Salzgitter : Annual Report 2023 (including non-financial Report)

ANNUAL REPORT 2023

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

TABLE OF CONTENTS

• 2 TO OUR SHAREHOLDERS
• 3 The Salzgitter Group in Figures
• 4 Letter of the Executive Board
• 7 Report of the Supervisory Board

13 The Salzgitter Share

1. COMBINED MANAGEMENT REPORT
2. Background Information about the Group

1. Declaration of Corporate Governance

1. Information Concerning Takeovers

1. Financial Control System
2. Performance Report

1. Profitability, Financial Position and Net Assets

1. Opportunities and Risk Report, Guidance

• 96 NON-FINANCIAL REPORT
• 97 About this Report
• 98 Sustainability at Salzgitter AG

106 Environment, Climate and Energy

113 EU Taxonomy

126 Social Aspects

140 Governance and Compliance

148 GRI Index

153 CONSOLIDATED FINANCIAL STATEMENTS

1. Consolidated Income Statement
2. Consolidated Statement of Comprehensive Income
3. Consolidated Balance Sheet
4. Consolidated Statement of Cash Flows
5. Changes in equity
6. Notes

225 FURTHER INFORMATION

226	Assurance from the Legal Representatives
227	Audit Opinions	1

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

TO OUR SHAREHOLDERS

• 3 The Salzgitter Group in Figures
• 4 Letter of the Executive Board
• 7 Report of the Supervisory Board
  13 The Salzgitter Share

2

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

The Salzgitter Group in Figures

THE SALZGITTER GROUP IN FIGURES

			2023	2022
Crude steel production		kt	5,709	6,109
External sales		€ m	10,790	12,553
Steel Production Business Unit		€ m	3,528	4,263
Steel Processing Business Unit		€ m	2,127	2,106
Trading Business Unit		€ m	3,313	4,581
Technology Business Unit		€ m	1,647	1,430
Industrial Participations / Consolidation		€ m	176	174
EBIT before depreciation and amortization (EBITDA)		€ m	677	1,618
Steel Production Business Unit		€ m	295	946
Steel Processing Business Unit		€ m	227	173
Trading Business Unit		€ m	20	268
Technology Business Unit		€ m	115	77
Industrial Participations / Consolidation		€ m	19	154
Earnings before interest and taxes (EBIT)		€ m	355	1,312
Earnings before taxes (EBT)		€ m	238	1,245
Steel Production Business Unit		€ m	76	791
Steel Processing Business Unit		€ m	145	86

Investments2

Depreciation / amortization2,3

Total assets

Non-current assets

Current assets

Inventories

Cash and cash equivalents

Equity

Liabilities

Non-current liabilities

Current liabilities

of which due to banks4

Net financial position on the reporting date5

Employees

Personnel expenses

Core workforce on the reporting date6

Total workforce on the reporting date7

		2023	2022
	€ m	583	475
	€ m		-321		-306
	€ m	10,502	11,103
	€ m	4,570	4,510
	€ m	5,932	6,593
	€ m	2,867	3,474
	€ m	940	988
	€ m	4,834	4,850
	€ m	5,668	6,253
	€ m	2,353	2,704
	€ m	3,314	3,549
	€ m	656	756
	€ m		-214		-553
	€ m		-1,888		-1,883
	Employees	23,138	22,622
	Employees	25,183	24,569

Trading Business Unit		€ m		-14		243
Technology Business Unit		€ m	81	48
Industrial Participations / Consolidation		€ m		-50	77
Consolidated result		€ m	204	1,085
Earnings per share - basic		€	3.70	20.00
Return on capital employed (ROCE)1	%	5.6	20.1
Cash flow from operating activities		€ m	892	597

Disclosure of financial data in compliance with IFRS

1 ROCE = EBIT I (= EBT + interest expenses excl. interest portion in transfers to pension provisions) divided by the sum of shareholders' equity (excl. calculation of deferred tax), tax provisions, interest-bearing liabilities (excl. pension provision) as well as liabilities from finance leasing

and forfaiting

1. Excluding financial assets
2. Scheduled and unscheduled write-downs

• Current and non-current bank liabilities

5	Including investments, e.g. securities and structured investments	3
	Excl. trainee contracts and excl. non-activeage-relatedpart-time work
	Incl. trainee contracts and incl. non-activeage-relatedpart-time work

3

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Letter of the Executive Board

LETTER OF THE EXECUTIVE BOARD

Valued Shareholders,

Ladies and Gentlemen,

After the announcement of a "historic turning point" the year before, sentiment in Germany was permeated by growing uncertainty in 2023. We are experiencing an erosion of the long-term stability and reliability of relevant fundamental framework conditions. High inflation, high (energy) costs, high interest rates: conditions such as these still present all market players with major challenges today. Financial headroom is tight - especially after the Constitutional Court's precedent ruling from November 2023. This situation is compounded by known and new geopolitical risks: the war in Ukraine, the role of China in a global context, and the recent events in Israel. All of this is a harbinger of uncertainty for citizens and for companies alike.

