High Performance Metals Division

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

Market environment and business development

The market environment of the High Performance Metals Division improved considerably in the first quarter of the business year 2021/22. This positive development took hold in all of the division’s industrial segments except aerospace.

In the HPM Production business segment, which comprises all of the division’s production plants, facilities closely linked to tool steel clearly benefited from the upswing in demand. As expected, the plants focused on aerospace were the only ones to develop along a relatively low yet stable trajectory.

While the construction of the new special steel plant in Kapfenberg, Austria, continued even during the COVID-19 crisis, late component deliveries delayed its completion. It is now slated to be started up in mid-2022.

The Value Added Services business segment, which comprises the international sales organization, benefited from the rebound in the toolmaking industry and the resulting increase in tool steel sales.

The division continued to expand its capacities in Additive Manufacturing (3D printing)—a strategic, cutting-edge technology—throughout the first quarter of the business year 2021/22 as planned. It currently operates two research facili­ties and two production facilities for manufacturing the powder in Austria and Sweden. It also runs seven Value Added Services facilities in Europe, North America, and Asia for assembling com­ponents that are manufactured using additive processes. The ability of the High Performance Metals Division to develop powders and customer-specific components in-house will further buttress its position and unique selling proposition (USP) as a premium supplier.

Tool Steel

The rebound in demand in the tool steel product segment carried over from the previous business year through the first quarter of the business year 2021/22. This was driven mainly by the automotive industry besides the consumer goods industry despite existing semiconductor supply chain problems.

Special Materials

While regional air traffic has more or less reached pre-crisis levels, intercontinental flights (the in­dustry’s other pillar) have still not resumed. According to the experts, aircraft construction is not expected to return to the levels seen prior to the COVID-19 crisis until after 2023. While demand for components and parts is commensurately low at this time, the division has seen slight increases in orders even from the aerospace segment; this may mean that demand has already bottomed out.

Considering current investment activity, the oil & natural gas sector seems to be on the rebound as well. The division has been receiving a growing number of inquiries and expects to post substantial year-over-year growth as the business year wears on. But this industry is still being buffeted by uncertainty despite a crude oil price that once again enhances projects’ viability. The restrained investment climate despite high pent-up demand reflects the growing pressure from politicians and investors alike regarding the need to transform this CO₂-intensive industry.

Regional Development

Europe

Demand for tool steel has rebounded substantially in Europe owing, in particular, to the auto­motive industry. While demand from certain areas of the oil & natural gas industry has intensified as well, demand from the aerospace industry remains relatively subdued.

North America

North America has seen a dramatic recovery in tool sales to the automotive industry. The market environment in both aerospace and oil & natural gas largely held steady year over year. However, the 25% tariffs that the United States introduced a while ago on all imports of steel products continue to generate market uncertainty.

South America

Conditions in South America have also improved substantially year over year thanks mainly to the oil & natural gas sector. On the whole, the size of the South American market thus exceeds previous years’ levels.

Asia

In the first quarter of the business year 2021/22, the market environment in Asia and especially in China improved slightly over the previous business year. India, South Korea, and Turkey delivered substantial growth, whereas sales in Japan, Taiwan, and Thailand were lower year over year.

Development of the key figures

In the first quarter of the business year 2021/22, the High Performance Metals Division succeeded in continuing the upward trend that had started in previous quarters. Compared with the same quarter of the previous year, which was massively impacted by the COVID-19 pandemic, the division’s key performance indicators (KPIs) improved significantly year over year. Revenue rose in Q1 2021/22 by one third to EUR 704.2 million (Q1 2020/21: EUR 527.3 million) due largely to growing delivery volumes as well as to the slight in­crease in prices for steel products. Accordingly, EBITDA rose year over year to EUR 101.2 million (previous year: EUR 40.4 million) and the EBITDA margin from 7.7% to 14.4%. While EBIT was slightly negative in the same period of the previous year (EUR –1.5 million, margin of –0.3%), it improved in the reporting period to EUR 61.4 million and a margin of 8.7%.