Good morning, ladies and gentlemen, and a cordial welcome to the presentation of the half year's results of voestalpine AG. We are speaking of the period 1st of April until September 30, 2022. Very good news, very successful period that was. We are here at voestalpine AG's headquarters at Linz in the Blue Tower. I'm Peter Felsbach, Head of Group Communications, and I'll be your moderator. First of all, thank you very much for being with us, for listening in, and we have the same procedure as usual. First presentation, some 20 minutes-25 minutes by the management board, and after that, you can ask your questions, address them to us. You have several options. You can use the phone patch. You can come in via a conference call.
You will receive the information later on, and you can find it already under Presset ermine press information voestalpine.com. Please do that 5-10 minutes before, and when we are at the outlook of the second half year, please wait for a few minutes before you are in. It is also new that we also have directly your questions which you can enter . Please use this as well, and the press information, the pictures, and the videos can be found on voestalpine.com in the Media area. Onto your presenters today. First, we have the CEO, Herbert Eibensteiner, who will start with some retrospective look on the elapsed six months. He will give an overview of the four divisions, their development, and then at the end, we have some outlook before I hand over to you. I hand over to Herbert Eibensteiner.
Thank you very much. Good morning. Good morning to the presentation of the first half-year 2022-2023 of voestalpine. Let me get started with the current situation. Where do we stand? This, of course, also is a retrospective glance on the elapsed six months. Generally speaking, you can say that we have benefited from high demand and a good price level, and we live in a business situation which is getting more and more difficult. Towards the end of the first half-year, we had an all-time high year-over-year. I believe that this indeed is a very favorable and good news for all of us having had a share in this, our staff, of course, and in particular, all those having worked in an excellent manner in this difficult context.
Over a large area, we had a very high demand in most essential market segments. What we did see was an excellent situation and development in the total field of energy, which of course, goes across divisions and also has an input in most diverse fields. This is certainly also driven by high energy prices. I can usher this in by saying that the sector of energy will show a very good development in the future as well. It's a positive trend also. In aerospace, for instance, this trend is definitely going on. You see that this is a very cyclical area, and it does not surprise us that this is so. Railway systems, here, as usual, we have a very solid and favorable situation.
This is international business which exists on all continents, and there we have an excellent situation, and we have a very good order backlog. What we also have is an excellent output, which we see. Here it is solid as usual, and this also means that this area also in the previous years has been a very stabilizing factor also for voestalpine's business. In the automobile industry, particularly in Europe, what we also have is a very stable demand and also on a cushioned level. You all certainly know the reason. The reason is the problem of delivery chains, supply chains, particularly also as regards semiconductors. I believe that we had a stable demand, but on a low level. In the cyclical areas, particularly in consumer goods and so on, and also certain parts of the construction industry, we have seen this very good trend.
What then is the situation in the individual regions? In North America, there is also the Fed, which also had quite high reactions. The economic trend there also has been the same, even if the trend is still very high and so is headcount. Still, what we do have is an excellent environment. Towards the end of the first half year, we had a certain weakening of the business situation in Europe, but with these stable areas which I had addressed before. In China, as a matter of fact, we have had a development which hasn't been so bad at all. Yet in China, particularly in the first half of the year, due to large-scale lockdowns, the economic growth and the economic perspective have clearly been worsened. We have also felt this, of course, at our end.
Still, we have mastered this period quite well. It's always surprising more and more the development in South America and in Brazil, where we see a continued positive development in our areas. Just a few words on the Robert Ottel figures, which Robert Ottel will go through in detail. We have a half year revenue of EUR 9.3 billion. Again, a clear improvement year-over-year, and the previous year was very good already. In the EBITDA, we have EUR 1.4 billion, also an all-time high. Our EBIT amounts to short of EUR 900 million, which also is by some 40% better than the previous half year. Our net financial debt, once again, has decreased, and the number of employees, our headcount, has risen slightly in that elapsed half year.
