Back to black: Salzgitter Group stabilizes earnings
March 23, 2026 | Reading time: 10 minutes
A weak economy, high energy prices, and global overcapacity: In this interview, CFO Birgit Potrafki explains how Salzgitter AG overcame adverse conditions to deliver stable earnings in 2025, the role played by the P28 earnings improvement program and the exchangeable bond, and why she is cautiously optimistic about the new financial year.
A breakeven with lower sales—how do you explain that?
Stabilizing our earnings was anything but guaranteed. The steel industry is still navigating a challenging market environment. In 2025, business activity faltered, the German economy stagnated, and major customer sectors such as the long-ailing automotive industry failed to recover. In this situation, the significant overcapacity and the disruption to the global flow of goods as a result of US trade policy made things particularly difficult for the steel industry. That’s why 2025 was even more challenging than the year before. Against this background, generating EBITDA VX of EUR 406 million and earnings before taxes of EUR 2 million—not including valuation effects from the exchangeable bond—shows that we are resilient and hold our ground even in a difficult market environment.
Talking of the exchangeable bond: Salzgitter AG successfully issued this financing instrument in October 2025 at a value of EUR 500 million. What was behind this decision?
The exchangeable bond increases our financial flexibility—both for ongoing financing and for investments related to our transformation, such as for stage one of SALCOS®. This bond diversifies our financing and ensures a better distribution of maturities. It also allowed us to lock in part of the capital gain on the Aurubis share, which performed very well last year.
The exchangeable bond linked to Aurubis shares affects your earnings figures. How are you dealing with this?
Salzgitter holds approximately 30 percent of the shares in Aurubis and was therefore able to offer tranches of the bond on favorable terms. At the same time, price fluctuations can result in valuation effects that distort our earnings figures—without a change in operating performance. That is why, for 2026 and beyond, we are reporting our financial figures and our guidance without these valuation effects. We are therefore reporting “EBITDA VX” and “EBT VX”. VX stands for “valuation exchangeable” and refers to the valuation of the bond. We can thus eliminate earnings effects related to the valuation of the exchangeable bond.
In addition to strategic financing instruments, you are primarily focusing on long-term performance: With the P28 earnings improvement program, the Group wanted to save nearly EUR 100 million in 2025—how far did you get?
Thanks to our employees’ great dedication, we actually exceeded our targets. Compared with the planned EUR 97 million, we achieved a permanent cost reduction of EUR 110 million, plus further savings of EUR 19 million from measures with non-recurring effects. This gives us a total of EUR 129 million. That represents 33% overachievement. Compared to last year, we were able to double our savings. This is a major success, and everyone who contributed to it can be really proud. I am very impressed by the strength and dedication of our teams and our colleagues.
In the last twelve months and until the outbreak of the Iran war, the Salzgitter share was performing very strongly. What does this growth mean and how important is it for Salzgitter AG to be back in the MDAX?
We are of course delighted that our share will be represented in the MDAX again from March 23, 2026. This means that, in terms of market capitalization, we are again one of the 90 largest listed companies in Germany, which makes us more visible and will potentially bring us more investor interest. At the same time, we should be realistic in our expectations: The price growth is not attributable solely to our own efforts—such as the measures to improve our earnings or optimize our portfolio—but also to external factors such as the Carbon Border Adjustment Mechanism (CBAM), which is restructuring energy-intensive industries and their competitive position on Europe’s external borders, or new trade defense instruments – as well as our stake in Aurubis AG.
External factors such as the Iran war are currently having a negative impact on most share prices. What is your view of this development?
The Iran war is a potent demonstration of why it is so important for us to stay focused on our long-term goals, achieve sustainable growth, and thus cement a trusting relationship with the capital market. In addition, the current situation highlights the strategic importance of stable supply chains and a robust domestic steel industry—resilience has intrinsic value, both economically and in terms of national security. And our customers are businesses that are increasingly willing to recognize this value via the prices they pay too.
What developments do you expect in the current financial year?
I’m cautiously optimistic about 2026. I expect to see initial momentum from regulatory changes: The first effects of the CBAM are already visible. The positive impact of the EU steel safeguards should begin to materialize starting in the third quarter. I then expect a clear upward trend in 2027. Only then are the German government’s infrastructure program and some of the foreign trade defense measures likely to be felt. Positive signals from our customers are crucial for us. Following a decline in production in 2025, for example, the mechanical engineering sector expects a turnaround toward slight growth in 2026. This would benefit not only our machinery and plant manufacturer KHS, but also the steel industry.
Geopolitical tensions, high energy costs, and overcapacity in the global market: How can a resilient business model be built amid these challenges?
We can only achieve resilience through a holistic strategy that combines short-term stabilization with long-term competitiveness. This includes a mix of economic measures—such as flexible adjustments to capacity and inventory—and rigorous performance measures like P28, which structurally improve efficiency within the company. Clear cost discipline is crucial here to safeguard earnings and cash flow even during weaker market phases.
Saving is not a panacea …
That’s right. Companies need to stay close to the market. Consistent customer focus helps identify needs early on, make the right investments, and tailor the portfolio to specific goals. And we are making our financing robust: Diversifying liquidity—that is, widening the range of financing sources and maturities—ensures the flexibility to steer the business effectively even in uncertain times.
New key figures: “VX” brings more clarity
The key figures EBITDA and EBT appear in every one of our annual reports. They refer to a company’s operating or pre-tax earnings. In 2026, Salzgitter AG is now introducing new, adjusted key figures: EBITDA VX (earnings before interest, taxes, depreciation, amortization, and valuation exchangeable) and EBT VX (earnings before taxes and valuation exchangeable). Why? They correct for distortions resulting from the valuation date of the exchangeable bond. Salzgitter AG is thus offering an improved metric for the company’s performance as well as improved comparability of its figures for analysts and investors in response to the sharp fluctuations in the value of the exchangeable bond issued in October 2025.
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