26.02.2016
Salzgitter AG DE0006202005
DGAP-News: Salzgitter AG: Key data for the financial year 2015
DGAP-News: Salzgitter AG / Key word(s): Final Results
Salzgitter AG: Key data for the financial year 2015
26.02.2016 / 07:30
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Salzgitter Group delivers first positive annual result since 2011
- "Salzgitter AG 2015" program achieves decisive impact on earnings
- Sound balance sheet: equity ratio of 35 %; net financial position rises
to EUR 415 million despite adverse market conditions and non-recurrent
burdens
- Guidance for the financial year 2016:
- operating pre-tax result around breakeven and
- marginally positive return on capital employed (ROCE)
Against the backdrop of a persistently challenging environment in the
European steel market that deteriorated continuously over the course of the
year due to the massive rise in Chinese imports at dumping prices, the
Salzgitter Group generated a positive pre-tax result for the first time
since 2011. Despite an amount of EUR -73.8 million on balance in burdens on
earnings from non-recurrent effects, the company therefore raised its
result by almost EUR 30 million compared with the year-earlier period and
closed - as forecasted - with a pre-tax profit in the lower double-digit
million euro range. Above all, the groupwide "Salzgitter AG 2015"
restructuring program, of which more than two thirds had been implemented
by the end of 2015, contributed to improving the result. The already very
sound balance sheet and financial structure was strengthened further by the
growth in the equity ratio to 35% and the higher net financial position
that rose to EUR 415 million.
The Salzgitter Group's external sales (EUR 8,618.4 million; 2014: EUR
9,040.2 million) declined due to the downturn in average selling prices for
steel products. Earnings before taxes climbed to EUR 12.6 million (2014:
EUR -15.2 million). This figure includes a profit contribution of EUR 21.8
million from the Aurubis investment (2014: EUR 31.2 million), as well as
EUR -73.8 million on balance in burdens on earnings from the relining of a
blast furnace in the Salzgitter steelworks and non-recurrent
accounting-related effects. Earnings after tax stood at EUR -45.5 million
(2014: EUR -31.9 million). This figure includes EUR 26.5 million in tax
expenses due to potential burdens arising from a ruling by the German
Federal Fiscal Court (BFH) on securities lending from January of 2016.
Earnings per share therefore stood at EUR -0.89 (2014: EUR -0.64) and
return on capital employed came in at 2.1 % (ROCE 2014: 1.8 %).
Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann commented as
follows: "The first positive pre-tax result delivered since 2011, generated
in an extremely adverse market environment, marks a milestone. The
Salzgitter Group has provided impressive proof of the effectiveness of its
self-help measures launched in and ongoing since 2012. In the new financial
year, the challenges remain tremendous given the steel imports flooding
into the European Union and the still potential tightening of framework
conditions under energy and environmental policies. We will therefore
unceasingly press ahead with our endeavors to further optimize the
Salzgitter Group. The urgently necessary EU trade defense measures already
implemented and partly decided a short while ago, the first signs of
recovery in the large-diameter tubes business, as well as the recent halt
called to the declining prices of many steel products gives us the basis
for looking to the future with cautious optimism."
Development of the business units
The market environment of the Strip Steel Business Unit saw a massive
increase in imports from China, accompanied by slipping raw material
prices, which exerted huge pressure on selling prices and margins. In
conjunction with a marginal decline in shipments, this situation resulted
in external sales dropping to EUR 1,922.5 million (2014: EUR 2,060.1
million). The business unit's pre-tax result (EUR -26.0 million; 2014: EUR
-8.8 million) declined compared with the previous year's figure owing to
the non-recurrent burden on earnings from relining the blast furnace at
Salzgitter Flachstahl GmbH (EUR -41.9 million). Excluding this effect, the
business unit would have delivered a pre-tax profit.
In the period under review, the Plate / Section Steel Business Unit also
operated in a markets exposed to very fierce competition, with the plate
segment in particular coming under pressure from imports. The business
unit's shipment volume remained stable as opposed to lower external sales
due to the downturn in selling prices (EUR 908.8 million; 2014: EUR 1,118.8
million). The segment considerably improved its performance compared with
2014, but nevertheless delivered another clearly negative pre-tax result
(EUR -68.0 million; 2014: EUR -130.0 million). This outcome primarily
reflects the loss of EUR -56.9 million sustained by HSP Hoesch Spundwand
und Profil GmbH that includes special burdens of EUR -29.4 million from
winding down the business in December 2015. Moreover, the business unit's
result comprises EUR -7.0 million in costs assigned to Ilsenburger
Grobblech GmbH from relining the blast furnace.
The situation on Europe's pipe and tube market remained challenging in
2015. As a result, the Energy Business Unit's external sales decreased to
EUR 1,062.6 million (2014: EUR 1,226.5 million). The segment nonetheless
generated a positive pre-tax result, having still disclosed a clear loss in
the previous year (EUR 2.2 million; 2014: EUR -40.6 million). Thanks to the
healthy business of the US companies, and despite provisions of EUR 10.0
million earmarked for restructuring measures at EUROPIPE France S.A., the
EUROPIPE Group delivered a profit.