What is important for us within the voestalpine Group, we want to be and remain an attractive employer. You know that everywhere skilled workers are missing. There is an enormous shortage in this field, so we mainly focus on education and further training of our people. Education for us means, of course, to attract young professionals, which we then train in our state-of-the-art training centers. Presently in Austria, we have some 900 apprentices in 30 professions who we train. We have added another 400 now in autumn. This is 100 more than last year. What is particularly important is also the further education and training for all those being with us already. This is CPD, continuing professional development, and we spend some EUR 500 million on this per year.
Maybe I should also add here that internationally speaking, we train 1,400 apprentices. We have a similar system, as you know, in Switzerland and in Germany. Just to give you an idea, we spend some EUR 90,000 per apprentice there. I'd like to hand over to Mr. Robert Ottel, my colleague, for some KPIs.
Okay. Thank you very much indeed. I'd also like to say hello to you from today's virtual press conference. I know that for you this is more comfortable. You just need to sit in front of the screens. Still, I like personal encounters much more, and my impression is that then the figures have some more meaning. It's a bit like all the press or video conferences we are so much used to.
Anyway, here you see the comparison of the first half year's KPIs compared to the previous first half year. You see the change here in the right column. Almost in all KPIs, we have an increase of around 40%, which suggests that it has been a very special half year, particularly in the first quarter of this half year that was characterized by high raw material costs. The second quarter then was characterized by declining raw material costs, but high energy costs. What you do see here is the revenue compared to the year before, from EUR 6.8 billion to EUR 9.3 billion, almost EUR 2.5 billion more. This particularly is due almost exclusively to the high raw materials cost we have seen this year.
Just for the sake of comparison, you see in the first half year that the voestalpine Group had a revenue of EUR 9.3 billion, and compared to this, the COVID year, the total year, 2021, that was some EUR 10.9 billion, I believe. You clearly see that this half year was clearly characterized by the high raw material cost. Our operating result, our EBITDA, it has climbed clearly by more than EUR 400 million, in particular in the Steel Division and in particular in the first quarter, where we had this excellent result. The second quarter then, from my perspective, went back to normal, so to speak, and is still a very good one. What we then also see in the difference between EBITDA and EBIT is that you see this year, the depreciation is higher. We've published this already.
In the second quarter in the HPM Division, we had to do an extraordinary depreciation. The high energy cost and the volatile interest situation have brought this about. This does not take any cash effects, so cannot be seen in the operating result. After interest and tax, it means a profit after tax of more than EUR 700 million. This EUR 700 million has been invested into our equity, so the financial basis of the voestalpine Group is even stronger now. When compared half-year-over-half-year, so in the last 12 months, the gearing of the voestalpine Group, thus, has come from 55% to 33%, so a very massive decrease. What is the situation of the gearing ratio in the long run? You see it here. You know, gearing is the ratio between the net financial debt and the equity.
You also see that this year, as of end of March, the gearing ratio was kept stable. On the one hand, debt, this is the gray part, went up a little bit. This is mainly due to higher values in the raw material storage or inventory. On the other hand, equity in these six months has been set up by close to EUR 0.5 billion . This certainly is an all-time high in equity. This is the financial muscle and power of voestalpine. What we also very clearly see here is that the equity, the book value per share, also has an all-time high of EUR 42 , and this is a bit clearly different from the share price.
Since the business year can be appraised, can be analyzed much better now, and we see such stability as the management board, we have a share buyback program which we have decided upon, which will start tomorrow, on the 10th of November. What is such a share buyback program? If we buy all shares at today's price, the equity would be reduced, the debt would go up a bit, and in total, this would amount to some 4%. There again, on today's basis, with the exception of last year, we would have the lowest debt of the last 10 years. On that, I'd like to hand over or back to Herbert for his outlook.
Yes, thanks indeed, Robert. As to the outlook for the remainder of this business year, you certainly know that the economic experts forecast some cool down of the business situation in the second half year. We also expect a decline of demand in the cyclical industries, like for instance in white goods, in construction, and also in mechanical engineering. We have these very stable areas like energy, and there, the upward trend is expected to continue. Same thing in aerospace, where our order backlog is very good indeed. We expect, furthermore, a stable development in the field of railway systems. I do believe that this geographical international positioning which we are having, and also our group's diversification, mean that we have some stable areas and some cyclical areas which more or less outweigh each other.
