BUSINESS YEAR 2004/05 -1 st HALF Investor Relations November 2004 - PowerPoint PPT Presentation

BUSINESS YEAR 2004/05 -1 st HALF Investor Relations November 2004 www.voestalpine.com

COMPANY OVERVIEW www.voestalpine.com

Group Figures: Sales 2,734.5 €m (+21%) EBITD 333.5 €m (+14%) EBIT 187.1 €m (+27%) Sales 1,400 €m 808 €m 388 €m 320 €m EBIT 112 €m 45 €m 8 €m 42 €m EBIT-margin 8.0% 5.6% 2.2% 13.2% Sales/Division 48% 28% 13% 11% BY 2004/05 – 1 st Half 3

UPDATED RAW MATERIAL SITUATION voest alpine purchase price index 280 iron ore 230 coke Index coal 180 scrap Scrap 130 Poland Coal Coal Coke 80 Coke (1Q 04/05) BY 98/99 BY 99/00 BY 00/01 BY 01/02 BY 02/03 BY 03/04 BY 04/05 CZ Danube / Rhein Ukraine AUT Iron Ore Scrap Coal Danube Iron Ore Brazil / Iron Ore Negative cost impact ~270 - 300 €m Australia / Coal South Africa / Iron Ore in 2004/05 China / Coke Advantage of Austrian iron ore supply Expected price increase for 2005: in mt BY 2004/05 transport by rail transport by vessel up to 20% 4

STEEL PRICE & MARKET DEVELOPMENT BY 2004/05 – 1 st HALF 30% Strong price increase in the 20% first two quarters, mainly driven by 10% white goods, engineering and construction 0% demand -10% Further growth of 2Q 01/02 3Q 01/02 4Q 01/02 1Q 02/03 2Q 02/03 3Q 02/03 4Q 02/03 1Q 03/04 2Q 03/04 3Q 03/04 4Q 03/04 1Q 04/05 2Q 04/05 3Q 04/05 sales in CEE BY countries Automotive Household appliance Building industry 5

OUTLOOK Rising raw material prices in Q4 Further increase in steel prices in 2005 Higher than expected shipments due to smooth start-up of blast furnace A Positive impact from wire and seamless tubes Pressure on division motion due to rising steel prices Further outstanding performance of Division Profilform New all-time-high results in three of four divisions 1H BY 2004/05 result will be at least matched in 2H 6

DIVISION STEEL www.voestalpine.com

DIVISION STEEL CURRENT SITUATION Ongoing high demand for flat steel products, including heavy plate Further upward trend of prices for all products Highly improved product-mix (HDG +22% in 1H 2004/05) Shipments will exceed last year's figure (4.2 mt BY 2003/04) despite of BF A upgrading 1H 2004/05 1H 2003/04 Sales €m 1,399.8 1,160.4 EBITD €m 187.7 163.5 % of Sales 13.4 14.1 EBIT €m 111.6 93.7 % of Sales 8.0 8.1 8

DIVISION STEEL LINZ 2010 – BLAST FURNACE A Start of operation: October 26, 2004 Duration of revamping: July 15 – October 26 105 days Capacity increase: From 6,200 tpd to 7,800 tpd 2005/06 production scenario ~4.3 mt 3.6 mt Pig iron ~5.0 mt 4.4 mt Crude steel 2003/04 2005/06 9

DIVISION RAILWAY SYSTEMS www.voestalpine.com

DIVISION RAILWAY SYSTEMS CURRENT SITUATION Weak market for rails & switches in Germany and some CEE countries Compensated by expanded deliveries to South-Africa, Australia and the US Risen raw material costs offset by price increases Strong demand for wire rod and seamless tubes 1H 2004/05 1H 2003/04 Sales €m 807.6 664.2 EBITD €m 80.0 72.1 % of Sales 9.9 10.8 EBIT €m 45.1 33.6 % of Sales 5.6 5.1 11

