Key figures for the Saarstahl Group for the business year 2016

However, there was consistently good utilization of capacity in the bar steel and wire rod facilities and shipping volumes remained around the same high level as the previous year. Fred Metzken, Spokesman for the Management Board, commented on the annual figures saying “We were able to record consistently good sales of wire rod and bar steel in 2016 in spite of the adverse market environment. At the same time, there was great pressure on the financial results. This was largely due to the reduction in revenues and the higher expenses, above all in connection with the very difficult situation at Saarschmiede. Overall, the Saarstahl Group continues to have a very good equity ratio and financial structure”.

Key figures

• Difficult financial year for the Saarstahl Group in 2016
• Good utilization of the facilities and high sales levels for wire rod and bar steel in spite of relining of blast furnace 4
• Group turnover fell from 2.159 auf 2.028 billion euros due to a decrease in revenues
• Very sound financial structure with an equity ratio of 70 %

The market for long products was again characterized in 2016 by overcapacities and the unchanged continuation of imports into the EU market, in particular from China. The ongoing structural crisis aggravated the existing pressure on volume and price. By positioning itself in the higher-value quality range, in 2016, Saarstahl AG was able to benefit from the robust development of strongly export-orientated German automotive manufacturers in the premium sector. Utilization of capacity was therefore on a consistently high level in spite of the relining of blast furnace 4 at ROGESA Roheisengesellschaft Saar (ROGESA). Sales revenues were also under pressure in 2016 and only recovered towards the end of the year.

There was no change in the situation at Saarschmiede GmbH Freiformschmiede which continued to be very tense. Most market segments in which Saarschmiede operates are characterized by large overcapacities, aggressive competition and, in connection with these factors, also by high price pressure. Political crises in the Middle East or North Africa as well as profound changes on energy markets with accompanying low oil and gas prices, have meant that investment behaviour in the field of energy generation worldwide has been very hard to predict.

Figures for the Saarstahl Group for the year 2016:

• Production of crude steel fell by 11.8 % to 2.451 million tonnes (previous year: 2.779 million tonnes). At 2.312 million tonnes, sales volumes of Saarstahl AG (wire rod and bar steel) remained at about the level of the previous year (2.336 million tonnes).
• Group sales amounted to 2.028 billion euros (previous year: 2.159 billion euros). Germany continues to be the most significant sales market for Saarstahl, ahead of the EU and third-party countries (NAFTA, Asia, Rest of the World).
• The group result before interest and tax (EBIT) amounted to -155 million euros (previous year: 2 million euros) and the EBITDA (EBIT before depreciation and amortisation) to -25 million euros (previous year: 138 million euros).
• The clearly negative result is due to the decrease in sales revenues and the higher expenses, largely in connection with the very difficult situation at Saarschmiede.
• The Saarstahl Group continues to be one of the most important employers in the region with a total workforce which, at 6,554 has remained constant compared with the previous year (previous year: 6,591). In addition, there are 261 trainees (previous year: 243). At Saarstahl AG, the number of employees remained constant at 4,009 employees as at 31.12.16 (previous year: 4,031).
• At 103 million euros, investments in the group further increased to a higher level (previous year: 90 million euros). Thus Saarstahl has invested more than 1 billion euros in facilities and processes since 2010.
• With 70.3 %, the Saarstahl Group continues to have a very good equity ratio and financial structure in a comparison within the industry.

Your contacts:

Ute Engel,                 
Tel.: +49 6831/ 47 3011, E-Mail: ute.engel@stahl-holding-saar.de

Ulrike Jungmann,      
Tel.: +49 6831/ 47 5746, E-Mail: ulrike.jungmann@stahl-holding-saar.de