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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 Railway Systems business segment—which was set up as part of the Metal Engineering Division at the start of the business year 2018/19 to combine all activities related to railway, turnout, and signaling technology under a single roof for the very first time—met with good demand overall in Europe in the first three quarters of the business year 2018/19 even though prices in the rails segment developed along a slightly weaker trajectory overall than those in the other segments. The market launch of a new generation of heat-treated high-performance tracks, which has already started, should enable us in the years to come to achieve greater differentiation vis-à-vis the competition and thus to better shield ourselves from price pressures than we are able to do at present. Owing to the continued expansion of high-speed rail lines, in both the second and the third quarter of the current business year the turnout systems segment profited particularly from excellent market conditions in China despite a period of project-related delays at the start of the business year. Given our extensive activities in the Chinese mass transit sector, this segment is currently collaborating with a well-known local joint-venture partner on the construction and expansion of a second local production facility.

Capacity utilization at the turnout production facilities in North America has been good during the business year 2018/19 to date. While the momentum in the Asian as well as the North American railway sector is developing very well at this time and the fundamentals in the EU are also pointing in the right direction, so to speak, developments in the mining regions are below average; South Africa, in particular, showed little momentum in 2018.

The outlook for the Industrial Systems business segment has dampened somewhat over the course of the current business year due to the downturn in the European automotive industry as well as the growing trade barriers that the U.S. Administration is putting in place. As a result, the momentum in the Wire Technology segment began to weaken substantially starting in the second quarter of the current business year due to European automotive manufacturers’ decision to throttle production in connection with the new Worldwide Harmonized Light Vehicle Test Procedure (WLTP). But demand should pick up again from the fourth quarter of the current business year (which corresponds to the first quarter of the calendar year) gradually. By contrast, the growing challenges in the Seamless Tubes segment stem primarily from the introduction of protectionist (“Section 232”) tariffs on imports of steel products into the U.S.; with the exception of a temporary weakening in December 2018, however, the general market environment and hence demand remained largely stable. Capacity utilization of the core facilities of the Seamless Tubes segment thus was solid as well in the first three quarters of the business year 2018/19. The Welding Consumables product segment had to contend with stiff price competition throughout the current business year to date even though demand was good. Consequently, this segment is intensifying its focus on measures intended to boost its cost efficiency and develop new business models as well as expand its collaborative projects with other voestalpine Group companies.

Financial key performance indicators

Quarterly development of the Metal Engineering Division





In millions of euros








Q 1–Q 3





Q 1 2018/19


Q 2 2018/19


Q 3 2018/19



















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EBITDA margin


























EBIT margin













Employees (full-time equivalent)













The key performance indicators of the Metal Engineering Division for the first three quarters of the business year 2018/19 are largely stable compared with those for the first nine months of the previous business year, even though there has been greater differentiation in the recent performance of the individual business segments. In terms of revenue, the division posted an increase of 3.6% from EUR 2,239.0 million in the first three quarters of the business year 2017/18 to EUR 2,318.7 million in the same period of the current business year. The Industrial Systems business segment generated this growth in consequence of both higher delivery volumes of seamless tubes and rising prices occurring in tandem with lower delivery volumes in the wire technology product segment. The welding consumables product segment also boosted revenue year over year. At EUR 262.2 million (margin of 11.3%) for the first three quarters of the business year 2018/19, compared with the previous year’s figure of EUR 261.6 million (margin of 11.7%) the division’s operating result (EBITDA) is stable. While the operating result of the Railway Systems business segment remained a bit subdued, the wire technology segment succeeded in delivering substantial growth, because the start-up phase of the new wire rod mill generated negative effects in the previous business year. At EUR 137.4 million (margin of 5.9%), the profit from operations (EBIT) in the current business year is 10.9% higher than the previous year’s figure of EUR 123.9 million (margin of 5.5%), because the wire technology segment recognized EUR 15 million in impairment losses (negative one-time effect) in the second quarter of the business year 2017/18.

The direct comparison of the second and third quarter of the business year 2018/19 shows that, while the revenue of the Metal Engineering Division rose by 3.2% from EUR 747.6 million to EUR 771.3 million, earnings were unable to keep pace with this development. The earnings uptick in seamless tubes was unable to offset the (partly seasonal) slight decline in the margins of the Railway Systems business segment as well as the more pronounced downturn in the wire technology segment, which resulted from the dampening of economic sentiment in the automotive sector. In sum, EBITDA fell 8.1%, from EUR 85.3 million in the second quarter of the business year 2018/19 to EUR 78.4 million in the third quarter of the business year 2018/19. EBIT dropped by 17.3% in the same period, from EUR 44.4 million (margin of 5.9%) to EUR 36.7 million (margin of 4.8%).

At 13,377, the number of employees (FTE) in the Metal Engineering Division at the end of the third quarter of 2018/19 was 0.8% higher year over year (13,267). Compared with the figure (13,481) as of the end of the previous business year, the number of employees has declined by 0.8%.

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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