Salzgitter Ag · XETR:SZG
Salzgitter — Non-Deal Roadshow (June 2018)
52 slides from Salzgitter's roadshow presentation, June 2018
Slide 1: Presentation of the Group
english Presentation of the Group SZAG Investor Relations
Slide 2: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 3: 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
Slide 4: 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 5: Diversified product portfolio
Salzgitter Group Diversified product portfolio Steel and Technology Strip products Line pipes Steel Service Center Precision tubes Heavy plates Stainless tubes Sections Stockholding trading Engineering services International trading Injection molding machinery Beverage filling plants SZAG Investor R
Slide 6: 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:
Slide 7: Group structure
Salzgitter Group Group structure Salzgitter AG Salzgitter Mannesmann / Salzgitter Klöckner-Werke Strip Steel Plate / Section Steel Mannesmann Trading Technology Industrial Participations / BU BU BU BU BU Consolidation Salzgitter Ilsenburger Salzgitter Mannesmann Verkehrsbetriebe Peine- Mannesmannröh
Slide 8: 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
Slide 9: 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
Slide 10: Key data per 2017/12/31
Salzgitter Group Key data per 2017/12/31 FY 2017 FY 2016 Δ 2017 – 2016 Crude steel production kt 6,955.2 6,804.4 150.8 Consolidated Sales € million 8,990.2 7,905.7 1,084.5 Earnings before tax € million 238.0 53.2 184.8 Earnings after tax € million 193.6 56.8 136.8 Earnings per share (undiluted) € 3.
Slide 11: Key data per 2018/03/31
Salzgitter Group Key data per 2018/03/31 Q1 2018 Q1 2017 Δ Crude steel production kt 1,773.8 1,739.6 34.2 External sales1 € million 2,307.5 2,353.9 -46.4 Earnings before tax € million 95.9 77.1 18.8 Earnings after tax € million 65.2 48.7 16.5 Earnings per share (undiluted) € 1.18 0.87 0.31 ROCE % 11
Slide 12: 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
Slide 13: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 14: Environment
Market Situation Environment 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: Slightly improving
Slide 15: Raw materials
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 90 270 300 80 240 250 70 210 06/18 06/18 06/18 60 200 180 50 150 150 40 120 100 30 90 20 50 60 SZAG Investor Relations Raw materials markets marked by high
Slide 16: Steel prices
Market Situation Steel prices Spot prices Northern Europe Hot-rolled coil prices international (€/t) 850 (€/t) 950 850 750 750 650 650 06/18 06/18 550 550 450 450 350 350 250 250 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 HRC EXW Ruhr Plate EXW Ruhr Medium sections Norther
Slide 17: International steel trade
Market Situation International steel trade International trade policy Steel imports into the EU-28 Import of finished steel products (1,000 t/month) 40% of all global 2500,0 trade defense measures 2000,0 concern steel products 1500,0 1000,0 500,0 - 2014 2016 Q1 2018 China Ukraine Russia Turkey India
Slide 18: EU trade defense actions relevant for Salzgitter AG
Market Situation EU trade defense actions relevant for Salzgitter AG Product/Type of investigations Against … Filed on… Status Results / Next steps Cold-rolled strip China, March 31, 2015 August 4, 2016 Final duties exceed provisional tariffs. Anti-dumping investigation Russia Final AD-duties adopte
Slide 19: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 20: Strip Steel Business Unit Overview
Strip Steel Business Unit Overview 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 proce
Slide 21: Strip Steel Business Unit Key data
Strip Steel Business Unit Key data Order intake Consolidated sales Earnings before taxes 1,400 700 75 1,200 1,240 600 1,195 609 549 1,000 500 62.5 € million € million 800 400 53.7 kt 50 600 300 400 200 200 100 0 0 25 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 SZAG Investor Relations Gratifying
Slide 22: Plate / Section Steel Business Unit Overview
