EANS-News: Economic slowdown and one-off effects impact voestalpine’s earnings for the third quarter of the BY 2019/20; excluding the one-off effects puts the operating results in slightly positive territory CNE

2/6/2020, 7:30 AM (Source: euro adhoc)
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Quarterly Report

Linz - voestalpine has been confronted with a gradual dampening of economic
sentiment throughout the business year 2019/20. The negative effects of the
trade conflicts on the global economy, particularly the weak performance of
Europe's export-driven industries-voestalpine's key sales market-pose
significant challenges for the company. Aside from declining demand in the key
automotive segment, globally rising iron ore prices in tandem with low steel
prices put additional pressure on profit margins in the steel sector.
Internally, steps taken at the company's plant in Cartersville, Georgia, USA,
have already boosted its efficiency, but additional optimization steps will be
required to achieve the initial targets.

"The economic downturn in our most important markets and industries as well as
the impairment losses and provisions booked in the current business year have a
substantially negative impact on voestalpine's result for the third quarter of
the business year 2019/20. At the same time, however, the cost-cutting and
efficiency improvement measures that we are implementing are already bearing
fruit. We are seeing first signs that demand might stabilize in some of the
business segments," says Herbert Eibensteiner, Chairman of the Management Board
of voestalpine AG. "Our broad positioning in terms of both technology and
regions turns out to be a source of strength in these challenging times. As a
result, the performance of the rail technology, aerospace as well as welding and
storage technology systems segments was solid throughout the first nine months
of the current business year."

Brexit and Coronavirus Epidemic

While a "hard Brexit" with its negative effects did not come to pass, the
economic and financial fallout from the coronavirus epidemic in China, where
voestalpine operates nine local manufacturing companies, is not foreseeable at
this time. Pursuant to governmental requirements or recommendations, these
Chinese plants are subject to an extended vacation shutdown until at least
February 9th. The ramifications of the coronavirus add yet another risk factor
to the current global economic picture.

Development of Revenue and Earnings

Due to lower delivery volumes, the revenue of the voestalpine Group as of the
third quarter of the business year 2019/20 declined slightly by 3.8%, from EUR
9.9 billion the previous year to EUR 9.6 billion. Year-over-year comparisons of
the current earnings figures are only marginally relevant to descriptions of the
company's operating performance. As previously reported, voestalpine AG
recognized impairment losses in its key business segments and, additionally, set
up provisions for restructuring expenses and other risks in the third quarter of
the current business year following an analysis of the changed global economic
environment. About EUR 75 million in provisions adversely affect EBITDA for the
third quarter; the impact on EBIT amounts to about EUR 345 million (impairment
losses and provisions). As a result, EBITDA fell year over year by a total of -
24.2%, from EUR 1.1 billion to EUR 837 million. Given the difficult economic
environment and the aforementioned non-recurring effects, EBIT stands at EUR -82
million, down from EUR 526 million the previous year.

In keeping with EBIT, the Group's profit before tax is EUR -185 million, while
the profit after tax is EUR -160 million. Aside from the Group's earnings
performance, accounting measures also had a significant impact on the
development of the gearing ratio (net financial debt as a percentage of equity).
For one, the EUR 500 million hybrid bond issued in 2013, which had previously
been recognized in equity, was repaid as of October 31, 2019, and refinanced
through borrowings. For another, the net financial debt increased as a result of
changes in accounting standards (IFRS 16). In sum, net financial debt rose by
20.3% year over year to EUR 4.6 billion as of December 31, 2019. Equity fell in
the same period by 12.1% to EUR 5.7 billion, ultimately causing the gearing
ratio to climb from 58.4% the previous year to currently 80%.

The voestalpine Group had 49,838 employees (FTE) as of December 31, 2019; this
figure represents a reduction by 3.2%. The number of full-time equivalents will
continue to drop in the business year's fourth quarter through ongoing measures
such as reductions in the number of leased employees and cuts in both vacation
and overtime.


Based on the fact that the first nine months of the business year 2019/20 have
passed and, in particular, based on analyses of the changed global economic
environment and its ramifications for voestalpine's key business segments and
given the conclusions drawn and actions taken, from today's vantage point the
Management Board of voestalpine AG expects EBITDA of EUR 1.2 billion for the
business year 2019/20 and an EBIT to be just positive.

Key figures of voestalpine Group


*Before deduction of non-controlling interests and interest on hybrid capital.

voestalpine AG's 1st-3rd quarter results BY 2019/20 as of December 31, 2019, may
be viewed on the Company's website, www.voestalpine.com [http://
www.voestalpine.com/], under the "Investors" tab.

If you have any questions, please contact the Investor Relations Team at +43/

Further inquiry note:
voestalpine AG
Mag. Peter Felsbach, MAS
Head of Group Communications I Konzernsprecher

voestalpine-Straße 1
4020 Linz, Austria
T. +43/50304/15-2090
www.voestalpine.com [http://www.voestalpine.com/]

Further inquiry note:
Peter Fleischer
Head of Investor Relations
Phone: +43/50304/15-9949
Fax:  +43/50304/55-5581

end of announcement                         euro adhoc

issuer:       voestalpine AG
              voestalpine-Straße  1
              A-4020 Linz
phone:        +43 50304/15-9949
FAX:          +43 50304/55-5581
mail:         IR@voestalpine.com
WWW:          www.voestalpine.com
ISIN:         AT0000937503
indexes:      WBI, ATX
stockmarkets: Wien
language:     English

EAX0005    2020-02-06/07:30

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