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Salzgitter (SZGPY)
OTHER OTC:SZGPY
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Salzgitter
(OTC:SZGPY)
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Rating:58Neutral
Price Target:
$5.50
▲(14.82% Upside)
Action:ReiteratedDate:01/13/26
The score is held back primarily by weakened financial performance, with recent losses and persistently negative free cash flow despite moderate leverage. Technicals are supportive with a strong uptrend and positive MACD, but overbought signals add pullback risk. Valuation is helped by an extremely high dividend yield, though negative earnings limit confidence from P/E-based valuation.
Positive Factors
Diversified revenue streams
Salzgitter's mix of flat, long and tubular steel plus trading and engineering services exposes it to multiple end markets (automotive, construction, energy). This structural diversification reduces reliance on a single sector and supports more resilient revenue across cycles.
Manageable leverage and equity buffer
Debt levels are moderate for a cyclical steel company and equity has grown versus 2020, providing a stronger capital cushion. This durable balance-sheet profile helps absorb industry downturns, preserve access to financing, and sustain strategic investments over the medium term.
Operating cash flow recovery
A recovery in operating cash flow to ~835M TTM indicates core operations can generate meaningful cash even while margins and FCF lag. Sustained OCF supports working capital needs and funds operational resilience, giving management time to address profit and FCF weaknesses.
Negative Factors
Sustained profitability deterioration
The shift to recurring losses and negative operating profit in recent years signals structural margin pressures or cost/price imbalances. Persistent profitability weakness undermines earning power, limits reinvestment from internally generated profits, and elevates the need for strategic corrective actions.
Negative free cash flow
Consecutive periods of negative free cash flow indicate that investment and working-capital needs are consuming cash despite improved operating cash flow. This persistent FCF shortfall reduces financial flexibility and may necessitate external financing or asset sales to fund dividends and capex.
Returns have turned negative
Negative ROE reflects that the company is not earning a return on shareholder capital, evidencing erosion of profitability and capital efficiency. If sustained, this undermines long-term shareholder value and constrains the firm's ability to fund growth without altering capital structure or strategy.
Salzgitter (SZGPY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.49B
Dividend Yield0.53%
Average Volume (3M)930.00
Price to Earnings (P/E)7.6
Beta (1Y)1.07
Revenue Growth-7.78%
EPS Growth-0.92%
CountryUS
Employees23,868
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.09
Shares Outstanding600,970,000
10 Day Avg. Volume400
30 Day Avg. Volume930
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.19
Price to Sales (P/S)0.08
P/FCF Ratio-1.47
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue0.41
Enterprise Value/Gross Profit1.23
Enterprise Value/Ebitda9.55
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Salzgitter Business Overview & Revenue Model
Company DescriptionSalzgitter AG is a leading German steel and technology company that operates primarily in the steel production sector. The company is involved in the manufacturing of a wide range of steel products, including flat steel, long steel, and tubes, which serve various industries such as automotive, construction, and energy. In addition to steel production, Salzgitter also engages in trading and provides engineering services, further diversifying its portfolio and market reach.
How the Company Makes MoneySalzgitter generates revenue primarily through the sale of its steel products, which are sold to various sectors, including automotive, construction, and mechanical engineering. Key revenue streams include flat steel products, long steel products, and tubular products. The company also benefits from trading activities and engineering services, which contribute additional revenue. Significant partnerships with major industrial clients and participation in international markets enhance its sales opportunities. Furthermore, the company invests in innovations and sustainable practices, which not only improve efficiency but also create competitive advantages in a market increasingly focused on sustainability.
Salzgitter Earnings Call Summary
Earnings Call Date:Aug 11, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 23, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook for Salzgitter, with strong performance in the Technology segment and effective cost reduction measures being positive aspects. However, these are counterbalanced by challenges in the steel production segment due to weak demand and prices, as well as negative impacts from derivatives and ongoing market uncertainties. The sentiment remains cautious with an emphasis on strategic management and future growth opportunities.Q2-2025 Updates
Positive Updates
Strong Performance of Technology Segment
The Technology segment, particularly KHS, foresees a record year with an EBT well above EUR 100 million. Order intake is also significantly above last year, driven by the success of Plasmax technology, especially in India, and expansion into Africa and the Americas.
Effective Cost Reduction and Performance Program
Salzgitter's performance program, 'Performance 2028', has realized EUR 48 million in savings in the first half of the year, with a target of EUR 97 million by year-end. This is part of a broader effort to achieve EUR 500 million in cost savings by 2028.
Stability in Trading Segment
The Trading segment has shown recovery compared to last year, and restructuring efforts are leading to sustainable improvements with a significant contribution from restructuring activities.
Positive Financial Position
Salzgitter maintains a healthy equity ratio of 42.2%, and cash flow from operating activities was significantly stronger than last year, reaching EUR 81 million.
Negative Updates
Weak Steel Demand and Prices
The steel production segment has been impacted by low demand and weak prices, with revenues flat and sales and earnings down due to low prices and weak demand for heavy plate.
Negative Impact from Derivatives
The reporting date related valuation of derivatives resulted in a negative impact of roughly minus EUR 80 million, compared to a positive EUR 10 million in the first half of '24.
Challenges in Key Markets
Salzgitter faces challenges due to trade disputes, low demand in Germany and the EU, high imports, and pressure from Chinese steel inflows. The fiscal policy effects are not expected until 2026.