Against this backdrop, Germany's economic output contracted by 0.3% in 2023. Europe's economic performance remained stable over the same period, with global growth even putting in as much as 3.1%. With this as a result, Germany stands in competition with other nations for global market shares, product leadership and talent as the only industrial nation to sustain a decline in its gross domestic product.

Change is on the cards and necessary to bring a halt to these negative developments and achieve a turnaround. Policymakers are adopting a range of different approaches in their search for solutions in crisis mode. The economy is under greater pressure than it has been for many years.

"If we want things to stay as they are, things will have to change." This quote from the Italian author Giuseppe Tomasi di Lampedusa gives us an answer to the question of how to deal with the current challenges. The time has now come to rethink old customs and habits, chart new courses and adapt.

For us at Salzgitter, this means continuing to rigorously implement our "Salzgitter AG 2030" strategy, just as we presented it to you. The necessary adaptations and developments impact all areas: from how we deal with one another, our corporate portfolio, and right through to our production processes. #wemakeithappen is therefore so much more than a slogan for us: It's something we practice every day in our Group.

This is particularly evident in our SALCOS® decarbonization program. In April 2023, the Federal Republic of Germany and the Federal State of Lower Saxony approved funding for us amounting to just under one billion euros in total. Construction work commenced directly afterwards. Site preparations have meanwhile been concluded and laying the foundations for the facilities is well under way. Also in the autumn, and presumably for the last time, we had a traditional blast furnace at the Salzgitter location relined. The steel production of the future is approaching inexorably.

Back in 2022 we had already placed an order for the electric arc furnace for the first stage of SALCOS®. In the financial year elapsed, we awarded contracts for all the other main aggregates. Our goal remains to supply our customers with the first green steel from the new facilities as early as 2026. And there is demand for this steel: The production volumes planned for 2026 have already been virtually fully allocated. This response affirms us in our strategic direction and motivates the entire team.

At the same time, decarbonizing steel production is only one mainstay of our strategy. "Salzgitter AG 2030" centers around circularity. For us, this means keeping resources once sourced from nature for as long as possible in economic use, which enables us to contribute to minimizing the additional introduction of finite resources into the economic cycle. By treading this path, and with the certification of Ilsenburger Grobblech GmbH as a supplier of low-carbon heavy plate for Siemens Gamesa's GreenerTower in the offshore wind area, along with additional, new agreements with customers for developing closed loops, we achieved further milestones in the last financial year.

Salzgitter AG has also changed in structural terms. In the context of our portfolio management, we found a new owner in 2022 for Salzgitter Bauelemente, with transfer of ownership taking place on January 1, 2023. The American pipe mills of our EUROPIPE joint venture found a new home with pipe manufacturer Borusan Mannesmann in which we also held a stake through to the autumn.

Honing our focus makes us stronger. The acquisition of today's Harzer Schrott und Recycling GmbH4 that reinforces our regional presence in scrap procurement and processing also stands for this.

4

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Letter of the Executive Board

Also going forward into the future: We will continue to develop our corporate portfolio in harmony with our strategic objectives and with the best owner principle in mind.

Valued Shareholders,

Change is not an aim unto itself. Rather it serves the core task of safeguarding Salzgitter AG's profitability, especially in times of adversity. In the financial year 2023, we generated earnings before taxes of € 238 million. In line with our forecast, this result falls significantly short of the exceptional year 2022. In view of the framework conditions outlined above in the financial year now ended, we nevertheless consider this result as an affirmation of our resilience and our strategy's effectiveness. Our principal banks that fully support our financing requirements also share this view. At the end of 2023, the syndicated loan was renewed and the volume increased to somewhat more than one billion euro - including a first-time cash credit line for delivery contracts regarding green electricity - which sends a strong signal.

