The economic slowdown that has been expected for almost a year arrived in some areas of the voestalpine Group in the first half of the business year 2023/24, particularly in the second quarter.
As expected, the market environment in the construction, mechanical engineering, and consumer goods industries has weakened. From today’s perspective, the current situation is expected to continue in the second half of the business year 2023/24 and thus we assume no substantial improvement in demand in these segments. This means stagnating demand at a subdued level.
From today’s perspective, the automotive industry should remain largely robust in the second half of 2023/24. Although the high order backlogs built up as a result of the pandemic are increasingly being processed by car manufacturers, overall development is expected to remain largely stable until the end of the current business year.
The conventional energy sector (oil and natural gas) lost momentum on the price side in the course of the first half of the business year 2023/24, but this is due to the reduction of material bottlenecks and not to market weakness. Demand for voestalpine products for the oil and natural gas industry has consequently normalized. A largely stable development can be anticipated for the second half of 2023/24. The good market environment in the renewable energy sector (photovoltaics) is expected to continue for the remainder of the business year 2023/24.
In the area of railway systems, the current very good development is expected to continue for the remainder of the business year, although the usual seasonality over the Northern winter has to be taken into account.
The upward trend in the aerospace industry will also continue in the second half of the business year 2023/24.
The forecasts are therefore largely in line with previous assessments, although the economic outlook for Europe must now be viewed somewhat more cautiously. Investment activity in the industrial sector in particular has slowed and is estimated to remain at a low level in the second half of 2023/24.
Therefore, assuming no massive economic distortions on account of the central banks’ interest rate policies or geopolitical escalation scenarios, the Management Board of voestalpine AG expects EBITDA for the business year 2023/24 to be at the lower end of the previously stated range (EUR 1.7 to 1.9 billion) and thus in the region of EUR 1.7 billion, which is also in line with current market expectations.
The impact of current geopolitical developments remains difficult to assess. However, it is clear that the war in Europe and the armed conflict in the Middle East have significantly increased the risk of unforeseeable influences on the economic environment. This makes all forecasts more uncertain.