Ladies and gentlemen, welcome to the conference call of the Q1 results 2026 of the Salzgitter AG. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Birgit Potrafki, CFO, and Markus Heidler, Head of Investor Relations.
Thank you very much, and a good morning, ladies and gentlemen, and a warm welcome from me here in Salzgitter. I'm happy to announce that with EUR 280 million adjusted EBITDA, we have made a promising start to 2026, and I can tell you that after two challenging years, that feels really good. As announced on April 21st, our first quarter performance was boosted by an exceptionally strong contribution from our stake in Aurubis.
This was driven by the high prices commanded for precious metals. It's important to stress, though, that all our core business units also contributed to the earnings improvements versus a year earlier. This is obviously very pleasing. Our P28 Performance Program has been a key contributor to this business-wide turnaround. An additional EUR 43 million in efficiency gains were realized already in the first quarter.
Our net financial position has also improved considerably since the beginning of the year from - EUR 954 million to - EUR 679 million, mainly on the back of the prompt payment of additionally committed public funding of EUR 253 million on the first quarter. Having said that, we are not getting carried away. The market environment in which we are operating offers some glimmers of hope but remains challenging overall.
We said at the start of the year that we were cautiously optimistic about our prospects for the year, that remains the case. On the one hand, the new trade defense instrument proposed by the EU Commission in October will be formally adopted in the coming weeks. From July onwards, it will enable the EU to reset duty-free imports back to where they were a decade ago.
This will reverse the recent surge in imports and help restore the long-term viability of EU Steel Production. At the same time, the carbon border adjustment mechanism introduced at the turn of the year is already showing a welcome impact on pricing. On the other hand, the high levels of economic uncertainty that have been depressing the European steel market have persisted. In fact, they have increased again due to the hostilities in the Gulf region and the closure of the Strait of Hormuz.
Additionally, they have resulted in surging energy prices and freight rates. While we are well hedged for 2026 for gas and electricity, those price pressures are pushing down growth projections worldwide. In that context, we have revised our guidance upwards for the year, but not by as much as some of you might have anticipated after such a strong first quarter.
When talking personally to some of you before we adjusted the guidance, I can tell you some of you really challenged me on that. While we expect profit to be higher than projected at the start of the year, our revenue guidance is unchanged. As disclosed on April 21st, we are now guiding for sales of around EUR 9.5 billion and an EBITDA VX of between EUR 625 million and EUR 725 million.
To conclude, we have made a promising start to the year, and it is pleasing to see all our core business units contributing to our improved performance. EU measures will also bring some relief, but ongoing geopolitical and macroeconomic uncertainties mean our growing optimism must be balanced with a healthy dose of caution. Thank you for your attention. I'm now looking forward to your questions.
Thank you very much. Dear ladies and gentlemen, if you are dialed in the conference call, please press star nine and the pound key to ask a question, or if you joined us via web interface, please click on the dial-in button and then raise your hand to ask a question. I repeat, the combination if you are dialed in the call is star nine pound key, or please click on the dial-in button on the web interface and raise your hand. The first questions are already incoming. One moment for the first question, please.
Boris, your question please.
Can you hear me? Right.
Yeah.
Hi. The question is really my questions on the Steel Production business. We see that order intake shows a + 7% year-on-year growth, so there seems to be a slight recovery. I would be interested in getting your comments on the drivers, what you see behind this recovery and whether you continue to see a change in the customer behavior in Europe. On the profitability side, it seems like you've been helped by input prices, which shows a EUR 54 per ton EBITDA in Q1. How sustainable is that number? Do you see potential upside going into the rest of the fiscal year? Thanks.
Thank you, Boris, for your question. Starting with the sales, we see an overall sales improvement for the total year in Steel Production as well as for the whole company, of course. We have already gave that outlook when we talked last time here. Looking at the cost basis, we believe also that this will be continued to be stable. Yes, you're right. We have seen an increased order intake, and that is supporting our projection that sales will be improved compared to last year and is perfectly in line with our guidance that is also above sales of last year.
Okay. Thank you. Just on, as a follow-up, when you say that this continued to be stable, you mean the costs? We should see an improvement in the EBITDA per ton margin over the remainder of the year? That's the right way to put it?
You're still talking about the segment Steel Production, Boris, right?
yes, correct. Yeah.
We see we have had also in Steel Production a good result in the first quarter and a lot stronger than the year before. We see a continued strong performance in the total year and also in each of the quarters.
