Steel Manufacturer Further recovery in key business segments: Voestalpine presents quarterly results
Austria — The Austrian steel and technology group, Voestalpine, reports further recovery in key business segments during the third quarter of the business year 2020/21. This development followed a considerable decline in demand in almost all customer segments and regions during the first quarter 2020.
In the first nine months of the business year 2020/21, the performance of the Voestalpine Group was strongly shaped by the Covid-19 pandemic. While the business year’s first quarter was characterized by the massive meltdown in demand in almost all customer segments and regions, the second quarter saw a considerable rebound in major sectors. Upward trends in key business segments continued in the third business quarter despite renewed lockdowns.
The automotive industry, in particular, gradually recovered following the production shutdowns during the Northern spring, once again returning to order levels during the Northern fall that equated roughly to those prior to the outbreak of the Covid-19 pandemic. The construction, consumer goods, and white goods industries also managed to rapidly return to pre-Covid-19 order levels — the last two did well even during the difficult first business quarter, the company said. Conditions in the aerospace industry as well as in the oil and natural gas sector remained difficult, however. The railway infrastructure technology segment developed along a stable, positive trajectory during the entire reporting period. The high-bay warehouses customer segment also posted highly satisfactory performance. Thanks to the growth in online commerce, this unit posted record order levels in Europe and North America (key markets both) during the Northern fall.
Herbert Eibensteiner, Chairman of the Management Board of Voestalpine: “Our current performance in key customer segments has boosted our outlook. Our efforts with respect to cost savings and efficiency gains are having an effect. We are well positioned and even succeeded in stabilizing yet further in this difficult environment, substantially increasing the free cash flow, and decreasing our debt by one third.” At the same time, the company invested € 450 million. Positive market signals notwithstanding, it remained to be seen how the future course of the Covid-19 pandemic will affect the global economy, Eibensteiner added. The risk of downtimes in production or of interruptions in essential supply chains owing to the pandemic could not be predicted at this time.
In no small part, this is why Voestalpine’s management continues to focus on cost management and earnings stabilization. Its efforts with respect to working capital management and curtailment of investments in order to buttress both cash flow and the Group’s asset and capital structure are to continue as well.