In a challenging steel market environment, Salzgitter demonstrated remarkable resilience and strategic foresight in fiscal 2025, returning to adjusted profitability. The company's performance was underpinned by effective restructuring initiatives, particularly the P28 program, which not only surpassed its initial targets but also saw its overall ambition significantly raised. Concurrently, Salzgitter advanced its long-term sustainability goals through the SALCOS decarbonization project, securing substantial public funding and reaffirming its commitment to green steel production. The strategic acquisition of HKM and diversification into defense steel further illustrate the company's proactive approach to navigating market complexities and fostering future growth.
Looking ahead, Salzgitter maintains a cautiously optimistic outlook for 2026, anticipating improved momentum driven by its strategic interventions and a more favorable policy landscape. The company's focus remains on operational efficiency, sustainable practices, and strategic expansion to ensure continued competitiveness and profitability in an evolving global steel industry.
Operational Resilience and Financial Turnaround
Despite a downturn in the steel sector, Salzgitter achieved adjusted profitability in fiscal 2025, demonstrating strong operational resilience through comprehensive internal performance measures and successful restructuring efforts. The company's adjusted pre-tax result turned slightly positive, an achievement CEO Gunnar Gröbler highlighted as a return to 'black' figures, alongside improved cash generation. This financial rebound was particularly notable given a decrease in group sales to approximately EUR 9 billion, a reduction attributed primarily to the divestiture of Mannesmann Stainless Tubes and weaker demand across various steel segments, coupled with lower trading volumes.
The financial stabilization was significantly bolstered by stringent cost controls and cash management strategies. Adjusted EBT reached a positive EUR 2 million, contrasting with a reported EBT of -EUR 28 million, which included a negative valuation impact from an exchangeable bond. Salzgitter also reported a robust gross operating cash flow of EUR 505 million, marking a substantial increase from the previous year. The net financial position, while still negative at -EUR 954 million, surpassed earlier internal projections, indicating effective financial stewardship. Critical cost components such as material, personnel, and other operating expenses were carefully managed, with reduced material costs notably offsetting the sales decline. The company also addressed depreciation and amortization impacts, which were influenced by impairments related to Mannesmann Precision Tubes and HKM recorded in 2024.
Strategic Growth and Decarbonization Initiatives
Salzgitter has aggressively pursued strategic growth and decarbonization, implementing significant restructuring across its European trading business, which involved streamlining product lines, optimizing customer groups, and reducing staff, ultimately returning the unit to profitability in 2025. Restructuring efforts also extended to steel processing and Mannesmann Precision Tubes, including site closures and operational adjustments. The company's P28 performance program was a standout success, exceeding its 2025 target by 33%, delivering EUR 129 million against a EUR 97 million goal, with EUR 110 million deemed sustainable. The program's success led to an increased overall ambition of EUR 575 million, targeting a EUR 122 million contribution in 2026. This involved innovations like optimizing material mix in electric arc furnaces and enhancing logistics efficiency through shifts from road to rail transport.
In decarbonization, the SALCOS phase one project remains on track, with construction well advanced and commissioning imminent. Salzgitter secured an additional EUR 322 million in funding, bringing total public support to EUR 1.3 billion, despite project cost increases to EUR 2.7 billion. While phase two of SALCOS has been strategically postponed to 2028-2029 to align with market and regulatory conditions, the company remains committed to building a second electric arc furnace. Furthermore, Salzgitter's bid to acquire full ownership of HKM, intending to transform it into a one electric arc furnace steel mill by 2029-2030, highlights its focus on value-chain integration and feedstock security, especially with anticipated demand for slabs following Russian import sanctions. HKM has secured EUR 200 million in grant funding, and the acquisition is expected to conclude by summer, with HKM projected to contribute positively to the group by 2027. The company is also expanding into defense steel, anticipating attractive margins and expecting this segment to contribute a single-digit percentage of sales within two to three years. Despite ongoing headwinds and the absence of some one-time benefits, Salzgitter forecasts sales of EUR 9.5 billion for 2026, with an adjusted EBITDA of EUR 500-600 million and a pre-tax result of EUR 75-175 million, demonstrating cautious optimism for increased momentum from 2027 onwards.