Metal Forming Division

Financial key performance indicators

In the first half of 2017/18, the Metal Forming Division was embedded in a market environment that was solid and stable overall, benefitting especially from the improved sentiment in Europe. Particularly the Automotive Components business segment was driven by excellent unchanging demand from the automotive industry. This is substantiated by the official European statistics on new vehicle registrations, according to which the high auto sales figures in the previous year were topped yet again in the first three calendar quarters of 2017. The premium class segment, which is most important to the division, developed extremely well in both Europe and China whereas, all told, the U.S. market was stable at a satisfactory level. The increase in investments in both North America and China, especially in connection with hot forming facilities (“phs-ultraform^®” and “phs-directform^®”), is proceeding as planned, in turn continually boosting both the strategic and the financial significance of the sites outside of Europe.

As far as the Tubes & Sections business segment is concerned, conditions in the European market during the first half of 2017/18 improved slightly overall. This applies first and foremost to the commercial vehicle and agricultural machine industry as well as the construction industry. In Great Britain, too, the momentum in these areas was largely sustained despite the negative Brexit vote. Although the situation in South America, economically speaking, has yet to improve, the Tubes & Sections business segment which, to date, has focused largely on Brazil (the biggest single market) has developed clearly positive thanks to efficiency-boosting measures as well as comprehensive cost reduction programs and further successes in exports. Order levels in the United States were only moderate because of continued low investment levels especially in the construction and agricultural machinery industry. In China, by contrast, demand for customer-specific tubes and profiles noticeably improved during the year.

The excellent performance of the Precision Strip business segment is based not just on the good conditions in its European home markets that continue unabated, but also on the expansion of its international market position—the latter due not least to the acquisition last year of a North American competitor. The important sawmill industry, a customer segment, has performed very well as of late, both in Europe and in China. Demand in the United States in this segment remained stable in the first half of 2017/18.

The strong performance of the Warehouse & Rack Solutions business segment in recent years has continued unabated in the business year 2017/18 to date, primarily on account of the worldwide growth in online commerce.

Financial key performance indicators

The financial indicators of the Metal Forming Division point to a continuous upward movement. The increase in revenue by 11.2% from EUR 1,188.0 million in the first half of 2016/17 to EUR 1,321.6 million in the first six months of the current business year reflects the rise in pre-materials prices, for one, but results from continuous investments in the Automotive Components business segment as well as the continued excellent performance of the Precision Strip business segment, for another. This relatively small segment, in particular, also accounts for a substantial portion of the additional earnings growth in the current business year. On the whole, the division’s operating result (EBITDA) climbed by 6.7% from EUR 153.4 million in the first half of 2016/17 to EUR 163.7 million in the first half of 2017/18. The profit from operations (EBIT) improved at a similar ratio, specifically, by 5.2% from EUR 103.3 million to EUR 108.7 million. Due to the even greater increase in revenue, relatively speaking, the EBITDA margin fell slightly from 12.9% to 12.4%, and the EBIT margin from 8.7% to 8.2%.

The quarter-to-quarter comparison shows that revenue declined a bit by 3.5% from EUR 672.7 million in the first quarter of 2017/18 to EUR 648.9 million in the second quarter, due largely to seasonal effects. A downward trend made itself felt in the development of earnings for the same reason (i.e. customers’ regular summer plant closures in the two large business segments, Tubes & Sections as well as Automotive Components). From the first to the second quarter, EBITDA fell by 15.2% from EUR 88.6 million to EUR 75.1 million. This also lowered the EBITDA margin from 13.2% to 11.6%. The decline in EBIT was a bit more pronounced: it fell by 22.7% from EUR 61.3 million to EUR 47.4 million, with the result that the EBIT margin declined quarter on quarter from 9.1% to 7.3%.

As of September 30, 2017, the number of employees (FTE) in the Metal Forming Division was 11,498 or 7.2% higher than the past year’s figure of 10,724. This increase is due above all to the international expansion of automotive activities. Compared with the number of employees (11,073) at the end of the business year 2016/17, this represents an increase of 3.8%.