Shipments of the Trading Business Unit grew first and foremost on the back
of the robust development of international trading compared with the
previous year. External sales reported a price-induced decline compared
with the year-earlier figure (EUR 3,210.7 million; 2014: EUR 3,254.8
million). The segment delivered a relatively pleasing profit before taxes
of EUR 32.2 million (2014: EUR 60.1 million), boosted mainly by the good
pre-tax result of international trading as well as an overall amount of EUR
27.0 million in dividend income from non-consolidated subsidiaries and
non-recurrent accounting-related effects.
The Technology Business Unit's external sales grew significantly year on
year (EUR 1,309.4 million; 2014: EUR 1,198.2 million), primarily due to the
performance of the KHS Group. The KDE Group reported considerable growth on
the back of the recovery of the automotive sectors' investment activity, as
opposed to KDS that was unable to repeat the record level achieved in 2014.
In an persistently competitive environment, the segment generated a pre-tax
profit of EUR 24.6 million, thereby delivering a presentable result around
the level of the previous year (2014: EUR 25.2 million).
The external sales of Industrial Participations / Consolidation climbed to
EUR 204.5 million in the financial year 2015 (2014: EUR 181.9 million).
Earnings before taxes stood at EUR 47.5 million, which is lower than in the
year-earlier period (2014: EUR 78.9 million). This figure includes the
contribution of the Aurubis investment amounting to EUR 21.8 million (2014:
EUR 31.2 million). Lower interest income from cash management within the
Group, as well as provisions of EUR 12.5 million to cover the interest rate
risk arising from the potential non-recognition for tax purposes of
securities lending carried out in former years incurred a countereffect.
The annual financial statements for the financial year 2015 will be
submitted to the Supervisory Board for ratification at its next meeting and
a full version published on Friday, March 18, 2016.
Outlook
Guidance on the development of the macroeconomic situation is already
fundamentally subject to a great deal of uncertainty, particularly in the
current political and financial environment. The forward-looking statements
below on the individual business units assume the absence of renewed
recessionary developments. Instead, we anticipate a relatively moderate
economic recovery for our persistently contested main markets in the
current financial year.
Against this backdrop, the business segments anticipate that business will
develop as follows in the financial year 2016:
The activities of the companies of the Steel Business Unit are subject to
extremely challenging framework conditions in the current financial year.
Customer demand for passing on favorable raw materials procurement prices,
on the one hand, and the steep uptrend in the volume of cheap imports from
China into the European steel market since the second half-year of 2015, on
the other, have exerted considerable pressure on prices. Salzgitter
Flachstahl GmbH (SZFG), by far the business unit's largest company, expects
selling prices to stabilize as from the second half of 2016, depending on
when anti-dumping measures by the European Union (EU) enter into force. EU
anti-dumping measures for cold-rolled strip have meanwhile already been
decided, while a ruling on the respective measures against hot-rolled strip
and plate imports at dumping prices is expected in the second half of the
year. Assuming that demand remains satisfactory and with support from
further cost savings, we anticipate virtually stable sales and a slight
deterioration in the pre-tax result in comparison with 2015. The fact that
the previous year's sales and result were burdened by relining one of the
large blast furnaces in Salzgitter must be taken into account.
The Plate / Section Steel Business Unit is also exposed to a difficult
market environment in the current financial year. The plate mills in
particular are confronted with partly ruinous price declines due to the
flood of imports. Anti-dumping measures applied for in connection with this
product segment are only likely to ease the situation to a certain extent
in the second half of the year at the earliest. In addition, the capacity
utilization of Salzgitter Mannesmann Grobblech GmbH depends to a large
degree on realizing further large-diameter pipes projects. Extensive
measures to reduce costs and raise efficiency are necessary for both mills.
In connection with scrap prices returning to normal levels, Peiner Träger
GmbH expects another somewhat lower, but nevertheless positive pre-tax
result. Along with non-recurrent losses from HSP Hoesch Spundwand GmbH,
whose operations were discontinued at year-end 2015, this is, however,
unlikely to be sufficient to compensate for the plate mills' deficit. We
nonetheless anticipate a significant reduction in the business unit's
pre-tax loss. Owing above all to selling prices, coupled with the
discontinuation of the sheet piling business, notably lower sales are
anticipated.
The companies of the Energy Business Unit will continue to operate in
markets with varying potential in 2016. The awarding of major projects in
Europe's large-diameter pipes market also depends on geopolitical
considerations. Moreover, the currently low levels of oil and gas prices
are hampering customers' investment propensity worldwide. The first orders
already securing capacity utilization were nevertheless acquired in 2016.
