Presentation of the Group - Salzgitter AG...Salzgitter Mannesmann Grobblech GmbH Germany; shareholder: SZAG 100% Heavy plate mill specialized in plate for longitudinally welded line

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Presentation of the Group

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1 Salzgitter Group2 Market Situation3 Business Units4 Strategy5 Guidance

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Global Presence

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Salzgitter Group

Strip SteelPlate / Section Steel

Mannesmann

Trading

Crude steel production 2018: 7.0 million tons; trading volume: 4.5 million tons;Among the top 3 producers of beverage filling and packaging machinery

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Technology

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Diversified product portfolioSalzgitter Group

Steel and Technology

Stainless tubes

Stockholding trading

International trading

Strip products

Steel Service Center

Heavy plates

Sections

Engineering services

Injection molding machinery Beverage filling plants

Line pipes

Precision tubes

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Group structure and key data FY 2018Salzgitter Group

Salzgitter AG Group

External Sales cons.: € 9.3 billion EBT: € 347 million

Employees: 23,523

External Sales:€ 2.3 billion EBT:

€ 205.8 million Employees:

6,182

Strip Steel

External Sales:€ 1.0 billion EBT: € 24,8 million Employees:

2,451

Plate / Section Steel


€ -5,4 million Employees:

4,675

Mannesmann


€ 43,1 million Employees:

5,490

Technology


€ 50,5 million Employees:

2,109

Trading

5All data about employees as per 12/31

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Salzgitter AG

Salzgitter Mannesmann / Salzgitter Klöckner-Werke

Strip Steel BU

Plate / Section Steel BU

MannesmannBU

TradingBU

TechnologyBU

Salzgitter Flachstahl

Ilsenburger Grobblech Mannesmannröhren-Werke Salzgitter Mannesmann

Handel KHS

Salzgitter Mannesmann Grobblech Europipe Salzgitter Mannesmann

StahlhandelSalzgitter Europlatinen

Peiner Träger

Mannesmann Grossrohr

Salzgitter Mannesmann International

KHS Corpoplast

Salzgitter Bauelemente

DEUMU Deutsche Erz- und Metall-Union

Mannesmann Line Pipe

Universal Eisen und Stahl

Mannesmann Precision Tubes

Salzgitter Mannesmann Stahlservice

Mannesmann Stainless Tubes

Hüttenwerke Krupp Mannesmann

BorusanMannesmann Boru

50%

30%

23%

Industrial Participations / Consolidation

Verkehrsbetriebe Peine-Salzgitter

Hansaport

Gesis Gesellschaft für Informationssysteme

Salzgitter Automotive Engineering

Telcat

Aurubis

Salzgitter Hydroforming

Salzgitter Mannesmann Forschung

51%

>25%

Klöckner DESMA Elastomertechnik

DESMA Schuhmaschinen

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BU = Business UnitAs of December 2018

Group structureSalzgitter Group

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5%Tubes producers

13%Other

12%Food and beverage industry

6%Mechanical engineering

6%Re-rollers

3%Energy sector and utilities

15%Vehicle construction

24%Traders, Steel-Service-Centers

12%Construction industry

4%White goods,

electrical equipment

External sales 2018 by customer industriesSalzgitter Group

Broad customer base

7Only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE Group

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Share of ex-Germany sales by consignee 52%

External sales 2018 by regionsSalzgitter Group

5%Other

7%Asia

13%Americas

3%Other Europe

24%Other EU

48%Germany

8Sales by consignee (only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE-Group)

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Key data per 2018/12/31

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Salzgitter Group

FY 2018 FY 2017 Δ 2018 – 2017

Crude steel production kt 7,039.4 6,955.2 84.2

Consolidated Sales € million 9,278.2 8,990.2 288.0

Earnings before tax € million 347.3 238.0 109.3

Earnings after tax € million 277.7 193.6 84.1

Earnings per share (undiluted) € 5.06 3.52 1.54

ROCE % 10.3 8.6 1.7

Core workforce (12/31) 23,523 23,139 384

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Salzgitter Group delivers the best result for the last ten years

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2,025 2,389

569761

2,3272,275

3,836 3,332

Aktiva Passiva

Balance sheet per 2018/12/31Salzgitter Group

Property, plant and equipment and other

non-current assets

Inventories

Cash and securities

Other current assets

Equity

Pension provisions

Other non-currentliabilities

Current liabilities

€ million

8,757 8,757Goodwill:

€ 6 m Equity ratio:

38.0%

Assets to equity: 87%

Net position due to banks: € 192 m

€ 679 m € 269 m

€ 200 m € 418 m

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Sound financial basis

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Focus on expansion investments

Salzgitter Group Investments and Depreciation / Amortization

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Salzgitter Group

Investments1 Scheduled depreciation Unscheduled depreciation

1 Property, plant and equipment and intangible assets, excluding financial assets

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270330

411340 352 342

287342 338 340

52 15 49 44

2014 2015 2016 2017 2018

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History

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Salzgitter Group

Stock listing 1998First blast furnace in Ilsede, 1861

First broad-flanged beam mill in Peine, 1914

1989 privatization with the sale to Preussag AG

Demonstrations to save the smelting works in Salzgitter, c. 1950

Privatization and acquisitionof the Ilsenburg rolling mill, 1992

Cross-rolling process sketch ofMax Mannesmann, pre 1885

Bottle filling line Phönixc. 1936

llsenburg: est. 1595,plate since 1948Mülheim an der Ruhr: plate since 1882Peine: Sections since 1876

