Report of the Supervisory Board
The year 2024 was again determined by uncertainty, geopolitical tensions, and high energy prices not competitive in the international arena. The persistently weak economic environment was especially reflected in the steel sector’s key customer markets. Whereas the Salzgitter Group’s start to the financial year was more modest than in the previous year but nevertheless progressed as expected, there were signs over the course of the first six months that the recovery in Germany’s economy would be more hesitant and weaker than expected in the second half of the year as well. This was particularly evident in order intake postponements at our steel-related companies.
Above all, orders for long anticipated infrastructure projects, in the line pipe business for instance, suffered notable delays. In the autumn, the Group’s result was additionally significantly burdened by impairment essentially pertaining to the assets of the Mannesmann Precision Tubes Group. Against this backdrop, the company had to revise its revenue and profit forecast over the course of the financial year. In response to the weak market environment, the Salzgitter Group initiated an extensive package of additional measures that went beyond the current “Performance 2026” profit improvement program with the aim of future proofing the business units’ positioning. A package of measures was also initiated to support liquidity and earnings in the short term. These include the restrictive allocation of funds for investments and maintenance and the optimization of working capital. These packages of measures entailed one-off expenses in 2024 recognized through profit or loss in particular for restructuring in the Trading Business Unit. The measures will have noticeable, positive impact in subsequent years, as will the necessary impairment of the Hüttenwerke Krupp Mannesmann GmbH joint operation. On a high note, our Technology Business Unit performed exceedingly well again and our participating investment in Aurubis AG also supported the consolidated result. As a result, and minus the aforementioned one-off effects, the Salzgitter Group delivered a pre-tax result well in the black in the difficult environment described above. Our diversified business model has once again delivered proof of its effectiveness.
In the final quarter of the financial year Salzgitter AG was informed by its shareholder GP Günter Papenburg AG about considerations given – together with TSR Recycling GmbH & Co. KG – to submitting a voluntary public takeover offer to Salzgitter AG’s shareholders to purchase their shares. That said, the Executive Board set about engaging in discussion with the potential bidders with a view to understanding the economic rationale behind this potential offer. At the time when the annual financial statements were being drawn up, the company was unable to make a statement on the basis of the information so far available as to whether a takeover of this kind was in the best interest of the company, its shareholders and employees and other stakeholders of the company. In response to the announcement of the voluntary public takeover offer, the Supervisory Board decided to set up a Takeover Committee and to commission its own consultants.
Monitoring and advising the Executive Board in the exercising of its management duties
In the financial year 2024, the Supervisory Board kept itself continuously apprised of the situation of the Group and the development of business. The Executive Board informed the Supervisory Board by way of detailed written quarterly reports about the Group’s result of operations, the current financial position and the net assets, as well as about developments in the relevant markets, the course of business and the investments in the individual business units. The reports also comprised information on the developments and activities in the personnel area as well as detailed estimates on the opportunities and risks over the course of the year. Moreover, the Supervisory Board held five meetings to obtain detailed reports on the respective current situation of the Group and the important Group companies, as well as on material business transactions and relevant changes. The development of business compared with corporate planning was explained to the Supervisory Board. Any deviations from planning were elaborated on and then queried and discussed by the Board. Compensatory measures were addressed. In addition, the meetings also focused on the status of implementation of the groupwide “Performance 2026” efficiency program. The Supervisory Board devoted special attention to long-term planning, as well as to the status of the SALCOS® program. By using the dashboard regularly provided by the Executive Board, the Supervisory Board was able to track the development of the SALCOS® program in a timely manner and, if necessary, engage in clarifying discussions with the Executive Board at short notice. Business transactions requiring the consent of the Supervisory Board were approved by the Board after thorough examination and consultation. Furthermore, between meetings, the Chairman of the Supervisory Board was kept regularly informed by the Executive Board Chairman on current topics.
The Supervisory Board held regular meetings in the reporting year, in the months of March, May, September and December, and convened an extraordinary meeting in February. The attendance rate at the Supervisory Board meetings, held without exception as plenary meetings with individual members participating via online connection if necessary, stood at 97 %. The Supervisory Board convened generally with the Executive Board attending. However, it regularly discussed topics such as Executive Board remuneration and the key findings of the audit conducted on the annual financial statements in the absence of the Executive Board members. Regular preliminary discussions – partly with and partly without the attendance of the Executive Board – in separate meetings with owner and employee representatives served the purpose of initial consultation on the current situation and imminent decisions.