This supports, of course, our revenue and our result. This is why the management board gives an outlook for the business year 2022-2023, an operating EBITDA in the bandwidth between EUR 2.3 billion and EUR 2.4 billion. A ssuming, of course, that there won't be any unexpected further economic distortions. Well, ladies and gentlemen, just on time. This is the end of our double presentation, and we'd now like to hand over for your questions.
Thank you very much, Mr. Ottel. Thanks, Mr. Eibensteiner, for your presentations. Now you can come in with your questions. First of all, let me add that we have a new phone number, an 0800 number. Please do use it, and also the confirmation number for the phone patch. Then if you want to ask your questions, please press star key and one.
On the other hand, as said at the beginning, on the live stream, we have a chat pool now on our streaming page. Here again, you can write your questions to us. We will receive them directly, and you will have the answer. I'd like to get started. We have already on the chat pool a first question from Dietmar Mascher, Oberösterreichische Nachrichten. His question: In Sweden, there is the first climate-neutral steel plant. How long will it take before voestalpine has one, and why is Austria then slower than Sweden?
Well, Mr. Mascher, good morning first. You certainly are familiar with our greentec steel project. If you see the two locations dealing with this project, if you look into this, you will see there is some preparatory work already for the first step of a CO₂-reducing steel plant b ecause with greentec steel, in the first step, by 2027, we want to drop our emissions by 30%. This would amount to 2.5 million tons of green steel.
The preparatory work for this is going on already at the locations. If we say that the preparatory work has been launched, this is a EUR 200 million worth activity which we currently are investing into such preparatory work already. We are now awaiting for March, the final approval of the project, and then construction work will start. From 2027, the 2.5 million tons of green steel will exist. There will be some further steps, and I believe it's essential to see this modular structure and procedure so that even during ongoing operation, we can decarbonize as best possible.
You see, voestalpine and Austria are not lagging behind, but definitely at least as good as Sweden, if not better.
Thank you very much. Then, Ingrid Kovárik-Bersianér. How many of your apprentices you train stay in the group?
We always submit an offer to each and every individual apprentice to remain within voestalpine, and most of them also take it. Along the years, we have been having a very high retention rate, and we see that the fluctuation of the trained staff is much lower than staff which we get from outside and integrate into voestalpine. It is a very high retention rate. Thanks.
Over to the phone patch, Mr. Kneidinger, Kronen Zeitung. One question for Mr. Eibensteiner. You spoke about an excellent development in the field of energy. Can you elaborate on what voestalpine produce for the energy sector? What does voestalpine produce and where?
Well, we produce tubes and pipes for the gas area in Styria, Steiermark. We also produce heavy plates at Linz, for instance, for pipelines or also for drilling platforms, and also in some other areas like wind power. We produce steel constructions and structures for the now very important area of photovoltaics and also some special demands in the High Performance Metals Division for valves, for instance, for pumps and for some other products, which then are also used in the area of renewables and also some other fields of energy.
Thank you. Excellent. Then a question as regards the shortage of skilled labor. First, the 1,400 apprentices, do you also integrate the Austrian ones here?
Yes. We have some 900 of the 1,400 in Austria. You've also addressed a training and education.
You invest some EUR 90,000 into one that was at EUR 70,000 once, I remember. Why is it so much higher now? Have you changed anything? Have you intensified, improved things, or is it just the increase of prices everywhere?
Well, of course, we have our training centers, which we have expanded and clearly improved and revamped, and we have focused much more on digitalization. Obviously, the number of apprentices in the course of the years also have gone up more and more, and I believe that now we can also offer an infrastructure which is certainly excellent and is among the best which we have in the field of apprentices trainings.
Excellent. Thank you. Thank you very much. As to the phone, as you see the number here on your screens, please press star key and the number one if you want to ask a question. Online in the chat tool, Bernhard Ecker, trend newspaper. In the field of energy, what about trends in wind power, renewables, and conventional areas of oil and gas? Can you differentiate here? Is there an equal amount of growth in the two fields?
