We Are Working on Shaping a Successful

for theSalzgitter Group Shaping asuccessfulfuture e areWorking on “W

.” on them. and employeeswhoarededicatedly working measures fromour“360Degree Concept” On thefollowingpageswe present selected there isstillawaytogoachieve ourgoal. show thatweareontheright track, but change. thereby initiatingaprocessoffarreaching sive furtherdevelopmentoftheGroup,and Concept” thatisadvancingthecomprehen- quently, wehavedevelopedour“360Degree dence –wemusttakeactionourselves.Conse­ and safeguardourentrepreneurialindepen- raise SalzgitterAG’s profitabilitysustainably We cannotcountonhelpfromoutsideto environment areanythingbutfavorable. steel marketandourentiremacroeconomic The resultsofthefinancialyear2014 T here’s nodenyingthefacts:Europe’s

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 28 . Background Information on the Group/I. Business and Organization

I. Business and Organization

1. Group Structure and Operations

With a crude steel capacity of more than 7 million tons, above 25,000 employees and external sales totaling € 9 billion in 2014, the Salzgitter Group ranks among Europe’s leading steel technology and plant engineering corporations. Worldwide, the Group comprises almost 200 subsidiaries and affiliated companies.

Global presence

Headquarter of Salzgitter AG

Steel andTechnology in these products. We are also successfully active in the special machinery and plant engineering areas. trading and products tubes and steel rolled of processing and production the in lie competences core Our

Section steel Plate Steel strip Injection moldingmachines Logistic services Engineering A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization Seamless steeltubes Precision tubes Pipeline tubes Beverage fillingfacilities International trading Stockholding trading . .

29

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 30 . Background Information on the Group/I. Business and Organization

Since January 1, 2014, the Group, headed by Salzgitter AG (SZAG) as the holding company, has been divided into the five business units of Strip Steel, Plate / Section Steel, Energy, Trading and Technology.

All major companies belonging to the Salzgitter Group are combined together under the intermediate holding of Salzgitter Klöckner-Werke GmbH (SKWG). This structure allows us to carry out centralized and unrestricted financial management for the Group, among other tasks. As the management holding, SZAG manages SKWG, along with all associated companies, via the intermediate holding Salzgitter Mannesmann GmbH (SMG). The Executive Board of SZAG is composed of the same persons as the Executive Board of SMG and the Management Board of SKWG. The management and control of the Group are therefore carried out by the executive bodies responsible for SZAG (Executive Board, Supervisory Board). The activities of the business units have been coordinated by the heads of the business units since January 1, 2014. They are also the chief operating officers each of a large company belonging to their respective unit. The Executive Board and business unit heads form the new Group Management Board. This structure ensures that the activities of the companies are directly coordinated and managed across the business units, while incorporating the respective operational expertise.

is included in the sectionon “General Business Co Statements”.Financial Consolidated in the to “Notes the listed are holdings The page. next the on chart the in shown is Group Salzgitter the of structure The business. for the associated important are protection environmental other in of and regulations Germany and in rules based the largely countries, are European sites production Group’s the As locations. specific the in prevailing requirements legal respective the of influence decisive the to subject is production Industrial factors Legal A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization nditions and Performance of the Business Units”.and PerformanceBusiness nditions of the emn ad h Erpa Uin n aain and taxation on Union European the and Germany More information on the individual business units units business individual the on information More . .

31

Business and Organization A / Group Management Report and Management Report on Salzgitter AG A / Group Management Report and Management Report on Salzgitter AG 32 Background Information on the Group/I. Business and Organization Background Information on the Group/I. Business and Organization 33

Business Units

Salzgitter AG

Salzgitter Mannesmann / Salzgitter Klöckner-Werke

BU Strip Steel BU Plate / Section Steel BU Energy BU Trading BU Technology Industrial Participations / Consolidation Business and Organization

Salzgitter Mannesmann Salzgitter Flachstahl Ilsenburger Grobblech Mannesmannröhren-Werke KHS Verkehrsbetriebe Peine-Salzgitter Handel

Salzgitter Mannesmann Salzgitter Mannesmann Salzgitter Europlatinen Europipe 50 % KHS Corpoplast Hansaport 51 % Grobblech Stahlhandel

Salzgitter Mannesmann Salzgitter Mannesmann Gesis Gesellschaft für Salzgitter Bauelemente Peiner Träger KHS Plasmax Line Pipe International Informations­systeme

Salzgitter Mannesmann Salzgitter Mannesmann HSP Hoesch Spundwand und Profil Universal Eisen und Stahl Klöckner DESMA Elastomertechnik Telcat Stahlservice Großrohr

DEUMU Deutsche Erz- und Metall- Salzgitter Mannesmann Salzgitter Mannesmann Klöckner DESMA Schuhmaschinen Union Precision Forschung

Salzgitter Mannesmann Salzgitter Automotive Engineering Stainless Tubes

Hüttenwerke Krupp 30 % Salzgitter Hydroforming Mannesmann

Borusan Mannesmann 23 % RSE Grundbesitz und Beteiligung Boru

Salzgitter Mannesmann Personalservice

Glückauf Immobilien

Aurubis 25 %

BU = Business Unit

Organization chart as of August 2014 . A/Group Management Report and Management Report on Salzgitter AG 34 . Background Information on the Group/I. Business and Organization

2. Management and Control

The Executive Board

The members of the Executive Board of Salzgitter AG (SZAG) are appointed by the Supervisory Board. The Supervisory Board can rescind the appointment for an important reason. The Executive Board represents, heads up the company and manages the company’s business under its own responsibility. A restriction that certain transactions may only be concluded subject to the approval of the Supervisory Board has been imposed. The General Meeting of Shareholders can only decide matters affecting the management of the Group if this has been requested by the Executive Board.

In the financial year 2014, the following members belonged to the Executive Board of SZAG:

Prof. Dr.-Ing. Heinz Jörg Fuhrmann Burkhard Becker Chairman Finance

a) Aurubis AG, Hamburg (Chairman) a) Aurubis AG, Hamburg

 Hüttenwerke Krupp Mannesmann GmbH,  EUROPIPE GmbH, Mülheim/Ruhr

Duisburg  Ilsenburger Grobblech GmbH, Ilsenburg,

 Ilsenburger Grobblech GmbH, Ilsenburg since March 13, 2014

(Chairman)  KHS GmbH, Dortmund

 KHS GmbH, Dortmund (Chairman)  Mannesmannröhren-Werke GmbH,

 Mannesmannröhren-Werke GmbH, Mülheim/Ruhr

Mülheim/Ruhr (Chairman)  Nord/LB Asset Management AG, Hanover

 Öffentliche Lebensversicherung  Peiner Träger GmbH, Peine

Braunschweig, Braunschweig  Salzgitter Flachstahl GmbH, Salzgitter

 Öffentliche Sachversicherung Braunschweig,  Salzgitter Mannesmann Grobblech GmbH, Braunschweig Mülheim/Ruhr, since February 18, 2014

