In the business year just ended, voestalpine mourned the loss of one of the personalities who had a major impact on the Group in recent decades. Dr. Joachim Lemppenau was a member of voestalpine AG’s Supervisory Board for 23 years and chaired it for 18 of those years. He died in late September 2022 at the age of 81. Dr. Lemppenau played a decisive role in shaping the success story of today’s steel and technology group voestalpine. On the Supervisory Board, he worked to push the Group’s global position as a technology and quality leader in steel, to develop its processing expertise, and accelerate its internationalization. Yet Dr. Lemppenau’s exceptional impact was not just due to his considerable entrepreneurial skill; he also cultivated compassion and accountability. Although he stepped down as Chairman of the Supervisory Board at the end of March 2022, he would have continued to make himself available to the company up to the Annual General Meeting in 2024, i.e., throughout the last two years of his term of office, as a member of the Supervisory Board. Following his death, the Supervisory Board decided not to hold an election for the now vacant seat until his term of office officially ends as of the 2024 Annual General Meeting.
The business year 2022/23 was affected by a number of adverse developments: the war in Ukraine, high energy prices in Europe, growing inflation and rising interest rates, as well as persistent supply chain problems. Despite this generally difficult macroeconomic environment, the business year was characterized by solid demand in most market segments. By demonstrating operational flexibility and adaptability, the voestalpine Group once again achieved record figures for revenue and operating result despite the challenging environment. As both the Report of the Management Board and the Group Management Report address the economic environment and the Group’s earnings in greater detail, we may dispense with such explanations here.
During the past business year, the Supervisory Board fulfilled its responsibilities under the law and the Articles of Association, holding six plenary sessions, three meetings of the Audit Committee, and six meetings of the General Committee. In both the General Committee and the Audit Committee meetings, the Management Board provided comprehensive verbal and written information on the development of the company’s business as well as its position and financial management.
In addition to the regular reports on the Group’s current business and financial position, the meetings of the Supervisory Board dealt especially with matters related to sustainability, innovation, and information technology—all of which will determine the future. Preparations for the first steps toward decarbonizing the company’s plants in Linz and Donawitz (both in Austria) undoubtedly took center stage in these discussions during the business year just ended. Already in March 2022, the Supervisory Board gave its approval to carry out the preliminary work needed for climate-friendly steel production in Austria. In March 2023, it approved the next step in this process: With an investment volume of some EUR 1.5 billion, an electric arc furnace is to be built at each of the two sites, replacing two of the five blast furnaces currently in use. According to the greentec steel project plan, decisions regarding facilities and suppliers will be made before the end of 2023, construction will start in 2024, and both units will be commissioned in 2027. From then on, the Group will be saving up to 30% of the current CO2 emissions. This equates to about 5% of Austria’s overall annual CO2 emissions, making the project the country’s largest singular undertaking in terms of climate action. voestalpine’s long-term aim is to pave the way for carbon-neutral steel production. To achieve this goal by 2050 at the latest, the Group is already researching several new processes and investing in pilot projects exploring alternative pathways in steel production. These include research projects such as the H2FUTURE hydrogen pilot facility at the Linz plant for manufacturing and using “green” hydrogen on an industrial scale, as well as the testing facilities at the Donawitz plant for carbon-neutral steel production based on direct reduction of iron ore using hydrogen. Yet more research projects focus on storing and reusing unavoidable residual emissions.
The Management Board was also continually kept abreast of yet another Group project that is key to its plans in terms of both innovation and sustainability—namely, the construction of the new special steel plant in Kapfenberg, Austria, that will be started up in the business year 2023/24.
The Supervisory Board also dealt with issues such as the security of the voestalpine Group’s supplies of raw materials and energy in the long term, particularly in light of new decarbonization technologies, and a wholly integrated circular economy approach to establishing expanded material cycles.
The General Committee addressed, in addition to questions of compensation, above all the procedures for filling positions on the Management Board after the current term expires in March 2024, as well as preparatory work for the election of the new Supervisory Board at the 2024 Annual General Meeting.
The Audit Committee concerned itself chiefly with the preparation and review of voestalpine AG’s Consolidated and Annual Financial Statements, the auditor’s independence, and topics related to the current and future structure of the internal control system, the risk management system, and Internal Audit.
For details regarding the composition and procedures of the Supervisory Board and its committees, see the Consolidated Corporate Governance Report 2022/23.
Both the Annual Financial Statements and the Consolidated Financial Statements as of March 31, 2023 were audited by the auditor elected at the Annual General Meeting on July 6, 2022, specifically Deloitte Audit Wirtschaftsprüfungs GmbH, Vienna, Austria. The auditor attended all three meetings of the Audit Committee and was available for questions and discussions.
The audit did not give rise to any objections. It showed that the Annual Financial Statements comply with statutory requirements, as do the Consolidated Financial Statements, which were prepared in accordance with the International Financial Reporting Standards (IFRS) as mandated by Section 245a Austrian Commercial Code (Unternehmensgesetzbuch – UGB). The auditor issued an unqualified audit opinion both for the Annual Financial Statements and the Consolidated Financial Statements, and confirmed that the Management Report is consistent with the Annual Financial Statements and that the Consolidated Management Report is consistent with the Consolidated Financial Statements.
Following the Audit Committee’s prior review of the financials, on June 6, 2023, the Supervisory Board reviewed and approved the Annual Financial Statements as of March 31, 2023. The Annual Financial Statements are herewith deemed to have been adopted pursuant to Section 96 (4) Austrian Stock Corporation Act (Aktiengesetz – AktG). Furthermore, following the Audit Committee’s prior review, the Supervisory Board reviewed and approved all the financials for the business year 2022/23, specifically: the Management Report, the Consolidated Financial Statements, the Consolidated Management Report, the Consolidated Corporate Governance Report, and the Corporate Responsibility Report. The Supervisory Board’s reviews did not raise any objections.
The Consolidated Corporate Governance Report 2022/23 was also audited by Deloitte Audit Wirtschaftsprüfungs GmbH as part of the annual external review of voestalpine AG’s compliance with the Austrian Code of Corporate Governance (the “Code”). This review did not bring to light any facts and circumstances that would cause us to assume that the company’s Consolidated Corporate Governance Report does not comply with material aspects of the Code. Compliance with the Code’s C rules pertaining to the auditor (Rules 77 through 83) was reviewed and confirmed by the law firm, WOLF THEISS Rechtsanwälte GmbH & Co KG, Vienna, Austria. This review, too, confirmed compliance with the rules.
The Corporate Responsibility Report (CR Report) for 2022/23 was audited by Deloitte Audit Wirtschaftsprüfungs GmbH. These audit procedures did not bring to light any facts and circumstances either that would cause us to assume that the CR Report of voestalpine AG does not comply with material aspects of applicable legal requirements and the standards of the Global Reporting Initiative (GRI).
It is hereby established that voestalpine closed the business year 2022/23 with a net profit of EUR 268.0 million. We propose paying a dividend of EUR 1.50 per share to the shareholders entitled to a dividend and to carry forward the remaining amount.
Yet again, the Supervisory Board must first thank the roughly 50,000 employees of the voestalpine Group worldwide for their commitment and their loyalty in these difficult times. The Board’s thanks are also due to both the Management Board and the executive team for their determination and their consistency in action under challenging conditions. Last but not least, we thank our shareholders for staying loyal to the company in these economically unsettled times.
The Supervisory Board
Dr. Wolfgang Eder
(Chairman)
Linz, June 6, 2023
This report is a translation of the original German-language report, which is solely valid.
