Letter from the Management Board

      Ladies and Gentlemen:

      The business year 2022/23 was a special year for voestalpine. The fact that the company’s Supervisory Board greenlit the investment of EUR 1.5 billion for greentec steel paves the way for green steelmaking and sets an important milestone for the Group’s future. Yet we can look back on a very successful year in financial terms too. We posted the best operating result in the Group’s history despite the exceedingly turbulent environment shaped by the war in Ukraine, high inflation and rising interest rates as well as supply chain problems and sharp increases in energy costs. As of March 31, 2023, net financial liabilities were the lowest since the business year 2006/07. This creates a solid financial basis for our greentec steel decarbonization plans and other investments that will be key to the future.

      Numerous major orders that we received in the business year 2022/23 underscored our customers’ high level of trust in our cutting-edge technologies. voestalpine Railway Systems, the world’s leading provider of complete rail technology systems, was awarded the contract for Great Britain’s new high-speed network (“High Speed 2”)—the unit’s largest individual order to date. Add to that orders for international rail infrastructure projects that will run for several years. During the reporting period, we also succeeded in securing several major orders for the coming years from renowned international aerospace manufacturers.

      The fact that we completed the construction phase of the world’s most advanced special steel plant in Kapfenberg, Austria, during the business year ended constitutes a crucial technological step that is equally decisive to sustainability and the digital transformation. This new special steel plant—the voestalpine Group’s largest project in recent years—will be started up in the current business year 2023/24. It will allow us to supply our customers with even better material grades and thus to further expand our global market leadership in both tool steel and special steels.

      All of this shows yet again that our strategy is leading us in the right direction. We want to take this opportunity to thank all employees whose commitment and hard work made a key contribution to this development.

      voestalpine is committed to achieving climate neutrality by 2050. We decided to join the Science Based Targets initiative (SBTi) in order to ensure that the information we provide to our stakeholders regarding our climate action work is as transparent and comparable as possible. Our ambitious goal to reduce greenhouse gas (GHG) emissions along the entire process chain will thus be subject to independent review. In turn, this ensures that our strategy is in line with the Paris Agreement.

      The decarbonization of steel production at our plants in Linz and Donawitz (both in Austria) is at the heart of this long-term alignment. We worked intensively on greentec steel in the business year ended. In a first step, starting in calendar year 2027, we plan to replace one blast furnace each in Linz and Donawitz with one electric arc furnace each. The construction is slated to begin in calendar year 2024 once open funding issues have been resolved. The two electric arc furnaces will enable voestalpine to produce about 2.5 million tons of CO2-reduced steel annually starting in 2027 and thus to lower its CO2 emissions by up to 30% from then on. This equates to some four million tons of CO2 per year which, in turn, corresponds to just under 5% of Austria’s total CO2 emissions, thus making greentec steel the country’s largest climate change mitigation program. Our plans also call for investment in a second electric arc furnace in Linz after calendar year 2030 and the decommissioning of yet another blast furnace each in both Linz and Donawitz. To achieve our goal of CO2 neutrality by calendar year 2050, we are already researching several new processes while also investing in pilot projects that explore new avenues in steel production.

      An innovative raw materials mix and even more efficient processes have enabled us to offer flat steel products with a low carbon footprint for more than a year now. This is already allowing us to support our customers with respect to their growing demand for green steel in the high-quality segment; in fact, we have already delivered the first coils of the greentec steel edition. Our goal in our capacity as a steel and technology group is clear: We want to be the quality leader in CO2-reduced and CO2-neutral steel production.

      We want to take this opportunity to once again bid fond farewell to Dr. Joachim Lemppenau, the long-reigning Chairman of our Supervisory Board, who died in September 2022 at the age of 81. This internationally recognized executive was key to voestalpine’s success story over the past two decades. We will always honor his memory and consistently pursue the path that he helped to forge for the Group.

      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.