2. Operating segments

      The voestalpine Group has five reportable segments: Steel Division, High Performance Metals Division, Metal Engineering Division, Metal Forming Division, and Other. The reporting system, which is based primarily on the nature of the products provided, reflects the internal financial reporting system, the management structure, and the company’s main sources of risks and rewards.

      As a global manufacturer of high-quality steel products, the Steel Division of the voestalpine Group plays a key role in shaping a clean future worth living. In its steelmaking operations, the Steel Division sets benchmarks for the current production route and, at the same time, works on future hydrogen-based options to achieve low carbon steel production. Its activities include the production of sophisticated hot and cold-rolled strip steel as well as electrogalvanized, hot-dip galvanized, and organically coated strip steel. This is augmented by electrical steel strip, heavy plate, and foundry products as well as the downstream Steel & Service Center and Logistics Services. The division operates the world’s most modern direct reduction plant in Corpus Christi, Texas, USA, which manufactures highest quality pre-materials (HBI) for both own and third-party steel production. It is the first point of contact for renowned automotive manufacturers and suppliers with respect to strategic product development and supports its customers globally. Moreover, it also is a key partner of the European white goods and mechanical engineering industries. The Steel Division produces heavy plate for applications in the energy sector under the most difficult conditions. Besides serving the traditional oil and natural gas segment, it also provides customized solutions to renewable energy operations.

      The High Performance Metals Division is the global market leader in tool steel and high-speed steel. The division holds a leading position in the global special alloys market for the oil and natural gas industry, the aerospace industry, and the energy engineering industry; nickel-base alloys as well as titanium are also utilized. It operates a global network of service centers with a focus on tool manufacturing, offering component processing, heat treatment, and coating services besides warehousing and preprocessing of special steels. In Houston (Texas, USA), Singapore, and Birmingham (Great Britain), the division offers a broad range of services including logistics, distribution, and processing especially for the oil and natural gas industry, thus underscoring its position as a technology leader in this field by virtue of the one-stop-shop solutions it offers to its customers. Additive manufacturing is considered a line of business that will be hugely important in the future. The Group’s facilities in Düsseldorf (Germany), Toronto (Canada), Houston (Texas, USA), Singapore, Shanghai (China), Dongguan (China), and Nantou (Taiwan) manufacture components using metal powders. The fact that the powder is produced at the division’s own factories in Hagfors (Sweden) and Kapfenberg (Austria) enables it to cover its entire value chain—from the powder all the way to the finished “printed” component.

      The Group’s expertise as the world market leader in turnout technology and as the leading provider of high-quality rails and digital monitoring systems as well as services related to rail infrastructure are brought together in the Metal Engineering Division. In addition, this division offers a broad range of high-quality wire rod and drawn wire, premium seamless tubes for special applications as well as high-quality welding consumables and welding machinery. The Metal Engineering Division also possesses its own expertise in steel, which ensures ultra high-quality supplies of pre-materials throughout the division.

      The Metal Forming Division is voestalpine’s expertise center for highly developed special sections; tube and precision strip steel products; pre-finished system components made from pressed, punched, and roll-profiled parts as well as storage system solutions. This combination of expertise in materials and processing, which is unique in the industry, and the division’s global presence make it the first choice for customers who value innovation and quality. These customers include nearly all leading manufacturers in the automotive production and supply industries, with a significant focus on the premium segment, as well as numerous companies in the commercial vehicle, construction, storage, energy, and (agricultural) machinery industries.

      In addition to the holding company, two financing entities, one raw materials purchasing company, one personal services entity as well as the group-IT companies are included in the business segment “Other.” These companies were combined because their focus is on providing coordination services and support to the subsidiaries.

      Segment revenue, segment expenses, and segment results include transfers between the operating segments. Such transfers are accounted for at transfer prices that correspond to competitive market prices charged to unaffiliated customers for similar products. These transactions are eliminated in the Consolidated Financial Statements.

      The voestalpine Group uses earnings before interest and taxes (EBIT) as well as earnings before interest, taxes, depreciation, and amortization (EBITDA) as the key figures to measure segment performance. These figures are the generally accepted indicators for measuring profitability in the Group.

