Key Data for the Business Year 2014 for the Saarstahl Group
31 March 2015
The Saarstahl Group closed the business year 2014 with significantly better figures in comparison with the previous year. In particular, the sales volume for bar steel and wire rod was on a high level while the revenue situation remained below expectations. At this year's annual press conference, CEO Dr. Karlheinz Blessing stated that “In spite of adverse market conditions, Saarstahl achieved tangible profits in 2014. This was the result of excellent performance across all divisions of the company combined with considerable internal improvement processes.”
(Press release from Saarstahl)
- Significant profits again
- Market share gained in higher grade quality range
- Sales volume for bar steel and wire rod on high level – revenue situation unsatisfactory
- Group turnover increased from 2.280 to 2.361 billion EUR
Saarstahl AG benefited from stable demand for wire rod and bar steel from the principle customers – the automotive and mechanical engineering industries. In particular, German premium range manufacturers in the automotive industry registered robust economic activity in 2014. As a quality leader, Saarstahl has managed to continually increase its market share in the higher grade quality range. However, the global decrease in price levels for steel products as a result of existing over-capacities and the greatly increasing imports on the European market put revenues under renewed pressure. Saarschmiede GmbH Freiformschmiede was able to halt the negative trend of the previous years but is still suffering due to far-reaching changes on the energy markets which are impeding respective investments in this segment.
Figures for the Saarstahl Group for the year 2014:
- Group production of crude steel increased by 9 % to 2.665 million tonnes (previous year: 2.448 million tonnes). The sales volume increased from 2.171 million tonnes to 2.361 million tonnes.
- The group turnover increased by 3.5 % to 2.361 billion EUR (previous year: 2.280 billion EUR). Germany continues to be the main sales market for Saarstahl before the EU and third party countries (NAFTA, Asia, Rest of the World).
- The financial result for the group before interest and tax (EBIT) amounted to 80 million EUR (previous year: - 131 million EUR) and the EBITDA (EBIT before depreciation and amortisation) to 233 million EUR (previous year: 19 million EUR).
- With a total workforce of 6,577 (previous year: 6,584), the Saarstahl Group continues to be one of the most important employers in the region. In addition, there are 247 trainees (previous year: 252). At Saarstahl AG, the workforce was increased so that as of 31.12.2014, there was a total workforce of 4,026 (previous year: 3,867) employed at the company; at Saarschmiede GmbH Freiformschmiede, the workforce amounted to 897 employees (previous year: 986)
- After the large investments of the previous years, - (Saarschmiede (forge), Stabstahlzentrum (bar steel centre) Nauweiler and new secondary metallurgy), investments in the group were on a lower level at 37 million EUR (previous year: 83 million EUR). Furthermore, at Saarstahl, from March 2014 until today, new strategic investments amounting to 90 million EUR which will have an impact on all 3 production locations in the Saarland, have been decided upon and initiated.
- At 74.8 %, the Saarstahl Group has seen yet another improvement in the equity and finance structure (previous year: 71.3 %).
Stable business year expected in 2015
The important customer sectors for Saarstahl AG of automotive manufacturing and mechanical engineering had a positive start to 2015 with, in some cases, significant increases in the number of newly registered vehicles on the passenger car market in Western Europe, in the USA, in China and India; however, it is anticipated that this trend will weaken over the course of the year. In mechanical engineering, moderate acceleration of growth is expected in comparison with the previous year. This development creates an overall positive starting position for wire rod and bar in the quality steel and high-grade engineering steel sectors, which will manifest itself in stable development of volumes and a good degree of capacity utilisation.
At Saarschmiede GmbH Freiformschmiede, the market situation remains tense. In 2015, optimization of the internal cost structure and processes will be furthered. All in all, it is anticipated that there will already be tangible improvements in 2015 and above all in 2016.
The Saarstahl Group started the year 2015 with a good degree of capacity utilisation. The market environment remains very demanding, however, due to considerable under-utilization of steel capacities in Europe and the world and the resulting increased competitive pressure. Saarstahl expects stable development of the sales figures and positive results in the bar steel and wire rod sectors. This is based on the assumption that the strict cost management will be continued and further efforts made to increase profitability. Saarstahl will therefore continue its strategy as a globally recognized manufacturer of high grade steel products. Investments which are planned and which have already been implemented are aimed at further optimizing processes and the quality of the products as well as further improving the service for our customers.
The extreme regulationism in energy politics has reached an extent which is almost existence threatening. “The amendment to the German renewable energy law (EEG) has stopped short of some important aspects, CO2 emission trading has left the western European steel industry at a one-sided disadvantage”, Blessing explains. “We are faced with an increasingly hard-fought global market and we are rising to this challenge with a high level of motivation. However, we are no longer able to simply conjure up ways of stemming politically motivated supplementary charges which are accumulating heavily.”