1989 Name change toPreussag Stahl AG

1970 Mergerto form StahlwerkePeine-Salzgitter AG

1937 Construction Hüttenwerk Salzgitter

(Part of Reichswerke)2007 Integration into SZAG

1880 Acquisition of PeinerWalzwerk, est.1872

1923Foundation of steel group

Klöckner-Werke AG

1886 First processfor the rolling of

seamless steel tubes1858 FoundationIlseder Hütte AG

1912 first attempts withstainless steel tubes

1897 Start of productionwelded steel tubes

2017 Relaunch ofthe brand presence

1977 First acquisition of part. infilling technology (H & K)

2000 Liquidation ofMannesmann Group,

Integration Tubes into SZ

1992 - 1995Insolvency, restructuring

and end of steel production

Strip Steel BU Mannesmann BU Technology

Plate / Section Steel BU

1964Salzgitter Hüttenwerk AG(since 1961 part of state-owned

Salzgitter AG old)

1998 Salzgitter AG

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Economic development in the European UnionMarket Situation

Industrial production in selected countries of the EU (Jan. 2007 = 100)

France Italy SpainGermany GB

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60

70

80

90

100

110

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Eurostat, own research, last figure from August 2019

Following the slight uptrend since 2013, the EU industrial production recently stagnated;Germany remains relatively strong despite deterioration since the second half of 2018

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Iron ore: dramatic price surge in the first half-year; recently rapid decreaseCoking coal: global demand can be satisfied completely at the moment – with a corresponding effect on pricing

Raw materials pricesMarket Situation

Iron ore(62% Fe CFR China, US$/dmt)

Coking coal(FOB Australia, US$/t)

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200

250

300

350

50

60

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90

100

110

120

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300

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500

600

700

800

900

Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jul 19300

400

500

600

700

800

900

Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jul 19

Following periods of rises, steel prices consolidate since mid 2018

Steel pricesMarket Situation

Spot prices Northern Europe

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Hot-rolled coil prices international

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(€/t) (€/t)

Northern Europe EXW Ruhr USA EXW Indiana China SchanghaiHRC EXW Ruhr Plate EXW Ruhr Medium sections

11/19

11/19

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EU import quotas for steel productsMarket Situation

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As part of a review, the EU Commission only adopted a marginal adjustment of the quota increases in July 2019 and 2020 from +5 to +3% despite decreasing demand for steel – a recalibration of quotas is necessary!

Safeguard quotas are already based on record levels of imports

Developing countries are exempt from the measures even though their import volumes were included in the quota calculation

Quota increases in February and July of 2019 as well as July 2020 do not reflect the actual market growth

Imports of developing countries increase the record level even further

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1 Salzgitter Group2 Market Situation3 Business Units: Strip Steel4 Strategy5 Guidance

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Overview

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Strip Steel Business Unit

Capabilities Integrated steel works with three blast

furnaces Approx. 4.7 mt/year crude steel capacity Modern production plants High processing competence (SSC)Core competences and products High-quality steel grades for sophisticated

applications Custom made solutions, e.g., hot-rolled

and cold-rolled coil, galvanized and coated sheet, laser-welded tailored blanks, corrugated sheets, coffers, sandwich and acoustic elements

Customer focus through local presence

Key data FY 2018

Consolidated Sales €m 2,341

Earnings before taxes €m 206

Core workforce (12/31) 6,182

Established supplier of the demanding German automotive industry

External sales by customer industry 2018

only from entities within the group of consolidated companies of Salzgitter Group

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4%

Other

35%

Vehicle construction

4%

Construction industry

7%

White goods,electrical equipment

32%

Traders

1%

Tube producers

16%

Re-rollers

1%

Mechanical engineering

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Strip ProductsStrip Steel Business Unit

Salzgitter Flachstahl GmbH

Supplier of premium OEMs

Germany; shareholder: SZAG 100% Hot-rolled coil, cold-rolled coil, electrogalvanized, hot dip

galvanized and organic coated sheet Integrated steel works with 3 blast furnaces Around 4.7 mt yearly crude steel capacity Top modern production plants High-tech downstream facilities 4% market share in the EU28

2018 2017

Shipments kt 4,341 4,154

Sales €m 2,887 2,652

Employees 12/31 5,666 5,58720en

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ProcessingStrip Steel Business Unit

Salzgitter Europlatinen GmbH

Germany; shareholder: SZAG 100%Custom-made solutions: Laser welded Tailored Blanks for lighter car bodies

2018 2017

Sales €m 71 77

Employees 12/31 122 117

2018 2017

Sales €m 52 46

Employees 12/31 71 67

Germany; shareholder: SZAG 100%Corrugated sheets, coffers, sandwich a. acoustic elements for wall and roof constructions of commercial buildings

Salzgitter Bauelemente GmbH

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Steel Service CenterStrip Steel Business Unit

Salzgitter Mannesmann Stahlservice GmbH

Germany; shareholder: SZAG 100% Two locations Modern plants and processes 600,000 t/year processing capacity

Excellent position in the heart of Europe

2018 2017

Shipments kt 584 598

Sales €m 415 402

Employees 12/31 323 32122en

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1 Salzgitter Group2 Market Situation3 Business Units: Plate / Section Steel4 Strategy5 Guidance

