Preface by the Executive Board

Ladies and Gentlemen,

In line with our expectations, 2010 was a year of transition for Salzgitter AG, a return from the dramatic crisis of 2009 to normality. The nature of this normality, however, is decidedly different from the phase also deemed “normal” prior to the steel boom that commenced back in 2004.

Today we are confronted with the extreme price volatility of raw materials needed for our rolled steel and tubes production, which is presenting us with new challenges. As opposed to the financial sector, which was able to pass the major share of the gigantic burden of its own making on to the public sector and thus to taxpayers, not all sectors relevant for Salzgitter AG have emerged from the crisis. One example is the European construction industry which is, to all appearances, suffering greatly from tight budget restrictions now that stimulus programs have expired. On a brighter note, firstly the German automotive industry, followed a little later by the engineering sector and its customers, as well as the global beverage industry, made gratifying contributions to the capacity utilization of our Group companies.

And this brings us to the prospects for Salzgitter AG, which speak for themselves: Well positioned with high-grade products, cutting-edge production facilities, highly qualified employees and a strong financial base, we will take on this decade’s megatrends and play our part in shaping them. There is more potential for further developing and optimizing the Group; our tenet is to recognize this potential and implement the requisite measures.

The internationalization of Salzgitter AG is a key component: In 1998, we only had 125 employees outside Germany, whereas this number has risen to more than 3,400 today. As this growth is set to progress in the future – while we remain firmly rooted in our tradition and in our values as a German industrial enterprise – the motto of this year’s Annual Report which is “24 hours at Salzgitter” can well be interpreted as a programmatic statement.

Discover today’s entrepreneurial and cultural diversity at Salzgitter AG. To give you an insight, we paid a visit to a selection of German and international locations from the five divisions and spent a day with the employees working there. This has made the Group’s ceaseless activities more of a tangible experience. When the working day in Germany is drawing to an end, a new day is dawning for our subsidiaries in other parts of the world.

It is with deep concern that we observe a growing threat to the global competitiveness of our steel production locations from the – in an international comparison – high energy costs and unilateral commitments of the European Union to environmental and climate protection. We, the Executive Board of Salzgitter AG, therefore expect answers from policymakers on how they intend to counteract the aforementioned burdens on domestic steel production, the industrial value chain and the ensuing relocation of jobs to countries not subject to such covenants and directives. Policies on climate protection have to be crafted in a joint effort by the international community; one-sided commitments and elimination of energy-intensive production will not ultimately be in the interest of global climate. They will merely serve to endanger Germany as an industrial location, and thereby incur severe economic, social and socio-political consequences.

Back to the financial year 2010: Having staged a return to the profit zone, we are able to raise dividend to € 0.32 per share, which is one third higher than in 2009. The increase is a reflection of the Group’s steadily rising profitability without its financial base being overtaxed in these changeable times.

On this note, we would like to extend our thanks to you as the shareholders and business partners of Salzgitter AG, also on behalf of our committed employees, for the trust that you vest – through thick and thin – in our company.

Sincerely,