The start to the financial year 2024 presented a disparate picture. While the internationally positioned Technology Business Unit and KHS Group in particular are looking at another gratifying financial year, the impact of Germany's ailing economy still dominates the steel market. The first positive signs are nevertheless emanating from a slight uptrend in the price of various steel products. In conjunction with consumer confidence and consumption improving in response to falling inflation and rising wages, conditions in the environment should gradually improve for the Salzgitter Group in the months ahead. Our share that shed 2% of its value last year in the context of growing concerns about the economy should derive benefit from this development.

Given the still challenging political and economic environment, and factoring in the first signs of recovery, the Executive Board and Supervisory Board intends to put forward a proposal to the Annual General Meeting of Shareholders on 29 May to distribute dividend of € 0.45 per share.

"A New Way of Thinking for a New Industry" - or to put it another way: we are changing at all levels

so as to remain the way we have been for our stakeholders for almost 170 years: an innovative, reliable and profitable company. Our thanks go to you, Salzgitter AG's valued shareholders and business partners, and to our employees for your trust in our company.

Sincerely,

Gunnar Groebler

Burkhard Becker

Michael Kieckbusch

Birgit Potrafki

5

5

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Letter of the Executive Board

6

(f.l.): Ulrich Grethe, Birgit Potrafki, Michael Kieckbusch, Gunnar Groebler, Burkhard Becker, Kai Acker, Dr. Sebastian Bross

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Report of the Supervisory Board

REPORT OF THE SUPERVISORY BOARD

Chairman of the Supervisory Board: Heinz-Gerhard Wente

The year 2023 continued to be determined by Russia's war of aggression against Ukraine, fragile supply chains, energy price hikes and a high inflation rate, which resulted in the persistently weak development of the German economy. At a geopolitical level, this situation was compounded by the terror attack on October 7, 2023, that re-ignited the conflict between Israel and Hamas. The Salzgitter Group nevertheless got off to an encouraging start to the year. The Steel Production and Steel Processing business units initially benefited from the exceptional trend of the previous year and at the start of the year before business began to slow in the second quarter. The Trading Business Unit suffered from the downturn in steel prices over most of the year, as opposed to the Technology Business Unit that delivered a stellar performance throughout the full year. As a result of criminal activity against Aurubis AG, the company itself as well as Salzgitter AG that holds a

participating investment of 29.99% in Aurubis AG in relation to the total number of shares were forced to initially suspend their profit forecasts and subsequently to revise them downward. The sales forecast was also adjusted at the start of November due to weaker business activity. Our company nevertheless generated a satisfactory annual result in 2023. Compared with the exceptionally successful financial year 2022, however, the result returned to a normal level.

In view of updated insights gained from detailed planning, progress made in construction, and the general facilities price trend, the overall budget for the first stage of the SALCOS® program was increased in March 2023 to between € 2.2 and € 2.4 billion. In the reporting year, the Group continued to lobby at all political levels to gain the necessary financial support for the program while campaigning for the requisite framework conditions conducive to the transformation from coal-based toward low carbon steel production to be set in place. At the same time, the Group made headway with the technical and financial planning, preparation and implementation of SALCOS®. These endeavors were rewarded on April 18, 2023, through Federal Republic of Germany and the Federal State of Lower Saxony handing over a funding commitment amounting to around € 1 billion. In addition, the Salzgitter Group continued to rigorously forge ahead with its current efficiency program in the financial year 2023, while raising the profit improvement potential resulting from the measures to between € 200 and € 250 million through to 2026.

MONITORING AND ADVISING THE EXECUTIVE BOARD IN THE EXERCISING OF ITS

MANAGEMENT DUTIES

In the financial year 2023, the Supervisory Board kept itself continuously apprised of the situation of the Group and the development of business. The Executive Board informed the Supervisory Board by way of detailed written quarterly reports about the Group's result of operations, the current financial position and the net assets, as well as about developments in the relevant markets, the course of business and the investments in the individual business units. The reports also comprised information on the developments and activities in the personnel area as well as detailed

estimates on the opportunities and risks over the course of the year. Moreover, the Supervisory7 Board held six meetings to obtain detailed oral reports on the respective current situation of the

Group and the important Group companies, as well as on material business transactions and relevant changes. The development of business compared with corporate planning was explained to the Supervisory Board. Any deviations from planning were elaborated on, and then queried and

7

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Report of the Supervisory Board

discussed by the Board. Compensatory measures were addressed. In addition, the meetings also addressed the status of implementation of the groupwide "FitStructure 2.0" efficiency program. The Supervisory Board devoted special attention to long-term planning, as well as to the status of the SALCOS® program. By using the dashboard provided by the Executive Board, the Supervisory Board was able to track the development of the SALCOS® program in a timely manner and, if necessary, engage in clarifying discussion with the Executive Board. Business transactions requiring the consent of the Supervisory Board were approved by the Board after thorough examination and consultation. Furthermore, between meetings, the Chairman of the Supervisory Board was kept regularly informed by the Executive Board Chairman on current topics.

