Investments

Following a steady stream of investments in recent years, some of which substantially exceeded depreciation, the voestalpine Group made fewer investments in the business year 2019/20 to date. As a result, this key performance indicator will be more or less equivalent to depreciation in the current business year. This must be considered against the backdrop of both the weakening economy and the optimization of processes in previously implemented projects. Overall, the investments of the voestalpine Group fell by 28.9%, from EUR 474.6 million in same period the previous year to EUR 337.5 million in the first half of the business year 2019/20.

The investments of the Steel Division dropped by almost two thirds, from EUR 206.8 million in the previous year to EUR 72.2 million in the reporting period. The comprehensive overhaul of Blast Furnace A at the Group’s facility in Linz, Austria, from June 2018 through the end of September 2018 was the last of its major projects to be implemented. Presently, the Steel Division is focused on optimizing existent facilities as well as on select replacement and maintenance investments. Among other things, the project to replace the crane track girders in the steelworks is now entering the second phase. And a testing center is being established for the strip steel segment to determine the mechanical properties of cold-rolled steel strip.

At EUR 114.3 million, the investments of the High Performance Metals Division in the first half of the business year 2019/20 were 12.1% higher than the investments of EUR 102.0 million in the first half of the business year 2018/19. Currently, this division’s most important project concerns the construction of the new special steel plant in Kapfenberg, Austria. Specialized companies are building the steel factory floor, the energy delivery system as well as the piping systems, thus ensuring that the construction work remains on schedule. The factory floor will be completed by the end of February 2020. The second half of the calendar year 2021 should see the completion of the project on the whole as well as the onset of the start-up phase. Work on another key project at the Kapfenberg site—a next-generation production facility for the construction of structural aircraft components—has already reached a highly advanced stage. The forging facility will be up and running in the next few months. The High Performance Metals Division already invested in a high-tech fast forge press for highly stress resistant, rotating aircraft turbine components a year earlier.

The investment volume of the Metal Engineering Division in the first half of the business year 2019/20 (EUR 61.3 million) was slightly less than in the first half of the business year 2018/19 (EUR 65.4 million). Currently, this division’s most important project involves the construction of a new continuous casting facility (“CC4”). This cutting-edge facility will replace the existent one (“CC2”) and create the conditions for even greater improvements in the product quality of the pre-materials used in processing operations. It is slated to be commissioned at the end of the current business year.

The investment expenditure of the Metal Forming Division in the first half of the business year 2019/20 (EUR 81.0 million) was 14.8% less than that in the first half of the business year 2018/19 (EUR 95.1 million). In recent years, this division had focused on the international rollout of its product innovations in automotive components (among others in China, the United States, and Mexico). This year, it is focused on optimizing processes at individual facilities. The Tubes & Sections business segment is currently pushing investments in new process technologies. For example, it invested in a powerful processing center in Shelbyville, Kentucky, USA, specifically for the aerospace industry. The French entity, Profilafroid, also focused on issues of production technology in the first half of the business year 2019/20 by installing a customized sectioning line.