Market environment and business development

      The Metal Forming Division’s performance overall in the business year 2022/23 was very satisfactory. The division’s Tubes & Sections (T&S), Warehouse & Rack Solutions (WRS), and Precision Strip (PS) business segments saw excellent levels of business activity in a year wracked by an increasingly difficult environment. By contrast, the customer landscape of its Automotive Components business segment continued to suffer from supply chain disruptions and the resulting fallout.

      The Tubes & Sections business segment carried on its excellent performance in the previous business year at a very solid level in the business year 2022/23. T&S develops and manufactures customer-specific steel tubes and sections for customer segments such as the automotive supplier industry, the construction and solar industry, or even the construction and agricultural machinery sector. This segment saw strong momentum across all key customer segments, especially in the first business quarter, until the number of new contracts in Europe leveled off to some extent during the Northern summer. Thanks to solid order books, capacity utilization at its production plants was good throughout the reporting period. Postponed projects in the construction sector, fewer orders in storage technology, and waning momentum in the construction machinery industry caused order levels to decline. Orders from the automotive supplier industry also fell slightly short of expectations on account of the lack of semiconductors. The commercial vehicle sector did not start to weaken until the fourth business quarter. Demand from both the solar and the agricultural machinery industries remained stable and at a high level worldwide throughout the business year just ended. While Great Britain’s economy experienced a sharp downturn, the business segment’s plant in England continued to deliver very good performance thanks to its excellent market position. Capacity utilization at the roll forming facilities in the United States was solid overall. The completion of orders from the agricultural machinery industry, the construction sector, the photovoltaics (PV) industry, and storage technology drove the encouraging performance of the U.S.-based facilities. The Brazilian plants in the Tubes & Sections business segment held their ground against the volatile economic environment. They, too, tapped into the positive momentum from the solar industry and also benefited from satisfactory order levels from the agricultural and construction machinery sector and the bus segment. The division’s plant in China also did well throughout the reporting period.

      In its capacity as a supplier to the worldwide automotive industry, the Automotive Components business segment supports renowned original equipment manufacturers (OEMs) thanks, in particular, to its expertise in laser-welded blanks, cold and hot forming processes for manufacturing automotive components, and complex component group assembly. The business year 2022/23 turned out be very challenging, just as the two preceding business years had been. Following the sharp downturn in passenger car sales on account of COVID-19, the forecasts of industry experts and customers alike assumed that the European automotive market would see a palpable rebound in calendar year 2022. In fact, however, the number of new vehicle registrations in 2022 within the European Union was even lower than the level recorded in the two preceding calendar years. As per the registration data, it fell between 25% and 30% compared with before the outbreak of COVID-19. By contrast, the number of battery-operated vehicles rose yet again in calendar year 2022. The Automotive Components business segment offers product solutions for passenger cars with conventional drivetrains as well as for those equipped with hybrid and electric drive systems. Manufacturing in the automotive industry was also limited in calendar year 2022, as supply chain issues other than the semiconductor shortage, which began to ease to some extent, continued to have adverse effects. The outbreak of the Ukraine war, for example, led to bottlenecks in wire harness deliveries that were eventually mitigated by shifting production elsewhere. Nonetheless, the automotive market still had to contend with long delivery schedules in calendar year 2022.

      Capacities at the European facilities of the Automotive Components business segment were cut back against the backdrop of shrinking automotive production, but production stoppages and adjustments implemented at short notice weighed yet further on manufacturing. Conditions at the non-European Automotive Components facilities were better, but even orders in the United States fell during the reporting period after a solid start. China offered a largely favorable environment throughout the business year 2022/23 despite regional lockdowns early on in the year and yet another COVID-19 wave in the wake of the openings announced by the country’s central government.

      The Precision Strip business segment benefited from favorable conditions during the reporting period. This segment specializes in the production of precision strip steel for a wide range of applications such as steel and cutting rules for the packaging industry, wood band saws and bi-metal strips for the sawmill industry, or precision strip steel for knives and scalpels. Orders did not weaken even a bit until the fall of calendar year 2022. The order backlog was reduced during the second half of the reporting period from what was an initially high level, with the result that production capacity utilization actually remained very robust. Competitive disadvantages stemming from high energy costs in Europe were the most important factor driving the decline in orders from markets outside of Europe. In turn, this led to shrinking demand in China, particularly with regard to precision strip steel for stone saws. Orders in the U.S. for wood band saws fell as well in the Northern fall of calendar year 2022. Bottlenecks in pre-materials supplies eased somewhat over the course of the reporting period.

      In the business year 2022/23, the Warehouse & Rack Solutions business segment benefited yet again from the continued positive momentum in its market springing from the unbroken trend toward online commerce. This segment provides efficient storage systems such as high-bay warehouses for various industries ranging from e-commerce all the way to industrial warehouses, and food and beverage retailers. Orders in hand remained high throughout the reporting period, notwithstanding a few isolated project postponements against the backdrop of rising interest rates and ensuing recession fears. A potential dampening effect on earnings arose from the tightening of freight capacities and generally high freight costs in connection with projects in North America. Yet high capacity utilization was ensured throughout the business year 2022/23. The high steel prices that marked the first half of the reporting period declined, thus benefiting the segment’s performance in the second half.