Annual press conference

Salzgitter Group achieves third earnings record in a row

A further set of record earnings, an extension of Lower Saxony's participation in the company, and a billion-euro investment program were the main topics of the annual press conference held in Salzgitter, presented by Wolfgang Leese, Chairman of the Executive Board, and Dr. Heinz Jörg Fuhrmann, Executive Board member responsible for finance.

The Federal State of Lower Saxony will retain its investment in Salzgitter AG until at least 2013, as stated by Minister-president Christian Wulff at a press conference held jointly with Wolfgang Leese in Hanover. In his opening words at the annual press conference, Wolfgang Leese explained that this would ensure the Group's independence on a sustained basis.

Dr. Fuhrmann went on to discuss the key figures for the 2006 financial year: operating pre-tax profit of EUR 947.9 million (excluding the effects from the sales of Vallourec and Vallourec & Mannesmann Tubes) had allowed the Group to once again exceed the previous year's excellent earnings level by a considerable margin (2005: EUR 802.7 million). Including the effect of the Vallourec sale, Salzgitter AG generated earnings before tax of EUR 1.85 billion. Consolidated sales in 2006 rose by 18 %, from EUR 7.15 billion in 2005 to EUR 8.45 billion in 2006, reaching a new record level. The same applies also for return on capital employed. ROCE rose to 47.8 %, far exceeding the Group's cross-cycle target of 12 %.

Along with the excellent conditions in the steel markets, Dr Fuhrmann also attributed the "set of superlative results" to an even higher level of dynamics compared with previous years.

Subject to the agreement of the General Meeting of Shareholders to be held in Braunschweig on May 23, 2007, the company intends to pay a dividend per share of EUR 1, plus a bonus of EUR 1, totaling EUR 2.Wolfgang Leese announced an extensive Group investment program intended to further the Group's growth strategy. Investments in plant facilities and processes of EUR 1.4 billion are planned for the period up to 2010 for the Peine and Salzgitter locations in Lower Saxony.

Executive Board Chairman Wolfgang Leese made the following forecast for 2007: "On the basis of the overall Group and divisional planning conducted before the start of the year, which comprises up-to-date information about the development of the current business year, we anticipate an almost unchanged level of sales for the 2007 financial year, and a repeated level of pre-tax profit at the higher end of the triple-digit million range. However, in view of the discontinuation of the Vallourec operating contributions, and the fact that trading margins are normalizing, it would appear too ambitious for us to expect to be able to repeat the previous year's level of EUR 948 million.