voestalpine AG vs. the ATX and international indices
Changes compared with March 31, 2023, in %
DEVELOPMENT OF THE voestalpine SHARE
As in the previous reporting period, inflation and interest rate issues continued to dominate the international stock markets in the 2023/24 business year. The interest rate turnaround took place in the summer of 2022 and the central banks ended their previously loose interest rate policy in order to combat rising inflation. In calendar year 2023 alone, the European Central Bank (ECB) raised its key interest rate six times. The continuous rise in interest rates had a dampening effect on consumer spending and increased refinancing costs for companies. In addition, fixed-interest securities became more attractive as an investment alternative due to the higher interest rates. In economic terms, the discussion centered on whether there would be a “soft landing” or a “hard landing” in the USA and Europe, i.e., whether a recession could be avoided or not.
At the beginning of the business year 2023/24, the voestalpine share price was still characterized by sideways movements. From the second quarter of 2023/24, however, the share price weakened significantly.
In addition to the negative interest rate environment, other adverse factors influenced the capital markets in the Northern summer and early Northern fall. For example, the economic environment in Europe and China was very subdued. The Middle East conflict, which came to a head with the Hamas attack on Israel in October 2023, had an additional negative impact.
The situation on the capital markets improved in the third quarter of 2023/24. One of the triggers was the decline in inflation in Europe and the USA. The prospect of central banks lowering interest rates again had a positive impact. Overall, the measures taken by central banks to combat inflation had an effect. From an economic perspective, gross domestic product (GDP) in the European Union stagnated. Sentiment in the construction and manufacturing industries remained subdued.
In the fourth quarter of 2023/24, there was growing concern that hopes of rapid interest rate cuts, which had been priced into share prices, were premature. This caused share prices to remain volatile.
At the end of the business year 2023/24, the voestalpine share was finally quoted at EUR 26.00. This represents a decline of 16.9% compared to the price at the beginning of the business year. The benchmark indices improved slightly in the same period. The ATX and the STOXX Index (Europe) rose by around 10% over the course of the year. The Dow Jones Industrial Index even climbed by 20%.
Treasury share buyback program
The Management Board of voestalpine AG resolved on November 3, to buy back up to ten million shares equating to equity of about 5.6%. The share buyback program was launched on November 10, 2022. It was effected solely via the stock exchange and multilateral trading facilities. The share buyback program was concluded as planned on July 10, 2023. In all, a total of 7,070,000 voestalpine AG shares were acquired, representing 3.96% of the share capital.
Convertible bond
In April 2023, voestalpine AG successfully placed a convertible bond in the amount of EUR 250 million. The offer was made exclusively to institutional investors as part of an accelerated offering. The convertible bond has a denomination of EUR 100,000 and has a coupon of 2.75% p.a. payable semi-annually. The initial conversion price was set at EUR 40.8915, which corresponds to a conversion premium of 30% over the reference share price of EUR 31.455. The bonds were issued on April 28, 2023 and, unless previously converted, redeemed, or repurchased, will be redeemed after five years at the nominal value plus accrued interest. The convertible bonds are listed on the Vienna MTF market of the Vienna Stock Exchange.
