Salzgitter AG's Financial Year 2024: Adapting to Market Challenges
In a year marked by economic uncertainty and uncompetitive energy costs, Salzgitter AG, a leading German steel producer, managed to maintain a positive trajectory with strategic investments, cost-saving measures, and its ongoing commitment to green transformation. Despite facing challenges such as high import costs and a sluggish economic recovery, the company’s transformation efforts, especially in the Technology Business Unit, have started to pay off, with record earnings reported.
Salzgitter AG saw its external sales drop to €10.0 billion in the 2024 financial year, compared to €10.8 billion in 2023. The company’s EBITDA also fell to €445 million from €677 million in the previous year, reflecting the pressures in the steel sector. However, despite these setbacks, Salzgitter’s strategic initiatives allowed it to deliver a positive pre-tax result of €109 million, excluding extraordinary items.
The Impact of Economic Challenges on Steel Production
The steel industry in Europe, particularly in Germany, has faced a tough economic environment characterized by high import levels, weak domestic demand, and uncompetitive energy costs. In addition, there has been a stagnation in the German economy, further exacerbating market conditions. These factors weighed heavily on Salzgitter AG's steel business, affecting its profitability and growth.
One of the company’s most pressing concerns has been the high energy prices, which continue to hinder competitiveness. To overcome these obstacles, Salzgitter AG is focusing on reducing its operational costs and improving efficiency within its core business units, with an emphasis on energy-efficient steel production methods and the integration of renewable energy sources into its production processes.
Financial Performance and Forecast for 2025
In its financial report, Salzgitter AG outlined its performance for 2024, which included some noteworthy financial metrics:
• Net financial debt grew to €574 million in 2024, compared to €214 million in 2023, as the company increased its investments in green technologies and sustainability.
• Earnings per share (EPS) for 2024 was €-6.51, a significant decline from €3.70 in 2023, primarily due to restructuring costs and impairments.
• Return on capital employed (ROCE) was -3.4%, down from 5.6% in the previous year.
For the upcoming 2025 financial year, Salzgitter expects:
• Sales to range between €9.5 billion and €10.0 billion.
• EBITDA to be between €350 million and €550 million.
• Earnings before taxes to fluctuate between €-100 million and €+100 million.
These projections reflect the challenges Salzgitter anticipates in the near future, with global economic uncertainty and fluctuating energy prices continuing to impact its performance.
Key Takeaways:
• Salzgitter AG faced a challenging economic environment in the 2024 financial year, marked by high import levels and uncompetitive energy costs.
• Despite these challenges, the company recorded a positive pre-tax result of €109 million before extraordinary items.
• External sales decreased to €10.0 billion (2023: €10.8 billion) and EBITDA dropped to €445 million (2023: €677 million).
• The company’s Technology Business Unit delivered record earnings, and its Aurubis AG participation contributed €184 million to earnings.
• Net financial debt rose to €574 million, reflecting investments in green technologies and sustainability efforts.
• Salzgitter AG expects 2025 sales to range between €9.5 billion and €10.0 billion, with EBITDA between €350 million and €550 million.
• The company continues to focus on green steel production and the SALCOS® program, aiming for carbon-neutral steel production by 2050.
• The 2024 financial year saw a decline in earnings per share, mainly due to restructuring costs and impairments.
• Salzgitter has initiated additional measures to support liquidity and improve earnings for future growth.
• The company remains committed to sustainability, leveraging green transformation and renewable energy sources for steel production.
Salzgitter AG is making significant strides in transforming its operations and positioning itself as a leader in the green steel sector despite ongoing economic and market challenges. The company's proactive approach to sustainability and green transformation ensures its future competitiveness in the steel industry.