Okay. At least this kind of profitability could be extrapolated?
Yeah. I see a really good stability.
Okay. Thank you.
Thank you, Boris.
Thank you very much.
Yeah
from my side. The next question is from Tristan Gresser, BNP Paribas. Please, over to you.
Yes. Hi. Thank you for taking my question. Just going back to Boris' question on the stability of margin performance for Steel Production. I mean, steel prices have moved up quite a bit since the start of the year. Your ASP in Q1 were probably not reflected that price increase, so I'm a bit surprised you said that you would expect some stability. My understanding is that Q2 should see a sharp appreciation in margin with steel pricing being the main driver. Would be keen to hear a bit about the bridge for that division into Q2. You talked about costs, yeah, what about prices and what about volume? Should we think about it? That would be my first question, then I have two more.
Volume-wise, we have seen the order intake, that is also giving some positive impacts on the volume side. Price-wise, if you look at the HRC price levels, and you see where they are right now, like around EUR 700, EUR 710, slightly below EUR 700. That price level is almost back to the level we have seen during the second quarter of last year. It's not really exceeding what we have seen last year yet, right? In July, we had a peak in the second quarter. We had a dip in July, prices have slowly recovered now. Not even back to the level that we have seen in the second quarter.
What we see from the price side, it has not yet been developing beyond what we have seen in some months last year. So far concerning the prices. Anyway, we are now negotiating, of course, contracts with customers based on the actual price level. We have included that in our guidance already.
Okay. You would not expect ASP selling prices to increase into Q2?
We have slighter assumptions. We do not see, to be honest, we do not see a bigger boost. Why is this? Because some of the price impacts coming from safeguards, expected safeguards, and coming from CBAM have already materialized in the prices. How much? We all don't know. However, some of these assumptions are already reflected in the price.
We believe that the impacts coming from safeguards which will apply up from July, will not be right away because we expect that some stock holding will be provided in order to get prepared for that change. We have already talked about that earlier. We see an additional impact from safeguards materializing more towards the end of the year, not in the middle of the year. That is how much I can disclose on our view on price development.
Oh, okay. Just to confirm I understood correctly, the bridge and the guidance into Q2 is stable cost, higher volumes, stable selling prices for the Steel Production division?
You are right. With some slight addition I would like to make. We are having our performance program, and we are targeting EUR 120 million cost savings, and we have materialized in the first three months already EUR 43 million. There are still some EUR 80 million to go, and of course, this will have a positive impact on our cost basis. Also to mention, we have a seasonality, of course, always in our revenues as each year, each and every year, with national holidays and also revision of our machinery. That is nothing different to what we have seen the previous years.
Okay. All right. Now it's not the second question, but on steel processing, would you expect the division to be positive a bit into Q2? I mean, you mentioned in the report the strong increase in plate prices. They've continued to perform well. I know in the report you also mentioned some higher costs offsetting fully this increase in prices. Keen to understand also a bit the bridge into Q2 and what sorts of cost pressure you've seen for that division and if that should prevent the division to turn a bit positive into Q2?
We definitely expect some improvement in the margins in the upcoming Qs, quarters and also in Q2. Let's see whether we will manage to be positive. I hope we can come up with some nice news when we give our next updates. However, we plan to improve here. The market remains challenging, especially in the precision tube groups, where we have still quite some underutilization. We are quite nicely booked in Ilsenburg, and we still have capacity when it comes to large diameter tubes and also when it comes to MGB. In case economy would pick up, we would be able to use more of our capacities. As I said, still quantities not as good as we would like them to be. All this covered in our guidance.
In case economy would pick up even further, we are ready to provide out of the entities that I have just mentioned. Other than that, about prices, we have talked already. That's more or less the picture I can provide to you.
Okay. That's clear. I go back to the queue. Thank you.
Thank you.
Thank you very much. The next question is from Maxime Kogge, ODDO BHF. Please, over to you.
Yeah. Good morning, Birgit . Another French analyst asking questions now. The first one is on HKM. You obtained the EU antitrust agreement recently for the deal. What do you still need to get to close the deal? Are you still in discussions with thyssenkrupp or Vallourec on some details? And when do you think you can give us a sense of the impact of HKM's integration into your results?
