Saarstahl: Key Data for the Business Year 2013 for the Saarstahl Group
01 April 2014
The course of the business year 2013 was varied within the Saarstahl group. While Saarstahl AG had better results than expected regarding quantities, Saarschmiede GmbH Freiformschmiede was again affected by a decrease in turnover.
(Press release from Saarstahl)
“Saarstahl was able to positively assert itself in a difficult economic environment, however, the group had an overall difficult business year in 2013 due to the negative development in field of equity investment” according to CEO Dr. Karlheinz Blessing speaking at this year's annual press conference.
- Good development in quantities of bar steel and wire rod
- Turnover for the group decreased from 2.5 to 2.3 billion EUR
- Good equity and financial structure (equity ratio for the group around 71 %)
- Saarschmiede implements cost-reduction programme
Saarstahl AG benefitted with regard to wire rod and bar steel, especially, as a result of the high workloads in the automotive industry. German manufacturers in the premium segment, in particular, consolidated and extended their global market share. From the second half of the year onwards, there was once again greater impetus from the field of mechanical engineering. However, there was renewed pressure on sales revenues as a result of the worldwide drop in prices for steel products caused by current over-capacities. Saarschmiede GmbH Freiformschmiede continues to suffer because investments have been withheld on energy markets; in order to improve the situation regarding the result in 2013 an internal cost reduction programme was implemented.
Figures for the Saarstahl Group for the year 2013:
- Group production of crude steel increased by 8.9% to 2.520 million tonnes (Previous year: 2.315 million tonnes).
- The turnover for the group fell by 6.8 % to € 2.280 billion (Previous year: € 2.492 billion). Germany continues to be Saarstahl's most significant sales market ahead of 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 - € 131 million
- (previous year: € 9 million) and the EBITDA (EBIT before depreciation and amortization) amounted to € 19 million (previous year: € 147 million).
- With a total workforce of 6,903 (previous year: 6,945) the Saarstahl group remains one of the most important employers in the region. In addition, there are 252 trainees (previous year: 303). At Saarstahl AG, a total workforce of 3,867 was employed as of 31.12.2013 (previous year: 3,791), at Saarschmiede GmbH Freiformschmiede there were 986 employees (previous year: 1,057).
- After the major investments of the last few years (Saarschmiede, Centre for Bar Steel in Nauweiler and the new secondary metallurgy) investments within the group continued on a high level at € 84 million even if on a somewhat lower level in comparison with the previous year (2012: € 141 million). At Saarstahl itself, € 55 million were invested (2012: € 99 million).
In spite of the losses incurred and further large investments, the Saarstahl Group has a solid equity structure and financial structure (equity amounts to 71 % of the total assets on the balance sheet).
Cautious positive outlook for 2014
In Saarstahl AG's important client segments of the automotive and mechanical engineering industries, it is anticipated that the market will continue to grow in 2014. The automotive industry, in particular, expects to make further good progress as a result of the recovery in the passenger car market in Western Europe. Mechanical engineering, too, is principally looking at 2014 with optimism. Saarschmiede GmbH Freiformschmiede anticipates a similarly difficult year to 2013. The “ambient noise“ on the energy markets is indeed getting louder and positive economic data from the significant USA market, in particular, signalizes an upward trend. Due to long lead times and approval processes for projects, however, any fundamental turnaround at Saarschmiede is only to be expected in 2015.
Low stock levels at dealers and the trend towards economic recovery have enabled the Saarstahl Group to have an overall good start to the year 2014 with a high level of capacity utilization. The positive development of the ifo-business climate index also offers a confident outlook for the further course of the year. In the segment of long products, a positive development is expected with regard to quantities and revenues and the company is striving for necessary price increases for 2014. The group expects that the course of business will continue to be difficult but with an improvement in sales figures and a balanced result.
The planned EEC amendment is hanging over the whole of German steel industry like Damocles' sword. “The EEC law indisputably needs to be reformed. However, it is hardly comprehensible that the price of the industry's own electricity production will be increased for this reform. It is highly efficient and offers the companies security of supply”, Blessing explains.