Financial key performance indicators

The key performance indicators of the Metal Engineering Division in the first half of the business year 2015/16 demonstrate that it was able to hold its own in an ambivalent market environment. Revenue rose by 14.7% from EUR 1,329.8 million in the previous year to EUR 1,525.3 million in the current reporting period. Some of the crucial factors responsible for this gain were the expansion of business volume in the turnout system business segment, the acquisition of Bathurst Rail Fabrication Centre (Turnout Systems business segment) and Trafilerie Industriali S.p.A. (Wire Technology business segment) in the second half of 2014/15 as well as the first-time full consolidation of voestalpine Tubulars GmbH & Co KG (Seamless Tubes business segment) and CNTT Chinese New Turnout Technologies Co., Ltd. (Turnout Systems business segment) as of the beginning of the business year. The equity method had been used by the latter two 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. As far as earnings are concerned, the first half of 2015/16 was substantially impacted by non-recurring effects associated with the acquisition of full control of these two companies. In the Metal Engineering Division, reassessments based on fair value less depreciation of hidden reserves resulted in positive non-recurring effects in the first half of 2015/16 amounting to EUR 126.5 million reported in EBITDA and EUR 114.1 million reported in EBIT. Therefore, EBITDA rose by almost two thirds from EUR 203.7 million in the first half of 2014/15 to EUR 336.1 million in same period of the current business year. Adjusted by these non-recurring effects, current EBITDA amounts to EUR 209.6 million, an increase of 2.9% compared to the previous year. The adjusted EBIT margin fell from 15.3% to 13.7%. In the same period, (unadjusted) EBIT rose by 73.4% from EUR 149.0 million to EUR 258.4 million. After deduction of the non-recurring effects, remaining EBIT (on a purely operating basis) is EUR 144.3 million, a slight decline of 3.2%. The EBIT margin went down from 11.2% to 9.5%.

A comparison of the first quarter of 2015/16 with the second quarter of 2015/16 shows a reduction in revenue of 2.9%, down from EUR 774.0 million to EUR 751.3 million; this was primarily the result of a decline in the sales of seamless tubes for the oil and natural gas industries. In a quarter-to-quarter comparison, the first quarter of 2015/16 was also impacted by non-recurring effects associated with the acquisition of full control of the aforementioned companies, resulting in a positive EBITDA figure of EUR 126.5 million and EBIT of EUR 120.4 million. In the second quarter of 2015/16, due to depreciation of hidden reserves that was associated with the acquisition of full control, there were negative non-recurring effects on EBIT amounting to EUR 6.3 million. EBITDA fell by 57.6% in a quarter-to-quarter comparison, going from EUR 236.1 million to EUR 100.0 million. Reduced by the non-recurring effects, EBITDA dropped by 8.8% from EUR 109.6 million (margin: 14.2%) to EUR 100.0 million (margin: 13.3%). Apart from seasonal effects, the main reason for this was the weak energy sector, which increasingly impacted the Seamless Tubes and Welding Technology business segments. From the first to the second quarter, (unadjusted) EBIT went down by 69.0% going from EUR 197.2 million to EUR 61.2 million. Adjusted by the non-recurring effects, EBIT declined by 12.1% from EUR 76.8 million (margin: 9.9%) to EUR 67.5 million (margin: 9.0%).

As of the end of the second quarter of 2015/16, the number of employees (FTE) in the Metal Engineering Division was 13,080 or 15.2% higher than last year’s figure in the same period (11,351). The increase is the result of the inclusion of the employees of voestalpine Tubulars GmbH & Co KG and CNTT Chinese New Turnout Technologies Co., Ltd. as well as those of the acquired companies Bathurst Rail Fabrication Centre and Trafilerie Industriali S.p.A. Compared to the figure at the end of the past business year (11,685), the number of employees increased by 11.9%.