Thank you, Maxime, for raising the HKM question that I think are of interest to almost everybody on the line. The EU, right, we've received the EU antitrust. Okay. That's fine. Other than that, we are still busy negotiating with our colleagues from thyssenkrupp Steel. We are quite confident that we will be able to close the deal in the near future. I'm not going, of course, you may understand, I'm not going to disclose any details on negotiation terms. However, we are really confident that in the upcoming time, there will be a good decision which will be good for everybody. After that, we will talk about the impacts on our results, and what this means for Salzgitter AG in total.
Okay. Second one here is on your recent announcements to dispose of your treasury shares. This had quite a negative impact on the share price when it was announced. Have you, in the meantime, carried out some disposals of treasury shares? Under which timeframe do you expect to achieve those sales? Is your objective to go down to zero of treasury shares? What would be the expected use of proceeds from that?
We were also quite surprised by the drop in the share. Why was this? Because, as you may have realized, that one of our main shareholders has reduced its shares without causing such an impact. That was a kind of a surprise. However, shares have recovered, so no sustainable impact here. We have started to sell some of our shares.
That is why we also went public, because we fell below 10%. We are not under pressure here. You have seen from our net financial position and from our cash position that there is no pressure here. However, we decided to optimistically use the situations to sell some of our shares. Why is this? First, we got the feedback from the market that the liquidity in the share should be increased. Second, it's also contributing to financial stability of the company.
All right.
Did I answer your question with this?
Yeah. The objective at the end would be to hold zero of treasury shares, or you could still own some of them, at the end of the process?
We are now targeting to move towards 5%. As I said, not under pressure. No time limit set for that, really easygoing here.
Okay. No, that's clear. Just the last one. You said previously you didn't expect volumes to increase that much in the coming two quarters. I should infer from that reopening the Blast Furnace C, the one that is still idled, is still not being considered, right? This is something that you will perhaps rather envisage at the end of the year.
Mm-hmm. Maxime, when I talked about we are not expecting too much volume increase, I was in the steel processing area, not so much in steel producing.
Okay.
Concerning Blast Furnace C, the plan is to get that switch on again in autumn somewhere.
In autumn. Okay.
Yeah.
Okay, that's clear. Okay. Just after the new safeguards has kicked in, yeah. All right. That's it on my side.
Thank you, Maxime.
Thank you very much for your questions. The next question is from Bastian Synagowitz, Deutsche Bank. Please, over to you.
Yes. Good morning. Thanks for taking my questions. Just a very quick remark on the pricing assumptions. I'm a little bit surprised. I mean, you say prices are not really above last year. I think they're well above last year, and so are margin. I think there's a lot of good reasons to be probably a bit more co-positive here. I just, I would probably take that as the usual Salzgitter conservatism. My question, though, is on cash flow. And, I thought that was actually very strong. Now, maybe could you please give us a quick refresher on the debt levels which you're now expecting for the end of this year? That's my first one.
Yeah, sure. When we talked, thank you, Bastian. When we talked last time, I have shown a graph where I showed our investments, I have also already announced on that graph that we are expecting this EUR 250 million. Luckily, we received them already in the first quarter. When we talked last time, my view on the liquidity side and on the net financial position was already including the anticipation of the EUR 250 million. With this, I stick that we will be slightly above a - EUR 1 billion towards the end of the year. Looking at our EBITDA guidance, that means we will be max reaching a leverage of 2x.
Okay. All right. Thank you. My next one is on maybe like, I guess the use of your balance sheet as well as your asset. You know, deciding to sell some treasury shares, obviously, on the other hand, you still have a very sizable stake in Aurubis, which, I mean, has just been hitting another, I guess, record share price level. How are you basically looking at these two options of selling your own shares relative to selling Aurubis shares as at a record level? Just keen to get your thoughts here.
You know that we have an exchangeable bond issued on some of our Aurubis shares, and we are fine with this. Next to that, we are quite pleased, especially looking at Q1 results, to participate in the nice Aurubis margins and EBITDA contributions to our EBITDA.
Has this been an option as well you've been at least considering as an alternative solution?
I mean, we are always You may very well imagine that we are considering and evaluating all the options constantly that you are also seeing. Then we take our decisions, and our decision has been exchangeable bond and selling of own shares.
Mm-hmm. Okay. All right. Maybe staying on the topic of Aurubis and also what it means for your guidance framework. I would say just from, I guess, the capital market side, the last quarter probably illustrated very, very well why there are probably a lot of good reasons for why Aurubis should probably not be part of your operating guidance. I mean, your operating guidance is barely more or less like a playbook of metal prices and derivatives with the leverage from Aurubis. Is this something you also consider potentially whether you may change that?
