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Report on the Group’s business performance and the economic situation

After a relatively optimistic start, the economic situation in the current business year 2014/15 was marked by an increasingly sober mood from the summer months onward. Of the major global economies, only North America remained firmly on its growth path throughout the course of the year. China is struggling more and more to maintain its economic growth, Brazil continues to be plagued by structural problems, Russia is being increasingly tested by Western sanctions, and in Europe, the recovery anticipated for 2014 had to be postponed by (at least) a year.

Once again, the beginning of the current business year was marked by economic optimism in the European Union, however, by mid-year, it was clear that 2014 would be yet another year when the actual economic momentum would not come close to the high expectations in the early part of the year. In addition to the “old,” unsolved structural problems primarily—but not solely—in Southern Europe, the main reason for the disappointing development was a somewhat weaker economic trend in Germany and its neighboring countries during the summer months, caused mainly by political tensions resulting from the Russia-Ukraine conflict. However, the latest signals from the German economy are again pointing to a certain economic revival. For some time, the economic situation in England, Poland, and most recently in Spain as well has been moving in a positive direction, although in the latter country, movement began at an extremely low point. The next months will show whether these incipient developments will—supported by measures to stimulate the economy taken by the new EU Commission and the European Central Bank—create more than a temporary easing of the economic situation.

In contrast to Europe, in North America growth forecasts were raised after the summer months, driven by positive trends from both consumers and investors. In addition to the sustained upward trend of various macroeconomic early indicators, such as the Purchasing Manager Index (PMI), which reached its highest level in several years toward the end of 2014, it is primarily the enormous number of newly created jobs and the resulting dramatic reduction of unemployment, which boost confidence in the economic recovery and which will probably result in an adjustment of the interest rate by the US Federal Reserve in the course of the year.

In China, anxiety about a more broad-based economic slowdown became more pronounced in the course of the current business year. Triggered by a correction in the real estate sector, the early indicator PMI fell below the critical 50-point mark for the first time in some time. The central government reacted to this situation by adopting a more expansive money market policy on one hand and, on the other, by implementing a comprehensive economic stimulus program of around EUR 1.3 trillion, of which the lion’s share of around EUR 900 billion will go to infrastructure projects, in order to guarantee annual minimum growth of 7%.

Just how dramatic the economic situation is in Russia is made abundantly clear by the inflation rate, which reached around 9% toward the end of the year and an interest rate in December 2014 of around 17%. The concurrent massive decline of the ruble highlights the magnitude of the recessive development.

While Brazil shifted from a recession to “mere” economic stagnation in the summer of 2014, the deterioration of the price of oil and other raw materials in conjunction with very negligible political reform momentum makes a rapid return to the growth rates of an emerging economy unlikely.

The voestalpine Group continued to hold its ground successfully in this uneven and inconsistent economic environment due to its broad-based positioning and sophisticated portfolio; in a year-to-year comparison, it again recorded stable revenues and improvements in all reporting categories.

In the first three quarters of the current business year, the Steel Division, (up to now still) mainly focused on the European market, faced a differentiated economic scenario insofar as the quite satisfactory level of demand was contrasted with a price environment that continued to be difficult. Despite deflationary framework conditions—falling raw materials and steel prices—the division maintained its revenue at a stable level and reported considerably higher earnings.

The Special Steel Division profited from its broad-based geographic positioning and substantially grew both revenue and earnings. In the past three quarters, the North American and Asian markets for tool steel and special materials made a particularly significant contribution to the division’s performance; viewed overall, after a rather volatile phase during the summer months, conditions on the European market most recently became more favorable.

The Metal Engineering Division once again reported outstanding results although they did not quite match the previous year’s level with its highly profitable railway infrastructure project business. Overall, the railway infrastructure segment is continuing unabated at a high level, and the other business segments Wire, Seamless Tube, and Welding Technology are enjoying a stable and positive level of demand.

The earnings of the Metal Forming Division performed unusually well during the business year 2014/15 thus far, due primarily to non-recurring effects resulting from portfolio streamlining. At the operational level, performance of the Automotive Parts and Components business segment continues to experience strong demand. Performance of the Tubes & Sections business segment differed widely depending on region, while the Precision Strip business segment was under increasing pressure from the competition. The Warehouse & Rack Solutions business segment continued its very satisfactory performance.

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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
46,461 Employees (FTE, 12/31/2014)

Earnings FY 2013/14

€ 11.2 Billion


€ 1.4 Billion


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