Metal Forming Division

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

MARKET ENVIRONMENT AND BUSINESS DEVELOPMENT

The development of the Metal Forming Division was characterized by different trends in the first three quarters of the business year 2023/24. Demand from the automotive sector improved somewhat in the reporting period, albeit from a weak level. The Warehouse & Rack Solutions business segment continued to operate in a solid economic environment. In contrast, the Tubes & Sections and Precision Strip business segments reported declining trends. The economic slowdown made itself felt here.

The Automotive Components business segment achieved an overall improvement in capacity utilization at its European sites in the first three quarters of the business year. The OEMs (Original Equipment Manufacturers) were able to increase production levels against the backdrop of the extensive elimination of bottlenecks in the procurement of primary materials. This was also due to the fact that the high order backlog was continuously reduced. However, the development of car production figures in Europe varied significantly depending on the car model. Overall, sales of new vehicles increased slightly in the calendar year 2023 compared to the previous year, but the level was well below the figures before the outbreak of the COVID-19 pandemic. The division’s Chinese and North American locations performed with solid sales. The sale of voestalpine Automotive Components Nagold took place in the third quarter of the business year 2023/24.

The Tubes & Sections business segment was confronted with varying regional conditions. The construction industry and the trading business in Europe were already showing signs of decline at the start of the business year 2023/24. As a result, orders from these sectors stabilized at a lower level. The same applied to the agricultural and construction machinery sectors. Orders in the commercial vehicle industry normalized at a pleasing level following the highs of the previous year.

In Brazil, economic growth weakened over the course of the 2023 calendar year. Nevertheless, voestalpine’s Brazilian sites remained robust. The satisfactory booking situation was largely supported by the solar industry there. Inflation and interest rates remained high in the United States, but the economy in North America was resilient and growth was surprisingly solid. Building on this, the Tubes & Sections business segment in the United States reported positive incoming orders from the storage technology and aerospace sectors. The voestalpine site in China benefited from very satisfactory incoming orders from the automotive supply industry, while conditions in the construction industry remained very challenging.

The Precision Strip business segment recorded a significant downward trend in the first three quarters of 2023/24. Orders fell significantly on the back of a general economic downturn – largely intensified by destocking within the value chain. The long delivery times of the previous year have returned to normal levels. From a regional perspective, demand in Europe was very subdued. Band saw steel and cutting lines for the packaging industry were particularly affected. Demand for band saw steel was also subdued in the United States. The market environment in China was somewhat better. Due to the high energy prices, however, the European voestalpine sites were at a disadvantage in terms of exports.

The Warehouse & Rack Solutions business segment was largely able to continue the positive development of previous years. The high level of interest rates in Europe and the USA had a dampening effect on project awards. The new production capacities in the United States were gradually ramped up from the Northern fall of 2023. The acquisition of Torri S.P.A., a manufacturer of shelving systems and storage platforms, enabled the company to expand its market position in Southern Europe.

DEVELOPMENT OF THE KEY FIGURES

The Metal Forming Division's revenue fell in the first three quarters of 2023/24, dropping by 14.7% from EUR 2,921.2 million to EUR 2,490.4 million. The decline in revenue affected all four business segments. While Automotive Components was only affected by a moderate reduction, there was a significant downturn in the other segments. EBITDA fell from EUR 278.6 million (margin of 9.5%) in the first three quarters of 2022/23 to EUR 219.5 million (margin of 8.8%) in the current reporting period. This is a decrease of 21.2%. The Warehouse & Rack Solutions business segment recorded stable development. All other business segments recorded declines, which were particularly pronounced in the Precision Strip business segment. EBIT fell by a third in the first three quarters of 2023/24, from EUR 170.3 million (margin of 5.8%) to EUR 111.9 million (margin of 4.5%).

Looking at the current business year, revenue fell by 3.2% from EUR 816.1 million to EUR 790.3 million from Q 2 to Q 3 2023/24. The Tubes & Sections business segment was primarily responsible for the decline, while the Warehouse & Rack Solutions business segment was able to generate an increase in revenue. EBITDA fell by 27.2% from EUR 79.9 million (margin of 9.8%) to EUR 58.2 million (margin of 7.4%) in the same period. The Precision Strip and Warehouse & Rack Solutions business segments recorded a largely stable trend on the earnings side. By contrast, earnings declined in the Tubes & Sections and Automotive Components business segments. EBIT fell by 46.5% from EUR 43.0 million (margin of 5.3%) to EUR 23.0 million (margin of 2.9%) in a comparison of the two quarters.

The number of employees (FTE) in the Metal Forming Division decreased by 1.2% from 11,454 (as of December 31, 2022) to 11,315 as of December 31, 2023.