FISCAL YEAR 2004/05 Investor Relations June 2005 www.voestalpine.com
HIGHLIGHTS 2004/05 All-time high sales of 5.8 €bn and EBIT of 553 €m (continued operations) Not included: 50 €m one-off-costs liquidation Matzner ROCE 15%; EPS 9.44 € Flat steel prices up 25% – all-time high production (4.6 mio t) Rail prices up 10%; Wire and seamless tubes up 30%; record volumes Excellent market conditions for sections & tubes Continuing operations of division motion 5.4% EBIT-margin 2
2004/05 Group Figures Sales 5,779 €m (+25%) EBITD 888 €m (+59%) EBIT 553 €m (+127%) Sales 3,087 €m 788 €m 713 €m 1,586 €m EBIT 338 €m 29 €m 83 €m 123 €m EBIT-margin 10.9% 3.7% 11.6% 7.7% Sales/Division 50% 13% 11% 26% 3
10 YEARS IN REVIEW OWNERSHIP STRUCTURE 1995 VA Tech OIAG 22.7% 38.8% 2005 38.5% North America Free Float Austria 19% UK 8% 45% 8% Average dividend 6% 10.3% Germany yield 4.6% p.a. Europe Share price Switzerland Employee- 2% ROW performance 150% shareholding scheme 1.7% Total shareholder return ~20% p.a. over the last 10 years 4
10 YEARS IN REVIEW COST CUTTING PROGRAMS To manage the negative price/cost squeeze in the steel business of ~2% 3 cost cutting programs since 1995 (TOP, CIP, R4F) 700 CIP TOP 600 savings p.a. 500 FY 2004/05 400 in €m 300 Savings per ton compared 200 to 1994 100 110 €/t 0 95 96 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 TOP * CIP ** R4F *** *Total Operational Performance **Continuous Improvement Program ***READY4FUTURE 5
STRATEGY THE PORTFOLIO EFFECT Flat Heavy Rails & Seamless SSC Wire steel plates Switches tubes Core competence steelmaking & processing LW Stamping Precision Sections Storage Blanks parts parts & Tubes systems Clear focus within divisions on core competences Industry mix leads to risk minimization and cyclical stabilization Synergies within the group are the key to enhanced value Growth opportunities combined with high profitability 6
STRATEGY ACQUISITIONS 2004/05 division motion Van Niftrik Plastic parts and hybrid technology for automotive industry/Netherlands Sales ~40 €m HTI Precision parts for airbags and suspension systems/Germany Sales ~16 €m Vollmer Stamping parts, structural parts and safety segments/Germany Sales ~30 €m Division Railway Systems Rail Products Switches producer/USA Total acquired & Fabrications Sales ~10 €m sales of JV Veekayan Switches, rail services/India & Digvijay Sales ~10 €m 206 €m Division Profilform Nedcon Storage systems/Netherlands Sales ~100 €m 7
STRATEGY ENERGY – GROWTH MARKET OF THE FUTURE Increasing energy consumption globally (+50% till 2025); oil +2% yoy Expected development in offshore-production: oil +40% | gas +80% Heavy Plate: 2/3 of sales from Energy; Plates for the deepest pipeline worldwide (length 230 km, depth 2,500 m; from Gulf of Mexico to Louisiana) Seamless Tubes: Drill pipes and tubes for the oil & gas industry as well as for Chinese power plants Profilform: Aluminium-plated special tubes for power plant cooling systems (China) Capacity increase from 350,000 t 2002/03 to 650,000 t 2007/08 in high quality heavy plates 8
RAW MATERIAL IMPACT Raw material price increase Influence on cost structure voest alpine purchase price index 250 Iron Ore Coke 200 Coal Others Index Scrap 150 100 50 26% Iron ore 22% FY 98/99 FY 99/00 FY 00/01 FY 01/02 FY 02/03 FY 03/04 FY 04/05 FY 05/06e 67% 62% Coal 12% 14% Material Material costs costs Scrap 10% 10% Current trend Iron Ore Coke 9% 8% Coke Alloys 7% 7% Coal Oil 2% 2% Scrap 2004/05 2005/06 Alloys 9
OUTLOOK Current uncertainty due to high inventories about further pricing in steel; long-term contracts minimize downside-risks Stabilization in European infrastructure spendings – Railway Systems will keep on high level Pressure on prices for standard sections & tubes – Profilform's margin slightly reduced Improving situation in division motion due to liquidation Matzner & latest highly profitable acquisitions EBIT 2005/06 expected again above 500 €m 10
DIVISION STEEL MARKET VIEW Sales Breakdown by industry Oil Sales 3,087.4 (+27.5%) EBIT 337.7 €m (+118.2%) EBIT-margin 10.9% Automotive Other 7% 26% 15% 11% Flat steel price development White 24% 17% Goods 50 Civil and Construction & mechanical constr. subsuppliers 4Q 04/05 engineering 40 3Q 04/05 price increase qoq 2Q 04/05 Investment program Linz 2010 30 1Q 04/05 First stage completed Rebuilding BFA 20 CC6 HDG 3 10 Colour Coating 2 0 Second stage - Orders placed for 1Q 2004/05 2Q 2004/05 3Q 2004/05 4Q 2004/05 Cold rolling mill Automotive White Goods Construction Automotive White Goods Construction Automotive White Goods Construction Automotive White Goods Construction HDG 4 (+5) Walking beam furnace 11
