Report on the financial key performance indicators of the voestalpine Group

The financial key performance indicators (KPIs) for the first half of the business year 2020/21 were shaped entirely by the COVID-19 pandemic. There were massive meltdowns in both revenue and earnings, especially at the start of the reporting period. Although the economy recovered quickly and forcefully in the business year’s second quarter, the numbers for both revenue and earnings fell far short of those for the same period the previous year.

In sum, revenue in the first half of the business year 2020/21 fell to EUR 5,110.1 million, down 21.9% from EUR 6,541.6 million in the same period the previous year.

All four divisions of the voestalpine Group were affected by the decline in revenue, albeit to different degrees. In this connection, a number of operating segments were not only confronted with declining delivery volumes but had to contend also with falling prices.

Despite the extremely unfavorable developments in the sales markets, the voestalpine Group succeeded nonetheless in generating substantially positive EBITDA of EUR 395.0 million for the first half of the business year 2020/21 thanks to the consistent measures it took with respect to both cost management and earnings optimization. To the extent available and suitable, the Group also availed itself of governmental support programs such as short time work. This approach made it possible to achieve effective flexibility of costs in those production units where lower capacity utilization over a limited time was foreseeable.

Against the backdrop of the difficult market conditions, EBITDA dropped 40.6% year over year from EUR 665.5 million in the same period the previous year. In turn, this pushed the EBITDA margin from 10.2% in the previous year’s reporting period to 7.7% in the current reporting period.

The decline in EBIT was much more pronounced than that of EBITDA which, apart from the pure operating performance, was due also to EUR 198.5 million in impairment losses on assets. These are allocable to the following companies: voestalpine Texas (EUR 167.6 million), voestalpine Tubulars (EUR 25.0 million), and voestalpine Special Wire (EUR 5.9 million). Given the expected earnings as of the close of the current business year, they arise mainly from global disparities triggered by the COVID-19 pandemic as well as from necessary adjustments of expected earnings in the medium term. See the Note, Effects of the COVID-19 pandemic, for additional details on these non-recurring effects.

In sum, EBIT turned negative, plunging from EUR 229.6 million in the previous year to EUR –215.0 million in the current business year.

The profit before tax dropped from EUR 162.5 million a year earlier to EUR –267.5 million in the current reporting period.

Accordingly, the profit after tax fell from EUR 115.2 million for the first six months of the business year 2019/20 to EUR –275.8 million for the first six months of the business year 2020/21.

The intensification of efforts to optimize both costs and earnings as well as lower investments resulted in substantially positive cash flows.

The gearing ratio (net financial debt as a percentage of equity) as of September 30, 2020, was 66.2%, an improvement of 8.9 percentage points compared with 75.1% as of September 30, 2019. Equity declined year over year from EUR 5,994.7 million as of September 30, 2019, to EUR 5,270.6 million as of September 30, 2020, due to the company’s operating performance but especially on account of the impairment losses. However, thanks to the positive cash flow the net financial debt fell from EUR 4,503.1 million as of September 30, 2019, to EUR 3,491.0 million as of September 30, 2020.

Compared with the March 31, 2020, reporting date, the gearing ratio improved slightly from 67.2% to currently 66.2%.

As of September 30, 2020, the number of employees (full-time equivalents, FTE) in the voestalpine Group fell year over year by 6.5% to 47,917 (September 30, 2019: 51,275).

Net financial debt can be broken down as follows: