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Report on the financial key performance indicators of the voestalpine Group

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

Comparison of the quarterly and nine-month figures of the voestalpine Group

In millions of euros

 

 

 

 

 

 

 

Q 1–Q 3

 

 

 

 

Q 1 2017/18

 

Q 2 2017/18

 

Q 3 2017/18

 

2017/18

 

2016/17

 

Change

 

 

04/01–06/30/2017

 

07/01–09/30/2017

 

10/01–12/31/2017

 

04/01–12/31/2017

 

04/01–12/31/2016

 

in %

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

3,251.5

 

3,050.8

 

3,158.1

 

9,460.4

 

8,101.2

 

16.8

EBITDA

 

513.8

 

455.1

 

436.6

 

1,405.5

 

1,061.1

 

32.5

EBITDA margin

 

15.8%

 

14.9%

 

13.8%

 

14.9%

 

13.1%

 

 

EBIT

 

328.8

 

255.4

 

250.4

 

834.6

 

545.0

 

53.1

EBIT margin

 

10.1%

 

8.4%

 

7.9%

 

8.8%

 

6.7%

 

 

Profit before tax

 

292.4

 

221.3

 

223.5

 

737.1

 

461.4

 

59.8

Profit after tax1

 

218.4

 

170.5

 

167.0

 

555.9

 

343.9

 

61.6

Employees (full-time equivalent)

 

50,047

 

50,638

 

50,658

 

50,658

 

48,765

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

1
Before deduction of non-controlling interests and interest on hybrid capital.

The 16.8% increase in the revenue of the voestalpine Group from EUR 8,101.2 million in the previous year to EUR 9,460.4 million in the first three quarters of the business year 2017/18 reflects the current economic upturn which, in terms of both breadth and momentum, is the strongest of the past ten years. Buttressed as well by the price increase in raw materials, this has resulted in substantially higher product prices, even though they have had different ramifications in each of the Group’s four divisions. The excellent demand for high-quality flat steel products enabled the Steel Division to post the largest increase in percentage terms. Given the already strong upward momentum in delivery volumes last year, the division’s revenue growth stems mainly from higher prices and the ongoing optimization of its product mix. By contrast, the revenue growth in each of the three other divisions arises from volume growth alone. The High Performance Metals Division thus benefitted from the positive market conditions overall in both Europe and Asia as well as the brightened mood in the oil and natural gas sector, which allowed the Metal Engineering Division as well to boost its unit sales, while the Metal Forming Division for its part successfully continued its expansion particularly in the automotive industry.

Coupled with the corresponding positive margin effects, the increase in all of the Group’s earnings categories was even more pronounced than the growth in revenue. As a result, the operating result (EBITDA) improved year over year by almost one third, from EUR 1,061.1 million in the first three quarters of 2016/17 to currently EUR 1,405.5 million. Here, too, the Steel Division posted the greatest increase by far, but the other three divisions also succeeded in improving their operating result. The extraordinary profitability of the Steel Division stems primarily from its consistent focus over many years on product and process innovations and the outstanding increase in orders for the most sophisticated strip steel products. The profit from operations (EBIT) presents a similar picture in terms of the distribution of earnings within the Group, except that, in this case the Metal Engineering Division’s performance fell slightly short of that the previous year, because its profit from operations for the first six months of 2017/18 already contained EUR 15 million in one-off negative effects from impairment losses on property, plant and equipment in the ultra high-strength fine wires product segment due to challenging market conditions that continue unabated.

Relative to the previous year, the net financial debt fell by 5.0% from EUR 3,545.8 million as of the end of December 2016 to EUR 3,370.1 million as of the close of 2017. The increase in the net financial debt per the end of the third quarter of 2017/18 compared with the March 31, 2017, reporting date (EUR 3,221.1 million) is due to the dividend distributions of just over EUR 200 million in the second business quarter as well as an increase in net working capital (NWC), which was driven chiefly by the need to build up pre-materials in order to offset the volume losses resulting from the pending major repairs of blast furnace A in Linz, Austria, in the summer of 2018; it is also due to higher prices for raw materials. Given comprehensive measures aimed at cutting back working capital in the individual divisions, the net working capital ought to decline in the fourth quarter of 2017/18 by about one half of the increase in the first three quarters of 2017/18, which will have a correspondingly positive impact on the development of both the free cash flow (FCF) and the net financial debt. At EUR 6,303.4 million, equity as of December 31, 2017, reached a new all-time high. This represents an increase of 8.7% compared with the same reporting date the previous year and of 4.0% relative to the most recent reporting date (March 31, 2017). Year over year, therefore, the gearing ratio (net financial debt as a percentage of equity) fell substantially from 61.2% as of the end of December 2016 to 53.5% as of the end of December 2017, but it remained largely unchanged (53.2%) relative to the March 31, 2017, reporting date.

The completion of numerous large-scale projects in the past 18 months lowered the investment expenditure of the voestalpine Group in the first three quarters of 2017/18 by 25.9% to EUR 527.3 million compared with the same period the previous year (EUR 711.4 million). Hence it is also lower than depreciation of EUR 571.0 million as of the close of the third quarter. The Steel Division posted the largest decrease in this connection, while investments by the divisions engaged in processing remained stable on the whole compared with the same period the previous year.

As of December 31, 2017, the voestalpine Group had 50,658 employees (FTE), which denotes an increase of 3.9% compared with 48,765 as per the same reporting date the previous year (December 31, 2016). This growth is due primarily to the Group’s expansion of its automotive activities at its international sites as well as to rising demand from the oil and natural gas sector owing to the economic upturn. The number of employees rose by 1.9% over the March 31, 2017, reporting date (49,703).

Net financial debt can be broken down as follows:

Net financial debt

In millions of euros

 

12/31/2016

 

12/31/2017

 

 

 

 

 

Financial liabilities, non-current

 

3,258.0

 

2,855.9

Financial liabilities, current

 

1,053.5

 

1,854.2

Cash and cash equivalents

 

–370.4

 

–728.1

Other financial assets

 

–365.0

 

–583.5

Loans and other receivables from financing

 

–30.3

 

–28.4

Net financial debt

 

3,545.8

 

3,370.1


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.

Facts

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

Earnings FY 2016/17

€ 11.3 Billion

Revenue

€ 1.54 Billion

EBITDA

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