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18. Pensions and other employee obligations

 

 

03/31/2016

 

03/31/2017

 

 

 

 

 

Provisions for severance payments

 

598.0

 

605.7

Provisions for pensions

 

491.4

 

476.9

Provisions for long-service bonuses

 

139.7

 

143.8

 

 

1,229.1

 

1,226.4

 

 

 

 

 

In millions of euros

Provisions for severance payments

 

 

2015/16

 

2016/17

 

 

 

 

 

Present value of defined benefit obligation (DBO) as of April 1

 

606.0

 

598.0

 

 

 

 

 

Service costs for the period

 

14.6

 

12.9

Past service costs

 

0.3

 

0.2

Interest costs for the period

 

9.3

 

11.0

Gains (–)/losses (+) on plan settlement

 

–0.6

 

0.0

Changes in the scope of consolidated financial statements

 

26.1

 

0.0

Severance payments

 

–27.8

 

–31.3

Actuarial gains (–)/losses (+) due to changes in financial assumptions

 

–27.4

 

19.3

Actuarial gains (–)/losses (+) due to experience-based adjustments

 

0.5

 

–4.4

Plan settlements

 

–2.9

 

0.0

Other

 

–0.1

 

0.0

Present value of defined benefit obligation (DBO) as of March 31

 

598.0

 

605.7

 

 

 

 

 

In millions of euros

Provisions for pensions

 

 

Present value of DBO

 

Plan assets

 

Provisions for pensions

 

 

 

 

 

 

 

As of April 1, 2015

 

905.5

 

–379.5

 

526.0

 

 

 

 

 

 

 

Service costs for the period

 

10.3

 

0.0

 

10.3

Past service costs

 

–0.5

 

0.0

 

–0.5

Net interest for the period

 

15.3

 

–5.7

 

9.6

Return on plan assets (excluding amounts included in net interest)

 

0.0

 

15.3

 

15.3

Gains (–)/losses (+) on plan settlement/curtailment

 

–7.6

 

0.0

 

–7.6

Changes in the scope of consolidated financial statements

 

5.8

 

–3.4

 

2.4

Pension payments

 

–34.2

 

18.8

 

–15.4

Net exchange differences

 

–8.7

 

5.8

 

–2.9

Employer contributions/repayments

 

0.0

 

2.3

 

2.3

Contributions by plan participants

 

0.0

 

–0.5

 

–0.5

Actuarial gains (–)/losses (+) due to changes in financial assumptions

 

–46.2

 

0.0

 

–46.2

Actuarial gains (–)/losses (+) due to changes of demographic assumptions

 

0.4

 

0.0

 

0.4

Actuarial gains (–)/losses (+) due to experience-based adjustments

 

–1.7

 

0.0

 

–1.7

Plan settlements

 

–64.2

 

64.2

 

0.0

Other

 

–0.2

 

0.1

 

–0.1

As of March 31, 2016

 

774.0

 

–282.6

 

491.4

 

 

 

 

 

 

 

In millions of euros

Provisions for pensions

 

 

Present value of DBO

 

Plan assets

 

Provisions for pensions

 

 

 

 

 

 

 

As of April 1, 2016

 

774.0

 

–282.6

 

491.4

 

 

 

 

 

 

 

Service costs for the period

 

9.8

 

 

 

9.8

Past service costs

 

–0.5

 

 

 

–0.5

Net interest for the period

 

16.9

 

–6.1

 

10.8

Return on plan assets (excluding amounts included in net interest)

 

 

 

–22.0

 

–22.0

Gains (–)/losses (+) on plan settlement/curtailment

 

–8.0

 

 

 

–8.0

Changes in the scope of consolidated financial statements

 

–0.1

 

 

 

–0.1

Pension payments

 

–35.0

 

19.4

 

–15.6

Net exchange differences

 

0.8

 

1.7

 

2.5

Employer contributions/repayments

 

 

 

–15.3

 

–15.3

Contributions by plan participants

 

 

 

–0.6

 

–0.6

Actuarial gains (–)/losses (+) due to changes in financial assumptions

 

36.4

 

 

 

36.4

Actuarial gains (–)/losses (+) due to changes of demographic assumptions

 

–4.2

 

 

 

–4.2

Actuarial gains (–)/losses (+) due to experience-based adjustments

 

–5.5

 

 

 

–5.5

Plan settlements

 

 

 

 

 

0.0

Other

 

–0.9

 

–1.3

 

–2.2

As of March 31, 2017

 

783.7

 

–306.8

 

476.9

 

 

 

 

 

 

 

In millions of euros

In the business year 2016/17, the obligation to active employees to make an additional payment to the national health care plan in their pension phase was eliminated at a Brazilian company. Provisions were therefore adjusted in line with the obligations to the remaining beneficiaries.

The conversion of pension obligations from defined benefit pension plans to defined contribution plans for a number of Dutch companies, which was initiated in 2013, was completed in the business year 2015/16.

