18. April 2007
Significant increase in turnover and EBIT Dr. Belche (Chairman): "Good positioning thanks to our sophisticated product mix" Positive forecast for 2007
Dillinger Hütte had an extremely successful 2006 business year. The company sees positive confirmation of its strategy in a 10.4 % increase in turnover of some 2.3 billion Euro and in the doubling of EBIT (Earnings Before Interest and Tax) to 401 million Euro. Chairman of the Board Dr. Paul Belche expressed his satisfaction with the trend in business at the company's annual press conference: "Our mix of products and countries positions us well, and we have increasingly produced higher added-value and more complex goods. We shall be consistently expanding this strategy." The 2006 trading year was dominated for Dillinger Hütte by extraordinarily good demand for its products and full utilization of production capacities. "Our workforce is an important key to our success: The competence, ideas and motivation of our employees have made a decisive contribution to these pleasing results", Dr. Belche emphasized.
As in the preceding year, the heavy-plate market showed itself to be in extremely good health. The high levels of demand experienced were driven, in particular, by the energy sector, mechanical engineering, the yellow-goods industry, and structural-steel engineering. Supply shortages lasting up to the end of the year occurred in certain cases for some products. On the European market steel prices for simple heavy-plate grades declined significantly as a result of drastically increased imports. In 2006, however, prices remained stable at a high level due to the all-in-all balanced demand vs. supply situation on the European heavy-plate market.
The level of income improved yet again thanks to rising sales of high-value products in both the carbon steel plate and the line pipe plate sector, and to the positive market trend. Despite a slightly decreased volume, Dillinger Hütte thus achieved turnover of around 2.3 billion Euro, an increase of 10.4 % (2005: 2.1 billion Euro). Production at the Dillingen rolling mill, and at Dunkirk, from the 100 % subsidiary, GTS Industries S.A., at 2.258 million tonnes, was 3.8 % below the level of the previous year (2.347 million tonnes). The principal reason for these slightly lower figures can be found in the greater proportion of production of more complicated grades and a more complex product mix. All in all, Dillinger Hütte shipped 2.235 million tonnes of heavy plate, compared to 2.271 million tonnes in the previous year.
As in the preceding year, Dillinger Hütte achieved top marks for its results, despite continuing high raw materials costs. EBIT more than doubled, to around 401 million Euro (2005: 198 million Euro). This includes a contribution of some 78 million Euro (2005: 19 million Euro) from the Dillinger Hütte subsidiaries, which all achieved very good results in 2006. EBITDA, i.e., the Earnings Before Interest, Tax and Depreciation, rose to 455 million Euro (2005: 237 million Euro). ROCE (Return On Capital Employed), at 44.2 %, was 19.2 percentage points above the already extremely high figure for the previous year (25.0 %).
At the end of 2006, Dillinger Hütte had 5231 employees, against 5292 in the previous year. These persons were employed at Dillinger Hütte itself, at Zentralkokerei Saar GmbH and at ROGESA Roheisengesellschaft Saar mbH. In a review of the trend in recent years, accident statistics at Dillinger Hütte exhibit an overall declining tendency. The 2006 figure for notifiable accidents (55) was, however, slightly above that of the lowest preceding year figure (47). At the end of 2006, a total of 287 young persons were undergoing high-quality, future-orientated initial training with good career prospects within the company. Dillinger Hütte has taken on eighty-one trainees for the 2006/2007 training year, to whom twenty technical university work-experience students in the technical/commercial and the purely commercial sectors must be added. Dillinger Hütte thus continues to live up to its responsibilities as one of Saarland's largest employers and training establishments.
Dillinger Hütte has a continuous program of investments, in order to keep its facilities up-to-date with the latest technical developments. The aim in this context is that of expanding technological capabilities and further optimizing all operating and business procedures. At 66 million Euro, Dillinger Hütte's total investments for 2006 were significantly above the level of the preceding year (32 million Euro). An investment volume totalling some 500 million Euro at the Dillingen location is planned for the next five years.
As the company entered the new business year, its facilities were fully utilized and Dillinger Hütte is anticipating production levels at around the capacity level for the whole of the year. Delivery difficulties exist for some products. Against the background of a good market trend and continuing high prices for raw materials and energy, Dillinger Hütte raised its prices for the first two quarters. Thanks to the positive trend in sales volumes and stable prices in both product groups (line pipe plate and carbon steel plate), continued high turnover levels and another good result can be assumed for 2007. The ongoing DH-TOP 2007 result-improvement program, aimed at permanently raising Dillinger Hütte's profitability, also makes an important contribution to these perspectives.
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 330 years.
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