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Report on the Group’s business performance and the economic situation

This report is a translation of the original report in German, which is solely valid.

After about five years of limited growth in most economies, the upswing in Europe that began in early 2017 across the board gathered momentum as the year wore on. This upward trend affects all European countries, albeit in different ways. While the economic data in numerous EU member states (especially those in the East) show above-average growth and the vote on Great Britain’s exit from the EU initially spurred exports and thus growth for currency reasons, coincidently it has increasingly put a damper on private investment due to the uncertainty about future prospects. The situation in the continental European countries, where companies’ willingness to invest has grown noticeably on account of the rising stability of the economic upturn, presents a different picture. Even though the year 2017 was buffeted by geopolitical tensions yet again and many countries continued to push their protectionist policies, neither these factors—nor the growing strength of the euro vis-à-vis the US dollar—have derailed the positive mood in Europe.

The voestalpine Group benefitted from this largely positive environment as well. Particularly the momentum of the European automotive industry contributed a great deal to the Group’s good performance. Furthermore, the consumer goods industry remained stable at a solid level, while the uptick was strong in the mechanical engineering sector and at least noticeable in the oil and gas as well as the construction industry. Only investments in the European railway infrastructure, which were cut at a surprisingly sharp rate starting in the summer of 2016, as well as in the power plant construction sector, which has been suffering for a long time virtually as a matter of course, showed no signs of rebounding. So far, voestalpine has not been affected by the ramifications of the Brexit, neither at its British sites nor outside of Great Britain.

In the United States, private consumption which accounts for about two thirds of the country’s economy drove growth yet again. While orders for capital goods have trended upward in the business year 2017/18 to date, volatility remained high nonetheless. The growth of the country’s gross domestic product (GDP) also came under pressure from the sharp decline in foreign direct investments in the productive sector. In this connection, the uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) is increasingly putting a damper on investments, not just in the U.S. but also in all of North America. Conversely, the most recently enacted comprehensive tax reform should enhance the attractiveness of the United States as an economic region; however, so far no concrete steps have been taken with respect to the infrastructure program that was announced with much fanfare. From the vantage point of voestalpine, growth in the North American market during the first three quarters of 2017/18 was uneven. Aerospace generated considerable positive momentum, and the oil and gas sector also exhibited signs of a recovery, at least in terms of its volume. While the American automotive market declined a bit overall, voestalpine’s sites in the United States continued to profit from strong demand on the part of European automakers’ local plants. The railway infrastructure in North America showed slight signs of picking up in the course of the year.

China’s economy continued to grow at a robust pace in 2017, thanks largely to foreign trade, which is its main pillar. But the growth of private consumption also reflected the increasing significance of this sector to the stability of the country’s development trajectory. As far as finance is concerned, there are no indications to date of a decline in high lending levels, which continue unabated. voestalpine’s sites in China developed very well in 2017. Demand was excellent throughout: in the railway infrastructure segment as well as in both the automotive industry and the consumer goods sector.

Following years of a massive recession, Brazil finally hit rock bottom in 2017 and then began to grow a little bit again. The implementation of the labor market reforms handed the newly formed government an initial success after the 2016 corruption scandal, but many other policy initiatives will be necessary to consolidate the country’s large budgetary deficits. Helped along by declining interest rates, private consumption, in particular, has contributed to the rebound of the Brazilian economy, as has the increase in exports that is being fueled by favorable foreign exchange rates. voestalpine’s sites took extensive steps in years past to lower costs and boost efficiency with the aim of counteracting the massive economic downturn in this, the largest South American country. This enabled them in the current business year to exploit the economic turnaround and achieve correspondingly positive revenue and earnings growth.

About voestalpine

In its business segments, voestalpine is a globally leading technology and capital goods group with a unique combination of material and processing expertise. With its top-quality products and system solutions using steel and other metals, it is a leading partner to the automotive and consumer goods industries in Europe and to the aerospace, oil and gas industries worldwide. The voestalpine Group is also the world market leader in turnout technology, special rails, tool steel, and special sections.


50 Countries on all 5 continents
500 Group companies and locations
50,000 Employees worldwide

Earnings FY 2016/17

€ 11.3 Billion


€ 1.54 Billion


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