Salzgitter (SZG) Q3 2024 earnings summary

Executive summary

• Operating result for the first nine months of 2024 was at breakeven or a small positive pre-tax operational profit, despite significant headwinds in steel-related units from low prices and volumes.

• External sales declined to €7.7 billion for 9M 2024, down from €8.4 billion year-over-year, mainly due to lower steel prices and weak demand in key sectors.

• Strong performance in the Technology division and Aurubis investment helped offset steel segment weakness.

• Major restructuring and cash safeguarding programs are underway, including postponing investments, reducing maintenance, and short-time work.

• A significant divestment (MST) is nearly closed, bringing in approximately EUR 130 million in cash.

Financial highlights

• EBITDA for 9M 2024 was €320.6 million, down €255.4 million year-over-year; EBT was €-141.2 million, a decline of €395.5 million year-over-year.

• One-time write-offs, including €129.4 million for Mannesmann Precision Tubes and €20 million for MST, led to a net loss of around €198 million for the period.

• Cash and cash equivalents at period end were €581.6 million, down from €1,147 million; net financial position deteriorated to €-889.4 million.

• Working capital improvements targeted to generate around €200 million in cash by year-end.

• Investments for Q4 are expected to be €200–300 million net.

Outlook and guidance

• Full-year 2024 sales expected between €9.5 billion and €10.0 billion; EBITDA €275–325 million.

• Pre-tax loss forecasted at €275–325 million, with ROCE to remain well below prior year.

• Guidance includes around €270 million in one-off impairment and restructuring charges.

• Technology division expected to continue strong performance into next year.

• No hard net debt/EBITDA covenant, but close monitoring of leverage as investments ramp up.