1. Operating segments

The voestalpine Group operates in six reportable segments: Steel Division, Special Steel Division, Railway Systems Division, Profilform Division, Automotive Division, and Other. The reporting system, which is essentially based on the nature of the products provided, reflects the internal financial reporting, the management structure of the organization, and the predominant sources of risks and rewards of the Company.

Since April 1, 2010, the cash-generating units Precision Strip and Welding Consumables have been managed and reported within the Profilform Division and the Railway Systems Division (previously Special Steel Division). In these consolidated financial statements, the two cash-generating units were therefore allocated to the operating segments Profilform Division (Precision Strip) and Railway Systems Division (Welding Consumables). The previous year’s comparative figures were adjusted accordingly.

The Steel Division focuses on the production and processing of flat steel products for the automotive, white goods, and construction industries. This division is a top-three European supplier of high-quality strip steel and heavy plate for the most demanding applications. The division produces and processes hot- and cold-rolled steel as well as electrogalvanized, hot-dip galvanized, and organically coated plate and electrical steel strip. Its other activities include heavy plate production, a foundry, and a number of downstream processes.

The Special Steel Division1 is a global market leader in tool steel. Furthermore, it has a leading position in the special forging segment. The division manufactures long steel products, medium-wide strip steel, open-die forgings, and drop forgings. The main customer group is the tool industry, which mainly supplies the automotive industry and the consumer goods industry. The division’s second foothold is energy technology—from exploration to components for gas and steam turbines. Furthermore, the Special Steel Division is a global supplier of the aviation industry.

The Railway Systems Division is the global market leader in switches, the European market leader in rails and processed wire, as well as a leader in welding technology. The division has access to its own steel production and manufactures the world’s widest range of high-quality rails and switch products, rod wire, drawn wire, prestressing steel, seamless tubes, welding filler materials, and semi-finished products. Furthermore, the division is also a full-service provider for railway construction, including planning and engineering, transportation, logistics, and system installation.

The Profilform Division combines the tube and section production activities of the voestalpine Group. It manufactures welded tubes and hollow sections, open standard sections, and all types of custom roll forming of special tubes and sections. In addition, the division also produces high-bay racking systems and components for road safety. The division is the global market leader in the special sections and the custom roll forming segments as well as a leader in precision strip steel. It focuses on supplying the construction and automotive supplier industries as well as the transportation, storage, and furniture industries.

The Automotive Division combines all activities of the voestalpine Group involving the processing of steel and other materials, such as plastics and composite material, into components, modules, and systems for the automotive industry. It focuses on body-in-white components, precision parts, and safety technology components. The Automotive Division has become a top-three player in the European automotive component supplier industry for body-in-white components, laser-welded blanks, and tubular components.

The holding company, several Group financing companies, as well as the entities of group-IT are included in Other. These companies are combined in this segment because their focus is on providing coordination and assistance to the subsidiaries.

Segment revenue, segment expenses, and segment results include transfers between operating segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers for similar products. These transactions have been eliminated in the consolidated financial statements.

The voestalpine Group uses the profit from operations (EBIT) to measure the performance of the segments because it is commonly used in the steel and steel processing industry as a comparative measure of financial performance. In addition, the voestalpine Group considers it a widely accepted indicator for measuring the Group’s profitability.

The operating segments of the Group are presented as follows:

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Operating segments1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Division

 

Special Steel Division

 

Railway Systems Division

 

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

3,098.7

 

4,175.0

 

1,895.4

 

2,631.3

 

2,295.8

 

2,723.3

Of which revenue
with third parties

 

2,746.2

 

3,548.5

 

1,862.6

 

2,567.0

 

2,264.6

 

2,688.3

Of which revenue with other segments

 

352.5

 

626.5

 

32.8

 

64.3

 

31.2

 

35.0

EBITDA

 

423.3

 

595.1

 

93.6

 

388.1

 

367.7

 

422.4

Depreciation and amortization of property, plant and equipment and intangible assets

 

221.9

 

223.3

 

196.8

 

179.6

 

126.5

 

113.5

Of which impairment

 

0.0

 

0.0

 

0.0

 

7.7

 

3.1

 

0.0

Of which reversal of impairment

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

Profit from operations (EBIT)