 Peiner Träger GmbH, Peine (Chairman)  Salzgitter Mannesmann Handel GmbH,

 Salzgitter Flachstahl GmbH, Salzgitter Düsseldorf

(Chairman)  Salzgitter Mannesmann Precision GmbH,

 Salzgitter Mannesmann Grobblech GmbH, Mülheim/Ruhr

Mülheim/Ruhr, since March 13, 2014 (Chairman b) Ilsenburger Grobblech GmbH, Ilsenburg, and since March 21, 2014) Salzgitter Mannesmann Grobblech GmbH, a) Membership in other Super- visory Boards  Salzgitter Mannesmann Handel GmbH, Mülheim/Ruhr, (Joint Advisory Council) formed subject to the defini- Düsseldorf (Chairman) since June 4, 2014 tion of Section 125 German  TÜV Nord AG, Hanover Stock Corpora- tion Act (AktG) b) Ilsenburger Grobblech GmbH, Ilsenburg, and b) Membership in comparable Salzgitter Mannesmann Grobblech GmbH, domestic and foreign con- trolling bodies Mülheim/Ruhr, (Joint Advisory Council, of commercial enterprises Chairman) since June 4, 2014

a) Mannesmannröhren-WerkeMülheim/Ruhr GmbH, Chairman of the Executive Boardof 30, 2014 September until Unit Energy Business Wolfgang Eging b) b) a) Ha Mannesmann Salzgitter Chairman of the Executive Boardof TradingSeptember 30, 2014 until Unit Business Heinz Groschke                  

Borusan Mannesmann Boru Yatirim Boru Mannesmann Borusan Holding since June 4, 2014 since 2014 June 4, Mülheim/Ruhr, Council) Advisory (Joint Salzgitter Mannesmann GmbH,Grobblech Ilsenburger Grobblech GmbH, Ilsenburg, and Vice Chairman) Vice Chairman) Turkey Istanbul, of Administration, (Board A.S., Salzgitter Mannesmann (España) S.A., Madrid, Madrid, S.A., (España) Salzgitter Mannesmann EUROPIPE GmbH, Mülheim/Ruhr Ilsenburger Grobblech GmbH, Ilsenburg, and Hong Kong, China (Board of Administration) Administration) of (Board Hong Kong, China Ltd., (HK) International Mannesmann Salzgitter Chairman) Vancouver,Inc., of Directors, Canada (Board (Canada) International Mannesmann Salzgitter Administration)of (Board Singapore Pte. Ltd., (Asia) International Mannesmann Salzgitter Salzgitter Mannesmann Line Pipe GmbH, Siegen Salzgitter GmbH, Salzgitter Flachstahl Dortmund KHS GmbH, 2014 15, since March Ilsenburger Grobblech GmbH, Ilsenburg, (Chairman) Mülheim/Ruhr GmbH, Precision Mannesmann Salzgitter Siegen (Chairman) Salzgitter Pipe Mannesmann GmbH,Line Düsseldorf GmbH, Handel Mannesmann Salzgitter 2014) 21, March until (Chairman Mülheim/Ruhr GmbH, Grobblech Mannesmann Salzgitter Duisburg (Chairman) GmbH, Krupp Mannesmann Hüttenwerke Spain (Board of Administration)Spain (Board since 2014 June 4, Mülheim/Ruhr, Council) Advisory (Joint GmbH, Grobblech Mannesmann Salzgitter EUROPIPE GmbH, Mülheim/Ruhr (Chairman) (Chairman) EUROPIPE GmbH, Mülheim/Ruhr ndel GmbH, Düsseldorf A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization a) Personnel Michael Kieckbusch b) Braunschweig (Supervisory Board) Board) Braunschweig (Supervisory                     Allianz für Regiondie GmbH, Dortmund KHS GmbH, UK (Board of Directors, Chairman) Chairman) Directors, UK of (Board Ltd., Harrogate, (UK) Salzgitter Mannesmann Directors, Chairman) of (Board Beijing, China TradeSalzgitter Mannesmann Ltd., (Beijing) Co. of Administration) (Board Sweden Lulea, AB, (Scandinavia) Salzgitter Mannesmann Chairman) Directors, (Board of Mumbai, India Ltd., Pvt. (India) International Salzgitter Mannesmann Pentasteel Administration) of Italy (Board S. r.(Italia) Salzgitter Mannesmann Milan, l., Chairman) Inc., Houston/Texas, USA of (Board Directors, (USA) International Mannesmann Salzgitter Directors, Chairman) de C. V.,S. A. City, Mexico of (Board Mexico (México) International Mannesmann Salzgitter Salzgitter (Supervisory Board) SalzgitterBoard) (Supervisory Wohnungsbaugesellschaft Salzgitter,mbH Board, Vice Chairman) Entwicklungs-GmbH, (Supervisory Salzgitter Salzgitter-WatenstedtIndustriepark since 2014 June 4, Mülheim/Ruhr, Council) Advisory (Joint GmbH, Grobblech Mannesmann Salzgitter Ilsenburger Grobblech GmbH, Ilsenburg, and Chairman) Board, (Supervisory Hamburg HansaportHafenbetriebsgesellschaft mbH, Salzgitter (Chairman) Verkehrsbetriebe Peine-Salzgitter GmbH, Salzgitter, 2014 March 31, until (Chairman) SZST Salzgitter Service und Technik GmbH, Ha Mannesmann Salzgitter Salzgitter GmbH, Salzgitter Flachstahl Peiner Träger GmbH, Peine Mülheim/Ruhr Mannesmannröhren-WerkeGmbH, Ilsenburger Grobblech GmbH, Ilsenburg, ndel GmbH, Düsseldorf . .

b) Membership Membership b) a) Membership 35 enterprises enterprises of commercial bodies trolling con- foreign and domestic in comparable (AktG) Act tion Corpora- Stock 125 German Section of tion defini- the to subject formed Boards visory Super- in other

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 36 . Background Information on the Group/I. Business and Organization

Group Management Board The Supervisory Board

Prof. Dr.-Ing. Heinz Jörg Fuhrmann Rainer Thieme Chairman Chairman Chairman of the Management Board of Burkhard Becker Wilhelm Karmann GmbH, retired, Osnabrück

Finance a) Köster Holding AG, Osnabrück

Wolfgang Eging Dr. Hans-Jürgen Urban Energy Business Unit Vice Chairman Member of the Management Board of Ulrich Grethe Industriegewerkschaft Metall, Frankfurt am Main

Strip Steel Business Unit a) Salzgitter Flachstahl GmbH, Salzgitter, since June 1, 2014 (Vice Chairman since June 18, 2014)

Heinz Groschke  Treuhandverwaltung IGEMET GmbH, Frankfurt Trading Business Unit until September 30, 2014 am Main

Michael Kieckbusch Konrad Ackermann Personnel Chairman of the General Works Council of KHS GmbH, Dortmund

 a) Membership Prof. Dr.-Ing. Matthias Niemeyer a) KHS GmbH, Dortmund in other Super- visory Boards Technology Business Unit formed subject to the defini- Bernhard Breemann tion of Section 125 German Dr.-Ing. Roger Schlim Chairman of the General Works Council of Stock Corpora- tion Act (AktG) Plate / Section Steel Business Unit Salzgitter Mannesmann Stahlhandel GmbH b) Membership in comparable domestic and Chairman of the Works Council of Salzgitter foreign con- trolling bodies Prof. Dr. jur. Gerd Schöler Mannesmann Stahlhandel GmbH, Gladbeck of commercial enterprises Trading Business Unit since October 1, 2014 a) Salzgitter Mannesmann Handel GmbH, Düsseldorf

Ulrike Brouzi Member of the Executive Board of Norddeutsche Landesbank Girozentrale, Hanover

a) NORD/LB Asset Management AG, Hanover

b) NORD/LB Luxembourg S. A., Luxembourg (Supervisory Board)