I guess the other question here is just given the significant volatility from Aurubis, which could obviously, like, almost change with any move in metal prices, I mean, is this something you have also basically been cushioning for a little bit, with maybe haircuts in other parts of your operating guidance, just given this is the volatility you can't really control?
First of all, we have not planned for the time being to change, the how to say, how we deal with the contributions from Aurubis. We have done this for many, many years the way we do it, and for the time being, we are going to for, to continue that. What we have done, and you have seen that we have, now established the EBITDA and EBT VX, and taking out the valuation effects from the exchangeable bond. That's very important because that's also fluctuating.
You're right, the Aurubis contribution, includes two elements. The first element is the operational performance, and the second element is the performance coming, from the precious metal evaluation. Here, we have taken a prudent approach in that way that we do not anticipate any further contributions coming, positive contributions coming from the precious metal sides, in the remaining quarters.
Okay. Thank you.
Thank you, Bastian.
The next question is from Dominic O'Kane from JP Morgan. The floor is yours.
Hello. I have three short questions. Firstly, just again on cash flow. At the Q4 update, you indicated that you were expecting CapEx for 2026 to be around EUR 900 million. The Q1 run rate is quite significantly below that. Again, if you could just maybe talk to us about how you're thinking about CapEx for the full year and the timing of the CapEx spend. I have two other questions.
Okay, let's start with this one. Thank you, Dominic. In the last call, I have shown that we anticipate for this year EUR 875 million of CapEx, and I have already indicated that EUR 250 million of additional funding will have a positive impact on that, meaning reducing that. That is what we have seen. First of all, we always have a seasonality in our CapEx spending, which is like in almost all other companies, more towards the second half of the year. Second, a big impact, this additional EUR 250 million of funding we have received in the first quarter, and that, of course, had a positive impact on our CapEx spending since it's accounted for in the CapEx.
That as much as I can say for the CapEx spending. We have proven in the last year, and in the last years that we anyway still look very carefully at each investment we are taking very, how to say, very mindful decisions on each bigger investment. So much on cash flow and CapEx.
Okay. Excellent. Then just two other questions. Obviously your commentary around the Q2 outlook for Steel Production is, I think, relatively conservative. Could you maybe just talk to us about how you're seeing the current customer environment with regards to some of the uncertainties in the Middle East? Are you seeing any kind of slowdown in customer inquiries or orders?
Is there any discernible change in customer behavior? Then my final question is, could we just maybe talk about the Technology business unit? It was a very strong quarter. There's certainly been an improvement in the contribution from that division in recent quarters. Do you think that you are able to sustain the type of run rate that you had in Q1 for the rest of 2026? Those are my-
Sorry, I didn't really catch the last question.
My last question is on the Technology business unit. You obviously had a very strong Q1.
Right.
Should we think that that is a sustainable run rate?
Okay. Yeah.
going forward?
Yeah. Fine. Thank you. I will start with the sales. You think we may be more bold in our guidance. Sales first, two messages. First of all, we have not seen significant cuts in single customer orders due to the crisis in the Middle East. Second, we have all seen that projections for the economy have been revised downwards, right? For Germany, below 0.5%. To be honest, that is not growth. That is a slight recovery of what we, about what we have lost the years before. The crisis in the Middle East and tariff discussions from U.S. are pushing on economic expectations, and this means also on all of our customer segments, of course.
Where we really feel it, where we really feel, the crisis in the Middle East is our international trade. Here we feel the pressure on the volumes, on prices, and, here we feel a real impact. If the customer behavior we have seen so far is more, in line with the economic expectations rather than individual, expectations. Looking at, and about our guidance. Look, we have so much, as I have said in my intro, we have so much uncertainties from this tariff stuff, from the situation in the Middle East, that there is quite some uncertainty about what's going to happen and how this is going to impact our business. Of course, we have taken into account that we somehow have to deal with these uncertainties.
Saying that, I personally, at this point in time, do not see any major threats to our guidance. The Technology result, I can tell that the Technology result in the first quarter has been strong because we are still very much profiting from the Plasmax orders that we are delivering. We have a bigger Plasmax order, and we are still profiting from that. Other than that, overall, in the total year, especially KHS will have another record year when it comes to sales, and will have another record year when it comes to profit as well. We see that we expect all four quarters in the profit side, on the profit side being stronger than the quarters we have seen last year. So much is how I look at it.