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Overview

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Plate / Section Steel Business Unit

Capabilities Section steel:

− Top-modern mini mill with two electric arc furnaces

− Annual crude steel capacity 1 mt− Two rolling mills for medium and heavy

sections Plate:

− Two rolling mills for plate with 1.6 mt annual capacity

− Plate width up to 4,800 mmCore competences and products High-strength, wear resistant and

specialized steel grades Medium and heavy sections, heavy plate

incl. offshore and tube grades

Consolidated sales €m 1,026

Earnings before taxes €m 24.8


Key data FY 2018

Plate: Broad range of high quality plate products Section Steel: Efficient production

External sales by customer industry 20181%

Vehicle construction8%

Construction industry

25%

5%White goods,

electrical equipment

41%TradersTube producers


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17%Other

3%

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Heavy PlatePlate / Section Business Unit

Ilsenburger Grobblech GmbH

Germany; shareholder: SZAG 100% Broad diversified heavy plate steel grades Construction plate, fine grained construction plate, alloyed

and unalloyed boiler plate, offshore and tube grades High-strength and wear resistant grades 7% market share in the EU28 State of the art facilities, one of the most modern water

quenching plants

2018 2017


Sales €m 534 501


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Heavy PlatePlate / Section Steel Business Unit

Salzgitter Mannesmann Grobblech GmbH

Germany; shareholder: SZAG 100% Heavy plate mill specialized in plate for longitudinally

welded line pipe and similar applications, especially for EUROPIPE GmbH Pipe bending plant for seamless and welded steel tubes

in carbon, alloyed, and high-alloy steels Test Center with a wide range of mechanical and

technological tests

2018 2017


Sales €m 378 394


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SectionsPlate / Section Steel Business Unit

Peiner Träger GmbH

Germany; shareholder: SZAG 100% Medium and heavy steel beams, Peine sections Progressive and flexible mini mill Two top-modern electric arc furnaces Adjusted crude steel capacity 1.0 mt/year 13% market share in the EU28 (plus N, CH) Two of the most efficient section mills worldwide with

comprehensive range of products

2018 2017

Shipments kt 1,022 997

Sales €m 619 523


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Other CompaniesPlate / Section Steel Business Unit

Deutsche Erz- und Metall-Union-Gruppe

Germany; shareholder: SZAG 100%Specialist trader for ferrous scrap, non-ferrous scrap, new metals and ferro alloys, as well as rolled steel products

2018 2017

Sales €m 678 627

Employees 12/31 378 378

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1 Salzgitter Group2 Market Situation3 Business Units: Mannesmann4 Strategy5 Guidance

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Overview

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Mannesmann Business Unit

Capabilities Own crude steel supply via 30%

participation in Hüttenwerke Krupp Mannesmann GmbH

Plant for the production of semis for the seamless tubes business

Core competences and products Line Pipe: participation (50%) in the world

market leader EUROPIPE; international presence

Precision Tubes: European market leader Seamless Stainless Tubes: top player in

the world market Longitudinal and spiral welded large-

diameter pipes, medium line pipes, seamless and welded precision tubes, stainless tubes


Earnings before taxes €m -5,4


Key Data FY 2018


Global player in the high quality segment of the global tubes market

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only from entities within the group of consolidated companies of Salzgitter Group, excluding EUROPIPE Group

1%Construction industry

5%

15%Energy sector

and utilities

40%Other

4%Traders

Tube producers


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Line PipesMannesmann Business Unit

EUROPIPE Group

Germany; shareholder: SZAG 50%, Dillinger Hüttenwerke 50% Longitudinal and spiral welded large-diameter pipes for

transcontinental and underwater pipelines In-house coating activities World market leader (7% market share) 3 locations in D, USA Since January 1, 2014 reported at equity

2018 2017

Shipments kt 895 1.099

Sales €m 953 1.042

Employees 12/31 1.048 1.03131en

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Line PipesMannesmann Business Unit

Mannesmann Line Pipe GmbH

Germany; shareholder: SZAG 100%HFI-welded medium line pipes incl. plastic- and cement coatings

2018 2017

Sales €m 285 261

Employees 12/31 364 385

2018 2017

Sales €m 67 78

Employees 12/31 125 124

Germany; shareholder: SZAG 100%Spiral-welded large-diameter pipes made of hot-rolled coil

Mannesmann Großrohr GmbH

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Precision TubesMannesmann Business Unit

Mannesmann Precision Tubes Group

Germany; shareholder: SZAG 100% Seamless and welded cold drawn precision tubes for the

automotive and engineering industries as well as the energy sector State of the art push bench plant for the production of hollows Market leader in the EU28 (24% market share) 10 locations in D, F, NL and Mexico

2018 2017


Sales €m 497 477

Employees 12/31 2,287 2,31333en

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Structural tube

AirbagsPump case

Stabilizers

Suspension components

Seat belt- IHU/IHVfixings

Engine-components

Drive shaftsDrivetrain and steering components

Camshafts

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Seamless Stainless TubesMannesmann Business Unit

Salzgitter Mannesmann Stainless Tubes Group

Germany; shareholder: SZAG 100% Seamless hot- and cold finished stainless tubes

for the chemical- and engineering industries, as well as for the energy sector 6% market share in the world 5 locations in D, F, I, USA

