Only two months after the outlook for 2012/13 set forth in the Annual Report for the business year 2011/12, it is impossible not to repeat oneself. No matter how much we wanted things to be different considering the not very optimistic forecasts, from the current perspective the economic expectations remain under pressure across the board. There are no major changes, neither with regard to the regional outlook nor concerning the outlook for the various sectors.

The situation in Europe continues to be dominated by the topics debt and euro crisis, which remain unsolved, and thus, the economic mood is still subdued. For the time being, the threshold countries, China, India, and Brazil, are not showing any signs of returning to their former growth levels, and the economic expectations for the USA are being repeatedly revised. Skepticism is dominating even the most important industries with regard to expectations for the second half of 2012. The construction and construction supply industries have been lingering at a modest level for quite some time; in the automobile industry, production expectations for the rest of the year are being scaled back not just for the mass market; and the energy sector has most recently lost a great deal of its momentum, both in the conventional and the alternative sectors. Demand in the mechanical engineering, aviation, and railway infrastructure sectors continues to be relatively stable, and the market situation for white goods and the consumer goods industry has improved slightly since the early part of the year.

The European steel industry is suffering more than ever from massive structural overcapacities, particularly in the flat products segment. Continuing weak demand combined with falling raw materials prices is resulting in ongoing destructive price wars.

The fact that the Steel Division of the voestalpine Group has spent the last 15 years consistently differentiating itself from the competition, both with regard to technology and quality, is enabling it to achieve both full capacity utilization and satisfactory profits for the coming months.

This confirms yet again how right our longstanding, consistent policy of extending the value chain down to the end user in demanding niche sectors has been. This has enabled the voestalpine Group to develop from a steel production to a leading processing and technology Group in promising, future-oriented market segments. The development of the Special Steel, Metal Engineering, and Metal Forming Divisions, which are active in just such segments, has been comparatively stable, both with regard to revenue and profit. These three divisions generated more than two thirds of the revenue and almost 80% of the operating results during the first quarter of the business year, and, from today’s perspective, this should enable us to again attain the previous year’s adjusted profit from operations (EBIT) of around EUR 900 million, confirming the forecast made at the beginning of the business year. This presupposes, however, that the economic environment does not experience additional turbulence, for example, an escalation of the euro crisis or a sustained economic slowdown in the threshold countries.

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