      The figures for the Group’s operating segments are as follows:

      Operating segments of the Group

       

       

       

       

      Steel Division

       

      High Performance Metals Division

       

       

       

       

       

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

       

       

       

       

       

       

       

       

      Segment revenue

       

      4,570.5

       

      4,216.7

       

      2,891.0

       

      2,299.8

      Of which revenue with third parties

       

      4,146.0

       

      3,839.5

       

      2,856.0

       

      2,267.4

      Of which revenue with other segments

       

      424.5

       

      377.2

       

      35.0

       

      32.4

      EBITDA

       

      494.0

       

      486.6

       

      276.0

       

      214.4

      Depreciation and amortization of property, plant and equipment and intangible assets

       

      594.6

       

      477.4

       

      199.5

       

      165.5

      Of which impairment

       

      239.8

       

      163.1

       

      27.2

       

      2.0

      Reversal of impairment of property, plant and equipment and intangible assets

       

      0.0

       

      0.0

       

      0.0

       

      0.0

      Share of profit of entities consolidated according to the equity method

       

      9.4

       

      9.6

       

      0.0

       

      0.0

      EBIT

       

      –100.6

       

      9.2

       

      76.6

       

      48.8

      EBIT margin

       

      –2.2%

       

      0.2%

       

      2.6%

       

      2.1%

      Interest and similar income

       

      1.4

       

      0.9

       

      17.2

       

      7.4

      Interest and similar expenses

       

      70.1

       

      45.5

       

      63.0

       

      50.2

      Income tax expense

       

      24.7

       

      8.0

       

      –38.2

       

      3.7

      Profit after tax

       

      –139.0

       

      –25.3

       

      –8.1

       

      11.2

      Segment assets

       

      4,777.2

       

      4,757.6

       

      4,244.7

       

      4,193.3

      Of which investments in entities consolidated
      according to the equity method

       

      101.0

       

      105.5

       

      0.0

       

      0.0

      Net financial debt

       

      1,941.1

       

      1,402.0

       

      1,472.2

       

      1,365.8

      Investments in property, plant and equipment and intangible assets

       

      151.6

       

      153.6

       

      258.9

       

      219.3

      Employees (full-time equivalent)

       

      10,419

       

      10,461

       

      13,404

       

      12,586

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Metal Engineering Division

       

      Metal Forming Division

       

       

       

       

       

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

       

       

       

       

       

       

       

       

      Segment revenue

       

      2,941.7

       

      2,667.3

       

      2,838.3

       

      2,553.9

      Of which revenue with third parties

       

      2,903.8

       

      2,626.7

       

      2,804.6

       

      2,523.6

      Of which revenue with other segments

       

      37.9

       

      40.6

       

      33.7

       

      30.3

      EBITDA

       

      301.1

       

      229.7

       

      203.3

       

      273.8

      Depreciation and amortization of property, plant and equipment and intangible assets

       

      268.2

       

      213.4

       

      194.5

       

      149.9

      Of which impairment

       

      82.9

       

      34.0

       

      51.8

       

      7.7

      Reversal of impairment of property, plant and equipment and intangible assets

       

      0.0

       

      0.0

       

      0.0

       

      1.4

      Share of profit of entities consolidated according to the equity method

       

      0.1

       

      0.4

       

      0.0

       

      0.0

      EBIT

       

      32.9

       

      16.3

       

      8.8

       

      124.0

      EBIT margin

       

      1.1%

       

      0.6%

       

      0.3%

       

      4.9%

      Interest and similar income

       

      3.5

       

      2.7

       

      2.7

       

      1.7

      Interest and similar expenses

       

      38.5

       

      34.3

       

      37.2

       

      29.4

      Income tax expense

       

      –14.1

       

      2.8

       

      29.2

       

      4.2

      Profit after tax

       

      –16.4

       

      –12.2

       

      3.6

       

      101.0

      Segment assets

       

      3,428.2

       

      3,345.5

       

      2,557.3

       

      2,645.3

      Of which investments in entities consolidated
      according to the equity method

       

      5.2

       

      5.3

       

      0.0

       

      0.0

      Net financial debt

       

      1,182.6

       

      1,051.9

       

      1,042.0

       

      855.9

      Investments in property, plant and equipment and intangible assets

       

      180.1

       

      129.1

       

      170.0

       

      99.8

      Employees (full-time equivalent)

       

      13,310

       

      13,145

       

      11,633

       

      11,525

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Other

       

      Reconciliation

       

      Total Group

       

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

       

       

       

       

       

       

       

       

       

       

       

       

      Segment revenue

       

      1,640.4

       

      1,231.5

       

      –2,164.7

       

      –1,702.6

       

      12,717.2

       

      11,266.6

      Of which revenue with third parties

       

      6.8

       

      9.4

       

      0.0

       

      0.0

       

      12,717.2

       

      11,266.6

      Of which revenue with other segments

       

