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2. Operating segments

The voestalpine Group has five reportable segments: Steel Division, High Performance Metals Division, Metal Engineering Division, Metal Forming Division, and Other. The reporting system, which is based primarily on the nature of the products provided, reflects the internal financial reporting system, the management structure, and the company’s main sources of risks and rewards.

The Steel Division of the voestalpine Group is the global quality leader for highest quality strip steel and the global market leader in both heavy plate used in the most sophisticated applications and complex casings for large turbines. Its activities include the production of sophisticated hot and cold-rolled strip steel as well as electrogalvanized, hot-dip galvanized, and organically coated strip steel. This is augmented by electrical steel strip, heavy plate, and foundry activities as well as the downstream Steel & Service Center and Logistics Services. The division operates the world’s most modern direct reduction plant in Corpus Christi, Texas, USA, which manufactures highest quality pre-materials (HBI) for both own and third-party steel production. It is the first point of contact for renowned automotive manufacturers and suppliers with respect to strategic product development and supports its customers globally. Moreover, it also is a key partner of the European white goods and mechanical engineering industries. The Steel Division produces heavy plate for the energy sector (which is used in the oil and natural gas industry as well as in connection with renewable energies) and for applications under extreme conditions (for example, deep-sea pipelines or in the world’s permafrost regions).

The High Performance Metals Division is the global market leader in tool steel and high-speed steel. The division holds a leading position in the global market in special alloys for the oil and natural gas industry, the aerospace industry, and the energy engineering industry. It operates a global network of service centers with a focus on tool manufacturing, offering heat treatment and coating services besides warehousing and preprocessing of special steels. In Houston, Texas, USA, Singapore, and Birmingham, Great Britain, the division offers a broad range of services including logistics, distribution, and processing especially for the oil and natural gas industry, thus underscoring its position as a technology leader in this field by virtue of the one-stop-shop solutions it offers to its customers. With facilities in Düsseldorf, Germany, Toronto, Canada, Houston, Texas, USA, Singapore and Taiwan, additive manufacturing, a segment that will be hugely important in the future, is being established along the entire value chain—from powders to the finished “printed” part.

The Group’s expertise as the world market leader in turnout technology and as the leading provider of high-quality rails and digital monitoring systems as well as services related to rail infrastructure are brought together in the Metal Engineering Division. In addition, this division offers a broad range of high-quality wire rod and drawn wire, premium seamless tubes for special applications as well as high-quality welding consumables. The Metal Engineering Division also possesses its own expertise in steel, which ensures ultra high-quality supplies of pre-materials throughout the division.

The Metal Forming Division is voestalpine’s expertise center for highly developed special sections, tube and precision strip steel products as well as pre-finished system components made from pressed, punched, and roll-profiled parts. This combination of expertise in materials and processing, which is unique in the industry, and the division’s global presence make it the first choice for customers who value innovation and quality. These customers include nearly all leading manufacturers in the automotive manufacture and supply industries, with a significant focus on the premium segment, as well as numerous companies in the commercial vehicle, construction, storage, energy, and (agricultural) machinery industries.

The holding company, several financing and raw materials purchasing companies as well as two personal services companies and the group-IT companies are included in the “Other” business segment. These companies were combined, because their focus is on providing coordination services and support to the subsidiaries.

Segment revenue, segment expenses, and segment results include transfers between the operating segments. Such transfers are accounted for at transfer prices that correspond to competitive market prices charged to unaffiliated customers for similar products. These transactions are eliminated in the Consolidated Financial Statements.

The voestalpine Group uses earnings before interest and taxes (EBIT) as the key figure to measure the performance of the segments. This figure is a widely accepted indicator for measuring profitability in the Group.