 NORD/LB Covered Finance Bank S. A., Luxembourg (Supervisory Board)

Annelie Buntenbach Managing Member of the National Executive Board of the Trade Union Federation, Berlin

No membership in other governing bodies

a) retired, Dortmund Chairman of the Executive Boardof KHS AG, Werke AG, retired, Duisburg Chairman of the Executive Boardof Klöckner- Flach Roland Bremerhaven(Board of Administration) b) Administration, and Economics, Law, Oldenburg Business Department Universität of Oldenburg, at Visiting the lecturer Carl Ossietzky von Bundestag, retired Member of the Dr. Thea Dückert Mülheim/Ruhr, 1, since 2014 December a) Salzgitter GmbH, Salzgitter Flachstahl Works the of Chairman Council of Salzgitter Salzgitter AG, Works Group of the of Council Chairman Cakir Hasan b) b) a) Verwaltungs-GmbHHamburg & Co., KGDirector of Managing Brücke 1” “Hohe Erste Karl Ehlerding Administration) of (Board a) GmbH, Remscheid Deutschland Salzgitter Mannesmann Stainless Tubes Works the of Chairman Council of Ulrich Dickert           

KHS GmbH, Dortmund Dortmund KHS GmbH, until March 26, 2014 2014 26, March until (Board of Ahmedabad, Directors)India, Ltd., Pvt. Machinery DESMA Klöckner German Co. Dry KG, Docks GmbH & Mannesmannröhren-Werke GmbH, KHS GmbH, Dortmund Dortmund KHS GmbH, Hamburg Elbstein AG, Norddeutscher Hamburg Rundfunk, Salzgitter GmbH, Salzgitter Flachstahl Frankfurt am Main FrankfurtMain am und Grundbesitz-AG, Beteiligungs- WCM MATERNUS-Kliniken Berlin AG, WerftLloyd Bremerhaven Bremerhaven AG, A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization a) a) Carolo-Wilhelmina zu Braunschweig, Braunschweig President of the Technische Universität Prof.Dr.-Ing. Dr. h.c. Jürgen Hesselbach a) Holding AG, retired, Osnabrück Chairman of the Executive Boardof Köster Osnabrück Managing Shareholder of HomeStead GmbH & Co. KG, Dr. Dieter Köster Mülheim/Ruhr a) Salzgitter, GmbH, Flachstahl since June 2014 1, Vice WorksChairman of the Council of Salzgitter 2014 31, March until Service und Technik GmbH, Salzgitter, Chairman of the Works Council of SZST Salzgitter Until February 28, 2015 Lehne Thomas a) Düsseldorf Industriegewerkschaft Metall, Branch Office of Board Secretary of Managing the Bernd Lauenroth Peiner Träger GmbH, Peine Vice WorksChairman of the Council of 2015 Since March1, Gabriele Handke  a) Krupp Mannesmann GmbH,Duisburg Works the of Chairman Hüttenwerke Council of Ulrich Kimpel  bodies governing in other No membership      

Sachversicherung Braunschweig, Braunschweig Mannesmannröhren-Werke GmbH, Braunschweig Braunschweig, Lebensversicherung Öffentliche Salzgitter, 2014 31, March until SZST Salzgitter Service und Technik GmbH, Georgsmarienhütte Georgsmarienhütte GmbH,Holding (Chairman) AG, Osnabrück Holding Köster Salzgitter Flachstahl GmbH, Salzgitter, GmbH, Salzgitter Flachstahl since June 1, 2014 since 2014 June 1, . .

b) Membership Membership b) a) Membership 37 enterprises enterprises of commercial bodies trolling con- foreign and domestic in comparable (AktG) Act tion Corpora- Stock 125 German Section of tion defini- the to subject formed Boards visory Super- in other

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 38 . Background Information on the Group/I. Business and Organization

Volker Mittelstädt Committees of the Supervisory Board Chairman of the Works Council of Ilsenburger Grobblech GmbH, Ilsenburg, since March 14, 2014 Presiding Committee:

b)Ilsenburger Grobblech GmbH, Ilsenburg, and Rainer Thieme, Chairman Salzgitter Mannesmann Grobblech GmbH, Hasan Cakir Mülheim/Ruhr, (Joint Advisory Council) Peter-Jürgen Schneider since June 4, 2014 Dr. Hans-Jürgen Urban

Prof. Dr. Hannes Rehm Audit Committee: President of the Hanover Chamber of Industry and Prof. Dr. Hannes Rehm, Chairman Commerce (IHK), Hanover Konrad Ackermann Chairman of the Executive Board of Norddeutsche Bernd Lauenroth Landesbank Girozentrale, retired, Hanover Rainer Thieme

No membership in other governing bodies Strategy Committee: Peter-Jürgen Schneider Rainer Thieme, Chairman Minister of Finance of the Federal State Lower Hasan Cakir Saxony Ulrich Kimpel

a) Bremer Landesbank, Bremen (Vice Chairman) Prof. Dr. Hannes Rehm

 Deutsche Messe AG, Hanover Peter-Jürgen Schneider

 Norddeutsche Landesbank Girozentrale, Dr. Hans-Jürgen Urban Hanover (Chairman) Nomination Committee: Dr. Werner Tegtmeier Peter-Jürgen Schneider State Secretary, retired, of the Federal Ministry Rainer Thieme of Labor and Social Affairs

a) Mannesmannröhren-Werke GmbH, a) Membership Mülheim/Ruhr in other Super- visory Boards  Salzgitter Mannesmann Precision GmbH, formed subject to the defini- Mülheim/Ruhr tion of Section 125 German Stock Corpora- tion Act (AktG) Dr. Johannes Teyssen b) Membership in comparable Chairman of the Board of Directors of E.ON SE, domestic and foreign con- trolling bodies Düsseldorf of commercial enterprises a)  Deutsche Bank AG, Frankfurt am Main

Board members. activities as 2013 their Executive for in or year 2014 Board financial in the pa external by pledged or granted were benefits No components). variable and (fixed remuneration years’ two of amount the to restricted is entitlement this However,contract. the of expiry until agreed remuneration the to entitled are members Board Executive activities Board Executive Should remuneration. is, settlement This employment. of contracts their of amount the in settlement to entitled are members member Board Executive of termination premature of as payments for eligible deemed be will he 62, of age the at wish own his at or 59 of age the at request its at company the from retires Dr.-Ing.Prof.Fuhrmann is entitlement Pension commitments. 60 the on depends commitment pension of amount The is capped. developmen sustainable the promotes that effect ye five past the of average an as calculated (ROCE) comp the of success pension the on partly a and achieved, are and remuneration annual fi respective variablethe in member Board use, private partly depends for remuneration Variable available commitment. car company a making instal monthly equal in out paid salary, basic fixed annual an components: following the of consists remuneration system, remuneration current the Under overallon level the customary in the comparable business environment. based is remuneration of amount The company. the of success the by as well as performance individual Executive the of members the of remuneration The Remuneration Board of Executive the Ex the of Remuneration

% of the fixed salary. The variable remuneration components are not relevant for pension pension for relevant not are components remuneration variable The salary. fixed the of % ecutiveBoard and of nancial year, measured by the extent to which agreed personal goals goals personal agreed which to extent the by measured year, nancial valid when an Executive Board member reaches the age of 65. If 65. of age the reaches member Board Executive an when valid A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization t of the company. The performance-based component performance-based The company. the of t ars. The multi-year assessment basis has an incentive incentive an has basis assessment multi-year The ars. lments, supplementary benefit supplementary lments, e emntd ihu a iprat esn the reason, important an without terminated be the Supervisory Board if he had already reached the age of 65. In the event the In 65. of age the reached already had he if Board is determined by determined is Board oee, apd o h vle f he yas of years three of value the to capped however, n maue b te eun n aia employed capital on return the by measured any te t te niiul ebr o te Executive the of members individual the to rties n h proa promne f h individual the of performance personal the on length of service to the Group and is a maximum maximum a is and Group the to service of length overall remuneration for the remaining term of of term remaining the for remuneration overall activities due to a change of control, the Board Board the control, of change a to due activities their tasks and their own their and tasks their s consisting mainly in in mainly consisting s . .

