Business performance of the Metal Forming Division in the first quarter of 2014/15 lagged somewhat behind the very good results of the immediately preceding quarter; however, compared to the previous year (first quarter of 2013/14), the division demonstrated a stable trend.
The Automotive Body Parts business segment maintained the positive trend of the last quarters, due primarily to increasing sales and production figures for compact and sub-compact cars in Europe; the German premium automobile manufacturers in particular had been enjoying full capacity utilization for quite some time as a result of their strong exports. The prospects for the next months continue to be favorable; because of the current level of orders, a number of automobile manufacturers has announced that they will shorten their usual production closures during the summer.
At the beginning of this business year, the Tubes & Sections business segment faced a sharply differing environment both regionally and with regard to market segments. Demand continues to be excellent in both the segment of precision tube components, which are marketed globally for the automotive safety sector, and also for special parts for the aviation industry produced in the USA. Construction activity for both industrial and commercial projects has developed quite dynamically on the British market and in some Central European countries like the Czech Republic and Poland. Demand in Germany was moderate, particularly in the construction and mechanical engineering industries. Due to higher truck sales in advance of the introduction of the Euro 6 environmental standard as of January 2014, sales in this customer segment since then have been increasingly restrained. The political conflicts involving the Ukraine has a dampening effect on sales of tubes and sections in Eastern Europe. In connection with the start-up of the new tube and section plant in Shanghai, tapping the Chinese market has been a challenging proposition. Recently, incoming orders in the Tubes & Sections business segment have been rising slightly so that at least a stable level of demand can be expected for the next months.
In the Precision Strip business segment, the market has been stable for its main products of bimetal and special strip steel. However, due to new capacity that has opened up globally, price pressure here has recently again increased. In the Warehouse & Rack Solutions business segment, project activity continues to be robust; the excellent order situation practically guarantees high capacity utilization and solid results for the entire business year 2014/15.