High Performance Metals Division

MARKET ENVIRONMENT AND BUSINESS DEVELOPMENT

The opposing trends of the previous reporting periods continued in the first half of the business year 2024/25: The tool steel segment continued to perform modestly on the European market and also cooled off somewhat in North America in the second quarter. In the special materials segment, the aerospace industry recorded continuously rising global sales figures, while the oil and gas sector lost momentum in the second quarter.

Weak demand from the European automotive industry had a negative impact on the tool steel segment in the first half of the year. A cautious investment climate for tools for new car models and reduced demand for replacement tools led to a decline in volumes, particularly in Germany. The rising proportion of imported tools from Asia also increased the pressure in the standardized area. With the sale of Buderus Edelstahl, the High Performance Metals Division took measures to optimize its portfolio and focus its product range on the technologically sophisticated high-performance segment. In North America, the subdued investment activity typical of presidential election years and thus reduced demand for tool steel was noticeable in the second quarter. In South America, the results were at a satisfactory level. The High Performance Metals Division recorded rising sales figures in this segment in China, driven by positive developments in the automotive and consumer goods sectors. By contrast, the white goods segment remained subdued in all regions in the current reporting period. Demand for household appliances, which is strongly linked to the real estate sector and the currently weak construction industry, is not yet showing any signs of a trend reversal.

In the special materials segment, the positive trend in the aerospace industry continued. The High Performance Metals Division benefited from the global increase in passenger volumes. In the energy sector, falling energy prices dampened investment in the development of new oil and gas sources. This led to a decline in demand in Europe and North America, while South America and Asia performed comparatively well. In the power engineering sector, the recovery of the European market for gas turbines and the nuclear industry consolidated.

Capacity utilization at the division’s production plants, High Performance Metals Production, varied. In the Northern summer months of the second quarter, planned seasonal repair shutdowns also led to lower production volumes. The Swedish special steel plant Uddeholm recorded good capacity utilization figures thanks to improved demand from Asia. Incoming orders at the special steel plant in Kapfenberg declined due to the fall in demand for tool steel, primarily as a result of the situation in Germany, and the slowdown in demand for special materials in the oil and gas sector. The new special steel plant is still in the ramp-up phase and is on schedule with its output increases. Customer approvals for most products have already been successfully completed. The Buderus Edelstahl steel plant in Germany has been particularly affected by the weak European economy. As reported in Northern spring 2024, the Management Board of voestalpine AG therefore decided to initiate a sales process for this plant. This was concluded shortly after the end of the reporting period with the signing of the contract with the buyer Mutares SE & Co. KGaA. The economic slowdown in Brazil led to slightly lower capacity utilization at the Villares Metals special steel plant in the first half of 2024/25.

The business segment Value Added Services, which represents the division’s global sales network and offers special services for tool manufacturers, recorded significant volume declines for tool steel in Europe and North America in the current reporting period. While demand for special materials in the aerospace sector developed well, the decline in demand in the oil and gas industry impacted the service centers in North America. Heat treatments and surface coatings are closely linked to developments in the tool steel sector, but continue to make positive contributions, with Asia and China in particular performing well.

FINANCIAL KEY PERFORMANCE INDICATORS

The High Performance Metals Division’s revenue decreased by 9.4% year-on-year from EUR 1,787.7 million in the first half of 2023/24 to EUR 1,619.7 million in the first half of 2024/25. Lower sales volumes and a slightly lower price level were the main reasons for this development. The fact that the operating result (EBITDA) weakened more significantly is also due to the negative one-off effects in the current reporting period. Against the backdrop of the Buderus Edelstahl sales process, current assets had to be written down by EUR 81 million in the first half of 2024/25 on the basis of existing binding offers. Overall, EBITDA decreased by 89.0% from EUR 143.2 million in the first half of 2023/24 to EUR 15.8 million in the first half of 2024/25. As a result of the impairment requirement, the operating result (EBIT) turned negative at EUR –62.5 million (margin of –3.9%) in the first half of 2024/25. In the previous year, the High Performance Metals Division reported EBIT of EUR 59.0 million with a margin of 3.3%.

In a direct quarter-on-quarter comparison from Q1 to Q2 2024/25, shipment volumes were slightly lower in the Northern summer quarter as a result of seasonal effects. By contrast, the High Performance Metals Division was able to keep prices stable. As a result, the High Performance Metals Division reported a decrease in revenue of 3.7% from EUR 825.2 million in Q1 2024/25 to EUR 794.5 million in Q2 2024/25. On the earnings side, negative one-off effects (Q1: EUR –28 million, Q2: EUR –53 million) from the sale of Buderus Edelstahl had an impact on the reporting figures. EBITDA in the second quarter was therefore slightly negative at EUR –12.8 million (margin of –1.6%). In the immediately preceding quarter, it amounted to EUR 28.6 million (margin of 3.5%). EBIT weakened from EUR –10.6 million (margin of –1.3%) in the first quarter to EUR –51.9 million (margin of –6.5%) in the second quarter.

The number of employees (FTE) decreased by 2.1% to 13,202 as of September 30, 2024 (13,492 employees as of September 30, 2023).