2018 2017

Shipments kt 23 25

Sales €m 245 237

Employees 12/31 1.000 93534en

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Significant shareholdingsMannesmann Business Unit

Hüttenwerke Krupp Mannesmann GmbH

Germany; shareholder: ThyssenKrupp 50%, SZAG 30% + Vallourec 20% (Pool) Steel works with two blast furnaces Production of slabs and round steel bars Up to 1,000 different steel grades Yearly crude steel production of > 4 million tons

2018 2017

Sales €m 2,468 2,515

Employees 12/31 2,980 2,90735en

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1 Salzgitter Group2 Market Situation3 Business Units: Trading4 Strategy5 Guidance

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5%

Vehicle construction

Overview

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Trading Business Unit




Capabilities 74 sites in 30 countries Own distribution network for steel products

with warehousing sites in Europe Processing group specialized on heavy

plate products International tradingCore competences and products Global presence in all relevant regions with

own representation Distribution channel for Salzgitter Group

products Procurement channel for Salzgitter Group

works Value add services for customers

Key Data FY 2018


High customer and market orientation through a global sales organization

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14%

Other

29%

Construction industry3%

White goods,electrical equipment

32%

Traders

2%

Tube producers

5%

Re-rollers

2%

Energy sector and utilities

7%



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International10 Companies2 Rep. offices

Europa7 Companies

Europa4 Agencies

Salzgitter Mannesmann Handel Group

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Salzgitter Mannesmann Handel

Shipments 2018: 4.3 mt Sales 2018: € 3.3 billion

Trading AgenciesStockholding

Salzgitter Mannesmann International GmbH, Düsseldorf (SMID)

Salzgitter Mannesmann International (USA) Inc., Houston (SMIH)

Salzgitter Mannesmann International (Canada) Inc., Vancouver (SMIV)

63 locations in 30 countries with 1,739 employees

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Salzgitter Mannesmann Stahlhandel GmbH, Düsseldorf (SMSD)

Stahl-Center Baunatal GmbH, Baunatal (SCB)

20 Branches with warehouses and further processing (incl. 4 flame cutting plants), 4 Sales offices

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Universal Eisen und Stahl Group

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Universal

Shipments 2018: 0.2 mt Sales 2018: € 0.2 billion

North America Europe

5 Branches

Universal Eisen und Stahl GmbH, Neuss (UES) Universal Aciers Sarl, Couzon au Mont d'Or, France

UNIVERSAL STEEL HOLLAND B.V., SK Papendrecht, Netherlands

UNIVERSAL-Stal Sp. z o.o, Gliwice, Poland

UNIVERSAL OCEL spol. s.r.o., Prague, Czech Republic

UNIVERSAL STEEL AMERICA, Inc., Houston, USA

1 Branch in Chicago

11 locations in 6 countries with 370 employees

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1 Salzgitter Group2 Market Situation3 Business Units: Technology4 Strategy5 Guidance

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Overview

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Technology Business Unit

Capabilities 17 Production plants worldwide 60 Service sites > 90% of sales outside of GermanyCore competences and products KHS: among the top 3 global suppliers for

filling and packaging machines; technology and innovation leadership

DESMA Elastomertechnik: Global leader for rubber and silicon injection molding machines

DESMA Schuhmaschinen: World market leader for the production of machines for the production of shoes and shoe soles

Turn-key lines, single machines and service


Earnings before taxes €m 43.1


Top 3 producer for filling and packing industry, world market leader for rubber and silicon injection molding as well as direct soling machines

Key data FY 2018


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1%White goods,

electrical equipement

87%


Food and beverageindustry



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Filling and packagingTechnology Business Unit

KHS Group

Germany; shareholder: SZAG 100% A global leader and solution provider of first choice in the packaging

industry Among the Top 3 producers Focus on beverage applications Supplier of single machines and turnkey solutions (one-stop-shop

supplier) Leadership in technology and innovation 11 production sites: 5 in Germany, 2 in the US, and 1 each in Mexico,

Brazil, China and India

2018 2017

Sales €m 1,161 1,138

Employees 12/31 4,714 4,64842en

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Special machineryTechnology Business Unit

Klöckner DESMA Elastomertechnik Group

World market leader for rubber and silicone injection molding machinery

2018 2017

Sales €m 116 100

Employees 12/31 552 530

2018 2017

Sales €m 62 47

Employees 12/31 224 208

World’s largest producer of machines for the fabrication of shoes and shoe soles

DESMA Schuhmaschinen GmbH

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1 Salzgitter Group2 Market Situation3 Industrial Participations4 Strategy5 Guidance

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Overview

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Industrial Participations

Comprises activities that are not directly allocated to a business unit

Core competences and participations Services:

− Research and development for the Group and external customers

− Information technology− Engineering services− Real estate- and facility development as

well as management− Freight traffic

Shareholdings:− Aurubis− Hansaport

Consolidated sales €m 186



Key data FY 2018

Gratifying contribution from the service companies and the Aurubis investment

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Derivation of pre-tax result 2018

in € million

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EngineeringIndustrial Participations

Salzgitter Mannesmann Forschung GmbH

Germany; shareholder: SZAG 100%Research and development for the Group and external customers with a focus on: Processes for the manufacture, processing

and application of metallic materials and products made of them Development of new materials Development of application areas Material and component characterization including testing

techniques Application and engineering technology from component design

through forming and assembly to corrosion protection Automation and testing techniques, as well as the construction

of non-destructive testing facilities

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Raw Materials and Logistics

Glückauf Immobilien, RSE

Companies specialized in real estate- and facility development as well as management