39

Business and Organization 1) 1) 1) to IAS 19 pursuant Service cost to IAS 19 pursuant Service cost 40 . . Schneider retired the who year from Board the2013). during financial me including 5,988, k€ year: (previous Board Executive active for remuneration Overall Total remuneration Pension expenses Total remuneration variable Multi-year remuneration One-year variable Total Benefits Fixed remuneration In k€ Remuneration received by the individual members of the Executive Board (income for the year) Total remuneration Pension expenses Total remuneration variable Multi-year One-year variable remuneration Total Benefits Fixed remuneration In k€ Remuneration receivedby the individualmembers theof Executive Board (benefits accordedfor theyear)

BackgroundInformation on the Group/I. Business and Organization AG Salzgitter on Report Management and Report Management A/Group 1) 1)

1,844 1,546 2013 297 602 944 924 20 20 Prof. Dr.-Ing. Prof. 0

Fuhrmann Heinz Jörg

1,570 1,814 2014 244 602 968 948 CEO total remuneration for the former Executive Board members Nonn and and Nonn members Board Executive former the remunerationfor total 20 0 Burkhard Becker 2013 921 143 777 280 497 475 22 0 1,844 1,546 2013 297 602 944 924 20 0 2014 900 115 784 280 504 480 CFO 24 0 1,814 1,570 2014 244 602 968 948 20 mbers in financial year 2014 stood at k€ 5,000 5,000 k€ at stood year 2014 financial in mbers 0 Heinz Jörg Fuhrmann Fuhrmann Heinz Jörg 2013 664 598 205 393 361 since2013/02 66 32 Kieckbusch Kieckbusch 0 (min.) Personnel Personnel 1,814 1,570 2014 2014 244 602 968 948 Michael Michael 20 Prof. Dr.-Ing. Dr.-Ing. Prof. 0 2014 848 142 705 245 460 420 40 0 (max.) 2,555 2,311 2014 2014 244 741 602 968 948 CEO 20 Energy Business Business Energy Wolfgang Eging Eging Wolfgang 1,016 2013 209 807 294 513 492 until2014/09 21 21 0

2013 921 143 777 280 497 475 22 22 0 2014 Unit Unit

614 614 221 394 378 16 16 0 0

2014 Trading Business Trading Business 900 115 784 280 504 480 24 24 Heinz Groschke Heinz Groschke 1,010 0 2013

195 815 294 521 492

until 2014/09 until 29 0 (min.) Burkhard Becker 2014 2014 620 115 504 504 480 24 2014 Unit 0 0 824 197 627 221 407 378 29 0 (max.) 1,300 1,184 2014 2014 115 400 280 504 480 CFO 24 2013 664 598 205 393 361 66 66 32 0 8) 7) 6) 5) 4) 3) 2) 1) since 2013/02/20 Michael Kieckbusch until2014/09/30 Groschke Heinz until2014/09/30 Wolfgang Eging Burkhard Becker Chairman Prof. Dr.-Ing. Jörg Fuhrmann Heinz In € Pensions

Accounted for at SMHD until 2014/12/31 Pro rata temporis at the end Pension of entitlement the at th Pension entitlement Accounted for at temporis rata Pro at th Pension entitlement Including a former employer’s pension commitment taken over against compensation

2014 848 142 705 245 460 420 40 40 0

MRW until 2014/12/31 MRW until 2014/12/31 with SZAG and with SMHD SZAG and with MRW Michael Kieckbusch Kieckbusch Michael (min.) 2014 2014 e end with age of SZAG contract > the 2014/09/30, 65 e end with age of MRW contract > the 2015/09/30, 65 603 142 460 460 420 40 40 since2013/02 0 0

Personnel (max.) contract with SMHD 2015/09/30, age > 2015/09/30, 65 with SMHD contract 1,198 1,055 2014 2014 142 350 245 460 420 40

2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 1,016 2013

209 807 294 513 492 21 21 0

upon pension 252,000 252,000 322,056 340,200 308,448 326,592 288,000 288,000 568,800 568,800 eligibility payment A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group 2014 Annual 614 614 221 394 378 16 0 0 BackgroundInformation on the Group/I. Business and Organization 1) 1) 1)5) 1)6) 1)5) 1)2) 1) 1) 1) 1) Energy Business Unit Unit Business Energy

(min.) Wolfgang Eging Eging Wolfgang 2014 2014 according according 1,178,771 1,060,368 394 394 394 378 16 492,530 884,403 823,407 358,134 716,518 348,878 751,467 until 2014/09 until 0 0 0 to HGB 37,813 Allocation to pension to pension Allocation (max.) 2014 2014 929 929 315 221 394 378 16 0 1,736,589 1,871,073 1,236,106 1,328,032 2,630,248 according to according 732,978 262,839 602,884 738,570 779,211 provision 1,010 2013 195 815 294 521 492 IFRS 29

0 7) 3)

according according 1,835,373 1,873,186 4,693,688 5,578,091 5,031,341 5,389,475 2,342,812 2,691,690 5,551,371 6,302,838 2014 824 197 627 221 407 378 to HGB to HGB 29 0 Trading Business Unit Trading Business Present value of the of value Present (min.)

2014 2014 Heinz Groschke Heinz Groschke 604 197 407 407 378 10,162,406 29 29 2,636,735 3,369,713 5,718,883 7,589,956 6,072,250 7,308,356 3,316,556 4,644,588 7,532,158 until 2014/09 until according to according 0 0

obligation (max.) 1,139 IFRS 2014 2014 8) 4) 197 942 315 221 407 378

29 . .

41

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 42 . Background Information on the Group/I. Business and Organization

Remuneration of the Supervisory Board Since the start of the current Supervisory Board’s term of office on May 23, 2013, each member of the Supervisory Board has received a fixed amount of € 60,000 in accordance with a resolution passed by the 2013 Annual General Meeting of Shareholders. The fixed remuneration is double the amount for the Vice Chairman and three times the amount for the Chairman. In addition, each member receives € 5,000 for committee activities, the respective committee chairmen and members of the Audit Committee € 10,000 and the chairman of the Audit Committee € 30,000. The Chairman of the Supervisory Board and the Vice Chairman are not remunerated for membership in the committees. An attendance fee of € 500 is paid for participation in each Supervisory Board meeting; participation and decision-making by way of telephone do not count as participating in a meeting.

