Business performance and
financial key performance indicators*

The sustained challenging economic environment is reflected in the development of the financial key performance indicators of the voestalpine Group. In a year-to-year comparison, revenue declined by 7.6% from EUR 3,001.7 million to EUR 2,772.4 million, caused primarily by the increasingly noticeable deterioration of demand in the oil and natural gas sector, which affected all of the Group’s divisions with the exception of the Metal Forming Division. An (uncommented) comparison of the earnings with the previous year has limited informative value due to non-recurring effects stemming from changes in consolidation in the Metal Engineering Division, which resulted in significant positive non-recurring effects in EBITDA and EBIT in the first quarter of the previous year. (Decline of EBITDA by 36.6% from EUR 526.6 million in the first quarter of 2015/16 to EUR 333.9 million in the first quarter of 2016/17; EBIT down by 54.5% from EUR 368.4 million in the first quarter of 2015/16 to EUR 167.6 million in the first quarter of 2016/17).

Excluding the non-recurring effects, the picture is much more positive; nevertheless, the economic environment has left its mark on the Group’s operating result. In a year-to-year comparison of the first quarter, adjusted EBITDA fell by 14.2% from EUR 389.0 million to EUR 333.9 million, and adjusted EBIT declined by 27.6%, from EUR 236.9 million to EUR 171.5 million (before application of purchase price allocation).

In addition to negative operational effects in the first quarter of the business year 2016/17, the Steel Division also reported negative aperiodic impacts resulting from the start-up costs for the new direct reduction plant in Corpus Christi, Texas, USA, and the adjustment-related reduced performance of a blast furnace in Linz, which had been extensively renovated in the last business year. Overall, these two non-recurring effects had a negative impact of EUR 20 million on EBITDA and EBIT of the Steel Division and thus of the Group in the first quarter of 2016/17.

Furthermore, changes in the interest rates in the valuation of employee benefits resulted in negative effects in both income (about EUR –6 million) and—to a much greater extent—in equity (EUR –71 million). This was the primary reason for the increase in the gearing ratio (net financial debt in percent of equity) from 53.4% in the previous year (or from 54.5% as of the reporting date of March 31, 2016) to 55.9% as of June 30, 2016.