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Saarstahl Press Release: Difficult business year 2012 for Saarstahl

27 March 2013

"We achieved a slightly positive result. Measured according to the economic environment, we have therefore been able to assert ourselves well", said Chief Executive Officer Dr. Karlheinz Blessing in the today's annual press conference of Saarstahl group.

(Press release, 27.3.2013)

" We achieved a slightly positive result. Measured according to the economic environment, we have therefore been able to assert ourselves well", said Chief Executive Officer Dr. Karlheinz Blessing in the today's annual press conference of Saarstahl group.

  • Group turnover decreased from 2.673 to 2.492 billion euros
  • Capacity utilisation good, but revenues under pressure
  • Chief Executive Officer Dr. Karlheinz Blessing: “We achieved a slightly positive result in 2012. Measured according to the economic environment, we have therefore been able to assert ourselves well.”

While the first months in 2012 were still satisfactory from an economic point of view, in the further course of the year, the situation in the automotive and mechanical engineering customer segments, which are important for Saarstahl, worsened. While the German premium manufacturers in the automotive sector, who are in a good position globally, are achieving success on the market, there has been a tangible reduction in production in Europe. Impulses from the German mechanical engineering sector were rather restrained, nonetheless the demand from abroad remained stable. Price levels for steel products, which are falling globally while the cost of raw materials remains high, has created pressure on revenues. In the year 2012, the Saarstahl group had a slight increase in orders received and good utilisation of capacity of equipment. Saarschmiede GmbH Freiformschmiede received the full force of the insecurity which currently prevails in the energy sector along with the subsequent retention of investments and therefore had to accept a further decrease in turnover.

Figures for the Saarstahl group for the year 2012:

  • The production of crude steel for the group fell by 2% in 2012 to 2.315 million tonnes compared with the previous year (2.362 million tonnes).
  • Due to falling revenues, the turnover for the group decreased by 6.8 % to 2.492 billion euros (Previous year: 2.673 billion euros). Germany continues to be the most important selling market for Saarstahl. In 2012, it was possible to further increase exports to third party countries (NAFTA, Asia, rest of the world).
  • The result for the group in 2012 before interest and tax (EBIT) amounted to 9 million euros
  • (Previous year: 210 million euros) and the EBITDA (EBIT before depreciation and amortisation) to 147 million euros (Previous year: 354 million euros).
  • With a total workforce of 6,945 the Saarstahl group continues to be one of the most important employers in the region. In addition, there are 371 trainees currently doing occupational training in the group. At Saarstahl AG, itself, there were a total of 3,791 employees on 31.12.2012 and at Saarschmiede GmbH Freiformschmiede, 1,057 employees.
  • Investments continued on a high level even in 2012. The focus lay on the new building of the secondary metallurgy. At Saarstahl AG, itself, the volume of investment amounted to 99 million euros (2011: 122 mil¬lion euros). For the two indirect shareholdings ROGESA Roheisengesellschaft Saar mbH and Zentralkokerei Saar GmbH, the investments amounted to a total of 55 million euros of which Saarstahl AG carried half, in accordance with its share in the companies.

Hardly any improvement expected for 2013

Saarstahl Sekmet Steuerleitstand V3 Saarstahl Sekmet Steuerleitstand V3

The Saarstahl group started the year 2013 with its traditionally good utilisation of capacity. However, due to the lack of impulse from the economy, no tangible change is expected in the trend for this year. “In the field of long steel products, we expect a tendency towards stable figures regarding the turnover and result at Saarstahl for 2013. In the group, as a whole, the trend is that we will have to prepare for a further hard year”, Blessing explains.

The Saarstahl group views the burden imposed by the energy and climate politics of Germany and the European Union critically. “We support the changes in energy politics and are making an important contribution towards more energy efficiency and environmental protection by continually developing new types of steel. These investments are increasingly hard to bear, however, if the German steel manufacturers are constantly burdened with rising costs”, Blessing clarifies. “We are faced with international competition and, at some point, we are no longer able to make up for the cost advantages of manufacturers outside Europe, even with the best quality.”

Saarschmiede GmbH Freiformschmiede expects a similarly difficult year to 2012. The outlook on the energy markets is being evaluated more optimistically again. However, since the projects generally have long lead times, the positive effects will only be apparent in the medium term. Saarschmiede will no doubt benefit from the increasing demand for energy and the expected trend towards high efficiency power stations.

In the automotive and mechanical engineering customer segments, which are important for Saarstahl AG, stagnation on the market is expected in Europe for 2013. The focus will therefore be on further internationalisation of the company towards threshold countries and on the corresponding sales organisation. Possibilities for setting up further processing facilities on site are also being examined. The overall development of the Germany automotive manufacturers should provide positive impulses, especially for rolled wire and bar steel in the field of high quality and high grade structural steel. The secondary metallurgy, which went into operation at the beginning of 2013, will provide further capacity and an improved quality range in this segment.