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 (continued operations) Not included: 50 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 (+25%) EBITD 888 (+59%) EBIT 553 (+127%) Sales 3,087 788 713 1,586 EBIT 338 29 83 123 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 22.7% 38.5% 38.8% OIAG 2005 Free Float Average dividend yield 4.6% p.a. Share price performance 150% UK Germany North America 19% 8% 45% 8% 6% 10.3% Europe Switzerland 2% ROW 1.7% Employeeshareholding scheme Austria 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) in 700 600 500 400 300 200 100 CIP TOP savings p.a. FY 2004/05 Savings per ton compared to 1994 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 SSC Flat steel Heavy plates Core competence steelmaking & processing Rails & Switches Wire Seamless tubes LW Blanks Stamping parts Precision parts Sections & Tubes Storage 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 HTI Vollmer Plastic parts and hybrid technology for automotive industry/netherlands Sales ~40 Precision parts for airbags and suspension systems/germany Sales ~16 Stamping parts, structural parts and safety segments/germany Sales ~30 Division Railway Systems Rail Products Switches producer/usa & Fabrications Sales ~10 JV Veekayan Switches, rail services/india & Digvijay Sales ~10 Division Profilform Nedcon Storage systems/netherlands Sales ~100 Total acquired sales of 206 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 voestalpine purchase price index Index 250 200 150 Iron Ore Coke Coal Scrap Others 100 50 FY 98/99 FY 99/00 FY 00/01 FY 01/02 FY 02/03 Current trend Iron Ore Coke Coal Scrap Alloys FY 03/04 FY 04/05 FY 05/06e Iron ore Coal Scrap Coke Alloys Oil 22% 12% 10% 9% 7% 2% 62% Material costs 26% 14% 10% 8% 7% 2% 2004/05 2005/06 67% Material costs 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 10
DIVISION STEEL MARKET VIEW Sales Breakdown by industry Sales 3,087.4 (+27.5%) EBIT 337.7 (+118.2%) EBIT-margin 10.9% Other 15% Oil 7% Automotive 26% price increase qoq 50 40 30 20 10 Flat steel price development 4Q 04/05 3Q 04/05 2Q 04/05 1Q 04/05 White Goods 11% 17% Construction & constr. subsuppliers 24% Investment program Linz 2010 First stage completed Rebuilding BFA CC6 HDG 3 Colour Coating 2 Civil and mechanical engineering 0 1Q 2004/05 2Q 2004/05 3Q 2004/05 4Q 2004/05 Automotive White Goods Construction Automotive White Goods Construction Automotive White Goods Construction Automotive White Goods Construction Second stage - Orders placed for Cold rolling mill HDG 4 (+5) Walking beam furnace 11
division motion MARKET VIEW Sales 788 (+12.9%) EBIT 29.4 (+68.7%) EBIT-margin 3.7% Sales Breakdown by industry Other Civil and mechanical 1% Construction & constr. engineering subsuppliers 12% 3% Automotive markets relatively stable in 2004/05, slight improvement in 2005 expected 84% Automotive 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 Loss in 2004/05 10 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 713.1 (+47.2%) EBIT 82.8 (+105.2%) EBIT-margin 11.6% Sales Breakdown by industry Transport Other & Storage 22% 17% All-time high shipments of 650,000 t in 2004/05 (+10%) Outstanding price level Automotive 14% 12% Civil and mechanical engineering 35% Construction & constr. subsuppliers 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 1,586.4 (+22.0%) EBIT 122.5 (+126.0%) EBIT-margin 7.7% Rails & Switches Demand in Germany still weak, rest of Europe stable, South Africa and Australia booming. Integration of latest acquisitions in USA and India Sales Breakdown by industry Other Oil 12% 4% 14% Automotive 5% 7% Construction Civil Wire Further concentration top quality segments with high pricing power 5% 10% High Railway 58% Bearing steel Seamless Tubes Shipments (+20% yoy) & EBIT (+270% yoy) driven by high energy demand 40% 29% 26% 59% 24% 7% Quality Low Spring steel 2000/01 2004/05 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 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 5,779.1 4,616.3 +25% EBITD 887.7 557.9 +59% % of Sales 15.4 12.1 EBIT 552.5 243.7 +127% % of Sales 9.6 5.3 Profit for the period* (continued operations) 373.5 141.2 +165% Discontinued operations -50.0-10.7 Equity 2,166.3 1,853.2 +17% Investments 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 744.2 431.7 Changes in working capital -193.6 144.8 Cash Flow from operating activities 550.6 576.5 Cash Flow from investing activities -530.5-357.8 Free Cash Flow 20.1 218.8 18
NET DEBT & EQUITY GEARING 1,530 1,564 1,786 1,853 2,166 624 40% 831 47% 635 34% 684 32% 252 16% 2000/01 2001/02 2002/03 2003/04 2004/05 Net Debt () Equity () Net Debt/Equity Ratio (%) 19
RETURN ON CAPITAL EMPLOYED 15.0% 3,696 12.1% 3,129 3,132 9.0% 1,873 1,972 7.8% 2,131 2,632 6.1% 7.1% 7.8% 1997/98 1998/99 1999/00 2000/01 2002/03 2003/04 2004/05 Capital employed () ROCE in % 20
PER SHARE DATA 2004/05 2003/04 EPS* 9.44 3.38 Book value per share 54.79 47.49 Dividend 1.50** Bonus 0.60** 1.25 Bonus 0.35 Dividend Yield (average share price) 4.4% 4.9% *IFRS basis on net profit from continuing operations **Subject to approval at AGM 21
EBIT-DEVELOPMENT FY 2004/05 vs FY 2003/04 +608 +114 +1 553-398 -16 244 EBIT 5.3% Price/mix Net effect Volume Raw materials Acquisition Misc. EBIT 9.6% FY 2003/04 FY 2004/05 22
GROWTH SUCCESS SINCE IPO 1 9 9 5 2 0 0 4 / 0 5 () Sales 2,456 5,779 +135% EBIT 221 553 +150% Equity 944 2,166 +130% Gearing 23% 32% Investment Dividend pay-out Σ 4 bn Σ 475 23
Reuters VOES.VI Bloomberg VOE AV IR Contact Wolfgang Lemberger E-Mail wolfgang.lemberger@voestalpine.com Phone +43 / 732 / 6585-9949 www.voestalpine.com
voestalpine VALUE DRIVERS BACKUP STABILITY Gearing-Ratio < 70% VALUE ENHANCING ROCE 12% ATTRACTIVE DIVIDEND Dividend Yield ~4% PROFITABILITY EBITD 14% SALES GROWTH Internal/External 25
USP LOCATION: FUTURE MARKET CENTRAL & EASTERN EUROPE BACKUP Unique location as high-quality producer within 500 km radius New automotive, building and household capacities are concentrated in the core region of voestalpine voestalpine Steel-capacity increase mainly dedicated to CEE Automotive White Goods Construction 26