Business performance of the voestalpine-Group

Despite this quite challenging overall economic climate, the revenue generated by the voestalpine Group in the first quarter of the business year 2012/13 of EUR 3,050.6 million was almost equal to the revenue in the very positive first quarter of the previous year (EUR 3,051.5 million). This is primarily due to a new quarterly record in generated revenue set by the Metal Engineering Division (previously Railway Systems Division), as the Steel, Special Steel, and Metal Forming Divisions all reported slight declines. The consistent level of revenue year to year makes it abundantly clear that the broad-based regional and sectoral set-up of the voestalpine Group enables it to maintain a largely stable level of revenue even in economically difficult periods.

The operating results, however, could not match the previous year’s levels. In the first quarter of 2012/13, EBITDA fell by 19.0%, decreasing from EUR 462.9 million to EUR 375.0 million, which corresponds to an EBITDA margin of 12.3% (previous year: 15.2%). At EUR 230.7 million, EBIT was 27.4% below the comparative figure of the previous year (EUR 317.6 million), resulting in an EBIT margin that fell in the first quarter of 2012/13 from 10.4% to 7.6%.

The decline in the operating results, which affected all the divisions—albeit to differing degrees—reflects the macroeconomic environment, which has deteriorated significantly compared to the previous year. This change has been particularly noticeable on the European steel market. While demand and price trends in the first quarter of the previous year were still affected by a strong inventory-building cycle due to the more positive growth expectations, the market environment in the current business year has thus far been characterized by falling demand, prices that have been trending down, and increasing structural overcapacities. The fact that the Steel Division has specialized in the top quality and technology segments enabled it to maintain full utilization of its production capacity and relatively stable prices, but overall, this sector’s operating results nevertheless plunged due to the weak market, dropping by almost one half compared to the previous year. A quarter-to-quarter comparison showed a much more stable development; the same applies to the trend over the entire business year in the three processing divisions, which have a greater proximity to the end customer and are thus less cyclical.

With a financial result that has remained stable compared to the previous year, in the first quarter of the business year 2012/13, the profit before tax was EUR 185.1 million, 31.9% below last year’s figure of EUR 271.8 million. The profit for the period (net income) was EUR 144.9 million after EUR 209.6 million in the first quarter of the last business year (–30.9%).

Equity increased from EUR 4,878.3 million to EUR 4,980.8 million. Concurrently, due to positive free cash flow that amounted to EUR 92.2 million, net financial debt was reduced to EUR 2,484.2 million, compared to EUR 2,779.6 million in the same period of the previous year and compared to EUR 2,585.7 million in the immediately preceding quarter. As a result, the first quarter of the business year 2012/13 saw another significant decline in the gearing ratio (net financial debt in percent of equity) to 49.9%, down from 57.0% (as of the end of the first quarter of 2011/12) and from 53.5% (as of the end of the immediately preceding quarter) respectively.

As of June 30, 2012, the workforce of the voestalpine Group consisted of 46,075 employees (full-time equivalent). Compared to the first quarter of 2011/12 (45,161 employees), this corresponds to a significant increase, although the total workforce declined compared to the immediately preceding quarter (46,473 employees).