The figures for the Group’s operating segments are as follows:

Operating segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Division

 

High Performance Metals Division

 

 

 

 

 

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

4.772,7

 

4.887,3

 

2.918,0

 

3.136,3

Of which revenue with third parties

 

4.368,9

 

4.464,8

 

2.860,5

 

3.082,7

Of which revenue with other segments

 

403,8

 

422,5

 

57,5

 

53,6

EBITDA

 

908,2

 

653,2

 

453,9

 

434,9

Depreciation and amortization of property, plant and equipment and intangible assets

 

315,3

 

334,2

 

156,3

 

154,9

Of which impairment

 

0,0

 

0,0

 

10,1

 

0,0

Reversal of impairment of property, plant and equipment and intangible assets

 

0,0

 

0,0

 

0,0

 

0,0

Share of profit of entities consolidated according to the equity method

 

11,7

 

8,8

 

0,0

 

0,0

EBIT

 

592,9

 

319,0

 

297,6

 

280,0

EBIT margin

 

12,4 %

 

6,5 %

 

10,2 %

 

8,9 %

Interest and similar income

 

1,0

 

2,0

 

12,7

 

13,1

Interest and similar expenses

 

60,8

 

67,5

 

66,1

 

67,9

Income tax expense

 

–124,8

 

–76,1

 

–65,6

 

–74,6

Profit after tax

 

410,1

 

180,0

 

178,2

 

151,0

Segment assets

 

5.292,3

 

5.373,5

 

4.128,4

 

4.326,6

Of which investments in entities consolidated according to the equity method

 

96,8

 

98,8

 

0,0

 

0,0

Net financial debt

 

1.623,5

 

1.810,2

 

1.002,7

 

1.308,6

Investments in property, plant and equipment and intangible assets

 

229,5

 

322,5

 

226,4

 

241,2

Employees (full-time equivalent)

 

11.020

 

10.877

 

14.274

 

14.398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal Engineering Division

 

Metal Forming Division

 

 

 

 

 

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

2.989,7

 

3.147,1

 

2.743,4

 

2.937,4

Of which revenue with third parties

 

2.947,1

 

3.104,6

 

2.705,5

 

2.897,0

Of which revenue with other segments

 

42,6

 

42,5

 

37,9

 

40,4

EBITDA

 

372,0

 

369,0

 

325,2

 

213,3

Depreciation and amortization of property, plant and equipment and intangible assets

 

181,0

 

167,0

 

112,4

 

119,5

Of which impairment

 

15,6

 

0,0

 

0,0

 

0,0

Reversal of impairment of property, plant and equipment and intangible assets

 

0,0

 

6,9

 

0,0

 

0,0

Share of profit of entities consolidated according to the equity method

 

0,4

 

0,2

 

0,0

 

0,0

EBIT

 

191,0

 

202,0

 

212,8

 

93,8

EBIT margin

 

6,4 %

 

6,4 %

 

7,8 %

 

3,2 %

Interest and similar income

 

2,4

 

3,4

 

1,5

 

3,4

Interest and similar expenses

 

40,0

 

37,6

 

31,7

 

36,3

Income tax expense

 

–40,1

 

–35,2

 

–41,4

 

–11,5

Profit after tax

 

114,3

 

133,0

 

141,1

 

52,2

Segment assets

 

3.357,9

 

3.485,3

 

2.442,8

 

2.686,2

Of which investments in entities consolidated according to the equity method

 

5,2

 

5,0

 

0,0

 

0,0

Net financial debt

 

972,0

 

1.028,7

 

757,9

 

1.027,4

Investments in property, plant and equipment and intangible assets

 

207,5

 

210,7

 

218,6

 

223,2

Employees (full-time equivalent)

 

13.481

 

13.501

 

12.003

 

12.240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Reconciliation

 

Total Group

 

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

1.629,4

 

1.603,4

 

–2.155,4

 

–2.150,8

 

12.897,8

 

13.560,7

Of which revenue with third parties

 

15,8

 

11,6

 

0,0

 

0,0

 

12.897,8

 

13.560,7

Of which revenue with other segments

 

1.613,6

 

1.591,8

 

–2.155,4

 

–2.150,8

 

0,0

 

0,0

EBITDA

 

–102,5

 

–99,9

 

–2,7

 

–5,9

 

1.954,1

 

1.564,6

Depreciation and amortization of property, plant and equipment and intangible assets

