debt investor update - voestalpine: technology group€¦ · 12 debt investor relations steel...

www.voestalpine.comvoestalpine AG

DEBT INVESTOR UPDATEBUSINESS YEAR 2018/19

| |voestalpine AG

» voestalpine is a leading technology and capital goods group with combined material and processing expertise

» It is holding global top positions in its business units

» The group focuses on most demanding product and system solutions based on steel and other metals in technology-intensive industries and niches

» Clear focus on strategically in the long run most promising sectors like mobility and energy

» Long-term relationships with customers, suppliers and R&D-institutions as key drivers for innovation

June 20192 Debt Investor Relations

voestalpine GROUPOVERVIEW

| |voestalpine AG3

One Group – 500 sites – 50 countries – 5 continents

Debt Investor Relations

voestalpine GROUPGLOBAL FOOTPRINT

INCREASING NON-EU-BUSINESS, MOBILITY-SECTOR STABLE

June 2019

34% (34%)

11%(11%)

3% (3%)

15% (15%)

9% (9%)

9% (9%)

5% (5%)

14% (14%)

Automotive

Railway systems

Aerospace

Energy

Building/Construction

Mechanical engineering

White goods/Consumer goods

Other

65% (66%)

16% (14%)

8% (8%)

8% (8%)

3% (4%)

European Union

USMCA

Asia

Rest of world

South America

Revenue by industries - Business year 2018/19

Revenue by regions - Business year 2018/19

MOBILITY: 48% (48%)

(figures 2017/18)

(figures 2017/18)

| |voestalpine AG

voestalpine GROUPCORPORATE RESPONSIBILITY

4 Debt Investor RelationsJune 2019

Ökonomie

ENVIRONMENT

» Decarbonisation of steel making» H2Future» SuSteel

» Climate Protection» LCA management» Energy management» Water management» Recycling and waste

management

SOCIETY

» Supporting local communities» Anti-corruption and compliance

trainings» Occupational health & safety

programs and certification» Fair working conditions» Training and apprentices» Equal treatment» Employee participation

HUMAN RIGHTS

» No child or forced labour» No discrimination» Freedom of association /

collective bargaining

ECONOMY

» Ethical corporate management» Sustainable Supply Chain

Management

More information on our website underhttp://www.voestalpine.com/group/en/group/corporate-responsibility/

http://www.voestalpine.com/group/en/group/corporate-responsibility/

| |voestalpine AG

voestalpine GROUPMANAGEMENT BOARD

5 Debt Investor Relations

Wolfgang Eder *Chairman of the Board (CEO)Joined voestalpine in 1978, member of the Board since 1995

Robert OttelMember of the Board, Chief Financial Officer (CFO)Joined voestalpine in 1997, member of the Board since 2004

Herbert Eibensteiner **Member of the Board, Head of Steel DivisionJoined voestalpine in 1989, member of the Board since 2012

Franz RotterMember of the Board, Head of High Performance Metals DivisionJoined voestalpine in 1981, member of the Board since 2011

Franz KainersdorferMember of the Board, Head of Metal Engineering DivisionJoined voestalpine in 1996, member of the Board since 2011

Peter SchwabMember of the Board, Head of Metal Forming DivisionJoined voestalpine in 1993, member of the Board since 2014

All members of the Board have long-term engagementand experience in voestalpine Group!

Mr. Eder will leave the board as of July 3, 2019

Mr. Eibensteiner will succeed Mr. Eder as CEO as of July 3, 2019 and Mr. Hubert Zajicek will succed Mr. Eibensteiner as head of the Steel Division with effect from July 4, 2019

June 2019

*

**

| |voestalpine AG

voestalpine GROUPSHAREHOLDER STRUCTURE


Major individual shareholders (as of March 31, 2018)

Raiffeisenlandesbank Oberösterreich Invest GmbH & Co KG < 15 %

voestalpine employee shareholding scheme 14.8 %

Oberbank AG 8.1 %

Ownership structure according to regions (Figures as of March 31, 2019)

June 2019

| |voestalpine AG

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voestalpine AG Steel-Peer-Group

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voestalpine Group Steel DivisionHigh Performance Metals Division Metal Engineering DivisionMetal Forming Division

voestalpine GROUPSOLID EARNINGS IN A CYCLICAL BUSINESS


EBIT margin (%) by divisions

Solid earnings – only one quarter with negative EBIT since IPO 1995 – due to...