During the previous term of office of the Supervisory Board – in accordance with a resolution passed by the 2010 Annual General Meeting of Shareholders – the following arrangement was latterly applied to remuneration: Each member of the Supervisory Board received annual remuneration which consists of a fixed and variable component. The fixed remuneration component amounted to € 40,000 for each member of the Supervisory Board. The variable component was geared to the success of the company in the long term and amounted to € 300.00 per full € 5 million on the portion of the pre-tax result – prior to deduction of minority interest in the consolidated financial statements of the company (EBT) – which exceeded € 150 million on average over the last three financial years (including the year when remuneration is paid). The Chairman of the Supervisory Board received double and the Vice Chairman one and a half times the amount from the addition of the respective remuneration components. The sum total of both remuneration components paid annually was limited to € 160,000 for the Chairman of the Supervisory Board, to € 120,000 for the Vice Chairman of the Supervisory Board and to € 80,000 for all other Supervisory Board members. In addition, attendance fees were paid out to each Board member and, wherever appropriate, for membership of the committees.

Remuneration received by the individual members of the Supervisory Board

In € Annual remuneration

Fixed Committee remuneration remuneration Attendance fees Total

Rainer Thieme, 2014 180,000 0 8,000 188,000 Chairman 2013 138,333 8,333 7,500 154,167

Dr. Hans-Jürgen Urban, 2014 120,000 0 5,000 125,000 Vice Chairman 2013 95,000 4,167 5,000 104,167

Konrad Ackermann 2014 60,000 10,000 4,000 74,000 2013 40,000 6,667 2,500 49,167

Bernhard Breemann 2014 60,000 0 1,000 61,000 2013 51,667 0 2,000 53,667

Ulrike Brouzi 2014 60,000 0 2,000 62,000 2013 40,000 0 1,500 41,500

Annelie Buntenbauch 2014 60,000 0 2,000 62,000 2013 40,000 0 1,500 41,500

Hasan Cakir 2014 60,000 10,000 5,000 75,000 2013 51,667 9,167 4,500 65,333

Ulrich Dickert 2014 60,000 0 2,000 62,000 2013 51,667 0 2,000 53,667

Dr. Johannes Teyssen Dr. Werner Tegtmeier until2013/03/31 Christian Schwandt Peter-Jürgen Schneider until2013/05/23 Dr. Rupprecht Rudolf Prof. Dr.Hannes Rehm until2013/05/23 HartmutMöllring until2013/05/23 Dr. Arno Morenz Volker Mittelstädt Thomas Lehne Bernd Lauenroth Dr. Dieter Köster Ulrich Kimpel Jürgen Hesselbach Prof. Dr.-Ing., Dr. h.c. Roland Flach until2013/05/23 Hannelore Elze Karl Ehlerding Dr. Thea Dückert In € Total until2013/05/23 Prof. Dr.Martin Winterkorn until2013/05/23 Weber Helmut

2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014

remuneration A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group 1,440,000 1,243,333 BackgroundInformation on the Group/I. Business and Organization 60,000 51,667 60,000 51,667 60,000 51,667 60,000 40,000 60,000 16,667 51,667 60,000 40,000 60,000 16,667 16,667 51,667 60,000 51,667 60,000 10,000 40,000 60,000 16,667 51,667 60,000 16,667 16,667 51,667 60,000 40,000 60,000 51,667 Fixed 0 0 0 0 0 0 0 remuneration Committee Annual remuneration 80,000 10,000 79,583 10,000 26,667 35,000 5,000 5,000 2,083 2,083 1,250 3,333 4,167 6,667 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Attendance fees fees Attendance 59,000 65,000 4,000 2,000 2,000 3,000 2,500 2,000 2,000 1,500 2,000 2,000 2,000 1,500 1,000 2,000 2,000 1,500 1,500 2,000 2,000 1,000 2,000 4,500 1,000 5,000 2,000 2,500 1,000 2,000 2,000 1,500 2,000 3,000 500 0 0 0 0 0 0 0

1,579,000 1,387,917 74,000 53,667 62,000 59,667 67,500 53,667 62,000 41,500 62,000 20,750 53,667 61,500 41,000 62,000 17,167 20,750 53,167 61,500 53,667 62,000 12,250 45,333 74,500 17,667 83,333 97,000 23,333 17,667 53,667 62,000 41,500 62,000 61,333 Total . . 0 0 0 0 0 0 0

43

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 44 . Background Information on the Group/I. Business and Organization

In addition, the following Supervisory Board members received remuneration for Supervisory Board mandates of subsidiaries: In € Annual remuneration

Fixed Committee remuneration remuneration Attendance fees Total

Konrad Ackermann 2014 10,000 0 750 10,750 (KHS) 2013 10,000 0 750 10,750

Bernhard Breemann 2014 10,000 0 200 10,200 (SMHD) 2013 10,000 0 300 10,300

Hasan Cakir 2014 8,000 0 300 8,300 (SZFG) 2013 8,000 0 400 8,400

Ulrich Dickert 2014 833 0 100 933 (MRW) 2013 0 0 0 0

Karl Ehlerding 2014 10,000 0 500 10,500 (KHS) 2013 10,000 0 500 10,500

Roland Flach 2014 10,000 0 750 10,750 (KHS) 2013 10,000 0 750 10,750

Ulrich Kimpel 2014 10,000 0 300 10,300 (MRW) 2013 10,000 0 300 10,300

Thomas Lehne 2014 1,250 0 100 1,350 (formerly SZST) 2013 5,000 0 400 5,400

(SZFG) 2014 4,667 0 300 4,967 2013 0 0 0 0

Volker Mittelstädt 2014 1,750 0 300 2,050 (Joint ILG/MGB Advisory Council) 2013 0 0 0 0

Dr. Werner Tegtmeier 2014 10,000 0 300 10,300 (MRW) 2013 10,000 0 300 10,300

(SMP) 2014 5,000 0 200 5,200 2013 5,000 0 300 5,300 The employee representatives Dr. Hans-Jürgen Urban 2014 0 0 0 0 who are members of (formerly SZS) 2013 15,000 0 400 15,400 trade unions have declared (SZFG) 2014 7,000 0 300 7,300 that they will remit their 2013 0 0 0 0 remuneration to the Hans Böckler Total 2014 88,500 0 4,400 92,900 Foundation in accordance with 2013 93,000 0 4,400 97,400 the provisions of the German Sum total 2014 1,528,500 80,000 63,400 1,671,900 Trade Union Confederation. 2013 1,336,333 79,583 69,400 1,485,317

3. Corporate Governance and Declaration of Conformity

The declaration on the management of the company corresponds to the Corporate Governance Report and can be accessed on the company’s website at www.salzgitter-ag.de/en/Investor_Relations/ Corporate_Governance/ at any time.

taey Te oiie eeomn i cpct util capacity in development positive The strategy. 0.5 of increase an to corresponds and more, people 109 is which number Group Salzgitter the of workforce core the 2014, 31, December of As Total workforce Non-active age-related part-time employment Apprentices, traineesstudents, Group Core workforce cont decisive a make employees Our 4. Employees Trends workforce in the challenges changing and demographic conditions. abil competitive Group’s Salzgitter the bolster that environment working development attractive through employees our in promote environment, working healthy a ensure we why is KHS’s international companies grew in line with the ex the with line in grew KHS’scompanies international in employees of number the companies, consolidated of group the in changes of effects aforementioned had also developments other of 2015”,part as realized AG “Salzgitter adjustments the to addition In time. first the for statistics personnel the in included quarte third the in place took that companies Group various of consolidation initial was the 2014 to attributable in workforce core our in increase The Grou 894 (EP Group EUROPIPE with the from and (HKM) employees Mannesmann GmbH the Krupp from effects the Hüttenwerke of consolidation initial proportionate includes and structure has new Group’s the of account figure take to adjusted been comparable The 2013. year financial

