Salzgitter Q3 EBITDA Rises; FY25 Sales, Earnings Forecast Now In Lower Half Of Prior Outlook Range

Salzgitter (SZGG.DE) reported a significant Q3 turnaround, achieving a €40.7 million profit to shareholders and an increased EBITDA of €107.2 million, reversing a prior-year loss, despite a sales decline to €2.20 billion. For the first nine months, the company narrowed its pre-tax loss to €72.7 million, though overall sales and EBITDA decreased year-over-year. However, the company revised its 2025 outlook downwards, now projecting sales slightly above €9.0 billion and EBITDA between €300 million and €350 million, with a pre-tax loss expected between €100 million and €50 million, signaling a more cautious forward view despite recent profitability.

Analysis

Salzgitter (SZGG.DE) reported a significant operational turnaround in Q3, achieving a profit to shareholders of 40.7 million euros, a substantial improvement from the 180.3 million euros loss in the prior year. This was supported by an increase in EBITDA to 107.2 million euros from 87.0 million euros, indicating enhanced profitability despite a sales decline to 2.20 billion euros from 2.48 billion euros. The basic profit per share also reversed to 0.75 euros from a 3.34 euros loss.

For the first nine months of the current financial year, the Group's external sales decreased to 6.9 billion euros from 7.7 billion euros, with EBITDA also declining to 224.0 million euros from 320.6 million euros year-over-year. However, the pre-tax loss narrowed considerably to 72.7 million euros from a loss of 141.2 million euros, reflecting some underlying improvements in loss mitigation over the longer period.

The company has issued a revised, more cautious outlook for 2025, projecting sales slightly above 9.0 billion euros, a downward adjustment from the prior guidance of between 9.0 billion and 9.5 billion euros. Similarly, the EBITDA forecast was narrowed to between 300 million and 350 million euros, down from the previous range of between 300 million and 400 million euros.

The updated pre-tax loss expectation of between 100 million and 50 million euros also indicates a less optimistic view compared to the prior guidance of between a loss of 100 million euros and 0 million euros, suggesting potential for a wider loss than previously anticipated at the upper end of the range.

Key Decisions for Investors

• Investors should acknowledge the positive Q3 operational turnaround and EBITDA growth, but temper enthusiasm with the revised, more conservative 2025 outlook.
• Monitor future guidance revisions and the company's ability to achieve the lower end of its updated EBITDA and sales projections, as well as managing the projected pre-tax loss.
• Evaluate the sustainability of Q3's profitability improvements against the backdrop of declining overall sales and a wider projected pre-tax loss range for 2025, indicating potential headwinds.