... a diversified portfolio ... a long value chain

... positioning in various market segments ... focus on innovation, service and cost efficiency

... partial backward integration

EBIT margin (%) voestalpine AG vs. European competitors

Lower volatility in earningsand higher profitability thanSteel-Peer competitors!

(excluding impairments) (excluding impairments)

June 2019

| |voestalpine AG

voestalpine GROUPBUSINESS DEVELOPMENT 2018/19

8 Debt Investor RelationsJune 2019

» Strong start into BY 2018/19 but slowing economic momentum in H2 2018/19

» Europe & China harmed by escalating global trade conflicts and slowing automotive industry

» US-economy with sustained upswing, however less euphoric sentiment recently

» Brazil with moderate recovery in BY 2018/19

» Performance in BY 2018/19 negatively affected by one-offs, solid development in Q4 2018/19 despite slowing economy

» Earnings – mainly in Q2 & Q3 – impacted by blast furnace repairs, provision in Heavy Plate & start up costs at US-

automotive components plant

» Downward trend in tool steel (Europe, China) triggered by global trade tensions

» Cost burden from rising raw material prices in Q4 2018/19 already, but full impact yet to come

» Efficiency improvement programs in all 4 divisions intensified as response to challenging conditions

| |voestalpine AG9 Debt Investor Relations

voestalpine GROUPFINANCIAL OVERVIEW

June 2019

BY 2017/182017/04/01-2018/03/31

BY 2018/192018/04/01-2019/03/31

Delta%

Revenue 12,898 13,561 +5.1

EBITDA 1,954 1,565 -19.9

EBITDA margin 15.2% 11.5%

EBIT 1,180 779 -33.9

EBIT margin 9.1% 5.7 %

Profit before tax 1,043 646 -38.1

Profit after tax* 825** 459 -44.4

EPS – earnings per share (euros) 4.40 2.31 -47.5

In millions of euros

* Before deduction of non-controlling interests and interest on hybrid capital.** BY 2017/18 adjusted retrospectively.

| |voestalpine AG

voestalpine GROUPCOMPANY STRUCTURE AND MARKET POSITION


Steel Division

High Performance Metals Division

Metal Engineering Division

Metal Forming Division

Worldwide quality leadership Global leadership Global leadership Global leadershipGlobal quality leadership in highest quality steel strip and global market leader in heavy plate for the most sophisticated applications as well as casings for large turbines.

Worldwide leadership in toolsteel, leading position in high-speed steel and special forgings.

Worldwide market leader inturnout technology; European market leader in rails and specially treated wire; and leading position in seamless tubes for special applications and high quality welding consumables.

Global market leader in defined niches supplying high quality metal processing solutions with a global network and service.

35% 22%22% 21%

More information about voestalpine‘s business models and facts is available online:http://www.voestalpine.com/group/static/sites/group/.downloads/de/aktie/praesentation/2018-19-business-model-and-facts-voestalpine-group.pdf

voestalpine Group (Revenue in BY 2018/19)

June 2019


STEEL DIVISIONBUSINESS SEGMENTS AND PRODUCTS

Sheet Heavy Plate Steel & Service Center Hot Briquetted Iron (HBI) Foundry

European TOP player Global TOP player European TOP player GlobalTOP player Global LEADERSHIP

Highest quality sheet for automotive, white goods, electrical, construction and mechanical engineering industries

Processed, coated andgalvaniced sheet

High-quality heavy plate for the energy market (pipelines, oil & gas platforms)

High-strength and wear-resistant steel grades forsteel and vehicle engineering sectors and chemical industries

Individual preprocessing of flat products and cut heavy plates

3-dimensional processing

Production of finished parts & components

Individual logistic solutions

Production of premium Hot Briquetted Iron (HBI)