The Supervisory Board held regular meetings in the reporting year in the months of March, May, September and December, and convened extraordinary meetings in March and June as well as an inaugural meeting of the newly elected Supervisory Board in May. The attendance rate at the Supervisory Board meetings, held without exception as plenary meetings with individual members participating via online connection, if necessary, stood at 95%. The Supervisory Board convened generally with the Executive Board attending. However, it regularly discussed topics such as Executive Board remuneration and the key findings of the audit conducted on the annual financial statements in the absence of the Executive Board members. Regular preliminary discussions - partly with and partly without the attendance of the Executive Board - in separate meetings with owner and employee representatives served the purpose of initial consultation on the current situation and imminent decisions. No conflicts of interest were brought to the attention of the Supervisory Board, neither by the Supervisory Board members nor by members of the Executive Board, in the reporting year.

Upon assuming their mandates, members newly appointed to the Supervisory Board in the financial year were supported, as is customary with all new Supervisory Board members, through an onboarding program that includes detailed information on the Group and its various business activities, along with an extensive manual with further information relevant to Supervisory Board activities.

FOCUS OF THE CONSULTATIONS OF THE SUPERVISORY BOARD

The extraordinary meeting of the Supervisory Board held on March 2, 2023, essentially focused on the status of the SALCOS® program. In its meeting on March 23, 2023, and as is customary in the regular March meetings, the Supervisory Board focused primarily on the financial statements of Salzgitter AG and of the Group, both drawn up as of December 31, 2022, as well as on the combined management report on the company and the Group for the financial year 2022. The representatives of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, the auditor selected by the Annual

General Meeting of Shareholders, explained the key findings of their audit and answered the questions put to them by the Supervisory Board members. Following a detailed examination of the documentation pertaining to the financial statements, with the aid of the report of the auditor, the Supervisory Board ratified the separate and consolidated annual statements.

With a view to the variable remuneration of Executive Board members, the Supervisory Board used the fixed performance criteria to determine the degree to which targets set had been achieved for the Performance Cash Award 2019 and the annual bonus for 2022. Moreover, the Board ratified its report for the Annual General Meeting of Shareholders, the remuneration report and the resolutions to be put forward to the 2023 Annual General Meeting of Shareholders on the individual agenda items. Furthermore, the Supervisory Board also consulted on the 2022 non-financial report and, following its own detailed examination, approved the audit findings in the report by the auditor. In addition, the Supervisory Board extended its approval for investments - on July 13, 2022, initially only in the amount of the funds to be committed at that point in time - in the first stage of the SALCOS® program to the effect that it released the entire investment volume envisaged (internal and external funds).

The Supervisory Board continued to follow the development of business and the legal relationship with an Executive Board member who left the company some time ago. Moreover, it elected Mr. Gerald Heere as a further member of the Presiding Committee, of the Nomination Committee and of the Strategy Committee. Finally, the Supervisory Board approved the sale of BERG EUROPIPE Holding Corp., a subsidiary of EUROPIPE GmbH, in which Salzgitter AG holds a 50% stake indirectly, including the subsidiaries.

The main topics addressed by the Supervisory Board in its regular meeting on May 25, 2023 concerned business development and the profit improvement program, along with the status of the SALCOS® program. Following the re-election of the Supervisory Board by the Annual General Meeting of Shareholders on May 25, 2023, the Board held its inaugural meeting on the same day, partly in its new composition. The chairman and vice chairman were elected, the committees defined and their members determined.

In its extraordinary meeting on June 16, 2023, the Supervisory Board focused on discussions about

the future composition of the Executive Board. In view of the imminent retirement of Mr. Burkhard8 Becker, Chief Financial Officer, and following a structured search and selection process, the

Supervisory Board appointed Ms Birgit Potrafki as a member of Salzgitter AG's Executive Board for the period from February 1, 2024, through January 31, 2027, and extended Mr. Becker's appointment for the last time through to March 31, 2024. In addition, the Supervisory Board approved the

8

Salzgitter AG | Annual Report 2023

To Our Shareholders

Combined Management Report

Non-Financial Report

Consolidated Financial Statements

Further Information

Report of the Supervisory Board

sale of the participating investment in Borusan Mannesmann Boru Yatirim Holding A.S. and obtained an overview of the development of the Group's business.

