Report on the financial key performance indicators of the voestalpine Group

At –1.5%, from EUR 5,643.4 million in the first half of 2013/14 to EUR 5,561.1 million in the first six months of the business year 2014/15, the voestalpine Group’s revenue this year was down slightly. The sole reason for the dip was the closure of the standard rail production in Duisburg as of the end of 2013 and the resulting decrease in the Metal Engineering Division’s delivery volume. In contrast, all other divisions in the Group boosted their revenue. The weaker level of prices, which is due to raw materials and pre-material costs that continue to fall, had an overall negative impact on revenue in the first half of 2014/15.

At EUR 756.9 million, the operating result (EBITDA), which was markedly higher in the current business year by 11.2%, includes non-recurring effects in the Metal Forming Division totaling EUR 66.5 million due to the sale of the Flamco Group in August 2014, the agreement executed in late September 2014 to sell the automotive companies voestalpine Polynorm Van Niftrik B.V. and voestalpine Polynorm Plastics B.V., and the structural reorganization of pension obligations in individual companies in the Netherlands, which are part of the Metal Forming Division, also in the second quarter of 2014/15. Adjusted for these non-recurring effects, EBITDA rose by 1.5% from EUR 680.4 million in the previous year to EUR 690.4 million this year; as a result the (adjusted) EBITDA margin went up from 12.1% to 12.4%. The (unadjusted) profit from operations (EBIT) rose by 12.2% from EUR 396.3 million to EUR 444.7 million. Adjusted by the non-recurring effect of EUR 45.2 million due to the one-time effect detailed above and reduced by a write-down of individual assets that are not part of the core business, EBIT came to EUR 399.5 million in the first half of 2014/15, which corresponds to an increase of 0.8%. The adjusted EBIT margin was therefore at 7.2% (previous year: 7.0%). With the exception of the Metal Engineering Division, which, however, still remains the strongest division in terms of margins, all of the divisions reported a gain in both operating result and profit from operations in the first half of 2014/15.

Although gross financial debt increased as of the reporting date of September 30, 2014, due primarily to the reclassification of the hybrid bond 2007 from equity to borrowed capital, interest charges were significantly reduced. Recognition of the entire hybrid bond 2007 as part of borrowed capital became necessary as a result of the resolution adopted by the Management Board of voestalpine AG in September 2014 to call the entire issue of this bond as of the first possible call date, i.e., October 31, 2014. Interest charges declined primarily because interest rates fell considerably in a year-to-year comparison; as a result, the improvement in the profit before tax of 25.5% from EUR 312.1 million to EUR 391.7 million was very substantial. After deduction of the non-recurring effect of EUR 45.2 million, profit before tax in the first six months of the current business year was still EUR 346.5 million or 11.0% above the previous year’s figure.

Profit for the period gained 35.9%, going from EUR 238.4 million to EUR 324.0 million. Without taking the non-recurring effects (EUR 43.4 million) into account, the adjusted profit for the period is EUR 280.6 million, also an improvement compared to the previous year of 17.7%. This is a result of the increase in profit before tax and a decrease of the tax rate. Thus, earnings per share were EUR 1.65 in the first six months of the current business year, a sharp rise of +43.5% compared to the previous year’s figure of EUR 1.15. The adjusted earnings per share for the first half of 2014/15 were EUR 1.40 or 21.7% higher than last year’s figure.

As of September 30, 2014, equity fell year-to-year by 2.6%, going from EUR 5,062.3 million to EUR 4,931.5 million. Compared to the reporting date of March 31, 2014 (EUR 5,261.0 million), equity fell by 6.3%. This decline is largely due to the previously described reclassification of the hybrid bond 2007, which was called in September 2014, from equity to borrowed capital totaling EUR 500 million as of September 30, 2014 as well as dividend payments amounting EUR 170 million in the second quarter of 2014/15. As a result of the early redemption of the hybrid bond 2007, net financial debt went up year-to-year by 22.4% from EUR 2,368.3 million (adjusted retroactively) to EUR 2,898.8 million. Compared to the reporting date of March 31, 2014 (EUR 2,421.4 million, adjusted retroactively), there was an increase of 19.7%. Due to these changes in the Group’s financing structure, the gearing ratio (net financial debt in percent of equity) rose in the first six months of the business year 2014/15 from 46.0% to 58.8%.

As of September 30, 2014, the voestalpine Group had 47,379 employees (FTE); this corresponds to an increase of 0.5% compared to the figure of 47,126 employees (FTE) twelve months ago.