      1,633.6

       

      1,222.1

       

      –2,164.7

       

      –1,702.6

       

      0.0

       

      0.0

      EBITDA

       

      –87.0

       

      –70.0

       

      –5.9

       

      0.0

       

      1,181.5

       

      1,134.5

      Depreciation and amortization of property, plant and equipment and intangible assets

       

      13.7

       

      13.1

       

      0.0

       

      0.0

       

      1,270.5

       

      1,019.3

      Of which impairment

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      401.7

       

      206.8

      Reversal of impairment of property, plant and equipment and intangible assets

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      1.4

      Share of profit of entities consolidated according to the equity method

       

      0.0

       

      0.0

       

      1.4

       

      3.6

       

      10.9

       

      13.6

      EBIT

       

      –100.8

       

      –83.1

       

      –5.9

       

      0.0

       

      –89.0

       

      115.2

      EBIT margin

       

       

       

       

       

       

       

       

       

      –0.7%

       

      1.0%

      Interest and similar income

       

      198.3

       

      165.7

       

      –197.7

       

      –165.7

       

      25.4

       

      12.7

      Interest and similar expenses

       

      161.7

       

      136.0

       

      –204.3

       

      –169.9

       

      166.2

       

      125.5

      Income tax expense

       

      12.0

       

      2.5

       

      0.2

       

      –0.3

       

      13.8

       

      20.9

      Profit after tax

       

      –429.9

       

      –51.4

       

      373.3

       

      8.4

       

      –216.5

       

      31.7

      Segment assets

       

      10,698.3

       

      10,632.6

       

      –10,737.6

       

      –10,664.1

       

      14,968.1

       

      14,910.2

      Of which investments in entities consolidated according to the equity method

       

      0.0

       

      0.0

       

      21.4

       

      24.9

       

      127.6

       

      135.7

      Net financial debt

       

      –1,861.8

       

      –1,932.8

       

      –1.1

       

      0.0

       

      3,775.0

       

      2,742.8

      Investments in property, plant and equipment and intangible assets

       

      15.1

       

      8.6

       

      0.0

       

      0.0

       

      775.7

       

      610.4

      Employees (full-time equivalent)

       

      916

       

      937

       

      0

       

      0

       

      49,682

       

      48,654

       

       

       

       

       

       

       

       

       

       

       

       

       

      In millions of euros

      The reconciliation of the key performance indicators, EBITDA and EBIT, is shown in the following tables:

      EBITDA

       

       

      2019/20

       

      2020/21

       

       

       

       

       

      Net exchange differences and result from valuation of derivatives

       

      –7.4

       

      –3.8

      Consolidation

       

      1.5

       

      3.8

      EBITDA – Total reconciliation

       

      –5.9

       

      0.0

       

       

       

       

       

      In millions of euros

      EBIT

       

       

      2019/20

       

      2020/21

       

       

       

       

       

      Net exchange differences and result from valuation of derivatives

       

      –7.4

       

      –3.8

      Consolidation

       

      1.5

       

      3.8

      EBIT – Total reconciliation

       

      –5.9

       

      0.0

       

       

       

       

       

      In millions of euros

      All other key performance indicators contain solely the effects of consolidation.

      Geographical information

      The following table provides select financial information summarized according to the major geographical areas. External segment revenue is broken down by the customers’ geographical location.

      Non-current assets and investments are reported based on the entities’ geographical location.

       

       

      Austria

       

      European Union

       

      Other Countries

       

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

      2019/20

       

      2020/21

       

       

       

       

       

       

       

       

       

       

       

       

       

      External revenue

       

      883.6

       

      829.9

       

      7,002.1

       

      6,123.6

       

      4,831.4

       

      4,313.1

      Non-current assets

       

      5,376.1

       

      5,235.0

       

      1,622.7

       

      1,580.5

       

      1,520.9

       

      1,216.4

      Investments in property, plant and equipment and intangible assets

       

      486.4

       

      390.0

       

      166.5

       

      124.7

       

      122.8

       

      95.7

       

       

       

       

       

       

       

       

       

       

       

       

       

      In millions of euros

      The voestalpine Group does not record revenue from transactions with a single external customer that amounts to 10% or more of the entity’s revenue.

      EBIT (earnings before interest and taxes)
      Profit before the deduction of taxes, non-controlling interests, and financial result.
      EBITDA (earnings before interest, taxes, depreciation, and amortization)
      Profit before the deduction of taxes, non-controlling interests, financial result, and depreciation and amortization expenses.