Hansaport1

Germany's largest seaport terminal for handling dry bulk goods (coal and ores), annual capacity of approximately 15 million tons

Verkehrsbetriebe Peine-Salzgitter

Commercial transportation provider with an annual freight volume of approximately 43 million tons

1 SZAG share: 51%47en

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Data Processing and Communications

Telcat Multicom/Telcat Kommunikationstechnik

Systems for decentralized communication, Broad array of information solutions ranging from office communication and video technology to network services

Integration of business processes into one uniform IT-solution that reflects the entire workflow, Electronic data processing center capacities andthe internet-based eService platform as a unified hub for order processing are offered for group companies and external clients

GESIS Gesellschaft für Informationssysteme

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Aurubis-Participation

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Aurubis Dividend (€/Share)

Since 2008 successful shareholding in the leading European copper producer

SZAG shareholding: 29.99% (per May 23, 2019)

Net dividend received since 2009: € 106.5 million (per FY17/18)

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0.65

1.00

1.20

1.35

1.101.00

1.351.25

1.451.55

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

2015/2016

2016/2017

2017/2018

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Review

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Strategy

“Salzgitter AG 2015” Other programs(since end of 2016 combined under FitStructure SZAG)

2012 – 2016€ 260 million p.a. € 350 million p.a.

> € 600 million € p.a. earnings improvement potential realized

Structural measures 2012-2018

Initial emphasis on restructuring and cost reduction measures

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Development of the portfolio towards high- and highest-strength grades: to this large-scale investments ILG and SZFG

DESMA Achim “Factory of the Future”, Expansion precision tubes group in Mexico

Acquisition SOTEP, Joint Venture Baolong Salzgitter Hydroforming, Increase of the Aurubis AG shareholding

“Salzgitter AG 2021” growth strategy Strategy

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Steel-related Less steel-related

60% 40%Start 2016

Rolled steel production and partsof the tubes production can only grow qualitatively, not quantitatively.

Quantitative growth is possible exclusively in activities apart from steel – especially in the Technology Business Unit.

External growth on a larger scale is not mandatorily necessary for the development of the business units – can, however, be desirable.

Target

2019

50% 50%

44%56%

Status implementationGoals Stipulations

Q2

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Sustainable strategy:Realization of major investment projects also in less comfortable phases!

Update investment projects

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Strategy

Salzgitter Flachstahl: Hot-Dip Galvanizing Line 3

Qualitative growth in the strip steel business Reinforcement of the market position in the automotive segment Strengthening of the premium segment for auto customers

Commissioning: 2022

Ilsenburger Grobblech: New heat treatment line Optimization of the product portfolio Expansion of the market position and volume expansion for higher

value grade segments such as high strength and wear resistant, water tempered steel Commissioning: 2021

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Update programs of measures

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Strategy

All in all around € 400 million in additional effects from optimization programs planned

€ million earnings improvement potential

FitStructure 2.0 (incl. remaining effects of FitStructure 1.0) SZAG 2021 Growth Programs

€ million additional profit contribution

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We are developing the future: research project GrInHy2.0 Strategy

Green Industrial Hydrogen via steam electrolysis (GrInHy2.0)

February 2019January 2019 Currently

Start GrInHy2.0 with Sunfire, Paul Wurth and Tenova

Successful conclusion of the GrInHy project with 10,000 hours of operation

Construction of GrInHy2.0 system and continuation of the GrInHy plant operation

GrInHy2.0 – efficient hydrogen production for a CO2-reduced steel production:Salzgitter-Group is an important research partner for the highly efficient steam electrolysis technology

55

This project has received funding from the Fuel Cells and Hydrogen 2 Joint Undertaking (JU) under grant agreement No 826350. The JU receives support from the European Union’s Horizon 2020 research and innovation programme and Germany, Luxembourg, Italy, France.

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The future of CO2-reduced and sustainable steel production – in Salzgitter!

56Source: Fraunhofer-Gesellschaft/SZAG

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– SAlzgitter Low CO2 Steelmaking

Standard DRP Use of already established(direct reduction with natural gas) and novel (hydrogen production and use) technologies

Integration into existing and optimized integrated iron-and-steel works

Gradual reduction of CO2emissions: between 25% and 95% CO2 savings!

Sustainable "Carbon Direct Avoidance" approach: Reducing instead of recycling!

Use of hydrogen (H2) instead of carbon (C) for iron ore reduction.

Direct reduced iron as energy storage

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We affirm our offer to politics and society to realize a low CO2 steel production in the near future

Strategy

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CO2 I

CurrentlyApril 3, 2019

Memorandum of Understanding with Tenova on the mutual cooperation for the realization of SALCOS ®

Discussions with relevant stakeholders about the creation of suitable framework conditions

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– Salzgitter Low CO2 Steelmaking

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CO2 IIStrategy

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Price forecast CO2 allowances

Source: ICIS, own calculations

€/t C

O2

Medium-term shortfall in CO2 allowances has been compensated for the most part at the subsidiaries of the Salzgitter Group by allowances purchased as a precautionary measure

Price CO2 allowances

Third trading period Fourth trading period

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Estimates price CO2 allowances

Insider information from June 14, 2019

“[…] The market value of all CO2 allowances acquired as a precautionary measure exceeds the figure accounted for in the balance sheet as of today’s date by around € 300 million.”

