Report on the Group’s business performance and the economic situation
EUROPE/EU
In Europe, economic development remained extremely subdued throughout the 2024/25 financial year. Modest growth was primarily driven by private consumption and the service sector, while the construction industry remained weak and industrial production recorded negative growth figures throughout the reporting period. Germany was particularly affected by the economic downturn. Following the summer of 2024, several well-known European industrial companies issued profit warnings and lowered their earnings forecasts. As a result, economic sentiment continued to deteriorate.
In fall 2024, Donald Trump’s election as President of the USA and the subsequent introduction of new tariffs against trading partners contributed to further uncertainty for the European economy.
The changing geopolitical landscape also triggered stronger emphasis on European security policy. In Germany, for example, a shift in fiscal policy began in the final quarter of 2024/25, following federal elections, creating new financial leeway for an expansive economic stimulus package focused on infrastructure and defense. The Clean Industrial Deal, adopted in February 2025, signaled a potential easing of restrictive and investment-inhibiting regulations that have increasingly hindered competitiveness and economic growth across the EU.
These developments led to a notable improvement in economic sentiment indicators toward the end of the reporting period, despite a difficult financial year 2024/25 overall.
Inflation in the eurozone moved steadily towards the target corridor of 2% as a result of the weak economic development. Accordingly, the European Central Bank (ECB) began cutting key interest rates in the first quarter of the financial year, which stood at 2.5% at the end of the reporting period.
The European market remained challenging for voestalpine in the 2024/25 financial year. Demand from the construction, mechanical engineering and consumer goods sectors was very subdued over the entire reporting period. Demand from the automotive industry also declined. In response, the voestalpine management took measures at an early stage to optimize the portfolio, including the sale of the German plant Buderus Edelstahl and a comprehensive reorganization of its European Automotive Components business.
The challenges were partially offset by very good market momentum in the railway infrastructure, aerospace and warehouse & rack solutions segments.
NORTH AMERICA/USA
Economic development in North America was positive for most of the 2024/25 financial year. Growth was supported by strong private consumption and high employment levels. Investment activity was particularly high in the area of information technology and related infrastructure, although industrial production remained subdued for much of the period. Towards the end of the 2024/25 financial year, uncertainty emerged in response to the new US administration’s tariff policy in North America.
Inflation in the United States eased over the course of the 2024/25 financial year but was not yet able to reach the target corridor of 2%. In response, the US Federal Reserve (FED) began lowering interest rates in September 2024, reducing key interest rates to an interest margin of 4.25% to 4.50% by the end of the 2024/25 financial year.
North America proved to be a consistently satisfactory market for the voestalpine Group in the 2024/25 financial year. While demand in the capital goods sector was subdued and investments in oil and gas exploration declined over the course of the reporting period due to the fall in the oil prices, other segments performed more positively. Demand in railway infrastructure, warehouse & rack solutions and tubes & sections remained solid throughout the financial year.
At the end of the financial year, tariffs of 25% were imposed on steel and aluminum imports to the USA.
BRAZIL/SOUTH AMERICA
Economic development in Brazil, the most important market for voestalpine on the South American continent, was mixed in the 2024/25 financial year. The first half of the reporting period was marked by positive momentum, driven by high employment, rising wages, strong consumption and growth in the service sector. However, the agricultural sector, an important economic factor in Brazil, suffered from heavy rainfall and flooding in the southernmost state of Rio Grande do Sul during the summer months. Industrial production was also rather subdued for much of the financial year and deteriorated further toward the end of the reporting period, impacted by stagnant demand and increased competition from Chinese imports. In response to the significant rise in inflation expectations, the Brazilian Central Bank raised its key interest rate to 12.25% in December 2024, which put additional pressure on the interest-sensitive investment sector.
The Brazilian voestalpine locations performed largely satisfactorily in the 2024/25 financial year. The railway infrastructure and tubes & sections segments in particular performed well over the entire reporting period. The Brazilian voestalpine special steel plant Villares Metals faced an increasingly difficult environment in the second half of the year due to declining demand and increased competition.
CHINA/ASIA
The Chinese central government’s strategic target of 5% economic growth was largely achieved in the 2024/25 financial year, maintaining its status as a key growth region. However, developments across sectors were highly uneven during this reporting period.
The construction industry remained severely depressed, largely due to the ongoing real estate crisis in China. Despite central government stimulus efforts, the persistent oversupply of housing relative to demand continued to weigh on the sector.
As a result, private consumption remained weak, affected by declining property prices and stagnating real wage growth.
In contrast, industrial production developed very satisfactorily. Additional government stimulus measures targeting industries such as automotive, household appliances and electronic consumer goods also boosted domestic demand in the second half of the year. Exports remained at a high level throughout the 2024/25 financial year.
China responded to the tariffs announced by the US administration shortly after the end of the past financial year with counter-tariffs, which subsequently led to a spiral of tariffs. At the time of preparing this report, the two largest economies in the world were finally able to reach an agreement on a moderate customs regime on both sides, which was initially valid for 90 days.
The Chinese voestalpine sites benefited from the high level of industrial production. Both the local automotive industry and the consumer goods industry showed increased demand for high-quality voestalpine tool steels in the 2024/25 financial year. Following a strong first half of the year, however, the Chinese Automotive Components voestalpine plants were confronted with declining customer call-offs and falling sales volumes towards the end of the reporting period. Meanwhile, after years of building state-of-the-art railway networks, the Chinese railway infrastructure market has reached saturation point. As a result, demand is now primarily driven by replacement and maintenance rather than construction.