Financial key performance indicators

The Metal Engineering Division’s key figures in the business year 2015/16 were quite solid considering the challenging market conditions in the energy sector. The division increased its revenue by 9.9% from EUR 2,593.0 million in the previous year to EUR 2,850.4 million in the reporting period; this gain is primarily the result of the first-time full consolidation of the revenue generated by voestalpine Tubulars GmbH & Co KG, voestalpine Tubulars GmbH (both Seamless Tubes business segment) and CNTT Chinese New Turnout Technologies Co., Ltd. (Turnout Systems business segment). The equity method had been used by the companies to report financial results up to and including the business year 2014/15 so that their earnings were not included in the voestalpine consolidated financial statements. The increase in earnings is due to non-recurring effects in connection with the acquisition of the controlling interest in the two companies, which were fully consolidated for the first time. In the business year 2015/16, the division reported positive non-recurring effects from reassessments of these two companies based on fair value less depreciation of hidden reserves totaling EUR 126.5 million reported in the operating result (EBITDA) and EUR 63.4 million reported in profit from operations (EBIT).

This also includes the depreciation of intangible fixed assets relative to the hidden reserves disclosed when the method of consolidation was changed for voestalpine Tubulars GmbH & Co KG in the fourth quarter of 2015/16. This need to record an impairment adjustment was caused by the negative market trend, in particular, the prices for oil and natural gas, which have fallen considerably.

Overall, the operating result (EBITDA) improved by 21.7% compared with the previous year, going from EUR 419.8 million to EUR 510.9 million, while profit from operations (EBIT) rose by 7.8% from EUR 292.1 million to EUR 314.9 million. Disregarding any non-recurring effects, EBITDA declined by 8.4% to EUR 384.4 million and EBIT fell by 13.9% to EUR 251.5 million. The adjusted EBITDA margin in the business year 2015/16 is 13.5% (previous year: 16.2%), while the EBIT margin adjusted for non-recurring effects dropped from 11.3% to 8.8%. The outstanding performance in the Railway Systems business segment and the concurrent cost reduction measures in the wake of the challenging conditions in the oil and natural gas sector were not sufficient to fully compensate the extremely weak market in the energy sector.

A quarter-to-quarter comparison of the fourth quarter of 2015/16 with the immediately preceding quarter shows a decrease in revenue of 7.3% from EUR 687.7 million in the third quarter to EUR 637.4 million in the following quarter. Due to project- and accounting-related reasons, business volume for rails and turnout systems in the first calendar quarter was slightly below the level of the fall quarter. EBITDA declined in a quarter-to-quarter comparison by 6.6% from EUR 90.4 million to EUR 84.4 million, while the margin remained stable at 13.2% (margin in the third quarter: 13.1%). EBIT was affected by negative non-recurring effects in both quarters: EUR –6.2 million in the third quarter and EUR –44.5 million in the fourth quarter. Adjusted for the non-recurring effects, EBIT in the fourth quarter was EUR 49.0 million, 15.8% under the figure in the third quarter (EUR 58.2 million) due to seasonal effects. The adjusted EBIT margin declined commensurately from 8.5% to 7.7%.

As of March 31, 2016, the Metal Engineering Division had 12,675 employees (FTE), almost 1,000 persons or 8.5% more than on the same reporting date in the past business year (11,685). This rise is largely due to the fact that the staff of voestalpine Tubulars GmbH & Co KG, voestalpine Tubulars GmbH, and CNTT Chinese New Turnout Technologies Co., Ltd. were included in the overall number of employees as these companies were fully consolidated for the first time.