Proactive risk management, as it has been understood by and practiced in the voestalpine Group for many years, serves both to ensure the existence of the Group as a going concern in the long term and boost its value and thus is key to the success of the Group overall. As part of the systematic risk management process, which is undertaken groupwide several times a year in uniform fashion, and as part of internal control systems, which are also integral elements of the Group’s structural and workflow organization, potential risks are systematically recorded, analyzed, assessed, and subjected to permanent monitoring; appropriate measures to minimize risks are taken as necessary.
The risk environment of the voestalpine Group in the first six months of the current business year as well as compared with the previous years has remained largely unchanged. Material fields of risk (such as the availability of raw materials in the required quantity and quality, the loss of critical production facilities, the loss of critical IT systems, the CO2 issue, knowledge management, or financial risks) and the respective precautionary measures thus have remained largely the same. The material fields of risk and the respective measures to minimize risk, which are presented and described in detail in the Annual Report 2016/17 of the voestalpine Group (Annual Report 2016/17, “”) thus remain valid for this Management Report for the first half of the current business year.
To supplement the explanations in the Management Report for the business year 2016/17 regarding the Austrian energy tax rebate, note that the Federal Finance Court (Bundesfinanzgericht) has directed a request for a preliminary ruling to the European Court of Justice (ECJ) (BFG 10.31.2014, RE/5100001/2014). The amendment of the Austrian Energy Tax Rebate Act (Energieabgabenvergütungsgesetz) by means of the 2011 Austrian Budget Accompanying Act (Budgetbegleitgesetz (BudBG)), which applies to periods after December 31, 2010, limited the energy tax rebate to manufacturing companies. Subsequently, the question as to whether this restriction, which may be deemed state aid, violated European Union law was submitted to the ECJ for a preliminary ruling; the highest court has by now answered the question in the affirmative (ECJ 07.21.2016, docket no. C-493/14, Dilly’s Wellnesshotel GmbH). This means that the restrictions envisioned in the Budget Accompanying Act 2011 have not taken effect. Therefore, service providers, in particular, can retroactively apply for the energy tax rebate with respect to periods after February 1, 2011. In its subsequent ruling, the Federal Finance Court declared that the restriction to manufacturing companies did not enter into effect. The Austrian fiscal authorities appealed this decision to the Austrian Higher Administrative Court (Verwaltungsgerichtshof), which in September 2017 (decision dated 09.14.2017, EU 2017/0005 and 0006-1) again sought recourse with the ECJ. No adverse impact is anticipated for the voestalpine Group.
Based on the insights gained from the economic and financial crises in the recent past and their effects on the voestalpine Group, in recent years additional—primarily corporate—measures were taken to minimize the Group’s risk exposure, which were also described in detail in the Annual Report 2016/17, and these measures have been and are being consistently implemented in the current business year. For example, this entails conducting ongoing analyses of the effects, if any, of the Brexit decision on affected business segments.
The measures that have been put in place to avert or prevent identified risks aim to reduce potential losses and/or minimize the likelihood of losses occurring.
It must be stated that, as of the date of this Management Report for the first half of the current business year, the risk exposure of and resulting uncertainties in the voestalpine Group are limited and manageable and do not threaten the continuation of the Group as a going concern. There are no such threats to the Group in the future, nor are any such risks discernible as of the semi-annual reporting date.