Industrial Participations /Consolidation Technology Business Unit TradingUnit Business Unit Energy Business Plate / Section Steel Business Unit Strip Steel Business Unit

% compared with the end of the the of end the with compared % 2)

where every employee can optimally integr optimally can employee every where ) ih 1 employees. 612 with p) deconsolidation of the the of deconsolidation d 355 employees, 23,555 ed ribution to maintaining and develo and maintaining to ribution A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization zto a Slgte Mnemn Sanes Tubes Stainless Mannesmann Salzgitter at ization an impact on workforce numbers. Alongside the the Alongside numbers. workforce on impact an ity against the backdrop of the current business business current the of backdrop the against ity pansion of the business an business the of pansion ad eutd n ttl f 4 epoes being employees 340 of total a in resulted and r Regional distribution ofthe workforcedistribution Regional vest concertedly in developing junior staff and and staff junior developing in concertedly vest opportunities. Our aim is to offer a motivating a offer to is aim Our opportunities. 2014/12/31 23,555 25,529 1,888 4,959 3,108 6,192 1,548 2,509 4,899 ate their talents. These are elements elements are These talents. their ate 426 ping the Salzgitter Group, which which Group, Salzgitter the ping 2013/12/31 d in accordance with the the with accordance in d 23,446 25,694 1,844 5,016 3,230 6,292 1,568 2,333 4,731 19,802 680 1,392 1,865 1) 448 48

regions Other Asia America Europe of Rest Germany Change – – – – – –

122 100 109 165 254 176 168

57 20 44 . .

2) 2) 1) 45 bodies bodies non-executive executive and members of the Excluding 2013 restated

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 46 . Background Information on the Group/I. Business and Organization

Group (MST Group) also necessitated hiring additional staff. Including trainees and employees in non- active age-related part-time work, the core workforce stood at 25,529 employees.

At the end of the year we had 945 temporary employees, which corresponds to 3.9 % of the sum total of core workforce members and staff outsourced. The year-on-year reduction, adjusted for effects from consolidation effects in 2014, amounted to eight employees. Whereas 520 workforce members were still affected by short time work as of December 31, 2013, this number had fallen to three by the end of 2014.

Personnel expenses amounted to € 1,601.3 million in 2014, which is 0.9 % higher than in the year-earlier period, a development also attributable to wage increases from collective bargaining and the expansion of the group of consolidated companies; counter effects emanated from the “Salzgitter AG 2015” reorganization program.

“Salzgitter AG 2015” The implementation of the “Salzgitter AG 2015” concept is generally proceeding according to plan. By

December 31, 2014, we had realized 76 % of the reduction potential estimated at more than 1,500 jobs within the Group. As far as possible, we make personnel adjustments in line with socially compatible practice. Implementation is based on a Pact for the Future signed back in 2013 between the Executive Board and employee representatives, accompanied by IG Metall. Since launching the program, the instruments largely used comprised the signing of severance agreements and natural fluctuation. In 2014, addressing structural issues focused on Peiner Träger GmbH (PTG) and the Salzgitter Mannesmann Precision Group (SMP Group).

As part of the “Salzgitter AG 2015” program, we developed numerous process optimization measures. For instance, centers of excellence were set up throughout the Group in order to combine expertise in various fields. These centers are aimed at providing strategic, conceptual and advisory services in future for member Group companies. They will pursue their activities in accordance with instructions from the parent company and be linked with existing structures through their integration into the Group companies. We anticipate a more efficient use of the resources available and greater standardization of workflows.

For the purpose of handling fundamental personnel processes we set up shared services structures in pension and payroll accounting at a prior point in time, aligned with counterpart processes in accounting.

In order to foster groupwide collaboration, and with a view to coordinating the implementation of personnel strategies more closely, we agreed to establish a Human Resource (HR) Board during the process of concluding the Pact for the Future. This board met once in the financial year ended. Its participants are made up of the personnel general managers of the reporting and management companies belonging to the respective business units and the Group’s Chief Personnel Officer. The HR Board establishes the principles and guidelines of our personnel policy and also discusses topical issues affecting the various business units.

A further component of the Pact for the Future consists of a joint declaration by the Group’s Executive Board and representatives of the employees to meet the challenges of demographic change by finding solutions at the operational level. Salzgitter AG (SZAG) has been engaged in developing appropriate strategies as part of its groupwide “GO – Generation Campaign 2025 of Salzgitter AG” since 2005. Endeavors are geared to further developing the measures already established in ongoing dialog with employee representatives. In this context, the HR Board and the Group Works Council maintain close contact.

that includes an increase of 3.4 of increase an includes that agreement pilot a reached Baden-Württemberg in bargaining collective electron to parties the 2015, 24, and February metal the in agreement collective The month delay forthe employees of PTG. six a with implemented being are adjustments respective The earliest. the at 2015, 31, October on terminated be may collective agreement The bargaining years. training all for month a training 2014, 1, € 36 by board the across raised July were allowances from As onward. 2015, “Salzgitte the on information More once again in excess of our own requirements. This is how we are secure the next generation of of generation next the secure are we how is This requirements. employees while own making a contribution tosociety. our of excess in again once othe and trainees student interns, 297 employed we addition, In experience. practical and theoretical e combin that degrees or training vocational for opted the within employees young 1,251 2014, of end the At also train people young in commercia courses degree dual for and careers Germany. throughout Wh companies Group the in offered 29 the of one in training vocational for apply can leavers School and partnerships school fairs, the career as well. as planning resources of our human components ersity univ well and as universities, days with information cooperations at contact personal the tec into insights with vocati people young and choosing children in assist to Offers staff. junior alig primarily activities versatile for opted has SZAG planning Human resources majori for the 1, 2014, with June effect from The increase in actual remuneration of 1.8 of remuneration actual in increase The and € traineespayment 150 of € 55. Janu from months the For earliest. the at 2016, 31, , 04 ad nte rs o 1.7 of rise another and 2014, 1, area in the east. The agreement includes an an includes 2.3 of agreement increase The east. the tariff in the area by adopted subsequently was 2014 that July a in agreement reached bargaining industry collective steel German West The Collective rounds bargaining in Germany Company, the of Control and Strategy”. Goals

% in wages and salaries as of July July of as salaries and wages in %

% in wages from April 1, 2015, onward and may be terminated on March March on terminated be may and onward 2015, 1, April from wages in %

fo My 1, May from % r AG 2015” program is included in included is program 2015” r AG l professions, IT and logistics. logistics. and IT professions, l

% agreed in the previous year previous the in agreed % ty of employees in the Trading Business Unit. A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization onal training and higher education already provide provide already education higher and training onal hnical and scientific areas of employment. Alongside Alongside employment. of areas scientific and hnical extensive mentoring of trainees, form further key key further form trainees, of mentoring extensive ary to March 2015, employees will receive a one-off one-off a receive will employees 2015, March to ary Breakdown of tariffs with of tariffs Breakdown ned to the long term in order to win well-qualified well-qualified win to order in term long the to ned r trainees, which means that our trainee ratio was was ratio trainee our that means which trainees, r ics industry expired on December 31, 2014. On On 2014. 31, December on expired industry ics Group were embarking on their careers, having having careers, their on embarking were Group ile the main emphasis is on technical fields, we we fields, technical on is emphasis main the ile the section on “Management and and “Management on section the had been largely implemented largely been had in the Group (domestic) the Group in 12% 26% 58% 4% Without tariff and others tariff House industry electrical Metal and industry steel and Iron . .

