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2. Operating segments

The voestalpine Group operates in five reportable segments: Steel Division, High Performance Metals Division, Metal Engineering Division, Metal Forming Division, and Other. The reporting system, which is based primarily on the nature of the products provided, reflects the internal financial reporting, the organization’s management structure, and the Company’s main sources of risks and rewards.

The Steel Division of the voestalpine Group is the global leader in quality for highest quality strip steel and a global market leader for both heavy plate used in the most sophisticated applications and casings for large turbines. Its activities include the production of sophisticated hot and cold-rolled strip steel as well as electrogalvanized, hot-dip galvanized, and organically coated strip steel. This is augmented by electrical steel strip, heavy plate and foundry activities as well as the downstream areas, Steel & Service Center and Logistics Services. The division operates the world’s most modern direct reduction plant in Corpus Christi, Texas, USA, which manufactures highest quality pre-materials (HBI) for both own and third-party steel production. The Steel Division is the first point of contact for important automotive manufacturers and suppliers with respect to strategic product development and supports its customers globally. Moreover, it also is a key partner of the European white goods and mechanical engineering industries. The Steel Division produces heavy plate for the energy sector (which is used in the oil and natural gas industry as well as in connection with renewable energies) and for applications under extreme conditions (for example, deep-sea pipelines or in the world’s permafrost regions).

The High Performance Metals Division is the global market leader in the tool steel and high-speed steel sector. In the segment of special alloys for the oil and natural gas industries, the aerospace industry, and the energy engineering industry, the High Performance Metals Division holds a leading position on the global market. The division has a global network of service centers with a focus on tool manufacturing, offering heat treatment and coating services as well as warehousing and preprocessing of special steels. In Houston, Texas, USA, Singapore, and Birmingham, Great Britain, the division offers a broad spectrum of services including logistics, distribution, and processing, especially for the oil and natural gas industries. Its position as a technology leader in this field is highlighted by the one-stop-shop solutions it offers customers. Additive manufacturing, a business segment that will be hugely important in the future, with facilities in Düsseldorf, Germany, Toronto, Canada and Singapore is being established along its entire value chain, from powders to the finished “printed” part.

The Metal Engineering Division is the global market leader in turnout technology, the European market leader in rails and specially treated wire, and has a leading position in seamless tubes for special applications and high-quality welding consumables. The division manufactures the world’s widest range of high-quality rails and turnout products, high-quality rod wire, drawn wire, premium seamless tubes, and welding filler materials. Furthermore, the division offers an extensive range of services in the railway systems sector. Moreover, the Metal Engineering Division has access to its own steel production.

The Metal Forming Division is the expertise center at voestalpine for highly developed special sections, tube products, and precision strip steel as well as pre-finished system components made from pressed, punched, and roll-profiled parts. This combination of expertise in materials and processing is unique in the industry, and with its global presence, the division is the first choice for customers who value innovation and quality. These customers include nearly all leading manufacturers in the automotive manufacture and supply industry, with a significant focus on the premium segment, as well as several companies in the commercial vehicle, construction, storage, energy, and (agricultural) equipment industries.

The holding company, several Group financing and raw materials purchasing companies as well as one personal services company and the group-IT companies are included in the segment Other. These companies are combined in this segment because their focus is on providing coordination services and assistance to the subsidiaries.

Segment revenue, segment expenses, and segment results include transfers between operating segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers for similar products. These transactions have been eliminated in the Consolidated Financial Statements.

The voestalpine Group uses EBIT as the key figure to measure the performance of the segments. In the voestalpine Group, this figure is a widely accepted indicator for measuring profitability.