Well, I can only speak for our own area. In oil and gas, there is an improvement there. Of course, we grow continually along with the market. What is special in the field of renewables, there's a lot being invested, but particularly in the field of PV, and this does not only happen in Europe, but it also happens in Brazil or in the U.S. I believe that this very area is growing far more than the market because there is also a lot of investment.
The field of wind power presently is growing, if a bit more slowly, but will also increase in the future.
Thank you very much. Next question from the chat tool, Christian Ebert, Kronen Zeitung. How high will EBIT or would EBIT be without the cost influence?
I find it difficult to do this calculation. It's an if calculation, and everything is iffy here. I think the EBIT would be more or less the same. But in terms of revenue, you can, of course, reduce that by EUR 2 billion more in terms of raw materials cost, but you cannot separate, you cannot decouple the two. I could not do that. In terms of revenue in the half year, the raw material cost increase amounts to some EUR 2.1 billion.
Thank you very much. Next question, Lucas Möllers, Stahl magazine. Which challenges do you expect for 2023, and how do you wish to encounter it?
Well, I believe the essential point for all of us in our industry is how are we positioned, how resilient are our business cases and models in a market which is worsening? I would say that this is a key topic for all of us, and Europe has to grant security of supply energy-wise, and there are the high energy prices. There are so many topics we could discuss, decoupling of electricity price from gas price and so on, reduction of energy prices. All of that will be important for us, obviously. There is also a lot of uncertainty, and it will be a bit difficult to continue stable business. This will be a challenge also for 2023.
I said before, we have very good diversification, also internationally and in our segments, and we have some segments which are very, very stable.
Thank you indeed. Next question comes from Svetoslav Abrossimov, Kallanish Commodities. I hope I haven't mispronounced the name. Good morning. What is your expectation as to demand for steel in the automotive sector?
Well, we know, of course, and you might have gathered it from our outlook that the automotive situation will remain stable short-term, and in the long run, we do not expect any further improvement in this field. I would say maybe as an answer to your question, we expect that the development of the steel demand in automotive will remain on today's level. We do not see any further improvement soon.
Next question, Philipp Kremser, APA. In your press release, you speak about the gas supply situation. What about iron ore? Because a lot of ore comes from Ukraine.
Well, our delivery paths have been changed. We had raw materials from Russia, and we also have some new delivery paths for quantities which had come from Ukraine and can't be delivered any longer. That also has been changed. T hat's also granted for raw material supply in the future.
Claudia Haase, Kleine Zeitung. Two questions. First, an update on hydrogen in Linz. How much money will it be after the uncertainties of the last few months? What is the future perspective for a further extension? T he second question on gas supply. You certainly have secured it for several months. Do you further expand this? Is that possible at all?
Well, as to the update of H2FUTURE, we are having a project in the pipeline for the further use of hydrogen. This is hydrogen compression, hydrogen cleaning in order to also use it for some further processes. That project has been planned, has been submitted. We do not yet have the final go-ahead as to whether we will get any subsidies, but we believe we will have the green light in the next few months. As to your questions, yes, this project definitely will be continued. As to gas supply, the 1.5 TW gas has been stored, and for the time being, the storage situation is very good, and that's kind of an insurance policy for us in the case, in the event of a gas shortage. Presently, we keep the storage volume as it is. We don't expand it any further.
Thank you. Before we go back to Ms. Kneidinger, let me tell you, please use the star key plus one if you want to ask a question by telephone and in writing, please use the chat tool on our streaming page. So far, all questions have been dealt with. Back to Ms. Kneidinger for the next question.
Thank you. Mr. Eibensteiner, when answering to Mr. Mascher, you said that EUR 200 million have been invested into preparatory work already at Linz. Can you tell us what costs EUR 200 million there? Is this construction work? Has something been demolished, or why is it EUR 200 million already?
