Page 6 - Best of STIL 2018 English

“Our business model is robust”
The annual interview with Prof. Dr.-Ing. Heinz Jörg Fuhrmann, Chairman of the Executive
IBoard of Salzgitter AG
t has been some 20 years since the Salzgitter Group went public. STIL spoke with Chairman of the Execu- tive Board Prof. Dr.-Ing. Heinz Jörg
Fuhrmann about the past two decades of internal and external growth, as well as the current prospects and challenges.
STIL: As companies rooted in more than 160 years of tradition, Salzgitter AG and its legal predecessors have experienced
a great number of transitions over time
– and experienced some highs and lows along the way. The headline “Auf Jubel folgt Jammer” (“After the Party comes the Misery”) was published 20 years ago – do you remember it?
Prof. Fuhrmann: Of course I do! Though that was almost one of the kinder descrip- tions of our split from Preussag AG and the resulting IPO on June 2, 1998 at the end of that year. One of the others from that period was: “Ein Albtraum?” (“A Nightmare?”). There was an armada of critics at that time who greatly doubted our ability to operate as an independent company. And the actual reason that
the initially underwhelming share price development was the financial and eco- nomic crisis in East Asia, which massively impacted us and the entire steel industry during the second half of 1998.
STIL: Some 20 years later, Salzgitter AG is still in business. The Group is in great shape, in the black and making positive headlines. Does this fill you with satisfac- tion?
Prof. Fuhrmann: Absolutely. Nine years later, in 2007, the headline appearing
in Hannover’s Neue Presse was: “Das Wunder von Salzgitter” (“The Salzgitter Miracle”). After all, contrary to all the prophecies of gloom and doom, Salzgitter AG had held its own up to that point and developed into a prospering, multifaceted group. Our business model has proven robust to this day, standing firm through several financial and industry crises. Facts and figures say more here than a thou- sand words: Consolidated sales have tri- pled to around 9 billion euros, while the core workforce has doubled. Our equity ratio is 36 % – today, just as things stood some 20 years ago. Without having made a capital increase, we have been able to
6 SALZGITTER INSIDE
quadruple equity. And we have done it all through our own means, without outside help and in conjunction with above-av- erage dividend payments. The Group’s positive development is also reflected in the share price: Our share was trading
at 8.95 euros at the end of 1998, and it
is currently worth 27.60 euros (as of: 9.1.2019). By the way, this development is also impressive compared to competitors. We have achieved all of this as a compa- ny – the managers and staff – together with the numerous associates and peers that have supported us with courage and foresight during the last 20 years.
The fundamental long-term course set by the Group is sound
STIL: Despite that, we were still repeat- edly accused of not being committed enough to shareholder value.
Prof. Fuhrmann: Salzgitter AG consciously operates as a stakeholder- oriented group and the short-term maximization of the share price is not the primary goal in this respect. The sense of obligation we have towards shareholders also applies to employees, customers
and the individual locations and their regions. Our shareholders have certainly done very well with this type of corporate management which adopts an integrated approach focusing on long-term success. The facts also back us up in this respect: We have generated added value for our shareholders, particularly if dividend payments are taken into account: The overall return for a shareholder who has held shares since the IPO is a handsome 251 %.
STIL: How do you view the Group’s current situation? The profit forecast was raised twice in 2018 – so is everything “sunshine and roses”?
Prof. Fuhrmann: As always, distinctions have to be made. On the one hand, we have achieved the best bottom line in the last ten years. On the other, share prices fell during 2018 as the skepticism of market participants grew for a range of reasons, including the trade disputes, ris- ing protectionism and the discussions re-
volving around the automobile industry. Yet sentiment is perhaps more negative than the actual situation at present, as the positive long-term trend of the past few years may have tangibly slowed, but still remains intact: EU industrial production still rose slightly over the past year; and Germany remains the driving force in this respect.
Our above-average performance in 2018 is largely a result of our own hard work. This links neatly back to the 20- year comparison: The fundamental long- term course set by the Group is expedient and sound. We are systematically evolving as part of our “Salzgitter AG 2021” strategy. This is one of our constant tasks as managers; just as it is to ensure that all subsidiaries in the five Business Units are ideally positioned in the competitive en- vironment going forward. But I imagine we’ll be coming back to that.
STIL: What were your highlights of the Group’s development in 2018?
Prof. Fuhrmann: First of all, 2018 rep- resents the fifth financial year in suc- cession in which results have increased. This doesn’t happen often, particularly if development is largely driven by internal measures instead of improved market conditions. Generally speaking, our Group is purposefully in a state of flux – and we will remain that way. The 360 degree concept we have pursued since 2013 describes the projects for all Business Units in the fields of efficiency, development, innovation, motivation and qualification in concrete terms. It goes without saying that we are focusing on different aspects of this at the various companies within the Business Units.
If the latest highlights were measured in terms of figures, then the substantial investments in steel would certainly dominate, and these are very capital intensive. One good example is the new heat treatment line in Ilsenburg, where the groundbreaking ceremony recently took place in the presence of Minister President Dr. Haseloff and Minister for Economic Affairs Prof. Dr. Willingmann. We will be investing more than 150 mil- lion euros there to produce heavy plate for demanding applications at the highest technological levels. The project is a clear