12. April 2011
The past financial year was marked by numerous stoppages due to investment projects, and by significant increases in raw material costs
• Decline of consolidated revenue to € 2.1 billion – increases in consolidated EBIT (€ 368 million) and EBITDA (€ 458 million). • Chief Executive Officer Dr. Karlheinz Blessing: “Given the difficult underlying conditions, we handled the challenges of 2010 well. “ • Dillinger Hütte is investing large sums in environmental protection and expects reliable energy and environmental policies (in return?). The 2010 financial year was a difficult one for the Dillinger Hütte Group (Dillinger Hütte and its subsidiaries). The situation on the late-cycle heavy plate market recovered at a slower pace than that of other steel products. Demand for products from the Dillinger Hütte Group increased incrementally beginning in the second quarter; however, the increase in sales revenue remained subdued and, on the whole, trailed the increase in raw material prices. For this reason, consolidated revenue declined in comparison with the previous year to around € 2.1 billion (2009: € 2.3 billion). In contrast, consolidated earnings improved. Consolidated EBITDA rose to € 458 million (2009: € 232 million) and EBIT rose to € 368 million (2009: € 131 million). “Despite considerable cost increases and a difficult market environment, we handled the challenges of 2010 well. We were able to increase volumes noticeably. However, it took a long time for the revenues to improve to an adequate level,” Dr. Blessing said during the annual press conference.
The upswing in the heavy plate market made itself felt later than in the markets for other flat products. Significantly increased demand was registered starting in the second quarter; however, the market was characterized by relatively high volatility throughout the entire year. Until autumn, average utilization of capacities at European heavy plate mills was around 63 % (2009: 51 %), and thus remained unsatisfactory for 2010 as a whole.
Utilization of capacities at Dillinger Hütte (DH) was marked by extreme fluctuations in production throughout the entire year. These fluctuations were caused by stoppages that had been planned long in advance and that were required to implement large investment and modernization projects in various production areas. The demand for heavy plate, which began increasing in the second quarter, led to significantly increased orders received at Dillinger Hütte in 2010 compared with the previous year, and as a consequence, to relatively high utilization of plant capacities.
Production at the rolling mills in Dillingen and at the wholly owned subsidiary, GTS Industries S. A. in Dunkirk, France, reached 1.882 million tons, compared with 1.609 million tons in 2009. In all, Dillinger Hütte shipped 1.881 million tons of heavy plate (2009: 1.677 million).
Consolidated revenues, at around € 2.110 billion, declined in comparison with the previous year (2009: € 2.258 billion) due to the low revenue levels.
The consolidated earnings of Dillinger Hütte and its subsidiaries were positively impacted by the changeover to new accounting criteria in Germany (Act to Modernize Accounting Law [BilMoG]). Consolidated earnings before interest & taxes (EBIT) amounted to € 368 million (2009: € 131 million) and consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) were € 458 million (2009: € 232 million). Consolidated return on sales (EBIT margin) amounted to 17.4 % (2009: 5.8 %) and the return on capital employed (ROCE) was 12.1 % (2009: 4.4 %).
A total of 5 412 people were employed at the Dillingen location at the end of the financial year (Dec. 31, 2009: 5 296). These employees worked at the Dillingen location at Dillinger Hütte itself, at Zentralkokerei Saar GmbH (ZKS) and at ROGESA Roheisengesellschaft Saar mbH (ROGESA). Compared with the previous year, this amounts to an increase in the workforce of 116 employees (+ 2.14 %). A total of 8 072 employees are employed within the Dillinger Hütte Group (2009: 8 178).
The year 2010 featured numerous large investment projects. These included projects at Dillinger Hütte itself, where investments in 2010 – at € 73 million – were significantly higher than the previous year’s level (€ 56 million), and at both indirect subsidiaries, ROGESA and ZKS, at the Dillingen location. Here, investment spending amounted to a total € 120 million (2009: € 131 million), of which Dillinger Hütte bore half, in proportion to its shares in the companies.
Dillinger Hütte is investing large sums in improving environmental protection. In the past five years, around € 270 million has been spent on these efforts. At the same time, the heavy plate from Dillinger Hütte is being used to construct environmentally compatible projects, such as the erection of offshore wind power plants or water power plants. The CO2 benchmarks defined by the European Commission as part of emissions trading (third trading period beginning in 2013) could not be met by any steel company in the European Union. These benchmarks in addition to rising energy costs represent a threat to the international competitiveness of the domestic steel industry.
The Dillinger Hütte Group expects 2011 to be a good financial year overall. Due to the continuing recovery of demand in almost all consumer segments, high utilization of production facility capacities is expected throughout the entire year at Dillinger Hütte and its subsidiaries.
The general underlying economic conditions send a distinctly positive signal for the remainder of 2011: stronger demand and correspondingly increasing prices are anticipated in the area of heavy plate, particularly for premium products. However, strain in the markets for raw materials continues.
Due to the improved market situation, Dillinger Hütte was in the position to raise prices during the current year, and plans additional price increases in the coming months. Overall, the investments made and the improved market conditions in 2011 create a good basis for Dillinger Hütte’s business prospects, and the company anticipates a significant increase in revenues and positive earnings.
Innovative top-quality steel products, total orientation around our customers' needs and unceasing technological development in close cooperation with our partners form the basis of our success - as they have for more than 333 years.
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