Financial key performance indicators of the voestalpine Group

The key performance indicators (KPIs) of the voestalpine Group for the first three quarters of the business year 2020/21 reflect the economic ramifications of the COVID-19 pandemic. They were particularly pronounced at the start of the reporting period when voestalpine’s business volume crumbled Group-wide due to the rigorous lockdowns in key sales regions. Subsequently, order levels improved over time—especially in the automotive sector. The Group reported a minor year-over-year revenue shortfall for the business year’s third quarter. The Steel Division and the Metal Forming Division—both of which are strongly aligned with the automotive sector—showed the clearest signs of a trend toward recovery. Year over year, the revenue of the voestalpine Group for the first three quarters of the business year 2020/21 fell by 16.8% to EUR 7,971.1 million (Q 1 – Q 3 2019/20: EUR 9,575.2 million).

Both the decline in the sales volume and the fact that prices keep falling while raw materials costs remain high had a negative effect on the Group’s earnings performance. Comprehensive programs aimed at cost optimization, particularly adjustments in personnel to lower demand, made it possible to keep declines in earnings within certain limits. Restructuring measures were carried out especially at facilities exposed to longer-term declines in demand from the aerospace industry as well as the oil and natural gas sector. The use of state-sponsored short time work programs partly cushioned temporary order shortfalls. The year-over-year comparison of the operating result (EBITDA) takes about EUR 75 million in non-recurring effects (provisions for restructurings and other risks) into account. At EUR 682.9 million, EBITDA for the first three quarters of the business year 2020/21 is 18.4% less than the EBITDA of EUR 837.2 million reported for the first three quarters of the business year 2019/20. Just as happened with the revenue, the voestalpine Group’s EBITDA also improved continually during the current business year’s first three quarters.

The profit from operations (EBIT) for both the previous year and the reporting period contains significant non-recurring effects. In addition to the aforementioned non-recurring effects impacting EBITDA, impairment losses on assets also weighed on EBIT for the first three quarters of the previous business year. In sum, therefore, EBIT for the previous year’s first three quarters contained about EUR 345 million in non-recurring effects, while EBIT for the first three quarters of the current business year comprises non-recurring effects of EUR 200 million in impairment losses that are attributable to Steel Division companies and the Metal Engineering Division. Against this backdrop, the voestalpine Group’s EBIT of EUR –133.7 million for the reporting period is in negative territory (Q 1 – Q 3 2019/20: EUR –82.3 million). Its profit before tax for the first three quarters of the business year 2020/21 is EUR –210.5 million (Q 1 – Q 3 2019/20: EUR –185.2 million). At EUR –159.3 million, the profit after tax has remained more or less the same year over year (Q 1 – Q 3 2019/20: EUR –160.0 million).

The voestalpine Group brought about a truly positive change in the gearing ratio (net financial debt as a percentage of equity). Specifically, it succeeded in reducing the gearing ratio from 80.0% as of December 31, 2019, to 58.4% as of December 31, 2020. While equity fell by 5.0% to EUR 5,411.3 million as of December 31, 2020 (down from EUR 5,693.2 million year over year), net financial debt dropped by 30.7%, from EUR 4,554.7 million in the previous year to EUR 3,158.3 million in the reporting period. As a result, voestalpine has demonstrated yet again that it possesses tremendous internal funding potential even in a difficult economic environment. Management’s strong focus on lowering working capital turns out to be a major driver of the improvement in the net financial debt: It was reduced by more than EUR 1.1 billion within a single year. The reduction in investments, which ended up being far less than depreciation in the business year to date, is yet another major measure aimed at controlling the debt.