Let me specify maybe. The budget for this preparatory work is EUR 200 million, and you just have to see, and this applies to both areas, Linz and Donawitz, that we are of course integrating a steel mill into an existing one. There of course, there are some pipings and tubings. Some preparatory work has to be done , I don't know, for heating, ventilation, you name it, a power supply which will go across a kindergarten, and we add a new kindergarten and there are many such infrastructural measures which have to be implemented now while preparing for the real fully-fledged project of greentec steel.
It's part of it. It's a sub-project, if you will. You just have to see that there is pipes and tubes of 3 m of diameter, and they have to be relaid and adapted, and these are huge tasks and huge bits of work. That is why we have to start on time in order also to then start and launch the real work after the approval.
Since I'm speaking of the kindergarten, what you might not know, we are making a kindergarten for 200 children. This is so important for us in order also to attract more families and in order to win over more families for voestalpine. We offer 200 places at our kindergarten around the clock even, 24/7, in order also to attract some employees having families for shift work and the jobs we are offering. This, I believe, is also a major point we should highlight. When will it be operational, the childcare facilities? When will it be operational? In springtime next year.
Really 24/7, or is this just a saying?
No, no, it's really 24/7, at least part of it, if some staff do shift work with us.
A very concrete question as to the kindergarten. There has been an existing one already. Is this now a new project, a greenfield one?
No, no, there has been one, but with 80 places only. Now, of course, due to the high demand and the shortage of childcare facilities, we have decided to step up the number clearly to 200 children.
Thank you very much, indeed. Then again, a question from our phone patch, Claudia Haase, Kleine Zeitung.
Yeah. It's much better to speak than only to write into a chat. I'd like to speak about the medium range. Maybe you can say already, will it be 20 or 30?
W hat do you mean? You mean the demand for green steel volume?
Well, the demand, of course, is one topic that would be fascinating to know as well. I think it will be in very high demand, but what will you be able to produce in terms of volume?
Well, in the first step, 2.5 million tons of green steel, greentec steel. This is our production capacity in the greentec steel project. As you have heard as well, there will be a next step after 2030, and then it will grow up, grow continually.
Since you've said it should be a modular extension, I thought that in 2030 it will be more than 2.5 million already. But you don't, of course, want to make any promises now time-wise, so it will rather be post 2030, will it?
Yes. It will be operational, say, in 2027. We take it that a market will be created for greentec steel, and then we will have concluded our new activities and will grow along the green steel market.
How much more expensive is greentech steel than normal steel, in inverted commas?
As a matter of fact, right now, the first green steel markets and prices are being created, are being formed. I t's a bit too early, I would say, to speak about prices which will then exist in 2027, maybe.
What about hydrogen in the medium run? How can that be integrated? Will it play a part therein?
Well, hydrogen, for us, will then be important in a second step or in some further steps post 2030. You certainly know that in Styria as well, we are working upon some technologies with hydrogen as to pre-material for the steel production.
We take it, in order to really decarbonize, that there again, hydrogen will play a major part. This is why we have all these projects in the field of hydrogen.
There is no time lag, no delay in hydrogen? No, say, time gap between project old and project new. Is this hampering you anyhow, or is it not so important?
No, no. I think here we are still in the field of research and development, and the quantities we are producing right now are available even now. I think the final approvals for this project will come, and then we will go on.
Thank you.
Thank you. This takes us to a final question, a second one from Mr. Ebert, Kronen Zeitung, as to the real property sale amounting to EUR 120 million. Which plot or piece of land is it, and who is the buyer?
It's at Düsseldorf, Germany, from the former Böhler group, which isn't used any longer by us. It's rather used by some other tenants, so it has no strategic importance to us any longer. The buyer is a real estate group or developer, and we do not yet know because there are several interested parties.
Okay, thank you very much. Ladies and gentlemen, thank you. This is the end already of our press conference call on the half year 2022/2023. Thank you very much to the two presenters, to the management. Thanks to the team. Thanks to you for your questions and for listening in, for having taken the time back early in February with the figures on Q3. We wish to you and your families all the best. Please stay healthy.
See and hear you soon. Bye-bye. Auf Wiedersehen.