Market environment and business development
The economic environment for the Special Steel Division improved moderately in the first three quarters of 2016/17 compared to the previous year. The aerospace industry has maintained its dynamic momentum despite selective postponements in incoming orders. An initial uptick in orders in the oil and gas industry indicates that this sector has bottomed out. Positive sentiment in the automotive and consumer goods industry is yet another reason for the improved global demand for tool steel. Conversely, in the special steel sector demand from the European mechanical engineering sector remained slack due to continued weakness in its important export markets of China and Russia.
Viewed regionally, performance in Europe continued to be rather subdued. In the USA, the oil and gas sector showed the first signs of recovery since late summer 2016. The automotive industry in Mexico is currently experiencing a strong growth trajectory even if longer-term performance is increasingly uncertain due to policy changes in the USA. Despite a certain political consolidation, the economic climate in Brazil has not yet perceptibly improved. Investment activities in the oil and gas industry in particular remain at an extremely low level. In contrast, positive momentum in the tool steel sector was driven by Asia, largely China, primarily due to solid performance in the automotive and consumer goods industries.
Financial key performance indicators
Special Steel Division |
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In millions of euros |
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Q 1 – Q 3 |
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Q 1 |
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Q 2 |
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Q 3 |
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2016/17 |
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2015/16 |
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Change |
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04/01– |
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07/01– |
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10/01– |
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04/01– |
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04/01– |
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in % |
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Revenue |
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667.1 |
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638.9 |
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643.5 |
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1,949.5 |
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1,984.8 |
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–1.8 |
EBITDA |
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99.2 |
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94.3 |
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91.0 |
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284.5 |
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259.9 |
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9.5 |
EBITDA margin |
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14.9% |
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14.8% |
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14.1% |
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14.6% |
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13.1% |
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EBIT |
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63.4 |
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58.2 |
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56.9 |
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178.5 |
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158.2 |
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12.8 |
EBIT margin |
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9.5% |
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9.1% |
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8.8% |
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9.2% |
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8.0% |
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Employees (full-time equivalent) |
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13,507 |
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13,573 |
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13,587 |
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13,587 |
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13,301 |
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2.2 |
At EUR 1,949.5 million, revenue in the Special Steel Division for the first three quarters of 2016/17 was 1.8% below last year’s figure of EUR 1,984.8 million for the same period. While sales prices in the current business year lagged behind those for the same period in the previous year, the delivery volumes grew in a year-on-year comparison. The improved earnings can therefore be traced back to both an increase in the production and sales figures as well as efficiency-raising measures. The operating result (EBITDA) therefore rose in the first three quarters of 2016/17 by 9.5%, from EUR 259.9 million (margin 13.1%) to EUR 284.5 million (margin 14.6%), compared to the same period in the previous year. Profit from operations (EBIT) rose by 12.8% from EUR 158.2 million to EUR 178.5 million and, as a result, the EBIT margin rose from 8.0% to 9.2%.
The number of employees (FTE) in the Special Steel Division as of the end of the third quarter of 2016/17 was 13,587, which is 2.2% above the comparative figure for the previous year (13,301). This increase is primarily the result of having acquired Sermetal and Advanced Tooling Tek (ATT).
* This report is a translation of the original report in German, which is solely valid.
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