Report on the financial key performance indicators of the voestalpine Group

Revenue of the voestalpine Group in the first half of 2015/16 was EUR 5,786.7 million, 4.1% higher than the figure of EUR 5,561.1 million in the same period of the previous year. This gain can be attributed to three factors: a rise in sales resulting from operational activities in the individual divisions, revenue contributions stemming from acquisitions undertaken by the Metal Engineering Division in the second half of 2014/15, and a change in the consolidation of two Metal Engineering Division companies as of April 1, 2015 from consolidation at equity to full consolidation.

From a purely operational perspective, revenue in the Steel Division and the Special Steel Division rose despite a slight decline in volume. While a special project in the heavy plate business segment was responsible for this gain in the Steel Division, the increase in the Special Steel Division was due to that fact that the product mix was improved in the current business year.

In the Metal Engineering Division, the acquisitions made in the second half of the past business year—Italian manufacturer of special wire Trafilerie Industriali S.p.A. and Australian specialist for railway systems Bathurst Rail Fabrication Centre (BRFC)—contributed to the boost in sales. Furthermore, the revenue generated by voestalpine Tubulars GmbH & Co KG, Austria, and CNTT Chinese New Turnout Technologies. Ltd., China, which also belong to this division, were consolidated for the first time in the current business year. Streamlining that had been undertaken in the past business year in the Metal Forming Division had a negative impact on its revenue in the business year 2015/16. It consisted of the divestment of the Flamco Group (second quarter of 2014/15) and of the plastics companies (third quarter of 2014/15), all of which were headquartered in Holland, as well as Rotec AB, Sweden (fourth quarter of 2014/15).

The earnings figures for the first half of 2015/16 contain non-recurring effects in connection with the achievement of control of the aforementioned Metal Engineering Division companies, which were reported as of April 1, 2015. Revaluations based on the fair values less depreciation of hidden reserves impacted EBITDA of voestalpine AG with a total of EUR 137.6 million and EBIT with EUR 125.2 million. In the first half of 2014/15, the results of the voestalpine Group were impacted by non-recurring effects in the Metal Forming Division, with EBITDA going up by EUR 66.5 million and EBIT rising by EUR 45.2 million. Including the non-recurring effects in both comparative periods, EBITDA amounted to EUR 892.3 million in the current business year compared to EUR 756.9 million in the previous year, an increase of 17.9%.

Excluding the non-recurring effects, in the first half of 2015/16, adjusted EBITDA amounted to EUR 754.7 million, a rise of 9.3% over the previous year’s figure of EUR 690.4 million. The adjusted EBITDA margin improved from 12.4% to 13.0%. EBIT went up significantly in the current business year, rising from EUR 444.7 million in the previous year to EUR 575.3 million, a plus of 29.4%. Adjusted by the non-recurring effects, the increase is 12.7% from EUR 399.5 million to EUR 450.1 million. The corresponding EBIT margin rose from 7.2% to 7.8%. With the exception of the Metal Engineering Division, which was most severely affected by the negative results of the decline in the energy sector, all of the divisions reported a higher EBIT margin after exclusion of the non-recurring effects.

In the first half of 2015/16, profit before tax contained non-recurring effects amounting to EUR 125.2 million (previous year: EUR 45.2 million) and profit for the period contained EUR 130.4 million (previous year: EUR 43.4 million) due to the specific tax treatment of these non-recurring effects in this case. Compared to the previous year, profit before tax went up by 29.1% from EUR 391.7 million to EUR 505.7 million, while profit for the period rose by one third from EUR 315.6 million to EUR 420.6 million. Excluding the non-recurring effects, profit before tax in the current business year was at EUR 380.5 million, 9.8% over the previous year’s figure of EUR 346.5 million, while profit for the period rose by 6.6% from EUR 272.2 million to EUR 290.2 million.

Equity increased by 11.7% in a year-to-year comparison, going from EUR 4,932.1 million to EUR 5,509.3 million. In addition to the solid earnings trend in recent quarters, the aforementioned changes in consolidation (from equity to full consolidation) as of April 1, 2015 also contributed to the rise in equity. Another positive effect in the first half of 2015/16 was the capital increase of 1.45% of share capital slated to be used for the continuing development of the employee shareholding program, which boosted equity by EUR 85.3 million. Compared to the reporting date in the business year 2014/15, equity rose by 8.0% from EUR 5,102.5 million to EUR 5,509.3 million.

During the past twelve months, net financial debt grew by 8.8% from EUR 2,898.8 million as of September 30, 2014 to EUR 3,152.9 million as of September 30, 2015. Compared with the figure on the reporting date of March 31, 2015 (EUR 2,978.1 million), net financial debt went up by 5.9%. This increase compared to the prior reporting date is due to the Group’s considerable investment activity in the current business year and the payment of dividends in the second quarter of 2015/16.

The gearing ratio was reduced both in a year-to-year comparison and compared to the reporting date of the business year 2014/15. As of the end of September 2014, the gearing ratio was at 58.8%. It then decreased slightly as of March 31, 2015 to 58.4% and now, as of the end of the first half of 2015/16, it is at 57.2%.

As of the reporting date September 30, 2015, the voestalpine Group had 48,719 employees (FTE). In a year-to-year comparison (47,379 FTE as of September 30, 2014), this is an increase of 2.8%. Compared to the reporting date of March 31, 2015 (47,418 FTE), this is a plus of 2.7%. The expansion of the workforce compared to the previous year is primarily the result of acquisitions in the Metal Engineering Division in the past business year and the aforementioned full consolidation measures, which also affected companies in the Metal Engineering Division. Compared to the previous year, the number of employees in the Metal Forming Division was reduced by the divestment of the plastics companies (third quarter of 2014/15) and Rotec AB (fourth quarter of 2014/15).