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IV. Risk Report
1. Risk and Opportunities Management System
Business activity as defined by the Articles of Incorporation makes risk-taking unavoidable in many
instances. Assuming risks is frequently the necessary precondition for exploiting opportunities. All risks
must, however, be contained and manageable for the management of the company. Effective and
foresighted risk management is therefore an important and value-creating component among the
management functions deployed by Salzgitter AG to safeguard the company as a going concern,
along with the invested capital and jobs
Differentiation between risk and opportunities management
In the Salzgitter Group, risk and opportunity management are treated separately as a matter of
principle. A separate reporting system maps and tracks risks. By contrast, the identification and
communication of opportunities forms an integral part of the management and controlling system
that operates between our subsidiaries and associated companies and the holding company. Identification,
analysis and implementation of operational opportunities is incumbent on the management
of the individual companies. In cooperation with the Group’s Strategic Planning and Coordination,
measures are devised to profile our strengths and tap strategic growth potential. They are structured
systematically in a strategy atlas specially developed for this purpose and consistently reflect our
product and market environment. Potential for opportunities for the Salzgitter Group is, on the one
hand, inherent in a market-oriented price policy and in reinforcing our market position by developing
new materials and products relevant for the steel sector. On the other hand, we also use the
ongoing implementation of our profitability improvement and selective acquisitions, as exemplified
in the current financial year 2007 by Klöckner-Werke AG and Vallourec Précision Etirage S.A.S. As
regards tapping selected opportunity potential, we refer to our Forecast. To secure value-oriented
corporate management, we weigh up the aspects of risks versus opportunities.
Organizational permeation
Risk management incorporates all fully consolidated companies in the Steel, Trading and Services Divisions
– also including the non-consolidated Salzgitter Hydroforming GmbH & Co. KG and Telefonbau
Marienfeld GmbH & Co. KG. In the Tubes Division, both the fully consolidated companies and the
joint venture Europipe GmbH, including MÜLHEIM PIPECOATINGS GmbH, are integrated into the risk
management system in accordance with Salzgitter AG’s guidelines. The companies of the Klöckner-
Werke AG (KWAG) were consolidated for the first time in the third quarter of 2007 and, since that
time, they have formed the core of the Salzgitter Group’s Technology Division. Salzgitter AG performs
its group management duties in respect of risk management for the listed company KWAG as part of
the control functions of KWAG’s Supervisory Board. KWAG’s Supervisory Board has formed an audit
committee in which SZAG is represented. One of the duties of the audit committee is to monitor the
risk management and material risks. The committee meets regularly.