DGAP-News: Salzgitter AG / Key word(s): Quarterly / Interim Statement/Half Year Results Salzgitter AG: Salzgitter Group delivers a pre-tax profit in the first half of 2016 10.08.2016 / 07:30 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- - EU steel market: first positive effects emanating from EU anti-dumping initiatives - Decisive profit contribution by internal program of measures - Upward revision of earnings forecast in June affirmed Due above all to a stronger second quarter, the Salzgitter Group delivered a pre-tax profit in the first half of 2016 that was boosted significantly by the contribution from the continued successful implementation of internal restructuring measures. Although the immense price pressure exerted since the fall of 2015 by cheap imports - first and foremost from China, but also from Russia and the Ukraine - is reflected in the results of the strip steel and plate segments, the profit contributions of the other business units and the Aurubis investment fully offset this effect. The first EU anti-dumping measures have caused a surprisingly sharp decline in Chinese imports since the spring of 2016, accompanied by a concurrent increase in the price level of many steel products. In response to the market returning to a more stable level, Salzgitter AG lifted its earnings forecast for the financial year 2016 back on June 28, 2016. Due in particular to the extremely tense selling price situation still prevailing in the spring for rolled steel products in the European market, the Salzgitter Group's external sales declined to EUR 3,967.5 million in the first half of 2016 (H1 2015: EUR 4,529.6 million). Earnings before taxes of EUR 16.1 million (H1 2015: EUR 80.2 million) comprise a total of EUR 6.6 million in expenses for measures aimed at structural improvements (H1 2015: EUR -33.1 million), as well as EUR 26.1 million contribution from the Aurubis investment (H1 2015: EUR 16.4 million). The after-tax result stood at EUR 9.3 million (H1 2015: EUR 41.3 million), which brings earnings per share to EUR 0.13 (H1 2015: EUR 0.72) and return on capital employed (ROCE) to 2.1 % (H1 2015: 5.4 %). Even following another reduction in the actuarial rate applicable to pension provisions to only 1.25 %, the company continues to enjoy a sound financial basis, with an equity ratio of 32 % and a net financial position of EUR 183 million that is virtually unchanged year on year. Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann commented as follows: "Thanks to the rigorous implementation of our self-help measures and our excellent technical and financial basis, we can look to the future with confidence, which is also underpinned by our performance. We welcome the urgently necessary anti-dumping initiatives of the EU Commission, without which significant parts of the European steel industry would have been placed at risk in the medium term. However, as the scope and sustainability of the measures introduced are not foreseeable, and seeing as a general solution to the EU market's problems has by no means yet been found, we will continue to focus on optimizing the processes and structures of our own company. We cannot and will not diverge from this path!" External sales by business unit (EUR million):

                                                         H1 2016  (H1 2015)
Strip Steel                                                937.0  (1,030.1)
Plate / Section Steel                                      366.6    (500.2)
Energy                                                     502.5    (574.9)
Trading                                                  1,425.5  (1,690.3)
Technology                                                 641.7    (636.3)
Industrial Participations / Consolidation                   94.1     (97.7)
Group                                                    3,967.5  (4,529.6)

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

                                            H1 2016               (H1 2015)
Strip Steel                                   -37.3                  (20.7)
Plate / Section Steel                         -17.0                 (-19.5)
Energy                                          9.4                   (3.3)
Trading                                        16.5                  (17.3)
Technology                                     12.6                  (14.6)
Industrial Participations /                    31.8                  (43.7)
Consolidation
Group                                          16.1                  (80.2)

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 they are based more on the assumption of a moderate economic recovery in our persistently contested main markets. Over the remainder of the year, the Strip Steel Business Unit anticipates an uptrend that will be attributable first and foremost to the decline in dumped Chinese imports and the associated increase in the selling prices of strip steel products. This uptrend will not, however, be able to compensate for the losses accumulated from the temporary destruction of market equilibrium. Against this backdrop, a downturn in sales and a marginal decline in the pre-tax result compared with the previous year has been assumed. In the Plate / Section Steel Business Unit the ruinous price competition triggered by the flood of imports that the plate companies had to contend with appears to have been halted for the time being. The Mülheim mill is benefiting from comparatively good capacity utilization due to the awarding of the Nord Stream 2 project. The section steel business remains exposed to a difficult market environment; short-term fluctuations in demand and scrap steel prices make forecasting more difficult. Thanks to the non-recurrence of losses from the operations of HSP Hoesch Spundwand und Profil GmbH that were wound down at year-end 2015, we anticipate a significant reduction in the business unit's pre-tax loss. Sales are anticipated at a notably lower level due above all to selling prices. The companies of the Mannesmann Business Unit, renamed as of August 1, 2016 (formerly: Energy Business Unit), report a very heterogeneous performance: While capacity utilization in the large-diameter pipe mills is good, order bookings in the segment of medium-diameter line pipes are unsatisfactory as a result of energy prices. The precision tube companies expect stable demand from automotive manufacturers, as opposed to the markets of the energy and industry product segments that are likely to display a weaker trend. The stainless steel tubes business anticipates a gradual market recovery following initially reticent order intake during the first months of 2016. The sales and pre-tax result of the Mannesmann Business Unit are expected to settle around the 2015 level. The Trading Business Unit expects the price level and demand conditions to stabilize as the financial year 2016 progresses. All in all, the segment anticipates lower sales compared with 2015, which is mainly due to the decline in international trading's shipment tonnage and the downturn in average selling prices. The temporary widening of the margins in the stockholding steel trade is nevertheless likely to lead to a higher pre-tax profit. The Technology Business Unit expects a stable sales and profit trend supported by a high order backlog. In view of the continued fierce competition in the global project business, the KHS Group intends to generate growth through profitable product segments, as well as through the additional expansion of its service business. The prospects of the smaller specialist mechanical engineering companies are also positive. Against this backdrop, the Salzgitter Group affirms its forecast of June 28, 2016 and assumes the following, as before: - a decline in sales to between EUR 8.0 and 8.5 billion (previous year: EUR 8.6 billion), - an increase in the pre-tax profit of between EUR 30 and 60 million compared with 2015 (EUR 13 million), which already includes the balance of around EUR10 million in burdens on earnings for individual measures aimed at structural improvements within the Group and income from the sale of assets, - a return on capital employed that is marginally higher year on year (previous year: 2.1 %). Additional information can be found in the full press release and the financial report published today (www.salzgitter-ag.com/en). 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. 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] --------------------------------------------------------------------------- 10.08.2016 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. Archive at 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, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 490947 10.08.2016