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FQ3 Pre-announcement and Adjusted Guidance

2 February 2009 | 

voestalpine increases 9-month earnings - forecast downgraded for the year as a whole

In view of the fact that real economic growth has tightened steadily worldwide since autumn in the previous year, and the situation in the first weeks of 2009 gives no reason to expect any change in this trend, the Management Board of voestalpine AG feels impelled to provide an early earnings forecast for the first time since the Company’s initial public offering in 1995. Publication of the detailed quarterly financial statements as at 31/12/2008 will take place as scheduled on 25 February 2009, regardless of this announcement.

Based on EBITDA (earnings before interest, taxes, depreciation and amortisation), earnings for the first three quarters of current financial year 2008/09 will be around 10% higher than the comparable value in the previous financial year (EUR 1.36 billion). EBIT (earnings before interest and taxes) will also be approximately 10% higher compared to the first nine months of the previous year (EUR 870 million). Both of these estimates remain above their values for the previous year, even before accounting for the purchase price allocation (PPA) from the Böhler-Uddeholm acquisition. These figures represent the Group’s best nine-month earnings to date, thereby also confirming the Management Board’s previous positive assessment of financial year 2008/09.

However, due to the ever-worsening downward market trend that has taken place since the end of 2008, based on current knowledge, EBITDA for financial year 2008/09 as a whole is now expected to decline by approximately 5% compared to the previous year (EUR 1.84 billion), and EBIT is expected to decrease by around 10% (2007/08: EUR 1.15 billion), in both cases after PPA (the declines approximately double when PPA is not taken into account). The weak earnings in the final quarter are primarily the result of a massive decline in demand in all areas, with the exception of the railroad infrastructure and energy sectors, significantly decreased price levels in almost all product groups, accompanied, however, by raw materials costs that (still) remain high, and negative nonrecurring effects due to personnel adjustment measures.

The unpredictability of the markets over the next 12 months makes it impossible to provide an earnings forecast for financial year 2009/10, which begins on 1 April 2009. “We do, however, expect earnings to remain significantly positive in the coming financial year, even if the negative market trend continues”, stated voestalpine CEO Wolfgang Eder. Even in this difficult environment, the Management Board also expects a clear positive change in cash flow.