EQS-News: voestalpine: voestalpine counters challenging environment in Q3 2024/25 with active measures

• Good demand for voestalpine’s high-tech steel products
• Revenue decreased only slightly year-on-year to EUR 11.7 billion (from EUR 12.4 billion)
• Comprehensive reorganization of the German automotive locations; sale of Buderus Edelstahl
• Strategy of broad positioning by sector and region shows strength
• EBITDA of EUR 968 million influenced by negative one-off effects (Q3 2023/24: EUR 1.3 billion)
• Significant increase in free cash flow in the third quarter
• Net financial debt was reduced by 2.6% year-on-year to EUR 2 billion
• Equity remains stable at EUR 7.5 billion compared to the reporting date (March 31, 2024)
• At 50,670, the number of employees (FTE) remained at the previous year’s level (50,712)
• EBITDA outlook at around EUR 1.3 billion and profit from operations (EBIT) at around EUR 500 million

The economic environment, especially in Europe, proved to be particularly challenging for voestalpine in the first three quarters of the 2024/25 business year (April 1 to December 31, 2024). However, the international steel and technology group profited from its global positioning and industry diversification, and generally recorded pleasing demand for its high-tech products. The railway infrastructure segment performed particularly well in the first nine months of the current business year. The aerospace segment was also able to continue its existing upward trend. Energy industry consumption decreased over the course of the business year, but the market for the products of voestalpine’s Steel Division in this segment showed very positive demand trends. Demand for automated high bay warehouses also continued in the storage system business segment. The consumer goods industry and the construction and mechanical engineering industries remained at a low level. Market momentum in the European automotive industry has continued to slow down. As previously reported, the voestalpine Management Board responded actively to the changing conditions and initiated a comprehensive reorganization program for the European and especially the German locations of the Automotive Components business unit. With the sale of Buderus Edelstahl completed at the end of January, voestalpine’s High Performance Metals Division is concentrating its product portfolio on the technologically demanding segment of high-performance materials.

“We are countering the current difficult economic environment in Europe with active management and a global growth strategy. Our Group strategy is strong and we are in a solid financial position. Especially in these challenging times, this is a stability factor and the basis for our investments in the future,” says Herbert Eibensteiner, CEO of voestalpine AG.

“Local for local”: international growth projects

The voestalpine Group is continuing to drive forward its “local for local” strategy in various business segments this business year. For example, an expansion of production and sales capacities is planned in the storage systems business segment for the North American location in Louisville, Kentucky. In the niche area of welding technology, in which the Group is considered a global leader, voestalpine has invested in expanding its production of welding consumables in India and in strengthening its application technology in order to be able to provide customers with even more comprehensive local service. voestalpine has also been successfully pursuing its strategy of establishing local turnout production facilities in strategically important markets in the railway infrastructure sector for many years. The most recent example of this is the production of high-performance turnouts in Cairo, Egypt. voestalpine Railway Systems is supplying around 260 high-speed turnouts including turnout maintenance software for the construction of the first Egyptian high-speed line (“Green Line”).

The key performance indicators in detail

In the first three quarters of the current business year, revenue fell by 5.2% from EUR 12.4 billion to EUR 11.7 billion. The operating result (EBITDA) decreased by 23.6% year-on-year to EUR 968 million (Q1 to Q3 2023/24: EUR 1.3 billion). The profit from operations (EBIT) fell by 43.9% year-on-year to EUR 391 million (previous year: EUR 697 million) and is also influenced by negative one-off effects of around EUR 170 million. These include, in particular, the impairment loss requirement already processed in the first half of the year in connection with the sale of Buderus Edelstahl, one-off effects from the reorganization of the Automotive Components business unit in Germany, and valuation effects of the voestalpine gas storage facility.

At EUR 254 million, earnings before taxes were 54.5% below the previous year’s figure of EUR 558 million. Profit after tax fell to EUR 207 million (Q1 to Q3 2023/24:
EUR 415 million). Free cash flow was significantly increased to around EUR 130 million in the third quarter.

