High Performance Metals Division

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

Market environment and business development

The economic environment of the High Performance Metals Division was robust throughout the first quarter of 2022/23. In Europe, the division largely managed to pass on the rising costs of both raw materials and energy to its customers. In its overseas markets, however, where competitors were not exposed to similar increases in the cost of natural gas and electricity, this was only possible to a very limited extent.

Tool Steel

Orders from the European automotive industry remained good at the start of the business year 2022/23 despite manufacturers’ current low capacity utilization. This scenario was driven by the greater range in car model variants resulting from new models engineered for electromobility. In both North and South America, the tool steel product segment benefited from investments in new car models. The momentum in the consumer goods industry—the second key driver of demand for tool steel besides the automotive industry—weakened a bit in China owing to the COVID-19 lockdowns.

Special Materials

The substantially positive upward trend in the aerospace industry continued to solidify in the current business year’s first quarter. Passenger numbers in regional air traffic are already approaching the level prior to the outbreak of COVID-19. In turn, this is boosting demand for single aisle aircraft. The rebound in demand for wide-body aircraft, by contrast, is much weaker. In the oil and natural gas sector, for its part, demand has grown substantially year over year. Rising energy prices are creating incentives to invest in oil and natural gas projects. Regionally, developments in this market segment were mainly shaped by good order levels in Europe as well as in North and South America.

High Performance Metals Production

Given the brisk demand, capacity utilization in the production plants was very good during the first quarter of the business year 2022/23. Against the backdrop of disrupted international value chains, some customers have responded to the uncertain supply situation by building up inventories. Regionally, the costs of electricity and natural gas followed very different trajectories; the division’s production plants particularly in Austria and Germany had to contend with yet more price increases. The new special steel plant in Kapfenberg, Austria, was completed by the end of the first quarter of 2022/23. The facilities at this plant are state of the art throughout and will be started up in phases beginning in the Northern summer of 2022.

Value Added Services

Over and above the high demand for tool steel and special materials, the division’s business that is generated through services such as heat treatment and coating has also developed very well. Accordingly, the performance of the Value Added Services business segment continued to improve in the first business quarter. Progress in the global implementation of digital marketing and sales processes was instrumental to this development.

Development of the key figures

The development of the key performance indicators of the High Performance Metals Division reflects the year-over-year improvement in the market environment of individual customer segments. Compared with the previous business year, revenue for the first quarter of 2022/23 rose by 36.2% to EUR 958.9 million (Q1 2021/22: EUR 704.2 million). In addition to a marked increase in product prices against the backdrop of sharp increases in the cost of raw materials and energy, this is also due to the higher-value product mix in special materials. Delivery volumes fell slightly compared with the same period in the previous year. On the whole, improved gross margins boosted earnings. EBITDA jumped in the first quarter of 2022/23 by 44.3% to EUR 146.0 million with a margin of 15.2% (Q1 2021/22: EUR 101.2 million, margin of 14.4%). EBIT for the reporting period soared by 75.4% to EUR 107.7 million with a margin of 11.2% (Q1 2021/22: EUR 61.4 million, margin of 8.7%).

As of June 30, 2022, the number of employees (FTE) in the High Performance Metals Division increased by 4.2% to 13,344 (previous business year: 12,802).