Special Steel Division*

Market environment and business development

In the first quarter of 2016/17, the market environment of the Special Steel Division was significantly more subdued than in the first quarter of the previous year. However, a solid level of incoming orders from the automotive and consumer goods industry—primarily in the tool steel segment—compensated weaker demand in other industrial segments. Furthermore, the acquisitions undertaken in previous periods in the Value Added Services business segment have already made very positive contributions to earnings. The trend of demand for products for the oil and natural gas sector was characterized by a continuing low level of investment, although lagging demand has improved somewhat compared to the previous quarters. The trend in the aerospace industry remained positive.

Viewed regionally, demand in the European Union for special steel products again lost momentum. Most recently, business performance in North America has been modest at best, primarily due to a lack of demand in the oil and natural gas sector. As far as the economy in Brazil is concerned, there is still no light at the end of the tunnel; Asia, on the other hand, continues to demonstrate a positive market environment in the special steel sector. Particularly in China, the Special Steel Division has been able to expand its position, not least due to the acquisition of Advanced Tooling Tek in Shanghai.

In Düsseldorf, Germany, a new technology center for additive manufacturing was opened in the first quarter of 2016/17. The expertise of the division in this future-oriented sector is being consistently expanded along the entire value chain, as evidenced by the new powder testing facilities in Hagfors, Sweden, and Kapfenberg, Austria.

Development of the key figures

At EUR 667.1 million, in the first quarter of the business year 2016/17 the revenue of the Special Steel Division was 5.9% below the previous year’s figure of EUR 709.0 million. The reason for this dip was that in the first quarter of the previous year, the effects of the marked decline in incoming orders from the oil and natural gas sector were not yet being reflected in revenue and earnings. In the tool steel product segment, on the other hand, sales volume was once again increased compared to the previous year. While EBITDA at EUR 99.2 million (previous year: EUR 99.9 million) and EBIT at EUR 63.4 million (previous year: EUR 65.2 million) remained largely constant in absolute figures, the EBITDA and EBIT margins increased significantly from 14.1% to 14.9% and 9.2% to 9.5% respectively.