Investment property 82.4 83.5 -1.1 Financial assets 69.6 75.6 -6.0 Investments accounted for using the equi
Slide 44: Consolidated balance sheet: equity and liabilities
Financials Consolidated balance sheet Equity and liabilities (€ million) 30.09.2019 31.12.2018 Δ Equity 2,981.5 3,332.1 -350.6 Subscribed capital 161.6 161.6 0.0 Capital reserve 257.0 257.0 0.0 Retained earnings 2,885.3 3,181.0 -295.7 Other reserves 33.8 60.0 -26.2 Unappropriated retained earnings 3
Slide 45: Cash flow statement
Financials Cash flow statement € million 800 600 77.7 -378.1 6.8 400 193.3 555.6 455.3 200 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 period SZAG
Slide 46: 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: 2,150.2463 Shares per Bond1 Conversion price: € 46.50631 Underlying shares: 3,610,2631 Conversion right period:
Slide 47: Salzgitter Group – Guidance
Financials Salzgitter Group – Guidance The Salzgitter AG affirm earnings forecast for the financial year 2019, adjusted on September 26 and anticipates therefore against the backdrop of restructuring expenses still to be determined for the implementation of the “FitStructure 2.0” profit improvement