Plate / Section Steel Business Unit Overview 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
Slide 23: Plate / Section Steel Business Unit Key data
Plate / Section Steel Business Unit Key data Order intake Consolidated sales Earnings before taxes 700 350 15 600 629 300 586 287 500 250 265 10 € million € million 400 200 kt 300 150 5 200 100 9.4 9.3 100 50 0 0 0 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 SZAG Investor Relations Earnings impr
Slide 24: Mannesmann Business Unit Overview
Mannesmann Business Unit Overview 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
Slide 25: Mannesmann Business Unit Key data
Mannesmann Business Unit Key data Order intake* Consolidated sales* Earnings before taxes 450 350 5 400 412 300 383 350 289 271 250 300 1.6 € million € million € million 250 200 0 200 150 150 -3.0 100 100 50 50 0 0 -5 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 * excluding EUROPIPE-Group SZAG In
Slide 26: Trading Business Unit Overview
Trading Business Unit Overview 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
Slide 27: Trading Business Unit Key data
Trading Business Unit Key data Shipments Consolidated sales Earnings before taxes 1,400 1,000 30 900 1,200 1,259 862 800 1,123 1,000 760 700 20 21.6 600 € million € million 800 kt 500 600 13.8 400 10 400 300 200 200 100 0 0 0 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 SZAG Investor Relations Im
Slide 28: Technology Business Unit Overview
Technology Business Unit Overview 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 su
Slide 29: Technology Business Unit Key data
Technology Business Unit Key data Order intake Consolidated sales Earnings before taxes 350 400 25 300 350 306 290 335 328 20 300 250 250 15 € million € million € million 200 200 13.1 150 10 11.2 150 100 100 5 50 50 0 0 0 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 SZAG Investor Relations Hetero
Slide 30: Industrial Participations Overview
Industrial Participations Overview Comprises activities that are not directly Excursus Aurubis allocated to a business unit Since 2008 successful shareholding in the leading European copper producer Core competences and participations Services: SZAG shareholding: 20.00% (per April 9, 2018) − Res
Slide 31: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 32: Business Units – Forecast 2018
Guidance Business Units – Forecast 2018 Strip Steel Plate / Section Steel Mannesmann Trading Technology very good start to the year Plate: continuing difficult Large-diameter pipe mills: international trading will not KHS Group: continuing fierce 2018 thanks to the increase market environm
Slide 33: Salzgitter Group – Guidance from May 15, 2018
Guidance Salzgitter Group – Guidance from May 15, 2018 Given the good start to the year, the generally positive business outlook, as well as the planned further effects of the programs of measures and to promote growth, Salzgitter AG lifted its earnings forecast at the end of April for the financial
Slide 34: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 35: Strategy – review
Strategy Strategy – review Structural measures 2012-2017 SZAG 2015 Other programs (since end of 2016 combined under FitStructure SZAG) 2012 – 2016 € 260 million p.a. € 240 million p.a. € 500 million € p.a. earnings improvement potential 2012-2017 SZAG Investor Relations Initial Emphasis inevitably o
Slide 36: What we achieved since 2012
Strategy What we achieved since 2012 … Reconciliation of earnings 2012 vs. 2017 Effects allocated by business unit € million Programs 2012-2017 Earnings effect (net) -87 Strip Steel BU + € 131 million p.a. Plate/Section Steel BU + € 133 million p.a. 238 Mannesmann BU + € 108 million p.a. 527 Trading
Slide 37: What we intend in the coming years
Strategy What we intend in the coming years Restructuring – 2018-2021 additional € 140 m p.a. earnings improvement potential FitStructure Focus on Mannesmann and Technology business units Growth – around € 240 million p.a. additive earnings contribution Growth in target segments by shifting stee
