Salzgitter Aktiengesellschaft: Salzgitter Group delivers €1.2 billion in earnings before taxes in the exceptional year of 2022

 

• Dividend proposal for the Annual General Meeting of Shareholders of € 1 per share, reflecting a dividend yield of 3.5 %
• New “Salzgitter AG 2030” Group strategy in implementation
• Guidance for the financial year 2023:
• sales in the region of € 13 billion,
• earnings before interest, taxes, depreciation and amortization (EBITDA) of between € 750 million and € 850 million,
• earnings before taxes (EBT) of between € 300 million and € 400 million

In the financial year 2022, a year indelibly marked by massive geopolitical turbulence, the Salzgitter Group delivered a new sales record and the second best operating result in the company’s history. Factors determining this success included the outstanding results of the Steel Production and Trading business units. The Steel Processing and Technology business units also made gratifying contributions, however, as did our participating investment in Aurubis AG.  Whereas, in the first six months of the year, the rapid increase in steel prices definitively bolstered this trend, the second half of the year presented a market environment impacted by high inflation, energy prices at record levels and the associated huge uncertainty of market participants, accompanied by declining steel prices. Some product segments saw prices even drop below pre-war levels at year-end. The first quarter of 2023 has been characterized by upbeat demand. Assuming no further escalation in political and economic circumstances, this warrants confidence in looking toward the full year 2023. In view of these prospects and the outstanding results achieved in the financial year 2022, the Executive Board and the Supervisory Board will put forward a proposal to the Annual General Meeting of shareholders on 25 May to pay dividend of € 1.00 per share. Measured against Salzgitter share’s closing price, the payout corresponds to a dividend yield of 3.5 %.

 

The year 2022 was not only very successful in financial terms: With the presentation and implementation of the “Salzgitter AG 2030” strategy, we have repositioned our company and achieved the first milestone on the journey toward our goal of establishing Salzgitter AG as a leading company in the circular economy. Above all, events in this milestone include the new Group structure with now four business units and the unanimous vote of the Supervisory Board to release funds for implementing the first stage of our SALCOS® decarbonization program.

 

Driven principally by the dynamic uptrend in rolled steel prices in the first half of 2022, the Salzgitter Group’s external sales rose by almost one third to € 12.6 billion (2021: € 9.8 billion). EBITDA of € 1,618.2 million (2021: € 1,261.6 million) and earnings before taxes of € 1,245.4 million (2021: € 705.7 million) makes 2022 one of Salzgitter AG’s most successful years ever. The result includes a contribution of € 156.3 million from Aurubis AG (2021: € 217.1 million), an investment included at equity (IFRS accounting). An after-tax result that stood at € 1,085.4 million (2021: € 586.1 million) brings earnings per share to € 20.00 (2021: € 10.74) and return on capital employed to 20.1 % (ROCE; 2021: 16.2 %). Equity ratio rose to a very sound 43.7 % (2021: 32.7 %) on the back of the very good result, coupled with the adjustment to the interest rate for pension provisions.

As Gunnar Groebler, Salzgitter AG’s Chief Executive Officer, commented:

“The financial year 2022 marks a turning point in Salzgitter AG’s history. After years of preparation, the implementation of the first stage of SALCOS® was greenlighted. Orders have been placed for the first facilities, and preparations for construction in the Salzgitter steelworks have commenced. Under our new “Salzgitter AG 2030” corporate strategy, we are focusing on the principle of a circular economy, and not just as a stand-alone proposition, but as part of a strong partner network built together with customers, suppliers, plant engineering companies and other stakeholders. I would like to make very special mention of our employees: They accompanied the Group’s realignment with huge commitment and a great deal of passion, thereby guaranteeing the success of the transformation. Naturally, in spite of all these changes, we did not lose sight of everyday business and achieved an outstanding result. While the first six months reaped the benefits of the sharp uptrend in steel prices, the second half of the year required us to stay the course in a rapidly deteriorating economic environment – which we accomplished very well.”

 

CFO Burkhard Becker added: “Excellent earnings before taxes of € 1.2 billion also stems from the rigorous drive to optimize costs that we have also anchored in our new strategy. In addition, we released funds tied to working capital in the second half of the year of € 360 million to strengthen our financial base. Furthermore, upon the sale of Salzgitter Bauelemente GmbH at the end of 2022, we implemented the first step in optimizing our portfolio in line with the best owner principle. As the first quarter has proven to be better than expected at the end of 2022, we are looking at 2023 as a whole with confidence.”

External sales by business unit (EUR million):

  FY 2022 FY 2021 Steel Production 4,262.7 3,127.0 Steel Processing 2,105.9 1,509.9 Trading 4,580.9 3,603.1 Technology 1,429.9 1,360.5 Industrial Participations / Consolidation 173.9 166.9 Group 12,553.3 9,767.4

 

Earnings before taxes (EBT) by business unit (EUR million):

	FY 2022	FY 2021
Steel Production	790.9	494.9
Steel Processing	86.2	-308.5
Trading	243.1	352.5
Technology	48.0	59.2
Industrial Participations / Consolidation	77.1	107.5
Group	1,245.4	705.7

Outlook

Against the backdrop of generally healthy demand at the start of the year, and assuming no further escalation in political and economic circumstances, we anticipate the following for the Salzgitter Group in the financial year 2023:

 

• sales in the region of € 13 billion (2022: € 12.6 billion),
• earnings before interest, taxes, depreciation and amortization (EBITDA) of between € 750 million and € 850 million,
• a pre-tax profit of between € 300 million and € 400 million, and
• a return on capital employed (ROCE) notably below the previous year's level.

 

As in recent years, please note that opportunities and risks from currently unforeseeable trends in selling prices, input material prices and capacity level developments, as well as exchange rate fluctuations, may considerably affect business performance in the course of the financial year 2023.

 

The complete report released on the results of the financial year 2022 can be viewed at: https://www.salzgitter-ag.com/en/investor-relations/news-and-publications.html

Contact:
Markus Heidler

Head of Investor Relations

Salzgitter AG
Eisenhüttenstraße 99
38239 Salzgitter

Phone +49 5341 21-6105
Fax +49 5341 21-2570
E-Mail ir@salzgitter-ag.de