Market environment and business development

In Europe, the initially positive development in the business year 2011/12 deteriorated in the course of the year as a result of increasing uncertainty about the effects of the high level of sovereign debt in a number of countries in the euro zone. Furthermore, the strong momentum from growth regions, such as China, slowed in the latter part of the business year.

This overall economic situation is reflected in the business performance of the Profilform Division. After a very strong first quarter, with a high level of demand in virtually all major customer industries, its performance was dampened, however, in the final quarter of the year under review, it returned again to a satisfactory level.

Customers of the Profilform Division (pie chart)

The business segment Tubes and Sections reported a quite positive momentum in demand throughout the year, especially from the commercial vehicle and agricultural machinery sectors, both on the division’s core markets in Europe and North America and in the growth regions of China, India, and Brazil.

The significant roll-back of public subsidies for alternative energies in Europe resulted in a decline in the solar energy sector, which was not unexpected, with a significantly decreased number of new projects. The hoped for more broad-based recovery in the construction and construction supply industries did not occur. Especially in Russia, this sector’s development continued to be disappointing.

In the Precision Strip sector, demand was extraordinarily robust until the end of the 2011 calendar year, with considerable volume increases in all customer segments. A slight decline in incoming orders did not make itself felt until the end of the business year.

The Storage Technology segment profited from the continuing positive level of demand from the logistics sector, with numerous major projects being contracted not only in Europe, but in North America as well. Incoming orders and order backlog developed very satisfactorily and resulted in good capacity utilization that continued throughout the year.

Markets of the Profilform Division (pie chart)

From a regional perspective, market development was characterized by satisfactory business performance in Europe and an uptrend in North America. While demand in Europe became increasingly subdued toward the end of the business year, the positive mood in the USA settled in. Eastern Europe, on the other hand, and Russia in particular generally fell short of expectations in the year under review.

Business development in Brazil was also only at an average level. The strength of the Brazilian currency, high borrowing costs, and strong fluctuations of the local pre-material prices had a negative effect on demand.

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