Due to the improving economic circumstances and increasing cost savings resulting from the implementation of efficiency improvement and cost-cutting programs, the voestalpine Group achieved very significant growth in revenue and profit during the first three months of the business year 2010/11 not only in comparison to the same period of the previous year; it also recorded higher figures vis-à-vis the immediately preceding quarter for the fourth consecutive time.
The Group’s revenue went up in the first quarter of 2010/11 compared to the first quarter of the past business year by EUR 462.9 million (+22.1%) from EUR 2.093.2 million to EUR 2,556.1 million.
Carried by the positive business performance of all the divisions, the voestalpine Group was able to boost its revenue - including vis-à-vis the immediately preceding quarter (Q4 2009/10) - by an additional 13.0% from EUR 2,261.7 million to EUR 2,556.1 million.
The improved economic situation, the profit threshold (break-even point) that has been lowered in the course of the crisis, and the success in implementing optimization programs are reflected in the profit from operations before depreciation and amortization (EBITDA) even more strongly than in the level of revenue. In comparison to the first quarter of 2009/10, the rise in revenue of 22.1% resulted in EBITDA that went from EUR 134.2 million to EUR 350.9 million, representing an increase of 161.5%; this means a Group margin in the first quarter of 2010/11 of 13.7% (previous year: 6.4%).
The gain by EUR 100.6 million from EUR 34.0 million to EUR 134.6 million (in absolute figures) means that the Steel Division was able to improve EBITDA almost fourfold. Viewed in relative terms, the Special Steel and Profilform Divisions boosted EBITDA most markedly from EUR 4.7 million to EUR 77.1 million and from EUR 7.1 million to EUR 39.1 million, respectively. But the Automotive Division’s EBITDA also more than doubled from EUR 12.7 million to EUR 26.4 million. Despite an already very high comparative EBITDA figure in the previous year and the noticeable drop in rail prices, the Railway Systems Division - carried by the very positive performance in the wire and seamless tube segments - again improved EBITDA by 4.1% from EUR 87.4 million to EUR 91.0 million.
In a direct comparison to the fourth quarter of 2009/10, the increase in EBITDA of 3.1% (from EUR 340.4 million to EUR 350.9 million) is still lagging behind due to the fact that raw material prices went up as much as 100% as of April 1, 2010 and can only passed on to customers over time.
In comparison to a slightly negative EBIT of EUR -26.3 million in the first three months of the business year 2009/10, the Group recorded an operating result for the same period of 2010/11 that was EUR 203.3 million higher, a very satisfactory figure considering the still tense economic situation; this represents an EBIT margin of 8.0% ( after -1.3% in the previous year). As all divisions posted clearly positive operating results, they all contributed to this gratifying development.
Compared to the immediately preceding quarter (fourth quarter of 2009/10), EBIT rose in the first quarter of 2010/11 by 15.0% from EUR 176.8 million to EUR 203.3 million; this represents a far more significant gain than EBITDA growth.
Due to an operating result that was up strongly in the first quarter of 2010/11 compared to the same period of the previous year, rising from EUR -70.1 million to EUR 156.5 million, the profit before tax (EBT) turned around. The profit for the period (net income)5 came to EUR 121.1 million (compared to EUR -48.2 million in the previous year).
Equity went up in the first quarter of 2010/11 compared to March 31, 2010 by 4.1% from EUR 4,262.4 million to EUR 4,435.9 million. This increase is largely the result of the markedly positive profit for the period of EUR 121.1 million and foreign exchange rate effects of EUR 52.8 million. Compared to March 31, 2010, net financial debt declined by 1.8% from EUR 3,037.3 million to EUR 2,981.8 million due to the very good operating result and the investment expenditure that was substantially lower than depreciation. Thus, as of the end of the first quarter of 2010/11, the voestalpine Group’s gearing ratio (net financial debt as a percentage of equity) was 67.2%, which means that it was reduced within a period of just three months by another 4.1 percentage points compared to the gearing ratio as of March 31, 2010 (71.3%).
The Group’s crude steel production in the first quarter of 2010/11 was 1.96 million tons, 54.3% higher than the previous year’s corresponding figure (1.27 million tons). At 1.36 million tons, the Steel Division reported a 47.8% growth in production, and at 390,000 tons, the Railway Systems Division reported an increase in output of 50.0%. The Special Steel Division more than doubled its production from 90,000 tons to 210,000 tons.