Salzgitter (SZG) AI Stock Analysis

• Market Cap: €2.85B
• Dividend Yield: 0.51%
• Average Volume (3M): 283.50K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: -9.52%
• EPS Growth: -4.21%
• Country: DE
• Employees: 23,868
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.75
• Shares Outstanding: 60,097,000
• 10 Day Avg. Volume: 395,583
• 30 Day Avg. Volume: 283,498
• PEG Ratio: <0.01
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.09
• P/FCF Ratio: -1.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €50.44
• Price Target Upside: 6.50% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: €47.00 ▼(-0.76% Downside)

Salzgitter's overall stock score is primarily influenced by its strong technical momentum, which is offset by significant financial performance challenges and a poor valuation. The stock's bullish technical indicators suggest potential for gains, but the overbought conditions and negative earnings outlook present risks. Investors should be cautious of the financial headwinds and consider the potential for a short-term pullback due to overvaluation concerns.

Positive Factors

Diverse product & service mix

Salzgitter's broad portfolio across flat, long and specialty steels plus plant engineering and OEM partnerships spreads industry and customer concentration risk. This diversification supports more stable revenue streams and resilience through demand swings across automotive, construction and engineering sectors.

Moderate leverage position

A debt/equity of ~0.40 and ~42% equity ratio indicate manageable leverage for a capital-intensive steel firm. This balance sheet capacity gives Salzgitter structural flexibility to fund maintenance capex and phased investments in decarbonization without immediate solvency pressure, important over the medium term.

Resilient gross margin

A ~32% gross margin signals underlying product pricing and input-cost coverage in core steel operations. Sustained gross margins provide a structural cushion to absorb cyclical top-line weakness and finance incremental investments in efficiency and low-carbon tech, supporting medium-term recovery potential.

Negative Factors

Declining revenue trend

Falling revenues reduce scale benefits in a capital-intensive industry, worsening fixed-cost absorption and pressuring margins. Persistent top-line declines constrain the firm's ability to fund capex, R&D, and decarbonization projects internally, raising reliance on external financing over the medium term.

Weak cash generation

Severely negative FCF growth and poor conversion of earnings to cash limit internal funding for maintenance and green investments. Structural cash constraints reduce strategic optionality, increase refinancing risk in cyclic downturns, and necessitate stricter working capital and capex prioritization.

Negative profitability and ROE

A negative ROE, alongside negative EBIT and net margins, indicates persistent operational inefficiencies and value destruction. Over the medium term this undermines shareholder returns, limits reinvestment capacity, and complicates execution of costly structural shifts like low-carbon steel production.

Salzgitter Business Overview & Revenue Model

Company Description

Salzgitter AG, together with its subsidiaries, engages in steel and technology businesses worldwide. It operates through five segments: Strip Steel, Plate/Section Steel, Mannesmann, Trading, and Technology. The Strip Steel segment manufactures branded and special steels, such as hot-rolled strip steel and steel sheets, sections, tailored blanks, and components for the construction industry. The Plate/Section Steel segment produces various high-grade heavy plates for engineering, shipbuilding, and mechanical engineering, as well as trades in scrap. The Mannesmann segment is involved in the manufacture of line pipes, HFI-welded tubes, precision and stainless-steel tubes, and spiral-welded and longitudinal-welded large-diameter pipes; and seamless and welded tubes for the energy, automotive, and mechanical engineering sectors. The Trading segment operates a European sales network, as well as trading companies and agencies worldwide. The Technology segment engages in the provision of machinery and plants for the filling and packaging of beverages, as well as special machinery engineering for shoe manufacturing and elastomer production. The company also provides IT, facility management, logistics, automotive engineering, and research and development services, as well as supplies raw materials. Salzgitter AG was founded in 1858 and is headquartered in Salzgitter, Germany.

How the Company Makes Money

Salzgitter generates revenue primarily through the sale of steel products and related services. Its key revenue streams include the production of flat steel, long steel, and specialty steels, which cater to various industries such as automotive, construction, and mechanical engineering. The company also earns income from its engineering and plant construction services, providing customized solutions to clients. Significant partnerships with automotive manufacturers and construction firms contribute to stable demand for Salzgitter's products. Additionally, the company invests in innovations aimed at reducing carbon emissions in steel production, which may open up new revenue opportunities in the growing market for sustainable materials.

