High Performance Metals Division

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

Market environment and business development

While the ramifications of the COVID-19 pandemic substantially dampened demand for the products of the High Performance Metals Division during the first three quarters of the business year 2020/21 over all, the outcomes varied by region and industry. Early on, the division developed and consistently implemented countermeasures aimed at lowering costs. A few customer segments recorded slight upward trends in sales, but not until the third quarter.

The tool steel product segment saw demand rebound slightly over the course of the business year in tandem with the gradually growing momentum in the automotive industry. Demand for hybrid vehicle drive trains had a positive impact on orders for high-speed steel, whereas delays in the release of new projects and models had a negative impact on sales of tool steel for conventional vehicle fleets. Orders from the consumer goods industry developed along a much better trajectory, China being the country where the division has a strong customer base.

The special materials product segment of the High Performance Metals Division was confronted with massive cutbacks in the aerospace industry. When air travel might recover cannot be predicted at this time, but the recertification of Boeing’s 737 MAX by the U.S. Federal Aviation Administration (FAA) in November 2020 sent a positive signal. The oil and natural gas sector saw a slight recovery in the third business quarter after equally challenging conditions in the preceding months. Here, demand for corrosion-resistant special steels and nickel-based alloys for offshore projects intensified.

The High Performance Metals Production business segment comprises four international production facilities that manufacture materials for both product segments. The business unit’s individual plants were affected to different degrees by the decline in demand. Capacity utilization at production facilities focused on tool steel was more or less satisfactory in the first three quarters of the business year 2020/21. Production facilities focused on special materials, however, were confronted with much steeper declines. Accordingly, the restructuring measures carried out at these facilities were broader even though major cost optimization programs were implemented at all plants.

The Value Added Services business segment comprises the division’s global sales network. In keeping with the different approaches worldwide to the handling of the COVID-19 pandemic, individual sales organizations developed along different trajectories also.

While Europe experienced a significant downturn in demand for tool steel owing to the plant shutdowns across the automotive industry at the start of the year, subsequent quarters saw a slight rebound. Benefiting as it did from the recovery of the construction industry, the commercial vehicle industry recovered substantially over the course of the business year. The High Performance Metals Division’s greatest losses in Europe are related to the aerospace industry.

In North America, the division was affected the most by the economic fallout of the COVID-19 pandemic because aerospace as well as oil and natural gas account for a greater share of its product portfolio there.

In South America, market conditions were a bit more advantageous even though demand flattened in major customer segments owing to the pandemic in this region, too.

In China, developments on the whole were positive throughout the current business year, especially due to the substantial rebound of the Chinese economy since the second quarter. The country’s consumer goods industry—particularly expenditures for entertainment electronics as well as medical technology—was key to order growth in the division, whereas the rest of Asia had to contend with a much more difficult market environment.

Financial key performance indicators

Quarterly development of the High Performance Metals Division

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While the financial performance of the High Performance Metals Division came under considerable pressure during the reporting period due to the economic fallout of the COVID-19 pandemic, the Group managed to leverage both its global orientation and comprehensive cost optimization programs with the aim of limiting the decline in the division’s key performance indicators (KPIs). Revenue for the first three quarters of the business year 2020/21 decreased year over year over all by EUR 24.9 million to EUR 1,633.7 million (Q 1 – Q 3 2019/20: EUR 2,176.4 million). This mainly reflects a significant weakening in delivery volumes followed by lower prices which, given the current market environment, were additionally exacerbated by a less than advantageous product mix.

Any year-over-year analysis of the division’s earnings performance must consider non-recurring effects contained in the previous year’s figures. Among other things, they include restructuring expenses incurred for the special steel plant in Wetzlar, Germany. On the whole, the non-recurring effects had impacted EBITDA for the third quarter of the business year 2019/20 to the tune of some EUR 50 million and EBIT to the tune of some EUR 60 million. Year over year, the division’s EBITDA for the first three quarters of the business year 2020/21 dropped nonetheless by 28.5% to EUR 131.7 million (Q 1 – Q 3 2019/20: EUR 184.3 million). This caused the EBITDA margin, in turn, to decline a little from 8.5% to 8.1%. The profit from operations (EBIT) fell to currently EUR 8.5 million with a margin of 0.5%, down from EUR 44.4 million (margin of 2.0%) in the same period the previous year. The division’s High Performance Metals Production business segment was affected, in particular, by the decline in earnings resulting from sharp reductions in capacity utilization at its production facilities. Capacity adjustments made in the light of shrinking demand via state-sponsored short time work programs as well as comprehensive restructuring programs helped to contain the losses on the earnings side. The performance of the Value Added Services business segment was satisfactory, given the general weakness of the market owing to the COVID-19 crisis. This outcome stems especially from its ability to leverage its global distribution network with the aim of offsetting significant declines in core markets through its solid performance in other regions.

The quarter-on-quarter comparison (QoQ) of the second and third quarters of the business year 2020/21 shows that revenue rose by 7.0%, from EUR 534.4 million to EUR 572.0 million, thanks to rising delivery volumes and steady prices. Both the slight improvement in demand, which led to better capacity utilization rates in the High Performance Metals Production business unit, and the restructuring measures had an increasingly positive impact on the segment’s earnings performance. The QoQ for the Value Added Services business segment also shows stable and good performance. EBITDA for this unit soared by 50.8%, from EUR 36.4 million in the second quarter of 2020/21 to EUR 54.9 million in the third quarter, causing the EBITDA margin to rise from 6.8% to 9.6%. In turn, EBIT climbed from EUR –4.7 million in the second quarter of 2020/21 (margin of –0.9%) to EUR 14.7 million in the third (margin of 2.6%).

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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