With the exception of two members of the Supervisory Board, no conflicts of interest were brought to the attention of the Supervisory Board in the reporting year, neither by the Supervisory Board members nor by members of the Executive Board. Only the Supervisory Board members Karin Hardekopf and Klaus Papenburg indicated in December 2024 that they may be exposed to a conflict of interest insofar as the Supervisory Board would need to deliberate on the voluntary public takeover offer submitted to Salzgitter AG’s shareholders by GP Günter Papenburg Aktiengesellschaft and TSR Recycling GmbH & Co. KG. This conflict of interest was resolved by the aforementioned Supervisory Board members not participating in resolutions taken by the Supervisory Board in connection with the possible takeover and by their temporary withdrawal from Supervisory Board meetings at such times when the Supervisory Board addressed topics that pertained to the potential takeover offer.
Since no new members joined the Supervisory Board in the financial year 2024, an onboarding process was not necessary.
Focus of the consultations of the Supervisory Board
The extraordinary meeting of the Supervisory Board held on February 1, 2024, essentially focused on the status and the further expansion stages of the SALCOS® program. In addition, the Supervisory Board gave its consent to the disposal of Mannesmann Stainless Tubes GmbH, including the company’s subsidiaries, and was informed about the investment in a new shredder plant planned by DEUMU Deutsche Erz- und Metall-Union GmbH.
In its meeting on March 14, 2024, and as is customary in March meetings, the Supervisory Board focused primarily on the financial statements of Salzgitter AG and of the Group, both drawn up as of December 31, 2023, as well as on the combined management report on the company and the Group for the financial year 2023. The representatives from EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, the statutory auditor elected by the Annual General Meeting of Shareholders, explained the key findings of their audit. In doing so, they also responded to the questions put to them by Supervisory Board members. Following a detailed examination of the documentation pertaining to the financial statements, with the aid of the report of the auditor, the Supervisory Board ratified the separate and consolidated annual statements.
With a view to the variable remuneration of Executive Board members, the Supervisory Board used the fixed performance criteria to determine the degree to which targets set had been achieved for the Performance Cash Award 2020 and the annual bonus for 2023. Moreover, the Board ratified its report for the Annual General Meeting of Shareholders, the remuneration report and the resolutions to be put forward to the 2024 Annual General Meeting of Shareholders on the individual agenda items. Furthermore, the Supervisory Board also consulted on the 2023 non-financial report and, following its own detailed examination, approved the audit findings in the report by the auditor. In addition, in view of Mr. Burkhard Becker’s departure from the Executive Board, the Board approved an amendment to the Executive Board’s schedule of responsibilities. Finally, the Board adopted the updated remuneration system for the Executive Board, effective January 1, 2024.
In its meeting on May 29, 2024, the Supervisory Board focused on discussions about the future composition of the Executive Board, among other matters. In view of the imminent retirement of Mr. Michael Kieckbusch, Executive Board member responsible for personnel, at the end of 2024, the Supervisory Board appointed Ms. Birgit Dietze to Salzgitter AG’s Executive Board for the period from September 1, 2024 through August 31, 2027. Furthermore, the Supervisory Board approved the investments of Salzgitter Flachstahl GmbH in a new walking beam furnace and of Salzgitter Mannesmann Grobblech GmbH in a new hot leveling machine.
The Supervisory Board held a meeting in Mülheim on September 26, 2024. In the run-up to the meeting, the Board members visited the plant of Salzgitter Mannesmann Handel GmbH in Gladbeck in order to inform themselves on site. During the meeting, the Supervisory Board renamed its Strategy Committee as the Strategy and Sustainability Committee in accordance with the key topics addressed by this committee and appointed Mr. Amit Bedi as the new head of the Steel Processing Business Unit, effective October 1, 2024. Furthermore, the Supervisory Board discussed the most recent business development and informed itself about the current status of the SALCOS® program. The Supervisory Board also had the Executive Board report in writing and orally on the Group’s compliance management system and on investigated compliance activities. Finally, it gave its approval to Salzgitter Flachstahl GmbH’s investment in replacing the main drives in the tandem mill.
In its meeting on December 5, 2024, the Supervisory Board and the Executive Board discussed the corporate plan in detail prepared and submitted by the latter for the financial years 2025 through 2027. The Supervisory Board was also brought up to date on the SALCOS® program. Other topics of consultation in this meeting included the imminent defining of the qualitative criteria determining variable Executive Board remuneration in 2025 for assessing the performance of the individual Executive Board members, as well as the stakeholder objectives for the performance period from 2025 through 2028. The Supervisory Board also concerned itself with the recommendations of the German Corporate Governance Code for purpose of submitting the Declaration of Conformity for 2024. In addition, the Board appointed Dr. Denecke-Arnold, effective May 1, 2025, as the head of the Steel Production Business Unit. Moreover, the Supervisory Board discussed the findings of an assessment of itself and the efficiency of its work with the aid of external support and formed a Takeover Committee from its members. In addition, in view of Mr. Kieckbusch’s withdrawal from the Executive Board, the Board approved an adjustment to the Executive Board’s scheduled responsibilities.
Work of the Committees
In order to prepare for its consultations and decisions, the Supervisory Board has formed presiding, audit, strategy and sustainability, along with takeover and nomination committees.
The Presiding Committee held four plenary meetings in 2024. The committee consulted in detail on business development. In addition, the Presiding Committee dealt with the issue of succession at the level of the Executive Board and the Group Management Board, adjusting the Executive Board’s schedule of responsibilities, the components of variable Executive Board remuneration, corporate planning, reviewing the Supervisory Board's remuneration, the Supervisory Board’s selfassessment, the possible takeover offer to the company’s shareholders, the recommendations of the German Corporate Governance Code, planned investments, as well as the current situation and the future prospects of Hüttenwerke Krupp Mannesmann GmbH.
The members of the Audit Committee held five meetings during the reporting period, the first as a web conference and all other meetings with physical attendance. As is customary in February and March, it prepared the audit of the 2023 annual financial statements at company and at Group level by the whole Supervisory Board and in the presence of representatives from the auditor, in particular by way of in-depth consultation on the respective audit reports and the oral report by the representatives of the auditor on the key findings of the audit. To this end, the Audit Committee met twice: on February 29 exclusively with representatives of the statutory auditor and again on March 12 with these auditor representatives and the Executive Board. In the context of its audit, the Audit Committee saw no reason to raise objections and recommended that the full Supervisory Board approve the annual financial statements.
In the same manner, the members of the Audit Committee examined the 2023 non-financial report in preparation and discussed the results of reviewing the remuneration report. In addition, the Audit Committee focused on the independence of the statutory auditor and of the auditor of sustainability reporting, in particular the scope of non-audit services provided by the auditor and the quality of the audit. The consultations of further meetings of the Audit Committee concerned IT security and IT structures, monitoring the accounting process, as well as the effectiveness of the accounting-related and non-accounting-related internal control system, the risk management system, and the internal audit system. In addition, the Audit Committee had itself involved in detail regarding the Group's compliance management system (including tax compliance), as well as the status of using the company’s financing instruments. The Audit Committee also dealt with preparing the proposal of the Supervisory Board for the appointing of the statutory auditor for the financial year 2024 by the Annual General Meeting of Shareholders, the assignment of the audit engagement, and agreeing the fees with the statutory auditor (including sustainability reporting) and the stage reached in preparing sustainability reporting. The quarterly financial reporting of the Group was discussed in detail with the Executive Board before publication. The Chairman of the Audit Committee also maintained regular dialog with the statutory auditor between meetings.
In March 2025, following a detailed preliminary review, the Audit Committee recommended that the full Supervisory Board approve the 2024 annual financial statements at company and at Group level. The committee’s preliminary review of the 2024 non-financial report did not give rise to any objections either.
The Strategy and Sustainability Committee held one meeting with members personally attending in 2024. Topics included the status of implementing the “Salzgitter AG 2030” strategy and core ESG aspects, the SALCOS® program, the Group’s financial framework conditions, performance and active portfolio management.
The Nomination Committee did not hold any meetings in 2024.
The Takeover Committee formed by the Supervisory Board on December 5, 2024, met twice in the form of a web conference in 2024. During these meetings, the Board dealt with a possible public voluntary takeover offer by GP Günter Papenburg Aktiengesellschaft and TSR Recycling GmbH & Co. KG to buy the shares in the company, in particular with mandating its own consultants, and the implications of a possible takeover for the company and its stakeholders, as well as the respective status of the activities.
Dealing with sustainability topics
A recurring, key topic addressed by the Supervisory Board in its work concerns sustainability issues. The Executive Board regularly reports on general developments of significance and progress in the area of sustainability, since May 2024 at each regular meeting of the Supervisory Board. Regarding these sustainability issues, the SALCOS® program that is geared to the company’s virtually climateneutral steel production forms the centerpiece of this work. Including the requisite preliminary discussions by the Presiding Committee, the SALCOS® program was a fixed item on the agenda of each regular Supervisory Board meeting, while also the focus of an extraordinary full Board meeting and a central topic of the Strategy and Sustainability Committee’s meeting. Deliberations in the committees were then reported on in the next full Supervisory Board meeting. The head of the Steel Production Business Unit who also bears responsibility for the program as General Manager of Salzgitter Flachstahl GmbH also participated in the Board meetings.
In determining the variable remuneration of the Executive Board members, the Supervisory Board also agreed non-financial targets with the members of the Executive Board in 2023 for 2024 and in 2024 for 2025. These non-financial targets are mainly attributable to the area of sustainability (managing demographic change, reducing the number of accidents, increasing the proportion of women in management positions, securing the supply of green electricity).