Superior feedstock for high-quality steel production

Partly used at voestalpine production sites

Partly sold to high-quality steel producers

Casting components for the energy industry such as turbines

June 2019


STEEL DIVISIONBUSINESS DEVELOPMENT BY 2018/19

June 2019

» Steel Division with high volatility in earnings throughout BY 2018/19» Profitability in Q2 impacted by (scheduled) major blast

furnace repairs, in Q3 by cartel provision in Heavy Plate

» Increasingly difficult environment in H2 2018/19» Fading momentum in automotive and consumer goods

» Still robust order intake in building & mechanical engineering

» Solid activities in energy business, however drop in deep-sea pipeline investments recently

» Ongoing strong steel imports in Europe – above all from Russia & Turkey – despite safeguard measures

» First negative effects from soaring iron ore prices in Q4

» Improving capacity utilization at HBI-plant in Texas in H2

€mQ1

18/19

Q2

18/19

Q3

18/19

Q4

18/19

BY

18/19

BY

17/18

Delta

in %

Revenue 1,276 1,139 1,175 1,297 4,887 4,773 2.4

EBITDA 224 119 106 205 653 908 -28.1

EBITDA-% 17.5% 10.4% 9.0% 15.8% 13.4% 19.0%

EBIT 145 37 19 118 319 593 -46.2

EBIT-% 11.4% 3.2% 1.6% 9.1% 6.5% 12.4%


HIGH PERFORMANCE METALS DIVISIONBUSINESS SEGMENTS AND PRODUCTS

Stainless Steel89%

Tool Steel8%

High Speed Steel1%

Nickel alloys

2%

Carbon Steel91%

Engineering Steel7%

Speciality Steel2%

High Performance MetalsProduction

High Performance MetalsDistribution & Value Added Service

Special Forgings

Global LEADERSHIP Global LEADERSHIP European TOP player

Production of tool steels, high-speedsteel, valve steel, powder-metallurgicalsteel, high alloyed steels forsophisticated metallurgical areas in oil and gas, energy equipment, aerospace and automotive industries

Eight production sites in Austria, Germany, Sweden, USA and Brazil

Global distribution and servicenetwork with 150 warehouse andservice sites in 50 countries

Very well established brands creatingstrong customer loyalty

Providing of Value Added Services like local warehousing, machining, heat treatment, coating, applicationconsulting etc.

Closed-die forged components with focus on aerospace, commercial vehicles and energy equipment

June 2019


HIGH PERFORMANCE METALS DIVISIONBUSINESS DEVELOPMENT BY 2018/19

June 2019

» After positive business conditions in H1 2018/19, fading dynamics in particular regions & sectors

» Advancing protectionism as major driver for margin pressure

» Decreasing order intake in consumer goods and automotive sectors in Europe & China

» In contrast, stable development in North America, improving sentiment in Brazil

» Activities in aviation sector unchanged strong

» Sentiment in oil & gas overall positive

» New special steel plant in Kapfenberg well on track

€mQ1

18/19

Q2

18/19

Q3

18/19

Q4

18/19

BY

18/19

BY

17/18

Delta

in %

Revenue 780 766 751 839 3,136 2,918 7.5

EBITDA 129 101 90 116 435 454 -4.2

EBITDA-% 16.6% 13.1% 11.9% 13.8% 13.9% 15.6%

EBIT 92 64 52 73 280 298 -5.9

EBIT-% 11.8% 8.3% 6.9% 8.6% 8.9% 10.2%


METAL ENGINEERING DIVISIONBUSINESS SEMGENTS AND PRODUCTS

Rail Technology Turnout Systems Wire Technology Tubulars Welding Consumables

European TOP player Global LEADERSHIP European TOP player Global TOP player Global TOP player

Innovative rail manufacturer of highest quality products (120m head-hardened rails)

“Plug and Play” turnout systems for high-speed railways, mass transit and heavy-haul railways

