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Looking back at the past business year 2014/15, it must be stated that the expectations at the beginning of the year, namely, a transition of the global economic trend from its crisis mode, which has now lasted for five years, to a broad-based upwards trend have once again not been fulfilled. Apart from the USA and Mexico, a few countries in Southeast Asia, and individual European countries, reality ultimately fell far short of the original hopeful predictions, just as it had in previous years.

Basically, the assessment of the development from voestalpine’s perspective exactly one year ago came quite close to the truth. “Despite this improved economic environment, it would be premature to speak of a broad-based global trend reversal. However, it might be possible to create those prerequisites in 2014 to enable a more significant upward trend of the global economy than has been the case in recent years.”

Even with everything that has occurred in the past year—the decline of the oil price, significant shifts in the rates of exchange of major currencies, continuing escalation of the Russia-Ukraine conflict, and the spread of strife in a number of Middle Eastern countries—all of which does not exactly promote a reduction of economic tensions at the international level—the overall economic trend should at least continue to stabilize in 2015.

For the first time in a number of years, a positive contribution by Europe can be anticipated, as the stabilization of the budgets in several EU—particularly Southern European—member states and fiscal stimulus measures by the EU Commission and the European Central Bank are resulting in economic revitalization effects. The anticipated growth of the Indian economy should furthermore bring a positive momentum to the global economy as well. In North America, the economic situation in Mexico in particular continues to be encouraging. In the USA, however, the strong upward trend of the past two years is expected to lose some of its momentum in the course of the year. The situation in China is characterized by the challenging transition from an economy that is dominated by state investment and intervention to a consumption-driven economy. Nevertheless, China should again achieve growth of around 7% in 2015, albeit increasingly in more sophisticated economic segments than in the past as it shifts away from commodity capitalism. In most of the economies in Southeast Asia, the development in 2015 should continue to be positive. In Brazil, on the other hand, the situation is critical and there is reason to fear that it will take longer than the next six—or even twelve—months to find solutions to its home-made problems. It is difficult to predict the future of the Russia-Ukraine conflict. However, regardless of how it develops, the global economic effects of this conflict will continue to be more or less moderate.

The most important customer industries are sending very different signals for the second half of 2015 with regard to indications of future demand. Continuing very strong global development—most recently including Europe as well—in the automotive industry is contrasted by the energy sector that is marked by considerable uncertainty. However, the sharp decline of prices of raw materials in the past months, especially of oil, has shifted to a phase of consolidation so that this should mean a certain market stability for the rest of 2015. The situation in the alternative energy sector is largely stable and continues to have a favorable outlook. However, the conventional energy production sector has fewer and fewer future prospects as a result of the energy transition or energy paradigm shift so that it is definitively facing massive structural changes—not just in Europe. The situation of the construction and construction supply industries is currently characterized by differences that vary sharply from region to region. While this industrial sector is expected to continue to recover in Europe—assisted by both national and EU-wide incentive programs—the last uptrend seems to have already peaked not only in China, but in the USA as well, and the classic signs of a bubble are again increasing. The development of the consumer goods, white goods, and electrical industries is largely unremarkable, while the mechanical engineering sector has shown growing momentum in recent months, especially in Germany, after going through a mostly weaker phase in the past year. The aviation sector continues to be fueled by strong demand in 2015, and the development in the railway infrastructure sector also remains solid, driven primarily by a broad-based revival of demand in Europe, a market in North America that continues to be strong, and a railway infrastructure sector in China that is still expanding.

Against this economic backdrop, it is expected that both the Steel and Special Steel Divisions of the voestalpine Group will see full capacity utilization and stable or somewhat rising prices due to their focus on high quality, sophisticated steel grades based on state-of-the-art technology, and the cost-cutting and efficiency improvement programs that have been implemented. From today’s vantage point, this development should continue beyond the first half of the business year as long as the situation in the current political trouble spots does not escalate and new hotspots do not materialize. It should be possible for both divisions to largely compensate the difficult situation in the oil and natural gas sector, both with regard to demand and price, by way of other projects. The Metal Engineering Division’s activities relating to oil field pipes will probably be more severely impacted by this situation in the next months because, as of the beginning of the new business year, significant contractual agreements with the US joint venture partner are being fundamentally revised and there will be a shift from at equity consolidation to full consolidation. The impact of this weakening in the oil and natural gas sector on the division’s earnings should remain quite manageable as the traditionally high degree of stability of its other business segments, both with regard to volumes and prices, is not expected to change in the new business year. The Metal Forming Division, which does business primarily with the automotive industry, should profit from the continuing strong development of this sector in the course of the year, especially because the numerous plants being put into operation at new, international locations will provide additional support and security as a result of the favorable economic situation.

Against this backdrop, in the business year 2015/16, the voestalpine Group should be able to not only defend the leading position it has acquired in the past years in technology and quality as well as efficiency and earnings vis-à-vis its competitors but expand it. The new investments undertaken in recent years at a number of sites in all divisions that are now beginning to bear fruit and the continued consistent implementation of the EUR 900-million program to optimize earnings will do their part to support this development. Furthermore, the uncompromising implementation of the downstream strategy, which has been pursued by the Group for 15 years, is leading toward the definitive departure from the classic earnings mechanisms of the steel industry in favor of both higher and more stable margins in sophisticated industrial sectors. Based on the current economic situation, it can be anticipated that in the business year 2015/16, the voestalpine Group will record further improvement compared to the business year just ended in both operating result (EBITDA) and profit from operations (EBIT), before any non-recurring effects and changes in the scope of consolidation.

Linz, May 22, 2015

The Management Board


Wolfgang Eder

Herbert Eibensteiner

Franz Kainersdorfer

Robert Ottel

Franz Rotter

Peter Schwab

About voestalpine

The voestalpine Group is a steel-based technology and capital goods group that operates worldwide. With its top-quality products, the Group is one of the leading partners to the automotive and consumer goods industries in Europe and to the oil and gas industries worldwide.


50 Countries on all 5 continents
500 Group companies and locations
48,100 Employees worldwide

Earnings FY 2014/15

€ 11.2 Billion


€ 1.5 Billion


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