 

201.4

 

371.9

 

–103.2

 

208.5

 

241.2

 

308.9

EBIT margin

 

6.5%

 

8.9%

 

–5.4%

 

7.9%

 

10.5%

 

11.3%

Share of profit of associates

 

10.5

 

15.9

 

0.0

 

0.0

 

3.8

 

7.7

Interest and similar income

 

3.7

 

1.9

 

14.2

 

14.3

 

4.4

 

3.9

Interest and similar expenses

 

57.9

 

58.2

 

47.2

 

53.1

 

34.0

 

32.4

Income tax expense

 

–25.0

 

–67.8

 

24.8

 

–52.5

 

–51.0

 

–74.5

Profit for the period

 

139.5

 

270.0

 

–106.8

 

118.9

 

164.2

 

213.5

Segment assets

 

3,342.3

 

3,724.5

 

3,925.5

 

4,095.0

 

2,319.3

 

2,428.6

Of which investments in associates

 

83.5

 

92.6

 

0.0

 

0.0

 

13.3

 

18.5

Net financial debt

 

949.3

 

797.3

 

784.4

 

728.4

 

414.0

 

402.2

Investments in property, plant and equipment and intangible assets

 

240.7

 

152.6

 

146.6

 

87.5

 

77.8

 

94.7

Employees
(excl. temporary personnel and apprentices)

 

9,510

 

9,622

 

10,968

 

11,364

 

9,730

 

10,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profilform Division

 

Automotive Division

 

Other

 

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

871.3

 

1,139.3

 

835.4

 

1,040.1

 

88.4

 

94.7

Of which revenue
with third parties

 

841.8

 

1,109.7

 

833.1

 

1,037.4

 

1.7

 

2.8

Of which revenue with other segments

 

29.5

 

29.6

 

2.3

 

2.7

 

86.7

 

91.9

EBITDA

 

83.0

 

159.5

 

73.8

 

121.1

 

–60.8

 

–56.3

Depreciation and amortization of property, plant and equipment and intangible assets

 

44.4

 

41.5

 

55.9

 

57.1

 

6.7

 

5.8

Of which impairment

 

0.0

 

0.0

 

0.0

 

2.7

 

0.0

 

0.0

Of which reversal of impairment

 

0.0

 

0.0

 

9.3

 

3.4

 

0.0

 

0.0

Profit from operations (EBIT)

 

38.6

 

118.0

 

18.0

 

64.0

 

–67.7

 

–62.2

EBIT margin

 

4.4%

 

10.4%

 

2.2%

 

6.2%

 

 

 

 

Share of profit of associates

 

0.0

 

0.0

 

0.0

 

0.0

 

6.0

 

5.7

Interest and similar income

 

3.8

 

2.6

 

2.2

 

1.4

 

162.6

 

128.4

Interest and similar expenses

 

20.0

 

18.2

 

10.9

 

11.6

 

234.3

 

218.4

Income tax expense

 

–1.9

 

–27.5

 

8.2

 

–2.4

 

51.7

 

33.1

Profit for the period

 

20.5

 

75.4

 

16.4

 

51.5

 

–233.5

 

626.8

Segment assets

 

1,000.3

 

1,083.7

 

866.7

 

930.2

 

8,662.8

 

9,107.4

Of which investments in associates

 

0.0

 

0.0

 

0.0

 

0.0

 

1.0

 

2.3

Net financial debt

 

178.0

 

151.6

 

283.8

 

228.6

 

504.4

 

449.1

Investments in property, plant and equipment and intangible assets

 

47.6

 

52.3

 

22.5

 

28.0

 

4.4

 

5.3

Employees
(excl. temporary personnel and apprentices)

 

4,014

 

4,200

 

4,551

 

4,789

 

633

 

647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation

 

Total Group

 

 

 

 

 

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

 

 

 

 

–535.0

 

–850.0

 

8,550.0

 

10,953.7

Of which revenue
with third parties

 

 

 

 

 

0.0

 

0.0

 

8,550.0

 

10,953.7

Of which revenue with other segments

 

 

 

 

 

–535.0

 

–850.0

 

0.0

 

0.0

EBITDA

 

 

