| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.26 | -40 |
| Intrinsic value (DCF) | 10.23 | -77 |
| Graham-Dodd Method | 42.82 | -6 |
| Graham Formula | n/a |
Salzgitter AG is a leading German steel and technology company with a diversified business model spanning multiple segments, including Strip Steel, Plate/Section Steel, Mannesmann, Trading, and Technology. Founded in 1858 and headquartered in Salzgitter, Germany, the company operates globally, supplying high-grade steel products for industries such as construction, shipbuilding, automotive, and mechanical engineering. Salzgitter AG is known for its branded and specialty steels, including hot-rolled strip steel, heavy plates, and precision tubes, catering to both industrial and infrastructure demands. The company also engages in machinery and plant engineering, particularly for beverage packaging and elastomer production, enhancing its technological footprint. With a strong European sales network and global trading presence, Salzgitter AG plays a critical role in the steel supply chain. Despite cyclical industry challenges, the company maintains a robust R&D focus and sustainability initiatives, positioning itself as a key player in the transition toward greener steel production. Its diversified operations and long-standing industry expertise make it a significant entity in the Basic Materials sector.
Salzgitter AG presents a mixed investment case. On one hand, its diversified steel and technology segments provide resilience against cyclical downturns, and its strong European market presence offers stability. The company’s focus on high-grade steel and technological innovation could benefit from infrastructure and automotive demand recovery. However, the steel industry remains highly sensitive to raw material costs, energy prices, and global economic conditions, as evidenced by its recent net loss of €352.2 million in the latest fiscal year. Additionally, high capital expenditures (€968.8 million) and substantial total debt (€1.76 billion) weigh on financial flexibility. While the dividend yield (€0.65 per share) may appeal to income-focused investors, the negative diluted EPS (-€6.51) and volatile beta (2.024) suggest elevated risk. Investors should closely monitor steel price trends, energy cost management, and the company’s progress in reducing leverage before considering a position.
Salzgitter AG operates in a highly competitive global steel industry, where scale, cost efficiency, and technological differentiation are critical. The company’s competitive advantage lies in its diversified product portfolio, particularly in high-margin specialty steels and precision tubes, which cater to niche markets like automotive and shipbuilding. Its Mannesmann segment, specializing in seamless and welded tubes, holds a strong position in the energy sector, benefiting from infrastructure and renewable energy demand. However, Salzgitter faces intense competition from larger European and Asian steelmakers with greater economies of scale, such as ThyssenKrupp and ArcelorMittal. While Salzgitter’s Trading segment provides a broad distribution network, it lacks the vertical integration of some rivals, making it more vulnerable to raw material price fluctuations. The Technology segment, though smaller, adds diversification but competes with specialized engineering firms. Salzgitter’s sustainability initiatives, including its SALCOS® green steel project, could enhance long-term competitiveness as decarbonization pressures intensify. However, execution risks and high capital requirements for green transitions remain challenges. Overall, Salzgitter’s regional strength and product specialization provide some insulation, but it must improve cost efficiency and debt management to compete effectively against global giants.