After weathering an interim, very subdued phase following the Northern summer, the business year 2022/23 ended on a positive note that continues to defy forecasts of an economic decline.

      The fact that the COVID-19 pandemic has largely been overcome, the significant easing of international supply chain pressures, and, not least, the reduction in Europe’s dependence on Russian sources of energy in record time contribute to the still prevailing positive economic sentiment.

      One cannot ignore the fact, however, that the war in Ukraine rages on and that overall geopolitical tensions worldwide are on the rise. Inflation in both Europe and North America has also turned out to be more persistent than expected. This means that the central banks on either side of the Atlantic are not expected to reverse their interest rate hiking cycle even though its fallout is already negatively affecting the banking sector.

      Given that the central banks have accorded highest priority to the fight against inflation and are working to achieve it by slowing the momentum in both prices and demand, this policy is generally expected to put a damper on the economy after some time.

      Yet expectations as to the development of different economic regions and individual market segments have differed widely so far.

      The coming months will show whether China’s abandonment of its strict zero-COVID policy and subsequent reopening will substantially boost economic growth in the business year 2023/24 compared with the reporting period. As interest rates continue to rise in North America, just as in Europe, we expect demand for voestalpine’s products to slow down during this phase in these two economic regions. Despite the sharp drop in inflation, demand in Brazil is expected to slow slightly due to uncertainties arising from the change in government as well as declining exports in a globally cooling economy.

      As far as individual market segments are concerned, we expect the consumer goods and white goods industries to continue along a fairly subdued trajectory. The construction industry is expected to continue weakening over the course of the business year 2023/24. The automotive industry, by contrast, should follow a largely stable trajectory at the current level thanks to still existing orders on hand and the improvement in international supply chains. While demand from the conventional energy sector (oil and natural gas) is expected to remain good in the business year 2023/24, it will no longer reach the record highs seen during the business year ended.

      The upward trends in both the renewable energy sector and the aerospace industry should continue unabated in the current business year.

      Good demand from the traditionally stable railway infrastructure market segment is expected for the business year 2023/24 and beyond. For one, there is a large need for investment in some European countries in this area; for another, the worldwide trend toward climate action will continue to buttress this market segment in the long term.

      Assuming that the global economy will not be hit by massive economic distortions on account of the central banks’ interest rate polices and that there will be no further escalation scenarios in the Ukraine war or additional geopolitical tensions, the Management Board of voestalpine AG expects the Group to generate EBITDA of between EUR 1.7 billion and EUR 1.9 billion in the business year 2023/24.

      Linz, May 26, 2023

      The Management Board

      Herbert Eibensteiner

      Franz Rotter

      Franz Kainersdorfer

      Peter Schwab

      Robert Ottel

      Hubert Zajicek

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

      EBITDA (earnings before interest, taxes, depreciation, and amortization)
      Profit before the deduction of taxes, non-controlling interests, financial result, and depreciation and amortization expenses.