Financial key performance indicators*

In the first three quarters of 2015/16, the Metal Engineering Division increased its revenue by 12.9%, from EUR 1,960.3 million in the previous year to EUR 2,213.0 million. The increase in revenue, however, is not from operations but is due to 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 April 1, 2015. 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. In addition to these accounting effects, the acquisitions made in the second half of 2014/15 of Bathurst Rail Fabrication Centre (Turnout Systems business segment) and Trafilerie Industriali S.p.A. (Wire Technology business segment) contributed to increase revenue. The weak oil and natural gas sectors had an adverse effect on revenue; this affected the Seamless Tubes, the Wire Technology, and the Welding Technology business segments.

In the first quarters of 2015/16, earnings were also impacted by non-recurring effects associated with the acquisition of the controlling interest in the two previously mentioned 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 three quarters of 2015/16 amounting to EUR 126.5 million reported in EBITDA and EUR 107.9 million reported in EBIT. Against this backdrop, the operating result (EBITDA) rose by 44.1% to EUR 426.5 million in the current business year (previous year: EUR 295.9 million). Adjusted for non-recurring effects, EBITDA was also higher, although only by 1.4% at EUR 300.0 million. The adjusted EBITDA margin fell to 13.6% from 15.1%. Similarly to the (unadjusted) operating result, the (unadjusted) profit from operations (EBIT) also improved by 45.0% from EUR 214.0 million in the first three quarters of 2014/15 to EUR 310.4 million in the period under review. Reduced by the non-recurring effects, profit from operations declined compared with the first nine months of 2014/15 by 5.4% to EUR 202.5 million. The EBIT margin fell therefore from 10.9% in the previous year to 9.2% in the period under review. Improved performance from operations in the railway infrastructure sector (rails and turnouts) is contrasted with a sometimes significant decline in earnings in those business segments that are heavily involved with the energy sector.

Comparing the third quarter of 2015/16 with the second quarter of 2015/16, revenue decreased somewhat by 8.5% going from EUR 751.3 million to EUR 687.7 million. The lower level of investment in the railway infrastructure sector during the winter months is the main reason for this decline. Comparing the quarter under review with the immediately preceding quarter, non-recurring effects relating to depreciation of hidden reserves associated with the acquisition of full control of the two aforementioned companies had a negative impact of EUR –6.2 million on EBIT in the third quarter; the non-recurring effects were almost identical to those in the immediately preceding quarter (EUR 6.3 million). EBITDA fell by 9.6% in the third quarter of 2015/16 compared with the immediately preceding quarter, going from EUR 100.0 million to EUR 90.4 million; at 13.1%, the EBITDA margin remained practically unchanged in the third quarter due to lower revenue (immediately preceding quarter: 13.3%). EBIT fell by 15.0% in a quarter-to-quarter comparison, going from EUR 61.2 million to EUR 52.0 million. Taking the non-recurring effects during the quarter into consideration, EBIT decreased by 13.8%, going from EUR 67.5 million (margin: 9.0%) to EUR 58.2 million (margin: 8.5%). In addition to slightly lower earnings contributions due to seasonal effects by the Rail Technology business segment, the main reason was a continued weakening of the energy sector; this impacted the Seamless Tubes business segment by causing prices to decline.

As of December 31, 2015, the Metal Engineering Division had 12,652 employees (FTE), an increase of 12.1% compared to the same reporting date in the past business year (11,284). This gain is the result of the inclusion of employee figures of voestalpine Tubulars GmbH & Co KG and CNTT Chinese New Turnout Technologies Co., Ltd. and acquisitions in the current business year. Compared with the figure at the end of the last business year (11,685), headcount rose by 8.3%.