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1. Company Snapshot

1.a. Company Description

Salzgitter AG, together with its subsidiaries, engages in steel and technology businesses worldwide.It operates through five segments: Strip Steel, Plate/Section Steel, Mannesmann, Trading, and Technology.The Strip Steel segment manufactures branded and special steels, such as hot-rolled strip steel and steel sheets, sections, tailored blanks, and components for the construction industry.


The Plate/Section Steel segment produces various high-grade heavy plates for engineering, shipbuilding, and mechanical engineering, as well as trades in scrap.The Mannesmann segment is involved in the manufacture of line pipes, HFI-welded tubes, precision and stainless-steel tubes, and spiral-welded and longitudinal-welded large-diameter pipes; and seamless and welded tubes for the energy, automotive, and mechanical engineering sectors.The Trading segment operates a European sales network, as well as trading companies and agencies worldwide.


The Technology segment engages in the provision of machinery and plants for the filling and packaging of beverages, as well as special machinery engineering for shoe manufacturing and elastomer production.The company also provides IT, facility management, logistics, automotive engineering, and research and development services, as well as supplies raw materials.Salzgitter AG was founded in 1858 and is headquartered in Salzgitter, Germany.

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1.b. Last Insights on SZG

Salzgitter's recent momentum is driven by strong Q3 earnings, which exceeded estimates by 280%. The company's improved cash flow and strategic funding for key projects have enabled it to maintain its full-year outlook despite a volatile market. Robust demand in the materials sector and renewed investor interest in domestic steel production have also contributed to its growth. Additionally, the company's valuation remains attractive, with some analysts considering it a bargain. Salzgitter's progress in navigating challenges has likely bolstered investor confidence.

1.c. Company Highlights

2. Salzgitter's H1 2025 Earnings: Navigating a Challenging Market Environment

The company's financial performance in the first half of 2025 was marked by a decline in sales and earnings, primarily due to low steel prices and weak demand. Sales figure came in at EUR 4.665 billion, 11% below last year's level, while EBITDA decreased to EUR 116.8 million. The actual EPS came out at '-1.02', missing estimates at '-0.6867'. Despite the challenging environment, the company has delivered a strong performance, with a significant contribution from its cost-saving programs and a robust Technology segment.

Publication Date: Aug -28

📋 Highlights
  • Market Resilience Despite Global Challenges: Salzgitter's U.S. export exposure remains minimal amid U.S. tariffs and Chinese steel competition, with management emphasizing defense stimulus and construction demand as growth drivers.
  • Cost-Saving Program Progress: The EUR 500 million "Performance ’28" program achieved EUR 48 million in H1 2025, 49.5% of the annual EUR 97 million target, offsetting pressure from low steel prices.
  • Financial Performance Decline: Sales fell 11% to EUR 4.665 billion, driven by MST Group deconsolidation and trade sector weakness, while EBITDA dipped to EUR 116.8 million despite cost-cutting and Technology segment gains.
  • Narrowed Guidance and Risks: Full-year management guidance reflects sales of EUR 9–9.5 billion, EBITDA of EUR 300–400 million, and pretax results of minus EUR 100 million to 0, highlighting operational and market uncertainties.
  • Trade Policy Advocacy: Salzgitter prioritizes EU trade defense, including CBAM implementation and a 50% import cut, while lobbying for regulatory clarity to protect industry competitiveness against global oversupply.

Operational Challenges and Market Environment

Salzgitter's crude steel production was impacted by low demand and maintenance work, while the steel processing segment struggled due to weak demand. However, the trading segment has recovered, and the technology segment is expected to have a record year, driven by the strong performance of KHS. The market environment remains challenging, with U.S. tariffs and Chinese steel exports affecting the industry. As noted by Gunnar Groebler, the company is focusing on reducing imports and increasing demand through construction and defense stimulus.

Financial Health and Guidance

The company's equity ratio remains healthy at 42.2%, and net financial debt is expected to be around minus EUR 1.2 billion, significantly below the previous prognosis. Salzgitter has narrowed its management guidance for the remainder of the year, with sales expected between EUR 9 billion and EUR 9.5 billion, EBITDA between EUR 300 million and EUR 400 million, and pretax results between minus EUR 100 million and 0.

Valuation and Key Metrics

Looking at the company's valuation metrics, the P/E Ratio stands at -2.93, while the P/B Ratio is 0.28, and the P/S Ratio is 0.13. The EV/EBITDA ratio is 5.95, indicating a relatively moderate valuation. The Net Debt / EBITDA ratio is 2.6, suggesting a manageable debt level. The company's ROE (%) is -9.48, and ROIC (%) is -6.36, reflecting the challenging operating environment.

