EANS-News: SALZGITTER AG - First half-year of 2010

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Subtitle: The Salzgitter Group records pre-tax profit again in the second
quarter of 2010

Salzgitter (euro adhoc) - The positive earnings trend of the Salzgitter Group
continued in the second quarter of the financial year 2010 in the form of a
pre-tax profit. Contributing factors included the satisfactory capacity
utilization situation of most product segments and the sharp increase in selling
prices in steel trading operations. Particularly when compared with the
crisis-ridden previous year's period, the business of the Group has clearly
stabilized. The majority of leading indicators support a more confident
assessment of the outlook for business in the second half-year.
The consolidated sales of the Group, which came to EUR 4,034.2 million (first
half of 2009: EUR 4,125.7 million) fell marginally short of the year-earlier
level. In the second quarter of 2010, the Salzgitter Group generated an
operating pre-tax profit of EUR 18.6 million (second quarter of 2009: EUR -96.9
million), bringing the first half of 2010 to a close with an operating profit
before tax of EUR 21.2 million (first half of 2009: EUR -158.6 million). This
half-yearly operating result already includes EUR 13.2 million in provisions for
onerous contracts in connection with project orders booked and confirmed where
the costs of production are presumably no longer covered due to the exorbitant
increases in the price of raw materials. The reported pre-tax result of the
first half-year came to EUR -5.1 million (first half of 2009: EUR -195.2
million) and includes an additional EUR 26.3 million in provisions for
streamlining measures. Profit after tax stood at EUR -3.5 million (first half of
2009: EUR -165.0 million), and earnings per share posted EUR -0.11 (first half
of 2009: EUR -3.07). Return on capital employed (ROCE) of an annualized 0.4 %
was in the black again (first half of 2009: EUR -8.1 %).

External sales by Division (EUR million):

H1 2010    (H1 2009)
Steel           1,081.6      (799.9)
Trading         1,409.2    (1,683.7)
Tubes             892.0    (1,107.9)
Services          195.3      (146.4)
Technology        429.7      (367.5)
Others/Cons.       26.4       (20.5)
Group           4,034.2    (4,125.7)

Earnings before tax by Division (EUR million):

H1 2010    (H1 2009)
Steel             -76,2     (-190.2)
Trading            43.4      (-57.7)
Tubes              13.1       (96.0)
Services           11.4       (-5.4)
Technology        -15.7      (-43.7)
Others/Cons.       18.9        (5.8)
Group              -5.1     (-195.2)

The short-lived fluctuations in the price of raw materials are a hindrance to
any planning certainty. For this reason alone, it is currently not possible to
arrive at an accurate, quantitative forecast for sales and profit of the
Salzgitter Group. In consideration of the currently discernible risks and
potential, we nonetheless believe that a pre-tax result above breakeven is
achievable in the current financial year.
As in recent years, we make special reference to the fact that opportunities and
risks from currently unforeseeable trends in selling prices, input materials and
capacity utilization developments, as well as changes in the currency parity,
may still affect performance considerably over the course of the financial year
2010. The resulting fluctuation in the consolidated pre-tax result may, as
events in the first half year have shown, be within a considerable range, either
to the positive or to the negative. The dimensions of this range become clear if
one considers that, with around 4 million tons of steel products to be sold by
the end of this year by the Steel, Trading and Tubes divisions, an average
difference of EUR 30 in the margin per ton is sufficient to cause a variation in
the annual result of more than EUR 120 million.
More information can be found in the full press release and interim report
published today. (please refer to: www.salzgitter-ag.de).

Further inquiry note:
Bernhard Kleinermann
Tel.: +49 (0) 5341-21-3783
E-Mail: [email protected]
end of announcement euro adhoc
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issuer: Salzgitter AG
Eisenhüttenstraße 99
D-38239 Salzgitter
phone: +49 (0) 5341-21-3783
mail: [email protected]
WWW: http://www.salzgitter-ag.de
sector: Iron & Steel
ISIN: DE0006202005
indexes: Midcap Market Index, MDAX, CDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, Hannover, München
language: English

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