Financial year 2020

15.03.2021 | Press release of Salzgitter AG

Salzgitter AG – Financial Year 2020: By no means a lost year!

  • Decarbonization offensive expedited
  • Strategic investment projects systematically pursued
  • Financial year 2021: pre-tax profit envisaged between € 150 million and € 200 million

The Salzgitter Group delivered a pre-tax result of € –196.4 million in the financial year 2020 that was determined by the Corona pandemic and its severe disruption to society and the economy at large. Following a plunge in order intake caused by economic restrictions imposed on a global scale in the second quarter, we responded swiftly and resolutely with counteracting measures to secure earnings and liquidity. After a period of stabilization over the summer, the Strip Steel Business Unit showed the first strong signs of recovery in the final quarter that have held steady since then.

The Group’s external sales declined to € 7,090.8 million due above all to the drop in average selling prices for rolled steel products and lower shipment volumes (2019: € 8,547.3 million). The pre-tax result came in at € –196.4 million thanks to rigorous crisis management and the recent uptrend in performance, particularly in the Strip Steel, Trading and Technology business units, that exceeds the previous year's level (€ –253.3 million). The result also includes € 18.9 million in net income from restructuring provisions (2019: € –56.1 million) and a very gratifying contribution of € 104.0 million from the participating investment in Aurubis AG accounted for using the equity method (2019: € 99.5 million, including € 27.8 million in income from an accounting adjustment in connection with the acquisition of shares). Earnings after taxes of € –273.9 million (2019: € –237.3 million) comprise € 71.0 million in additional tax expenses for capital gains tax to be paid in connection with the ruling of the Federal Fiscal Court (Bundesfinanzhof) issued on structured securities lending in 2016. Salzgitter AG has lodged an appeal against this repayment. Earnings per share dropped to € –5.13 (2019: € –4.46), return on capital employed (ROCE) improved compared with the previous year’s figure but remained in negative territory (–3.9 %; 2019: –5.8 %). Against this backdrop, we will not be paying any dividend for the past financial year. With signs of a significant improvement in the financial situation in the current year, we expect to be able to resume dividend distribution again in 2022.

With an equity ratio of 32.5 % (2019/12/31: 34.1 %), Salzgitter AG’s balance sheet remains sound. In addition, the hidden reserves not evident from the balance sheet from the acquisition of our participating investment in Aurubis AG and the CO2 allowances purchased as a precautionary measure for the fourth period of the EU greenhouse gas emission trading scheme that commenced on January 1, 2021 meanwhile range in the upper triple-digit million euro range.

Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann on the financial year 2020:

“The year 2020 presented us all with an exceptional situation: With the onset of the coronavirus pandemic, also in Europe, daily life as we knew it changed overnight. In the face of all these challenges, this exceptional year has made two things patently clear: Firstly, our corporate strategy geared to the long term and to a well-balanced portfolio has proven its worth again. And secondly, our corporate culture that is infused with identification, motivation and discipline works. This is evident in the swift implementation of a slew of highly diverse urgent measures upon the outbreak of the pandemic in Group companies across the globe, while keeping operations up and running. This was only possible thanks to the exceptional dedication of our employees, also under additional burdens and pressure. Despite the huge challenges, we were therefore able to sustain our company’s liquidity without injections of external capital, continue our work on the two strategically important major projects – the third hot dip galvanizing in Salzgitter and the new heat treatment line in Ilsenburg – and push ahead with our decarbonization offensive through implementing the “Wind Hydrogen Salzgitter”, “Green Industrial Hydrogen 2.0” and “Green Strip Steel” projects. The financial year 2020 was therefore not a lost year for the Salzgitter Group. Quite the opposite! For us it is a source of confidence and assurance of being able to master the tasks that lie ahead.”


With explicit reference to the still imminent, virtually unquantifiable risk of the Corona pandemic, we generally anticipate the following for the Salzgitter-Group in the financial year 2021:

  • an increase in sales to more than € 8.5 billion,
  • a pre-tax profit of between € 150 million and € 200 million, and
  • a return on capital employed (ROCE) that is tangibly above the previous year's figure.


We are stepping up to the challenging goals of the European emission trading system to reduce CO2 with our SALCOS® (SAlzgitter Low CO2 Steelmaking) concept. This concept covers the implementation of all technical measures required by a significant and gradual reduction of the CO2 emissions in steel production at the Salzgitter site, while harnessing existing production facilities to the greatest extent possible. For the integrated steel production we are targeting reductions in CO2 emissions of 30 % by 2030 and of 95 % by 2050. Within the context of this concept, Salzgitter AG initiated the “Wind Hydrogen” and the “GrInHy / GrInHy2.0” (= Green Industrial Hydrogen) projects.

Last week, we commissioned “Wind Hydrogen Salzgitter – WindH2”, Germany’s only crosssector project that will in future produce green hydrogen with electricity from wind power. Consequently, we have taken an important and exemplary step on the path to decarbonizing the steel industry. In addition, Salzgitter AG has been working together with its partners since 2016 on the EU “GrInHy” research projects to find new ways of generating hydrogen efficiently.

In an initial step, Salzgitter Flachstahl GmbH (SZFG) will use “green hydrogen” for its annealing process, thereby replacing hydrogen produced from natural gas. At a later stage, the direct reduced iron (DRI) plant scheduled to go on line in the first half of 2022 is also to be supplied. Federal Environment Minister Svenja Schulze gave us the funding approval for the construction of these facilities at the start of December 2020. The new plant represents another milestone on the course to realizing SALCOS®. Further knowledge will be gained from the operations, the aim being to enable the production of efficient and low CO2 directly reduced iron on a large scale in a few years’ time.

Low CO2 green steel slabs have been produced in our Peine mini mill since the end of 2020 for subsequent processing by SZFG into hot and cold strip in a defined range of various dimensions and grades. These steel grades have met with strong interest from customers operating in a range of different sectors. As Europe’s first steel producer, Salzgitter AG has obtained two conformity statements certified in line with TÜV SÜD’s VERIsteel process. The process provides proof of product-specific CO2 emissions in steel production and flanks the process of decarbonization. As a result, the CO2 footprint of slabs is to be reduced by more than 75 %.

Disclaimer: Some of the statements made in this report possess the character of forecasts or may be interpreted as such. These are made to the best of the Company’s knowledge and judgment, and by their nature are subject to the proviso that no unforeseeable deterioration occurs in the economy or in the specific market situation pertaining to the business units’ companies, but rather that the underlying bases of plans and outlooks prove to be accurate as expected with regards to their scope and timing. Notwithstanding prevailing statutory provisions and capital market law in particular, the Company accepts no obligation to continuously update any forward-looking statements that are made solely in connection with circumstances prevailing on the day of their publication.

As in recent years, please note that opportunities and risks from currently unforeseeable trends in selling prices, input material prices and capacity level developments, as well as exchange rate fluctuations, may considerably affect performance in the course of the financial year 2021. The resulting fluctuation in the consolidated pre-tax result may be within a considerable range, either to the positive or to the negative. The dimensions of this volatility are illustrated by the following example: With around 12 million tons p.a. of steel products sold by the Strip Steel, Plate / Section Steel, Mannesmann and Trading business units, an average € 25 change in the margin per ton is already sufficient to cause a variation in the annual result of more than € 300 million. Moreover, the accuracy of the company's planning is restricted by the volatile cost of raw materials and shorter contractual durations, on the procurement as well as on the sales side.