Economic environment and course of business

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

Worldwide, the COVID-19 pandemic dominated the economy during the first half of the business year 2020/21. While its first quarter saw sharp economic downturns in the most important countries, the second saw rapid recoveries. But there were marked differences the world over.


The business year’s first quarter delivered an economic shock that affected large swaths of Europe. Almost all countries imposed state-mandated lockdowns in reaction to COVID-19, restricting public life in order to contain the pandemic. Given the quasi “imposed” nature of this economic crisis, most governments acted quickly to put in place support programs aimed at preventing a widespread wave of bankruptcy.

Personal consumption bounced back once the lockdowns were lifted toward the end of the first business quarter. Industrial production, for its part, saw a strong recovery during the subsequent quarter, albeit after a delay.

The service sector was the one that was hit hardest by the lockdowns. Here, both governmental restrictions along with the fear of contracting COVID-19 allowed only a moderate rebound even after the lockdowns were lifted.

Investment activity was restrained throughout the first six months of the business year 2020/21 owing to the uncertainties as to sustained damage and the shape of the economy down the road. In the medium term, however, the European Union’s EUR 750 billion Recovery Fund should boost the propensity to invest.

The European Central Bank (ECB) responded rapidly. Among other things, it set up a Pandemic Asset Purchase Program (PEPP) that gives European states financial leeway despite growing sovereign debt.

The lockdowns led to cuts or—as in the European automotive industry—even to weeks-long production shutdowns. In this environment, the voestalpine Group had to contend with massive business losses because it generates approximately two-thirds of its revenue in Europe. It availed itself of governmental support programs; one of the most effective of these was the short time work program.

European economies consolidated at the start of the Northern summer. With the exception of the aerospace industry and the oil and natural gas sector, practically all of the voestalpine Group’s markets recovered during the business year’s second quarter. The automotive industry, which is most relevant to the Group, saw an unexpectedly strong rebound.

North America / USA

In North America, specifically, the United States, the COVID-19 pandemic triggered an unprecedented economic recession in the first quarter of the business year 2020/21. In contrast to Europe, however, no nationwide lockdown was put in place. In turn, this kept economic sentiment and momentum a bit more afloat than in Europe.

Toward the end of the business year’s first quarter, consumer spending recovered quickly and emphatically, relatively speaking, and the labor market also signaled a turn toward the better. Capital spending, by contrast, showed only slight signs of improving, and industrial production remained fairly weak at first.

The rebound clearly picked up momentum over the course of the business year’s second quarter. Supported by the rapidly recovering labor market, personal consumption, in particular, continued to develop dynamically. Both the construction industry and investments also rapidly rebounded from the lows they had recorded back in April 2020.

Compared with the European crisis intervention programs, state support for the economy in North America remained modest. But the Federal Reserve (Fed) responded by easing its monetary policy yet further, putting in place emergency loans, and presenting the new cornerstones of its strategy. Aside from inflation and stability targets, these new cornerstones are now more strongly aligned with developments in the labor market also.

The ramifications of this environment for the voestalpine Group’s North American companies were different depending on the market segment.

Just as in Europe, the U.S. automotive industry shut down production completely for several weeks during the first quarter of the business year 2020/21, but rapidly regained its footing in the second. Aerospace as well as the oil and natural gas industry did not display any signs of recovering during the reporting period. On the whole, voestalpine Group companies and sites that focus on consumer goods were less affected by the economic turbulence during the current business year’s entire first half.

South America / Brazil

The COVID-19 pandemic hit Brazil—the most relevant country on the South American continent for the voestalpine Group—a bit later than elsewhere. As a result, the country’s economic development on the whole and capacity utilization at voestalpine’s sites in Brazil were still good at the start of the reporting period. But the downturn did hit in the course of the first business quarter, even though the Brazilian government made an effort in connection with its management of the pandemic to avoid placing far-reaching governmental restrictions on the economy. Support measures that it enacted for the benefit of the country’s population, however, helped to mitigate the recession and to rekindle the economy during the business year’s second quarter.

The Brazilian sites of the voestalpine Group were differently affected by the pandemic’s ramifications and had to adjust their production rates to the weakened demand. Increases in orders during the second quarter of the business year did not make themselves felt until the end of the reporting period.

Asia / China

In Asia, China was the first country to be affected by COVID-19 during the company’s business year 2019/20. The country’s political culture made it possible to bring the pandemic under control quite quickly using a rigorous approach, including massive restrictions on people’s individual liberties. Following a complete lockdown in vast regions that lasted a few weeks, China already started to rekindle its economy in coordinated fashion even before voestalpine’s business year 2019/20 was out.

Moreover, the Chinese government intensified state-sponsored capital spending programs in both infrastructure and real estate; this succeeded soon in returning the country to a growth trajectory. China’s industry and consumers alike embraced it immediately.

Given these parameters, voestalpine’s sites in China achieved production levels in the first quarter of the business year 2020/21 that were equivalent to those prior to the outbreak of the COVID-19 pandemic and succeeded in generating further growth in the remainder of the business year’s first half.

The fact that the Chinese steel industry produced record levels of crude steel was a knock-on effect of the comprehensive construction and infrastructure program. Demand for iron ore in the world market thus remained high, in turn pushing the price of iron ore ever higher despite the deep recession worldwide. The fear that the pandemic would also lead to delivery shortfalls in the regions that produce iron ore (such as Brazil) further fueled this dynamic, but this did not come to pass over the reporting period. Accordingly, the global iron ore market saw a slight easing toward the close of the first half of the business year 2020/21.

In sum, global developments at the macroeconomic level resulted in an extremely difficult first business quarter that saw revenue meltdowns in almost all regions and segments. The second business quarter was marked decisively by a rebound that already enabled some of the voestalpine Group’s divisions to return to almost normal production levels.

The Group’s broad positioning with a focus on technological niche markets turned out to be an advantage yet again. For example, the Metal Engineering Division’s railway infrastructure segment turned out to be downright resilient. Railway operators used the cutbacks in railway services during the lockdowns to carry out maintenance work.

The lockdowns also delivered a massive boost to e-commerce. The Warehouse & Rack Solutions segment, which had already benefited previously from the growing trend toward e-commerce, posted new highs in orders received and achieved maximum capacity utilization.

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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