voestalpine AG: voestalpine posts solid result and a significant increase in operating cash flow in Q1 2024/25 in a difficult market environment

voestalpine posts solid result and a significant increase in operating cash flow in Q1 2024/25 in a difficult market environment

• Solid result in a poor economic environment once again confirms Group strategy
• Revenue down slightly year-on-year at EUR 4.1 billion (EUR 4.4 billion)
• EBITDA of EUR 417 million influenced by negative one-off effects (previous year: EUR 499 million)
• Significant increase in operating cash flow from EUR 10 million to EUR 215 million
• Debt increased by 6.3% to EUR 1.8 billion compared to the balance sheet date
• Number of employees (FTE) increased slightly by 0.4% year-on-year to 51,400
• EBITDA outlook at the lower end of the communicated range of EUR 1.7 billion to EUR 1.8 billion
• greentec steel on schedule and on budget, CO₂ reduction path confirmed

voestalpine generated a solid result in the first quarter of the 2024/25 business year (April 1 to June 30, 2024). The global positioning and sector diversification ensured stability for the steel and technology group even in the very poor European economic environment. The rail infrastructure and aerospace sectors performed particularly strongly in the first quarter. The energy sector recorded positive demand, especially in the renewable energy segment. By contrast, the construction and mechanical engineering industries remained at a persistently low level. The ongoing weak development, particularly in the German automotive industry, led to low demand for tool steel and in the Automotive Components business segment. In contrast, demand from the automotive industry for products from voestalpine’s Steel Division was satisfactory. Demand for voestalpine’s ultra-modern high bay warehousing systems made from the most robust steel profiles remains strong.

“In an extremely difficult environment, especially for European steel companies, we were able to perform very well both in steel production and in the area of downstream processing. Our high-quality steel products are highly sought after in the most technologically demanding segments, such as the rail and aerospace industries. Our strategic goal remains continued growth in high-yield markets,” says Herbert Eibensteiner, CEO of voestalpine AG.

Investigation of the already reported intentional false journal entries is ongoing

With regards to the facts already presented in the 2023/24 Annual Report, voestalpine has commissioned a specialized auditing company and a German law firm to investigate the intentionally false journal entries uncovered last business year. The false journal entries were intended to raise profit figures at a German company of the Metal Forming Division totaling around EUR 100 million over the business years between 2012/13 and 2023/24. The accounting consequences were corrected retrospectively and are fully taken into account in the 2023/24 annual financial statements. The investigation of the matter is ongoing, and voestalpine will provide information on the results once the final report is available. Only then will it be possible to decide whether to bring civil or criminal charges.

voestalpine considers issuing a green corporate bond

voestalpine is considering issuing a new corporate bond in the Northern fall of this year. With the publication of a Green Financing Framework in June—as the first European steel company to do so—and the relaunch of the issuing program in July, the foundations were laid for issuing a green bond—the first green corporate bond in the European steel sector. A decision by the Management Board of voestalpine AG on the effective implementation of a transaction depends on the prevailing market situation.

greentec steel on schedule and on budget, CO₂ reduction path confirmed

As part of the transformation of its steel production, voestalpine will initially commission one electric arc furnace each in Linz and Donawitz in 2027. Both major projects are on schedule and on budget. To improve verifiability, the Group has had its CO₂ reduction targets validated by the independent Science Based Targets Initiative. This confirms that a 30% reduction in direct greenhouse gas emissions from production (Scope 1) and from energy procurement (Scope 2) by 2029 compared to 2019 is in line with the Paris climate protection targets. These reductions correspond to annual savings of almost 4 million tons of CO₂-emissions, making greentec steel Austria’s largest climate protection program.

From 2030 to 2035, the Group is aiming to reduce CO₂-emissions by 50% compared to 2019. The long-term goal for 2050 is economically viable steel production with net zero CO₂-emissions.

Solid operating result, significant increase in cash flow, negative one-off effects

At EUR 4.1 billion, revenue in the first quarter of the business year 2024/25 was slightly below the same period in the first quarter of the business year 2023/24 (EUR 4.4 billion). The EBITDA operating result decreased by 16.5% year-on-year to EUR 417 million (Q1 2023/24: EUR 499 million). The EBITDA is influenced by negative one-off effects of EUR 28 million from the ongoing sales process for Buderus Edelstahl.

As reported, voestalpine is planning to sell its German company Buderus Edelstahl. This step is a consistent implementation of the Group’s strategy to focus the materials sector on the highest quality spectrum. This planned sale already led to unscheduled impairment losses of EUR 181 million in the High Performance Metals Division in the previous business year. Due to binding offers that have now been received, a further impairment loss of EUR 28 million was recognized in the first quarter of 2024/25.

Profit from operations (EBIT) fell by 26.7% year-on-year to EUR 228 million (Q1 2023/24: EUR 311 million). Earnings before taxes amounted to EUR 189 million (Q1 2023/24: EUR 273 million). Profit after tax fell to EUR 150 million (Q1 2023/24: EUR 213 million). Cash flow from operating activities increased significantly from EUR 10 million in the previous year to EUR 215 million.

Equity increased by 0.8% compared to the reporting date (March 31, 2024) and amounted to EUR 7.6 billion as of June 30, 2024. Net financial debt increased by 6.3% compared to the reporting date to reach EUR 1.8 billion as of June 30, 2024. At 23.2%, the gearing ratio (net financial debt in relation to equity) increased slightly compared to the balance sheet date (22.0%).

As of June 30, 2024, the number of employees in the voestalpine Group worldwide amounted to 51,400 (full-time equivalent), which is 0.4% more than in the previous year (51,200).

Outlook

Following the solid performance in the first quarter, the existing trends are currently expected to continue for the remainder of the 2024/25 business year.

While no substantial improvement can yet be assumed for the construction, engineering, and consumer goods segments in the current reporting period, the markets in the customer segments railway systems, aerospace, and warehouse technology, which have performed very well to date, should continue to show high demand for products and system solutions from the voestalpine Group. Demand from the conventional energy sector in the area of oil and gas exploration lost momentum in the first business quarter, especially in North America, but should remain stable at the now lower level for the remainder of the reporting period. The automotive industry was largely stable overall in the first quarter of 2024/25, although somewhat more moderate demand momentum cannot be ruled out in this segment in the second half of 2024/25 due to the persistently weak economy in Europe. Developments in the current globally challenging environment for tool steel should bottom out in the first half of 2024/25. Demand is expected to improve in the second half of 2024/25, driven in particular by momentum in the Asian economic region.

In light of the continuing weak economic momentum in Europe, particularly in Germany, and the generally solid but by tendency lower-than-expected first quarter, the Management Board of voestalpine AG currently expects EBITDA for the business year 2024/25 to be at the lower end of the previously communicated range of EUR 1.7 to 1.8 billion and thus in the region of around EUR 1.7 billion.

The Report of the first quarter of 2024/25 of voestalpine AG as of June 30,2024, may be accessed on the company's website at www.voestalpine.com under the 'Investors' tab.
In case of questions, please contact the company's Investor Relations team at +43/50304/15-9949.

Please direct your inquiries to

voestalpine AG

Mag. Peter Felsbach, MAS

Head of Group Communications I Spokesman

voestalpine-Strasse 1

4020 Linz, Austria

T. +43/50304/15-2090

peter.felsbach@voestalpine.com

www.voestalpine.com

 

Peter Fleischer

Head of Investor Relations

voestalpine-Strasse 1

4020 Linz, Austria

T. +43/50304/15-9949

peter.fleischer@voestalpine.com

www.voestalpine.com