Business development of the Metal Forming Division in the first half of 2014/15 was characterized by positive sentiment in the European automobile industry but also by a slowdown in other business segments.
The Automotive Body Parts business segment was able to rely on excellent demand from the German premium automobile manufacturers who continue to count on their strong export performance. However, production of sub-compact and compact cars in Europe has also significantly increased compared to the previous year; individual manufacturers are profiting from the successful market launch of new models. The somewhat weaker production figures for the month of August visible in the detailed comparison to last year are mainly due to accelerated reduction of inventory levels by automobile manufacturers in the wake of high production numbers in the previous month and do not indicate a trend reversal.
The development of the Tubes & Sections business segment in the first six months of the business year 2014/15 was somewhat weaker than in the previous year, although this trend differed according to region. Demand momentum from Germany and France was diminished compared to the previous year, while the performance of the British market and the markets in some Central European countries, such as the Czech Republic and Poland, were satisfactory. Business in the USA was characterized by momentum of demand that was broadly based, while the markets in Brazil have been increasingly facing competitive disadvantages resulting from state over-regulation. As far as the most important customer segments in this business area are concerned, recent months saw a decline in sales of trucks that was more significant than expected, due to stepped up purchases in advance of the introduction of the Euro 6 environmental standard at the beginning of the 2014 calendar year. The agricultural machinery segment, which had a solid level of demand in recent years, has also come under increasing pressure due to cautiousness in new investment resulting from the low prices for basic foodstuffs. However, the order situation for precision tube components for the automobile industry, which are sold worldwide, was very favorable; the same applies for special parts for the aviation industry.
The Precision Strip business segment enjoyed a stable development, although price pressure is increasing because production capacity is being built up in the Far East. A weakening of the euro, however, could bring competitive advantages in exports in the future for bimetal and special strip steel, this segment’s core products.
In the Warehouse & Rack Solutions business segment, the excellent level of incoming orders continued in the first half of 2014/15 so that full capacity utilization has already been ensured for the entire current business year.
In the Metal Forming Division, the past six months saw a significant streamlining of its portfolio. With the sale of the Flamco Group, which specializes in heating and drinking water installations, that closed in August 2014 (closing), and of the automotive plastic component manufacturers voestalpine Polynorm Van Niftrik B.V. and voestalpine Polynorm Plastics B.V., for which the agreement was executed in September 2014 (signing), the Metal Forming Division has set a course that is keenly focused on its core business. In connection with the streamlining of the portfolio and a separate revaluation of individual assets that do not form a part of the division’s core business, as well as a structural reorganization of pension obligations in the divisional companies located in the Netherlands, there was a positive non-recurring effect on EBITDA in the second quarter of 2014/15 of EUR 66.5 million and on EBIT of EUR 45.2 million.