The operating segments of the Group are as follows:

Operating segments

 

 

 

 

Steel Division

 

High Performance Metals Division

 

 

 

 

 

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

3,912.4

 

4,772.7

 

2,697.9

 

2,918.0

Of which revenue with third parties

 

3,599.5

 

4,368.9

 

2,641.7

 

2,860.5

Of which revenue with other segments

 

312.9

 

403.8

 

56.2

 

57.5

EBITDA

 

563.9

 

908.2

 

395.2

 

453.9

Depreciation and amortization of property, plant and equipment and intangible assets

 

300.6

 

315.3

 

142.5

 

156.3

Of which impairment

 

0.0

 

0.0

 

0.0

 

10.1

Reversal of impairment of property, plant and equipment and intangible assets

 

0.0

 

0.0

 

0.0

 

0.0

Share of profit of entities consolidated according to the equity method

 

12.7

 

11.7

 

0.0

 

0.0

EBIT

 

263.2

 

592.9

 

252.7

 

297.6

EBIT margin

 

6.7%

 

12.4%

 

9.4%

 

10.2%

Interest and similar income

 

8.8

 

1.0

 

13.5

 

12.7

Interest and similar expenses

 

54.1

 

60.8

 

69.2

 

66.1

Income tax expense

 

–33.2

 

–124.8

 

–65.9

 

–65.6

Profit after tax

 

187.5

 

410.1

 

132.8

 

178.2

Segment assets

 

5,255.3

 

5,292.3

 

4,087.2

 

4,128.4

Of which investments in entities consolidated according to the equity method

 

93.9

 

96.8

 

0.0

 

0.0

Net financial debt

 

1,926.8

 

1,623.5

 

914.0

 

1,002.7

Investments in property, plant and equipment and intangible assets

 

404.2

 

229.5

 

179.5

 

226.4

Employees (full-time equivalent)

 

10,898

 

11,020

 

13,733

 

14,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal Engineering Division

 

Metal Forming Division

 

 

 

 

 

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

2,684.6

 

2,989.7

 

2,426.1

 

2,743.4

Of which revenue with third parties

 

2,648.8

 

2,947.1

 

2,386.4

 

2,705.5

Of which revenue with other segments

 

35.8

 

42.6

 

39.7

 

37.9

EBITDA

 

360.8

 

372.0

 

317.0

 

325.2

Depreciation and amortization of property, plant and equipment and intangible assets

 

160.0

 

181.0

 

106.3

 

112.4

Of which impairment

 

5.0

 

15.6

 

0.1

 

0.0

Reversal of impairment of property, plant and equipment and intangible assets

 

0.0

 

0.0

 

0.0

 

0.0

Share of profit of entities consolidated according to the equity method

 

0.2

 

0.4

 

0.0

 

0.0

EBIT

 

200.8

 

191.0

 

210.7

 

212.8

EBIT margin

 

7.5%

 

6.4%

 

8.7%

 

7.8%

Interest and similar income

 

2.7

 

2.4

 

2.2

 

1.5

Interest and similar expenses

 

39.8

 

40.0

 

28.0

 

31.7

Income tax expense

 

–47.9

 

–40.1

 

–48.3

 

–41.4

Profit after tax

 

117.4

 

114.3

 

136.6

 

141.1

Segment assets

 

3,260.5

 

3,357.9

 

2,236.3

 

2,442.8

Of which investments in entities consolidated according to the equity method

 

5.1

 

5.2

 

0.0

 

0.0

Net financial debt

 

838.2

 

972.0

 

556.3

 

757.9

Investments in property, plant and equipment and intangible assets

 

211.0

 

207.5

 

205.1

 

218.6

Employees (full-time equivalent)

 

13,157

 

13,481

 

11,073

 

12,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Reconciliation

 

Total Group

 

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue

 

1,395.0

 

1,629.4

 

–1,821.5

 

–2,155.4

 

11,294.5

 

12,897.8

Of which revenue with third parties

 

18.1

 

15.8

 

0.0

 

0.0

 

11,294.5

 

12,897.8

Of which revenue with other segments

 

1,376.9

 

1,613.6

 

–1,821.5

 

–2,155.4

 

0.0

 

0.0

EBITDA

 

–89.3

 

–102.5

 

–6.9

 

–2.7

 

1,540.7

 