 

9,1

 

9,6

 

0,0

 

0,0

 

774,1

 

785,2

Of which impairment

 

0,0

 

0,0

 

0,0

 

0,0

 

25,7

 

0,0

Reversal of impairment of property, plant and equipment and intangible assets

 

0,0

 

0,0

 

0,0

 

0,0

 

0,0

 

6,9

Share of profit of entities consolidated according to the equity method

 

1,6

 

3,2

 

1,5

 

1,7

 

15,2

 

13,9

EBIT

 

–111,6

 

–109,5

 

–2,7

 

–5,9

 

1.180,0

 

779,4

EBIT margin

 

 

 

 

 

 

 

 

 

9,1 %

 

5,7 %

Interest and similar income

 

170,5

 

179,4

 

–165,8

 

–177,6

 

22,3

 

23,7

Interest and similar expenses

 

148,7

 

140,7

 

–169,9

 

–183,3

 

177,4

 

166,7

Income tax expense

 

54,8

 

10,1

 

0,0

 

0,2

 

–217,1

 

–187,1

Profit after tax

 

805,7

 

368,0

 

–824,0

 

–425,6

 

825,4

 

458,6

Segment assets

 

11.656,5

 

11.517,2

 

–11.422,9

 

–11.737,2

 

15.455,0

 

15.651,6

Of which investments in entities consolidated according to the equity method

 

8,0

 

11,0

 

8,5

 

9,5

 

118,5

 

124,3

Net financial debt

 

–1.396,7

 

–2.057,7

 

35,7

 

8,2

 

2.995,1

 

3.125,4

Investments in property, plant and equipment and intangible assets

 

13,1

 

13,8

 

0,0

 

0,0

 

895,1

 

1.011,4

Employees (full-time equivalent)

 

843

 

891

 

0

 

0

 

51.621

 

51.907

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The reconciliation of the key performance indicators, EBITDA and EBIT, is shown in the following tables:

EBITDA

 

 

 

 

 

 

2017/18

 

2018/19

 

 

 

 

 

Net exchange differences and result from valuation of derivatives

 

–3.2

 

–7.4

Consolidation

 

0.5

 

1.5

EBITDA – Total reconciliation

 

–2.7

 

–5.9

 

 

 

 

 

In millions of euros

EBIT

 

 

 

 

 

 

2017/18

 

2018/19

 

 

 

 

 

Net exchange differences and result from valuation of derivatives

 

–3.2

 

–7.4

Consolidation

 

0.5

 

1.5

EBIT – Total reconciliation

 

–2.7

 

–5.9

 

 

 

 

 

In millions of euros

All other key performance indicators contain solely the effects of consolidation.

Geographical information

The following table provides select financial information summarized according to the major geographical areas. External revenue is broken down by the customers’ geographical location.

Non-current assets and investments are reported based on the entities’ geographical location.

 

 

Austria

 

European Union

 

Other contries

 

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

2017/18

 

2018/19

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

900.9

 

964.0

 

7,659.9

 

7,892.1

 

4,337.0

 

4,704.6

Non-current assets

 

5,126.4

 

5,314.0

 

1,664.8

 

1,663.2

 

1,537.7

 

1,670.5

Investments in property, plant and equipment and intangible assets

 

492.4

 

613.0

 

209.4

 

213.9

 

193.3

 

184.5

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The voestalpine Group does not record revenue from transactions with a single external customer that accounts for 10% or more of the entity’s revenue.


About voestalpine

In its business segments, voestalpine is a globally leading technology group with a unique combination of materials and processing expertise. With its top-quality products and system solutions using steel and other metals, it is a leading partner of the automotive and consumer goods industries as well as of the aerospace and oil & gas industries. voestalpine is also the world market leader in complete railway systems as well as in tool steel and special sections.

Facts

50 Countries on all 5 continents
500 Group companies and locations
52,000 Employees worldwide

Earnings FY 2018/19

€ 13.6 Billion

Revenue

€ 1.6 Billion

EBITDA

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