 

 

 

23.7

 

–24.3

 

1,004.3

 

1,605.6

Depreciation and amortization of property, plant and equipment and intangible assets

 

 

 

 

 

0.1

 

0.0

 

652.3

 

620.8

Of which impairment

 

 

 

 

 

0.0

 

0.0

 

3.1

 

10.4

Of which reversal of impairment

 

 

 

 

 

0.0

 

0.0

 

9.3

 

3.4

Profit from operations (EBIT)

 

 

 

 

 

23.7

 

–24.3

 

352.0

 

984.8

EBIT margin

 

 

 

 

 

 

 

 

 

4.1 %

 

9.0 %

Share of profit of associates

 

 

 

 

 

0.1

 

0.8

 

20.4

 

30.1

Interest and similar income

 

 

 

 

 

–123.2

 

–106.1

 

67.7

 

46.4

Interest and similar expenses

 

 

 

 

 

–124.9

 

–108.4

 

279.4

 

283.5

Income tax expense

 

 

 

 

 

–3.3

 

5.2

 

3.5

 

–186.4

Profit for the period

 

 

 

 

 

186.5

 

–761.5

 

186.8

 

594.6

Segment assets

 

 

 

 

 

–7,822.8

 

–8,293.0

 

12,294.1

 

13,076.4

Of which investments in associates

 

 

 

 

 

28.7

 

29.4

 

126.5

 

142.8

Net financial debt

 

 

 

 

 

–76.6

 

–44.1

 

3,037.3

 

2,713.1

Investments in property, plant and equipment and intangible assets

 

 

 

 

 

0.1

 

0.0

 

539.7

 

420.4

Employees
(excl. temporary personnel and apprentices)

 

 

 

 

 

0

 

0

 

39,406

 

40,700

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Since April 1, 2010, the cash-generating units Precision Strip and Welding Consumables have been managed and reported within the Profilform Division and the Railway Systems Division (previously Special Steel Division). In these consolidated financial statements, the two cash-generating units were therefore allocated to the operating segments Profilform Division (Precision Strip) and Railway Systems Division (Welding Consumables). The previous year’s comparative figures were adjusted accordingly.

In millions of euros

The reconciliation of the key ratios EBITDA and EBIT are shown in the following tables:

(XLS:) Download

EBITDA

 

2009/10

 

2010/11

 

 

 

 

 

Net exchange differences incl. result from valuation of derivatives

 

18.3

 

–3.5

Value adjustments for receivables/waiver of receivables

 

–1.7

 

–18.5

Consolidation

 

7.2

 

–1.9

Other

 

–0.1

 

–0.4

EBITDA – Total reconciliation

 

23.7

 

–24.3

 

 

 

 

 

 

 

In millions of euros

(XLS:) Download

EBIT

 

2009/10

 

2010/11

 

 

 

 

 

Net exchange differences incl. result from valuation of derivatives

 

18.3

 

–3.5

Value adjustments for receivables/waiver of receivables

 

–1.7

 

–18.5

Consolidation

 

7.2

 

–1.9

Other

 

–0.1

 

–0.4

EBIT – Total reconciliation

 

23.7

 

–24.3

 

 

 

 

 

 

 

In millions of euros

For the most part, all other key ratios contain solely the effects of consolidation.

Geographical information

The following table provides selected financial information subsumed into the major geographical areas. External revenue is allocated by geographical location of the customers’ companies. Non-current assets and investments are reported by geographical location of the companies.

(XLS:) Download

 

 

Austria

 

European Union

 

Other countries

 

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

2009/10

 

2010/11

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

774.3

 

1,079.4

 

5,345.1

 

6,834.7

 

2,430.6

 

3,039.6

Non-current assets

 

4,350.0

 

4,225.4

 

1,598.5

 

1,537.0

 

544.9

 

547.6

Investments in property, plant and equipment and intangible assets

 

403.9

 

271.3

 

105.7

 

109.8

 

30.1

 

39.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The voestalpine Group does not record any revenue from transactions with a single external customer amounting to 10% or more of the entity’s revenue.

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  • Share price, end of period (euros) 33.13    EPS – Earnings/share (euros) 3.04    Dividend/share (euros) 0.80
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