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Business Units – Forecast 2019Guidance

Oversupply of the European steel market

Higher raw material costs, especially for iron ore

Plate: continuing weakness of the market

Impact from the low utilization of the large-diameter pipes segment

Section Steel: satisfactory margins

Large-diameter pipe mills: unsatisfactory capacity utili-zation in Germany – but better in the US

Medium line pipes: norma-lization of demand

Precision tubes: weaker development

Stainless tubes: moderate improvement in the market

Prospects in international trading will remain under pressure due to restrictive trading policies everywhere and dampened market conditions

Expected margin decrease in stockholding steel trade due to decreasing selling prices

KHS Group: selective order intake, expanding service business and additional positive effects from the measures introduced to enhance efficiency

Specialist mechanical engineering companies of the DESMA Group: decreasing earnings ecreased

Decreasing sales

Tangible reduction in the pre-tax profit due to margins

Sales below previous year

Notable pre-tax loss

Sales slightly decreasing

Positive pre-tax result

Lower sales

Marginally positive earnings before taxes that will be significantly lower than the year-earlier figure

Moderate increase in sales

Decline pre-tax profit

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Strip Steel Plate / Section Steel Mannesmann Trading Technology

Business Unit

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Salzgitter Group – GuidanceGuidance

The Salzgitter AG affirm earnings forecast for the financial year 2019, adjusted on September 26 and anticipates thereforeagainst the backdrop of restructuring expenses still to be determined for the implementation of the “FitStructure 2.0” profitimprovement program:

lower external sales of under € 9.0 billion compared with the previous year,

a return on capital employed (ROCE) that is tangibly below the year-earlier figure.

a pre-tax loss in the mid-double-digit million euro range,

Legal Note and other remarks

We make explicit reference to the fact that imponderables, including changes in the cost of raw materials, precious metal prices and exchange rates, along with global trade policy measures and their possible impact may still exert a considerable influence over the course of the financial year.

To the extent that this presentation contains statements oriented towards or related to the future, such statements are based on our current state of knowledge and the estimates based on such knowledge made by the management of Salzgitter AG. However, as is the case with any forecasts or prognosis, such statements are also subject to uncertainties and risks. Notwithstanding prevailing statutory provisions and capital market law in particular, we are not obligated to update this data. In particular, we shall not assume liability of any kind for knowledge and statements, as well as any acts resulting on the basis of such knowledge or statements that emanate directly or indirectly from the analysis of the data, content and correlations of this document. The information and data made available do not represent an encouragement or invitation to buy, sell or conduct any other type of trade in securities. Salzgitter AG shall neither assume liability for direct nor indirect damages, including lost profits, arising as a result of the utilization of the information or data contained in this document.

For computational reasons, rounding-off differences of +/– one unit (€, % etc.) may occur in the tables. This document is also available in German language. In the event of any discrepancy, the German version shall prevail.

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BACKUP1 Financials2 Pensions3 Investor Relations

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9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

Crude steel production kt 5,060.1 5,203.6 -143.5 1,648.0 1,672.3 1,739.8

External sales1 € million 6,637.3 6,931.2 -293.9 2,111.1 2,232.4 2,293.8

Earnings before tax € million 40.7 284.6 -243.9 -104.6 19.4 125.9

Earnings after tax € million -29.8 194.0 -223.8 -126.2 -0.3 96.7

Earnings per share (undiluted) € -0.63 3.51 -4.14 -2.36 -0.03 1.76

ROCE % 2.5 11.6 -9.1 -10.0 2.8 14.1

Core workforce2 23,562 23,338 224 23,562 23,639 23,683

Key data per 2019/09/30

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Financials

The Salzgitter Group records pre-tax profit in a persistently challenging market environment despite a net amount of € 92.2 million in burdens on earnings

1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date

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Income statement

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Financials

Income Statement (€ million) 9M 2019 9M 2018 Δ

Sales 6,637.3 6,931.2 -293.9Increase/decrease in finished goods and work in process/other own work capitalized 2.3 24.7 -22.4

6,639.7 6,955.9 -316.3

Other operating income 196.4 196.7 -0.3

Cost of materials 4,329.6 4,503.6 -174.1

Personnel expenses 1,335.7 1,292.0 43.8Amortization and depreciation of intangible assets and property. plant and equipment 262.2 252.9 9.3

Other operating expenses 897.8 811.1 86.6

Income from shareholdings 1.8 4.8 -3.0Result from investments accounted for using the equity method 73.9 35.7 38.2

Finance income 13.9 9.4 4.4

Finance expenses 59.5 58.3 1.2

Earnings before taxes (EBT) 40.7 284.6 -243.9

Income tax 70.5 90.6 -20.1

Consolidated result -29.8 194.0 -223.8

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Consolidated balance sheet

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Assets (€ million) 30.09.2019 31.12.2018 ΔNon-current assets 4,159.7 3,835.9 323,8

