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    Home > Finance > Salzgitter's results hit by subdued economic environment in Europe, tariff threat looms
    Finance

    Salzgitter's results hit by subdued economic environment in Europe, tariff threat looms

    Published by Global Banking & Finance Review®

    Posted on May 12, 2025

    2 min read

    Last updated: January 23, 2026

    Salzgitter's results hit by subdued economic environment in Europe, tariff threat looms - Finance news and analysis from Global Banking & Finance Review
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    Tags:Economic developmentsfinancial managementcorporate strategyInvestment opportunities

    Quick Summary

    Salzgitter's Q1 results were below expectations due to Europe's economic slowdown and potential US tariffs, impacting steel exports and financials.

    Salzgitter Faces Challenges as Economic Conditions Weigh on Results

    By Bernadette Hogg and Isabel Demetz

    (Reuters) -Salzgitter reported first-quarter results below analysts' expectations on Monday, as subdued economic developments in Europe, and especially Germany, weighed on its steel production and steel processing businesses.

    "The economic environment was anything but supportive," Chief Financial Officer Birgit Potrafki said in a statement.

    The German steelmaker's quarterly core profit fell 37.6% to 78.6 million euros ($88.16 million), missing analysts' average forecast of 90 million euros in a company-provided poll.

    Its external sales of 2.33 billion euros were also lower than the 2.46 billion analysts had expected and the 2.7 billion euros it had reported last year.

    Salzgitter said U.S. tariffs would hit individual business units through indirect steel imports from Germany into the United States.

    "Discussions currently held about raising duties on steel and steel pipes imported into the U.S. in response to EU tariffs are likely to put EU exports in an even more difficult position in the global competitive arena," it added.

    It sees a decline of between 2 million and 3 million tonnes in direct and indirect steel exports from Europe, or around 2% to 3% of demand, at current tariff levels. This figure is expected to double in the event of 25% and more tariffs levied on European goods.

    Its import-oriented subsidiary KHS Group, which produces machinery for the beverage filling and packaging industry, would be particularly impacted by the U.S. tariff policy, Salzgitter said, although it expects to be able to pass on a large part of the tariff burdens to customers.

    The group confirmed its annual guidance and said the first-quarter earnings were weighed down by 23 million euros in charges from the reporting-date-related valuation of derivative positions and a 10 million euro impairment risk from planned portfolio streamlining.

    ($1 = 0.8916 euros)

    (Reporting by Bernadette Hogg and Isabel Demetz in Gdansk, editing by Milla Nissi-Prussak)

    Key Takeaways

    • •Salzgitter's Q1 profits fell 37.6%, missing forecasts.
    • •European economic slowdown impacts steel production.
    • •US tariffs threaten EU steel exports, including Salzgitter.
    • •KHS Group faces tariff challenges but plans to pass costs.
    • •Salzgitter maintains annual guidance despite challenges.

    Frequently Asked Questions about Salzgitter's results hit by subdued economic environment in Europe, tariff threat looms

    1What were Salzgitter's first-quarter core profit results?

    Salzgitter reported a core profit of 78.6 million euros, which is a 37.6% decline compared to the previous year and below analysts' expectations of 90 million euros.

    2How are U.S. tariffs affecting Salzgitter?

    Salzgitter indicated that U.S. tariffs would impact individual business units due to indirect steel imports from Germany, potentially leading to a decline in EU exports.

    3What is the expected decline in steel exports from Europe?

    Salzgitter anticipates a decline of between 2 million and 3 million tonnes in direct and indirect steel exports from Europe, which represents around 2% to 3% of demand at current tariff levels.

    4What charges affected Salzgitter's first-quarter earnings?

    The first-quarter earnings were negatively impacted by 23 million euros in charges related to the valuation of derivative positions and an additional 10 million euros in other costs.

    5Did Salzgitter change its annual guidance after the first quarter?

    Despite the challenges faced in the first quarter, Salzgitter confirmed its annual guidance, indicating confidence in its overall performance for the year.

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