Financial key performance indicators

The key performance indicators (KPIs) of the High Performance Metals Division deteriorated in the business year 2019/20 compared with the previous year as a result of the substantial dampening of the economic environment. Specifically, revenue fell by 7.8%, from EUR 3,136.3 million in the previous year to EUR 2,891.0 million in the reporting period. This decline was relatively moderate because rising alloy prices were passed on to the customer in the form of higher prices. Primarily the price of nickel, the division’s most important alloying element, shot up in the course of the business year. Delivery volumes, by contrast, dropped substantially year over year. The High Performance Metals Division registered a significant weakening on the earnings side. The decrease in EBITDA from EUR 434.9 million (margin of 13.9%) in the previous year to EUR 276.0 million (margin of 9.5%) in the business year ended signifies a decline of 36.5%, due chiefly to limited capacity utilization at the production plants as well as declining delivery volumes, especially in the tool steel product segment. In addition to the operating performance, restructuring expenses at Buderus Edelstahl in Wetzlar, Germany, as well as provisions also impacted EBITDA for the business year 2019/20 to the tune of EUR 54 million owing to the significant deterioration in the economic environment.

At –72.6%, EBIT dropped dramatically from the previous year’s value of EUR 280.0 million to EUR 76.6 million in the reporting period. In addition to the dampened volume trends and the aforementioned expenditures associated with the restructuring of Buderus Edelstahl, EUR 26 million in impairment losses at this German special steel plant had a negative impact on EBIT for the business year ended. The EBIT margin fell accordingly from 8.9% to 2.6%.

The quarter-on-quarter (QoQ) comparison between the third and fourth quarters of 2019/20 shows a slight uptick in the performance of the High Performance Metals Division. In revenue terms, the division posted growth of 5.8%, from EUR 675.5 million to EUR 714.6 million, as a result of growing delivery volumes. This development, however, stems only in part from a recovery of demand at the start of calendar year 2020; instead, it is due largely to seasonal declines in the sales volume in the third quarter of the business year 2019/20. In the fourth quarter, finally, the economic consequences of measures designed to mitigate the COVID-19 pandemic put a damper on the division’s performance. The division’s EBITDA jumped quarter on quarter, from EUR 6.9 million (margin of 1.0%) to EUR 91.7 million (margin of 12.8%). Note, however, that both the aforementioned restructuring expenses at the Buderus special steel plant and the provisions affected primarily the third business quarter. From the third to the fourth quarter, EBIT improved substantially from EUR –48.0 million to EUR 32.2 million, pushing the EBIT margin from –7.1% to 4.5%. EBIT for the third and fourth quarter contains impairment losses of EUR 11 million and EUR 15 million, respectively, both of which are attributable to Buderus Edelstahl.

As of March 31, 2020, the High Performance Metals Division had 13,404 employees (FTE). This corresponds to a decrease of 6.9% over the number (14,398) as of the previous year’s reporting date. The reduction stems both from the restructuring of the special steel plant in Wetzlar, Germany, and the adjustment of the labor force to the difficult market environment overall.