High tech drawn wire for automotive and construction industry

Fastening and material handling technology

High-tech seamless tubes for oil and gas industries

Special tubes for various industrial applications

Specialist for medium-and high-grade alloy welding filler materials

RAILWAY SYSTEMS INDUSTRIAL SYSTEMS

June 2019

http://www.voestalpine.com/rotec/en/products/tubes/drawn_precisionsteeltubes/seamless_precisiontubes.html


METAL ENGINEERING DIVISIONBUSINESS DEVELOPMENT BY 2018/19

June 2019

» Railway Systems business with mixed development» Margin impact from raw materials on rails after slight market

recovery in early BY 2018/19

» Unchanged strong performance in turnouts bolstered by strong conditions in China, the US, Australia, Brazil and recently also EU

» Market development and protective US-tariffs dampening performance of Industrial Systems business

» Easing automotive industry affecting order intake in wire

» Strong seamless tubes deliveries to North America, but margins impacted by US-duties

» Focus in welding consumables on further operational performance improvement

€mQ1

18/19

Q2

18/19

Q3

18/19

Q4

18/19

BY

18/19

BY

17/18

Delta

in %

Revenue 800 748 771 828 3,147 2,990 5.3

EBITDA 99 85 78 107 369 372 -0.8

EBITDA-% 12.3% 11.4% 10.2% 12.9% 11.7% 12.4%

EBIT 56 44 37 65 202 191 5.8

EBIT-% 7.0% 5.9% 4.8% 7.8% 6.4% 6.4%


METAL FORMING DIVISIONBUSINESS SEGMENTS AND PRODUCTS

Tubes & Sections Automotive Components Precision Strip Material Handling

Global LEADERSHIP European TOP player Technology & market LEADERSHIP EuropeanTOP player

Innovative and high-quality tubes, sections, and precision steel tube products

Innovative and high-quality automotive components for the automobile industry

Cold stamping, hot forming, body panels and tailored blanks

Cold rolled stainless steel strips with a high degree of precision and excellent surface quality

High-sophisticated solutions in the areas of high-bay warehouses and racking systems

June 2019


METAL FORMING DIVISIONBUSINESS DEVELOPMENT BY 2018/19

June 2019

» Automotive Components business significantly down in H2 2018/19» Car sales in Europe heavily impacted by WLTP after summer

» Massive start-up cost overrun in US-automotive component plant Cartersville

» Sentiment in Tubes & Sections on average level» Solid order intake from construction, commercial &

agricultural vehicle industries in Europe

» Continuation of step by step recovery in Brazil, USA with positive momentum in building & aviation sectors

» Precision strip with increasing competition in Europe & China, but still with healthy demand situation

» Ongoing strong project activities in Warehouse & Rack Solutions

€mQ1

18/19

Q2

18/19

Q3

18/19

Q4

18/19

BY

18/19

BY

17/18

Delta

in %

Revenue 748 697 698 794 2,937 2,743 7.1

EBITDA 84 68 1 60 213 325 -34.4

EBITDA-% 11.3% 9.8% 0.2% 7.5% 7.3% 11.9%

EBIT 56 39 -29 28 94 213 -55.9

EBIT-% 7.5% 5.6% -4.1% 3.5% 3.2% 7.8%


voestalpine GROUPOUTLOOK BY 2019/20

June 2019

» Determining factors for development of voestalpine Group in BY 2019/20

» Change of global trade structures due to growing protectionism

» Further trends in raw material prices, above all iron ore (including CO2 pricing)

» Consequences of new emission test (RDE) and future mobility concepts on car sales and production

» Impact of BREXIT on European economy

» Further improvements at US-plants as main internal challenge

» Despite increasing political & economic uncertainties, management works hard to keep EBITDA for BY 2019/20 stable in comparison to BY 2018/19


