DGAP-Adhoc: Salzgitter AG: Salzgitter AG revises its guidance for the financial year 2013 in view of the persisting structural crisis in the European steel industry

Salzgitter AG / Key word(s): Change in Forecast

05.08.2013 17:45

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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The ongoing recession in many European countries has put pressure on the
European steel industry in the form of a structural crisis. The direct and
indirect consequences of this crisis have considerably burdened Salzgitter
AG. The downturn in demand has resulted in significant surplus capacities
arising especially among the steel producers of these countries. The
ensuing fierce competition has led to insufficient capacity utilization in
many production plants throughout the EU, while the selling prices that can
be commanded by many rolled steel products in the EU market are below the
manufacturing costs. Owing to the extreme contraction in construction
activities in southern European countries, with no significant recovery in
sight in the medium term, sectional steel products such as beams are
particularly hard hit.

Against this backdrop, Peiner Träger GmbH (PTG), a Salzgitter Group
company, is reporting persistently high losses. Despite the extensive
restructuring measures initiated, earnings prospects are likely to remain
unsatisfactory in the medium term as well. The assessment of the fair value
of PTG's assets in accordance with applicable IFRS accounting standards has
shown the necessity of impairment amounting to EUR 185.0 million on PTG's
assets. This impairment will be fully recognized through profit and loss in
the half-yearly accounts of the Salzgitter Group as of June 30, 2013.

The market valuation of metal price hedging transactions and the
reporting-date valuation of Aurubis AG's inventories (NAAG; 25% stake held
by Salzgitter AG) have resulted in a negative after-tax contribution of EUR
60.0 million by NAAG to the Salzgitter Group in the second quarter. The
prices of copper and other metals declined notably in the second quarter.
For this reason, there is a risk that the profit contribution of Aurubis to
the consolidated result of the Salzgitter Group may not be in the range
originally anticipated for the financial year as a whole.

The operations of the Salzgitter Group's other companies are also exposed
to challenging framework conditions:

The earnings prospects of the Steel Division have therefore deteriorated
overall. To counteract this situation, designated cost-cutting measures,
such as investing in a coal injection plant for the Salzgitter blast
furnaces, and numerous other projects are being vigorously advanced.

The European large-diameter pipe producers of the Salzgitter Group are
faced with a pronounced shortfall in orders, as no notable projects for
large-diameter pipes are currently being awarded in the global market.
Consequently, short-time work introduced in a number of Group companies is
likely to run at least until the end of the year. The business activities
of Europe's leading precision steel tube manufacturer Salzgitter Mannesmann
Precision Group continue to be hampered by the persistent weakness of the
French automotive market. The company is forging ahead with the
restructuring measures introduced. Accordingly, the Tubes Division is set
to deliver a notable pre-tax loss.

The results of the Trading and Services divisions still meet expectations,
while the Technology Division continues to perform well.

In the first half of 2013, the Salzgitter Group has posted a pre-tax loss
totaling EUR 298.7 million, including all operating and accounting-related
effects (first half of 2012: EUR -17.9 million).

In view of the aforementioned negative influences, and due to the operating
development anticipated, adjusting our profit guidance has become
necessary. The Salzgitter Group now anticipates a negative pre-tax result
of around EUR 400 million in the financial year 2013. As already announced,
additional special effects may still arise as a consequence of implementing
the 'Salzgitter AG 2015' Group project.

Further details on the half-yearly financial statements, adjusted guidance
for the year, and progress made with the extensive 'Salzgitter 2015'
restructuring program will be issued on August 14, 2013.

Contact:
Markus Heidler

Deputy Head of Investor Relations

Salzgitter AG
Eisenhüttenstraße 99
38239 Salzgitter

Phone +49 5341 21-6105
Fax +49 5341 21-2570
E-Mail ir@salzgitter-ag.de

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Language: English
Company: Salzgitter AG
Eisenhüttenstraße 99
38239 Salzgitter
Germany
Phone: +49 5341 21-01
Fax: +49 5341 21-2727
E-mail: info@salzgitter-ag.de
Internet: www.salzgitter-ag.de
ISIN: DE0006202005
WKN: 620200
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart

End of Announcement DGAP News-Service

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