With the first quarter being especially strong, if you look at the seasonality of the Technology segment, you also always see a very strong fourth quarter in almost each year. We are expecting this to happen also this year.
Thank you very much.
Thank you, Dominic.
There are no further analyst questions, but there is a question on the chat, asking if there are any one-offs included in the results, especially in the Steel Production divisions.
In the steel if you look at the first quarter, we have had one one-off effect which was not in Steel Production, but which was taking place in the trade segment. Here we had reduced restructuring cost following some negotiations. We had a positive result here of EUR 11 million.
Now we have the next question coming from Christian.
Hi, thanks for taking my question. Slight clarification on the green steel subsidy. You said you received EUR 250 million, you know, well ahead now your expectations. Can you help us as in how much of the total subsidy you have received, and do you expect to receive any further subsidy like in 2027?
We have received more than EUR 1 billion of subsidies already and we are getting EUR 1.3 billion subsidies overall. The majority we will receive until the end of the remaining. Almost EUR 300 million we will receive until the end of this year, and only a minor portion is to be expected for 2027.
Understand. Thanks a lot. Then following up on Bastian's questions in terms of giving the operating guidance excluding the Aurubis. What is the rationale of including Aurubis in your guidance when you know, when you are supposed to, you know, make an assessment of what Aurubis is going to make when you don't control that business? Have you considered giving the guidance only for the operating businesses, maybe from, say, next year onwards?
You know that Aurubis has been part of our group for many years, and it has always been, it's a major stake. We have a major stake here and we look at the Aurubis as an integral part of our company. That is why, we have decided to include and to guide also the contributions from Aurubis. Apart from this year, where we have decided to guide an EBT VX and EBITDA VX, taking into account or taking out the fluctuations we see on the exchangeable bond. Our philosophy has always been not to provide EBT and EBITDA adjusted, where it's difficult to see what's the result of the overall company. That's what's more or less has been our philosophy and still is.
Understand. Thanks a lot.
Thank you, Christian.
Was there a follow-up question, Christian?
Christian, you're fine, or you had more questions?
No, I'm good. I'm good. Thanks a lot.
Thanks, Christian.
Okay. Cole, it's up to you now.
Morning. Thanks for taking my question. Just like a little bit of color on, you know, how you're seeing trading and inventory levels for steel in Europe considering, you know, people are buying a little bit more before the quota system comes in. I'm just wondering how you see those inventory levels being managed through the rest of this year. Just a housekeeping question. I know you said you're gonna be selling treasury shares, and there's no rush to do that, but could you give us how much shares you've sold at the moment, just from a share count perspective for the following quarters? Thank you.
Starting, Cole, thanks for your questions. I will start with your first question concerning inventory levels. We have seen higher imports in the fourth quarter of last year. Our interpretation is that this is a front-loading in line with the CBAM regulations and also already some preparation concerning the import quotas to be reduced mid-year. Yes, we have seen that taking place, and still we see, if I talk to my colleagues from the trade, they still see that happening. That is why we believe that the impacts from the safeguard measures as of July will materialize with the time being.
Concerning the treasury shares, I know and I can understand that this is of high interest to understand how much we have sold in the meantime. However, please be so kind to understand that we are not going to disclose any details here.
Will you just provide a share count number with every quarter then, just so we get the correct share count?
We will provide the next information, when we come to the 5%, so when official regulations require us to give more information.
Okay. Understood. Could I just follow up on HKM? Would you mind just providing, I know you can't give too much at this stage, but rough timelines and process from here when you will give us a more detailed update on HKM? Thank you.
Yeah. I would like to repeat, Cole, what I have said before, that we are still in negotiations with the colleague from thyssenkrupp Steel, and that we are confident that in the near future we will be able to come to an agreement, which is good for all sides, and that as soon as this is happening, we will provide the required information.
Thank you.
We have a question in the chat from Jonas Freming, what steel price we assume in our guidance. We do not First of all, we do not disclose the prices we have in our contract. Also you have to understand that in our contracts, how to say? The contracts have different time horizons. Some contracts we are doing in steel have a time horizons of four weeks or two weeks. Some have three months, some have six months, some have 12 months. Giving one single price would also be really of no help. Next to that, we are not disclosing single prices that we have included in our guidance.
Okay. We have all answered the question from the chat. There are no further questions in the line. If so, please let us know.
At the moment, there are no further questions. Dear ladies and gentlemen, thank you very much for your questions. We are closing the Q&A session now.
Thank you. Have a great day.
Thanks.