division motion MARKET VIEW Sales Breakdown by industry Other Civil and mechanical 1% Sales 788 (+12.9%) EBIT 29.4 €m (+68.7%) EBIT-margin 3.7% engineering Construction & constr. 3% subsuppliers 12% 84% Automotive markets relatively stable in 2004/05, Automotive slight improvement in 2005 expected Subsuppliers still in squeeze position, between high steel prices and over capacities of OEMs Nevertheless operative performance of division on track New production record in Tailor-Welded Blanks (EBIT-margin: 6.0%) High demand for precision parts (EBIT-margin: 8.4%) Stable demand for pressing and spare parts (EBIT-margin: 4.4%) 12
division motion STRATEGY Less demand from OEMs for engineering services and separate orders for engineering and manufacturing – lack of synergy Withdrawal of division motion from the field of engineering services for third parties while maintaining expertise as a foundation for production-related development Liquidation of Matzner One-off-costs 40 €m Loss in 2004/05 10 €m Focus on Body-in-White unchanged but further growth mainly in niche production areas with no direct competition to OEMs 13
DIVISION PROFILFORM MARKET VIEW Sales Breakdown by industry Transport Other Sales 713.1 (+47.2%) EBIT 82.8 €m (+105.2%) EBIT-margin 11.6% & Storage 17% 22% 14% Automotive 35% 12% Civil and All-time high shipments of 650,000 t Construction & mechanical engineering constr. subsuppliers in 2004/05 (+10%) Outstanding price level High demand from civil- and mechanical engineering and truck industry in general and from construction in UK & Belgium Still rising demand for storage facilities; integration of Nedcon Concentration of commodity production in Eastern European low-cost-locations 14
DIVISION RAILWAY SYSTEMS MARKET VIEW Sales Breakdown by industry Other Sales 1,586.4 (+22.0%) EBIT 122.5 €m (+126.0%) EBIT-margin 7.7% Oil Railway 4% 12% 14% 58% Automotive 5% 7% Construction Civil Rails & Switches Wire Demand in Germany still weak, Further concentration top quality segments rest of Europe stable, South Africa with high pricing power and Australia booming. Integration High of latest acquisitions in USA and 5% Bearing India 10% steel 40% Quality Seamless Tubes 59% Shipments (+20% yoy) & EBIT Spring (+270% yoy) driven by high steel 29% energy demand 24% 26% Low 7% 2004/05 2000/01 15
FINANCIAL HIGHLIGHTS 2004/05 Record high in sales and profitability Working capital increase driven by purchase prices and capacity increase IFRS 3 adjustments – depreciation of Goodwill 18 €m Discontinued operations from liquidation of Matzner Positive impact from new tax rate and group taxation (24.9% vs 30.1% yoy) 16
CONSOLIDATED OVERVIEW 2004/05 2003/04 Change Sales €m 5,779.1 4,616.3 +25% EBITD €m 887.7 557.9 +59% % of Sales 15.4 12.1 EBIT €m 552.5 243.7 +127% % of Sales 9.6 5.3 Profit for the period* €m 373.5 141.2 +165% (continued operations) Discontinued operations €m -50.0 -10.7 Equity €m 2,166.3 1,853.2 +17% Investments €m 564.9 436.1 +30% Employees 22,955 22,755 +0,9% *acc. IFRS incl. Minorities 17
CASH FLOW – 2004/05 2004/05 2003/04 Cash Flow from result €m 744.2 431.7 Changes in working capital €m -193.6 144.8 Cash Flow from operating activities €m 550.6 576.5 Cash Flow from investing activities €m -530.5 -357.8 Free Cash Flow €m 20.1 218.8 18
NET DEBT & EQUITY – GEARING 2,166 1,853 1,786 1,564 1,530 47% 831 40% 684 635 624 32% 34% 252 16% 2000/01 2001/02 2002/03 2003/04 2004/05 Net Debt (€m) Equity (€m) Net Debt/Equity Ratio (%) 19
RETURN ON CAPITAL EMPLOYED 15.0% 3,696 12.1% 3,129 3,132 2,632 9.0% 2,131 1,972 1,873 7.1% 7.8% 7.8% 6.1% 1997/98 1998/99 1999/00 2000/01 2002/03 2003/04 2004/05 Capital employed (€m) ROCE in % 20
PER SHARE DATA 2004/05 2003/04 EPS* €m 9.44 3.38 Book value per share €m 54.79 47.49 1.50** 1.25 Dividend €m Bonus 0.60** Bonus 0.35 Dividend Yield €m 4.4% 4.9% (average share price) *IFRS basis on net profit from continuing operations **Subject to approval at AGM 21
EBIT-DEVELOPMENT FY 2004/05 vs FY 2003/04 +114 €m +608 €m 553 €m +1 €m -398 €m -16 €m EBIT 244 €m 9.6% EBIT Price/mix Volume Raw Acquisition Misc. 5.3% Net effect materials FY 2003/04 FY 2004/05 22
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