Net financial debt was reduced by 2.6% year-on-year to EUR 2 billion as of December 31, 2024 (December 31, 2023: EUR 2.01 billion), an increase of 18.7% compared to the reporting date on March 31, 2024 (EUR 1.7 billion). At EUR 7.5 billion, equity is at the level of March 31, 2024, while the equity ratio increased from around 45% to 48%.  The gearing ratio (net financial debt in relation to equity) remained unchanged compared to the previous year at 26.2% as of December 31, 2024. Compared with the value as of the reporting date on March 31, 2024 (22.0%), there has been a slight increase in the gearing ratio.

The number of voestalpine Group employees (full-time equivalent) remained at the previous year’s level (50,712) at 50,670 as of December 31, 2024. Compared with the March 31, 2024 reporting date (51,589), the number of employees declined by 1.8%.

Outlook

While the business year 2024/25 began with a solid performance, the economic environment cooled noticeably as the year progressed. Europe recorded hardly any significant growth over the entire reporting period. In addition, the automotive industry, which is important for voestalpine, weakened significantly in the third quarter. Outside Europe, the economy performed significantly better. In North America, the economy developed satisfying overall from voestalpine's perspective, with only investment activity slowing somewhat in the third quarter of the business year in the course of the presidential election campaign. In Brazil, on the other hand, the economy lost somewhat more momentum in the last quarter of the report. In China, demand for the voestalpine Group's products has held up well overall in the business year 2024/25 to date, except for European OEMs, which suffered a drop in sales in China in the third quarter of the business year.

For the fourth quarter of the business year 2024/25, the Management Board of voestalpine AG expects the good demand situation for railway infrastructure, high bay warehouse technology and aerospace to continue in all economic regions worldwide. There are hardly any signs of positive economic impetus for Europe in the coming months. No recovery is expected for the construction, mechanical engineering, consumer goods and automotive sectors in the last quarter of the current business year, except for restocking in individual segments. Expectations for North America are divided. The Group's local North American sites should continue to benefit from the good economic momentum, whereas exports to the USA are fraught with uncertainty due to the announced tariffs on steel products. Considering the latest interest rate hike by the BCB (Brazil's central bank), there are no signs of any significant improvement in the economic environment in Brazil. The Chinese voestalpine plants, which are primarily dependent on local industrial production, should continue to develop well in the coming months.

Against the backdrop of the results for the first nine months of the current business year 2024/25 and the expectations for the final quarter, the Management Board of voestalpine AG expects from today’s point of view an EBITDA for the business year 2024/25 of around EUR 1.3 billion and therefore slightly lower than previously communicated (around EUR 1.4 billion). This corresponds to an EBIT of around EUR 500 million. These earnings expectations include negative non-recurring burdens of around EUR 200 million, among others from the sale of Buderus Edelstahl as well as from reorganization projects like the Automotive Components sites in Germany.

The voestalpine Group
voestalpine is a globally leading steel and technology group with a unique combination of materials and processing expertise. voestalpine, which operates globally, has around 500 Group companies and locations in more than 50 countries on all five continents. The voestalpine Group has been listed on the Vienna Stock Exchange since 1995. With its premium products and system solutions, voestalpine is a leading partner to the automotive and consumer goods industries, as well as to the aerospace and energy industries. The company is also the global market leader in railway systems, tool steel, and special sections. voestalpine is committed to the global climate goals and has a clear plan for transforming steel production with its greentec steel program. In the business year 2023/24, the Group generated revenue of EUR 16.7 billion, with an operating result (EBITDA) of EUR 1.7 billion; it has around 51,600 employees worldwide.

Please direct your inquiries to

voestalpine AG
Peter Fleischer
Head of Investor Relations

voestalpine-Strasse 1
4020 Linz, Austria
T. +43/50304/15-9949
peter.fleischer@voestalpine.com
www.voestalpine.com