voestalpine boosts revenue in the 3rd quarter of 2018/19, earnings affected by non-recurring items

• Revenue for first nine months rises 5.2% year over year from EUR 9.5 billion to just under EUR 10 billion
• Negative non-recurring effects impact Group’s earnings categories
• Operating result (EBITDA) declines by 21.4% from EUR 1.4 billion to EUR 1.1 billion
• Profit from operations (EBIT) drops by 37% from EUR 835 million to EUR 526 million
• Profit before tax drops by 41.6% from EUR 737 million to EUR 431 million and profit after tax by 50.4% from EUR 556 million to EUR 276 million
• Equity improves from EUR 6.3 billion to EUR 6.5 billion
• Gearing ratio rises from 54% to 58%
• At 51,472, number of employees as of 12/31/2018 1.6% higher year over year

As a result, earnings in the second business quarter were impacted primarily by the complete overhaul of large blast furnace A in Linz and—to a lesser extent—by the fact that several weeks of planned and unplanned production stoppages occurred at the HBI facility in the United States. Add to that provisions that were set up in the third business quarter for the heavy plate segment in connection with a pending investigation by the German Federal Cartel Office (Bundeskartellamt); significant start-up cost overruns at the automotive facility in Cartersville, Georgia, USA; as well as associated provisions related to external shifts in order activity.

The revenue of the voestalpine Group rose by 5.2% in the first three quarters of the business year 2018/19 from EUR 9.5 billion to just under EUR 10 billion. All four divisions posted revenue growth. As far as earnings are concerned, the voestalpine Group had to contend with substantial losses in the current business year due to the aforementioned negative non-recurring effects. In sum, therefore, the Group’s operating result (EBITDA) for the first three quarters of the business year 2018/19 dropped year over year by 21.4% from EUR 1.4 billion (margin of 14.9%) in the previous year to EUR 1.1 billion (margin of 11.1%) in the current year. The profit from operations (EBIT) fell in the same period by 37.0% from EUR 835 million (margin of 8.8%) to EUR 526 million (margin of 5.3%). The profit before tax declined to an extent echoing EBIT, specifically, by 41.6% from EUR 737 million to EUR 431 million. The profit after tax dropped year over year from EUR 556 million to EUR 276 million.

Equity improved in the past 12 months, from EUR 6.3 billion as of December 31, 2017, to EUR 6.5 billion as of December 31, 2018, and the equity ratio (total equity relative to total assets and liabilities) thus is 42.4% (as of December 31, 2017: 41.2%). Net financial debt rose from EUR 3.4 billion as of December 31, 2017, to EUR 3.8 billion as of December 31, 2018. Consequently, the gearing ratio (net financial debt as a percentage of equity) rose year over year from 53.5% as of December 31, 2017, to 58.4% as of December 31, 2018.

The details of the shortfalls in earnings were already communicated in the ad hoc reports dated October 24, 2018, and January 16, 2019. Given the comprehensive optimization measures that have been launched, it is to be expected from the current vantage point particularly with respect to net working capital that the funding ratios will relax substantially yet again by the close of the current business year.

As of December 31, 2018, the voestalpine Group had 51,472 employees (FTE), an increase of 1.6% year over year (50,658 employees).