In a weakening overall economic environment, the Voestalpine achieved a solid result in the 1st half of 2023/24 (April 1 to September 30). Especially in Europe, the economic dynamics in the reporting period continued. For the Voestalpine, this meant a declining demand from the segments construction, mechanical engineering and consumer goods industry. Exports Chinese steel manufacturers also led to massive pressure on the international steel markets.
Nevertheless, thanks to its strategic orientation towards the highest quality, the voestalpine recorded a consistently positive development in its most important customer segments. In the automotive industry, the relaxation of the global supply chain situation was reflected in a stable production. The railway and aviation industry, the conventional energy sector (oil & gas) and the area of renewable energy (solar industry) continued to develop very well against the overall economic trend. There was also a positive demand for warehouse technology.
“In a partly challenging market environment, the Voestalpine with its focus on high-quality products, especially for the mobility and energy industry in the 1st half of 2023/24, was able to demonstrate its strengths. The last financial year showed record values. The current result is on average and is quite satisfactory with regard to the current economic framework, ”says Herbert Eibensteiner, CEO of Voestalpine AG.
With the start of Greentec Steel, the ambitious step plan of the voestalpine for green steel production, an important step for the future viability of the group has recently been taken. By 2027, a blast furnace is to be replaced by a green electricity-powered electric laying stove by 2027, thus saving 30 % of CO2 emissions. Another milestone for the future was the official opening of the new high-tech steel works in Kapfenberg.
Development of sales and results figures
After the Voestalpine Group achieved record values for sales and results in the 1st half of the 2022/23 financial year, the financial performance indicators weakened in the annual comparison. Specifically, sales revenue decreased by 8.4 % from EUR 9.3 to EUR 8.5 billion in the 1st half of 2023/24. EBITDA was reduced by EUR 36.7 %from EUR 1.4 billion (Marge 15.6 %) to EUR 915 million (Marge 10.7 %). Based on the strong performance of the Railway System and the Tubular product segment (seamless pipes), the Metal Engineering Division was able to increase sales revenues and EBITDA. The other three divisions report a weaker development for the reporting period. EBIT decreased in the 1st half of 2023/24 by 40.9 %from EUR 898 million (Marge 9.7 %) to EUR 531 million (Marge 6.2 %).
The net finance result (reduced financial expenses) decreased from -52 to -91 million EUR. As a result, the result before tax reduced by 48.1 % from EUR 846 to EUR 440 million in the previous year. In total, the Voestalpine group in the first half of 2023/24 generated a result after taxes of EUR 333 million (- 53.5 %).
The Gearing Ratio (net fault debt in % of equity) decreased from 32.7 % to 26.6 % as of September 30, 2023. Specifically, the Voestalpine was able to reduce the net fuel debt in the reporting period by 15.6 % from EUR 2.5 to EUR 2.1 billion. In the case of equity, the group recorded a slight increase of 3.9 % from EUR 7.5 to EUR 7.8 billion in the half -year comparison. The number of employees (FTE, full -time equivalent) increased by 1.7 % to 51,212 employees: inside.
Outlook
The economic excavation, which has been expected for almost one year, has arrived in some areas of the Voestalpine Group in some areas of the Voestalpine Group in the first half of 2023/24. As expected, the market environment in the construction, mechanical engineering and consumer goods industry have weakened. From today’s perspective, a continuation of the current situation and therefore no substantial improvement in demand in these segments is expected for the second half of 2023/24. This means a stagnant need at a steamed level.
From the current point of view, the automotive industry should remain essentially robust in the second half of 2023/24. Although the high order stands built as a result of the pandemic are increasingly being processed by the automotive producers, an overall largely stable development is expected by the end of the current financial year.
The conventional energy sector (oil and gas) lost in the course of the 1st half of 2023/24 on the price side of dynamics, which is due to the reduction of material bottlenecks and not to a market weakness. The demand for voestalpine products for the oil and gas industry has consequently normalized. For the second half of 2023/24, a largely stable development can be expected. For the area of renewable energy (photovoltaic), a continuation of the good market environment is expected for the rest of the 2023/24 financial year.
In the area of the railway systems, the currently very good development in the rest of the financial year will continue, although the usual seasonality can be expected over the winter.
The upward trend in the aviation industry will also continue in the second half of 2023/24. The forecasts are essentially coincided with the previous assessments, although the economic outlook for Europe now has to be assessed somewhat more cautiously. In particular, the investment activities in the industrial sector have broken down and are expected to remain at a low level in the second half of 2023/24.
Therefore, the board of Voestalpine AG under the premise does not expect a massive economic fault, triggered by the interest rate policy of the central banks or geopolitical escalation scenarios, for the 2023/24 financial year at the bottom of the bandwidth mentioned so far (1.7 to 1.9 billion. EUR) and thus in an area of EUR 1.7 billion, which also corresponds to the current market expectation.
The effects of current geopolitical developments remain difficult to assess. However, it is clear that the war in Europe and the armed conflict in the Middle East have significantly increased the risk of unpredictable influences on the economic environment. This makes all forecasts more uncertain.
