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Metal Engineering Division

This report is a translation of the original report in German, which is solely valid.

Market environment and business development

In the Metal Engineering Division, the first quarter of 2017/18 basically saw a continuation of the prevailing trends in previous quarters. As a result, the slowdown in the market environment of the Rail Technology segment, which had already made itself felt in the second half of the previous business year, continued unabated at the start of the current business year. No significant increase in investments especially in the European rail network is expected in the course of the year. Moreover, the current activities of mine operators with respect to the maintenance and expansion of their railway infrastructure also remain rather cautious. Due to its comprehensive global positioning, the Turnout Systems segment continued its solid performance in the first quarter of 2017/18. The weakness of the European market was offset especially by the excellent development in Asia. North America is showing the first signs of an upturn in heavy goods traffic, even though no significant improvement is on the horizon.

In market terms, the Wire Technology segment profited particularly from the attractive business climate in the automotive industry. The start-up of the new wire rolling mill is nearing completion, and the plant is expected to be fully operational by the close of the second quarter of 2017/18. The upward trend in the Seamless Tubes segment that started after the summer of 2016 with respect to drilling activities in the USA is continuing. The positive development of this segment has been driven not least by internal technical innovations that significantly boost productivity in shale mining and thus also make investments more attractive than has been the case to date, given low oil and natural gas prices. Although the price level has only been improving incrementally since the fall of 2016, in terms of quantities full capacity utilization was achieved yet again in the first quarter of 2017/18. The Welding Consumables segment continues to face a challenging competitive framework primarily due to the ongoing weakness of the energy sector. The improvement in the segment’s earnings performance compared with the previous year is largely due to the restructuring measures that had been initiated in prior years.

Financial key performance indicators

Quarterly development of the Metal Engineering Division



In millions of euros


Q 1 2016/17


Q 1 2017/18









in %






















EBITDA margin














EBIT margin







Employees (full-time equivalent)







The dampened key performance indicators of the Metal Engineering Division for the first quarter of 2017/18 also reflect the uneven development of the market environment in the individual segments. However, the 13.2% revenue increase in the first quarter of 2017/18 from EUR 680.4 million to EUR 770.0 million stems largely from the structurally higher price level that is rooted in higher pre-material costs, especially those for raw materials. In terms of earnings, at EUR 87.2 million the operating result (EBITDA) was maintained at the previous year’s level (EUR 87.6 million). Given the challenging market situation, the development of EBITDA in the rail segment was weaker, while the more attractive business climate in the oil and gas sector led to an improvement with respect to seamless tubes. At EUR 47.0 million, the profit from operations (EBIT) was 5.4% less than the previous year (EUR 49.7 million) due to the increase in the level of depreciation in the Wire segment. The EBITDA margin decreased from 12.9% to 11.3% against this backdrop, and the EBIT margin from 7.3% to 6.1%.

As of June 30, 2017, the Metal Engineering Division had 13,274 employees (FTE), which represents an increase of 5.3% over the same reporting date of the past business year (12,606 FTE). This increase is rooted primarily in the switch from two-shift operations to four-shift operations in the Seamless Tubes segment due to the improved business climate.

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.


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

Earnings FY 2016/17

€ 11.3 Billion


€ 1.54 Billion


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