Salzgitter (SZG) Q2 2024 earnings summary

Executive summary

• H1 2024 saw a significant decline in sales and profitability, with sales down by EUR 593 million and a net loss of €18.6m, mainly due to weak steel demand and lower prices, but diversification and the Technology segment partially offset losses.

• Major cost-saving and cash safeguarding programs were implemented, and the syndicated loan of EUR 1 billion was extended to August 2029, ensuring financial flexibility.

• Investments in SALCOS® green steel transformation continued, with €2.3bn committed and public funding secured for the first stage.

• Active portfolio management included the divestment of Mannesmann Stainless Tubes, expected to close in Q3 2024.

• Workforce increased to 23,511, mainly due to SALCOS®-related hiring and digitalization initiatives.

Financial highlights

• EBITDA for H1 2024 was €233.6m (H1 2023: €429.3m); full-year 2024 guidance is €400–500 million, with sales expected around €10 billion.

• Pre-tax result is forecasted at break-even for the full year; H1 2024 EBT was €11.5m (H1 2023: €211.0m).

• ROCE is expected to be tangibly lower year-on-year; H1 2024 ROCE was 1.9% (H1 2023: 7.9%).

• Net CapEx for 2024 is reduced to EUR 850 million after adjustments; H1 2024 investments totaled €314.5m.

• Equity ratio remains solid at 45.6%.

Outlook and guidance

• 2024 sales expected around €10 billion, EBITDA between €400–500 million, pre-tax result near breakeven, and ROCE tangibly below prior year.

• No recovery effects from the economy are included in the 2024 guidance.

• Steel production is expected to remain at break-even pre-tax for the year, while steel processing will likely post negative EBITDA and EBIT.

• Technology segment is expected to deliver profit before tax above EUR 100 million and notable sales and earnings growth.

• CapEx for SALCOS phase I is planned at roughly EUR 500 million per year for 2024–2026.