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Metal Engineering Division

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

Market environment and business development

The market conditions in the key customer industries of the Metal Engineering Division continued to present an ambiguous picture at the start of the business year 2018/19. European demand overall in the largest business segment—Railway Systems, which now combines the rails and turnouts product groups including signaling technology since the start of the business year—remained moderate, but registered a slight uptick. Although it is the leading provider of specialty rail tracks such as ultralong, heat-treated premium grades, the railways product segment, which focuses primarily on Europe, had to participate to some degree in the very intense price wars. The situation in the Turnout Systems segment which, given both its worldwide presence and very good market position, performed much better, is a bit different. While the high-speed railways segment in China experienced slightly slowing demand in the first quarter of 2018/19 compared with the extraordinarily high demand the previous year due to project delays, the key heavy-haul transports segment in the United States showed some signs of recovering. Solely the market environment in South Africa for the turnout segment remained as challenging as before.

The Wire Technology business segment, which will be able to fully exploit the potential of the new state-of-the-art wire rod mill for the first time this business year, benefitted in the first quarter of 2018/19 particularly from the continued positive environment in its most important customer segment, the automotive industry.

While the upturn in oil and gas exploration activities in the United States continued in the Tubulars business segment, the tubulars manufactured in Austria faced massive disadvantages at the same time owing to the import tariffs (“Section 232”) that the US Administration has imposed on European steel imports. voestalpine has filed comprehensive applications for tariff exemptions, which have not yet been decided upon, against the backdrop of the inadequate national capacity coverage of the Oil Country Tubular Goods (OCTG) market in the US.

The Welding Consumables business segment followed a satisfactory trajectory in the first quarter of 2018/19, given strong competitive price pressures. Even though a slight upturn made itself felt recently in both Asia and Europe as well as in the oil and gas sector, efforts to rein in costs in these areas will intensify yet again in the current business year.

Financial key performance indicators

Quarterly development of the Metal Engineering Division



In millions of euros


Q 1 2017/18


Q 1 2018/19









in %






















EBITDA margin














EBIT margin







Employees (full-time equivalent)







Year over year, the Metal Engineering Division boosted both its revenue and its results. The division posted a revenue increase of 3.9%, from EUR 770.0 million in the first quarter of 2017/18 to EUR 799.8 million in the first quarter of 2018/19. Rising deliveries of rails and seamless tubes as well as generally higher prices resulting from raw materials costs are the main drivers of this revenue growth. The division delivered even greater increases in the individual earnings categories in the same period, but these increases were largely driven by the Wire Technology business segment. While the new rolling mill was still in its start-up phase in the first quarter of 2017/18, the facility has been able to boost its performance incrementally since it became fully operational in October 2017. Despite the imposition of protective tariffs in the United States on imported steel products as of June 1, 2018, the Tubulars business segment managed to improve its profitability, with the result that the operating result overall (EBITDA) of the Metal Engineering Division rose year over year by 13.0%, from EUR 87.2 million (margin of 11.3%) in the first quarter of 2017/18 to EUR 98.5 million (margin of 12.3%) in the first quarter of 2018/19. The increase in the profit from operations (EBIT) was even higher, soaring by 19.8% from EUR 47.0 million to EUR 56.3 million and, in turn, lifting the EBIT margin from 6.1% to 7.0%.

At 13,577, the number of employees (FTE) in the Metal Engineering Division at the end of the first quarter of 2018/19 was 2.3% higher compared to the previous year (13,274).

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
51,600 Employees worldwide

Earnings FY 2017/18

€ 13 Billion


€ 2 Billion


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