Voestalpine: Strategic resilience amid economic challenges in 2024/25

voestalpine AG has reported a stable performance in the first half of its 2024/25 business year, weathering a difficult economic climate for the European steel industry. The Austrian steel and technology group’s strategic focus on high-tech products and diverse market positioning has enabled it to remain resilient despite headwinds, with revenue of EUR 8 billion, down slightly from EUR 8.5 billion in the previous year.

CEO Herbert Eibensteiner highlighted the company’s adaptability, noting, “In this extremely difficult environment for European steel companies, voestalpine once again demonstrates its flexibility and adaptability.” He added that the Group’s broad industrial and regional footprint has been key to stabilizing results.

Sectoral Performance and Strategic Initiatives

Railway infrastructure and aerospace have been standout performers, with demand remaining strong for advanced steel profiles used in high-bay warehouse systems. Conversely, the energy sector and construction-related industries experienced a slump, while European automotive markets weakened further, exacerbated by profit warnings from major car manufacturers. However, voestalpine’s non-European automotive sites continue to report robust capacity utilization.

To support future growth, voestalpine is advancing major international projects, including a EUR 70 million investment to expand production in Indiana, USA, and the construction of a record 50-meter high-bay warehouse in the Czech Republic for Nexen Tire Corporation. In railway infrastructure, the Group is fulfilling a major contract for Egypt’s first high-speed line, the “Green Line.”

Financial Highlights and Green Financing

EBITDA for the first half of 2024/25 was EUR 718 million, down from EUR 903 million the previous year, impacted by negative one-off effects, including a EUR 81 million write-down related to the sale of its German subsidiary, Buderus Edelstahl. The company’s net financial debt decreased year-on-year but rose from March 2024 levels, while the gearing ratio increased to 27.5%. Despite these pressures, equity remains robust at EUR 7.4 billion.

In a significant milestone, voestalpine issued its first green bond in September, worth EUR 500 million, marking a pioneering step for European steel companies. The funds will be dedicated to sustainable projects like the greentec steel initiative.

Outlook Amid Economic Headwinds

The economic environment in Europe deteriorated over the course of the year, particularly impacting construction, mechanical engineering, and consumer goods sectors. As Eibensteiner explained, “In business segments facing structural changes, we responded immediately with specific measures, such as reorganizing our German Automotive Components locations.” Despite these challenges, voestalpine maintains a positive outlook for global markets, especially in railway infrastructure, aerospace, and warehouse technology.

The Group has adjusted its EBITDA forecast to approximately EUR 1.4 billion for 2024/25, factoring in non-recurring costs and market downturns. Nevertheless, strong performance in non-European business units and active management efforts are expected to support voestalpine through the remainder of the fiscal year. Meanwhile the company remains committed to its green transformation, with greentec steel projects proceeding on schedule.

Source and Photo: Voestalpine