Result III. Quarter

Successful Start in the MDAX Segment - Significant Earnings Increase during First Nine Months of Fiscal 2001 Owing to its balanced range of activities, Salzgitter AG presented itself in excellent condition in spite of an increasingly difficult economic environment.
Consolidated Group sales during the first nine months of the fiscal year 2001 amounted to Euro 3.39 billion. This is a growth of 30% compared to the equivalent period of the previous year, when the Tube Division was not yet part of the Group. Earnings before tax increased by 65% to Euro 124.7 million. Income after tax was more than doubled (+105%) and reached Euro 110.8 million. Salzgitter AG's key financial indicator, the return on capital employed (ROCE), hit 15.2% and thus clearly exceeded the targeted 12%.
In line with the new Group structure accomplished early July, 2001, the five Divisions of the Lower-Saxon enterprise now operate with more independence. The management holding concentrates essentially on responsibilities such as strategy, controlling, finance and executive personnel. The Steel Division achieved external sales of Euro 1.13 billion, an increase of 15% over the comparable period of the year 2000. Income before tax of Euro 40.9 million is in line with the profit of Euro 41.3 million generated during the first nine months of the previous year. During the course of the current fiscal year, results diminished steadily; nevertheless, the third quarter 2001 ended evenly (+ Euro 0.4 million). Aside from the deterioration of some of Salzgitter AG's steel markets, rising purchase prices for raw materials and energy had addional negative impacts. This effect is intensified by a continued strong US dollar. Our mills are utilizing the present economic scenario and are working flat out to finalize large investment projects. For example, the beam-blank casting plant in Peine was recently successfully commissioned, which will provide a significant productivity boost for the Peine Works.

The Tube Division, comprising the companies of the Mannesmannröhren-Werke Group, developed exceptionally well during the first three quarters. It was particularly the demand for oil country tubular goods and line pipes from the energy sector which remained very active, benefiting from the relatively high oil price. Consolidated division sales during the first nine months reached Euro 723 million. Income before tax amounted to Euro 69.3 million, Euro 33.0 million of which came from the third quarter, an increase of approximately 50% on the second quarter. Lively order bookings and a high order backlog give rise to an optimistic outlook for the following months.
The slowdown of domestic and international economic activities adversely affected operations of the Trading Division during the first nine months of the fiscal year. This caused diminishing shipments and increased pressure on profit margins. External division sales of Euro 1.28 billion were thus 9% below last year's equivalent figure. In spite of the unfavorable scenario, an income of Euro 6.4 million was achieved (Euro 15.8 million during last year's equivalent period).The Services Division achieved satisfactory results during the first three quarters of the fiscal year 2001, sales amounted to Euro 170 million (-5% compared to the prior year), income before tax was Euro 13.4 million (last year's equivalent period Euro 20.3 million). Only the Processing Division, comprising various steel-processing activities and a number of industrial start-up companies, posted a minor loss of Euro 3.2 million with sales of Euro 89 million. During the third quarter of the prior year, Hoesch Spundwand und Profil GmbH was included in the consolidation for the first time, thus resulting in a sales increase of 136% on the previous year.
The current shipment and sales situation for cold rolled and surface coated sheet products should have reached the bottom of the cycle. The market situation for the other rolled steel products of Salzgitter AG is in better shape. This environment will have its negative effects on the earnings situation of the Steel and Trading Divisions during the months to follow. A recent price turn looming on the horizon was halted for the most part by the latest international political events. The situation is thus not likely to improve before spring 2002. By way of contrast, the perspectives of the Tube Division are currently and into the year 2002 quite encouraging. It is expected that demand for oil and gas field tubular goods will continue its steady development. The tube business is likely to experience additional positive impulses from the averted US import restrictions.
From today's point of view, Salzgitter AG is likely to exceed its prognosis of a consolidated Group income before tax of about Euro 135 million, made in spring of this year and reaffirmed several times since then. The Company considers this to be a successful start into the MDAX to which Salzgitter AG has been belonging since September 24 of this year.

Financial statements according to IAS 1) adjusted figures and without Mannesmannröhren-Werke AG 2) 2000 without MRW 3) without financial assets 4) annualized