Metal Engineering Division

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

BUSINESS DEVELOPMENT

The Metal Engineering Division was able to carry over the positive development from the previous business year into the first quarter of the new business year. Only the energy sector weakened in the first quarter of 2024/25.

Demand in the Railway Systems business segment continued to develop very positively at the start of the new business year. The rails product segment continued to operate at full capacity in the first quarter of 2024/25, particularly due to the good market situation in Europe. The turnout systems product segment saw good demand worldwide. The European core markets in particular performed very well. In North America, there was a slight slowdown in the heavy goods sector (Class 1), but this was largely offset by continued good demand from passenger transport (transit). The South African rail market provided positive impetus and demand in Australia also developed well in the reporting period. In China, the pace of investment in the high-speed sector slowed. However, maintenance investments in the existing railroad network led to largely stable development at turnout systems’ Chinese locations.

The Industrial Systems business segment was characterized by diverging trends in the first quarter of 2024/25. The tubulars product segment was confronted with declining demand following an exceptionally good market phase. Exploration activities for oil and gas declined noticeably, particularly in North America. The wire technology product segment is suffering from the ongoing economic weakness in Europe and remained largely stable at a moderate level in the first quarter of the business year. The welding product segment successfully implemented its strategy of becoming a full-range supplier by acquiring the Italian premium welding wire manufacturer Italfil S.P.A. The product segment’s business performance was stable overall in the reporting period, although the market situation in Europe was somewhat more difficult than in the international markets. While demand in North America also lost some of its momentum, the Middle East, Asia Pacific, and India regions performed very well. Demand for welding technology products of the Metal Engineering Division was also very good in China in the first quarter of 2024/25.

DEVELOPMENT OF THE KEY FIGURES

Revenue amounted to EUR 1,086.4 million in the first quarter of 2024/25, down 5.1% year-on-year (Q1 2023/24: EUR 1,144.4 million). While the Railway Systems business segment and the welding product segment reported largely stable revenue development, the wire technology and tubulars product segments recorded declines in revenue.

In terms of earnings, the Railway Systems business segment was once again able to improve on the previous year. While the welding product segment remained largely stable, the key earnings figures in the wire product segment weakened somewhat. Following the extraordinary boom with correspondingly high results in the same quarter of the previous year, the tubulars product segment saw a significant weakening of its key earnings figures in comparison.

Overall, the division’s EBITDA fell by 27.6% to EUR 132.0 million with an EBITDA margin of 12.1% (Q1 2023/24: EUR 182.3 million EBITDA with an EBITDA margin of 15.9%). EBIT decreased by 37.3% to EUR 86.5 million in the same period with an EBIT margin of 8.0% (Q1 2023/24: EUR 138.0 million EBIT with an EBIT margin of 12.1%).

As of June 30, 2024, the Metal Engineering Division had 14,696 employees (FTE, full-time equivalents). This represents an increase of 3.9% compared to the same day in the previous business year (14,145).