While practically the entire was characterized by a broadly-based downward trend in most of the economic regions worldwide, the first months of the current business year 2013/14 showed a certain stabilizing trend for the first time after a one-year-long downtrend, albeit naturally at a low level. The performance of the voestalpine Group confirms this trend insofar as the first quarter of the new business year brought very few changes in the most important key figures in comparison to the immediately preceding quarter.
Development of the major industrial sectors was also largely constant during the last six months. Demand in the entire construction and construction supply sector—especially in Southern and Eastern Europe—remained weak. With the exception of the month of April, the European automtive industry reported declining registration figures on the domestic market and—looking at a longterm comparison as well—has now reached a very low level. The premium manufacturers, who are strongly export-oriented, were the only ones who could compensate this development due to significant delivery volumes to Asia and North America so that their production figures (actual number of produced cars) are still trending upward. However, the development of production figures of the other manufacturers has recently also indicated that a certain stabilization can be expected in the course of the year.
In the first quarter of the current business year, the energy sector demonstrated a performance that has continued to be varied both according to economic regions and market segments. While projects in the pipeline sector have continued to experience a cautious climate worldwide, exploration activities—albeit regionally differentiated—continued to be at a solid level when viewed globally. In the energy engineering industry (power plant and turbine construction), however, demand, which has been restrained for quite some time, continued at that subdued level in the most recent quarter as well.
Both the consumer and the white goods sectors continued to be largely stable at a solid level where they have been since the fall of 2012, and the aviation industry also continues to be characterized by strong demand.
The railway infrastructure sector, which has been performing highly satisfactorily for quite some time, maintained its positive level during the most recent quarter; the strong level of demand in non-European markets more than made up for the weakness of the European markets as Southern Europe especially has not experienced any recovery trends.
Viewed overall, in the spring of 2013, the European economic region continued to demonstrate the same subdued economic trend of the past quarters. The economic drivers of recent years, China and Brazil, have also suffered a decline in their economic momentum in the course of last year; however, in recent months their development was again relatively stable, albeit at a significantly weaker level. The economic climate in North America, which has been quite positive overall, could not be translated into an upward momentum in demand in the first quarter of 2013/14.
The economic environment of significant segments of the voestalpine Group has been and continues to be marked by cautious buying patterns among its customers.
Continuing price volatility of raw materials (iron ore, coal, and scrap) has resulted in frequent but relatively short-term price fluctuations on the sales end of the spectrum—not only in the Steel Division. Nevertheless, by accelerating the implementation of its downstream strategy (strategy aimed at extending its value chain), the voestalpine Group is able to increasingly prevent these fluctuations from significantly affecting its corporate operating results so that—all in all—its performance is stable at a solid level.