KEY FINANCIALSBUSINESS YEAR 2018/19

| |voestalpine AG

voestalpine GROUPDEVELOPEMENT GEARING RATIO


Figures in millions of euros

June 2019

831635 684

377526

3,5723,762

3,037

2,7132,586

2,259 2,421

2,978 3,0803,221

2,9951,786

1,8532,125

2,5472,882

4,289 4,263

4,262

4,691 4,8365,075 5,262 5,115

5,652

6,060

6,554 6,710

47%

34% 32%

15% 18%

83% 88%

71%

58%54%

45% 46%

58%55% 53%

46% 47%

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Net Debt (€m) Equity (€m) Gearing ratio (%)

| |voestalpine AG

voestalpine GROUPDEVELOPEMENT NET DEBT / EBITDA

22

831635 684

377526

3,5723,762

3,0372,713

2,586

2,259 2,421

2,978 3,0803,221

2,995 3,125

517 558

8881,079

1,359

1,837 1,710

1,004

1,606 1,302 1,431 1,3741,530 1,583 1,541

1,954

1,5651.6

1.1

0.8

0.3 0.4

1.9 2.2

3.0

1.72.0

1.61.8 1.9 1.9 2.1

1.5

2.0

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Net Debt (€m) EBITDA Net Debt / EBITDA



June 2019

| |voestalpine AG

voestalpine GROUPDEVELOPEMENT FFO AND EBIT

23

444 432

744846

1,119

1,398

1,239

734

1,195

9941,097

1,166 1,176 1,1681,249

1,622

1,362

210 244

553

724

1,011

1,153

989

352

985

704

854788

886 889823

1,180

779

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

FFO EBIT



June 2019

| |voestalpine AG

voestalpine GROUPFINANCING PORTFOLIO


The financing strategy of voestalpine focuses on awell balanced financial structure using a broadrange of financing instruments!

The documentation is in line with investmentgrade standards and contains no pledges ofassets or financial covenants.

17%

18%

14%6%

17%

18%

10%

Schuldscheindarlehen

Senior Bonds

Committed Credit Lines (undrawn)

Syndicated Loan

Export Financing Facilities

Other Financing Facilities

Hybrid Bond

Instrument Volume €m Maturity

Schuldscheindarlehen 859 various

Senior Bonds 900 2021, 2024

Syndicated Loan 300 2020

Committed credit lines (undrawn) 700 mainly 2022

Export financing facilities 855 various

Other financing facilities 890 various

Hybrid Bond 2013 500 perpetual

Figures in millions of euros as of 2019/03/31

June 2019

| |voestalpine AG

486

664

157

680

83

420

1387

233

700

Liquidity 2019/20 2020/21 2021/22 2022/23 2023/24 further

voestalpine GROUPLIQUIDITY AND REDEMPTION SCHEDULE

25

1,419

LIQUIDITY REDEMPTION

Figures in millions of euros as of 2019/03/31

Cash

Financial assets

Committed lines

Debt Investor RelationsJune 2019

| |voestalpine AG

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voestalpine Steel Peers Non-Steel Bond Comparables iBOXX Non. Fin. BBB

voestalpine GROUPSECONDARY MARKET BOND SPREADS


Z-Spread (bps)

Stable development of secondary market bond spreadsand far less volatility compared to steel peers

June 2019


DEBT INVESTOR RELATIONSGünther Pastl T. +43/50304/[email protected]

Daniel HuberT. +43/50304/[email protected]

| |voestalpine AG

voestalpine GROUPDISCLAIMER


These materials do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer topurchase or subscribe for, any securities, nor shall part, or all, of these materials or their distribution form the basis of,or be relied on in connection with, any contract or investment decision in relation to any securities.

These materials contain forward-looking statements based on the currently held beliefs and assumptions of themanagement of voestalpine AG, which are expressed in good faith and, in their opinion, reasonable. Forward-lookingstatements involve known and unknown risks, uncertainties and other factors, which may cause the actual results,financial condition, performance, or achievements of voestalpine AG, or industry results, to differ materially from theresults, financial condition, performance or achievements expressed or implied by such forward-looking statements.Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place unduereliance on these forward-looking statements. voestalpine AG disclaims any obligation to update these forward-looking statements to reflect future events or developments.

June 2019

debt investor update - voestalpine: technology group€¦ · 12 debt investor relations steel...

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