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Market environment

Initially, the markets displayed some optimism during the first half of 2013/14 with regard to the economic trend; however, this sentiment was adjusted during the course of these months—not only in Europe. Positive expectations had been triggered by the fact that in spring 2013, the eurozone emerged from the recession and showed some economic growth for the first time since fall 2011. This development was driven by the fact that markets in Central and Northern Europe picked up markedly, while, at the same time, the downward trend in the southern EU periphery slowed.

Over long stretches of the first months of the current business year 2013/14, North America continued the positive trend that marked previous periods. However, in September/October, negotiations about the debt ceiling in the USA led to political upheaval that finally resulted in a government shutdown. It is still difficult to estimate the full scope of the economic effects of this shutdown, especially since the USA could be facing a second round of turmoil in January/February 2014. Due to the size of the US economy and the interdependence of global economic activity, negative effects on the national US economy and adverse impact on other important economies as well cannot be ruled out.

Due to its economic situation in the first two quarters of the current business year, South America was not able to return to its “old” growth rates. Domestic demand in Brazil, still the most important South American country for voestalpine, is still at a satisfactory level overall and will probably continue to be the driver of moderate economic growth on the continent. However, exports are not expected to provide any significant support toward an economic recovery.

After a volatile phase in the early part of the calendar year, the situation in Asia, especially in China, is a positive contrast to the underlying global trend that is still subdued. The growth expectations for the PRC were recently even raised to above the 7% mark. This is largely due to the announcement by the central government that continuing, massive investments in infrastructure are being planned. It is true that the country’s development in the direction of a consumer-oriented economy does not drive these projects forward, but it creates at least a solid basis for now for comparatively stable growth rates.

In recent months, there were no dramatic changes in the economic trends in the individual market segments. The construction industry is still weak and is showing few signs of a recovery in the short or medium term. The energy sector also continues to be mostly lackluster. Major projects in the oil and natural gas industries in particular were pushed back; however, exploration activities continued to be at a good level, not least due to the still high oil price. Power plant construction in Europe has not yet shaken off its weak performance in 2013, and most of the new projects were implemented in Asia (China and India).

The automobile industry has been able to maintain its production rates in Europe at a relatively stable level, largely due to strong exports by German premium brands. Long-term sales figures in Europe itself reached a new trough in the summer of 2013, but from today’s vantage point, this could mean a trend reversal.

The mechanical engineering industry most recently continued its rather volatile trend, primarily due to the economic situation in the emerging markets that continues to be inconsistent.

Viewed globally, the white goods and consumer goods industries were quite solid at a satisfactory level. Viewed overall, in the first half of 2013/14, it was private consumption that buttressed the economic landscape in practically all economies—particularly the ones that have become saturated.

Both the aviation industry and the international railway infrastructure markets have profited from continuing solid demand, and it was especially the latter that was able to more than compensate for the weaknesses in Europe that still persist.

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  • Share price as of September 30, 2013 (euros) 35.35    EPS – Earnings/share (euros) 0.47    Dividend/share (euros) 0.90
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