Metal Forming Division

Market environment and business development

The performance of the Metal Forming Division in the first three quarters of the business year 2017/18 was solid overall. Against the backdrop of continually rising sales volumes, especially in the European automotive industry, order levels from automakers remained excellent, particularly in the Automotive Components business segment. High incoming order levels drove the Division’s performance at non-European sites in the United States, China, and South Africa that produce mainly for German premium manufacturers.

In the Tubes & Sections business segment, the favorable economic environment in the European Union also supported the demand for tailor-made pipes and profiles. Recent quarters have seen a substantial upturn in the market for commercial vehicles and agricultural machines as well as in the construction industry. So far, the British construction industry has not suffered any noticeable setbacks either, despite the ongoing Brexit negotiations. Year-to-date developments in Brazil have produced slight signs of an economic recovery for the first time in years. In the United States, customer order levels were average overall, as before, while in China the upward trend solidified, especially with respect to customized product solutions.

The outstanding performance of the Precision Strip business segment, which continues unabated, stems from the interaction of a very solid business climate and the segment’s excellent market position. It benefitted not just from positive economic conditions, among others in the packaging and sawmill industry, but also from its strong market position in these product segments.

In its capacity as a provider of high-bay warehouses and system racks, the Warehouse & Rack Solutions business segment, which supports projects from the development stage through to assembly, also did well thanks to solid market conditions that remain unchanged. In this connection, online commerce—in particular and not just in Europe—turned out to be a reliable driving force in a pleasantly stable project landscape overall.

Financial key performance indicators

The Metal Forming Division slightly improved its key financial indicators in the first three quarters of 2017/18 compared with the same period the previous year. The increase in revenue stems primarily from the Group’s continued work to push its international activities in the Automotive Components segment and the excellent performance of the Precision Strip business segment. On the whole, the Division boosted its revenue by 13.9%, from EUR 1,754.0 million the previous year to EUR 1,997.8 million the current year.

The improvement in earnings is largely due to the excellent performance of the Precision Strip business segment, while the results of the other three segments were more or less the same year over year. Specifically, the operating result (EBITDA) rose year over year by 5.8%, from EUR 223.3 million to EUR 236.3 million, while the profit from operations (EBIT) improved by 4.1%, from EUR 146.9 million to EUR 152.9 million. The EBITDA margin decreased from 12.7% to 11.8% and the EBIT margin from 8.4% to 7.7%, because the growth in revenue was stronger than the growth in individual result categories. On the whole, however, the analysis of earnings growth in the Metal Forming Division must take into account that the division’s current earnings potential is still limited by the large number of new automotive projects that are being implemented or are in the operational start-up phase.

As of December 31, 2017, the number of employees (FTE) in the Metal Forming Division was 11,634 or 9.2% higher than the past year’s figure of 10,650. This increase is largely due to the expansion of the non-European sites in the automotive segment.