MARKET ENVIRONMENT AND BUSINESS DEVELOPMENT
In the business year 2024/25, the Steel Division has performed well to date in a generally difficult European steel market, but was confronted with a decline in demand in the third quarter.
The economic environment for the European steel industry has been very challenging overall in the current 2024/25 business year. With subdued demand from almost all key market segments, the price of steel in Europe fell continuously over the first nine months.
By focusing on high-quality sheet steel for technologically demanding applications, the Steel Division was largely able to escape this difficult environment in the first and second quarters of 2024/25. However, following a series of profit warnings from well-known automotive manufacturers in September 2024, demand for volumes declined in the third quarter.
In detail, the markets developed as follows during the current reporting period:
While European automotive production has been declining for several years, the Steel Division has so far been able to keep its delivery volumes stable in this market segment thanks to excellent delivery performance and active market development. In the third quarter of the current business year, however, demand for volumes fell rapidly and sharply following the profit warnings issued by car manufacturers.
The construction industry has remained at a low level since the start of the business year. Even the interest rate cuts by the European Central Bank in early summer 2024 have so far failed to provide any positive impetus in this sector, which tends to be sensitive to interest rates.
The household appliances and consumer goods industry remained stable at a low level in the first three quarters of 2024/25.
The sharp slowdown in investment activity in Europe also led to low demand from the mechanical engineering industry throughout the reporting period.
The Steel Division produces high-tech plates for the energy sector, for line pipe projects and for the offshore industry. This market showed very good demand in the first three quarters.
The raw materials relevant to steel production showed only minor fluctuations in the first nine months of the current business year. After a stable trend in the first quarter, there were slight price declines in metallurgical coal and scrap in the second quarter, which stabilized at this level as the year progressed. Iron ore prices remained essentially stable throughout the business year to date.
The implementation of the greentec steel decarbonization program at the Linz site was on schedule and within budget in the first three quarters of the 2024/25 reporting year. Another important milestone was reached with the official ground-breaking ceremony for the 220 kV supply ring and the now rapidly progressing expansion of the grid infrastructure.
In millions of euros |
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Q 1 – Q 3 |
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Q 1 |
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Q 2 |
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Q 3 |
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2024/25 |
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2023/24 |
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Change |
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04/01– |
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07/01– |
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10/01– |
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04/01– 12/31/2024 |
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04/01– 12/31/2023 |
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Revenue |
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1,566.1 |
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1,352.0 |
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1,336.5 |
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4,254.6 |
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4,502.9 |
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–5.5 |
EBITDA |
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229.7 |
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165.5 |
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129.4 |
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524.6 |
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512.2 |
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2.4 |
EBITDA margin |
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14.7% |
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12.2% |
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9.7% |
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12.3% |
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11.4% |
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EBIT |
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164.2 |
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100.1 |
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62.6 |
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326.9 |
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320.0 |
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2.2 |
EBIT margin |
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10.5% |
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7.4% |
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4.7% |
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7.7% |
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7.1% |
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Employees (full-time equivalent), end of period |
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10,816 |
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10,924 |
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10,705 |
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10,705 |
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10,617 |
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0.8 |
DEVELOPMENT OF THE KEY FIGURES
Although the Steel Division’s revenue level weakened slightly year-on-year, the division was still able to improve its earnings. Specifically, revenue decreased by 5.5% to EUR 4,254.6 million in the first three quarters of 2024/25 (previous year: EUR 4,502.9 million). This development is attributable to declining shipment volumes and a slightly lower price level for flat steel products. On the other hand, the favorable product mix had a positive impact in the form of high delivery volumes of special plates for the energy industry. This successful development in the heavy plate business unit is partly responsible for the year-on-year increase in EBITDA by 2.4% from EUR 512.2 million (margin 11.4%) to EUR 524.6 million (margin 12.3%). The Steel Division was able to increase its EBIT by 2.2% from EUR 320.0 million to EUR 326.9 million in the same period. The EBIT margin improved accordingly from 7.1% to 7.7%.
In a direct quarter-on-quarter comparison, the key financial figures for Q 3 2024/25 are slightly below the level of Q 2 2024/25. Revenue fell by 1.1% from EUR 1,352.0 million to EUR 1,336.5 million. While shipment volumes remained virtually stable, the price trend for quarterly contracts for flat steel products declined. The project business for specialty plates for the energy industry had a positive effect on the price side. At EUR 129.4 million (margin 9.7%), EBITDA in the third quarter was 21.8% lower than in the second quarter (EUR 165.5 million, margin 12.2%). EBIT fell by 37.5% from EUR 100.1 million (margin 7.4%) in Q 2 to EUR 62.6 million (margin 4.7%) in Q 3 2024/25.
The number of employees (FTE) rose by 0.8% to 10,705 as of December 31, 2024, compared to 10,617 employees as of December 31, 2023.