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Metal Forming Division

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

Market environment and business development

Following its solid start into the business year 2018/19, the Metal Forming Division was subsequently confronted with an increasingly difficult environment in key customer segments. Economic sentiment, particularly in the European automotive industry, was dampened over the summer of 2018 due to the new Worldwide Harmonized Light Vehicle Test Procedure (WLTP). The introduction of this testing procedure led not just to more volatile and short-term order activity on the part of automotive manufacturers, but also to lower automotive manufacturing activity overall in the fourth calendar quarter of 2018, with the corresponding effects on the supplier industry. Demand did stabilize after the traditional shutdowns for X-mas, but it is lower than the high level of demand in the same quarter of the previous year. China’s automotive market has also seen growing distortions over the course of the current business year, whereas in the United States both production and sales figures remained stable at a high level. The segment of large SUVs in the U.S., which is served not least by the German premium manufacturers, has even seen additional growth. In this connection, the Automotive Components business segment at the Group’s Cartersville, Georgia, site in the United States had to contend with massive start-up cost overruns relative to the planning for new production facilities. Earnings were substantially affected, furthermore, by non-recurring effects resulting from external shifts in order activity.

The Tubes & Sections business segment delivered solid performance in the first three quarters of the business year 2018/19 despite average market conditions on the whole. As far as individual sectors are concerned, the performance of the European commercial vehicle industry remained good, and orders from the construction and mechanical engineering industry remained stable. Regionally speaking, the uncertainties in this business segment in the U.K. have continued to intensify during the current business year to date on account of the Brexit vote. By contrast, the market environment in the U.S. was positive as before, especially in the aerospace industry. In Brazil, there has been a slight improvement in economic sentiment compared with the previous year, also in the Tubes & Sections segment.

The economic environment of the Precision Strip business segment deteriorated considerably over the course of the current business year for the first time in years. It has become increasingly difficult to pass on rising alloy prices, not least due to growing competition from Chinese producers. By contrast, the demand for sophisticated storage systems remained robust, particularly with respect to Web-based sales, thus benefitting the Warehouse & Rack Solutions business segment yet again and assuring full utilization of production capacities in the coming business quarters.

Financial key performance indicators

Quarterly development of the Metal Forming Division





In millions of euros








Q 1–Q 3





Q 1 2018/19


Q 2 2018/19


Q 3 2018/19



















in %








































EBITDA margin


























EBIT margin













Employees (full-time equivalent)













While the Metal Forming Division did post higher revenue in the first three quarters of the business year 2018/19, it had to contend with a substantial drop in earnings. Revenue rose by 7.3% compared with the first nine months of the previous year, from EUR 1,997.8 million to EUR 2,143.4 million. This is due, for one, to the segment’s ability to pass on higher pre-materials costs and, for another, to the expansion of the segment’s business activities relating to automotive components. In contrast to the initial planning, however, the Group’s international expansion in this segment during the current business year led to significantly higher start-up costs at its Cartersville site in the U.S., which were largely responsible for the decline in the operating result (EBITDA) by more than one third, from EUR 236.3 million (margin of 11.8%) in the first three quarters of the business year 2017/18 to EUR 153.8 million (margin of 7.2%) in the current business year. Non-recurring effects in the form of provisions arising from external shifts in order activity had an additional impact on earnings at the Cartersville site. The business segments, Tubes & Sections and Precision Strip, posted slightly lower earnings year over year in operational terms, whereas the Warehouse & Rack Solutions business segment succeeded in lifting EBITDA yet further. At EUR 65.6 million (margin of 3.1%), the profit from operations (EBIT) for the first three quarters of the business year 2018/19 is 57.1% lower than the previous year’s figure of EUR 152.9 million (margin of 7.7%) for the aforementioned reasons.

The direct quarter-to-quarter comparison shows that, at EUR 698.3 million in the third quarter of the business year 2018/19, the revenue of the Metal Forming Division was stable relative to the revenue of EUR 697.1 million in the second quarter of the business year 2018/19. However, as both the start-up costs and the provisions resulting from external shifts in order activity at the Cartersville site have a largely negative effect on third-quarter performance, divisional EBITDA fell substantially from EUR 68.2 million (margin of 9.8%) in the second quarter of the business year 2018/19 to EUR 1.2 million (margin of 0.2%) in the third quarter. This dramatic drop in earnings stems largely from developments at the Cartersville site, because the direct quarter-to-quarter comparison shows that the other three business segments delivered balanced earnings growth. At EUR –28.8 million and an EBIT margin of –4.1%, the EBIT of the Metal Forming Division for the third quarter of the business year 2018/19 is substantially negative compared with the positive EBIT of 38.7 million (margin of 5.6%) for the previous quarter.

As of December 31, 2018, the number of employees (FTE) in the Metal Forming Division was 11,983 and thus 3.0% higher year over year (11,634) due, in particular, to the global expansion of the Group’s automotive activities. Relative to the figure (12,003) as of the end of the business year 2017/18, the number of employees has been more or less stable.

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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