The major categories of plan assets for the periods presented in the consolidated financial statements as of March 31, 2017, are as follows:

2015/16

 

 

 

 

 

 

Category

 

Assets with quoted market price in an active market

 

Assets without quoted market price in an active market

 

Total assets

 

 

 

 

 

 

 

Debt instruments

 

48.6%

 

0.0%

 

48.6%

Equity instruments

 

25.7%

 

0.0%

 

25.7%

Property

 

0.7%

 

2.3%

 

3.0%

Cash and cash equivalents

 

7.1%

 

0.1%

 

7.2%

Insurance

 

0.0%

 

9.9%

 

9.9%

Other assets

 

5.6%

 

0.0%

 

5.6%

Total

 

87.7%

 

12.3%

 

100.0%

2016/17

 

 

 

 

 

 

Category

 

Assets with quoted market price in an active market

 

Assets without quoted market price in an active market

 

Total assets

 

 

 

 

 

 

 

Debt instruments

 

43.8%

 

0.0%

 

43.8%

Equity instruments

 

30.7%

 

0.0%

 

30.7%

Property

 

0.0%

 

2.2%

 

2.2%

Cash and cash equivalents

 

5.7%

 

0.1%

 

5.8%

Insurance

 

0.0%

 

9.0%

 

9.0%

Other assets

 

8.4%

 

0.1%

 

8.5%

Total

 

88.6%

 

11.4%

 

100.0%

The plan assets include own shares with a fair value of EUR 1.0 million (March 31, 2016: EUR 0.9 million).

The average expected return is determined by the portfolio structure of the plan assets, empirical data, and estimates of future investment returns. The calculation of the provisions for pensions was based on an expected (average) interest rate of 2.2% on plan assets. The actual interest rate was 9.9%.

The amount recognized as an expense in the income statement for defined contribution plans is EUR 29.6 million (2015/16: EUR 26.9 million).

The sensitivity analysis of the key actuarial assumptions used to determine defined benefit obligations is depicted below:

Sensitivities

 

 

Interest rate

 

Salary/wage increases

 

Pension increases

 

 

+1.0%

 

–1.0%

 

+0.5%

 

–0.5%

 

+0.25%

 

–0.25%

 

 

 

 

 

 

 

 

 

 

 

 

 

Pensions

 

–13.3%

 

+16.9%

 

+0.8%

 

–0.8%

 

+3.1%

 

–3.0%

Severance

 

–10.1%

 

+12.0%

 

+5.6%

 

–5.2%

 

 

 

 

Group-wide figures were determined for the effects associated with the interest rate, wage and salary increases, and pension increases. The sensitivities are not determined by way of estimates or approximations, but by way of comprehensive analyses, which vary the parameters.

For the business year 2017/18, the expected contributions to the defined benefit plans amount to EUR 2.5 million.

The interest-weighted, average duration for pension plans is 15.1 years and 11.1 years for severance payments.

Provisions for long-service bonuses

 

 

2015/16

 

2016/17

 

 

 

 

 

Present value of long-service bonus obligations (DBO) as of April 1

 

135.3

 

139.7

 

 

 

 

 

Service costs for the period

 

8.8

 

8.8

Interest costs for the period

 

2.0

 

2.5

Changes in the scope of consolidated financial statements

 

5.8

 

0.0

Long-service bonus payments

 

–9.0

 

–9.0

Actuarial gains (–)/losses (+) due to changes in assumptions

 

–6.6

 

5.0

Actuarial gains (–)/losses (+) due to experience-based adjustments

 

3.6

 

–1.7

Other

 

–0.2

 

–1.5

Present value of long-service bonus obligations (DBO) as of March 31

 

139.7

 

143.8

 

 

 

 

 

In millions of euros

Expenses/revenue relative to provisions for severance payments, pensions, and long-service bonuses recognized in the income statement are categorized as follows:

 

 

2015/16

 

2016/17

 

 

 

 

 

Service costs for the period

 

33.5

 

31.2

Net interest for the period

 

20.9

 

24.3

Gains (–)/losses (+) on plan settlement/curtailment

 

–8.2

 

–8.0

Actuarial gains (–)/losses (+) from long-service bonus obligations

 

–3.0

 

3.3

Expenses/revenue recognized in the income statement

 

43.2

 

50.8

 

 

 

 

 

In millions of euros

Net interest for the period is recognized in finance costs.


About voestalpine

In its business segments, voestalpine is a globally leading technology and capital goods group with a unique combination of material and processing expertise. With its top-quality products and system solutions using steel and other metals, it is a leading partner to the automotive and consumer goods industries in Europe and to the aerospace, oil and gas industries worldwide. The voestalpine Group is also the world market leader in turnout technology, special rails, tool steel, and special sections.

Facts

50 Countries on all 5 continents
500 Group companies and locations
50,000 Employees worldwide

Earnings FY 2016/17

€ 11.3 Billion

Revenue

€ 1.54 Billion

EBITDA

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