Intangible assets, property, plant and equipment 2,499.5 2,339.9 159.6

Investment property 82.4 83.5 -1.1

Financial assets 69.6 75.6 -6.0

Investments accounted for using the equity method 1,030.4 888.3 142.1

Trade receivables 19.9 25.5 -5.5

Other receivables and other assets 16.7 24.0 -7.3

Income tax assets 5.4 0.1 5.2

Deferred income tax assets 435.8 399.1 36.8

Current assets 4,929.6 4,921.0 8.6

Inventories 2,347.8 2,327.5 20.4

Trade receivables 1,402.3 1,367.2 35.1

Contract assets 207.6 175.2 32.5

Other receivables and other assets 442.1 403.7 38.4

Income tax assets 22.2 24.5 -2.2

Securities 50.3 67.4 -17.1

Cash and cash equivalents 455.3 555.6 -100.3

Assets available for sale 1.9 0.0 1.9

Balance sheet total 9,089.3 8,756.9 332.4

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Consolidated balance sheet

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Equity and liabilities (€ million) 30.09.2019 31.12.2018 ΔEquity 2,981.5 3,332.1 -350.6Subscribed capital 161.6 161.6 0.0Capital reserve 257.0 257.0 0.0Retained earnings 2,885.3 3,181.0 -295.7

Other reserves 33.8 60.0 -26.2

Unappropriated retained earnings 3.3 33.1 -29.8Treasury shares -369.7 -369.7 0.0Minority Interest 10.2 9.1 1.1Non-current liabilities 3,823.4 3,035.7 787.8Provisions for pensions and similar obligations 2.598.1 2.275.5 322.6Deferred tax liabilities 67.6 67.6 0.0Income tax liabilities 36.1 36.9 -0.9Other provisions 308.5 358.4 -50.0

Financial liabilities 801.0 291.1 509.9Other liabilities 12.2 6.1 6.1Current liabilities 2,284.5 2,389.2 -104.7Other provisions 413.9 281.4 132.5Financial liabilities 320.1 426.9 -106.8Trade payables 1,022.6 1,130.2 -107.7

Liability contracts 200.8 250.2 -49.4Income tax liabilities 6.9 37.0 -30.1Other liabilities 320.3 263.4 56.9Balance sheet total 9,089.3 8,756.9 332.5

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Cash flow statement

67

Financials

Positive operating cash flow despite the increase of working capital

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(€ million) 9M 2019 9M 2018 Δ

Cash and cash equivalents at the start of the period 555.6 679.4 -123.9

Cash flow from operating activities 77.7 280.4 -202.7

Cash flow from investment activities -378.1 -409.0 31.0

Cash flow from financial activities 193.3 -43.0 236.3

Changes in cash -100.3 -167.9 67.6

Cash and cash equivalents at the end of the period 455.3 511.6 -56.3

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BondsFinancials

Convertible Bond

Volume: € 167,900,000 Coupon: 0.0 % p.a. Issue date: June 5, 2015 Maturity date: June 5, 2022 Denomination: € 100,000 Conversion ratio: 2,150.2463 Shares per Bond1

Conversion price: € 46.50631

Underlying shares: 3,610,2631

Conversion right period: July 25, 2015 to May 26, 2022 Early redemption at the option of the Issuer: On or after June 5, 2018, and upon giving not less than 30 nor more than 40 calendar days notice,

only possible if the volume adjusted average XETRA-quotation on at least 20 of the 30 consecutive trading days directly prior to the notification date exceeds 130% of the then applicable conversion price

1 Most recently adjusted per 2019/05/2868en

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Strip Steel Business Unit

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Financials

Pre-tax result includes the release of a provision for typical operating risks amounting to € 41.3 million, counteracting factors were higher prices for iron ore and lower selling prices

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1 per reporting date

9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 1,730.1 1,812.1 -82.0 554.6 576.7 598.8

Order bookings kt 3,347.2 3,487.0 -139.8 1,064.8 1,143.6 1,138.8

Order backlog1 kt 910.2 928.6 -18.5 910.2 932.4 911.5

EBITDA € million 243.2 334.6 -91.4 75.0 68.1 100.1

EBT € million 84.6 171.2 -86.5 24.3 14.0 46.3

Core workforce1 6,138 6,174 -36 6,138 6,192 6,207

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Plate / Section Steel Business Unit

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Financials

Declining earnings due to decreasing volumes and margins, especially for heavy plate,sections record pre-tax profit, result includes release of a provision amounting to € 7.5 million at ILG

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9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 630.6 773.9 -143.3 188.3 212.6 229.6

Order bookings kt 1,429.2 1,688.9 -259.7 394.0 510.8 524.5

Order backlog1 kt 243.8 395.6 -151.7 243.8 314.6 337.8

EBITDA € million 22.7 49.4 -26.8 -2.1 10.7 14.0

EBT € million -13.0 14.5 -27.4 -13.5 -1.2 1.7

Core workforce1 2,414 2,460 -46 2,414 2,425 2,444

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Mannesmann Business Unit

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Financials

Breakeven achieved even though all product areas except the stainless steel tubes business record weaker results

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1)per reporting date

9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 842.1 841.6 0.5 259.8 292.0 290.3

Order bookings kt 1,065.9 1,118.2 -52.3 379.9 343.9 342.1

Order backlog1 kt 481.4 553.6 -72.2 481.4 461.1 477.3

EBITDA € million 50.7 74.0 -23.2 6.6 18.5 25.6

EBT € million -2.9 20.7 -23.5 -11.9 0.7 8.4

Core workforce1 4,670 4,602 68 4,670 4,696 4,700

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Financials

Decrease of shipments due to lower volumes in international trading, declining margins in the stockholding business, nonetheless slightly positive pre-tax result

