Voestalpine’s Restructuring Delivers Profit Lift Amid Revenue Dip

Key figures at a glance:
- EBIT: 473 million euros, +21%
- Free cash flow: positive, 345 million euros
- Net debt: 1.4 billion euros, down 27%
- Free cash flow guidance for the year: raised

Portfolio cleanup is paying off

Over the past quarters, Voestalpine has streamlined its portfolio. The High Performance Metals division sold Buderus Edelstahl in Wetzlar and consolidated locations outside Austria. In late January, BÖHLER Profil was disposed of to Kadant, a U.S. company. These actions are reflected directly in the earnings trajectory.

Pre-tax income climbed 46.5% to 372 million euros, while the operating cash flow surged by 53% to 1.1 billion euros. The free cash flow, which had been negative in the prior year, has moved clearly into positive territory.

Should investors sell immediately? Or is it worth buying Voestalpine?

Divergent business development

Segment performance varies across the portfolio. Railway Systems, Aerospace, and the storage-technology segment are experiencing solid demand, whereas the Automotive Components division continues to face softer market dynamics, particularly in Europe. The Construction, Mechanical Engineering, and Consumer Goods areas are showing stable but subdued activity levels.

The balance sheet shows meaningful improvement. Net debt decreased to 1.4 billion euros despite substantial investment activity for the greentec-steel program. The gearing ratio improved from 26.2% to 18.7%, and equity rose to 7.6 billion euros.

Outlook and cash flow expectations

Management sticks to the EBITDA guidance for the full year at 1.4 to 1.55 billion euros. For free cash flow, the forecast has been raised to a range of 350 to 400 million euros. The greentec-steel transformation program, with a total budget near 1.5 billion euros, remains on schedule and within budget. Capital expenditures are planned at 1.15 billion euros. The workforce contracted by 3.8% to 48,700 full-time equivalents.