Report on the Group’s business performance and the economic situation

      The business year 2023/24 was characterized by high inflation rates and considerable interest rate levels in key markets in which voestalpine operates. Central banks in both Europe and the USA aimed to reduce inflation by raising interest rates, with varying degrees of success and effects on the economic environment. While the European economy developed only moderately over the entire business year, the US economy proved to be much more robust.

      The dominant topic in China was the ongoing crisis in the real estate sector. This not only slowed down consumption, but also other areas of the economy with the exception of the high-tech sector. Although the signs in China pointed to growth in the business year 2023/24, the figures fell short of expectations. In contrast to Europe, the USA, and South America, China did not struggle with high inflation rates in the reporting period, but with falling consumer prices and the negative consequences of a deflationary environment.

      As in previous years, the global economy was confronted with geopolitical conflicts and uncertainties also in this reporting period. These included the Hamas attack on Israel in Northern fall 2023 and the attacks on international shipping in the Suez Canal.


      The European economy was characterized by very weak momentum in the business year 2023/24. As a result, gross domestic product stagnated at a low level. There was only a slight recovery in the fourth quarter. The economic environment in Europe was characterized by sharp interest rate hikes, particularly in the first three quarters of the business year, with which the European Central Bank sought to combat high inflation. This hit the construction and manufacturing industries hard in particular. After consumption had benefited from people’s travel activities in the summer months, it subsequently lost momentum. Inflation fell at the end of the third quarter, which led the ECB to refrain from further interest rate hikes. The trend of the previous months continued in the fourth quarter of 2023/24. Additional geopolitical tensions created further headwinds, including the attacks on international shipping in the Suez Canal. However, this did not slow down growth any further. Inflation weakened further due to lower basic materials and energy prices. The European Central Bank (ECB) therefore held out the prospect of lowering interest rates later in 2024.

      The difficult economic environment in Europe meant a decline in demand for voestalpine from the construction, mechanical engineering, and consumer goods industries in the business year 2023/24. Toolmaking in particular, which the High Performance Metals Division supplies with tool steel, reported very low demand in the second and third quarters of 2023/24. At the same time, imports of material from Asia, particularly China, were high.

      The automotive industry benefited from an easing of tensions of international supply chains, particularly at the beginning of the business year 2032/24, and remained stable over the remainder of the reporting period. Unlike the economy as a whole, the railways and aviation industries performed very positively. This also applies to the energy industry.

      The strategic focus in the business year 2023/24 was on expanding promising business areas such as railway infrastructure and warehouse technology. Strategic adjustments were made in sectors that are experiencing sustained economic difficulties. These included the initiated sales process for Buderus Edelstahl, Wetzlar, Germany, and the reorganization of the Automotive Components business in Germany.


      In contrast to Europe, the economic environment in the USA was much more positive. In the business year 2023/24, the US economy defied the sharp interest rate hikes and performed better than expected. Even the bankruptcy of Silicon Valley Bank at the start of the business year 2023/24 was unable to halt the momentum. Stubbornly high inflation is one downside of this development. The rapid and substantial interest rate hikes did not have a sufficient effect on combating inflation in the business year 2023/24. Hopes that inflation could ease were dashed in the fourth quarter of 2023/24. Accordingly, expectations that there will be a major easing of interest rates very soon are now subdued.

      Although sectors such as the construction industry, which is particularly sensitive to interest rate hikes, have cooled down, this has not been as strong or as widespread as feared. The main pillar of the positive economic development in the USA was private consumption, which was characterized by a very strong labor market with low unemployment and high wage growth. The real estate market also picked up again towards the end of the reporting period.

      Demand for voestalpine products in the North American market was solid in the business year 2023/24, with declines only in individual segments. The energy and railway infrastructure business performed very well. Positive momentum also came from the aerospace sector. By comparison, the capital goods sector was more moderate.

      In the business year 2023/24, voestalpine focused on expanding its North American production capacities in the areas of railway infrastructure, storage technology, and tubes and sections.


      Brazil was confronted with high inflation and corresponding interest rate hikes much earlier than Europe and North America. For this reason, Brazil passed the peak of inflation at the beginning of the business year 2023/24. The Brazilian National Bank began to cut interest rates as early as the second quarter of 2023/24. Overall, the Brazilian economy recorded remarkable growth of just under 3% in the business year 2023/24, despite interest rates and inflation remaining very high. This positive development was primarily driven by a record harvest and the associated high food production as well as robust consumption. The latter benefited from high wage increases. Economic momentum slowed in the third and fourth quarters. At the end of the business year, both domestic demand and private consumption were only moderate. Over the business year as a whole, the industrial sectors performed more modestly than GDP on average and became increasingly weaker towards the end of the reporting period.

      The voestalpine sites in Brazil performed well in this environment for most of the business year 2023/24. The ongoing boom in the photovoltaic sector drove demand for special sections. The high international demand for products for the oil and gas industry was reflected in good demand for special steels. The slowdown in momentum in the fourth quarter of 2023/24 was also felt by the voestalpine sites, which responded with targeted cost savings.


      China remained in growth mode in the business year 2023/24 despite the ongoing negative developments in the real estate sector. At 5%, however, GDP growth is significantly lower than in the past and is also below expectations. The problems in the real estate sector in particular, which had a negative impact on other areas of the economy and depressed private consumption, were felt across all business quarters. The countermeasures taken by the Chinese central government failed to reverse the trend, but at best had a stabilizing effect.

      The extremely low inflation and, in some quarters, recognizable deflationary trend are a reflection of the weak momentum in Chinese domestic demand. The manufacturing industry sector—and in particular the high-tech sector—stands out positively. However, low domestic demand and, in some cases, subdued demand in Western markets led to a significant fall in consumer prices in China over the course of the business year. In the fourth quarter, the Chinese central bank therefore stepped up its expansionary monetary policy and lowered interest rates, among other things. The Chinese central government also announced economic stimulus measures, but these are only likely to lead to a stabilization of the economic situation.

      There is a special situation in the Chinese steel industry: Although the construction sector is weak and demand for steel is correspondingly lower, Chinese steel manufacturers are producing at record levels. As has often been the case in the past, the international steel markets came under pressure due to exports from China.

      The Chinese voestalpine sites performed very satisfyingly in the business year 2023/24. By focusing on the highest quality segment, the Steel Division is not directly affected by Chinese steel exports and imports to Europe. In order to strengthen its market position for the future, voestalpine invested in a new phs® plant in Shenyang, China, and the expansion of the sales network in the High Performance Metals Division, among others.