Slide 38: Example Strip Steel Business Unit
Strategy Example Strip Steel Business Unit Bainitic steel “SZBS800” for automotive chassis applications Shipments in t 120,000 100,000 80,000 Spring link MB C-Class 60,000 40,000 20,000 0 2012 2013 2014 2015 2016 2017 Wishbone MQB Golf GTI 7 SZAG Investor Relations Continuous steel grade development
Slide 39: Example Plate / Section Steel Business Unit
Strategy Example Plate / Section Steel Business Unit Measures at the Ilsenburg site Strategy SZAG 2021 – focus on qualitative growth Investment into a modern and competitive heat treatment line Commissioning: 2020 FitStructure SZAG – cost cutting and efficiency improvement Capacity reduction t
Slide 40: Example Mannesmann Business Unit
Strategy Example Mannesmann Business Unit Strategy SZAG 2021 – focus on growth Expansion of the precision tubes plant in Mexico Construction of a production line for thick-walled tubes Upgrade of the existing finishing line Structural tube Airbags Pump case Stabilizers Suspension FitStructure
Slide 41: Innovation and growth – example Mannesmann BU
Strategy Innovation and growth – example Mannesmann BU 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 Cold-finished seamless stainless tubes Produc
Slide 42: Innovation and growth – example Trading BU
Strategy Innovation and growth – example Trading BU Steel auctions with full price transparency Networking of merchandise management systems For customers without their own ERP systems SZAG Investor Relations Third expansion stage of e-World: First steel auction platform with full price transparency
Slide 43: Agenda
1 Salzgitter Group 2 Market Situation 3 Business Units 4 Guidance SZAG Investor Relations 5 Strategy 6 Financials english
Slide 44: Investments and Depreciation / Amortization
Financials Salzgitter Group Investments and Depreciation / Amortization 43 15 49 411 339 340 352 342 342 270 287 69 85 2014 2015 2016 2017 Q1 2018 Investments1 Scheduled depreciation Unscheduled depreciation SZAG Investor Relations Focus on expansion investments Outlook 2018 / 2019: € 70-100 million
Slide 45: Balance sheet per 2018/03/31
Financials Balance sheet per 2018/03/31 € million 8,408 8,408 Equity ratio: Goodwill: 0 € Property, plant and 36.9% Equity 3,104 equipment and other 3,586 non-current assets Assets to equity: 87% Pension 2,338 provisions Inventories 2,076 € 756 m € 398 m Other non-current Cash and 866 liabilities se
Slide 46: Balance Sheet – Figures
Financials Balance Sheet – Figures Working capital (€ million) Equity ratio 4,000 120 Q1 97 99 97 98 2018 37% 95 Coverage (days) 3,000 90 2017 36% 2,000 60 2016 34% 2,523 2,437 2,433 2,271 1,000 2,165 30 2015 35% 0 0 2014 2015 2016 2017 1Q 18 2014 34% Pension provisions (€ million) Net financial pos
Slide 47: Cash flow statement
Financials Cash flow statement (€ million) Q1 2018 Q1 2017 Δ Cash and cash equivalents at the start of the period 679.4 818.1 -138.7 Cash flow from operating activities 100.6 -29.6 130.2 Cash flow from investment activities -147.0 -95.4 -51.6 Cash flow from financial activities -7.0 -7.7 0.7 Changes
Slide 48: 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:
Slide 49: Pensions I
Financials Pensions I Mechanics of internal pension commitment funding over lifetime of employee ... ... Joins 5 years Retirement company Pension provision (non-cash) Contribution by SZAG (non-cash) Pension payment (cash) SZAG Investor Relations Provision is determined by development of individual
Slide 50: Pensions II
Financials Pensions II (2017/12/31) € bn (2017/12/31) 5 Projected Benefit Obligation (PBO): Balance sheet: pension provisions € 2,515 m1 € 2,441 m 4 According to IAS 19: Assets held by external funds: − Discount rate of 1.75%2 € 74.3 m 3 – in line with market average Non-current assets: €
Slide 51: Dividend
Financials 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 increased by
Slide 52: 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