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9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 2,294.5 2,405.7 -111.1 716.3 780.4 797.9

Shipments kt 3,027.7 3,381.5 -353.9 936.9 1,047.4 1,043.4

EBITDA € million 25.1 48.9 -23.8 6.7 8.7 9.8

EBT € million 3.3 35.2 -31.9 -0.9 1.2 3.0

Core workforce1 2,106 2,003 103 2,106 2,121 2,126

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Technology Business Unit

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Financials

Significant increase in the results of KHS-Group compensates in part the diminishing development of the DESMA companies

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9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 1,000.9 956.9 44.1 344.0 323.1 333.8

Order bookings kt 1,010.0 946.2 63.8 328.1 352.0 330.0

Order backlog1 kt 716.4 697.2 19.3 716.4 724.0 704.5

EBITDA € million 41.1 46.3 -5.3 12.6 10.6 17.8

EBT € million 22.5 30.5 -8.0 6.4 4.3 11.8

Core workforce1 5,576 5,493 83 5,576 5,556 5,559

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Industrial Participations / Consolidation

74

Financials

Pre-tax result impacted by an increase of risk provisioning, counteracting effects from contributions of Aurubis AG, included at equity, as well as services companies

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9M 2019 9M 2018 Δ Q3 2019 Q2 2019 Q1 2019

External sales € million 139.1 141.2 -2.0 48.2 47.7 43.3

EBITDA € million -30.9 31.3 -62.1 -100.6 8.7 61.0

EBT € million -53.9 12.6 -66.5 -109.0 0.4 54.7

Core workforce1 2,658 2,616 42 2,658 2,649 2,647

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Mechanics of internal pension commitment fundingPensions

Internal funding over lifetime of employee

Provision is determined by development of individual salary, time in employment at SZAG, actuarial life expectancy and inflation Contribution as personnel expense and interest element (both non-cash) Monthly payout from operating cash flow

Pension provision (non-cash) Contribution by SZAG (non-cash) Pension payment (cash)

Joinscompany

5 years Retirement

... ...

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Funding of pension commitmentsPensions

(2018/12/31) (2018/12/31)

Pension obligations completely covered by internal funds!

Projected Benefit Obligation (PBO): € 2,351 m1

According to IAS 19:− Discount rate of 0.75%2

– in line with market average− Trend in salaries: 2.75% p.a.− Trend in pensions:

1.75% p.a.− Staff turnover: 1% p.a.− Valuation based on the actuarial

principles

Balance sheet: pension provisions € 2,275 m Assets held by external funds:

€ 75.2 m Non-current assets: € 3,836 m Net position due to banks:

€ 192 m

1 thereof € 75.2 million covered by assets held by external funds 2 per 2019/06/30, previously: 1.00% per 2019/06/30, 1.25% per 2019/03/31, before that 1.75%

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0.200.25

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0.45

0.55

-15

4

53

238

347

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2014 2015 2016 2017 2018

DividendInvestor Relations

Dividend increased by another 20%

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Financial year 2018Dividend per share: 0.55 €

1 restated

1

€ € million

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Inst. shareholders – other Regions

Shareholder structure and share turnoverInvestor Relations

Balanced shareholder structure

Shareholder structure Daily turnover in thousand shares

Salzgitter AG

State ofLower Saxony

Inst. Shareholders – Germany

Inst. shareholders – North America

Inst. shareholders– UK + Ireland

Inst. shareholders– other Europe

Other shareholders

High liquidity

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1Q 13 4Q 13 3Q 14 2Q 15 1Q 16 4Q 16 3Q 17 2Q 18 1Q 19

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Free float: 63.5%Treasury shares: as of July 8, 2010; other information is based on the external shareholder identification as of January 2019

10.0%

26.5%

13.9%19.6%

3.3%

5.0%

1.1%

20.6%

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Disclaimer

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Legal NoteTo the extent that our Internet pages contain statements oriented towards or related to the future, such statements are based on our current state of knowledge and the estimates based on such knowledge made by the management of Salzgitter AG. However, as is the case with any forecasts or prognosis, such statements are also subject to uncertainties and risks. Notwithstanding prevailing statutory provisions and capital market law in particular, we are not obligated to update this data. In particular, we shall not assume liability of any kind for knowledge and statements, as well as any acts resulting on the basis of such knowledge or statements that emanate directly or indirectly from the analysis of the data, content and correlations of this document. The information and data made available do not represent an encouragement or invitation to buy, sell or conduct any other type of trade in securities. Salzgitter AG shall neither assume liability for direct nor indirect damages, including lost profits, arising as a result of the utilization of the information or data contained in this document.

CopyrightsThis data file and the data contained on these pages (including, among others, texts, images and graphics) are subject to copyright and other laws on the protection of intellectual property. To the extent that nothing contradicting or deviating is stated, all trademarks bear legal trademark protection. This applies in particular for Salzgitter company logos and product names. The brands and design elements used on our web pages are the intellectual property of Salzgitter AG. We therefore reserve all rights as such. The document serves to provide non-binding information regarding our company to the respective user, and may not be used within the framework of other depictions, in particular websites, without our express prior written consent.

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Documents

Presentation of the Group - Salzgitter AG...Salzgitter Mannesmann Grobblech GmbH Germany; shareholder: SZAG 100% Heavy plate mill specialized in plate for longitudinally welded line