Steel Division

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

Market environment and business development

For the Steel Division, the first quarter of the business year 2020/21 was marked by weak demand in all of its customer segments against the backdrop of the COVID-19 lockdown.

The European automotive industry largely shut down its manufacturing operations in April and restarted production incrementally in May and, in part, as late as in June. The lockdown also affected the division’s other market segments albeit to varying degrees. While the consumer goods and white goods industries weathered the crisis fairly well, the mechanical engineering industry was hammered by weak demand. Closings of construction sites due to COVID-19 restrictions affected the construction industry at the start of the reporting period, but its subsequent performance pointed to a fairly solid rebound.

Thanks to ongoing projects and considering the circumstances, the energy segment (oil and natural gas)—a market that is key to the heavy plate product segment—delivered satisfactory performance in the first business quarter.

On the whole, however, the prevailing sentiment in the market caused a meltdown, particularly at the start of the reporting period. Subsequent developments saw a slight recovery from a low level. Yet demand in Europe toward the end of the first quarter was still substantially lower compared to the level prior to the COVID-19 outbreak. The Steel Division’s production capacities had to be adjusted accordingly. A small blast furnace was shut down in March 2020, i.e., even before the start of the current business year. Combining the large blast furnace with another small one during ongoing operations allowed the division to adopt a flexible approach to the best possible use of raw materials and to adjustments regarding the development of demand over the course of the reporting period.

Iron ore prices continued to rise despite the deep disruptions of the market on account of the COVID-19 pandemic. This is because China has developed into the world’s largest consumer of iron ore. China’s steel industry barely made any capacity adjustments during the pandemic in its own country and achieved new highs in pig iron production once the lockdown was lifted. The prices of all other raw materials that are key to the production of steel, especially coal but also energy, fell in response to the capacity cutbacks in steel production outside of China. This made it possible to roughly offset the cost increases related to iron ore.

Steel prices in the European spot market during the first business quarter declined due to shrinking demand. While the Steel Division managed in part to steer clear of this trend thanks to long-term customer agreements, it had to contend with falling prices in its short- and medium-term business regardless.

Due to the steel production cutbacks in both North America and Europe, the division’s direct reduction plant in Texas, USA, was confronted with declining demand from its existing customer base during the reporting period. However, the acquisition of new customers in the Far East helped to largely offset this market weakness, thus ensuring fairly solid capacity utilization at the plant during the first business quarter.

Development of the key figures

Quarterly development of the Steel Division

In millions of euros


Q 1 2019/20


Q 1 2020/21









in %






















EBITDA margin


12.7 %


8.2 %










EBIT margin


5.1 %


–1.6 %



Employees (full-time equivalent), end of period







The Steel Division’s key figures for the first quarter of the business year 2020/21 reflect the difficult market environment. As a result, the division’s revenue dropped by 29.4%, from EUR 1,182.1 million in the first quarter of the business year 2019/20 to EUR 834.9 million in the reporting period. This substantial decline is due mainly to the dramatic decrease in deliveries. Slightly lower prices year over year had an additional negative impact.

The development of raw materials prices helped only in part to offset lower sales prices. The division’s cost structures were adjusted to the changed order levels in order to mitigate the negative impact of these developments on volumes. Against this backdrop, EBITDA plunged by 54.7% from EUR 150.6 million in the previous year to EUR 68.2 million in the first quarter of 2020/21, causing the EBITDA margin in turn to drop from 12.7% to 8.2%. At EUR –13.5 million (margin of –1.6%), the division’s EBIT for the reporting period is slightly negative compared with EBIT of EUR 60.8 million (margin of 5.1%) in the same quarter of the previous business year.

As of June 30, 2020, the number of employees (full-time equivalents, FTE) in the Steel Division fell year over year by 5.1% to 10,181 (June 30, 2019: 10,730). This reduction in human resources stems from the adjustments made in the light of the substantial drop in production.

About voestalpine

In its business segments, voestalpine is a globally leading steel and technology group with a unique combination of materials and processing expertise. voestalpine, which operates globally, has around 500 Group companies and locations in more than 50 countries on all five continents. It has been listed on the Vienna Stock Exchange since 1995. With its top-quality products and system solutions, it is a leading partner to the automotive and consumer goods industries as well as the aerospace and oil & gas industries, and is also the world market leader in railway systems, tool steel, and special sections. voestalpine is fully committed to the global climate goals and is working intensively to develop technologies which will allow it to decarbonize and reduce its CO2 emissions over the long term. In the business year 2019/20, the Group generated revenue of EUR 12.7 billion, with an operating result (EBITDA) of EUR 1.2 billion; it had about 49,000 employees worldwide.


50 Countries on all 5 continents
500 Group companies and locations
49,000 Employees worldwide

Earnings FY 2019/20

€ 12.7 Billion


€ 1.2 Billion


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