Letter from the Management Board

      Ladies and gentlemen,
      valued shareholders,

      The voestalpine Group performed solidly in the business year 2023/24. We look back on a reporting period that was characterized by geopolitical conflicts and high inflation and interest rates in all major economies, with the exception of China.

      With revenue of EUR 16.7 billion and an operating result (EBITDA) of close to EUR 1.7 billion, the voestalpine Group achieved a good result in the business year 2023/24 despite the very challenging economic development in a long-term comparison and met expectations.

      The resilience that the Group has shown under these difficult economic conditions is the result of the consistent implementation of voestalpine’s long-term strategy: The global positioning helped to cushion the weakness of the European core markets. The focus on technologically demanding market segments was the basis for expanding market share in the face of global competition. Diversification ensured stability in an environment in which interest rate-sensitive segments such as the construction and mechanical engineering industries experienced a significant decline in demand. The robust development in the automotive sector and strong demand from the railway infrastructure, aviation and energy industries proved to be the main pillars of earnings performance in the 2023/24 business year.

      In order to further strengthen our strategic positioning, we implemented important projects in our international markets in this reporting period. Highlights in the Railway Systems division, for example, included the continued strategic focus on becoming a railway infrastructure systems provider via the global roll-out of technologies from the previous year’s acquisitions in the areas of fastening and sleeper technology. In the Warehouse & Rack Solutions business, a new production site for automated high-bay warehouses was opened in the USA. In South America, production capacity for special sections, particularly for photovoltaic systems, was doubled. In China, where the automotive industry is booming the fifth phs® plant has now been put into operation and production capacity for air suspension systems has been significantly expanded.

      Due to structural changes in the general conditions, the strategic decision was made to initiate a sales process for Buderus Edelstahl in Wetzlar, Germany. As a result, the High Performance Metals Division will focus its product portfolio on the technologically demanding segment of special materials in the future and the production share of tool steel and engineering steel in the standard-grade area will be reduced.

      As the automotive supply industry in Germany is suffering from structural underutilization, the Metal Forming Division began to reorganize its Automotive Components business in Germany in the business year 2023/24.

      Based on these decisions in particular, impairment losses had to be recognized in both divisions in the business year 2023/24. The path thus taken will sustainably strengthen the future positions of these two divisions in global competition.

      Of particular strategic importance for the future of the Group are the projects to achieve the climate targets in all divisions. The downstream areas have an almost negligible direct CO2 footprint (Scope 1). The High Performance Metals Division also produces special steels exclusively using climate-friendly electric arc furnace technology. These areas accounted for slightly more than half of the voestalpine Group’s revenue in the business year 2023/24. Accordingly, the measures to achieve the climate targets focus on the supply chain (Scope 2 and 3).

      The relevant area for reducing voestalpine’s direct CO2 emissions (Scope 1) is steel production based on blast furnace technology. The products from this process accounted for slightly less than half of Group revenue in the business year 2023/24. With greentec steel voestalpine has developed a clearly defined step-by-step plan to transform the production route towards net zero CO2 emissions in this area. In a first step, one electric arc furnace will be built at each of the two sites in Linz and Donawitz. The integration of the two green electricity-powered electric arc furnaces into steel production will make it possible to electrify energy-intensive processes and thus save up to around 30% of CO2 emissions from 2027. The traditional groundbreaking ceremony took place in fall 2023. Since then, important milestones have been reached with the award of the core aggregates. The projects are on schedule and on budget.

      The investment volume for the two projects amounts to EUR 1.5 billion. The Group is ideally positioned for this with its solid balance sheet. Financial debt is at a historically low level, which, in addition to the good results, is due to the solid cash flow generation in recent years.

      The strategy of generating value-enhancing growth in the downstream business areas in addition to decarbonizing our steel production will be pursued further. voestalpine is well positioned to significantly further develop the Group’s portfolio in the future.

      Linz, May 27, 2024

      The Management Board

      Herbert Eibensteiner

      Reinhard Nöbauer

      Franz Kainersdorfer

      Carola Richter

      Gerald Mayer

      Hubert Zajicek

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

      Takeover or purchase of companies or of interests in companies.
      Cash flow
      • From investing activities: outflow/inflow of liquid assets from investments/disinvestments;
      • From operating activities: outflow/inflow of liquid assets not affected by investment, disinvestment, or financing activities.
      • From financing activities: outflow/inflow of liquid assets from capital expenditures and capital contributions.
      EBITDA (earnings before interest, taxes, depreciation, and amortization)
      Profit before the deduction of taxes, non-controlling interests, financial result, and depreciation and amortization expenses.