Market environment and business development

      The Metal Engineering Division continued its very positive development in the business year 2023/24. The tailwind for the very good performance was provided by the Railway Systems business segment, which recorded very satisfactory demand worldwide, as well as the favorable market environment in the oil and gas sector.

      As a leading provider of system solutions for railway infrastructure, the Railway Systems division closed the business year 2023/24 on a very satisfactory note, as in the previous year. The Rails product segment is focused on the European market, where it recorded positive development in Austria, Germany, and Switzerland in the business year 2023/24. Both mixed and urban transport contributed to the good order situation. Due to the very good market conditions in Europe, sales on overseas markets played a subordinate role in the past business year. Rail projects outside Europe were realized in Africa and Australia, for example. Rail production capacity at the Donawitz site in Austria was fully utilized in the business year 2023/24.

      In the globally positioned Turnout Systems product segment, innovative turnout systems are produced close to customers on all continents. In the European core markets, the product segment benefited from stable demand at a high level. North America developed well overall, with the Class 1 segment of the largest freight railroads in the United States performing rather moderately, while the urban passenger transport segment benefited from very good demand. In China, the market is increasingly changing. While only a few new projects are now being implemented in the high-speed segment, Turnout Systems’ business is increasingly being driven by maintenance investments in the existing high-speed network, as has been the case in the rail networks in Europe and North America for decades. After several difficult years, South Africa showed positive momentum again for the first time in the reporting period.

      The Signaling product segment rounds off the Railway Systems division’s complete system approach with the production of drive and locking systems for switches as well as diagnostic systems and hazard warning systems for fixed railroad infrastructure systems and rolling stock (wagons and locomotives). In the Signaling product segment, the business year 2023/24 was characterized by a satisfactory project landscape in Europe and North America. Project call-offs in Australia and the Middle East fell slightly short of expectations.

      The Industrial Systems division’s product segments performed differently in the businesss year 2023/24. The Wire Technology product segment (wire rod and drawn wire), for example, operated in a difficult market environment. Wire Technology supplies a wide range of customized wire solutions to its predominantly European customers in the automotive, construction, mechanical engineering, and consumer goods industries. Call-offs from the automotive industry in the business year 2023/24 were still relatively good compared to the previous year, while those from the construction and consumer goods industries were quite weak. The market environment for the further processing of wire rod into drawn wire was positive in the past business year.

      The Tubulars product segment (seamless tubes) primarily supplies oil and gas field equipment manufacturers with high-quality OCTG (Oil Country Tubular Goods) seamless tubes and threaded connections for the exploration of oil and gas fields. Following the sharp price spikes at the beginning of the war in Ukraine, the oil price weakened somewhat in the current business year, but remained above the long-term historical average. By contrast, natural gas prices fell significantly over the course of the business year, particularly in North America. Against this backdrop, global oil drilling activity remained high, while natural gas exploration declined noticeably and with it the demand for OCTG seamless pipes in this customer segment. The regional performance of the Tubulars product segment varied in the business year 2023/24: The number of all active oil and gas drilling fields in the US (rig counts) declined in the business year 2023/24 due to the weak natural gas price, while it increased slightly in the Middle East, Africa, and Europe. The MENA region (Middle East and North Africa) in particular is becoming increasingly interesting, as demand for more complex products for exploration is on the rise. The market for industrial tubes (mechanical engineering, automotive supply industry) was characterized by more volatile conditions in the business year 2023/24.

      The Welding product segment produces and markets complete solutions in the field of welding technology (“The Perfect Weldstream”) for demanding customer segments worldwide. Numerous production sites in North and South America and Asia offer good regional market access. Market conditions in Europe were challenging—particularly in the construction and mechanical engineering sectors. The situation in the European energy sector was better. The economic environment in the overseas markets was more favorable. Market development in North America was largely satisfactory. In Brazil, the energy sector was responsible for good incoming orders. Demand in Asia was consistently good—this applies to India as well as the Middle East and the Asia-Pacific region. In China, the product segment developed in a good economic environment—particularly in the demanding crane construction sector (e.g., cranes for erecting wind turbines) and for thermal power plants.