Financial key performance indicators

After an initially restrained start to the business year 2016/17, the Steel Division was able to successively improve its results over the course of the business year to finally deliver the best operating result (EBITDA) since the outbreak of the financial and economic crisis (second quarter of 2008/09) in the fourth quarter. A brightening of the operating environment contributed to this success, as well as the continuously intensified program of cost and efficiency optimization measures executed over the past years. In view of the excellent level of demand for high-quality flat steel products, as well as considerable rises in raw material costs, it was possible to increase contract prices significantly, especially in the final quarter of 2016/17. Together with an increase in sales volumes, revenue rose by 4.2%, from EUR 3,753.7 million to EUR 3,912.4 million in a year-to-year comparison. For the first time in the Steel Division, since the second half of 2016/17 revenue also included deliveries of HBI (sponge iron) to external customers.

In terms of earnings performance, in the business year just ended the division recorded a substantial improvement, even taking into account the start-up losses at the HBI plant in Texas, USA, and the provisions made in the financial statements in the third quarter of 2016/17 for ongoing orders in the heavy plate segment due to the strong rise in coking coal prices since summer 2016. In addition, the performance loss resulting from the extensive renovation of blast furnace 5 in the business year 2015/16 (fine-tuning adjustments to the coal injection system) adversely affected the division’s result in the first quarter of 2016/17.

The operating result (EBITDA) rose by 17.9% in the business year 2016/17, from EUR 478.3 million to EUR 563.9 million compared to the previous year. In percentage terms, profit from operations (EBIT) also improved to a similar extent, recording a plus of 19.6%, from EUR 220.0 million to EUR 263.2 million. Seen in terms of absolute values, the increase in EBIT was smaller than the rise in EBITDA due to the higher depreciation basis, the result of finalizing major investment projects (renovation of blast furnace 5, a new vacuum system at the site in Linz, Austria, and the HBI plant in Texas, USA). In a year-to-year comparison the EBITDA margin improved from 12.7% to 14.4%, and the EBIT margin from 5.9% to 6.7%.

In a direct quarter-to-quarter comparison between the third and fourth quarters of 2016/17, the Steel Division demonstrated a surge in revenue and results which reflects the generally positive economic framework conditions at the start of 2017, as well as traditionally solid demand during the first quarter of the calendar year. Consequently, during the closing quarter of 2016/17 the division not only succeeded in passing on the huge rises in raw material costs to the market, it also increased delivery volumes by around 15% compared to the third quarter of the business year. As a result, revenue rose by 30.3%, from EUR 927.8 million in the third quarter to EUR 1,208.5 million in the fourth quarter. In terms of earnings performance, in a direct quarter-to-quarter comparison EBITDA increased by 41.2%, from EUR 138.1 million to EUR 195.0 million, and EBIT by as much as 83.0%, from EUR 58.7 million to EUR 107.4 million. The EBITDA margin improved during this period from 14.9% to 16.1%, with the EBIT margin rising from 6.3% to 8.9%.

As of March 31, 2017, the Steel Division had 10,898 employees (FTE); this remained constant in comparison to the figure on the reporting date in the previous year (10,891 employees).