The compliance management system and investigated compliance activities are regularly debated at the Supervisory Board plenum’s autumn meeting, prepared beforehand by the Audit Committee’s in-depth deliberations on this topic. The head of the Group’s Legal Department generally reports to the full Supervisory Board and the head of the Group’s Compliance Management to the Audit Committee.
Special expertise in matters of sustainability is represented on the Audit Committee by the person of Prof. Dr. Schindler who has dealt intensively over many years with sustainability reporting and the respective audit as part of his supervisory board activities, and by Ms. Hardekopf who, in the position of managing director and Management Board member, has borne longstanding responsibility for the respective company’s finance department and therefore also for sustainability reporting. Establishing a separate Sustainability Committee exclusively for these issues is deemed unnecessary at the present point in time since sustainability aspects form an integral part of the “Salzgitter AG 2030” strategy and are best dealt with by the Strategy and Sustainability Committee. Furthermore, along with the full Supervisory Board regularly addressing sustainability topics, these topics are also dealt with by the other committees in line with their different prioritizations.
At Executive Board level, the topic of sustainability is largely the remit of the Chief Executive Officer in his role as Chairman, with the responsibility for matters affecting the employees resting with the Chief Personnel Officer.
Audit of the Annual Financial Statements of Salzgitter AG and the Consolidated Financial Statements
In its meeting on March 20, 2025, the Supervisory Board conducted a detailed examination of the financial statements of Salzgitter AG and of the Group, both drawn up as of December 31, 2024, as well as of the combined management report on the company and on the Group for the financial year 2024. Prior to this meeting, the independent auditor EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, Hanover, selected by the Annual General Meeting of Shareholders, reviewed both sets of financial statements and the management report on the Group and issued an unqualified “Auditor’s opinion”. The auditor thereby confirmed that the accounting, valuation and consolidation carried out in the consolidated financial statements complied with the International Financial Reporting Standards (IFRS) as applicable within the EU. Moreover, it was confirmed that the management report on the Group provides an accurate picture of the Group’s position. As part of its assessment of the early risk detection system, the auditor also ascertained that the Executive Board had taken the steps required by the German Stock Corporation Act (AktG) for the early recognition of risks that could endanger the company as a going concern.
The annual financial statements of Salzgitter AG, the consolidated financial statements of the Group, the combined management report on the company and the Group, the Executive Board’s proposals for the appropriation of retained earnings, as well as the auditor’s reports were available to the Supervisory Board for examination. The representatives of the independent auditor took part in the discussions of the annual financial statements and the consolidated financial statements and elaborated on the most important findings of their audit.
Based on the final results of its own examination of the annual financial statements at company and at Group level and the combined management report, the Supervisory Board did not raise any objections. The Board therefore approved the findings of the auditor's review and ratified the annual financial statements and the consolidated financial statements. The annual financial statements are thereby adopted. The Supervisory Board gave its approval to the proposal made by the Executive Board on the appropriation of retained earnings.
Non-financial report
In its meeting on March 20, 2025, the Supervisory Board also consulted on the topic of the separate, non-financial report on the Group for 2024. In view of the fact that the Corporate Sustainability Reporting Directive had so far not been enacted in German law, the Executive Board determined at an earlier date in in-depth consultation with the Audit Committee’s chairman which standards should be applied when drawing up this report. Prior to the meeting of the Supervisory Board, EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, Hanover, mandated by the Supervisory Board, examined the non-financial report on the Group to obtain limited assurance (Opinion). The auditor confirmed that no matters came to its attention that would cause it to believe that the report had not been prepared in all material respects in accordance with Sections 315b, 315c of the German Civil Code in conjunction with the requirements set out under Article 8 of the Directive (EU) 2020/852.
Changes to the Supervisory Board
There were no changes to the Supervisory Board in the financial year 2024.
Changes to the Executive Board
Aside from the aforementioned appointing of Ms. Birgit Dietze, effective September 1, 2024, there were no further changes to the Executive Board in the financial year 2024.
- Mr. Burkhard Becker withdrew from the Executive Board at the end of March 31, 2024. Ms. Birgit Potrafki has been the Executive Board member responsible for Finance since April 1, 2024.
- Mr. Michael Kieckbusch withdrew from the Executive Board at the end of December 31, 2024. Ms. Birgit Dietze has been the Executive Board member responsible for Personnel since January 1, 2025.
Thanks from the Supervisory Board
The Supervisory Board thanks Messrs. Becker and Kieckbusch for their long-standing successful activities to promote the good of the company.
Our thanks go to the Executive Board and to all the employees of the Group for their dedicated work and sound commitment throughout the financial year 2024.