Salzgitter Financial Statement Overview

Summary

Salzgitter is facing financial headwinds, characterized by declining revenues, profitability challenges, and cash flow constraints. While the balance sheet remains relatively stable, the company must address operational inefficiencies and improve cash flow generation to strengthen its financial position. Strategic initiatives focused on cost management and revenue growth are essential to navigate the current industry challenges and improve financial performance.

Income Statement

Salzgitter's income statement reveals a challenging environment with declining revenues and profitability. The TTM data shows a negative revenue growth rate of -3.01% and a net profit margin of -4.47%, indicating a struggle to maintain profitability. The gross profit margin remains relatively stable at 32.38%, but the negative EBIT margin of -2.65% highlights operational inefficiencies. Overall, the income statement reflects a need for strategic improvements to reverse the declining trend.

Balance Sheet

The balance sheet of Salzgitter shows moderate leverage with a debt-to-equity ratio of 0.40, which is manageable but requires attention given the industry's cyclical nature. The return on equity is negative at -9.48%, reflecting recent losses. The equity ratio stands at 41.73%, indicating a reasonable level of equity financing. While the balance sheet is stable, the company must focus on improving profitability to enhance shareholder returns.

Cash Flow

Cash flow analysis reveals significant challenges, with a negative free cash flow growth rate of -34.15% in the TTM period. The operating cash flow to net income ratio is 0.19, suggesting limited cash generation relative to net income. The free cash flow to net income ratio is -0.82, indicating cash flow issues. Salzgitter needs to enhance its cash flow management to support operations and future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.15B	10.01B	10.79B	12.55B	9.77B	7.09B
Gross Profit	3.05B	448.40M	3.37B	4.16B	3.54B	2.35B
EBITDA	393.30M	-68.60M	624.00M	1.44B	1.12B	190.40M
Net Income	-200.20M	-352.20M	200.10M	1.08B	581.10M	-273.90M
Balance Sheet
Total Assets	10.58B	10.47B	10.50B	11.10B	10.25B	8.24B
Cash, Cash Equivalents and Short-Term Investments	900.70M	1.00B	939.70M	988.40M	791.50M	621.40M
Total Debt	1.87B	1.76B	1.30B	1.70B	1.51B	1.23B
Total Liabilities	6.16B	6.02B	5.67B	6.25B	6.90B	5.56B
Stockholders Equity	4.41B	4.44B	4.83B	4.84B	3.35B	2.67B
Cash Flow
Free Cash Flow	-336.70M	-659.90M	140.20M	154.00M	-14.00M	-356.10M
Operating Cash Flow	817.50M	408.40M	892.00M	596.50M	329.40M	18.30M
Investing Cash Flow	-604.90M	-677.40M	-430.50M	-367.70M	-366.60M	-234.20M
Financing Cash Flow	126.90M	331.90M	-498.30M	11.30M	146.30M	151.00M

Salzgitter Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 47.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:SZG, the sentiment is Positive. The current price of 47.36 is above the 20-day moving average (MA) of 47.24, above the 50-day MA of 42.29, and above the 200-day MA of 28.64, indicating a bullish trend. The MACD of 1.32 indicates Positive momentum. The RSI at 57.99 is Neutral, neither overbought nor oversold. The STOCH value of 47.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:SZG.

Salzgitter Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRN	75 Outperform	€4.35B	15.16	14.99%	1.95%	8.15%	16.17%
GIL	68 Neutral	€3.78B	30.07	8.88%	2.19%	-13.98%	45.95%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
TKA	58 Neutral	€6.78B	15.84	4.81%	1.23%	-6.29%	―
SZG	57 Neutral	€2.85B	-12.80	-4.47%	0.51%	-9.52%	-4.21%
KCO	52 Neutral	€1.10B	-8.36	-8.11%	2.52%	4.41%	50.71%