Difficult environment has adverse impact on voestalpine’s results for the first half of the business year 2019/20

For the voestalpine Group, the first half of the business year 2019/20 was defined by a substantial dampening of sentiment in its economic environment. Particularly in Europe, where voestalpine generates about two thirds of its revenue, the weakening of the export industry due to increasing global barriers to trade, decreasing demand from the automotive industry as well as fewer investments affected all of the Group’s divisions. But the global trade disputes are being reflected in declining economic momentum in China and the United States too. The adverse conditions in the steel sector intensified all the more on account of massive increases in raw materials prices in tandem with decreasing sales prices and large volume steel imports into Europe that continue unabated. Furthermore, the financial expenditures for CO2 allowances in the European Union as well as the corporate issue of start-up costs at the Group’s Automotive Components plant in Cartersville, Georgia, USA, continued to have adverse impact on the profit margins.

Under these conditions, there was a decline in all earnings categories of the voestalpine Group in the first half of 2019/20. As measures to stabilize earnings, the cost-cutting and efficiency improvement programs already implemented were further intensified.

Nevertheless, in this generally difficult macroeconomic environment, the technology segments railway systems, aerospace, warehouse and rack-solutions as well as welding technology recorded a stable, positive development, confirming the strategic orientation of the voestalpine Group as a special and complete system provider.

Investments reduced

Having made large investments in recent years, the voestalpine Group is cutting back on its investment activity, reducing its investment volume in the first half of the year by almost 30% to EUR 338 million (EUR 475 million a year earlier).

Key figures of voestalpine Group