Outlook and Initiatives

Salzgitter expects a cautious economic recovery in the second half of the year, driven by reduced raw material costs and a strong fourth quarter. The company is focused on its performance, cash management, and investment activities, with a holistic approach to address the challenging market environment. The efficiency program aims to achieve EUR 500 million in savings, with a focus on bottom-up approach and FTE reduction.

3. NewsRoom

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Is There Now an Opportunity in Salzgitter After 117% Price Surge in 2025?

Nov -27

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Basic Materials Roundup: Market Talk

Nov -26

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Is Orla Mining (ORLA) Stock Outpacing Its Basic Materials Peers This Year?

Nov -20

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Fast-paced Momentum Stock Salzgitter (SZGPY) Is Still Trading at a Bargain

Nov -18

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Salzgitter AG (SZGPF) Q3 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

Nov -11

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Salzgitter (XTRA:SZG): Evaluating Valuation After Strong Recent Share Price Gains

Nov -11

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Basic Materials Roundup: Market Talk

Nov -10

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Basic Materials Roundup: Market Talk

Nov -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.24%)

6. Segments

Steel Production

Expected Growth: 4.37%

Salzgitter AG's 4.37% steel production growth is driven by increasing demand from the automotive and construction industries, coupled with the company's efforts to optimize production processes and reduce costs. Additionally, the company's focus on high-margin products and strategic investments in emerging markets have contributed to the growth.

Trading

Expected Growth: 4.83%

Salzgitter AG's 4.83% growth is driven by increasing demand for steel in the automotive and construction industries, coupled with the company's successful cost-cutting measures and strategic investments in digitalization and sustainability. Additionally, the company's diversified product portfolio and strong market position in Europe contribute to its growth momentum.

Steel Processing

Expected Growth: 4.83%

Salzgitter AG's Steel Processing segment growth of 4.83% is driven by increasing demand from the automotive and construction industries, coupled with the company's strategic expansion into high-margin product lines, such as special steels and tubes. Additionally, operational efficiency improvements and cost savings initiatives have contributed to the segment's growth.

Technology

Expected Growth: 8.5%

Salzgitter AG's Technology segment growth of 8.5% is driven by increasing demand for digitalization and automation in the steel industry, coupled with the company's strategic investments in Industry 4.0 and IoT solutions. Additionally, growing adoption of electric vehicles and renewable energy systems fuels demand for specialized steel products, further boosting segment growth.

Reconciliation

Expected Growth: 4.83%

Salzgitter AG's 4.83% growth is driven by increased demand for steel products, particularly in the automotive and construction sectors. Additionally, the company's focus on cost reduction and operational efficiency measures, such as the 'FitFuture' program, have contributed to improved profitability. Furthermore, strategic investments in digitalization and innovation have enhanced competitiveness, supporting the company's growth momentum.

7. Detailed Products

Steel

Salzgitter AG is one of the largest steel producers in Europe, offering a wide range of steel products including flat steel, long steel, and tubes.

Mannesmann Tubes

Salzgitter AG's Mannesmann Tubes segment offers a wide range of seamless and welded tubes for various industries including oil and gas, automotive, and construction.

Peiner Träger GmbH

Salzgitter AG's Peiner Träger GmbH segment offers a range of steel construction products including girders, columns, and beams.

KHS GmbH

Salzgitter AG's KHS GmbH segment offers a range of machinery and equipment for the beverage and packaging industries.

Aurum GmbH

Salzgitter AG's Aurum GmbH segment offers a range of engineering and consulting services for the automotive and industrial sectors.

8. Salzgitter AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Salzgitter AG is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Salzgitter AG is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Salzgitter AG is medium due to the company's dependence on a few large suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for Salzgitter AG is low due to the high barriers to entry in the steel industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Salzgitter AG is high due to the competitive nature of the steel industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.23%
Debt Cost 14.36%
Equity Weight 78.77%
Equity Cost 14.36%
WACC 14.36%
Leverage 26.95%

11. Quality Control: Salzgitter AG passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Outokumpu

A-Score: 5.4/10

Value: 6.9

Growth: 2.6

Quality: 2.9

Yield: 8.1

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Alleima

A-Score: 4.8/10

Value: 5.2

Growth: 5.2

Quality: 5.1

Yield: 3.1

Momentum: 6.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Klöckner

A-Score: 4.8/10

Value: 8.9

Growth: 2.2

Quality: 1.5

Yield: 6.2

Momentum: 6.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Stalprodukt

A-Score: 4.7/10

Value: 5.8

Growth: 2.3

Quality: 3.5

Yield: 5.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Salzgitter

A-Score: 4.4/10

Value: 9.6

Growth: 2.4

Quality: 2.1

Yield: 1.9

Momentum: 9.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Cognor

A-Score: 3.9/10

Value: 7.2

Growth: 1.6

Quality: 2.2

Yield: 4.4

Momentum: 5.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.6$

Current Price

37.6$

Potential

-0.00%

Expected Cash-Flows