In the medium line pipes segment, demand is likely to remain reticent owing
to the low energy prices; preparations for capacity adjustments and cost
reductions are currently under way and are to be implemented over the
course of the year. The precision tubes companies expect stable demand from
automotive manufacturers in contrast to the markets of the energy and
industry product segments that will remain exposed to tough competition. In
the seamless stainless steel tubes segment, we anticipate that all product
segments will stage a recovery in the second half of the year. Weaker
selling prices will result in a marginal sales downturn overall; the
pre-tax result is expected to remain at the year-earlier level.
In 2016, the Trading Business Unit forecasts a stabilization of the price
level and a recovery in demand. International trading is likely to increase
shipments on the back of a revival in project awards. In the stockholding
steel trade, raising the processing capacities and expanding the customer
base in the context of stepping up the digitalization of sales is likely to
generate growth momentum. Special items that boosted the result in 2015
will not repeat in 2016, which is likely to be reflected in a notably lower
pre-tax result. Adjusted for these effects, the segment anticipates a
slight upturn in sales overall and an appreciable improvement in the
underlying result. Additional support will be provided here by the
foreseeable success of restructuring at Salzgitter Mannesmann Stahlhandel
GmbH and the strategic realignment of Universal Eisen und Stahl GmbH toward
high-margin individual transactions.
Based on a high order backlog, the Technology Business Unit expects stable
sales and profit trends. In an environment of persistently price-led
competition for project business, growth in profitable product segments is
to be generated, as well as by a further expansion of the service business.
Accordingly, the KHS Group expects a result around the year-earlier level
at minimum. Above all further efficiency enhancing measures under the
"Fit4Future 2.0" program are set to develop their full impact. The outlook
for Klöckner DESMA Schuhmaschinen GmbH (KDS) and the KDE Group is similarly
promising.
In Industrial Participations / Consolidation that is mainly determined by
the costs of the management holding company, reporting-date related
valuation effects from foreign exchange and derivatives positions, the
results of the services companies assigned to it, and other associated
companies, including Aurubis AG, a positive pre-tax result is expected,
albeit around one third below the comparatively high year-earlier level.
Against the backdrop of the currently conditions, particularly in the
rolled steel and pipe market, and taking account of further positive
effects from the "Salzgitter AG 2015" program, flanked by additional
programs of measures for the individual companies, we assume the following
for the Salzgitter Group in the year 2016:
- sales virtually stable at around EUR 8.6 billion,
- an operating pre-tax result around breakeven - depending on when
anti-dumping measures take effect and net of non-recurrent expenses for
specific measures aimed at structural improvements within the Group -
as well as
- a marginally positive return on capital employed (ROCE).
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 changes in the currency parity, may
considerably affect performance in the course of the financial year 2016.
The resulting fluctuation in the consolidated pre-tax result may, as
current events show, be within a considerable range, either to the positive
or to the negative. The dimensions of this range become clear if one
considers that, with around 12 million tons of steel products sold by the
Strip Steel, Plate / Section Steel, Energy and Trading business units, an
average EUR10 change in the margin per ton is sufficient to cause a
variation in the annual result of more than EUR 120 million. Moreover, the
accuracy of the company's planning is restricted by the volatile cost of
raw materials and shorter contractual durations, on the procurement as well
as on the sales side.
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 division
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.
2015 2014 External sales EUR m 8,618.4 9,040.2 Strip Steel Business Unit EUR m 1,922.5 2,060.1 Plate / Section Steel Business Unit EUR m 908.8 1,118.8 Energy Business Unit EUR m 1,062.6 1,226.5 Trading Business Unit EUR m 3,210.7 3,254.8 Technology Business Unit EUR m 1,309.4 1,198.2 Industrial Participations / Consolidation EUR m 204.5 181.9 Earnings before taxes (EBT) EUR m 12.6 - 15.2 Strip Steel Business Unit EUR m - 26.0 - 8.8 Plate / Section Steel Business Unit EUR m - 68.0 - 130.0 Energy Business Unit EUR m 2.2 - 40.6 Trading Business Unit EUR m 32.2 60.1 Technology Business Unit EUR m 24.6 25.2 Industrial Participations / Consolidation EUR m 47.5 78.9 Net income/loss for the financial year EUR m - 45.5 - 31.9 Earnings per share - basic EUR - 0.89 - 0.64 Return on capital employed (ROCE)1) % 2.1 1.8Disclosure of financial data in compliance with IFRS 1) ROCE = EBIT (= 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) and liabilities from finance leasing, forfaiting 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 [email protected] --------------------------------------------------------------------------- 26.02.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Salzgitter AG Eisenhüttenstraße 99 38239 Salzgitter Germany Phone: +49 5341 21-01 Fax: +49 5341 21-2727 E-mail: [email protected] Internet: www.salzgitter-ag.de ISIN: DE0006202005 WKN: 620200 Listed: Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart; Terminbörse EUREX End of News DGAP News Service --------------------------------------------------------------------------- 440451 26.02.2016
|
Weitere Ad-hoc und Unternehmensrelevante Mitteilungen zu
Salzgitter AG ISIN: DE0006202005 können Sie bei EQS abrufen
Stahl/Kupfer , 620200 , SZG , XETR:SZG