Financial key performance indicators*

As a result of the challenging market environment, especially in the oil and natural gas sectors, the delivery volume of the Special Steel Division in the first three quarters of 2015/16 was somewhat lower than in the previous year. Economic effects, along with falling raw materials prices and shifts in the exchange rates—some of which were substantial—also created pressure on prices. While lower costs for raw materials exerted pressure on sales revenue, the strong US dollar had a positive effect for deliveries to North America. Against this backdrop, the revenue generated by the Special Steel Division fell in the first three quarters of 2015/16 compared to the same period of the previous year by 2.2%, going from EUR 2,028.9 million to EUR 1,984.8 million. The declining raw materials prices affected not only the price level but also required value adjustments of inventory that had commensurate negative effects on earnings. As a countermeasure to this trend, the division has stepped up its cost-cutting and lean management programs at key locations. As a result of these circumstances, the operating result (EBITDA) in the first three quarters of 2015/16, which amounted to EUR 259.9 million, was 6.8% below the previous year’s figure of EUR 278.9 million; the EBITDA margin went down from 13.7% in the previous year to 13.1%. The development of profit from operations (EBIT) was similar, falling by 10.1% from EUR 176.0 million (margin: 8.7%) to EUR 158.2 million (margin: 8.0%).

In comparison with the immediately preceding quarter, revenue fell by 6.6% from EUR 659.8 million in the second quarter of 2015/16 to EUR 616.0 million in the third quarter. Despite continuing solid sales of tool steel, they were not able to compensate declining deliveries to the oil and natural gas industries, which are now also affecting the division’s business with customers in Asia. Due to lower delivery volumes and the value adjustments on inventory that were made in the last quarter, in the third quarter of 2015/16, both EBITDA and EBIT were lower than the figures in the immediately preceding quarter. While EBITDA dropped by 14.4% from EUR 86.2 million to EUR 73.8 million, EBIT went down by 22.9% from EUR 52.5 million to EUR 40.5 million. Therefore, in a comparison with the immediately preceding quarter, the EBITDA margin decreased from 13.1% to 12.0%, and the EBIT margin went from 8.0% to 6.6%.

The number of employees (FTE) in the Special Steel Division as of the end of the third quarter of 2015/16 was 13,301, 0.2% below the comparative figure in the previous year (13,334 FTE). This means that the increase in staff to handle the expanded service portfolio in the Value-Added Services business segment was largely offset by a decrease in staff in production facilities due to lower capacity utilization. Compared with the figure at the end of the last business year (13,490), headcount fell by 1.4%.