Market environment and business development
The Metal Engineering Division posted a solid operating performance in the 2025/26 business year given the prevailing market conditions. On the one hand, the division benefited from robust demand in the Railway Systems business unit, while on the other hand, the individual segments of the Industrial Systems business unit presented a more mixed picture. Cyclical slowdowns in certain regions and product groups, as well as structural effects—particularly tariff measures—shaped performance in this area throughout the 2025/26 business year.
Over the entire reporting period, demand in the Railway Systems business unit developed positively. As expected, seasonal effects during the winter months led to temporary slowdowns without affecting the fundamentally stable trend.
The rails product segment continued to perform at a stable, high level during the reporting period, driven by continued strong demand in Europe, particularly in Southeast Europe and the DACH region. During the winter months, the market experienced the usual seasonal slowdown, and the phasing out of EU subsidies led to a decline in project awards in the CEE region; however, this was largely offset by individual international projects. In the final quarter of the 2025/26 business year, demand in selected European markets declined slightly but remained at a good level overall.
The turnout systems product segment recorded a largely positive performance during the reporting period. Europe showed consistently strong demand, particularly in Central and Eastern Europe, while in North America, demand remained solid throughout the 2025/26 business year despite increased procurement costs and a volatile environment resulting from U.S. tariffs. Brazil saw weak market performance at the start of the reporting period but benefited from a noticeable uptick in demand as the period progressed. The Asian market showed a generally positive but regionally mixed performance in the 2025/26 business year. Delayed projects in India and parts of Asia were offset by solid demand in China. In Africa, the market situation remained generally stable and positive throughout the reporting period.
The signaling product segment (sensor and signaling technology) recorded a positive performance in the 2025/26 business year, characterized by stable demand in Europe, particularly in Poland, and supplementary deliveries to the Arab region.
The fixations product segment performed well during the reporting period, driven by high demand for thresholds and fastening technology in Central and Eastern Europe. Seasonal declines in demand during the winter months were partially offset by increased exports to the Arab region. Toward the end of the 2025/26 business year, demand stabilized at a healthy level.
The segments of the Industrial Systems business unit performed differently over the course of the 2025/26 business year, depending on the product segment.
The welding product segment showed an overall stable performance during the reporting period. The European market was characterized by persistently challenging conditions and increasing competitive intensity. In certain product areas, the product segment faced increased activity from Chinese suppliers and ongoing price pressure. In North, Central, and South America, market momentum slowed during the 2025/26 business year. In the Middle East and Asia, however, demand remained stable. This was primarily driven by positive demand trends in China, particularly in the energy and specialty shipbuilding segments.
The tubulars product segment was significantly impacted by the broad effects of U.S. trade tariffs during the 2025/26 business year. Since June 2025, increased import tariffs on steel products have significantly restricted sales opportunities in the U.S. These measures necessitated a gradual reduction in production capacity alongside cost-saving programs, as well as a regional diversification toward the MENA region that had already been initiated previously.
The wire product segment faced subdued market sentiment in the core automotive, construction, and mechanical engineering sectors throughout the 2025/26 business year. Only specialty applications such as ball bearing steels, prestressing wires for railroad sleepers, and specialty wires for wind tower construction showed positive development. In a market situation characterized by overcapacity, a slight recovery became apparent toward the end of the business year. The implementation of the European CBAM system also showed initial positive momentum.