Metal Engineering Division

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

Market environment and business development

The Metal Engineering Division’s solid upward trend during the previous business year continued unabated in the first quarter of the business year 2022/23. The robust performance of the division’s Railway Systems business segment turned out to be key to the highly satisfactory utilization of capacity at its production plants.

Stable, good demand in its European core markets characterized the performance of Railway Systems at the start of the current business year. Delivery volumes in the rails product segment were good in spite of logistical challenges. Overseas, however, the sales volume fell slightly short of expectations. In Europe, the Turnout Systems business segment benefited from positive momentum in Austria and Switzerland as well as in Central and Eastern Europe. Satisfactory demand in North America, China, and India had an advantageous effect on the business unit’s performance as well. Projects in South America saw delays.

Advantageous market conditions also prevailed in the Industrial Systems business segment during the first quarter of 2022/23. Orders from the automotive industry—the most important customer segment of the wire technology product segment—remained high at the start of the reporting period, but demand returned to slightly more normal levels toward its end. The upward trend in the tubulars product segment continued unabated at the start of the current business year. In addition to continually improving market conditions in the oil and natural gas sector, as of January 1, 2022, the quota system applicable to U.S. tariffs also helped to boost segment earnings. This has resulted in a substantial reduction in the cost of European steel exports to the United States. The welding product segment (welding technology) also posted altogether good performance during the first business quarter. Both Europe and South America provided a positive market environment. The same applies to Asia with the exception of China, where the lockdowns have lowered incoming orders. Demand in the U.S. fell slightly short of expectations.

Development of the key figures

Compared with the previous business year, the development of the key financial indicators of the Metal Engineering Division in the first quarter of the business year 2022/23 followed a clearly positive trend. Revenue rose 30.1% to EUR 1,042.2 million (Q1 2021/22: EUR 800.9 million). Primarily, this reflects the sharp increases in product prices against the back-drop of marked increases in the cost of key raw materials and energy. Delivery volumes were largely unchanged year over year. The increase in the prices of seamless tubes and wire products exceeded that of the input costs, leading to pleasing earnings performance. Lower import tariffs in the United States also had a positive impact in the tubulars product segment. Against this backdrop, EBITDA rose in the first quarter of 2022/23 by 26.0% to EUR 121.2 million with a margin of 11.6% (Q1 2021/22: EUR 96.2 million, margin of 12.0%). EBIT jumped 48.4% in the reporting period to EUR 77.0 million, pushing the margin to 7.4% (Q1 2021/22: EUR 51.9 million, margin of 6.5%).

As of June 30, 2022, the Metal Engineering Division had 13,504 employees (FTE). This represents a year-over-year increase of 3.4% (June 30, 2021: 13,063).