Revenue of the voestalpine Group
In millions of euros
In the business year 2016/17, the revenue generated by the voestalpine Group was EUR 11,294.5 million, 2.0% above the previous year’s figure of EUR 11,068.7 million. Revenue in the Metal Engineering Division was down on the previous year due to economic factors—first and foremost as a result of the weak market environment in the oil and gas industry as well as a low investment appetite in the European rail sector. In contrast, the other three divisions all posted revenue growth, especially the Steel Division. Apart from the strong overall growth in demand in the second half of 2016/17, sales for the first time also included delivery volumes of HBI (sponge iron) from the new plant in Texas to external customers as well in the past business year. Higher deliveries in the High Performance Metals Division (formerly the Special Steel Division) saw a slight increase in revenue despite somewhat lower prices than in the previous year. The figures for the Metal Forming Division reflect the ongoing implementation of the internationalization strategy, not least in the significant revenue growth compared to the previous year. The acquisition of Summo Corp., Canada, which specializes in tube components for the automotive industry, also had a positive impact. The company has been included in the division’s financial statements since the second quarter of 2016/17.
EBITDA
In millions of euros
EBIT
In millions of euros
The consolidated operating result (EBITDA) declined by 2.7% in the past business year, from EUR 1,583.4 million in 2015/16 to EUR 1,540.7 million. However, the figures for the previous year (reported in accordance with IFRS) include significant non-recurring effects from non-operating activities. This non-recurring income was due to the first-time full consolidation of companies in the Metal Engineering Division in the annual financial statements for 2015/16 (due to the required fair value measurement and the depreciation of the disclosed hidden reserves) previously included using the equity method. As a result of the change in the method of consolidation (see the Annual Report 2015/16 for more information), the consolidated figures for the previous year include non-recurring effects that increased the operating result (EBITDA) by EUR 137.6 million and profit from operations (EBIT) by EUR 74.4 million. The change in consolidation did not have any further effect on EBITDA in the business year 2016/17. In contrast, EBIT again declined by EUR 16.6 million in connection with the remeasurement of the fair value depreciation of disclosed hidden reserves. Excluding all non-recurring effects, EBITDA increased by 6.6% from EUR 1,445.8 million to EUR 1,540.7 million in a year-over-year comparison. The adjusted EBITDA margin rose from 13.1% in the previous year to 13.6%, only slightly lower than the target operating margin for 2020/21 of 14%.
Apart from the Metal Engineering Division, where earnings declined as a result of economic factors, all divisions significantly increased EBITDA in the past business year. In the Steel Division, strong demand for high-quality strip steel and the resulting substantial volume growth, coupled with rising prices over the course of the year, more than offset the negative earnings effects (reduced performance of blast furnace 5 as a result of fine-tuning adjustments to the coal injection system, financial provisions for the Nord Stream II heavy plate project due to rising raw materials prices, start-up losses at the HBI plant in Texas). The Steel Division thus posted the strongest earnings increases in the Group, due not least to the extremely successful cost optimization and efficiency improvement measures in recent years. The High Performance Metals Division (formerly the Special Steel Division) defied weaknesses in the oil and gas sector and—from a regional perspective—the ongoing recession in Brazil and also significantly increased EBITDA. The division was buoyed by a stable, solid trend in the global automotive industry and favorable overall market conditions in Asia. The improved operating result in the Metal Forming Division is attributable to the continued rise in contributions from internationalization activities as well as outstanding earnings growth in the Precision Strip business segment. In all four divisions, by far the best quarterly result for the business year was achieved in the fourth quarter. Against this backdrop, the voestalpine Group lifted the operating result (EBITDA) in the final quarter of 2016/17 to a level last achieved in the fourth quarter of the business year 2010/11. Reported in accordance with IFRS, profit from operations (EBIT) for 2016/17 came to EUR 823.3 million, down 7.4% on the prior-year figure (EUR 888.8 million). However, after adjustment for non-recurring effects, EBIT improved by 3.1% compared to the previous year, from EUR 814.4 million to EUR 839.9 million. This gives an adjusted EBIT margin of 7.4% for the business year 2016/17, as in the previous year.
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