The voestalpine Group successfully carried out a number of strategically relevant investments in recent years. They include laying the groundwork to strengthen voestalpine’s leadership in quality and technology, investments required for replacement purposes and, last but not least, select projects aimed at expansion. These approaches to growth in technologically advanced customer segments went hand in hand with a greater emphasis on regional diversification, both of which enabled the Group to create a bigger footprint globally. The business year 2019/20 ushered in a consolidation phase. For one, consolidation serves to optimize existent facilities’ daily operations; for another, it shifted the Group’s focus to generating cash flows in a challenging environment. While the stated goal is to substantially reduce investments during the business year 2020/21 compared with the previous year yet again, the voestalpine Group will not deviate, now or in the future, from its core strategy of protecting its position as a technological pioneer. It will continue to implement far-reaching and cutting-edge programs in the near future. Against this backdrop, the Group’s investment volume in the first half of the business year 2020/21 was EUR 244.9 million. This means that investments in property, plant, and equipment; intangible assets; and equity investments declined by 27.4% compared with the previous year (EUR 337.5 million).
Investments of the Steel Division declined year over year by 17.6%, from EUR 72.2 million in the first half of the business year 2019/20 to EUR 59.5 million in the reporting period. The fact that numerous important plants were upgraded in recent business years—thus also setting new technological standards—is the reason for the low investment volume relative to current depreciation. These next-generation facilities make it possible to produce a wide range of high quality steel grades. Projects with a more manageable scope predominated during the current business year’s first six months. Among other things, the Steel Division is investing in a testing center that will be used to determine the mechanical properties of cold-rolled strip steel. The heavy plate product segment saw the launch of a new straightening machine, and a slitting line is nearing its launch at the division’s Steel Service Center in Linz, Austria.
At EUR 97.9 million, the investment volume of the High Performance Metals Division in the first half of the business year 2020/21 (previous year: EUR 114.3 million) was moderately higher than that of the Group’s other three divisions. While this division continued to push the construction of its new special steel plant in Kapfenberg, Austria, despite the COVID-19 pandemic, the latter did trigger a number of delays. Construction of the steel mill production floor was completed in the business year 2019/20. Project management is now focused on the assembly of units for mechanical components; on connecting the mill to water, gas, and other utilities; as well as on the electrics.
At EUR 42.1 million, the investment volume of the Metal Engineering Division in the first six months of the business year 2020/21 was 31.3% less than the previous year’s volume of EUR 61.3 million. Due to lower demand from downstream operations owing to the COVID-19 pandemic, planned maintenance work at one of the two blast furnaces in Donawitz, Austria, was initiated a few weeks earlier than planned. The work was completed in due course over the summer. On September 22, 2020, this division started up the world’s most advanced continuous casting facility (CC4) at its Donawitz plant. The launch of this fully automated facility will enable further quality improvements in the production of steel grades for the Metal Engineering Division’s downstream processing units.
At EUR 42.0 million, the Metal Forming Division also significantly lowered its investments in the reporting period compared with the previous year (EUR 81.0 million). This division had already scaled back its Automotive Components internationalization projects during the previous business year in order to focus instead on optimizing existent plants. Its most important project in the business year 2020/21 concerns the construction of what is already the fourth phs-ultraform® line in China, which will cover the additional needs of well-known automotive customers. The start-up phase of the third unit for producing press-hardening steel in China was not launched until the fall of the calendar year 2019.