47

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 48 . Background Information on the Group/I. Business and Organization

As with training young people, hiring university graduates is also one of the most important measures for counteracting the shortage of expert employees in technical and scientific professions forecast for the coming years. The “Best Recruiters” study recognized SZAG for the quality of its recruiting processes by awarding it first place in the iron/metal industry. In an overall comparison spanning all industries, we took 14th place among more than 500 employers surveyed throughout Germany. The activities tested included handling spontaneous applications, accessibility by telephone, the content of career websites, online job advertisements and social media activities.

Personnel development SZAG views continuous professional development for its employees as an important investment in the future. We therefore consistently continued to promote young professionals, experts and managers in 2014. Our groupwide programs dovetail and are geared to various target groups, depending on the professional experience and length of service to the company.

Having extended our personnel development concept to include a mentoring program for women in 2012, the second round of this offer was launched in the financial year under review. Qualified women employees receive effective support in their management careers. In addition, we developed an orientation program entitled “Career Paths for Women” in 2014 that commenced in January 2015. This program is designed for women in all functions and provides orientation in the decision they take when choosing an expert or management career.

Training and continuous professional development (CPD) We want to offer our employees continuous professional development and training at all stages of their working lives. In the newly created CPD Center of Excellence, we have a dedicated organization unit within the Group that systematically combines further training for the Group companies located in Salzgitter, Peine and Ilsenburg and will increasingly offer strategic and conceptual services in the future. Moreover, the Center for Vocational Training at Salzgitter Flachstahl GmbH (SZFG) offers specific and general courses, individual training in line with customer specifications as well as – supplementary to the Group’s personnel development programs – seminars for operations executives.

Occupational safety and occupational health management We view the health of our employees as a high-priority and valuable asset. Based on this premise, occupational safety and occupational health management are consistently implemented and practiced. Our responsibility is anchored in our duty of care for the wellbeing and physical integrity of all our employees, as well as the employees of partner companies, customers, suppliers and visitors.

Intensive activities in the area of occupational safety have allowed us to optimize the technical and organizational conditions in the past, which has meanwhile served to substantially reduce the number of accidents caused. Our activities are therefore currently focused on measures that promote a change in the attitude and behavior of all employees and managers.

the company.the “ of year’smotto This the under organized was event senior our keep to year every Forum Group a hold We Communication employees with theassociated diseases. adipose for and operators crane of group occupational the for components special adding action, whichare bothkey components indevelopin intensively, them involve to and directly employees Our awards. for eligible are services and product of of gr value the the with administrati and production of areas launched all in approaches starting initiatives, we through end, lived and this Year” To the “Innovation”. of “Value as other the after one Th acceptance. and participation employee ensure to Grou entire throughoutemployeesthe initiated process a in evolved mission corporate The of “AchievingTogether”More our chosen underscores Grou “ elapsed. the developing of process the completed We YOUNITED corporatemission a of Group in Forum.the part companies took international Standpoint the from manag Comments general – executives, Industry 345 its all, in and All Banker”. “Europe of topic the on LB, NORD of Officer speec keynote A units. business new Group’s the in presentations were focus of areas Other process. implementation the develop comprehensively to dedicated is that Concept re has that statement mission our fina the In experts. external and internal relevant problems psychological and disorders musculoskeletal prevention, encompasses that program modular a of occupational comprehensive our of part key a formed conc rehabilitation our and managers of training the meas detection early and Prevention operational safety through targeted dialog. aim the authority, managerial with employees all for obse on seminars broad-based thei launched we platform, of importance the of aware made systematically GmbH Grobblech Mannesmann Salzgitter at safety) (changing initiative “EUVIA” the is example prime A important principles and lays down guidelines for guidelines down lays and principles important YOU IE” ss h cmoet o “ol – Pa – “Goals of components the uses NITED” cently been approved. The Executiv The approved. been cently ures, promoting the individuals’ re individuals’ the promoting ures, p across all hierarchical levels and was discussed on a broad basis broad a on discussed was and hierarchicallevels all across p A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization oupwide competition for ideas in 2014. Innovative Innovative 2014. in ideas for competition oupwide ers and executive employees from the domestic and and domestic the from employees executive and ers ca ya edd te offe the ended, year ncial our day-to-day activities. activities. day-to-day our g our corporate culture, throughout the Group. h was given by Dr. Gunter Dunkel, Chief Executive Executive Chief Dunkel, Gunter Dr. by given was h intention in running this program is to address all all address to is program this running in intention aspiration and reflects our groupwide aspiration identity.our reflects and tiue ad eair n epc o occupational of respect in behavior and attitudes e six fundamental values are now to be introduced be to now are values fundamental six e ’ nw iso saeet n h fnnil year financial the in statement mission new p’s hrb fseig raiiy n entrepreneurial and creativity fostering thereby back at the end of 2012 with the collaboration of of collaboration the with 2012 of end the at back rvation and discussion techniques at MGB in 2014 2014 in MGB at techniques discussion and rvation health management. This concept takes the form form the takes concept This management. health being to give them tools them give to being ve processes, in the organization and in the range the in and organization the in processes, ve ept (BeReKo) that has won multiple awards also also awards multiple won has that (BeReKo) ept executives informed abou informed executives ing the Salzgitter Group and the current stage in stage current the and Group Salzgitter the ing (MGB). All employees, including managers, are are managers, including employees, All (MGB). swift recovery and rehabilitation in the case of of case the in rehabilitation and recovery swift and features a systematic network linking all the all linking network systematic a features and r behavior in special courses. Using this as a a as this Using courses. special in behavior r ths – Values” to formulate the Group’s most most Group’s the formulate to Values” – ths YOU e Board presented the 360 Degree 360 the presented Board e on current processes and projects projects and processes current on NITED – Achieving More Together”,More Achieving – NITED sponsibility for their own health, health, own their for sponsibility The fundamental statement fundamental The ig a splmne by supplemented was ring to reinforce a culture of of culture a reinforce to t topical issues within within issues topical t . .

49

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 50 . Background Information on the Group/I. Business and Organization

5. The Salzgitter Share

Capital Market and Price Performance of the Salzgitter Share

Against the backdrop of an extremely volatile political and economic environment, the stock markets did not form any longer-term trend in 2014. After a favorable start to the year, the emerging Ukraine crisis and weaker-than-expected economic data from the USA triggered a consolidation before the end of the first quarter. The subsequent countermovement saw the DAX break through the 10,000 point barrier for the first time at the start of June. Shortly afterwards, cooling economic sentiment indicators led to a second period of correction that persisted through to October, apart from a short-lived bullish phase in the second half of August. The renewed upturn in growth data from the USA and positively received statements by various central banks at the end of the year resulted in a fourth uptrend that brought the DAX to 10,093.03 points on December 5, thereby marking a new record level. The DAX achieved an overall

performance of 3 %, while the MDAX climbed by 2 % in the period under review.

