voestalpine AG vs. the ATX and international indices
Changes compared to March 31, 2018, in %
Development of the voestalpine share
While the mere threat on the part of US politicians at the start of the calendar year 2018 that Section 232 import tariffs would be imposed on steel and aluminum products on national security grounds unsettled the international capital markets, the nervousness caused by the subsequent implementation of precisely such measures grew exponentially. The voestalpine share came under pressure less from the direct effects of these actions (which, as far as voestalpine was concerned, were deemed manageable thanks to numerous exemptions), and more from fears of the consequences of the diversion of steel products from third countries to the European Union. Subsequently, the voestalpine Group’s customer focus on the European automotive industry intensified the share’s downward spiral in the fall of 2018, because the initial rollout of the WLTP emissions testing procedure gave rise to worries that automotive sales in Europe would lose their momentum not just temporarily, but instead that the positive momentum of the automotive industry would definitely come to an end after several boom years. Substantially higher start-up losses at the Group’s automotive facility in Cartersville, Georgia, USA, were a drag on the share price as well. Starting in the fall of 2018, the increasing restrictions on free trade between the United States and China caused uncertainty among Chinese consumers to grow and growth prospects to shrink—the latter not just in China itself, but also in the European Union, which is heavily dependent on exports. In the fall of 2018 and January 2019, respectively, these developments resulted in a change in voestalpine’s outlook with respect to its performance in the business year 2018/19, putting sustained pressure on its share price.
The sentiment in the capital markets during the first quarter of the calendar year 2019 improved somewhat, even though economic forecasts basically remained subdued. Overall, the voestalpine share shed more than one third of its value during the business year 2018/19. While its price at the start of the business year still was EUR 42.64, its closing price on the business year’s last trading day was EUR 27.07. In the same period, the performance of the leading Austrian share index (ATX) was about 10% weaker, whereas both the Dow Jones Industrial and the STOXX Index Europe (both benchmark indices) even trended slightly positive.