Business in Germany
Voest under pressure: millions written off, sale
Germany's economy is weakening, and the Linz-based steel group voestalpine is feeling the effects. The company now wants to sell Buderus Edelstahl and restructure its automotive business there, as the Group announced on Thursday afternoon. This is reportedly associated with one-off write-downs of around EUR 410 million.
The measures will reduce earnings before interest, taxes, depreciation and amortization (EBITDA) from around EUR 1.7 billion to EUR 1.6 billion in 2023/24.
Changed economic conditions
With these measures, the Management Board is responding to the changed economic conditions for industrial manufacturing companies and reorganizing production sites in Germany. Buderus Edelstahl is part of the High Performance Metals Division of voestalpine. Restructuring steps have already been taken in the past.
The division is concentrating its product portfolio on the technologically demanding segment of high-performance materials. The production share of tool steel and engineering steel in the "performance standardized" segment will be reduced.
90 million euros will take effect
According to the company, the sale and impairment losses in the High Performance Metals Division that have now been decided will result in negative one-off effects on earnings (EBIT) of around 340 million euros. Of this, "around 90 million euros will also affect EBITDA".
In the Automotive Components division, the management is maintaining its internationalization strategy and is now making an "adjustment to the structural underutilization of the automotive supply industry in Germany". The production network has already been consolidated, according to Voest, referring to the sale of the production site in Nagold, Germany.
One-off write-offs
The Metal Forming Division of voestalpine is reorganizing its automotive supplier business in Germany and has adjusted its planning assumptions accordingly. According to the Group press release, this will result in one-off write-downs of around EUR 70 million.
According to voestalpine, the above-mentioned effects will have a negative one-off effect on EBITDA of around EUR 90 million and on EBIT of around EUR 410 million. As a result, the management had to reduce its EBITDA forecast for the current business year 2023/24 from around EUR 1.7 billion to EUR 1.6 billion.
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