DIVISION RAILWAY SYSTEMS GROWTH IN NORTH AMERICA Meridian Successful integration and turnaround of Richmond Richmond operations Winnipeg Winnipeg Seattle Seattle Acquisition of Rail Products & Fabrications Chicago Chicago Cheyenne Cheyenne Pueblo Production of switches & parts Pueblo Newton Newton Asset-deal to enhance VAE Nortrak's Birmingham Birmingham strategic position in North America Improved service position for the West Coast region N°1 in the fast growing US switches market with a market share of 52% 12

division motion www.voestalpine.com

division motion CURRENT SITUATION Whole business still influenced by pressure on automotive markets Good development in tailor welded blanks and precision tubes Recovery of results in 2H expected Still difficult situation in engineering 1H 2004/05 1H 2003/04 Sales €m 388.2 352.3 EBITD €m 29.9 32.7 % of Sales 7.7 9.3 EBIT €m 8.4 10.7 % of Sales 2.2 3.0 14

division motion HIGHLIGHTS Van Niftrik Acquisition Full integration in motion's existing production units, profitability above group level New record production in tailor welded blanks: 7.4 million blanks (compared to 6.3 million last year) in 1H 2004/05 Precision tubes Rotec Excellent business with existing customers Asset-deal in Canada improves position in North America Further reduction of work force at Matzner-Engineering from 450 to 360 employees 15

DIVISION PROFILFORM www.voestalpine.com

DIVISION PROFILFORM CURRENT SITUATION Top profitability within voest alpine Group Strong demand for hollow sections and profiles Leading position in booming industrial markets Building industry UK European truck manufacturing Agricultural machinery Integration of Nedcon fully in-line 1H 2004/05 1H 2003/04 Sales €m 319.9 221.2 EBITD €m 54.0 29.3 % of Sales 16.9 13.3 EBIT €m 42.2 16.8 % of Sales 13.2 7.6 17

DIVISION PROFILFORM - SALES - - EBIT - 320 42 99 221 25 17 1H 2003/04 1H 2004/05 1H 2003/04 1H 2004/05 Further processing of tubes & sections Pricing policy Consolidation of Nedcon (1 month) Cost management, CIP Steel price increases passed to Promising start of new products customers and new activities 18

FINANCIAL REVIEW www.voestalpine.com

CONSOLIDATED OVERVIEW 1H 2004/05 1H 2003/04 Change Sales €m 2,734.5 2,263.2 +21% EBITD €m 333.5 292.1 +14% % of Sales 12.2 12.9 EBIT €m 187.1 146.8 +27% % of Sales 6.8 6.5 Net Profit* €m 105.8 87.4 +21% Equity €m 1,966.1 1,829.4 +8% Investment €m 301.3 193.6 +56% Employees 24,167 22,934 +5% * acc. IFRS incl. minorities 20

CASH FLOW – 1H 2004/05 1H 2004/05 1H 2003/04 Cash Flow from result €m 277 226 Change in Working Capital €m -54 -57 Cash Flow from operations €m 223 169 Net cash Flow from investments €m -301 -103 Free Cash Flow €m -78 66 21

NET DEBT & EQUITY – GEARING 1966 1873 1786 1564 1530 47% 831 790 40% 635 624 40% 34% 252 16% 2000/01 2001/02 2002/03 2003/04 1H 2004/05 Net Debt (€m) Equity (€m) Net Debt/Equity Ratio (%) 22

voest alpine VALUE DRIVERS STABILITY VALUE – ENHANCING ROCE ≥ 12% Gearing-Ratio < 70% ATTRACTIVE PROFITABILITY DIVIDEND EBITD ≥ 14% Dividend Yield ~4% SALES GROWTH Internal/External 23

Reuters IR Contact VOES.VI Wolfgang Lemberger E-Mail wolfgang.lemberger@voestalpine.com Bloomberg Phone +43 / 70 / 6585-9949 VOE AV www.voestalpine.com

BUSINESS YEAR 2004/05 -1 st HALF Investor Relations November 2004 www.voestalpine.com

BACKUP USP LOCATION: FUTURE MARKET CENTRAL & EASTERN EUROPE Unique location as high-quality producer within 500 km radius New automotive, building and household capacities voest alpine are concentrated in the core region of voest alpine Steel-capacity increase mainly Automotive dedicated to CEE Household appliance Building industry 26

BACKUP division motion RESTRUCTURING MATZNER Staff reduction Primarily in overhead-functions, no operational impact Work force reduction: 90 employees (~20% of total staff) Renunciation of extra salary (Christmas payments) Reduction in working hours Temporarily reduction up to 5 hours per week Optimization of administration / Size adjustment of production capacity 27