1,954.1

Depreciation and amortization of property, plant and equipment and intangible assets

 

8.0

 

9.1

 

0.0

 

0.0

 

717.4

 

774.1

Of which impairment

 

0.0

 

0.0

 

0.0

 

0.0

 

5.1

 

25.7

Reversal of impairment of property, plant and equipment and intangible assets

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

Share of profit of entities consolidated according to the equity method

 

0.7

 

1.6

 

1.0

 

1.5

 

14.6

 

15.2

EBIT

 

–97.2

 

–111.6

 

–6.9

 

–2.7

 

823.3

 

1,180.0

EBIT margin

 

 

 

 

 

 

 

 

 

7.3%

 

9.1%

Interest and similar income

 

147.7

 

170.5

 

–147.3

 

–165.8

 

27.6

 

22.3

Interest and similar expenses

 

130.2

 

148.7

 

–150.6

 

–169.9

 

170.7

 

177.4

Income tax expense

 

21.3

 

47.3

 

1.1

 

0.0

 

–172.9

 

–224.6

Profit after tax

 

523.0

 

798.2

 

–570.3

 

–824.0

 

527.0

 

817.9

Segment assets

 

10,984.2

 

11,656.5

 

–11,116.0

 

–11,422.9

 

14,707.5

 

15,455.0

Of which investments in entities consolidated according to the equity method

 

6.7

 

8.0

 

7.3

 

8.5

 

113.0

 

118.5

Net financial debt

 

–1,038.4

 

–1,396.7

 

24.2

 

35.7

 

3,221.1

 

2,995.1

Investments in property, plant and equipment and intangible assets

 

7.7

 

13.1

 

–0.1

 

0.0

 

1,007.4

 

895.1

Employees (full-time equivalent)

 

842

 

843

 

0

 

0

 

49,703

 

51,621

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The reconciliation of the key figures EBITDA and EBIT are shown in the following tables:

EBITDA

 

 

 

 

 

 

2016/17

 

2017/18

 

 

 

 

 

Net exchange differences and result from valuation of derivatives

 

–2.2

 

–3.2

Consolidation

 

–4.7

 

0.5

EBITDA – Total reconciliation

 

–6.9

 

–2.7

 

 

 

 

 

In millions of euros

EBIT

 

 

 

 

 

 

2016/17

 

2017/18

 

 

 

 

 

Net exchange differences and result from valuation of derivatives

 

–2.2

 

–3.2

Consolidation

 

–4.7

 

0.5

EBIT – Total reconciliation

 

–6.9

 

–2.7

 

 

 

 

 

In millions of euros

All other key figures contain solely the effects of consolidation.

Geographical information

The following table provides selected financial information summarized according to the major geographical areas. External revenue is allocated to the customers’ geographical location. Non-current assets and investments are reported based on the geographical location of the companies.

 

 

Austria

 

European Union

 

Other countries

 

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

2016/17

 

2017/18

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

813.5

 

900.9

 

7,036.8

 

7,659.9

 

3,444.2

 

4,337.0

Non-current assets

 

5,123.6

 

5,126.4

 

1,613.6

 

1,664.8

 

1,702.0

 

1,537.7

Investments in property, plant and equipment and intangible assets

 

522.7

 

492.4

 

188.5

 

209.4

 

296.2

 

193.3

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The voestalpine Group does not record any revenue from transactions with a single external customer amounting to 10% or more of the entity’s revenue.


About voestalpine

In its business segments, voestalpine is a globally leading technology and capital goods group with a unique combination of material and processing expertise. With its top-quality products and system solutions using steel and other metals, it is a leading partner to the automotive and consumer goods industries in Europe and to the aerospace, oil and gas industries worldwide. The voestalpine Group is also the world market leader in turnout technology, special rails, tool steel, and special sections.

Facts

50 Countries on all 5 continents
500 Group companies and locations
51,600 Employees worldwide

Earnings FY 2017/18

€ 13 Billion

Revenue

€ 2 Billion

EBITDA

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