Salzgitter : Financial year 2023

Diversification paying off - satisfactory result despite increasingly difficult market environment

• Significant reduction in net financial debt
• Dividend proposal for the Annual General Meeting of Shareholders of € 0.45 per share
• Guidance for the financial year 2024:
  • sales of between € 10.5 and € 11.0 billion,
  • earnings before interest, taxes, depreciation and amortization (EBITDA) of between € 700 million and € 750 million,
  • earnings before taxes (EBT) of between € 250 million and € 300 million

In a financial year dominated by high inflation rates and cooling economic momentum, the Salzgitter Group generated EBITDA of € 677.0 million and a pre-tax profit of € 238.4 million. The Steel Production, Steel Processing and Technology business units were the main drivers of this result. Following an encouraging start to 2023, economic conditions in most markets increasingly deteriorated. Running counter to sector trends, only the filling and packaging machinery business performed very well over the entire year, enabling the Technology Business Unit to deliver a record result thanks to a record order intake. Consolidated external sales decreased to € 10.8 billion, due above all to the downtrend in average revenue for steel products. Most steel product prices declined from their high year-earlier level throughout virtually the entire financial year, ultimately bottoming out in the final quarter. Business development in the first quarter of 2024 continued to be impacted by the adverse circumstances in the second half of 2023. If the slight signs of recovery currently in evidence hold steady, we see the prospect of the market environment gradually brightening over the course of the year. Provided that there is no further escalation in political and economic circumstances, we assume the following for the Salzgitter Group in the financial year 2024:

• sales of between € 10.5 billion and € 11.0 billion (2023: € 10.8 billion).
• earnings before interest, taxes, depreciation and amortization (EBITDA) of between € 700 million and € 750 million (2023: € 677 million).
• a pre-tax profit of between € 250 million and € 300 million (2023: € 238 million) and
• a return on capital employed (ROCE) at the previous year's level.

The Executive Board and the Supervisory Board will put forward a proposal to the Annual General Meeting of Shareholders to be held on May 29, 2024, to pay dividend of € 0.45 per share.

The Group's external sales declined by 14 % to € 10.8 billion (2022: € 12.6 billion) due above all to the lower steel prices. As a result, EBITDA contracted to € 677.0 million (2022: € 1,618.2 million) and earnings before taxes to € 238.4 million (2022: € 1,245.4 million). The result includes a contribution of € 40.0 million from Aurubis AG (2022: € 156.3 million), an investment included at equity (IFRS accounting). The after-tax result came in at € 204.1 million (2022: € 1,085.4 million), which brings basic earnings per share to € 3.70 (2022: € 20.00). Return on capital employed (ROCE) amounted to 5.6 % (2022: 20.1 %). Net financial debt dropped tangibly to € - 214.3 million (2022: € - 552.6 million). Together with an equity ratio that has risen to 46.0 % (2022:43.7 %), this is proof of the Salzgitter Group's resilience, also in challenging times.

Chief Financial Officer Burkhard Becker puts the figures into context:

"A pre-tax profit of € 238 million results from rigorous cost optimization, on the one hand, while demonstrating the viability of the Salzgitter Group's broad positioning, on the other. The latter is a source of great pleasure for me as I began my career in the Salzgitter Group as head of finance at KHS GmbH and, in my role as Salzgitter AG's CFO, have worked temporarily at the operational level in all business areas over the last 13 years. The financial year 2023 was a huge success, also from a financing standpoint. We not only renewed and raised the volume of our syndicated loan to somewhat more than € 1 billion - including a first-time cash credit line for delivery contracts regarding green electricity - but also freed up additional funds of around € 800 million tied up in working capital. This means that we start the new year with net debt of only around € 200 million. At the end of my career, I therefore arrive at the conclusion: I am absolutely convinced of Salzgitter AG's strength - as an autonomous entity with a diversified portfolio, together with people and codetermination. Keeping an eye on financial equilibrium will be important in the future as well."

As Gunnar Groebler, Salzgitter AG's Chief Executive Officer, comments:

"The Salzgitter Group's further development was expedited in the financial year 2023. Having obtained funding approval from the Federal Republic of Germany and the Federal State of Lower Saxony in April 2023, the implementation of the first stage of our SALCOS^® - Salzgitter Low CO₂ Steelmaking decarbonization program is fully under way. At the same time, we continued to breathe life into our "Pioneering for Circular Solutions" vision and entered into partnership agreements with prestigious customers and suppliers and other partners. Our commitment to the Ellen MacArthur Foundation - a pioneer of the circular economy - marks another special milestone. Here, we are hoping to generate further impetus for the concept's ecological, social, and ultimately financially viable advantages. In the 3 midst of the transformation, the annual result that is satisfying against the backdrop of market conditions demonstrates the Salzgitter Group's financial stability and sound balance sheet. This would not be possible without our employees' huge commitment and innovative strength. My warm thanks go to all our colleagues for their tireless dedication to our company. Upon today's publication of our financials, we are taking leave of our Chief Financial Officer Burkhard Becker who is retiring after 16 years with the Group. I would like to take this opportunity of expressing my special thanks to Burkhard Becker for the service he has rendered to Salzgitter AG. During his term of office, the company mastered a range of different challenges and is financially stable today, which lays a cornerstone for our transformation. We wish Burkhard Becker all the very best for his future."

The following links provide further information:

Keydata financial year 2023

Annual Report 2023 (including non-financial Report)

Magazine accompanying the Annual Report 2023

Website: Our Highlights 2023

Our program SALCOS^®

Group strategy "Salzgitter AG 2030"

The complete report released on the results of the financial year 2023 can be viewed at:
https://www.salzgitter-ag.com/en/investor-relations/news-and-publications.html​​​​​​​

Contact for our shareholders / capital market:

Markus Heidler
Head of Investor Relations
Phone: [phone]
[e-mail]

Contact for journalists / the press:

Thorsten Moellmann
Head of Group Communication & Brand
Phone: [phone]
[e-mail]

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 over the course of the financial year 2024.

Disclaimer: Some of the statements made in this report possess the character of forecasts or may be interpreted as such. These are made to the best of the Company's knowledge and judgment, and by their nature are subject to the proviso that no unforeseeable deterioration occurs in the economy or in the specific market situation pertaining to the business units' companies, but rather that the underlying bases of plans and outlooks prove to be accurate as expected with regards to their scope and timing. Notwithstanding prevailing statutory provisions and capital market law in particular, the Company accepts no obligation to continuously update any forward-looking statements that are made solely in connection with circumstances prevailing on the day of their publication.