Company Guidance
During the analyst conference call for Salzgitter Group's first half of 2025, the company outlined several key metrics and guidance for the rest of the year. The management expects sales to be in the range of EUR 9 billion to EUR 9.5 billion, with EBITDA projected between EUR 300 million and EUR 400 million. The pretax results are anticipated to fall between minus EUR 100 million to zero, while the return on capital employed (ROCE) is expected to slightly increase year-on-year. Additionally, the company reported a healthy equity ratio of 42.2% and a net financial debt projected to be around minus EUR 1.2 billion by year-end. Despite facing challenges such as low steel demand and fluctuating raw material prices, Salzgitter Group is focusing on cost-saving measures, aiming to achieve EUR 500 million in total cost savings by 2028, with EUR 48 million already realized in the first half of 2025. The company also emphasized its commitment to the decarbonization program, SALCOS, and urged policymakers to create a supportive regulatory environment for the steel industry in Europe.Salzgitter Financial Statement Overview
Summary
Profitability has weakened materially, shifting from solid profits in 2022 to losses in 2024 and TTM 2025, with negative operating profit in both periods. The balance sheet is a relative support with moderate leverage, but returns have turned negative and free cash flow remains negative in 2024 and TTM 2025, limiting near-term flexibility despite an operating cash flow rebound in TTM 2025.Income Statement
Profitability has deteriorated meaningfully from the 2021–2022 peak: the company moved from strong profits in 2022 (about 8.6% net margin) and a small profit in 2023 to losses in 2024 and TTM (Trailing-Twelve-Months) 2025 (net margin about -2.2%). While revenue rebounded sharply in TTM (Trailing-Twelve-Months) 2025 versus the prior period (strong positive growth), operating results remain pressured with negative operating profit in both 2024 and TTM (Trailing-Twelve-Months) 2025. A positive offset is that gross margin held up relatively well (low-30% range), but the swing to losses suggests higher operating costs, weaker pricing, and/or non-operating headwinds are weighing on the bottom line.46
Neutral
Balance Sheet
Leverage appears manageable for a cyclical steel business, with debt-to-equity in the ~0.27–0.46 range over the period and about 0.42 in TTM (Trailing-Twelve-Months) 2025. Equity has increased versus 2020, providing a stronger buffer than earlier years. The key weakness is returns: return on equity turned negative in 2024 and remained negative in TTM (Trailing-Twelve-Months) 2025, reflecting the recent losses and reducing balance-sheet “earning power” despite reasonable leverage.62
Positive
Cash Flow
Cash generation is mixed and currently a concern. Operating cash flow improved to about 835M in TTM (Trailing-Twelve-Months) 2025 (up from 2024), but free cash flow is negative in 2024 and TTM (Trailing-Twelve-Months) 2025, indicating spending and/or working-capital needs are consuming cash. The relationship between cash flow and earnings is also uneven: operating cash flow is modest relative to reported results in recent periods, and free cash flow remains weak even as operating cash flow recovered, pointing to limited near-term financial flexibility if conditions stay soft.40
Negative
| 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 | 3.17B | 3.37B | 4.16B | 3.54B | 2.35B |
| EBITDA | 393.30M | 478.60M | 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 | 12.43B | 10.47B | 10.50B | 11.10B | 10.25B | 8.24B |
| Cash, Cash Equivalents and Short-Term Investments | 1.06B | 1.00B | 939.70M | 988.40M | 791.50M | 621.40M |
| Total Debt | 2.20B | 1.76B | 1.30B | 1.70B | 1.51B | 1.23B |
| Total Liabilities | 7.24B | 6.02B | 5.67B | 6.25B | 6.90B | 5.56B |
| Stockholders Equity | 5.19B | 4.44B | 4.83B | 4.84B | 3.35B | 2.67B |
Cash Flow | ||||||
| Free Cash Flow | -371.91M | -560.30M | 140.20M | 154.00M | -14.00M | -356.10M |
| Operating Cash Flow | 835.40M | 408.40M | 892.00M | 596.50M | 329.40M | 18.30M |
| Investing Cash Flow | -636.60M | -677.40M | -430.50M | -367.70M | -366.60M | -234.20M |
| Financing Cash Flow | 150.22M | 331.90M | -498.30M | 11.30M | 146.30M | 151.00M |
Salzgitter Technical Analysis
Neutral
4.79
Price Trends
5.65
Positive
4.68
Positive
3.67
Positive
Market Momentum
0.18
Positive
44.43
Neutral
24.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SZGPY, the sentiment is Neutral. The current price of 4.79 is below the 20-day moving average (MA) of 6.21, below the 50-day MA of 5.65, and above the 200-day MA of 3.67, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 44.43 is Neutral, neither overbought nor oversold. The STOCH value of 24.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SZGPY.
Salzgitter Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.99B | 22.60 | 11.71% | 1.78% | -0.75% | -13.51% | |
69 Neutral | $4.86B | 61.64 | 5.84% | ― | -16.81% | -67.68% | |
67 Neutral | $7.94B | 10.04 | 10.51% | 1.02% | -1.61% | -81.36% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $7.05B | -7.69 | 2.47% | 2.92% | -2.53% | -36.08% | |
58 Neutral | $3.49B | 7.61 | -8.94% | 0.53% | -7.78% | -0.92% | |
53 Neutral | $1.99B | -19.29 | -10.50% | ― | -5.79% | -5.30% |
* Basic Materials Sector Average
SZGPY
Salzgitter
5.79
3.28
130.56%
CMC
Commercial Metals Company
71.61
25.00
53.65%
GGB
Gerdau SA
3.70
0.87
30.88%
SIM
Grupo Simec SA De CV
31.76
5.36
20.28%
SID
Companhia Siderúrgica Nacional
1.50
0.01
0.67%
WS
Worthington Steel, Inc.
39.10
13.36
51.90%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.