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-related sectors and lower prices, though diversification and the technology segment partially offset losses.

• Major cost-saving and cash safeguarding programs were implemented, including CapEx cuts, working capital reductions, and the Performance 2026 program targeting EUR 250 million in savings.

• The SALCOS® green steel project remains on time and on budget, with €2.3bn committed and public funding secured for phase I, enabling green steel deliveries from mid-2026.

• Active portfolio management included the divestment of Mannesmann Stainless Tubes, with a €20 million impairment and €125 million cash inflow expected in Q3 2024.

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

Financial highlights

• External sales fell to €5,243 million in H1 2024 from €5,836 million in H1 2023; EBITDA declined to €233.6m (H1 2023: €429.3m); EBT at €11.5m (H1 2023: €211.0m); net loss of €18.6m.

• Earnings per share: €-0.40 (H1 2023: €2.91); ROCE: 1.9% (H1 2023: 7.9%).

• Cash flow from operating activities was negative at €-137.3m; cash and cash equivalents decreased to €580.8 million.

• Investments rose to €314.5m in H1 2024, mainly for SALCOS® and plant upgrades.

• Equity ratio remained strong 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; economic weakness and low demand will continue to weigh on steel and processing segments.

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

• Opportunities for market recovery and demand increase are anticipated in 2025.

• Guidance excludes potential one-off effects from structural events.