voestalpine AG vs. the ATX and international indices
Changes compared with March 31, 2022, in %
Development of the voestalpine share
The voestalpine share fluctuated widely in the business year 2022/23, which reflects the numerous uncertainties to which the company was exposed throughout the reporting period. Two contrasting phases shaped the share’s performance. The substantial share price declines in the first half of the business year were followed by significant upward trends in the second half.
While the voestalpine share tended to move laterally at the start of the reporting period (i.e., the second calendar quarter), the negative market sentiment overall led to notable price drops in June 2022. The capital markets were unnerved, in particular, by the risk that Europe’s industrial sector was facing imminent bottlenecks in electricity and natural gas supplies, along with associated extreme price fluctuations. Not even voestalpine’s then highly positive earnings report at this point helped to stop the downward trend, because the assessment of a company’s future performance is an important yardstick in the valuation of share prices. As a result, the price of the voestalpine share shed about 30% of its value within two weeks. Aside from the threat scenario involving a shortage of energy on account of the Ukraine war, unstable global value chains as well as sharply rising inflation rates in both Europe and the United States further unsettled the stock markets. While the inflation dynamic in the U.S. was largely fueled by strong demand paired with bottlenecks in the labor market, the same development in Europe was fed mainly by high energy prices. In this environment, the central banks announced that significant interest rate hikes were in the offing. Market participants then began to fear that a worldwide recession was inevitable. Yet market sentiment began to brighten again from the early Northern fall of calendar year 2022. Most significantly, the fact that many European countries were reducing their dependence on Russian natural gas to an unexpected degree triggered euphoria in the capital markets. The central banks’ efforts to bring inflation under control also began to bear fruit. Thanks not least to governmental support packages in Europe and the United States, both economies turned out to be more robust than initially expected and the economic forecasts became increasingly optimistic. This environment had a commensurate positive effect on the voestalpine share. However, the announcement and implementation of the company’s share buyback program accounted to a significant extent for the stock’s extremely favorable performance in the second half of the business year 2022/23. Owing to the aforementioned developments, its price doubled within a few months from just over EUR 17 in late September 2022 to more than EUR 36 in early March 2023. Subsequently, the dire financial straits of Silicon Valley Bank (SVB) along with the financial collapse of Credit Suisse Bank put a stop to the positive trend. Given fears that the banking crisis might envelop the real economy as well, the value of the voestalpine share dropped by some 15% within a few weeks.
Viewed across the entire business year 2022/23, the voestalpine share rose 15.9%. While the price as of April 1, 2022, was EUR 26.98, by March 31, 2023, it had climbed to EUR 31.28. The benchmark indices, ATX and Dow Jones Industrial, declined only slightly during the same period. The level of the STOXX Index Europe as of March 31, 2023, however, was exactly the same it had been at the start of the reporting period (April 1, 2022).
Treasury share buyback program
The Management Board of voestalpine AG resolved on November 3, 2022, to buy back up to ten million shares equating to equity of about 5.6%. It had been authorized to do so by the Annual General Meeting on July 7, 2021. The share buyback program was launched on November 10, 2022. The voestalpine share had come under strong pressure during the Northern summer of calendar year 2022 due to great uncertainties in the wake of the Ukraine war and the expectation that it would trigger a significant economic downturn. Hence the share buyback program had an additional uplifting effect on the share price in the second half of the business year 2022/23 over and above the positive external factors affecting the share price development.
Convertible bond
voestalpine successfully floated a EUR 250 million convertible bond in April of calendar year 2023, i.e., after the business year 2022/23 had ended. The offer was made exclusively to institutional investors as part of an accelerated offering. The convertible bond is denominated in units of EUR 100,000 and has a coupon of 2.75% p.a., payable on a semi-annual basis. The initial conversion price is EUR 40.8915, which equates to a conversion premium of 30% over the reference share price of EUR 31.455. These bonds were issued on April 28, 2023, and will be redeemed after five years at the nominal value plus accrued interest unless they are converted, repaid, or redeemed at an earlier date. The convertible bonds are listed on the Vienna MTF market of the Vienna Stock Exchange.
