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 /  /  / Overall Statement by Management on the Economic Situation

Overall Statement by Management on the Economic Situation

Salzgitter Group continues on its successful course with a further increase in the result
Despite the disastrous conditions on the European steel market caused by imports at the start of the year, the Salzgitter Group closed the financial year 2016 with a significant year-on-year increase in earnings before taxes. The company has therefore affirmed its uptrend. The significant impact of internal programs of measures as well as the positive effect of the European Union’s urgently required trade defense measures as from February 2016 onward were major factors contributing to this development. In the second half of the year, the Strip Steel and Trading Business Units in particular benefited from steel prices firming up.

The Salzgitter Group’s external sales (€ 7,905.7 million; 2015: € 8,618.4 million) declined above all due to the downtrend in the average selling prices of steel products. Pre-tax profit increased to € 53.2 million (2015: € 4.1 million) and includes € 19.1 million in contribution from the Aurubis investment (2015: € 21.8 million) as well as a net figure of € –2.3 million in burdens on earnings from special items. Earnings after tax stood at € 56.8 million (2015: € –56.0 million), exceeding the pre-tax result mainly due to the anticipated greater use of tax loss carryforwards. Earnings per share therefore came in at € 1.00 (2015: € –1.08) and return on capital employed at 2.7 % (ROCE, 2015: 1.9 %). With a net financial position of € 302 million and an equity ratio of 34 %, the company continues to have a sound balance sheet and a comfortable financial basis.

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