Letter to Shareholders Q3 2012/13

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Despite the fact that the economic environment continues to be challenging, the voestalpine Group was able to maintain its revenue during the first nine months of the current business year at a largely stable level and keep the decline of the operating result down within narrow bounds. More information under http://bit.ly/V08k1b


  • 1. Letter to Shareholders 1st 3rd Quarter 2012/13www.voestalpine.com
  • 2. voestalpine Group Key FiguresQ 1 Q 3 2011/12 vs. Q 1 Q 3 2012/13In millions of euros Q 1 Q 3 2011/12 Q 1 Q 3 2012/13 04/01 04/01 Change 12/31/2011 12/31/2012 in %Revenue 8,877.2 8,652.5 2.5EBITDA 1,118.0 1,051.7 5.9EBITDA margin 12.6% 12.2%EBIT 676.4 615.1 9.1EBIT margin 7.6% 7.1%Profit before tax (EBT) 533.8 473.7 11.3Profit for the period1 411.4 369.5 10.2EPS Earnings per share (euros) 2.09 1.83 12.4Investments in tangible and intangible assets and interests 353.8 498.4 40.9Depreciation 441.5 436.6 1.1Capital employed 8,456.9 8,200.5 3.0Equity 4,873.9 5,041.5 3.4Net financial debt 2,989.4 2,508.5 16.1Net financial debt in % of equity (gearing) 61.3% 49.8%Employees (full-time equivalent) 45,144 44,696 1.01 Before deduction of non-controlling interests and interest on hybrid capital.
  • 3. Letter to Shareholders, 1st 3rd Quarter 2012/13 Ladies and Gentlemen: It was a long road for the voestalpine Group to transform itself from a typical steel company to a technology and industrial goods group. The first steps were taken 15 years ago by begin- ning to specialize in sophisticated steels and steel products. We shifted away from mass- produced goods and commodities, the production of which did not have a future in the long term in an economic region such as Europe, where overall costs are less and less competitive, population is shrinking, and the social and political arenas are taking an increasingly critical stance toward industry. Then, more than ten years ago within the scope of the strategy process 2001/02, came the final break with the goals of the steel industry: the departure from the steel industrys propensity of thinking in terms of tons and the Groups clear focus on high-tech products in the most advanced industry segments. For product decisions of the future, it was not the volume but the margin that was deemed to be the crucial factor. A new organizational structure was imple- mented for the Group: the two traditional divisions (steel) Flat Products and (steel) Long Products were replaced by the Railway Systems, Profilform, Automotive, and Steel Divi- sionswith the latter being just one of four divisions. The Groups focus shifted quickly toward the customers and products targeted by the new divisions. With a host of acquisitions, the largest of which was the acquisition of BHLER-UDDEHOLM in 2007, the transformation of the company to a technology and industrial goods group became irrevocable reality. In the consistent continuation of this strategy, the decision was made during the business year 2012/13, which is nearing its end, to again significantly expand the Groups structure to e ncompass the Metal Engineering, Metal Forming, Special Steel, and Steel Divisions and to orient the Group even more consistently toward the megatrends of the future during the next ten years with products that are largely at the end of a very long value chain in order to enable a continuation of value-adding growth even in challenging times. Even today, only around 30% of our Groups revenue is generated by classic steel products, but they are the best available in this industry and we need them as a foundation upon which to build and maintain our top position in the industrial goods sector. Even more than in the past, this is where the focus of our strategic direction will be in the next ten years. Mobility and energy are the key segments of our strategynot only in Europe but worldwide. More information about the strategy of the voestalpine Group will be provided in our Annual Report that will be published on June 5, 2013. Linz, February 7, 2013 The Management BoardWolfgang Eder Herbert Eibensteiner Franz Kainersdorfer Robert Ottel Franz Rotter 3
  • 4. Letter to Shareholders, 1st 3rd Quarter 2012/13 Highlights Macroeconomic environment marked by negative development throughout the course of the year. Toward the end of the year, economic stabilization at a low level in the wake of measures to reduce debt in Europe and the USA as well as a recovery trend in China. Subdued demand in the most important industry segments (construction and construction supply industries, automobile industry, energy sector); stable, positive development only in aerospace sector and railway infra tructure. s In December, long-term Group strategy of continued value-added growth until 2020 resolved; revenue target EUR 20 billion. Despite continuing difficult economic environment, ongoing solid performance in all business segments of the Group; almost full utilization of capacity in all major production facilities. In a year-to-year comparison, largely stable revenue performance: currently EUR 8,652.5 million compared to EUR 8,877.2 million in the first nine months of the previous year (decrease of 2.5%). Results decline slightly due to overall difficult economic trend: operating esult r (EBITDA) dropped by 5.9% to EUR 1,051.7 million from EUR 1,118.0 million in the previous year, profit from operations (EBIT) at EUR 615.1 million, 9.1% below p revious years figure (EUR 676.4 million), and net income (profit for the period) at EUR 369.5 million, 10.2% weaker than in the pre ious year (EUR 411.4 million). v Compared to the beginning of the business year (EUR 4,836.3 million), equity as of December 31, 2012 rose by 4.2% to EUR 5,041.5 million; during the same p eriod, net financial debt was reduced by 3.0% from EUR 2,585.7 million to EUR 2,508.5 million due to very positive cash flow development. Therefore, gearing ratio (net financial debt in percent of equity) fell by 3.7 per centage points from 53.5% at the beginning of the business year (March 31, 2012) to currently 49.8% (December 31, 2012). Number of employees (full-time equivalents) declined since the beginning of the business year (46,473 FTE) due to the economic situation by 3.8% to 44,696 FTE as of December 31, 2012.4
  • 5. Letter to Shareholders, 1st 3rd Quarter 2012/13Interim Management ReportMarket environment e conomic policy is concerned, the most important event for Europe in the business year 2012/13The first nine months of the business year 2012/13 thus far was the clear statement made by ECBwere characterized by an overall economic situ- head Mario Draghi regarding the European com-ation that was challenging both in Europe and in mon currency; in two short sentences, he declaredoverseas markets, and the situation became even the euro crisis to be over. Since then, the mediamore dire in some industrial segments in the fall are only concerned with the sovereign debtof 2012. Especially in the European automobile crisis; the euro itself is no longer being viewedindustry the situation was affected by lower sales as in danger of collapse. The capital markets re-figures toward the end o