Press release

Key figures for the Saarstahl Group for the business year 2015

22 March 2016

The Saarstahl Group was able to conclude the business year 2015 with slightly positive results in spite of economic adversity and a difficult situation on the market.

Key figures

  • Result for the group positive in spite of economic adversity
  • High degree of capacity utilization thanks to good sales volumes for bar steel and wire rod
  • Group turnover fell from 2.361 to 2.159 billion euro
  • Very good financial structure with an equity ratio of 75.7 %

Above all, in the wire rod and bar steel sector, there was a high degree of capacity utilization in all facilities and shipping volumes could be maintained on the same high level as the previous year. The continuing difficult situation at Saarschmiede and decreasing revenues put a burden on the result situation within the group. Fred Metzken, Spokesman for the Management Board commented on the figures for the year saying, “In spite of the huge challenge presented by the market environment, we have performed exceptionally well on the market for wire rod and bar steel and were able to gain additional new market share. At the forge Saarschmiede, major efforts must be undertaken in order to get back into the profit zone. All in all, the group has a very good and sound financial base.”

On the global steel market as well as in the sector for long products, the revenue situation was characterized by huge over-capacities that were further intensified by the dramatic slump on the Chinese steel market. Imports from China – mostly offered at dumped prices – have more than doubled within the last three years.

Saarstahl benefited from the positive development in the automotive industry in Germany and the EU in 2015 with the bar steel and wire rod by positioning itself in the higher quality range. In particular, German premium automotive manufacturers, who are strongly export-orientated, ensured growth at Saarstahl. However, the worldwide drop in price levels put renewed pressure on sales revenues. Although Saarschmiede GmbH Freiformschmiede was able to halt the negative trend of the previous years, it continues to suffer – even 5 years after Fukushima – as a result of profound changes on energy markets as well as under low oil and gas prices which impede corresponding investments in this sector.

Figures for the Saarstahl Group for the year 2015:

  • Crude steel production for the group increased by 1.9 % to 2.779 million tonnes (previous year: 2.727 million tonnes). At 2.336 million tonnes, the sales volume of Saarstahl AG (wire rod and bar steel) remained approximately on the level of the previous year (2.361 million tonnes).
  • The group turnover amounted to 2.159 billion euro (previous year: 2.361 billion euro). Germany continues to be Saarstahl's most important sales market before the EU and third party countries (NAFTA, Asia, rest of the world).
  • The earnings for the group before interest and tax (EBIT) amounted to 2 million euro
  • (previous year: 80 million euro) and the EBITDA (EBIT before depreciation and amortization) amounted to 138 million euro (previous year: 233 million euro).
  • With a slight increase compared with the previous year in the total workforce of 6,591 (previous year: 6,498), the Saarstahl group continues to be one of the most significant employers in the region. In addition, there are 243 trainees (previous year: 247). At
  • Saarstahl AG, the workforce remained constant at 4,026 employees as of 31.12.2015 (previous year: 4,031); at Saarschmiede GmbH Freiformschmiede, there were once again more employees (930) than in the previous year (897).
  • At 90 million euro, investment in the group was at a considerably higher level (previous year: 38 million euro). The strategic investments initiated in 2015 are now successively going into operation at the 3 different production locations. Saarstahl has thus invested a total of 871 million euro in equipment and processes since 2010.
  • At 75.7%, the equity and financial structure for the Saarstahl group has been improved once more (previous year: 74.8 %).

Subdued business year expected in 2016

The steel industry in Germany and the EU as a whole expects 2016 to be a difficult year. The market will still be struggling against increased competitive pressure, over-capacities and massive volumes of imports at dumped prices. Pressure on steel prices and profit margins will therefore remain. Against this background, it is crucial that politicians set a reasonable course in trade and climate policy. Rapid decision making routes to introduce anti-dumping measures, fair market practices and comparable statutory requirements to reduce CO2 are necessary in order to prevent the risk of de-industrialisation in Western-Europe.

In the major customer sectors for Saarstahl AG, a largely positive picture is emerging: The automotive industry expects a slight rise, the mechanical engineering sector expects that there will be stabilisation and the basic trend in the construction industry is positive. In the light of this, a sideways movement is to be expected in the demand for steel in the product segments of wire rod and bar steel that are relevant for Saarstahl. In spite of the relining of the blast furnace, the company expects that there will be a stable development in volume and a good degree of utilization capacity of facilities. The trend for prices, which slipped further at the beginning of the year, is estimated to be particularly fragile but should recover towards the middle of the year.

At Saarschmiede GmbH Freiformschmiede, the market situation remains tense. In 2015, there was a lot of new impetus, the sales strategy was realigned and this was accompanied by an upswing in incoming orders. Although a tangible improvement in the result is expected for 2016, further great efforts are to be made in order to drive the realignment in sales and general stabilisation further forward.

The Saarstahl group expects a turnover for 2016 on the level of the previous year and a balanced result. This is based on the assumption that there is continuation of the strict cost management and further efforts to increase earning power. Saarstahl will therefore further pursue the strategy as a globally recognized manufacturer of high-quality steel products. Current investments as well as investment that have already been made are targeted at further optimising processes and the quality of the products as well as further improving the service for the customers.

Saarstahl Group in figures

 

2014

2015

Hot metal purchase

thous. tonnes

2.365

2.369

Crude steel production

thous. tonnes

2.727

2.779

Shipping (Saarstahl AG only)

thous. tonnes

2.361

2.336

Sales revenues

M EUR

2.361

2.159

Workforce (without trainees)

31.12.

6.498

6.591

Trainees

 

247

243

 

 

 

 

EBIT

(Earnings before Interest and Tax)

M EUR

 

80

2

EBITDA

(Earnings before Interest, Tax, Depreciation and Amortization)

M EUR

233

138

Kontaktbild

Ute Engel

+49 6898 102265 Send email

Kontaktbild

Ines Oberhofer

+49 6831 472002 Send email

In the fiscal year 2015 Saarstahl has initiated investments of 90 million euros including 30 million euros for the new continuous blooming line in the rolling mill Völklingen that has recently been put into operation.

243 young people are currently benefiting from a profound apprenticeship at Saarstahl.