Salzgitter AG share price performance vs. the European Steel Index, MDAX and DAX

110

100

90

80

70

60

2013/12/31 2014/03/31 2014/06/30 2014/09/30 2014/12/31

Share price performance in % Salzgitter AG European Steel Index DAX MDAX Sources: XETRA closing price Deutsche Börse AG, Datastream STEELEU

fromDecember 31, 2013. 6,009 to came shares treasury of portfolio SZAG’s Treasury shares 13.4 to rose investors institutional German by held opne ad rs fo at 63.5 unchanged remain free shares float in trust and companies foreign requiremen reporting and no domestic with investors institutional as private well as investors, be to likely are latter The identified. be not could investors ao ivso, ed t es 39.9 least at held investor, major Germany, a as Saxony in Lower of State Federal the including registered shareholders shares, azitr hrs wih s rud 2.0 around is which shares, Salzgitter awardi the 50 a (EP), EUROPIPE GmbH and Europe in outlook to through index leading the than sharply more rose the 2013, in 31.00 € of price closing a from starting Accordingly, sectors. other of equities financial the in equities politicalenvironmentmainfactorswere Europe,the in in crisis structural ongoing The elnd o 20.7 to declined ih ered 03 Aat rm 10 from Apart 2013. year-end comparison with in in slightly only commissioned of changed has structure SZAG shareholder survey the 2014, a November to According Shareholder structure in 47th measured place by this criterion. capitalization market float free A 2014. 30, December 21st took (SZAG) AG Salzgitter billion, € 2.1 of volume 11 almost period falling the in thereby review, 310,000 at under stood exchanges stock Germany’s on share our of turnover daily average The than in the previous year (2013: 41.9 (2013: year previous the in than burdened share the price. Altoge contract Stream South the of suspension the of announcement the addition, In expectations.economic unde and index leading the from decoupled equities de market general the outperformed significantly more once that uptrend another supported – market capital the by received – positively figures very nine-monthly the of presentation The again. downtrend general the below decline it saw 2014 of half second the of beginning The 33.81. € posted it when 13 June on uptrend second the during year the

% (2013: 15.4 (2013: %

%); the share of foreign investors investors foreign of share the %);

(03 19.9 (2013: %

year 2014 as well. They therefore reacted more sensitively to news than the the than news to sensitively more reacted therefore They well. as 2014 year % participation. After the first price correction, the share reached a new high for for high new a reached share the correction, price first the After participation. % s sc a insurance as such ts, nain. Salzgitter undations.

) 29.4 %). ther, overall the –24 share Salzgitter posted performance of the the European steel industry, coupled with the fragile economic and and economic fragile the with coupled industry, steel European the

% in treasury treasury in %

%). The stake The %). velopment. In the last few months of the reporting period, steel steel period, reporting the of months few last the In velopment. ng of part of the South Stream pipeline project volume to to volume project pipeline Stream South the of part of ng

o the of %

% of our our of %

lower % blw h ya-ale fgr. ih n cuuae trading accumulated an With figure. year-earlier the below % A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group

%. %. BackgroundInformation on the Group/I. Business and Organization ,700 units as per December 31, 2014, and is unchanged unchanged is and 2014, 31, December per as units ,700 rwent a renewed consolidation owing to dampened dampened to owing consolidation renewed a rwent place in the MDAX ranking of Deutsche Börse AG on on Börse AG Deutsche of ranking MDAX the in place of approximately € 907 million placed the company the placed million € 907 approximately of mid-February, bolstered by the improved economic economic improved the by bolstered mid-February, Shareholder structure influencing the price trend of the majority of steel of majority the of trend price the influencing 29.4% 13.4% 26.5% 10.0% 63.5% Free float Free 63.5% 1.6% 6.0% 5.6% 7.5% Salzgitter share share Salzgitter shareholders Other other regions investors – Institutional America North investors – Institutional UK + Ireland investors – Institutional rest of Europe investors – Institutional Germany investors – Institutional Lower Saxony of State Federal Salzgitter AG As 2014/12 per

% in 2014. 2014. % in . .

51

Business and Organization . A/Group Management Report and Management Report on Salzgitter AG 52 . Background Information on the Group/I. Business and Organization

Information for investors

2014 2013 2012 2011 2010

Nominal capital1) € m 161.6 161.6 161.6 161.6 161.6

Number of shares1) units m 60.1 60.1 60.1 60.1 60.1

Number of shares outstanding1) units m 54.1 54.1 54.1 54.1 54.1

Market capitalization1)2) € m 1,266.2 1,676.7 2,132.4 2,089.4 3,124.6

Year-end closing price1)3) € 23.41 31.00 39.43 38.63 57.77

Stock market high3) € 33.81 41.56 48.95 65.64 74.32

Stock market low3) € 21.07 24.54 27.03 32.43 45.76

4)5) Earnings per share/EPS € – 0.64 – 9.11 – 1.89 4.31 0.55

4)5) Cashflow per share/CPS € 11.07 2.61 7.90 – 3.63 21.96

Dividend per share (DPS) € 0.206) 0.20 0.25 0.45 0.32

Total dividend € m 12.06) 10.8 13.5 24.3 17.3

Securities identification number: 620200, ISIN: DE0006202005

1) All information as per December 31 2) Calculated on the basis of the respective year-end closing price multiplied by the number of shares outstanding as per December 31 3) All data relate to prices in XETRA trading 4) Calculated by taking account of the weighted average number of shares outstanding 5) 2013 restated 6) Subject to approval by the General Meeting of Shareholders

Dividend The Executive and Supervisory Boards propose that the General Meeting of Shareholders approve a dividend payment of € 0.20 per share for the financial year 2014. Based on a nominal share capital of € 161.6 million, the dividend distribution proposed totals € 12.0 million.

Investor Relations

We used various channels to communicate intensively with our private and institutional investors in 2014 as well. We presented the results of the financial year 2013, along with those of the first six months of 2014, at well-attended analyst conferences in Frankfurt and London and engaged in intensive dialog with capital market representatives. We arranged telephone conferences when the reports were published for the first quarter and the first nine months of 2014. We also made presentations at investor conferences and road shows in Germany, Europe and the US. A large number of investors and analysts were eager to take the opportunity of visiting our production sites where they informed themselves on location about the relevant processes, facilities and products. In addition, the business situation and the potential of the Salzgitter Group were discussed in depth with Executive Board members and other managers on these occasions.

The “Freundeskreis der Aktionäre der Salzgitter AG” (circle of friends of Salzgitter AG shareholders) arranged a series of events for our private investors who were able to gain an insight into current developments within the Group and its business environment. Members of the Executive Board and of the Group Management Board also gave keynote presentations and reported on their areas of responsibility.

HSBC HSBC Sachs Goldman EXANE BNP Paribas DZ-Bank Deutsche Bank Davy Suisse Credit Commerzbank Citigroup BHF Bank Bankhaus Lampe Bank of America/Merrill Lynch Baader Bank Alphavalue    in the financial year 2014. year-endAt theirratings were: reports company and Recommendations the institutions At listed present, below

7 sell/underperform 9 hold/neutral 8 buy/outperform report onreport regularly the Salzgitter Group: on SZAG were issued by a minimum of 24 financial institutions institutions financial 24 of minimum a by issued were SZAG on A/Group Management Report and Management Report on Salzgitter AG Salzgitter on Report Management and Report Management A/Group BackgroundInformation on the Group/I. Business and Organization Metzler Metzler MainFirst Capital Macquarie LBBW Kepler Cheuvreux JP Morgan Jefferies UBS Steubing SociétéGénérale S&P Capital IQ NORD/LB Warburg M.M. . .

53

Business and Organization