In its meeting on September 28, 2023, the Supervisory Board had the head of Salzgitter AG's Investor Relations Department provide information about the findings of an Investor Relations Perception Study conducted with external support. Furthermore, the Supervisory Board deliberated on the review of Executive Board remuneration, discussed the most recent business development, and informed itself about the current status of the SALCOS® program. The Supervisory Board also had the Executive Board report in writing and orally on the Group's compliance management system and on investigated activities.

On December 7, 2023, the Supervisory Board and the Executive Board discussed the corporate plan submitted, explained by the latter for the financial years 2024 through 2026. The Supervisory Board was also brought up to date on the SALCOS® program. Other topics of consultation in this meeting, included the imminent defining of the qualitative criteria determining variable Executive Board remuneration in 2024 for assessing the performance of the individual Executive Board members, as well as the stakeholder objectives in the form of sustainability targets for the performance period from 2024 through 2027. The Supervisory Board also concerned itself with the recommendations of the German Corporate Governance Code for purpose of submitting the Declaration of Conformity for 2023. Furthermore, it appointed Mr. Gunnar Groebler as the Chief Executive Officer and Chairman of Salzgitter AG's Executive Board for another five years through to September 30, 2029. Finally, the Board was brought up to date on the theft and fraudulent activity at Aurubis AG generally known to the public.

WORK OF THE COMMITTEES

In order to prepare for its consultations and decisions, the Supervisory Board has formed presiding, audit, strategy and nomination committees.

The Presiding Committee held four plenary meetings in 2023. The committee consulted in detail on business development and on the SALCOS® program in particular. Moreover, the Presiding Committee concerned itself with successor planning at Executive Board level, corporate planning, reviewing Executive Board and Supervisory Board remuneration, the components of variable Executive Board remuneration, the recommendations of the German Corporate Governance Code, plans for the disposal of holdings, issues concerning the topic of sustainability, along with the theft and fraudulent activity at Aurubis AG that is in the public domain.

The members of the Audit Committee held five meetings during the reporting period, the first as a web conference, but all other meetings with physical attendance. As is customary in March, it prepared the audit of the 2022 annual financial statements at company and at Group level by the whole Supervisory Board in the presence of representatives from the auditor, in particular by way of in-depth consultation on the respective audit reports and the oral report by the representatives of the auditor on the key findings of the audit. To this end, the Audit Committee met twice: on March 9 exclusively with representatives of the statutory auditor and again on March 21 with these auditor representatives and the Executive Board. In the context of its audit, the Audit Committee saw no reason to raise objections and recommended that the full Supervisory Board approve the annual financial statements.

In the same manner, the members of the Audit Committee examined the 2022 non-financial report in preparation and discussed the results of reviewing the remuneration report. In addition, the Audit Committee once again focused on the independence of the external auditor as a routine task, in particular the scope of non-audit services provided by the auditor and the quality of the audit. The consultations of further meetings of the Audit Committee concerned IT security and IT structures, monitoring the accounting process, as well as the effectiveness of the internal control system, the risk management system, and the internal audit system. Moreover, the Audit Committee obtained detailed information on the Group's compliance management system and compliance measures. The Audit Committee also dealt with preparing the proposal of the Supervisory Board for the appointing of the statutory auditor for the financial year 2023 by the Annual General Meeting of Shareholders, the assignment of the audit engagement, and agreeing the fees with the statutory auditor. The quarterly financial reporting of the Group was discussed in detail with the Executive Board before publication. The Chairman of the Audit Committee also maintained regular dialog with the statutory auditor between meetings.

In March 2024, following a detailed preliminary review, the Audit Committee recommended that the full Supervisory Board approve the 2023 annual financial statements at company and at Group level. The committee's preliminary review of the 2023 non-financial report did not give rise to any objections either.

The Strategy Committee held one meeting with members personally attending in 2023. The main	9
topic consisted of the SALCOS® program and in particular its development stages going forward.

The Nomination Committee met once in 2023 in person to discuss the composition of the Supervisory Board for the period of office from 2023 through 2028.

9